tv Power Lunch CNBC July 14, 2017 1:00pm-3:00pm EDT
be good. >> bank of america, merrill, upside call buying, this outperforms after earnings. >> contrarian idea, at&t i think it's an industry ripe for consolidation, big dividend, out of favor. >> tom lee, thank you, gentlemen all, have a great weekend. thank you for watching half time don't go anywhere because "power lunch" begins right now. >> we will see you in just a few minutes, welcome, i'm tyler mathisen here is what's on the then you jamie dimon uncensored j.p. morgan's ceo going off on what's wrong in d.c., the media and went so far as to say being an american abroad is "almost an embarrassment. dimon, like you've never heard him straight before. and plus while everyone's screaming that social security is going to collapse in 17 years we el l hear from one expert who says this is a "phony crisis"
and target amendmenazon a new report says they're to blame for keeping wages low for the american worker. we'll debate that when "power lunch" begins right now. welcome to "power lunch" i'm michelle caruso cabrera. the dow and s&p 500 setting record intraday highs. dow would be higher if not for j.p. morgan and goldman sachs which are lower. j.p. morgan reporting numbers this morning, the nasdaq is on pace for its best week in two and a half months the. dow and the s&p 500 on track to post their biggest weekly gains in seven weeks check out the movers walmart and boeing are higher on upgrades gap is higher, retail stock being added to j.p. morgan's focus list and a number of well-known names hitting new all-time highs facebook, mastercard and ebay among them and we begin with j.p. morgan. that story that tyler told you about. ceo jamie dimon going off on
washington during an earnings conversation call with analysts blasting the d.c. dysfunction and the impact it's having on the economy. wilfred frost is here with more. >> that's right, michelle. and here is the main part of that rant dimon referring to the excessive gridlock he sees in washington. >> since the great recession which is now eight years old we've been going at 1.5% to 2% inn spite of stupidity and political gridlock because the american business seconder is powerful and strong and is going to grow regardless i'm saying it would be much stronger growth had we made intelligent decisions. >> now, instead, we'll play the right bite which we have now here is the main part of that rant >> we have become one of the most bureaucratic confusing litigious societies on the planet it's almost an embarrassment being an american citizen traveling around the world and listening to the stupid
[ bleep ] we have to deal with in this country. >> it's important to note that he was referring to the last decade broadly, not specifically washington today and his main point as we heard is that growth is resilient overall and has over the last decade grown despite gridlock but certainly it's fair to say he's envious of other nations like israel, ireland and china he called out but in particular the one he says was most pro active in changing laws and regulations to benefit growth was france and he praised the impact president macron has had in making the nation more business-friendly. guys >> even though moacron just got there. >> i know but he met him three days ago and as agift he gave him a bond that j.p. morgan financed to fund the war in 1918. >> he did a call with journalist ins the morning where he got angry, right you were on that call. >> i was on that call indeed and there's been perhaps a little exaggeration what he specifically said was after a question -- after going on a similar rant as we heard
from the analyst call in terms of the fact that we need to see more economic reform to deliver growth, the fallout question from someone was about the last two weeks of trading revenue which his response was to say that's not what is important, you shouldn't be writing about two weeks worth of trading revenue, you should be writing ant what washington needs to do to drive economic growth so he had a kickback but it was more light hearted than the seriousness we heard on the soundbites from the analyst call. >> have you ever heard a ceo go off that way on one of these calls? >> i've heard people get elevated on certain questions. >> that's a nice way to put it, "elevated. >> we had an outright swear word so i haven't heard that before this is an issue we heard him talk about before so that's why i'm not super surprised this topic got him going. i think it just came together once and for all today but i put the context on it. he was positive about u.s. growth saying we have grown regardless saying if we release
the gridlock we will grow faster, if we don't, we will grow slower so 1.5% to 2% is the base case but we can improve from here is his point. our next guest also heard those words firsthand. he was on the call, let's bring in jeffrey hart analyst at sandler o'neil, what did you think, jeff? >> i kind of liked hearing it. i enjoyed it i think what jamie was voicing was frustration that many have, including myself they're watching our elected officials find the time and money to fund expanded probes into russia through our presidential election but they can't seem to get around to reforming the tax code and the tax code is extraordinarily complicated and driving companies and jobs out of the country. they can't find the time or money to get around to that but they can get around to side political issues, it's frustrating for business owners that they have to deal with that tax code. >> do you agree with wilfred's point that when you look at what he said, since the great recession which is eight years
old we've been growing 1.5% to 2% in spite of stupidity and political gridlock it didn't sound like he was just talking about right now and russia at all. it sounds like he's been talking about what's been happening under the obama administration as well. >> our tax code has been a problem for a keck cade. it's not like it's a new concept and we've never gotten around to addressing it. dodd/frank, there's good things in dodd/frank that had to get done but they managed to publish over 22,000 pages of increased regulatory but couldn't get around to taxes. i think probably before the crisis if you look back there is a lot of frustration out there that the government isn't really helping the average person or u.s. companies be competitive globally in an increasingly globalized world they're almost kind of hurting as opposed to helping. >> so you basically think he had it mostly right and i think a lot of people agree that he has it mostly right though they might not choose to use the words he used. let's turn back to j.p. morgan
and its business how's it doing >> it was a pretty good quarter. the thing people didn't like was net interest income came in lighter than we thought and they took their full year net interest income guidance down a little bit but that tends to epiand flow with the forward yield curve. granted the guidance was more conservative but i didn't find it that disappointing and trading revenues were weak but they were literally as weak as promised so net-net to put up a number with those head winds working against you i think are decent results. as we move forward, what we're seeing is interest rates concerns and low-growth concerns rearing their head again it's not something new it's kind of today's fluctuation. we can get past. >> it jeff, good to have you on, jeffrey hart, thank you for being with us. >> thanks. despite jamie dimon's rant and everything else going on, the rally rolls on, the dow and s&p 500 hitting another intraday
record high in just the past hour michael vogelsang is president and ceo of boston advisers and we have a new face to power lunch, welcome, mike but vogelsang, it's amazin amazing, if we were waiting on d.c., we would be waiting forever. we had government shutdowns a couple years ago, we haven't had tax reform in more than a decade are we overreliant or overweighting on some miracle to happen inside the beltway while people are getting rich around us by ignoring washington? >> i don't think this market is going up because this stuff isn't getting done i think the market is going up because there's almost no future in looking at this stuff getting done washington's proven themselves to be completely dysfunctional and unable to establish any management of our economy, our infrastructure, our tax code, anything that is sort of reasonable, responsible and fair, it's very clear. that's what dimon is saying. >> before we get into your stock picks. when was washington functional
we had government shutdowns three or four times in the '80s, a couple times in the '90s, a couple times in the 2000s, we're longing for this time of government function and i'm thinking when was that meantime, corporate america chugs along. are disney's earnings going to be hurt because we're not getting corporate tax reform not yet. >> i don't think so. what we're looking for as citizens first and investors as well is progress, right? just being able to get stuff done that's reasonable and, frankly, for what the kind of taxes we all pay we should expect and every poll, every social view of the country shows that it's more polarized than it's ever been and that's basically what's driving washington and i don't see anything that sort of quickly will be repaired here. i mean, you know, look i was listening to the previous show and all these guys were talking about the individual stocks i got a couple to chat about but oh, my goodness, there's nothing
else except equities to be interesting from an investment perspective. we just keep grinding higher and higher and higher. i think we're in uncharted territory. >> mike labella, you say dimon's comments about the trump administration are a big red flag for the markets and investor confidence. explain that thought but i go back to what michelle said what i heard him talking about was not necessarily pointed particularly and certainly not exclusively at the trump administration but more broadly at a kind of systemic dysfunction that he thinks has infected washington for the better part of a decade if not longer. >> it highlights a really, really important disconnect that we've seen in the market and that's been the disconnect between consumer and business optimism, which really took off after the election, and the hard economic data which has been pointing to more of the same slow growth. dimon's comments that the fact is that this stuff is not getting done, every time there's a new distracting tweet, every
time there's another scandal it makes it less and less likely that this congress is going to get anything done whether it's infrastructure, whether it's tax reform, health care, anything else we need to focus on so it's not a matter of this is something new, it's about are we actually going to move away from this low-growth rut that we've been in the in the last decade. >> how do the tweets connect to discussion about health care or a discussion about tax reform? >> it's just another distraction. you look at the congress and every time they have to sit there instead of talking about health care policy they're replying on how they feel toll a particular tweet or the newest thing dwump might have said. the idea that s that doing things in congress is difficult enough, with all this distraction it makes it more unlikely anything will get done. >> and the media is complicit because we're asking how they feel about the tweet so what do you do with your money? labella -- i'm calling you labella because you're both
mike labella, what do you do with your money do we just keep grinding higher here. >> this is the question that everyone is asking, what do i do valuations are starting to really creep up, we're just in this 1.5% 2% gdp growth. we think that's likely to continue so investors need to focus on two things. do they need to be in equities many people are underfunded. legg mason came out with their global investment survey one of the startling things was 50% of baby boomers don't have half the amount of money they expected to when they were going to retire so that means investors have to relook at income and also relook at defensive equities so in other words things where they can get inflation protection but be more of a stable exposure if there is that market correction. >> michael vogelzang, leave us with some great stock. >> i just worry, right
i mean, stable stocks, utility stocks trading at 23, 24 times earnings, i understand why but oh, my goodness when those go back to ten times earnings, they won't be stable and safe that's the biggest worry we have we think equities are expensive, they're going to continue to grind higher but we're probably looking at 15% or 20% chance of a decent correction some time the second half of the year and i'm not sure people are ready for it. >> that's not a stock pick >> he was trying to give you a warning. >> i asked for good news give me one name to help us make money with a macro market decline. >> you wanted a stock pick people don't use stocks anymore, they just use etfs and passive investing. why do you want to talk about stocks >> that's your job. >> no, i understand. i mean best buy is a wonderful idea they're fighting the good fight against amazon and the internet. we've owned it for a couple years and are very happy with it they there's more ahead there. we like disney for the anti-est
opini -- anti-espn crowd, once disney figures out what to do, there will be value there. >> there was a stock pick. >> well, you beat him up. >> mike and mike, also the name of an espn show, but thank you very much. pair of mikes. it's friday so that also means the weekly rig count numbers are out, jackie de angelis, how are they coming in? >> we added two oil rigs according to baker hughes for the week so that's two weeks in a row that we're moving back higher remember, we had the opec output cut and here in the united states they added, added, added for like 23 weeks. all of a sudden we had one down week it was a head fake for the market and now we're going back up again one analyst i spoke to said, sure, why not? at $46, u.s. producers are still profitable so that could continue to happen until prices become more depressed. we are up about 1% on the day, this didn't move the needle much, a little hort-covering a we go into the weekend and there
will be up days throughout the summer but overall the feeling is if nothing really changes, these oil prices are headed lower. back to you. >> jackie, thank you. coming up, the latest projections show social security will tab out in 17 years unless we fix whatever its problems are. but our next guest says there's not really a problem calls it a phony crisis and that we should leave it alone is he right? we'll debate that one next ddos campaigns, ransomware, malware attacks... actually, we just handled all the priority threats. you did that? we did that. really. we analyzed millions of articles and reports. we can identify threats 50% faster. you can do that? we can do that. then do that. can we do that? we can do that.
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and others presented yesterday saying that medicare, its trust fund for hospital bills will run out in 2029 and social security in 2034? >> well, let's focus on social security first everybody's using the same numbers, it's just trickery and you know we've progressed so much since dean baker and i wrote that book in 1999, back then everybody believed that social security was going to run out of money, most people thought they weren't even going to see their retirement benefits which is, of course, impossible as long as there's still a country and so actually, no, the whole shortfall for the next 75 years is relatively modest, 2.8% of payroll so even if you had to increase the payroll tax to cover that whole thing, which you wouldn't necessarily at all 40,% of that gap comes from just too many people making incomes over $127,000 and don't pay social security taxes on that so you could correct that even if you do the whole increase, the average wage 40
years from now will be over 40% more than it is today so nobody's going to care, nobody cared in the '50s, '60s, '70s and '80s when we raised the payroll tax by more than we're going to have to deal with, fill the shortfall more than what we have to deal with going forward and so the problem is really how to increase benefits that's why you see bills in congress, 160 co-sponsors, that's what people need to talk about. people over 55 don't have much at all saved for their retirement they're looking at maybe getting $3,000 a year from their retirement savings and the average social security benefit is $15,000 a year. that's not enough. >> and it's going to go up next year for the first time by a larger margin than has been the case in recent years michael tanner, react to what you've just heard. is it a phony crisis is it a numbers game we need to payless attention to >> not only is it not a phony crisis, it's a much worse crisis than we believe.
the simple fact is that social security cannot pay the promised level of benefits with the current level of taxation, that right now we are tapping into the social security trust fund about every bond redeemed from the social security trust fund had to come out of general revenue so we're increasing the federal deficit in order to pay off social security and finally the overall unfunded liabilities of social security is some $32 trillion according to social security's trustees so we'ring a n a situation where we have enormous debt going forward, this is going to put an intolerable burden on young people and it will slow economic growth and we won't see the wage growth and job creation we need to see. >> mark said it's easy, raise taxes. right now after you make a certain amount of money you don't pay a social security tax anymore. this hole isn't that big if you just raise taxes >> first of all, this would be another tax on the people who create economic growth and innovation in this country that would have an effect on whether or not we grow as a society, whether or not we
create new products, whether or not we create new jobs but second it would do very little in terms of the cash flow because this additional revenue that comes in would be used to buy government bonds, the money becomes general revenue of the federal government, is spent on other programs by the federal government and we have to repay that out of general revenues which means a second tax increase or additional borrowing in order to pay back the bonds in the first place. >> how much is skewed, michael, by the demographics? generation x, of which i am a member, is the smallest generation so now we have to support the boomers. here's the good news millennials are coming there's 85 to 88 million of them who will be basically supporting us, a small generation won't this flip because of demographics >> it really doesn't look that way and essentially what you're looking at is in 1950 or so you had 16 people paying taxes for every person receiving benefits. today you've got about three by mid-century you should be down to about two and then it levels out from there but the fact is that as a society we're
not actually even at replacement rates in terms of birth rates in this country. >> it has to look better if you have 45 million gen-xors supporting 75 million baby boomers, you'll have 85 million millennials supporting 45 million gen-xors, that has to be a positive of some time. >> it helps but we're living longer so the retireers are going to be growing larger. >> i'm a baby boomer. >> you think millennials will work that that hard? they don't want to work that hard. >> mark, the last word to you, i read the report yesterday that indicates for social security in the year 2034 the deficit will -- the definite, in other words, what's taken in in tax versus what is paid out, will be a basically half a trillion dollars. that sounds like a problem and then it grows from there. >> no, no. these are all just misleading numbers. you have to stick to what really matters. what's the shortfall going
forward and what would it take to fix that? and how much would that make a difference to anybody going -- living in 2030, '40, '50, '60 or 75 years out and no matter how you slice it, as i said, it's going to be less than we had to cover in the '50s, '60s, '70s and '80s and there's no significant problem and nobody will notice as long as it's introduced gradually these numbers michael was saying are misleading numbers you can say unfunded liabilities for the pentagon are tens of trillions of dollars going forward but it just doesn't mean anything, there will be taxes that pay for it and that's all we're talking about here there's no significant shortfall, it's -- none of this stuff is going to come to pass. >> tweakable and addressable -- let me just get a final question tweakable and addressable by a minor tax increase or making the amounts of income that are
subject to social security tax go higher over time. am i understanding >> that would take care of 40% and the rest we could do with a payroll tax that nobody would notice -- >> everybody notices it, what do you mean nobody notices? everybody notices when their taxes go up on their payrolls. >> well, actually -- nobody will be bothered by that. >> as i said, we had payroll taxes of a bigger magnitude in the '50s, '60s, '70s, and '80s the income rises, when you talk about more baby boomers retiring and less people paying in, that's just giving one half of the baseball score it's like saying the cubs had a terrible game, they only scored two runs and you don't see the other team didn't score any. the any economy is growing, productivity is growing, wages are growing, the problem is distribution the problem is that most of the income in the last 30 years has been going to the richest people in the country that's the problem. >> you can't keep raising taxes
and expect the economy to grow you can't -- >> that's the last word. >> economic growth won't occur if you raise taxes >> that's the last word. gentlemen, thanks very much for your time. we appreciate it michael and mark you can e-mail us at power lunch @cnbc.com. >> still ahead -- ♪ >> there's a movie now there's an opera based on steve jobs life the composer and lib rhettist join us. who comes out on top o'geinthlostrade we'll tell you next.
it's turning into a good friday for your money today. the dow and s&p hitting another intraday high. get this -- the dow would be higher if it wasn't for j.p. morgan chase and goldman sachs holding it back. what is helping the dow? walmart. walmart getting an upgrade today. here's the biggest winner the group of 30 stocks, microsoft,
visa and dupont also leading the way. by the way, net app nrg energy seagate technology leading the s&p 500. nrg energy up about 40% just this week. the latest airline report card is out. are customers still complaining? of course they are it's airlines and this is america. but let's find out by how much philip bow is live in chicago with the answers, courtney reagan who got stuck in an airport last night is sitting here. >> complaining. >> she gives them an "f. >> not fake news, she's complaining about the airports. >> courtney, get in line the latest numbers for the month of may show that there was a surge in the number of complaints, not surprising given what we saw in april we'll talk about that in a bit the on time arrival ratings, overall they were on time 9ment% these were the best of the airlines no surprising hawaiian and delta near the top as they traditionally are month in and month out. who did the poorest in may --
and, remember, the average for the industry is 79%, express jet, frontier, spirit, jetblue, virgin america 58% of the flights arriving on time really poor month of may for virgin america now let's talk about those complaints they were up dramatically in april when there were a number of high-profile incidents that spilled over into may. we had a few at the beginning of may. there was a dealta customer fro hawaii, that got attention these complaints climbing after those high profile events so not a huge surprise there and yet when you look at the airline index, at the end of the day what investors are asking is what's going on with profits what's happening with passenger revenue? both are up and we had delta's numbers yesterday and some people might be worried about the cost going higher but q 2 will be a strong one for the airlines and that's why the airline index is moving higher so as i send it back to you,
guys, i know courtney isn't happ happy but as someone who flies all the time, join the club. >> how many hours have we spent sitting in airports? >> productivity killer. >> before we let phil go, be clear, every airline executive knows who phil lebeau is don't you get any "make sure this plane leaves on time. >> no, but i've had a business traveller who recognizes me sitting next to me and we're delayed and he goes "hey, how you liking the airlines right now? >> join us, whiskey. >> thank you, phil courtney is sitting here because we want to talk about retail sales that i fell unexpectedly in june for the second straight month. she joins us with more this is not a good sign. >> it's not. this week has been an interesting one for retail a lot of cross currents. we started the week sharply negative for retail when you're talking about those stocks
amazon prime day stole the attention midweek, target gave us a good pri announcement, thursday the xrt and fact gained 2%, the best day of the year today the etf is relatively flat why? because the commerce department says june retail sales fell slightly, 0.2%, when expectations for for a slight gain so let's break down the categories, sales drop more than 3% in miscellaneous store retailers. this includes retailers who don't fit into other define categories, merchants like florists, used merchandise stores and pet supply stores department stores slipped 0.7% sales at sporting goods stores fell by more than half a per sect the consumer price index data today showed food prices were flat in june after rising each of the last five months so it's hard to point to sudden price deflation but sales at restaurants fell 0.6% for may,
grocery store sales down a half percent. the strong retail categories continue to be strong, building and gardening equipment up half a percent. non-store retailer -- amazon is in here -- and non-store retailers -- walmart -- up 0.4%. general merchandise up.4%, remember ulta around sephora. >> you could have driven home from virginia. >> i know but i was so tired i would have been a danger to everyone on the road it's better for everyone else i just sat at the airport. >> courtney, good to have you back are companies like amazon killing wages and jobs one noted wall street analyst says yes but one of our next guests says no stop blaming tech, borots and out mission. who's right? who's wrong? we'll debate it. >>
hi, everybody, i'm sue herera, here's your update this hour house democratic leader nancy pelosi alleging the trump campaign eagerly intended to collude with russia and may have broken campaign laws she added that white house adviser jared kushner must lose his security clearance. >> i also for the revoking of the security clearance for jared kushner. it's absolutely ridiculous that he should have that clearance. >> the lawyer for betty shelby, a white oklahoma police officer recently acquitted of fatally shooting an unarmed black man has submitted her resignation from the police force. shelby had been working in an
administrative role since returning to work. beyonce has shared the first photo of her two twins, rumi and sir carter the two were born in los angeles. that's the news update this hour i will send it back to you, thai. >> brian and i thought the same thing. that looks like a very casual picture. >> yes, absolutely. >> spontaneous. >> spur of the moment. >> kind of a selfie. >> not at all choreographed. >> no stylizing there at all. >> none whatsoever. >> we're happy for them. >> it's very similar to what she did when she announced she was pregnant. >> very madonna and child. >> i looked exactly like that after giving birth. >> madonna not the singer. >> we have to get to rick santelli they're screaming in my ear. what's going on? oh, never mind. >> he's not there. but beyonce is still there my birthday and beyonce have the same birthday. the recent e-commerce boom, the
need for fulfillment centers is rising i don't like to disclose that kind of personal information it's giving mid-size cities an economic boost we're live in tracy california with more. >> reporter: we are in tracy, california, about 70 miles from san francisco and this place has become a magnet for fulfillment businesses, case in point is that big building behind me. that's a crate & barrel fulfillment center and right behind it, what you can't see, is one of two amazon distribution centers here in the city it's not just here let's look at the map of the u.s. and other top hot spots for fulfillment center businesses and those areas include central jersey as well as lehigh valley, pennsylvania, and louisville, kentucky all big hot spots. they are mid-size cities around the periphery of major pet moll tan areas that have low operating costs as well as cheaper land and labor as well but we wanted to see for ourselves so we took a driving tour of some of the industrial
parts of tracy and we found brands like fedex, safeway, medline just to name a few they've all set up shops, bringing jobs. keep in mind, this seems to be known as a railroad hub back in the day and then known for agriculture as well as food manufacturing companies. one expert tells me that there are an estimated 10,000 new jobs which have been in the area, new jobs created in the area the last five years in the county alone and all of this is prompting the city to create drone footage to try to attract more companies to come here and set up shop. now, some critics argue that these types of jobs are minimum wage jobs, not enough to support families but the mayor tells us they still create a lot of economic value. >> the people that come to our jobs here in tracy are not just all from tracy but throughout the region and what that also does is it brings the people in tracy, it increases our daytime population which in turn helps us attract more businesses like
restaurants and retail and commercial. >> he says that in the last quarter alone the city's sales tax revenues went up 35% which is helping build more parks and improve infrastructure being to you guys. >> all right, nation of fulfillment centers. thank you aditi. still ahead, just 60 seconds to convince a panel of experts your company is the next big thing. this startup promising laundry free linens win the panel over you can find out next. first, we're at the cme for today's bond report. rick >> it's been a really strange week if you're a bond person if you look at one week of tens, we're closing down about seven basis points on the week but if you look at boon yields, they're hovering at the highest levels since early 2016. one of the reasons and how it's showing up is a strong euro against the variety of currency. not very good since october. hey, wages are important to
are not rising more than they are. some say technological corruptions are contributes to the amazonfication of wall street keeping inflation levels and wages low. is this right? joining us jared bernstein from the center on budget and policy priorities and catherine ward, editor-in-chief of "reason." i did find this, with all due respect to bank of america, i found it weird because walmart has seven times more employees that amazon, does about three times the also of sales, has been around three or four times as long but you're focusing more on technology. is amazon the reason anything is being held back? >> i think there's a price effect the combination of globalization and technological change have certainly contributed lower more
stable prices. it's one of the reasons the fed has been having such problems hitting their 2% target. however, wages still respond to unemployment not as strong as they should and one of the things that goes on in places like walmart and amazon and lots of other big box firms is that workers simply don't have the bargaining power that they used to have i don't think that has all that much to do with technology, i think it has more to do with trade. >> i'm not going to defend ames but i'll say this, amazon didn't create low prices. amazon, in fact, is often not the lowest price if you shop around they're just competing with walmart. i wonder why we're focused -- is technology the issue >> i think one of the aspects of technology that you have to kind of acknowledge these days is that people can be much more price sensitive based on the kinds of platforms that both walmart and amazon offer along with the vast increase in the global supply chain so there's a
price connection but if you want to understand wage dynamics you have to look at worker bargaining power and those firms do suppress the ability of workers to bargain for higher pay. >> catherine >> i think the idea of amazon as the new boogieman is just a sort of retread of walmart as the old boogieman. the idea that they're somehow harm being done to consumers by keeping prices low and by making distribution faster or easier or more reliable strikes me as a weird way to approach the question and to raise the specter and say oh, maybe our wage dynamic looks more like japan and that would be an unambiguously bad thing. long ago we were desperate to be just like japan. so i think this is a weird deja vu of a bunch of old things mashed together. >> it's not consumers we're worried about. it's wage earners. >> wage earners are consumers. >> so i think you have to distinguish between consumers and workers or wage earners. often times they're the same person and what's interesting
about this debate is that there's no question that consumers benefit from the kinds of price dynamics we've been discussing but there's also wage effects and if you combine them then you have real wages around real wages have been stagnant. >> catherine, i read the report as if you're not worried about prices going up because things like amazon and the iphone keep getting cheaper you don't press for higher wages usually the reason workers are pressing for higher wages is because things are costing more. but now things get cheaper all the time so they don't. >> it's a little more complicated than that because, again, real wages have been stagnant for middle and low-wage workers for a long time so that combines obviously nominal wage growth and inflation even at low inflation lots of workers have been falling behind. >> let me throw a red meat one out there for you, catherine, where does the decline of union workers fit in all of this >> so obviously the decline of unions is a huge piece and it does for sure rebalance the
relationship between employer and employee, between amazon and the people they pay. i think it's for the good. i think there's once again a circumstance where the decline of union has opened up the market, allowed more innovation and, yes, of course in this case the result might be stagnation of wages but there are other benefits which shouldn't be overlooked. >> we're going to leave it there? >> i disagree 100% with what kat r -- catherine said but we don't have time. >> the wage stagnation piece is much of a bigger problem. >> we'll have you both back. >> time for the power pitch, ladies and gentlemen today is it all about bedding. yes, bedding so does this startup have what it takes to be the next big thing? >> i'm joan. >> i'm kirsten. >> and we're the founders of beantown bedding we sent our kids to college and gotten a education ourselves we learned that most students
are too busy to wash their sheets and the average dorm pillow contains 300,000 live bacteria colonies. so we came up with an easy and healthy solution ecofriendly disposable sheets. they're made from plants, can last for weeks and discarded guilt free because they're compostable. >> it's a $5 billion opportunity to change an industry and people love our sheets. we now sell on our web site, target, and bed bath & beyond for more than 100 businesses and hospitality. we're self-funded, have margins over 50% and leverage our backgrounds in management consulting and consumer products research now we're starting subscriptions at $15 they're for busy people who are sick and tired of washing sheets. >> welcome to today's power pitch. i'm dominick zhu, you saw bean town bedding's pitch let's meet our panel joining us on set, angel investor and startup adviser
kelly hoy. okay, kirsten and joan, you're in the hot seat. first question. >> talk about the pricing of the products >> we're looking to introduce a subscription service which would be $14.99. >> is it $14.99 per set of sheets per week >> per set of sheets, the sheet sets have a fitted sheet, a flat sheet and pillow case and queen and king sets would have two pillow cases. >> kelly >> my question is is your brand anything more a laundry solution for rich college kids? >> it's that and more. this is just for the retail market and hospitality beyond that there's disaster relief, health care applications but for us our focus is on the college and the on-demand economy now. >> one of my first questions is you mentioned a subscription model. does that apply both to a consumer around the b to b
model? >> the subscription is specifically for consumers we have contracts with businesses and they usually order on a yearly contract. >> what stops other companies from copying this concept? >> first we're building a brand and that's the most important advice we got from our patent attorneys. as well we have exclusivity with the finer in the sheets and there are technology barriers in well within the non-woven industry. >> i noticed in the video the kids can leave it on for several weeks but how durable is it when people think about how to put it on the bed. >> it's made from a eucalyptus fine we had kids use them for 40 plus nights we got some of those back because we wondered themselves as they wear they pill and eventually they will tear but they will hold up for considerably long period of time. >> so we just heard what kirsten
and joan have to say is the panel in or out inir? >> this is a smart innovation will expand the bedding category i like the business model and the product so for those reasons i'm in. >> kelly hoey? >> i'm impressed with what this founding of what this team has done and being boot strapped and funded i feel this is a product that can grow organically, i am out >> i like what these founders are doing, it is innovative product and i love that it is environmental freiendly i am out >> one in and two outs >> we are honored to have this opportunity to be included in "power pitch." thank you so much our panelists and that's today "power pitch." for more on "power pitch," visit
cnbc.com f ts. readyorhi an opera about steve jobs. we'll talk about the two people bringing his life to stage next i put everything into my business. and i had all these points from my chase ink card. so i bought ingredients, utensils, even made custom donut cutters. wow! all with points. that's how i created the ripple: the doughnut in a doughnut in a doughnut. suddenly it's everywhere. i mean, it really took off. what will you create with your points? learn more about the ink business preferred card. what will you create with your points? what?pony neighing] hey gary. oh. what's with the dog-sized horse? i'm crazy stressed trying to figure out this complex trade so i brought in my comfort pony, warren, to help me deal. isn't that right warren? well, you could get support from thinkorswim's in-app chat.
of the kpo and also steve campbell, he came up with the words. gentlemen, it is good to have you here >> great to be here. >> mason, this is your concept why is steve jobs' life deserving an operatic treatment? >> yeah, how can technology be the subject in opera steve jobs has everything in it that a great opera has, he's got passion, creativity and love and anger and redemption >> obsession >> the thing that makes interesting for opera is we change the way we communicate with our devices and opera can tell the story of how people communicate of different kinds of music weeping in and out. >> mark, how about you how are you telling the story with the words >> it is not just of the te
technological resolutivolutionse words. >> they did consult with you of the family, have they seen the work >> we reached out as a courtesy to let them know this is happening. this is a very honest, sympathetic portrait of steve jobs who had a positive and negative charge and his wife really grounded him. we did let him know that this was happening. i am sure being in the family like steve jobs, quite sensitive to all different treatments. i do think that the people in his life that helped make him who he is are critical pieces of this opera their key pieces is a puzzle >> did you have to dig old computers for props and find old
apples of the old, original iphones. >> we did not use props on stage and we don't even use the nail this is a fictionalized account of a real man that influenced our life and will continue to influence our lives. >> you don't use the names, i tune, iphones and mackintosh is it because you did not have permissi permission >> we did not feel it is necessary, everyone knows what those devices are. i cannot imagine the audience not knowing because of the influence he had on our lives. >> did you have to pay any kind of licensing fees if you were to
use those? >> we had early sounds of early electronic piece, you will hear hard drive of mac and plus of booting up and keys of booting i think probably from the staging and from a better perspective, it is in order to make it universal of certain degree, you want to stay away of mentioning of certain of things. >> i have an idea for a sequel and a follow up. it would be to do a musical. >> you and other people. >> musical on the first treasury of the second -- secretary of the united states. >> you should rap it >> who's next? jeff basils? >> i was wondering that. >> we got to get through this
one because i got to figure out how this all comes together. what's interesting of a person started and creating the world of a most powerful company is, how does that impact his life. with steve jobs, there were a lot of teaching in that life that makes it interesting. >> epic story. >> thank you, guys, good luck. mason bates and campbell >> more of the ceo backlas coming the second hour of "power lunch" begins with that and more in two-minutes. she's nationally recognized
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but how about making pizzas? check this out, a company using robots in making pizzas in less than five minutes. second hour of "power lunch" begins right now i i ism. the major market is high right now. utilities are among the best casino stocks are lower today and prosecutors in macao are guilty of corruptions. jp morgan reported earnings this morning and they beat the streets. jp morgan's kate snow dimon went uncensored and lashed out of washington, using words that we don't say on-air
he began explaining how those dysfunctions contributed to slower growth. >> since the great recession which is eight years old, growing at 1.5% to 2.5% in spite the stupidity and political gridlock what i understand is much stronger growth having made intelligence decisions and not gridlock thank you for pointing out because i am going to be a broken record until we get this done we are unable to build bridges or airports. >> he then compares to the u.s. to other countries around the world that are manage to get things done. >> i wouwas just in france and argentina and israel and ireland and we met with the prim
ministers of india and china it is amazing that every one of those countries understand that practical policies that promote business and growth is good for average citizens of those countries. he left his last criticism using the "s" word >> i don't buy the argument that we'll relegate this forever. we are not if this administration makes great, we have become one o f the most bureaucratic confusing
litigious. >> susan welch and our contributor and james is here with us from the american enterprise institute and also a cnbc contributor susie, this seems to me like a breath of fresh air. i wish more ceos would speak more plainly like jaime dimon did >> i heard from ceos and businesses from the last couple of weeks of incredible frustration with the lack of activities and gridlock. there is some hopefulness among the business community when trump was elected, this is going to be a probusiness environment and some great things can happen and we can unleash and now they're frustrated of the unforced air that's created distractions and the bureaucracy
on both side of the isle slowing things down. >> whether mr. trump or the republicans on capitol hill are able to get done any of their legislative priors, there is been some breakthroughs on deregulations, certainly at the epa and elsewhere, are we in a friendly climate and admitting and stipulating what susie says there is a lot of unforced and distracting errors >> we have to admit it it is a little cheeky for a banker to complaint about incompetent in washington for slow growth. growth has been slow in recent years because of major financial crisis, wall street may had some role in. it is a little funny there we elected a president who's not interested in policy and
generically. >> and you are not going to have legislation coming out there is a lot of blame to go around but it should not be surprising they were sitting here in the middle of july and we have not pass business past reforms and still not, and bringing in high skills immigrant as and have not done anything in infrastructure. >> dimon is one of the most frank ceo out there. is this a one off or do you think we'll see other ceos coming forward and say out loud what they told you behind closed doors because he said this >> i think jaime doing it does open the door for more ceos doing it it does not bold them. we'll hear more of it. i think we'll hear more specifics. what frustrates a lot of business leaders is the understanding that there is no
and the democratic are holding up appointments. nobody is working in washington and democrats have been successful in slowing down machinery by not approving any appointments >> listen. >> guys, hold on >> jimmy, i got to bring up this point i brought up early, i need a respond. >> when was this great era of corporation that we are declining for. we got 17 government shut downs since the modern budget put in 1976 >> hamilton and jefferson hated each other >> exactly [ laughter ] >> look at you going back to the reagan era >> arreagan and o'neal handing t out. >> do you get my point, jimmy.
it is 535 men and women of different points of use and different geography and goals. >> which is why it is important to have presidential leadership here the u.s. have benefited from strong win that's back from technological change and demographics and those are not blowing right now. we used to be where gridlocks is good, well, gridlock is not good anymore. we do need them to start working together or we'll be stuck of the 1.5 or 2% growth range >> mumjimmy made a good point. >> suzi. people in business getting up and keep on trying to make sheer company better and it could be
that and i am not sure if i buy the argument if it is the way that it is been or the way washington is, i do think it is worst and the gridlock is worse because of the partisan ship and distractions everyday >> suzy, hold on, we got breaking news. thank you very much miche e michelle we are going to go to sue herera >> thank you sprint engages warren buffet about investment >> he met separately with mr. malone at the sun valley gathering. the parties are discussing apparently unclear at this point. the talks at an early stage and
may not result of an agreement according to sources one possibility they are talking about at this point is seeing berkshire putting more than $10 billion in a transaction we do see the shares of sprints up 3.5% at $8.47 guys, back to you. >> sue, thank you very much. >> suzy, do you have any thought o s on this? >> well, they asked him. i don't know if he's doing it. we don't know what his answer was. >> he's making a point that this is dpoing to going to be busine different things and despite of what's going on in washington. we'll hear more asbout this very soon >> oh, jimmy >> thank you, suzy
>> telecom is still trying to find, sprint is trying to find its way on this. >> t-mobile talk >> remember, go way back in the doj wanted four competitors and they felt like if they allowed any consolidation in the industry, and instead of what they argued of what we ended up with are high competitors. verizon and at&t if you are able to report a monthly bill >> price are coming down >> oh, dramatically. that's part of the phase >> it is in the data >> yes, data previous coming down but the phone price is going up >> the next iphone, it is rumored to -- i had a meeting last night and i met with some
analysts the newest debt market is phone debt it is still small. >> now you are paying the full amount and most people are financing their phones its gone to 10 or $15 billion in a year >> you got to be one >> absolutely. >> he was. >> i don't know if he is still is >> interesting that those two guys, pinnacles. >> remember masayoshi's son met with trump >> he's one of the first guys trying to get the deal go through. >> if you want a wireless
network, you need capital. >> all right, lets go to meg terrell right now. >> tyler, we are watching a rise astrazeneca ceo is planning to stay at the company. that report is coming out from an israeli publication you see teva is up there we reached out to both companies and we have not heard back yet from astrazeneca rumors that astrazeneca is planning to stay on the company. we'll bring it back tow. >> thank you very much another high for the s&p 500 and the dow. >> joining us of what is another good week for equity, mark >> take a look at the dow
leadership microsoft is leading right now and we are seeing new hospitalized all over the place and facebook and pain pail and also up there and walmart is doing wet. apple is not high but it is moving up. we are talking about the earnings overall, it is so good. there are two issues for r the banks right now verses the fundamentals we had rather crummy numbers here on the inflation numbers and the cpi numbers and that means inflation is not really there. that means the bars have moved down today the banks would have been down today regardless if they had easte earnings or not. this information is provided to us by our partners one month before, banks tend to
trade up the day that jp morgan tends to trail downwardly so again, you have a fundamental reason why banks are down and you have a seasonal reason why they are down do you >> all right, guys, back to you. here is what coming up as "power lunch" goes on, the president is working hard to get the olympics to la. and what do we think of jay iss n's grant? th iall you need to know, robots making pizzas experience uncompromising performance at the lexus golden opportunity sales event before it ends. choose from the is turbo, es 350 or nx turbo for $299 a month for 36 months if you lease now. experience amazing at your lexus dealer.
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we know that los angeles and paris is going to get the bid. when do we find out what's happening? >> we are in the process to negotiate and the french to create this agreement. they're creating the win-win that they're trying to achieve i am proud to say that the olympics are coming back to los angeles. only one american city won the summer games in the last 100 years and that's in atlanta and la the christmas, the summer games are so expensive and so many security concerns, why is this a good thing for los angeles >> we have to build no permanent pressure it allows us to operate the g e
gam games it is never done before. >> we have a sporting infrastructure of the second to none in the country. all those things together is a unique place to be which gives us the confidence that we can deliver this >> here in the studio, having been in greece and seeing what happens to the infrastructure there and what's happened in brazil, the conversations that you had with the ioc representatives behind closed doors. have they figured out that giving it of the olympics to a city that's small or does not have the funding or the infrastructure is not worth it, that's not helping them to emerge to be a greater thing but a bigger burden. are we going liolympics going to places like la or
paris. >> and so i think what paris and los angeles and tokyo is going to allow is olympics to go to the city all over the world going forward with this new paradigm of hosting based on olympic agenda 2020, i think we are the ultimate proof of the olympics agenda in los angeles >> mahow much of anything are yu able to use of the '84 facilities and how much do you have to build new? >> buildings are the legacy of the olympics it is ironic that venus williams is playing, and so that's the true legacy, the social legacy of an olympic is amazing and it
shows you that la is an entire new city >> here in sun valley, there is a lot of talk about the future of sports and we have amazon and streaming 10 nfl games with roger goodell telling us how they're changing the format. what does that mean of the values of sports right is everything getting too fragmented >> no, i think the value of sports is that you don't have to guess what people like the beauty of digital distribution, you don't have to guess where those people are what's consistent is the values of live sports is unchanged. engage ing in the audience is unique and how that's distributed is going to change >> do you think the next big round is going to apple or
amazon or net flicflix instead h traditional networks >> whether they get them or not certainly paying billions of dollars for content is a big paradigm shift for a company they'll definitely be in the mix. >> all players are here in sun valley casey wasserman is here, thank you very much. fingerprisprint and warren t it is good to have you here. our audience is just joining us, we want to know of the headline of buffet of a possible investment in sprint, what do you think of this headline >> i think if sprint is having a problem of getting the deal with t-mobile now with exclusive talks of the
last two months. first, how the story is read, they're talking about getting a $10 billion from warren buffet they don't have other wireless networks that they merge with. what is buffet bringing to the table? >> where does jonhn malone fit into this? >> he's coming in as an investor and interest kbloeglobally and interests there. what the conversation is allegedly occurring right now based on some prior news report. >> why are they having trouble getting deals done with t-mobile >> i think it is a difference on price. >> when it is reported excluded a lot of expenses or capitalizing their phone expenses >> so georgia telecom is smart
enough to realize that it is a lot lower than that. it is a price difference in view between the two companies. they'll have to get telecom with the fact that regulators will not approve this there is tremendous energy that exist and ideal that's going to have to be agreed. that's probably means of a much higher price than t-mobile that a lot of people are thinking right now. >> like what >> sprint is at $80, then t-mobile should be at $90. >> that's the fair ratio on these two companies. >> $10 million from buffet alone, the company is talking about generating cash flows and operating great network facing low capitol budget if they are out there looking for investment in other people's
money, what does it say about the capitol investments that they have done >> is 50% bigger from a mark capitol. you se does t-mobile need sprint? >> t-mobile does not need sprint there is tremendous energy that could exist through that transaction as far as putting more customers on the t-mobile network and having repairs that may scare the tech company. certainly, there is values to the worry less company to have the marker repair going in as the government allows it >> are we anywhere and made any progress when it comes to the government now that it is a trump administration there is so much talk of consolidations but it was not going to happen under the obama administration for sure.
are we convinced a deal is allowed under the trump at minuad administrati administration however, sprint/t-mobile is going to have an issue with the department of justice. the real question is why would comcast and charters lo look at this the issues with tom wheeler and comcast thought going after time warner at the time that doj would approve it yes, it it s better for t-mobil. >> walter, thank you >> no problem. president trump commenting on steel companies we'll talk with with the kate snow >> the closing trade for oils right now. tl got those numbers and the
hour >> healthcare bill falls short for low income on medicaid the bill does not address the key concerns of physicians and patien patients jimmy carter was discharged from a canadian hospital this morning after being admitted for dehydration. the 92-year-old was working on a habitat humanity project in winnip winnipeg singapore bridge collapsed, killing one and injured ten. >> the brackets that helps support the beam given way it is free teas friday it is giving away the 12 ounce shaken teavana, while supplies
last >> yum >> back to you >> thank you. stocks are higher and hitting new today's high for the s&p 500 and the dow. >> remember we talked about if retail is under value on tuesday. the gap, by the way, one of those retailers jp morgan adding to its list. well, the oil market set to close for the day. jack jackie deangeles, how are we closing today? >> not bad for crude oil let me remind you of some of the points that we went through that people think can push these deals in longer terms. we did get a draw down but not
as steep as we have seen in summer passed. you saw recount number going up today. people expected to see these trends shift a little bit and supporting the price at the same time you got a weaker dollar and that's what we are seeing in the action as well dollar index at 95 is keeping this price lifted. a lot of thing to this to thinkt these numbers are going to shift around with inventories would be something to watch back over to you guys. the move is helping, both on pace for their best days since may. lets dig in morte on come momods
lets start with gold, what do you see there dennis gartman >> we tried to take out the numbers since last summer and we did not with those lows. >> after a year and a half or so, you have to think that the bear market has sended i think what's going on here is something is happening in commodities generally. there is such talk in deflation and discussions, beginning of the last month and a half, we have gone up and corn has and hn up >> what is that that's happening? >> what's changed? >> well, todd, i think if we have to put our finger on anything, one, the dollar has
stopped getting strong and a weak dollar is always going to get stronger commodity prices. more importantly on that, the globally economy is going quite well it is not just here in the united states but abroad things are doing better, asia and europe is doing better you have to have demand rather than supply declines and you have to have demand increase and that's what's taking place >> dennis, where is the money coming from, everything and everywhere in the world? >> is this the sideline money we are hearing about in five years. >> the monetary authorities have been expansion for seven or nine years already. if you take a look at the evaluations on interesting ratios between stock prices and commodities. i think at the margin, why is money at the margin is begs is beginning to say, perhaps, i should find some investment in the commodity markets.
it is the monetary authorities over the last decades being expansionary >> dennis, thanks as always. >> thank you for having me here. president trump had reporters on air force one the president said the following. there are two ways, quotas and terrorists, maybe i will do both they have been doing it for decades and i will stopping it it will stop joining us now is mark milan of steal dynamics >> good to have you here mr. milan. >> do you like these comments from mr. trump, what do you hope he will do >> i believe the administration is fully supportive of positive
trade movements and if you look at china in particular since 2004, chinese are going through absolute growth and they're still making capacity. they're not the only ones, japan and korea, all the emerged new economies since world war 2. they're all exports. japan, korea and turkey and vietnam. they're all generating products and going to consumer markets and the eu and america much of the steel is fairly traded and it is being dumped in america and dumped. >> you want him to put on terrorists and quotas? >> absolutely. >> the other side of the economic argument, people will come back and say okay, china got way too many steel factories and they themselves admitted and
they do it because they want to keep people employed yes, they're pressuring price markets. however, that's great for the consumer of steels your customers are getting great prices because of it >> well, i guess it is fine if you are willing to work with the people of the mark place you have steel dynamics and our assets are the state of the art. we have cultures and employees and men and women are working those assets by far the best and most efficient steel makers in the world. we recognize having the lowest cost of volume ending it in the planet we got a lot of structure. our structure mill today is running around 60% capacity. >> that's a market, it is pretty healthy, all modes are strong
and construction continues to rebound. we are running structural at 50%. >> the biggest defender here is china because the government is subsidizing them and they're selling their products at below market prices or below cost. >> absolutely. >> you have a situation where you have total over capacity of the markets to grand it in 2015, there is some great work done by the administration done in all honesty on the anti-dumping and strengths. and we saw sort of a diminishing falling of imports for a few months today, the first half of this year, we imported as a country, more code of product and all of those duties applied
>> on that note when it comes to getting anything out of washington i don't know if you heard of dimon's comment today of how frustrated he is with the action of congress reform and etcetera, do you feel the same way >> it is frustrating that prague is slow. i spent the day in washington yesterday, i had a one on one personal meetings with ambassadand the ambassador and also had discussions of wilbur ross >> those folks are bright, they understand the issue of a trade and they're working to recommend the president's restrengaints a of the environment of steel staying healthy again. >> they're slowly dissolving
for a healthy economy, you need manufacturing and steel production is the basis and the foundation of the manufacturing basis. >> it has a big historic role in this country mr. millet, thank you very much, we'll watch to see what the a administration does. >> have a great day. bye bye. >> it is the worst group of stocks today is the best bet for your money now >> a robot that can make buy piazzas better than you. >> no kidding, that story is ahead. . so i bought ingredients, utensils, even made custom donut cutters. wow! all with points. that's how i created the ripple: the doughnut in a doughnut in a doughnut. suddenly it's everywhere.
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opportunity. look at jp morgan, they are up 15% so pull backs are normal lets not forget that a lot of the recent run up was a project of the trump trade and none of that stuff is materialized >> rising rates are good for the banks. yes, the yield curve is flat but it will steepen when inflation picks up >> we do leave that we are at an in fluctuations point of wage inflation and that'll flow through the cpi growth we are buyers and we need the values there obviously, their balance sheets are strong, given the fact that they crush the trust test. >> gina? >> we agree of all the things that mark just said. in addition, we would add that
you are starting to see steepening of the bell curve >> we finally start to see it next month oing up fnly growinge short end. at the end of the day, it is not just rising rate, it is the steepening of the yield curve. jp morgan has -- as the yield curve continue to steepen, that should help us and increasing interest margins >> gina and mark, thank you very much reminder, check out tradii tradiing @cnbc.com >> coming up, it is so fresh out of the oven. one area that the food in industry is not automated. that'll be on sister fishing contessa >> you know, these lobsters are
delicate reaches they have to have humans catch them theme who want to work hard, where are they coming up with that after the state of main >> now you are turning nation stats of the day and a word from our sponsor. >> short selling can help you proft from a stock decline, however, because involved unlimited risk, you plus have a plan >> second, look for the stocks with the poorest technicals in that group and incorporating management techniques into our order to limit potential lawsuits
lobster business in man is booming. a lot of it is thanks to china.r them hey, contessa. >> reporter: oh, i found them. they are big and they are moving traditionally this was a family tradition. it was handed down from generation to generation this i go is not happy to be out of the water, let me tell you, amend it's very hard for outsiders to break no the lobster business the state regulations make it different that require apprenticeships and a long wait for licenses and, in fact, they even say that you can have only one license per fishermen, per lobster man, and the owner is required to be on the boat hauling them in. there's very little lobster conglomerates, none and very little automation because lobsters require all of this delicate handling. many of the processors at this point rely on significant
immigrant populations for seasonal help, somalis and sudanese make up a big immigrant population in the state of maine. there is some concern here about future work visas and then on the water the labor force is aging. the lobstermen roughly 50 years old on average the industry is working to encourage young people with easier access to licenses if they haven't yet turned 23 years old, but, come on, coaxing a kid into working on the ocean in a downeast winter? >> the skilled labor thing is -- it's really about wanting to work, right? these are hard jobs. they pay pretty well, but they are hard jocks and we're competing with the rest economy for, you know, inside jobs, right? >> reporter: when it comes to attracting skilled labor, of course the money helps some of the college graduate are coming back and by hauling the lobster out of the ocean here they can make easily six figures but working around the clock. what they are hoping is that they can manage the supply here
and keep up with demand and keep prices steady and keep making money. guys >> let that lobster claw go, contessa i want to see -- unstrap it. let it free. >> reporter: it wouldn't survive. you know, if i put him back in the water now, he's been rather traumatized by my handling, and so, i've got to give him -- >> a little butter, fantastic. >> time now for the story you've been waiting for the pizzas being made by robots and it's where else in, silicon valley in julia collins co-founder of zoom pizzaria who made the trek east. we teased it that way but you add people you have more than 100 workers. >> that's right. >> so this is not robots taking everybody's jobs how do you blend, you know, humanity with robot overlords? >> absolutely. the mission of the company is to use technology to get better food on to america's tables and
to provide better, safer job for the folks that are working at zume. >> you've said that before. >> so the issue is not whether or not automation will replace our jobs and our contacts because what we've done is create 120 new jobs in snowfally. >> what does the robot do? >> the robots do the tasks that are unsafe, that are repetitive, that are boring, that aren't really human-centered tasks like sticking your hand in and out of a 2,000-degree oven hundreds of times a day and the humans are doing collaborative work and creative work. >> coming up with the cheesy e with pineapple express i'm looking at your pizzas. >> is this cheaper for you the idea is they are not going to take sick days? did you decide to go this way for a specific reason? >> the problem we were solving is how to get health he food on to your table supportbly so there's a margin play going on here we're using automation and
technology to decrease some of our labor costs and occupancy costs and we're reinvesting the surplus from technology into better jobs. >> pizza pretty cheap. >> our pizzas are as affordable. >> a 14-inch enrony pizza will cost you $10, just the same as it would at a competitor. >> even though it has locally sourced sustainably farmed ingredients and it's the best quality. >> are the pizzas cooked in a central oven or retail location or can i walk in and get a beats yeah, all delivery, tell me, that and how much do these things cost, these robots in. >> zoo ume is delivery only. there is no storefront which means i don't play 10% of my revenue in rent and that's another thing we're doing to increase profitability all our pizzas are in a special assembly and we get the pizzas to you that cooks the pizza while it's being -- >> i just thought we saw it
coming out of oven. >> there are people. >> i see the people. they are not getting cooked. >> that is our power baking oven so on an early production shift we're pre-par baking and then we're finishing them. >> you can buy par baked bread and then you do the finishing. >> the pizza is cooked finally in the truck as it comes to my house. >> yes we have a specific inventory routing system that tells the ovens within the truck exactly when to turn of course, when to turn off, how hot to cook for so your pizza is cooked to perfection. >> i think other pizzerias are doomed all pizzerias you're out there in trouble you got it worked out. >> piazza is a $125 billion industry globally. there's plenty of pie to slips zume's technology >> greatest pie to slice up.
>> that is good. >> greatest chinese import, pizza. >> yeah. >> they invented the pizza >> pizza is great. wish you the best of look. >> what's your most popular pizza? >> pepperoni 25% of my sales, classic pepperoni pizza and i certainly eat my fair share. >> next time bring some pizza. >> or come on out to california. >> we should do the show from snowfally. >> we didn't get a lobster either. >> they are telling us we have to go. >> thanks, julia. >> check, please is next. >> they never say stay (baby crying) ♪ fly ♪ me to the moon (elegant music) ♪ and let me play
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where else are you going to get automated pizza, an opera about steve jobs and a discussion about amazon and whether it's killing wages in one place. only right here. i think amazon is getting scapegoated. >> in terms of whether or not they are killing wages. >> yeah. >> walmart existed well before them. >> the trends are so much broader than one store, one retailer's ability to affect them. >> automation is coming from a woman who has this cool pizza delivery company where they cook the pizza in a cool electronic
truck so it's arriving perfectly done at your house because it's so well programmed. >> ebay had a record sales day on amazon prime day. ebay is coming after amazon. watch them by the way, i'll hit them with the high and off all next week i'll be injecting liquidity into the wisconsin economy. >> "closing bell" starts right now. >> hi, everybody welcome to "closing bell" to close out the week on this friday afternoon i'm kelly evans at the new york stock exchange. >> it is friday, isn't it? >> i'm aware. >> already i'm bill griffeth. the dow, s&p hitting intraday record highs today the only sector that is low among 11 in the s&ps that you see there the financials all those bank earnings this morning didn't exactly please wall street and jpmorgan ceo jamie dimon got fired up during the firm's conference call in