Skip to main content

tv   Power Lunch  CNBC  July 17, 2019 2:00pm-3:00pm EDT

2:00 pm
that does it for wee"the exchan. "power lunch" with tyler matheson and melissa lee begins now. >> i'm melissa lee breaking news on the economy moments away in the meantime, where we stand right now. the s&p 500 down by a quarter of a percent, the biggest loser of the major three indices. to steve liesman for the beige book report. >> expanded at a modest pace some districts have seen healthy expansion. others said activity declined modestly or was flat overall, however, the outlook was positive for modest growth in the months ahead. two very big issues in the beige book here. tariffs and labor shortages. i'll go through each separately. on the tariff issue, widespread concerns about trade-related uncertainty. you heard the federal reserve chairman talk about that quite a bit. there were some increases in input costs from tariffs and rising labor costs, as well.
2:01 pm
but competition was set to restrain the ability of the manufacturing of those payment tariffs or higher labor compensation to pass that along. some of the details we saw was like philly and cleveland. richmond said there was strong volume at ports as there were a lot of imports to get ahead of some of the expected tariffs st. louis and kansas city said farmers suffered because of depressed crop prices because of tariffs. let's talk about the job situation, which is a completely different picture of the economy. employment grew at a modest pace labor markets, however, set to be tight and there was a lot of difficulty filling open positions. you've heard that before but they went on to say there were continued worker shortages across most sectors, especially construction, technology and health care. a staffing worker in the minneapolis district said it's the toughest market they have ever seen. there were concerns about renewing and securing work visas. compensation, however, grew at a modest pace which is the dilemma
2:02 pm
of this whole expansion we have had in tight labor markets but modestly growing wages there were, however, significant increases in entry-level wages and employers itdid a lot of things, expanded benefit packages, looked at other workers they normally don't look at and launch training programs. why do i go on at length about this, melissa? this is maybe the most bizarre beige book ahead of a rate cut i believe i've ever seen with such a strong job market. back to you. >> all right, steve. why don't you stay there we want to bring in the chief economist of the americas and cnbc contributor katie nixon, cio with northern trust management steve makes a good point, it is a strange beige book overall ahead of a fed rate cut decision at the same time, it's sort of underscoring the fact the economy is doing quite well. the employment -- labor market is extremely tight and yet we're not seeing inflation maybe the fed needs to do something to spark inflation here >> that's part of it certainly an argument that
2:03 pm
charlie evans who steve knows and spoke with as argued and john williams, as well the economy looks good at the moment but a lot of the survey data looks softer. we had some information this week from cass, the freight company that showed a significant falloff of activity. and with inflation undershooting and the trend probably being lower, the fed is being prudent, i think, ask trying to be forward-looking. and that's why they'll cut. >> we have seen that also in some of the earnings whether it be csx, which is down a lot today, we heard it from fastenal, able to pass through some price increases and also cost inflation and they were limited in terms of how much more they can pass on. what's your take from this and how do you translate into what we're seeing in earnings season so far >> i think it's clear that this had report sort of supports what the market has been saying for quite some time now, which is growth is slowing, and inflation is undershooting, persistently, and the risks are to the down side we have seen this uncertainty impact capital spending, a slow
2:04 pm
down in trade-related activity you reference csx and some of the other indicators, earnings and macro indicators we have seen that's already priced into the market, melissa. so i think expectations for earnings are already very reasonably low so as these reports come out, we see some misses and some minor market adjustments as a result but i don't think anyone is expecting anything heroic from earnings this season. >> steve, you want to jump in here >> yeah. i just want to point out, if joe is right, and i'm not saying he's wrong i will point out, joe is a participant in our cnbc rapid update, which is running -- the median running 1.8 for the second quarter if joe is right, it would be the most exquisite bit of timing where the fraelt federal reserve is cutting interest rates right at the absolute peak of the job market i have not seen a beige book go at length about the tightness of the job market i think almost ever. if you read each individual entry from each of the districts, which i did, so you
2:05 pm
don't have to, joe even though i know you will -- but the things that the employers are doing, training programs, extended parental leave, all over the country here, it seems like you have this worker shortage and so the fed would be cutting rates -- would seem to be at the peak of employment here. >> those are fair comments janet yellen said the tight labor market would be the best job training that we could get and maybe that's what's happening perhaps in the minneapolis district, as you were reporting the one thing we were sort of forgetting is the yield curve, extraordinarily flat, subverted in most pockets and that to me is a telltale sign of where the direction of gdp is going and the fact that the fed has not been able to generate more cyclicality and we have weakness in housing which people aren't really talking about, always about the trade. but the housing numbers today were really soft that's a function of mortgage rates having risen a lot last year this economy i don't think is as robust as people believe, and therefore needs some help.
2:06 pm
>> so you say cut the rates 50 -- half point. >> i would like them to go 50. >> so what happens then? because then you really lose some of the ammunition you have in the armory, don't you? in case things -- really bad, and what happens if we get where japan is, where so much of europe is. close to or in negative interest rates. hard to get out of there. >> very hard i would argue that a fed has as well -- some on the fed, you're better off moving sooner than waiting. because once you wait when it becomes obvious, you have to cut by default, it's too late. so i would get lower than sooner >> tyler, i think the importance here, there is not any down side to joe's idea or those on the fed that i can see immediately here that if the fed were to go, and it's not needed, i don't think you have an imminent problem with inflation you might fuel some of the
2:07 pm
excesses in the bond market, in the fixed income market. fuel some of the excesses in the market that's always a danger but in terms of inflation, i don't think you have a danger of getting it wrong here. >> so katie, do you not fight the fed and stay long equities or do you take a look at it from the reasons why the fed might be cutting and that is a weakening economy and troubles around the world and you get defensive? >> don't fight the fed here, melissa. and while our base case is not for a 50 basis point cut, i would offer that it would be a way for the fed to finally get a little bit ahead of the market and really send a powerful message to the market that they are focused on not just the slowing momentum, not just the trade war but most importantly on the expectations and you would see the expectations react pretty positively, i think, and move north pretty quickly if the fed does go 50 we think they'll go 25 25 now and 25 in september is maybe a distinction without a difference if they're going 25 in september, they may as well go 50 this month.
2:08 pm
but it will be supportive for risk assets because it's an environment of slowing but positive economic growth slowing earnings but recovery into 2020. so these are good conditions for risk assets. it doesn't mean double digit kind of returns. >> slow growth, modest inflation, low cost of money that's pretty nice >> and you get a trade deal next year give the market an extra oomph >> all right thank you all. katie nixon, joe and our own steve liesman. how is the bond market digesting this news? rick santelli is in the pits in chicago. hey, rick. >> hey, melissa lee. if you look at a two-day chart to give it more context, just in intraday on scaling, a two-day of two-year go to the further part of the curve, ten-year and the dollar index, you can clearly see the moves are already made, giving up ground rather quickly today here and abroad the dollar index was down. we see a little bit of movement based on the beige book. for the most part, just cementing what every trader i
2:09 pm
talked to already knows. jay powell didn't push back. you don't need to look at percentages or fed funds he will deliver in july. and the market will want more. the market will demand more. and i continue to say, these nine quarter point increases that brought us to 2.25, 2.5, shouldn't be used for slowing. they should be used as major economic life insurance, and that will be the ongoing debate. if anyone thinks doing 50 is going to nullify the appetite for more by the market, i don't think they have been awake the last couple of years. >> rick, thank you very much great to see you last night in chicago. >> you too, tyler. >> rick santelli. let's get to bob pisani at the new york stock exchange. >> not a lot of moves in the markets here mostly what we know already, what we care about, tariffs, jobs, credit, tariffs, delayed business investments we have known about that i think steve hit it on the head, this mystery jobs, continuing work shortages and compensation only growing modestly this is the great mystery we have seen.
2:10 pm
credit i also like to look at. bank lending in good shape overall. still a pretty good report the key for the markets right now, no big earnings warnings in the second half of the year. guidance has been fair csx is a bit of an exception but may be some very particular circumstances associated with csx overall so far, holding up the market, low cost of credit, number one and number two, expectations that there will be a trade deal somewhere down the road. if that changes, if the fed becomes less accommodative or there are problems on the trade front, those numbers are going to change at the s&p back to you, tyler. >> bob, thank you very much. coming up, shares of netflix lower today ahead of earnings. that report due out after the bell the stock prone to big moves after it reports profits or not. we'll tell you what to watch for. but first, the governor of new jersey will join us. he is suing the irs over tax deductions we'll ask him about that and much more when "power lunch" returns.
2:11 pm
2:12 pm
2:13 pm
stock market average is a little moved after we take a short break, we expect to have governor phil murphy of the state of new jersey. he is suing the irs.
2:14 pm
connecticut and new york over their disallowing of the use of charitable deductions to offset the loss of the so-called state and local tax writeoff and local tax writeoff governor murphy, when we return. [ sniffing ] come on. this summer, add a new member to the family. hurry into the mercedes-benz summer event today for exceptional offers. lease the glc 300 suv for just $419 a month at the mercedes-benz summer event. going on now.
2:15 pm
2:16 pm
prpharmacist recommendedne memory support brand. you can find it in the vitamin aisle in stores everywhere. prevagen. healthier brain. better life.
2:17 pm
welcome back to "power lunch. many americans feeling the pain from caps on state and local tax deductions that were a part of that 2017 tax law. and today new jersey joins with new york and connecticut in filing a lawsuit, suing steven mnuchin and the irs to block state's attempts to get around the $10,000 so-called s.a.l.t. cap. new jersey governor phil murphy joins us in a first on cnbc interview. governor murphy, welcome good to see you. i'm a new jersey resident. i would like nothing more than to be able to deduct all of the taxes i pay in my wonderful little town of montclair but the irs has said that the idea of allowing the state of new jersey and others to set up sort of charitable funds into which i would donate money doesn't work, because i'm getting something in return of
2:18 pm
value for that donation. namely, a tax credit aren't they right about that >> i think they're dead wrong, tyler. it's good to be on, by the way and it's the reason why we filed suit this morning in the southern district of new york, along with new york and connecticut. and it's not the first action we've taken to push back on this egregious tax law, both its constitutionality and now the irs interpretation there are 33 other states with about 100 different examples across those states, many of them red states, by the way, where the irs has allowed these sorts of charitable contributions to go ahead. so i would argue the radical actors is the irs. we want to put it back to where it should be on behalf of our taxpayers. >> so if there are other states where these -- these kinds of arrangements have been upheld, how will the courts not go along
2:19 pm
with that? >> it's a good question. we believe that federal courts in prior -- as far back as the '80s have been crystal-clear about defending the very action that we believe we can take through these charitable contributions. we think they would have to open up all of that precedent, and we don't believe that that is at the end of the day the right side of history. we believe we're right and it's crystal-clear we're right, which is why we're taking the action we took today. >> my biggest concern, as i've said on our air many a time, is that when i pay money to the good state of new jersey, that is money that is already taken out of my paycheck it is already spoken for i do not have the constructive use of that. it is taxed income and then i'm now -- if i lose the ability to deduct that, i am then taxed twice it is a -- to me, it is a
2:20 pm
perfect example of double taxation >> there's no question about it. and so that's why today's action is another action we're taking, but it's one of many one of which we challenged almost instantly coming into office through our -- the great work of our attorney general graywall, along with new york, connecticut and maryland we challenged the constitutionality of the restriction on deduction for that very same reason. we believe it is unconstitutional so we're not only challenging the constitutionality of it, we are challenging the irs' interpretation we're working with our federal delegation, including with new york, to try to get the law changed. and we're taking a whole series of steps here. and who knows what our likely outcomes will be, but we're not going to stop fighting on behalf of our property tax payers. >> so governor, this is obviously an important issue to the tristate area. i'm wondering if there is one or two data points you can point to to say this has been the impact
2:21 pm
on the state of new jersey, whether it be migrations out of the state or maybe a decline in property values. >> we haven't seen any real evidence, melissa, of either of those yet. but we know the math the math is about $18,000 on average of state and local deductions that are taken annually with a $10,000 cap. that's $8,000 on average of folks who are out of the money and this tax law, this vaunted trump tax law that was supposed to be a boon for the middle class, i think i've met literally one person, and i've asked everybody i meet, how did that filing go for you, was your refund larger, did you get something back as opposed to what you might have paid in years past everybody, literally, is out money. and this is another example of that and again, we haven't seen the evidence of folks leaving the state, because they come to a state like new jersey for the best public education in america, our location, transportation, health care, quality of life.
2:22 pm
there are lots of reasons why folks are here but this is pain this is pain for the middle class in our state. >> speaking of pain, i want to ask you, governor, about the status of the millionaires' tax, which would possibly or could possibly impose a top rate of 10.75% on people with over a million dollars. you signed a budget about a month ago. does that mean this is dead or is this something you take up, because some people will say you'retrying to save us on losi losing s.a.l.t. and yet trying to tax the rich with this millionaires' tax. >> listen, the millionaires' tax is far from dead in new jersey i still believe in my heart it's the right step to take and we'll continue to pursue it. i inherited a state 18 months ago which the middle class have been ravaged for eight long years. they were -- it was disinvestment, it was underinvestment. it was ignoring the middle class
2:23 pm
entirely so this is all about tax fairness it's not an us versus them we welcome the millionaires here we want more of them but we want them to pay a little bit more to help us reinvest in the middle class and education, transportation and all the stuff that makes the middle class in our state as strong as it is so i think it's a question of fairness, i believe still the right thing to do. and i'm going to stay at it. >> why are taxes so high in new jersey, governor i believe the state income tax rate at the top is the highest or second-highest in the country, and property tax rates in my town are among, if not the highest in the country why are they so high >> tyler, in the people's republic of montclair, one of our great communities, historically, listen, again, we inherited -- i got elected to fix the economy. let me start with that and that means to get it grogan and make it fair again and we inherited an enormous
2:24 pm
property tax burden. and so we are -- whether it's challenging the federal government, whether it's aggressively pursuing shared services, whether it's growing the economy again, any number of actions. every day we wake up trying to crack the back of the property tax crisis last year i should say was on average the lowest increase in our state's history. but it was still an increase so we're going to stay at this we have great education. great transportation health care, quality of life there's a -- we're a good value for money state. but folks want to pay a fair premium, and it had gotten out of control. >> montclair is the best place i've ever lived, governor. i love it to death it is a marvelous community. but let me make this observation. i grew up in northern virginia, where the counties were the main taxing authority and they are very large. >> yep. >> and there is one superintendent of schools for all of fairfax county, virginia.
2:25 pm
there is one chief of police there is one fire chief. in new jersey, we are organized by county, but we are largely organized by very small townships. so every little township, montclair and golan ridge, north call well, they have their recreation director, police chief, and so the economic model, you know, as a businessman, you're not getting any efficiencies of scale that way. >> yeah. so tyler, this is a big point. if you were to roll back the history, you would look immediately to home rule new jersey to your very good examples and those are all great communities, is the ultimate american home rule state we have 565 townships. over 600 school districts. that's hard to do, by the way. so we have more school districts than we have communities
2:26 pm
and it's both a source of our enormous pride and excellence on the one hand and the source of the biggest reason why we've got a property tax crisis. you've already articulated the analyzation of services by community and that's a huge contributor to the structural realities of the property tax challenges on the other hand, you know this in montclair and some of the other communities you mentioned. the pride of having in new jersey 3 or 400 of the best school districts, public school districts, literally in the united states. we are rebuilding at long last nj transit, which used to be and will be again the premier commuter organization in america. save the children ranks new jersey number one in the country to raise a kid we're rated as the safest and best hospital systems in america. i could go on. so there's that -- it is both the source of our greatest pride and excellence on the one hand and of our biggest headache on the other. >> good to have you on, governor
2:27 pm
phil murphy of new jersey. we appreciate it >> thanks for having me. >> you bet now let's get to mike santoli for "trading nation. mike >> melissa, thank you very much. check out gold getting a bid today after billionaire hedge fund manager ray dalio picked the asset as a top investment, calling it a diversification play and what he calls a paradigm shift katie stockton and nancy tangler our trading nation team today. katie, gold has had a good run surged above i guess about a six-year high recently, settled out a little bit where does it look to you right now in terms of where it's headed in ex >> we saw major base break out in gold in june and gaps in the likes of gld and the gold prices have managed to hold that gap, which i see as a positive development the consolidation phase now appears to be resolved to the up side and that really frees up gold to
2:28 pm
see some up side follow thrthro. the next resistance is around 1590, based on the fibonacci replacement levels and i think that up side is very realistic for gold, based on that base breakout we have seen. >> all right pretty significant move from here if it gets there nancy, as a fundamental investor, somebody who deals in asset allocation, what goal -- what purpose does gold serve potentially in a portfolio and would you buy it here? >> thanks, mike. yeah, so it's always -- fills the slot of a hedge, right, against disaster and against inflation. and we don't have any inflation. so to see -- or much inflation so to see gold rise in this environment has been somewhat anomalous. and so for me and i don't want to be in the position of disagreeing with the great ray dalio, but i do see it more as a trading opportunity. so a short-term place place to
2:29 pm
place funds. but a ten-year trend so we would advise clients to put some money in at current levels as a protection against slowing global growth, potentially, a fed that may not be as easy as some expect and some market volatility but i don't see this as a long-term trade at this level. >> all right we'll see -- this is an internal debate we'll see how it plays from here, guys thank you very much. katie and nancy. and for more "trading nation," head to our website or follow us on twitter @tradingnation. tyler, back over to you. ahead on "power lunch," just over an hour away from one of netflix's most important earnings reports ever. how the company will cope with losing some of its top shows plus, a surprising new report shows foreign buyers are fleeing the american housing market but not in new jersey! the fallout ahead. and on today's tasting menu, be elon musk is busy building
2:30 pm
cars, digging tunnels, flying to space. but now he wants to poke around in your brain. all this when "power lunch" returns. and now, the latest from and a word from our sponsor. transportation stocks can confirm or deny a broader market trend. it's important to remember that transports can be sensitive to changes in oil prices and other market influences. is don't rely exclusively on th theory when make an investment decision. i'm randy frederick, and schwab is the better move (gentle music)
2:31 pm
- my degree from snhu has helped me tremendously. the flexible class schedules allow me to go to work full-time, run my catering business and be a mom and parent. when i reached this accomplishment, it was like, it's here, it's happening, it's now. we, at southern new hampshire university, are the ones who succeed. we are the ones who break through. (carrying up to 50 times its tbody weight.essly marches on. it never questions the tasks at hand. but this year, there's a more thrilling path to follow. (father) kids... ...change of plans! (vo) defy the laws of human nature... the summer of audi sales event get exceptional offers now!
2:32 pm
2:33 pm
i'm contessa brewer. here is your cnbc news update. the world health organization says the deadly ebola outbreak in the congo is now an international health emergency the virus spread this week to a city of 2 million people, more than 1,600 people have died since august in the second deadliest ebola outbreak in history. mexican drug lord el chapo handed a life sentence in prison he was convicted on multiple counts of drug smuggling in february afterwards, his attorney said he didn't get a fair trial. >> all we asked for was fairness and no matter what you think of joaquin guzman, he still
2:34 pm
deserves a fair trial. everybody does in america. because if you don't give a fair trial to joaquin guzman, what happens to the guy off the street that gets arrested for tax evasion? >> tokyo disney giving the media a preview of its newest attraction, soaring fantastic flight it will open to the public next tuesday. the immersive indoor ride takes passengers on a virtual flight around the world that's the cnbc news update at this hour. back to you, tyler. >> thanks, contessa. the oil market closing for the day and let's go to mr. chu with the cnbc commodity desk dom. >> mr. matheson, oil prices continue their near term declines down by 1.5%, $56.68 crude prices down by 1.25 percent. those are multiday losing streaks, and they're building today after u.s. government inventory data that showed a bigger than expected drawdown in crude stockpiles which, yes,
2:35 pm
would push prices higher, but the data also showed a bigger build in supplies for refined products, like gasoline and distill at as. markets emphasized toward building gasoline supplies, hence the drop in prices yesterday the prices were lower based on headlines we could see easing tensions between the u.s. and iran so continued focus this summer willremain on the middle east dynamic and the fuel demand during this especially busy u.s. summer driving season, guys. back to you. >> thank you,dom chu. netflix getting ready to report earnings after the bell everyone loved "stranger things," but will investors love the results. they have outperformed this year, one of the best-performing fang stocks in 2019, only trailing facebook. wall street is expecting $5 billion in revenue both at home and abroad. joining us is matthew thornton, director at suntrust robinson humphrey, holds a buy rating at $402 matthew, great to have you with us. >> thanks for having me. >> you know, a key driver should be in theory the price increases
2:36 pm
that netflix imposed so what are you looking at in terms of average revenue per user and how important is that going to be? >> yeah. i think the theme of this quarter is going to be pricing power, as you alluded to, rolling through a 15% price increase on a slew of markets in parts of western europe, as well so the question is going to be, can they continue to grow subscribers through that price increase we think they can. we think they will it will be to the tune of 1 to $2 billion and they'll reinvest back into original content and keep the flywheel going of delighting members as reed hastings likes to say. >> what do you want to see on the international front to make you believe that whatever is happening internationally can offset sort of the high penetration slowing growth in the u.s. market? >> yeah, we're looking for roughly in line second quarter, roughly $4.7 million subscriber in a quarter we expect peak pricing pressure.
2:37 pm
we think some price increases will start to flow through and abate in 3q. at the same time, the content slate should strengthen materially we think the third quarter will be the best they have had to date so, again, we're looking for continued growth in the third quarter as well. we're looking for about 5.5 million subscriber ads in the international front in 3q. >> a lot of attention has been paid to the loss of shows like "the office" and "friends. which are produced by other companies, warner media, disney, nbc, you among them. and disney taking its content off. how big a threat is this or has too much been made of it >> i think too much is being made of it i think the shift for netflix from licensed content to owned and original content has been happening. it will continue to happen other content providers pulling content from netflix and going captive will continue to happen.
2:38 pm
it's not going to be a cliff overnight. if you look at shows like "the office" and "friends," our research shows it's been very helpful for retention, not a new subscriber ad driver and just the final point, i think you ought to think about where netflix's content is going to be, not right now but in 2020 and 2021 when big former network producers like shonda rhimes and murphy have their content up and running on netflix in the out years. i think it's been overplayed in terms of the head wind to netflix. >> what's your outlook once all the other dtc services launch, matthew? i'm asking in the context for instance of pricing increases. you may not believe that netflix will lose a lot of subscribers, but for instance in the future, can they impose pricing increases like we have seen recently or do you think that's the last one for the foreseeable future as it competes with the likes of a disney and hbo, et cetera >> yeah. we'll take them one by one let's start with disney. first and foremost launching in
2:39 pm
the fourth quarter keep in mind, it's domestic only, family oriented content. so not a perfect overlap with netflix. doesn't have much in the way of deep local international content the way netflix does they've got a lot of work to do in terms of optimizing their mobile experience for a lot of these international markets. so we're on the front end of increasing competition some at lower price points, some higher, as you saw with warner, for example. but again, we think this is going to be a very manageable and modest headwind for the incremental subscriber for netflix. >> matthew, thank you for your time matthew thornton of suntrust. >> thank you. amazon's two-day prime day is over. and the company says it was even bigger for them than black friday courtney reagan joins us with the numbers you need to know hi, court. >> hi, tyler if we only knew how big black friday was for amazon, this could make this equation easier. but there is a lot of things we could say. let's stick with the three big ones first, amazon says it sold more
2:40 pm
than 175 million items during the 48-hour event, topping its black friday and cybermonday combined second, and perhaps more important for the long run, amazon said it signed up new prime members, more of them, on monday than it ever has in history. and then almost as many on tuesday as it did on monday. so put those two days together, and they got an awful lot of new prime members. the trick, of course, is converting those free 30-day trials into long-term paid memberships. but from what we hear from other research groups, the retention rate is pretty good. third, amazon was not the only beneficiary of that day. adobe analytics now says u.s. retailers online with more than $1 billion in annual revenues saw their average sales of 68% compared to an average monday/tuesday in july pretty good, but i'd like to see some hard numbers from a lot of these retailers. back to you guys. >> court, thank you very much. coming up, a $1 million
2:41 pm
sneaker collection goes up for auction. one buyer says, i'll take 'em all. plus, who is not buying u.s. real estate? answers to those questions, coming up on "power lunch.
2:42 pm
2:43 pm
2:44 pm
foreign buyers have played a part in the major housing market in the past few years, but a new report says that chinese and other non-u.s. buyers are now fleeing the u.s. according to the national association of realtors, $77 billion worth of u.s. existing homes were bought by foreign buyers between april of 2018 and march 2019 that is a 36% drop in dollar volume from the previous year. so what's causing it with us now to discuss is lawrence yoon, chief economist
2:45 pm
for the national association of realtors what's causing it? it's that the chinese aren't buying any more, right, lawrence >> good afternoon. it's not only the chinese. the british are pulling back, canadians are pulling back, people from mexico are also pulling back so there are many confluences of factors. slower economic growth in these countries so it has less income generated. they are less capable of buying here in the u.s. stronger dollar is also making it more expensive to buy here in the u.s. but specifically related to china, capital control, no doubt, is limiting the money that can be taken out of china to invest here safely in the u.s. >> what role, if any, does a sense that foreigners are not welcome in the united states any more play in this? if at all. >> well, you know, when you look at any economic data, to see a 36% decline on a year aftover y,
2:46 pm
that is a substantial number, far in excess of any economic numbers. so without a doubt, the trade war rhetoric, whether people are anticipating less trade and hence less business activity, which means that chinese business person would not want to buy property in seattle knowing maybe their companies cannot expand here in the u.s. so the high temperature trade war rhetoric, i'm sure, is pulling back some of the potential buyers. >> and yet the chinese remain the number one single largest buyers of u.s. property. they spent $13.4 billion but that was down by more than a half from $30 billion the year before >> one should anticipate, given the gdp growth rate in china of 6%, that there will be continuing increase of chinese buyers in the u.s.
2:47 pm
typically foreign buyers, they are high net worth individuals, and the gdp growth of that nature will continue to generate people who are wealthy enough to buy in the u.s but the trade war rhetoric or even the discussion about the immigration, i think that is holding back but at the same time, you see canadians pulling back, the british are also pulling back, because british pound is much weaker compared to the u.s. dollar >> and the median price, in fact, of foreign buyers, as your report states lawrence, is slightly higher than the average price. what impact overall does this have on the overall housing market i mean, i would imagine it's sort of a push/pull. you have this 36% drop in foreign buyers, but you also have inventories which are very limited. >> well, melissa, what that means is that on the high end property in say new york city, miami, there could be some oversupply, because foreigners are very attractive to this market but if the foreigners are not stepping in, that means there
2:48 pm
could be an excess supply in also the s.a.l.t. situation and is also hurting in the new york, new jersey market a bit. but on the flip side of the coin, in some markets where there is a tight inventory shortage, given that now the foreigners are not there, it may provide a better opportunity for domestic buyers to get into the market >> thank you very much, lawrence we appreciate your time today. lawrence yoon. suggest bee's had an auction but before they hit the block, one buyer bought them all. robert has the story. >> hey, tyler, where sneakers are now officially a collectible, holding an auction of 100 of the most expensive rarest sneakers in the world this morning, one buyer bought almost all of them for $850,000. niles nadella bought 99 of the
2:49 pm
100 pairs. one pair will still be in the auction, the 197 2 pair of nike waffle shoes, expected to fetch $160,000 at auction. nadal told us he's not a sneaker head, didn't collect sneakers before this, but when he heard he could have the best collection for under 1 million bucks, he wrote a check. >> they will appreciate in value. it's not why i'm motivated to do it i'm motivated because they're beautiful forms of art makes us happy >> now, i want to show you a couple of my favorites, guys this is the nike air jordan 11 derek jeter model. they were made to honor jeter's retirement from the yankees. they're in the yankee blue they have jeter's number on the back nike only made five of these these sold for $60,000 now, my favorites are the nike mag caesar from the "back to the future ii" movie, have the laces that actually lace up when you
2:50 pm
press the button these sold for $70,000 now, nadal says he will not wear any of these he will display them in his private car museum in toronto, which is appropriate, since now a lot of these sneakers are worth about as much as a car of savings and service. whoa. travis in it made it. it's amazing. oh is that travis's app? .. .. .. .. .. .. .. no, guys, its me. see, i'm real. i'm real! he thinks he's real. geico. over 75 years of savings and service.
2:51 pm
2:52 pm
2:53 pm
on "the tasting menu" today, cannabis retail giant curaleaf is looking to ground, announcing a stock deal to acquire grassroots, the buyout of the privately held cannabis producer will give curaleaf access to new markets, including illinois and pennsylvania. >> it really is illinois, the crown jewel. it's the sixth largest state, recreational marijuana will be legal come january 1st right now the law favors existing operators, existing dispensaries, so buying an
2:54 pm
existing one. >> and grassroots has it. >> so this lets curaleaf into that very large state. neuroalink unveiled a chip for brains the procedure would be safe and easy, he says, just like lasik they he claims the system could be used to treat brain disorders as parkinson's or alzheimer's, medical experts believe the procedure poses serious risks. i guess time will tell the fda will get heavily involved. >> they're going to seek fda approval next year, but this works, imagine being a paralyzed person who all of a sudden can control devices. >> or a parkinson's patient. >> through your mind revolutionary. california is hoping to cure its doctor shortage by offering
2:55 pm
to pay off medical school debt med i-cal form the state plans to intend $340 million uses to bako tax risen an interesting idea. >> very interesting. good stuff more doctors for california. the latest klain to get in on is the meatless mania, plus check please, is next on "power lunch. with all that usaa offers why go with anybody else? we know their rates are good, we know that they're always going to take care of us. it was an instant savings and i should have changed a long time ago. we're the tenney's and we're usaa members for life. call usaa to start saving on insurance today.
2:56 pm
2:57 pm
...or trips to mars. $4.95. delivery drones or the latest phones. $4.95. no matter what you trade, at fidelity it's just $4.95 per online u.s. equity trade.
2:58 pm
have a. two big trends in food right now, alternative meat and home delivery >> we'll kick it off with the canadian coffee chain expanding the partnership with they first partnered with a test launch of a broeskt sausage sandwich, they say it's simple. they're prepped the same way as the sausage. this may also improve afternoon and evening foot traffic, which is an area that most coffee chains struggle with mcdonald's is partnering with door dash at the end of the month. it doesn't end the partnership with uber eats it means they're just no longer
2:59 pm
exclusive. globally that is not a $3 billion business, and available in 9,000 locations in the united states it also expands the delivery footprint for all of these restaurants, and will likely to continue pressure others in the states they've been say the past two quarters, that's eating into some of the market share that they long have held. so mcdonald's just making its footprint. >> so now that everybody is getting food delivered, domino's doesn't have the primacy >> yeah, it used to be only pizza you could get delivered. >> i wonder how well that food travels. >> the fries probably not. >> you can always pop them in the broilers >> it is, it is. >> i've never done that. >> a little food ordering from time to time mcdonald's has still not entered the plant-based meat alternative zone that would be a huge move for
3:00 pm
them analysts say beyond meat is the company to partner with. >> burger king has gotten into it >> they have the impossible. >> qsr has a perp with both impossible and beyond meat they have the two providers. thank you for watching "power lunch." >> "closing bell" starts hight now. welcome to "closing bell." i'm david faber in for wilfred frost. we're here at the bank of america post the financials are lower today, but bank of america is actually bucking the trend. we'll tell you why and i'm morgan brennan we have 58 minutes to trait. everything you need to no before the market closes. 9 per of s&p have recorded earnings, csx is dragging the transports lower, and the beige book says the fed sees the econom


info Stream Only

Uploaded by TV Archive on