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tv   Power Lunch  CNBC  March 6, 2018 1:00pm-3:00pm EST

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you can see the big u-turn, if you want to call it that in the dow jones industrial average. when we were on the air in the misdemeanor st. of this program, it was down by triple digits on fears over the tariffs and a trade war perhaps. perfect time to power starts right now. >> announcer: welcome to a special edition of "power lunch", live on the road, and across america from the heart of the nation's energy industry, houston, texas. to the home of big tech and unicorns, san francisco, california to the financial capital of the world, new york. energy, trade, the future of finance, and your money front and center, starts right now.
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and indeed we are talking about energy, but we're talking about trade, tariffs, and you're going to hear more of our exclusive interview with the ceo, the cnbc exclusive with saudi aramco. we're talking about their ipo plans and how electric cars will change the landscape with emerson, and shah near. we also have a big couple hours going west melissa lee, live in san francisco. >> hey there, brian. the where the biggest investors and thought leaders are gathering in just a matter the hou hours. >> we talked about two big%
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views, james disney, the mag in charge of credit suisse, and john burbank, who made his name and fortune betting on subprime. his next big bet, cryo all that and much more straight ahead. i'm here at boring headquarters not boring in the markets, though, another volatile day with the dow swinging between triple-digit gains and losses. check out what is moving at this hour they are higher by five and four respectivelily. more than 1% the slv is rallies for the first time since february. and also on pace for the best day since january 24th tyler
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>> bob pisani is at the new york stock exchange following the wild swings, and the dow just moved into the green now now. >> you see it's been moving up in the last ten minutes, there are stories floating that the president might be open to changes on tariffing i'll see if i can get you more the industrial names are the once that get most affected by the tariff stories boeing has generally been down, that's been a drag 3m, united tech, caterpillar and ge have been up.
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so the dollar has weaker, getting very notable moves up. not just the commodity stocks and k340dity etfs, so copper minors, like south after kaj and brazil, finally i just want to tell you we've been getting details of a big bond offering cvs has been trying to do that deal, they're announcing some details of the bond offering this will be one of the largest bond deals in many, many years demand reportedly has been very, very high, so we'll get you more details. cvs is down. s&p it just downgrade the ratings on concerns about how large this debt offering is.
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again, michelle, back to you. >> increasing leverage can often worry the credit agencies. for more on the d.c. drama, we'll bring in eamon javers. hey, eamon. >> hi, michelle. it's clear there's a trade war of sorts going on within the white house, within different factions of the economy economic team trying to do what they can on to at a time some of the area out of it. it is unsettled right now. not clear where we'll be at the end of the week. folks tell me, though, where this debate lands, there will have to be thaving, because the president announced them on live national television, so not likely to back off that position the question is, whether there could be carve-outs and caveats, some other things put into the tariff plan that might make it more palatable to the so-called
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globalist faction that's been fighting with. part of the stakes, or on offer seemingly. it feels like a different moment today we have statements from the president and vice president, which is bore encouraging on the diplomatic front. here's the tweet there the president earlier today. possible for the first time in many years, a maybe false hope, but the u.s. is ready to go hard
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in either direction, and just a few moments away, a statement from the vice president as well. indicating some significance, because the vice president was in south korea last month, saying whichever direction, we'll be firm in our resolve the united states and our al allying remain committed to applying maximum pressure on the kim regime to end their nuclear program. so touch talk from the white house, but the talk is about talks. so that means that diplomat set is in the forefront here thank you, eamon the dow has been down as much as 166 points, up as many as 120, let's bring in kirk hartman, global chief investment officer from wells fargo, and the ceo of united capital some of the worth trailing is
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when it appears that -- it suggests that the market is still very worried about how much we are going to see from this admanages when it comes to fighting some kind of trade battle if not trade war. are you as worried as the markets seem to be all tariffs are basically a tax, and there's no winner when you have a tariff battle, because typically you get retal ag, and it really dictates how much we should be concerns this is a derail from what's a very good underlying story, it's not to be ignored.
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lessening of moderate voices is something that everyone is concerned about. anytime you hear softening of positions, it means that there's some flexibility that's a huge positive for everyone what you don't want is a blanket battle where friendly nations are most harmed by this blanket of application of steel and aluminum obviously superficially it may seem easy do separate the kinds of industry that is might be affected by tariffs from the ones that might not. i think technology per se is not
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affected by tariffs. obviously steel and aluminum and some of the industries would be impacted, but my view is i think -- i think it will pass. let me ask you this. just in a wild scenario, why couldn't technology by started in a trade war if we're going to hit you where it really hurts. you think about technology and silicon valley, and a lot of what's going on. i think it would be foolish to try to get technology in the middle of that technology is what's driving this entire economy.
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>> joe, what do you do in this environment, when there's worries about a softening of position or harding in position and what the ripple effects might be >> first thing is to -- >> let's get joe in here the first thing i would do is concentration. so we ask everyone to constantly reassess your existing risk. second if you invest in equities, that you look at company that is benefit from a weakening dollars. again, all of this eventually will not change the trend, you're in houston right now. energy stocks are interesting. banking stock mentioned. ened tangentially the emerging marks have-nots participated in the rally. because they don't typically
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have abmuch complexity as the megacaps the most important thing is maybe sure you mix cash bonds and stocks, reflect something you can stand through, regardless of what the market does again, what we don't want to see is people getting in and out >> super important thank you, gentlemen kirk courtman and joe durant. we want to bring your attention to shares of target, now setting at session lows, as the investor meeting continues investors appear to be reacting to the margin forecast and lack of big announcements a reminder is we will be speaking with the company's ceo coming up roughly 2:30 p.m. eastern time let's head back to brian at the energy summit in houston what do you have on tap? target's ceo, this is a ceo-filled couple hours s we're
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here in houston talking all thing energy after the break, you will hear more from ours exclusive interview, the ceo of saudi aramco will talk about whether or not any fears of a trade war or tariffs will stop their expansion plans, more detail and color on the planned ipo which could be words upwards of a trillion dollars if that's not enough to get you to stick around, folks, i don't know what is the ceo of saudi aramco, exclusive on cnbc. right after this you know what's awesome? gig-speed internet.
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you know what's not awesome? when only certain people can get it. let's fix that. let's give this guy gig- really? and these kids, and these guys, him, ah. oh hello. that lady, these houses! yes, yes and yes. and don't forget about them.
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uh huh, sure. still yes! xfinity delivers gig speed to more homes than anyone. now you can get it, too. welcome to the party. well scum back to "power lunch. i'm brian sullivan live in houston. however big you may be that -- i want you to think again. it's probably bigger than that that are three times bigger than the next biggest company a company called exon -- when
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will saudi aram coannounce t the -- to curb any plans to expand in the united states. >> we do have plans for expansions in the u.s. we had to -- and we still planning to proceed with the feats ability study of the investments. you're talking about an expansion program that hopefully is proceeding very well. >> it's a very interesting time. you're talking about expanding, investing in the united states, when the u.s. shale boom is, as
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the iae said is booming. do you view yourself as a competitor to the u.s. shale industry >> i think the shale industry did a great job in terms of nicking supply, but if you look at the forecast of additional demand, you're talking about 1.4 to 1.7 million barrels of additional demand potential in 2018 if you add to it national decline that is happening in existing fields, so we're talking about between additional demand and national decline, there is a need for 4 to 5 million barrels of additional supply so the shale it's not a supply
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requirement. >> so there's room for both of -- >> definitely room to grow and shale will grow, especially with market improving, and -- but as i said, the demand side is healthy. >> you may have followed the news that russia has been in the news in the united states just a bit over the last year and a half or so just throwing that out there there's been reports that russia is building maybe 100 billion fund to invest in aramco down the road do potential u.s. investors need to be concerned about a growing relationship with russia >> i am not -- i don't want to comment about investment of other companies or other countries. aramco is still not listed, but we have good relation shall
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russia we are exploring opportunities, if there are opportunities for different sectors with russia in terms of services and other things, what is russia's role in the oil world. >> they are a major supplying of crude to the world, also a make -- with a lot of these products >> theoretically if you were to go public at some point, the question i have asked and people have asked me is why >> well, i think it's all about vision 2030, which is very ambition the king talks about the diversity of income, not relying heavily on oil and gas and bringing more small and medium enterprises, creating
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more jobs, and other social changes that are happens so when you talk about prioritization, you need to start with all sectors, including oil and gas. >> do you feel you will be able to work out or have already worked out a tack rate that will be friendly to shareholders, friendly to the king and friendly to aramco >> it's already worked out the company used to be 85%tax, a company ohm 50% tax, so this is already done. we are now paying only 50% tax, as agreed with the government, and 20% royalties. our products in the local market is sold at international prices.
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>> any chance that the ipo will not happen >> as i said, with regard to so far, we are working to aramco became a -- probably 2018, so all the signals that this thing is going ahead, but ultimately it's a shareholder decision. all the changes by the government to prepared aramco for listing is done. so it looks like the i pflt o is still a go, just waiting on the date we're going to find out this is not just a big ipo for them. but remember, if it goes off well, it could change valuations for all the major publicly traded oil and gas companies aramco in a way may lift all boats. i thought it was interesting too to talk about growth
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saudi aramco owns the biggest refinery in the united states. they have a joint venture. the company is called motiva you won't see aramco on the sign, but it is the single biggest refinery, so they expand it, that is more demand, also more jobs. coming up in the next hour, the nextically we'll talk about electric vehicles. will the demand for electric cars kill the oil company of the past he doesn't think so, and he has very interesting numbers to bring with him as well >> one of the interesting questions you asked him was russia and their interest po denchal in investing in saudi aramco, taking a big stake in it >> he did not seem to be troubled. >> no, because -- there's really four players in the global oil market right now i'm going to wildly over-simplify it, saudis,
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russia, the u.s., we're sort of the heavy hitter on the block, and the rest of opec that's sort of my breakdown. if capital is needed and there will be trillions in dollars needed just to maintain current output, that money has to come from somewhere if the u.s. is occupied with ourselves, it's hard to blame a company like aramco from going out and saying if the russians want to give up 100 billion of investment money, we're going to take it, because they're going to need the capital wherever they can, especially before the public market and the ipo. >> got it. thanks, brian. more stuff coming. is north korea really open to reconciling with south korea and even getting rid of their nuclear weapons? can kim jong-un be trusted that discussion is coming up on poly. plus we'll go back to melissa lee at the big blockchain market. >> we're talking to the head of
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a hedge fund who made money ahead of the subcrime crisis and next cryptocurrency sit, where does he see the opportunity in crypto? le with will john burbank next on "power lunch. ♪ feel that? that's the beat of global markets, the rhythm of the world. but to us, it's the pace of tomorrow. with ingenuity, technologies, and markets expertise we create the possible. and when you do that, you don't chase the pace of tomorrow. you set it.
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nasdaq. rewrite tomorrow. wi'm really grateful that usaaq. was able to take care of my family while i was overseas serving. it was my very first car accident. we were hit from behind. i called usaa and the first thing they asked was 'are you ok?' they always thank you for your service, which is nice because as a spouse you serve too. we're the hayles and we're usaa members for life. see how much you could save with usaa by bundling your auto and home insurance. get a quote today.
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welcome back to a special
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edition of "power lunch" on the road from coast to coast now here's melissa lee, live in san francisco. >> welcome back. where the biggest names in crypto and blockchain are gathered our nest guest has a new arm focused on cryptocurrency sits joining us is john burbank great to have you with us. >> thanks. >> exactly how are you approaching the space? are there equity plays involved in this as well? >> there are all kinds of things you can do a whole ecosystem that's parallel to wall street, made up of people you probably have never met before >> i think it's analogous to what hedge funds were like 20, 25 years ago which gave rise to
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the fund a fund industry we're also able to belong the largest coins in our special opportunities fund, and then there are some companies, overstock is our largest position as a effective buy in invests in this space. >> what are some of your biggest cryptocurrency sit holdings across your funds? >> well, the top three, the coin cash, ethereum are things we own. there are a few other things that we are doing but you know i guess i would say we're doing this in an institutional way we're anticipating the significance of this change, this technological change is going to become something all institutions are going to have to invest in, are going to want to invest in they're just not investing yet so we're taking a long term
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institutional approach, facing the eco system of those involves and also those now studying. >> there's very few pure play or even close to pure play, sort of blockchain or equities, also i think there's a position of amd. how do you decide has enough exposure 9 cfo in january i believe saidi hard for quantify how much they're getting from cryptomining how how do you decide it's a big enough play for you. >> there are more dedicated stocks in japan than the u.s japan is essentially all in on blockchain and allowing cryptocurrencies we're looking at it as a global approach, and i do anticipate this will change pretty r57dly
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i think the change will surprise people how much more relevant than they expected it will be. this is the way it is now, but it will change a lot in the next year >> looking overseas, where perhaps there are more blockchain companies that are better playing, for instance in japan, what is a big holding there. can you tell under the circumstances about a company that is really leverages blockchain sbi holding is one that's the largest e-broker, as long as 9% holder of ripple now that's something that's understood to have considerable value. >> you bet against subprime mortgages, you probably felt pretty strongly about that how strongly do you feel about investing in cryptocurrency sits >> my biggest macro trend is technology is going to change
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every major sector in the market in the world so the question is, for financial -- professionals -- is this the significant that tech will change in finance and what are you going to do about that as a fiduciary investor. the thing about finance, if it is a big change in finance, it's therefore going to be a massive change in commerce, which is to say it's going to affect almost all businesses all over the world. the fact that it's happening in parallel, that it's not a silicon valley dominated thing, the fact that it's happening all over the world, i believe it's going to grow at a much faster pace than what people are used to, and therefore i think the relevance is there for everyone to try to understand the irony is institutions have virtually no money involved, in which case they haven't put in the time to understand exactly what it's doing. >> thank you so much
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john burbank back over to you. >> melissa, thank you. the price of oil holding steady. more than double the lows, how is opec handling the thready u.s. production. the head of open peck will join us from houston. can north korea really be trusted to give up its nukes "power lunch" will be right back state-of-the-art drone testing facility in central new york and the mohawk valley, which marks the start of our nation's first 50-mile unmanned flight corridor. and allows us to attract the world's top drone talent. all across new york state, we're building the new new york. to grow your business with us in new york state, visit
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hello, everyone. i'm sue herera here's your news update for this hour benjamin netanyahu says iran is responsible for darkness descending on the middle east by building an anti-israeli power the comments are at a conference in washington. >> darkness is descending on our region iran is building an aggressive empire iran, iraq, syria, lebanon, gaza, yemen, more to come.
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>> the u.s. office of special counsel says trump adviser kellie anne conway violated federal law in two televised interviews last year, this by youths her white house position to weigh in on a political race. the interviewers were on fox news channel and cnn about the alabama election jeff bezos is the planet's richest person, according to "forbes. he's worst more than $400 billion. bill gates came in second at $90 billion. brian, over to you i just want to show the scene here the whole room is buzzing.
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many big themes here, one big themes, thinks particularly relevant to the cnbc audience, i know you've had many meetings -- why is the industry having so much trouble attracting capital to grow? why aren't people putting more money in the oil and gas space globally right now >> thank you very much for having me once again i'm glad to be back here this year this is a very important question, and it's a question that is on top of the agenda of this conference in this industry is emerging as well as the risks we are likely to face going forward in medium to long term during this oil cycle, particularly 2015 to 2016, up to
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2017, we have seen a very sharp construction in investment capital. >> why >> why because it is a cycle, one of the most severe cycles where volatility became the norm, and the lack of certainty on how long this cycle will last, and the fall joel have impacted very negatively from predators we have seen construction of other $1 trillion in u.s. dollars, which is not healthy for the continued growth and development. >> global supply/demand is fairly tight, correct? >> the fundamentals are very strong. >> if we don't get this needed capital, is the industry at risk of slowing down reduction growth
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and spiking prices, because we can't meet the demand? >> what is imagined as the process included here. if the trend of the last two, three years tinge we would be sewing seeds of a future global crisis that nobody wants to see. we are optimistic that the global industry together with the oil industry will bring this issue to the forefront of our agenda we need to catch up with the lost investment of opportunities that we had going forward. the lack of certainly is a binge tender global conventional oil production, is it going up remaining flat
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going down >> i think the production continues. we are approaching for the first time in history the $100 million mark in terms of global consumption, much earlier that most of us projected so supply is good, but demand is even more robust therefore, the market is slowly but surely returning to balance. >> the dirty secret about the u.s. shale boom, and i know you have met with some of the producers we producering 10.2 million barrels a day, projections that we go to 12 million, but decline rates of fracked wells are much faster than conventional wells. do you feel that this lack of capital and the decline rates are going to make it harder for the u.s. to achieve some of those optimistic projections >> we as opec, we welcome the shale revolution in the united states we welcome the application of
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technolo technology, managerial techniques, aggressive cost-cutting measures that enable the industry here, especially in the shale basins to raise productivity, raise efficiency, and bring down costs. i think the rest of the world has a lot to learn from the independents at our meeting last night, we are convinced that we need to work together. sir, it was a real pleasure to speak with you again. we appreciate it thank you for joining cnbc. >> thank you. michelle, if you heard what he said, without maybe trillions, hundreds of billions or trillions of dollars of new investment, we run the risk of not being able to immediate global demand. super capital intensive business no capital, things start to fall apart. >> and then prices start to rise
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again. thank you, brian see you later in the show. another thing affecting the markets, stocks rose when south korea announced that north korean leader kim jong-un is willing to discuss giving up nuclear weapons in direct talks with the united states the former assistant secretary for terrorist financing at the treasury department, a key member that helped create much of the sanctions structure that we have in place today good to have you are here. pyongyang says it's willing to give up its nuclear weapons if the military threat is eliminated and their security is guaranteed do you believe them? >> i think he believe them as far as that goes this is a long-standing north korean position. the problem is i think it's going to be almost impossible to persuade thenoicance that th aa
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koreans that they don't need the arsenal. i think only an existential pressure will persuade them that they are better without it we have been down this road many times before where they have articulated a willingness to discuss, even abandon the nuclear program if they felt they didn't need it. the challenge has always been they always feel they need it, and i don't think anything has changed. >> we have indeed been down this road before them. >> isn't that seemingly what the donald trump administration has been doing by way of tightening the screws, and threat i don't think the regime the trump administration has been continuing a very long-term strategy that the government has been apply iing now into the trp
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administration, in the hopes that north korea will be brought to its senses, and will decide it candidates to sit done in earnest i think it's better that they're they're prepared to have talk i think we need to approach this with a level of sobriety, that in fact if we have any future talks to succeed, we may in fact have toing in the appreciate. >> what's obvious happened is they demanded a reduction in sanctions, merely to sit at the table, to have discussions, and sometimes we've given into them in the past. what should we do right now? should there be any weakening to repardon them for coming to the table?
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what do we do? >> i hope there's nobody out there advocating, simply for the express willingness to engage in talks or for the willingness no sit down and have those talks. that's now hot even the obama administration dealt with iran throughout the nuclear talks, the level of pressure remained at least steady. what i think really needs to happen is north korea needs to understand it can't play through time for negotiations. what it needs to understand is it would not only be faced with serious pressure, but that pressure will continue and will increase over time until it comes to a resolution of this issue that's satisfies the international community. >> well, i do think it makes it tricky, i think part of it is
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north korea trying to split the alliance the united states has always been skilled at keeping the alliance together, and i think the trump administration will have to focus their attention on this this has to include china, japan and south korea, and all the countries in the international community affected by north korea's threat. >> thank you, mr. glazer good to have you on. danny glazer coming up, we're going back to the big energy summit in houston, talking the future of the industry stay with "power lunch."
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we have a question about your brokerage fees. fees? what did you have in mind? i don't know. $4.95 per trade? uhhh and i was wondering if your brokerage offers some sort of guarantee? guarantee? where we can get our fees and commissions back if we're not happy. so can you offer me what schwab is offering? what's with all the questions? ask your broker if they're offering $4.95 online equity trades and a satisfaction guarantee. if you don't like their answer, ask again at schwab.
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all welcome back to houston. not a lot of people think about stt lewis based emerson as an oil and gas company, but they are, and that's why their chairman and ceo is here, and he's here now with us on cnbc. thank you for joining us >> thank you great to be here >> you hear emerson, you know the name, and i mean this with respect, a lot of investors out there, what are you? why are you at an oil and gas conference what's your exposure to the global oil market and the price of oil >> we're the largest supplier in the automation business today. so our customers are aramco, bp, exxonmobil we supply the control systems, the control of the facilities. then we take that and take it downstream and make chemicals with it. we supply the chemical industry.
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our largest customer base is here right now, so that's why i'm here >> we just talked with the secretary-general of opec with the risk of not having enough capital. is it fair to say if the oil industry globally grows, it's a good thing for emerson, but if it declines, it's a bad thing for emerson. >> from our perspective, under investment for the last couple years and now they're starting to invest again. as they start spending money, that's great for emerson because we, our capital is used across that whole area. that's why we're here, why we're the main sponsor of this week because we want to support this industry, which is a main life blood for us and our sales >> we don't know if we're going to get tariffs right now, nothing more than a proposal if we literally got what the president said, 25% on steel, 10% on aluminum, would you care? >> i do care >> you don't make that stuff >> don't make it, but it's still disruptive to the industry from my perspective, the industry pricing will go up.
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that will go through the whole industry and impact what happens in the oil and gas industry. how much investment. prices will go up, maybe investments slow down. we have to sort through it i don't like the concept of putting tariffs, if you want to do surgical actions, do surgical actions. but doing broad tariffs is not good for any industry. >> you think there are second and third derivative impacts >> yes other consequences unintended consequences come out of this. look at the oil producers right now. pricing is good for them from the standpoint of building new capacity if the price of steel and aluminum goes up, that will impact the whole industry. prices will go up, the cost of making installations goes up >> on a macro scale, something interesting has been happening with bigger industrial companies lately, starting with ge, but others, too. the deal environment is incredible i think we're starting to realize that breaking up is the new getting together >> correct >> you went from five businesses down to two, but you're also making a bid for rockwell.
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do you think that the era of the massive big conglomerate is once again over >> it's over for now we'll see what happens from the standpoint -- >> why the cycles? >> emerson was a conglomerate. that's hi we did it. we built like ge, a smaller version of ge, five companies. three years ago, we decided to simpli simplify, go down to two business businesses one is automation, one supplies the heating and air conditions from my perspective, why we looked at expanding automation is we like the word automation and we're very powerful. >> is that why you made a bid for rockwell >> because we compete against ziemanns, abb, and rockwell, and we wanted to create a stronger global player against a ziemanns that's what we're trying to do >> david farr, ceo and chairman of emerson we appreciate your time. we'll see you with jim cramer. >> on the 19th >> on "mad money," get ready for jim. his brain doesn't stop >> i know.
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>> all right, so it's interesting that saudi aramco is one of their largest customers last night, we had the opportunity for a long exclusive with the saudi aramco ceo, aminnassar we talked about something very interesting here general motors ceo will be here tomorrow and she is bringing electric cars why would electric cars ceo be at an oil and gas conference we asked the ceo of saudi aramco what the future of evs will mean for the world's biggest oil company. >> i think definitely energy transformation is happening. mainly triggered by technology advancements policy, regulations, and climate change pressure. and we have seen more electric vehicles but i think they're starting from a small base, a low base. and if you look at the number of
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vehicles, electric vehicles in 2017, that entered the market, 2% of the total sales is electric vehicles. but if you look at 2% out of the total fleet, you are talking about .2%. if you look at the total consumption of crude that this electric vehicles that enter the market replace 60,000 barrels. 60,000 barrels out of 100 million barrels we are supplying every day. so the impact is still very, very small so i think they will grow, but they are starting from a small base transformation is going to take generations. it's not going to happen tomorrow they will continue to grow, but as i said, energy transition takes decades. >> in other words, michelle and tyler, perhaps the death of the internal combustion engine has been widely overstated really interesting numbers about
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the size of the global fleet and a generational shift we're not going to have electric cars on every corner, at least to the ceo of an oil and gas company, which is something you might expect him to say. speaking of general motors, the ceo will be here tomorrow and she'll be with us to talk about evs in an oil world. why, tyler and michelle, bring in electric cars to an oil and gas conference you're itching for a texas sized fight. >> yeah, you know, when he talks about how he's not convinced we'll have that many electric cars, i think about electric cars, brian, they're powered by coal people think they're driving something that is so environmentally friendly, but in fact, they're driving something that's powered by the coal business >> i was at a conference a couple years ago, and we were talking about teslas, and one of the panelists looked out and said who lives here and has a tesla. he said you're all coal burners. they looked like what?
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he said you get your power from a coal plant it was tongue in cheek the audience didn't like it, but you are right. you're kind of shifting it we'll talk about all that. we have much more with our aramco ceo exclusive coming up later on >> thank you very much >> let's take a look at the markets right now. the dow is lower, as tariff turmoil at the white house causes big swings for your money. the dow had been positive. it had been down, now it's up and now it's down again. we have more, much more from houston and san francisco, as an energized crypto blockchain coast to coast edition of "power lunch" continues after this. it was my very first car accident. i called usaa and the first thing they asked was 'are you ok?' they always thank you for your service, which is nice because as a spouse you serve too. we're the hayles and we're usaa members for life.
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good afternoon, everybody. i'm tyler mathisen here's what's on the menu for hour two of "power lunch." wait and see the markets are hanging on every word out of the white house on the state of those proposed tariffs and the future of one of the insiders who is said to oppose them, gary cohn should investors put all this talk aside and focus on the fundamentals and missing the mark, shares of retailer target falling as results fail to impress investors. the ceo will join us exclusively
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to make his case on why his company's good and his stock should be in your shopping basket >> and the start of the comeback after being clobbered over the past year, ge is on a streak, up nearly 4% this week. is this the start of a bigger turnaround we'll explore that as "power lunch" hour two starts right now. >> and welcome to "power lunch." i'm michelle caruso-cabrera. we're live today, coast to coast, with brian sullivan in houston and melissa lee in san francisco. brian, what have you got coming up >> yeah, michelle, thank you are we in the mountain time zone i think we have all of the other time zones covered we need somebody in boise, idaho, stat. we're continuing our week from the conference, continuing our exclusive interview with the ceo of saudi aramco, the biggest oil company. also, obviously, in the world, but that's not all
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we have credit suisse's co-head of investment banking. what's the deal environment look like we'll ask him, as well as the ceo of shu near energy, it's not just about oil liquefied natural gas is booming around the world that stock is up 24% in just the last six months. and their ceo will join us exclusively as well. you have cool stuff on block chain and crypto out west. >> lots of cool stuff. i'm live at the symposium, and we're talking all things krimento as well as the future of this emerging technology. i'll speak with james disney he says this technology could change everything you do, including getting a mortgage, and even calling an uber in the meantime, i'll send it back to you. >> got it. looking forward to all of that welcome to "power lunch. it's been a very volatile day on the street the dow swinging between gains and losses all morning we had been up as much as 120 points right now, though, the dow is lower by a little more than 20
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points the s&p lower my nearly 2 and the nasdaq by 22 1/2 excuse me, higher. it's been all over the map today. did i say that real estate and materials are the leading sectors in the s&p 500. health care and utilities are dragging down the index at this hour united health, walmart, johnson & johnson, those are the laggards right now when it comes to the dow all off more than 1% myelin, lam research, and micron technology helping to keep the nasdaq in the green with gains of roughy 4% and 5%. >> thank you very much for more now on the markets and the whipsaw action we have seen today, like so many others recently, let's bring in bob pisani and mike santelli from the new york stock exchange. explain this to us, guys >> okay. here's the problem the market moves on two issues interest rates and tariffs and today, up throughout most of the day, we didn't have news on either you see the s&p, meandering around then about an hour ago, the s&p
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popped up. you see that going into the green there. we had an ally of president trump, senator david perdue from georgia saying the president might be open to changes on the tariff, that there might be more targeted tariffs that are out there. that opened the door to either compromise or changing you saw the s&p moved into positive territory the key story is markets move whenever you hear headlines one way or another on the tariff issues, and this whole tariff issue has collided with the global growth story. that's the major problem out there. >> i would say those are the themes we have been kind of trading this range in a wide-swinging way for a little while now today you could probably say, okay, we're digesting yesterday's big rally okay we have crossed the 2700 mark in the s&p 5007 o 7 out of the las2 days so we're at one of these levels that the market has spent a lot of time going back and forth across in the last month or so and i think that you see
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leadership in semi-conductors today, the fang stocks are strong, the banks are okay that's insulating the market from further downside, but there's not a lot of impetus from the headlines that bob was citing or anything that that's going to gather momentum >> bob mentioned market trading on both tariffs and interest rates. to what degree are interest rates being contained by a fear of tariffs >> it's totally not clear, michelle i think you can sort of argue that down the road, if people really were going to price in the effect of across the board tariffs and paeb some retaliation, you would see treasury yields probably being restrained a little bit. i don't know right now, though, with the ten-year whether it's been, 2.88 or around today that it's necessarily a tariff story, but we're not making new highs >> tariffs in theory are inflationary that's an issue for the bond market, but the one thing i would emphasize, remember, the markets keep staying at new
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highs because of what we keep calling the global economic expansion, like it's some voodoo mantra we keep issuing this tariffs story intersects with that and hurts it because it questions how strong global growth can be. it's not just about soup cans. we know it's a much bigger story than that overall. >> definitely. thanks, guys >> so as the volatility continues, two more guests weighing in on the market. let's bring in mark, chief investment strategist, and scott is chief investment strategist with baird what do you make of the trading over the last couple days, bruce, when you see how the market reacts so strongly to whether or not we're going to see higher tariffs or some degrees of imposition on trade >> well, there's no question the market is being tossed around on the tariff news. but we think the odds of a trading confrontation with our trading partners is pretty unlikely the markets are likely focusing
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more on the economic fundamentals, which continue to be very strong the concern on the flipside of that is that the economy could get too strong and that would generate some inflation and perhaps some more aggressive federal reserve board, and i think that's what has led the market into this trading range that we think will continue for quite a while. >> you know, mark, bull markets at least in the modern era usually last until one of two things happen. the fed makes a mistake and generally interest rates rise too much for the stock market to stomach. or number two, there's a recession. and sometimes the two are connected. we haven't had a trade-related end of a bull market in a very, very long time that may be a wild card, but you don't see any of those other two worries about the endure nls of the bull market, do you? >> no, we don't. the fact of the matter is with the economic fundamentals being
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as strong as they are, we ultimately think this is now what is the third longest expansion in u.s. economic history, will be usurped by becoming the longest economic expansion once it passed through the middle of 2019 that's not a condition i think that's going to illicit concerns about recession any time soon, nor is monetary policy anywhere near restrictive at this juncture if you look at the formulas conducted by the san francisco federal reserve and john williams that try to identify what is the neutral rate, the so-called policy rate at which the economy operates by not overheating nor cooling, it suggests we're probably as much as 100 basis points or more below what would be considered to be restrictive at this point. even should the fed continue on the glide path of raising rates up toward 3%, possibly four more hikes this year, we're still unlikely to see a restricted monetary policy. therefore it's a green light for us, and therefore for risk assets >> bruce, you suggested that you think the market is going to be in a trading range, so what do
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you do within that trading range? are there sectors that might outperform or underperform that you would avoid? >> within that trading range, you could have some good performance of some sectors and the ones that have been leading the market have been consumer discretionary, the financials, and the industrials. i would stick with those sectors that are leading in terms of relative strength and are likely to continue to lead. >> how about you, mark what would you do here, specifically, when it comes to sectors or ideas very similar in aims to bruce. financials, certainly, industrials, and software technology, which tends to get a disproportionate benefit from capital expenditures by businesses that have age capital stocks we think all three will stand to continue to win, even though they have already been among the best performers on theyear to date basis >> thanks so much. and coming up on "power lunch," missing the target shares of the retail giant falling today as earnings fail to impress the ceo will join us in a power
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welcome back to "power lunch. i'm brian sullivan live in houston. let's continue our exclusive interview with the ceo of saudi
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aramco a wide ranging interview last night. we talked about electric vehicles, their ipo, we also talked about global growth, the need for capital, and profitability. >> what you are seeing is healthy economic growth globally healthy demand that we're seeing and forecasting going forward. the economy is doing very well, not only in oecd country, in the rest of the world. and with that, there will be a healthy demand, that is our projection >> are you actively hiring u.s. services companies to come to saudi arabia to help grow your production >> companies from the u.s. have been there for the last 50 years. halliburton, slumbergy and baker hughes are major four players in
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the service sectors. supporting saudi aramco for the last 50 years, as i say. >> i should have phrased it, sir, more as are you growing your business with them? we are cnbc. they're major companies with stocks are they getting more business from saudi aramco. >> their business is growing with our growth. ge is also with the latest merger with baker hughes, is also playing a major, in terms of services in the kingdom their business is expanding big time as we are adding more rigs and more services, as we are expanding our upstream business, especially in the gas sectors, we look at 2015 to the next ten years. we're almost doubling our gas production that required a lot of services from all of the companies, a
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number of rigs is increasing significantly. not only for oil and gas, also for exploration and for unconventional gas in the kingdom. with that growth, a lot of potential and a lot of opportunity for the service providers, which is the major companies i talked about that are major players in the sector >> somebody in the oil business said they asked me to ask you, they said, brian, i'll do my texas accent, can you ask them if they would be profitable at $5 a barrel? >> well, it would be challenging if we did it that way. >> that was a bad texas ascent, but you got the point. can it be profitable at $5 a barrel he said it would be challenging. i guess we can take it as a no that's part of our exclusive let's talk about the need for capital. that seems to be the theme so far. it's early, but that does seem to be the theme.
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let's bring in a couple guys that know about building capital and doing deals. the co-head of global oil and banking at credit suisse, and charlie lakem. thank you very much. we have to stop meeting like this from a macro perspective, how will the saudi aramco ipo, because they will eventually go public, he confirmed that to us. how will that change the game globally if at all for every other publicly trading oil and gas company? >> i think i agree with you, i think it will happen and i think it's an extremely well positioned company. and they're on par with any major global oil company i think what might change post the ipo with public shareholders is they're going to have to be more sensitive to having a public shareholder base, and they'll be focused on attending to the shareholders. things like corporate governance, disclosure, those sorts of things, and they'll
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also have to be attentive to shareholders in a slightly shorter time perspective than the kingdom currently does today. >> let me ask it a different way. i'm a cnbc viewer and sitting at home and own oil and gas stocks or a fund manager holding these stocks, if the ipo is very well received, would that provide a lift, do you think, to the entire industry, or will it take away capital to aramco and then hurt the others? >> i think capital will go to the best run companies with differentiated positions so in the short term, that could cause a little bit of a transfer among investors. but i think over time, it will all rotate to the best companies, and i believe saudi aramco will be one of those. >> charlie, we had the secret y secretary-general of opec n, and he said if we don't get more capital globally, we could have another oil and gas please it's very capital intensive. things rust, go bad. you're focused on the services
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space. there's. a huge folkicus around the 12 million barrels a day. do we have the capital necessary to meet these bullish goals? >> despite the improvement in the macro environment since we last sat down a year ago, the availability of capital has been quite limited. you've had traditional commercial banks in houston not looking for new loans to service companies. you had the capital markets be open but open selectively to companies, largely that were restructuring their balance sheets coming out of the downturn a lot of the capital raised in the last year or deployed has been to fixing balance sheets and getting companies positioned from a normal course perspective. i can tell you from the cso perspective, across all of our businesses, they're running flat out right now. to try to keep up with the base of demand in the current market. you mentioned the permian market, specifically that has been by far the largest growing activity center in the country. >> the banks won't lend, will
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they if i'm a 20-man firm, the american dream, i can't get the money right now. despite the fact that the industry is better i don't understand why there's a disconnect >> i think going into the downturn, giving how prolongs and how severe it was for many lenders and investors across the industry, there's a lot of groups otcapital that aren't ready to come back to the industry that creates opportunities as a private equity investor because a lot of these family-owned businesses need capital. >> i think that's a great opportunity for charlie and his partners because some of the traditional sources of capital are not available. and for companies that have differentiated positions, that's probably exactly the type of portfolio that charlie and his partners are looking at. >> but the world is awash in capital. why isn't it going more to oil and gas? that's what i don't understand the balance sheets appear to be healed, or maybe they're not >> i think oil and gas is still a very good investment opportunity. however, it hasn't been a good as other sectors in the past
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year and i think there's some concern about oil prices haven't risen too fast and they might turn over a little bit. i think that's a reason people are looking for more certainty, but i think there is certainly financialing available for people who are well positioned and the market doesn't behave in one way all year charlie and i had an interesting year raising a lot of money. one was an ipo, one was a spat, and he made a number of very attractive investments so it's, in general, capital might be a little tight, but for the right opportunities, people will get you the money >> we got to leave it there, guys i wish we could continue thank you very much. we appreciate your time. sdwr so far, michelle and tyler, that has been the theme, which has been things are better balance sheets are better, oil is above $60, yet the capital needed to go and actually build the stuff, buy the stuff, and run the stuff, simply has not been there and this stuff rusts out without investment, you could
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see shortages, and we'll see if the capital does return there. >> thank you very much brian sullivan in houston. let's head out, meantime, to melissa in san francisco for a look at what's ahead out there hi, melissa. >> coming up from san francisco, we'll be talking to credit suisse's global head of software investment banking he said we're only in the second inning of a the blockchain game and the technology will transform the way global services does business lots more ahead. stay tuned
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welcome back to a special edition of "power lunch" on the road from coast to coast now, here's melissa lee live in san francisco. >> welcome back to "power lunch. i'm melissa lee live at the credit suisse live symposium where the biggest investors and thought makers in krimento are gathering. the way we get a mortgage, even
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request an uber. joining us now is james disney, the global head of software investment banking at credit suisse we last spoke in october about the ways credit suisse could implement blockchain and help save the company money and tranlsfirm the way it does business since then, there have been a lot of developments. it's actually being implemented. >> a lot of innovation around the blockchain we recently did a collateral trade between us and another financial services institution we think about collateral trades, that relates to liquidity and capital. banks by regulation are required to hold a certain amount of collateral that collateral has to be high quality liquid assets such as u.s. treasuries. we're able to do one of thoed trades on the blockchain in doing so, we spoke a lot with regulators about it. they're able to have realtime visibility into the capital that each of those banks have if you think about some of the issues we saw in the last financial crisis, a lot of it was related to access to capital collateral, and this should be
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an easier way to make that happen >> how much can the bank save by doing this >> it's difficult to quantify, but i think it's really a foregone conclusion, using the blockchain in financial services the question is when and how we're actually going to implement it i will tell you over the last few months since we last spoke and our other symposium around blockchain on the east coast, we have started to move from experiments into trying to work out timelines for production capability of this and in doing so, with our peers and with other partners, we think it's something we might be able to implement in the near term >> basically, the way the average person out there should think about how blockchain can transform, whenever there's a transaction that involves a middleman, it can save because you can displace the middle person in the long run, right now, it's saving banks money in the long run, is a more of a friend or a foe to the financial services industry. >> i think it's very much a friend there was a lot of talk in the early days is this going to
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disintermediate the banks. i think it's opposite. you know, quite often, the question we get is when will the blockchain hit mainstream. when will my grandmother or your mother use the blockchain? >> when is this? >> we have been working around block chain with in tra bank liquidity. let's say you do to the atm to withdraw cash, but the atm is not your bank. that creates an obligation between that bank and your bank. if you aggregate those transactions, that's hundreds of billions of dollars. if we're able to do that with the blockchain, it will make the system more efish nltd and could be used on main street >> you're asking a bank to owe another bank money, but it could happen more seamlessly >> that's right, and it gives you greater visibility they have the ability to look at a realtime basis about where
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everybody's capital positions are. and that, i think, is one of the most important things. but this, you know, efficiency operations, speed, you know, and regulatory compliance, and being able to generate greater return on equity for our shareholders is what we're focused on >> great to speak with you, james disney back over to you >> super interesting stuff thank you. coming up, an exclusive interview with target ceo brian cornell, following the company's earnings we'll talk strategy, the shipping wars, and his plans for growth >> fast is going west. we're add the most important blockchain conference in america. that's today at 5:00 p.m. on fast money
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who's the new guy? they call him the whisperer. the whisperer? why do they call him the whisperer? he talks to planes. he talks to planes. watch this. hey watson, what's avionics telling you? maintenance records and performance data suggest replacing capacitor c4. not bad. what's with the coffee maker? sorry. we are not on speaking terms.
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you know what's not awesome? gig-speed internet. what's with the coffee maker? when only certain people can get it. let's fix that. let's give this guy gig- really? and these kids, and these guys, him, ah. oh hello. that lady, these houses! yes, yes and yes. and don't forget about them. uh huh, sure. still yes! xfinity delivers gig speed to more homes than anyone. now you can get it, too. welcome to the party. i'm sue herera here's your cnbc news update treasury secretary steven mnuchin assuring lawmakers that the trump administration will enforce the russian sanctions
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bill that was passed last year by congress. his comments came during a heated exchange with representative mike quigley. >> i fully assure you we will implement them last week, i gave the senate a classified briefing on the report, and where we are on sanctions. i would be more than happy to meet with members of the house to also do a classified briefing >> opioid overdoses have surged over the past year, according to a new government analysis. the cdc reports a 35%increase in emergency room visits for suspected opioid overdoses the increases were seen nationwide and what is believed to be the oldest message in a bottle was found washed up on a beach in western australia the bottle was traced to the captain of a german sailing ship named paula and it was dated 1886 in the late 1800s, it uz parentally was common for
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sailing ships to use bottles to under sea currents that's pretty cool that's the news update this hour ty, back to you. >> thank you very much let's head to washington and ylan mui with breaking news. >> tyler, senate majority leader mitch mcconnell telling reporters the republicans have a high level of concern that president trump's proposed tariffs could, quote, metastasize into a broader trade war. they're urging caution, telling the administration that the tariffs could perhaps derail economic growth and take some of the shine off those tax cuts that republicans worked so hard to pass. senate majority leader mitch mcconnell saying nafta has been a big winner for his home state of kentucky. i asked the senator if the white house was listening to these arguments. he says he thinks they are, and they're waiting for the president's final decision and hoping there's still time to change his mind. >> thank you very much ylan mui in washington >> let's go back out to houston
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and brian sullivan hi, brian. >> hey, tyler. good to see you again. thank you. we're joined by jack, the ceo of cheniere energy, and your timing could not bemore immaculate right now. i don't know if you heard it mitch mcconnell expressing concern that proposed tariffs could maybe turn into something bigger, perhaps a trade war. you are a company that makes its living off long, i mean, 20-year deals, with china, india, and other major players. do you worry about a trade war right now? >> well, brian, first off, thanks for having me i love being on tv, i love talking about cheniere to all of you. you know, right now, as you said, we have very long-term contracts. we're just now getting started with delivering those contracts. the tariff, the steal and aluminum tariffs, we're just wrapping up a $30 billion construction effort.
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we don't think it will have a meaningful impact on our business as an american, i would hate to see any kind of a long-term trade war with our customers or counterparties >> more than any other company, you literally engage in probably the longest term contracts i have ever heard of how would you describe your relationship with your particularly your chinese partners right now is it good >> so we have spent the last year and a half working with china, trying to help them with their air quality issues we have sent them 35 cargoes of l & g to date. we have multiple tracts with them, different terms, six months, two years, 25 years with them we believe it's just the beginning of a long-term relationship, and we're trying to help both countries have a better relationship. >> your investors, i believe, are truly long-term investors because seven some years ago, you signed a deal with india it's fairly good that we're talking because that first cargo
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shipment to india just left. i mean, more than a seven-year lead time, so congratulations on that how many, and you signed three deals this year. tell your investors why they should be confident about bigger deals to come, given these huge lead times, jack >> okay, well, we've got seven trains that we started for phase one to build four of those seven are in operations the other three are way ahead of schedule and under budget, quite frankly. so we expect those trains to come online shortly, and then we would have our contracts, our contracts being stood up with our customers and our cash flows going. so my job now is to grow the business beyond the first seven trains train number eight, we just announced that we have commercialized it. we feel very good about it we started engineering it's a four-year construction effort, though >> wow >> so --
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>> everything you do takes years. and investors i spoke with are asking, what is the status of corpus christi number three, if viewers don't know, your planned expansion at the corpus christi facility when can we get an update on that >> it's coming soon. we feel like we have commercialized it. we have contracts with electrici electricity, with a few contracts with cmpc in china we feel good that the cash flows are there, and we're working on the financing. >> say something that might blow our viewers' minds, which is the world's leading power source right now is still coal. in america, that's kind of hard to fathom, nearly 40% of the global power need in the world is still coal. your job is to get rid of that for a number of reasons. how long is that transition going to take? how big is your long-term opportunity? >> you know, it depends. it's different for different
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parts of the world it's coal, oil is next, nuclear is third so when we look at displacement fuels, natural gas is a cleaner burning fuel, fossil fuel that's reliable that's where our opportunity is. that's why demand in our product, l & g, is so strong in china, we saw 50% your over year increase in lng demand. >> you're weaning the world off coal >> we're providing a very competitive, affordable, reliable opportunity for them to get to a cleaner burning fuel source, yes. >> jack fusco, ceo of cheniere energy stocks up 24% in the last six months big ship going to india. congratulations on that. tyler, michelle, what he said, on time and under budget, those are not things we normally here in the new york metropolitan region for anything, is it it's nice to hear once in a while. >> for sure. congratulations on that. good stuff, brian. thank you. all right, a rough day for target shareholders as the stock falls on the back of an earnings
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call also lack of clarity on what the retailer is going to do with its tax savings. ahead, we'll speak with tarkt's ceo about the quarter and much more let's begin.
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positive, not so shares of target they're down sharply today after the company reported mixed earnings and said that it is raising its starting wage to $12 an hour this spring. analysts meanwhile left with questions as to why no new announcement made related to tax reform savings joining us now in a "power lunch" exclusive is target's chairman and ceo, brian cornell, along with courtney reagan out in minneapolis courtney over to you. >> hi, good afternoon to you thank you very much. i'm joined here by brian cornell. you spoke to investors you put up a quarter that was pretty good. sales were strong. a slight miss on earnings. there was disappointment when cfo cathy smith started going through the details of the
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operating margin the amped up capital expenditures program i think investors just want to make sure they see a return on all of the spending. are you guys guiding a little too conservative, as has been your recent history? >> i think we made great progress in 2017, it was a year that i'm really proud of. i'm proud of the team. we started remodeling stores over 110 we opened up great new stores in new neighborhoods. and we rolled out great new brands while we made big investment sa saids, we talked about our return of capital of over 14%. we generated $7 billion in pre-cash during the year so we made great progress. we finished with really strong results. it was only a few weeks ago on january 8th we preannounced, and talked about our november/december performance. at that rate, i thought we would grow by 3.4%, today, we said 3.6% we talked about digital growing by 26%, we announced today we
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grew by 29%, and we exceeded the midpoint of our guidance we guided to $1.35 we beat the number by two cents. so i felt really good about our performance, and as we looked to the future, we said we're going to continue to invest to grow. we're going to continue to invest in new capabilities to make sure we meet the needs of our guests, accelerate our remodel program, continue to move into new markets, bring great new brands to market, and build out these digital fulfillment capabilities, expanding things like drive-up, our ship to shopper service, and cathy said despite the fact that we're taking our capx up to 3.5 billion, we'll improve our return on investment capital over the year. i feel good about the progress we made. i'm really proud of the team, and i'm excited about 2018 so i know there were some questions today, but we're on a path to growth we're building market share again. we're meeting the needs of the consumer both in our store and online and we're providing great returns for our shareholders
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>> sales were really strong. they were stronger in january than what we had seen -- >> up 4% >> has that sales trend continued in february. you're a whole month into the new quarter? >> we guided to low single digit comp growth over the balance of the year in '18 starting in the first quarter. so we're off to a good start we're on a trajectory for positive growth both in store and online our new initiatives are being well received. i think we're going to continue the progress we made in 2017 throughout 2018. so we're on the right path, and i feel great about the progress we're making and we're just going to continue to execute our game plan throughout 2018. >> target is doing an awful lot as part of this big strategy $7 billion, three years, you're remodelling stores, expanding your fulfillment capabilities and you're also putting a strain on the stores. you're acing the labor in the stores to do more. what is the tipping point? how do you make sure you're serving the customer in the store but also really delivering on all these new fulfillment
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options. there's so many, restock, drive-up, buy online, pick up in store. how are you going to make sure the stores can do this appropriately? >> the biggest investment we have made over the last year and the most important one has been with our team. and our team is ready for the challenge. we have invested in training and development. we have brought in new operating models to our stores so we can provide great visual merchandising, a great customer experience so we can meet the needs of the guests who shop in our store one day and now is driving up in the parking lot and we're putting that package right in their trunk. so we're investing in our team we announced today, and i'm very proud we announced today, we're increasing our starting wage from $11 to $12. and that's going to attract even more talent to target. and i want to be an employer of choice it all comes down to our team. everything we have been doing is fueled by the investment we made in our team. starting with our store teams. so i think the store team is embracing the challenge. we're operating differently.
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but we're all focused on meeting the needs of today's consumer. >> you're increasing the wages, will you have to actually add store labor, more bodies to help you do what you're trying to do with the stores? >> we did last year. i certainly expect that we'll be investing in more store labor as we go forward. a lot will be more expertise in apparel and home, in food and beverage, in a category like beauty so we're building expertise into our model, hiring more team members, investing in training and development, paying them a higher wage, and that's going to be reflected in the service we offer the guest. so i feel great about the path the most important investment we made is in that team and i think that team is ready to deliver like they did in the fourth quarter >> some questions came up today, and cathy smith, your cfo, tried to address the tax reform savings. not only did you not get a border adjustment tax, you got this tax reform package. that came after you put the strategy in place. you didn't announce anything big
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you're doing with the savings. why not? what are you doing with that money? >> unlike others, we invested in advance of tax reform. what we laid out a year ago, the $7 billion investment plan, we already made the commitments to accelerate our capital expenditures, remodelling our stores, building new capabilities, investing in our brands as cathy talked about today, the benefits of tax reform, and they're significant for us, we were a full fare taxpayer, now our rate will drop down to the mid 24% range. that's going to flow back to shareholders in the form of improved eps next year >> i think that's what a lot of the retail peers are counting on as well. thank you so much, brian cornell. a lot more ground to cover, but you know how this goes we have to hit the highlights. thanks so much >> thanks, courtny >> back to you >> thank you ge having a good week for a change you heard that right a good week. the stock is up more than 3% over the past couple of days more than 1% tayod finally, a turnaround?
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we'll debate that next mpanies are reporting today. and, how's it looking? >>i don't know. there's so many opinions out there, it's hard to make sense of it all. well, victor, do you have something for him? >>check this out. td ameritrade aggregates thousands of earnings estimates into a single data point. that way you can keep your eyes on the big picture. >>huh. feel better? >>much better. yeah, me too. wow, you really did a number on this thing. >>sorry about that. that's alright. i got a box of 'em. thousands of opinions. one estimate. the earnings tool from td ameritrade.
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time now for trading nation general electric shares rallying for a third straight session up over 4% in that time period is is there relief in site for
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general electric matt is with miller taback and gina sanchez matt, what are you seeing in the charts has this thing finally bottomed? >> it's hard to say for sure but it's funny because i hated it in the charts from 27 down to this level, except for one very short time frame at the very beginning of the year where i thought it could bounce sharply because of tax loss selling would end at the start of the year. it bounced and then turned negative begin but we're starting to see signs we could, indeed, see another bounce one that lasts a little longer, on a technical basis anyway. one, you look at sentiment last week you couldn't go ten minutes without hearing or reading a negative story about general electric of course, it was cover story of barron's said it was cheap, earnings, very negative article. we all know how those magazines ive cover articles seem to be contra indicators. on a technical basis, you look at the relative strength index
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chart. on a monthly basis it's only been this is oversold at one time in the lows of 2009 i'm not saying back up the truck, but you could be getting ripe for a multiweek rally and one that could hurt the short. i would want to be short this name. >> gina, what do you think of shares of general electric at this point >> if you take the sum of the parts approach, i think it is intrinsic value is somewhere between $8 and $10 i would say we're getting close. why should you splat hairs at this point i think we're pretty close to the bottom we have seen ge reiterate its support for its investment in baker hughes just today ceo of aramco said they would be expanding their providers and specifically mentioned baker hughes so, i do actually think there is some support at this dollar value. there are so many other stocks that are overvalued this looks
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like a buy on a relative basis. >> thank you very much shares of jem electric for more insight, head to our website, don't forget, a lot of people at cnbc own general electric because they used to own us and one of the two stocks we're allowed to own, besides comcast. >> check please is next. >> announcer: and now the latest from and a word from our sponsor. >> short selling can help you profit from a stock's decline. however, because it involves unlimited risk, you must have a plan first, screen for poorly rated stocks showing weakness versus the broad markets. second, look for the stocks with the poorest technicals in that group. finally, incorporate risk management techniques into your order to limit potential losses.
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check, please. >> time for the coast-to-coast edition of check, please melissa, we kick it off with you. >> obviously, it's a big edition of "fast money." tweer going crypto we'll be speaking with three big investors. tim draper, he spotted skype and tesla in the early days. he's one of the biggest in cryptocurrency and blockchain and ceo of ripley and tell us how he's partnering up to cut cost and time, for instance, to transfer money cross-border and around the world and the president of coinbase.
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a lot of growing pains more coinbase accounts than schwab accounts. the company has also been sued a couple times in the past week or so so, there's a lot of controversy around coinbase. we'll ask him all about that tonight at 5:00. >> let's go down and see what brian is thinking about. hi, bri. >> hey, yeah, is it coast-to-coast or coast-to-gulf? we're here in houston, so pretty close. listen, cautious but optimistic. i think that's how i describe so far the mood at this conference, guys, one of the biggest oil and gas conferences in the world everybody's optimistic about growth s maybe 12 million barrels a day in america, but the theme, is there enough capital? if we don't have money, we can't grow the demand. you heard the secretary-general of opec say unless more capital comes into the industry, we could have another crisis. listen >> if the trend of the last two,
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three years continue, and god forbid, we would be see future global energy crisis that nobody wants to see >> because the dirty secret of the u.s. shale boom, remember the movie, there will be blood, i drink your milkshake the shale milkshake has a big straw so the decline is very high that needs to be replenished with more capital. >> it's interesting to thatter about that because it comes at the same time the iaea says the u.s. will be the biggest producer of oil by 2023. >> yeah, it is we can do 12 million a day in america. we're at 10.2 million now, which is a 47-year high. do we have the people? the money? the productivity to get to that? everything is bigger in texas. >> tyler, you were going to talk about trade? >> people are talking about if there's going to be a trade war. there already is a trade war in washington and it blossomed more in just
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the last hour as the senate republican leader mitch mcconnell, whose most famous export from kentucky, bourbon, apparently drew some interest from people in europe about potentially putting a tariff on that there is a lot of controversy. thanks so much for watching "power lunch." >> "closing bell" starts right now. >> announcer: the white house is at war with itself >> we're not looking to get into trade wars we are looking to make sure that u.s. companies can compete fairly around the world. >> announcer: one side favoring tariffs. the other side saying they'll sink the american economy and american stocks. >> the price was $1.99 so, who in the world is something to be too bothered by 0.6 of a cent? >> announcer: today the drama increases. more voices weigh in foreign governments vow to strike back.


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