Power lunch starts now welcome to power hundred mp. Its a record day on wall street the s p 500 notching new highs when tyler mentioned the dow and nasdaq are in striking distance. The nasdaq about 13 points away from that mark kelly. All right thank you very much. For more on whats sending stocks to new records today, lets go to bob at the New York Stock Exchange bob. Three things that are really mattering right now. Number one, trade talk optimism. Number two, the Federal Reserve cutting likely for the third time this year, this week and finally the Consumer Holding up well i think the Consumer Holding up is the key to all of this. I looked at the earnings calls for the 40 of kpacompanies that are reported so far, very clear. The consumer is holding up well and theres no concerns about a recession in 2020. Richard seeing the capital one ceo. I think the u. S. Economy and consumer is in pretty good shape. Me echoed many bank ceos that i heard saying the same thing. As for recession concerns, hes designed bank ceo. Holding up, no recession talk. Thats why were at new highs. Id say since the last time we hit new highs, the leadership is defensive sectors, consumer staples. We need to get other cyclical groups these are all lagging to lead and i think we need resolution of the trade war to really get that pattern back to you. Thank you very much. As we hit all time highs, is there anything that can stop this record breaking rally into the year end welcome to both of you you say you are positive on risk taking into year end 2020. Thats a long way if now stock market records which were talking abtoday are made to be broken youre a little more cautious you see zigging and zagging through year end your price target on the s p is a little lore than it is today yeah. We consider ourselves to be pretty neutral we said dont rule out another before end up. If you look at what we have seen its rally off when we have seen this in the past off the 2010, 2011, 2016 lows, we tended to get quite a few backs before the 10 the pull backs cause would be in. We dont like valuation thats the first thing that we have been pointing out too high . Too high. What we pointed out last week is were starting to bufferin up against getting pretty close to levels that we peaked out previously in the sickle we seen that already you have to assume is the good news and progress with trade war. We think a lot of that is vacant jim, what would you say laurie is missing. Sdm i dont think valuations tend to be a hurdle. A lot of the concern about pe ratios tend to be looking at them in absolute basis very low Interest Rate environment. The other thing i would say that might be missing from that analysis is how cautious investors really are theres not a lot of euphoria in the markets. You look at fund flows and talk to clients, theres still a fair amount of risk aversion. I think the struggle that some of the unicorns are having in going public is a good sign showing discipline in the Public Market it indicates were nowhere near yeuphoric type of environment one story about the level of bearishness now is quite high. I know its a concern to you and investor is trade. Will a faze one trade agreement whatever that means be sufficient to satisfy the market that the trade collision between u. S. And china has been ga mitigated or taken out of the play the benefit of phase one deal is the deferral of more tariff ons ttariffs on the way they actually bought nearly 29 billion annually in 2012 and 2013 the details dont look all that great but deferring greater tariffs coming on is something the market likes if youre worried about valuations, why do you like it we think its a little over valued but when we look at it with the s p we find its past peaks. Isnt valuation trips the market what else would. I think we have to consider the trade war itself i do think a lot of this has been baked in. We have a basket of stocks where we have evaluated the trade war. Those trade wars sensitives have out performed. We also said on the trade bar, if you look at the mine kni deal thats been discussed, what will happen that will restore business confidence. I havent heard a lot that says it will start doing better thank you very much more than a dozen wildfires continuing to rage in Southern California and Northern California today across the state hundreds of thousands of people have been evacuated from their homes and millions are without power as pg e and Southern California edison are using planned power outages. Both of those stocks are down today. Jane is live in california reporter its going give firefighters maybe 24 hours to try to get a jump on this fire here new fires breaking out today especially one on the west side of los angeles along the 405 some of the most famous people were forced to flee their homes. Here is the latest map up here where i am the kincade fire doubled in size overnight while its calm right now, they say more winds are coming. Were starting to get ready for another red flag event weve got a quiet 24 hour window right now. Reporter people are dealing not so much with the fire as the intentional power outages. You have 186,000 people evacu e evacuated but more than two Million People without power my daughter who lives in paci c pacifica says her power will probably be out until thursday back to you. Thank you mplgt co coming up, microsoft beats amazon in the clash of the clouds well have more on that story. A 14 Million Dollar offer for tiffany. 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Now you can take control of your home wifi and get a notification the instant someone new joins your network. Only with xfinity xfi. Download the xfi app today. The offer worth 120 per share. You can see thats below the stocks current price. Our next guest his worth a lot more lets bring in oliver chang. What do you think is fair price . Great to be here. We think a fair price is closer to 160 120 is low and modest. We think this company deserves 20 times if not 22. We look back at past deals harry winston, versace, these go for high multiples they really want to put a ring on tiffanys finger. Theres a lot of great sateasses tiffany is not in that category, per se they are trying to get there, obviously. Do they deserve the same kind of premium and they might think they are worth more but if they say no no this aftoffer, then wt they are such an iconic luxury brand they are Great Diamond supply. This would bring lvnh jewelry revenue from 9 to 17 . These are all competitive factors and hard luxury which is a category tiffany is in as we think about china and gifting, its a huge long term Growth Opportunity as well its interesting and you make a good case for the 160 to 180 valuation but the markets dont seem to believe that at all. The stock is trading up to 128 which is not more than the reported bid thats on the table. Why do you think the market doesnt see 160 to 180 at this point . I think its a bit of wait and see. Were out there because i believe luxury assets are very valuable this is once in a lifetime what were seeing is fragmentation as well as consolidation. Major luxury players evolve and really need to speak to new customers and their digital age as well. Theres many forces at play. A lot will be happening and the stock will be highly volatile over the next few weeks and months as well you mention this is a once in a lifetime opportunity its not really. Tiffanys has been hanging out for a while. Who might this be an attractive asset for if its the moment to pounce, so to speak. Its a big moment tiffany has a big watch opportunity. Also other players really like tiffanys bridal business. Its a little bit tougher for players to be authoritative. These arassets as we think about the map and the fundamentals around this, a lot of them will have the most revenue synergies. Mathematically the operating margins are lore you mentioned the possibility of other buyers strategic or financial, who might they be i think you look across the landscape in terms of who are the large luxury players the analysis is how much debt and how much these Business Models have. Its pretty modest they have the Financial Capacity to do it those are very good places to be real quickly, if this moves forward and even if it doesnt, is there someone this says hey, these are the next names that might be up for grabs or is this a unique situation in. I really think were living in the name of brands and having fragmentation and consolidation. Who has a great heritage and other brands in the marketplace. In the band bag space, these are all categories which good growth characteristics. Rethinking brands and the power of brands and how brands can extract pricing power, these are all what were pursuing. All right come back any time you want to name names thanks very much thank you up next, we will get you ready for todays big after the bell earnings. Google among them. Our traders will tackle that one next bitcoin up 14 in one week h bitadeen tumbling is the rebound for real . Well be right back. I dont know whats going on. Ive done all sorts of research, read earnings reports, looked at chart patterns. Ive even built my own historic trading model. And youre still not sure if you want to make the trade . Exactly. Sounds like a case of analysis paralysis. Is there a cure . Td ameritrades trade desk. They can help gut check your strategies and answer all your toughest questions. Sounds perfect. See, your stress level was here and i got you down to here, ive done my job. Call for a strategy gut check with td ameritrade. Its how we bring hope to our patients like viola. Her team treated her cancer and strengthened her spirit. So viola could focus on their future. Cancer Treatment Centers of america. Appointments available now. Welcome back to power lunch. Lets get a check on alphabet ahead of its earnings after the ball ripping higher to touch all time highs. Todd, Google Alphabet is unusual among the faang stocks because its at a high what does that tell you . Right i use that add to my portfolio i hold the stock weve just been bumping up against this 1300 region and the rest of the fangs have not i believe pit your attention to google we have been seeing google out perform the nasdaq stock they are climbing a 56 move overnight. I like the stock higher. Im taking it long in the earnings mark, the company does not really seem to massage the Quarterly Earnings report. Theres been some pretty big reactions. Positive and negative to numbers in past quarters what are you expecting today and how do you do the overall venals i expect good results we like the company. Its been one of the best performers over the last three to six months. I dont see it losing any of this momentum. Its the Fastest Growing company in the world the number one player in Digital Advertising and Companies Continue to move away from traditional advertising towards digital. The Cloud Business is growing at 33 year over year google maps has over a billion years that hasnt been monotized yet. I think youtube is an under appreciated asset. Nobody talks about youtube when it comes to streaming wars households are cutting the cords and getting rid of tv. All right a lot of talk about some of the parts values for alphabet. Thank you very much. For more trading nation head to our website or follow us on twitter. Back over to you ahead, taylor swift. Were talking about taylor swift. Are the haters going to hate her for this plus clash of the clouds microsoft snagging pentagon cloud contract right from under amazons nose. All this when power lunch returns. Woman my reputation was trashed online. I felt completely helpless. My entire career and business were in jeopardy. I called reputation defender. Vo take control of your online reputation. Get your free reputation report card at reputationdefender. Com. Find out your online reputation today and let the experts help you repair it. Woman they were able to restore my good name. Vo visit reputationdefender. Com or call 18778668555. Wheeveryone is different. Ta, which is why Xfinity Mobile is a different kind of Wireless Network that lets you design your own data. Choose unlimited, shared data, or mix lines of each and switch any line, anytime. Giving you more choice and control compared to other top wireless carriers. Save up to 400 a year when you switch. Plus, get 50 off when you buy any new lg phone. Xfinity mobile. Click, call or visit a store today. Welcome back here is your cnbc news update at this hour. German chancellor praise iing mi draghi he takes the raeins on friday i have every confidence you will be a superb leader. My goal has always been to comply with the mandate shrine by the treaty. former House Speaker paul ryan has launched a new Nonprofit Organization that will be focussed on fighting poverty and increasing economic opportunities. He announced the launch of the American Idea Foundation this morning. You are up to date thats the news update this hour back to you. Thank you lets get a check on the markets and where we stand the leading components there time now for power movers. The company beat on earnings and revenue and reported a jump in users. Roku higher today. Sanderson farms on way for gains. Shares of fit bit soaring. This is a 5 stock even with todays gain its all time high 51 set back in 2015. Ouch. The oil market is closing up for the day. Lets gone to dom. Oil prices are in a shorter term up trend. Its been derailed west texas off by 1. 5 55. 80 the last trade there. The prices hit their peak not long after the opening bell. Some more bullish activity around stocks helping the cause. Energy sector a huge focus today. Jedi Defense Department over amazon, thats a small amount of money for these companies. It could signal a big shift. Thats what microsoft ceo told me when i asked about the fight for this big cloud contract over the summer turns out uncle sam agrees the u. S. Department of defense awarding the Cloud Computing contract to microsoft. It could be worth as much as 10 billion over a decade. Microsoft jumping to a new all time high. No surprise amazon is happy. Aws is the clear leader in crowd computing and a detail assessment it leads to a different conclusion both of these companies generate a ton of money with their Cloud Businesses aws 9billion in revenue last quarter alone. Microsoft an estimated 4 billion last quarter this was a hotly contested composition tell ming james mattis to screw amazon out of the contract and the fight might not be over. Amazon is considering a challenge to this award. Back to you. Thank you with the jedi deal all wrapd up, what does this mean for microsoft and tres of the cloud players. The case can be made its not a huge mover in terms of winning future contracts, what do you think this could mean for the company . Thanks for having me. I think the main point is this is a validation of microsoft broader Cloud Strategy while this is a big deal, i think what it really shows people is micro soft can compete for deals. I think all sort of bring us to this day where you have been winning the bigger deal. They are gaining market share from amazon on a sort of face. In general as an investor what you want to take away is this is a great validation of what they have been saying and trying to execute against the broader cloud strike they might have to compete on price. It may not be as vibrant or may never be as vibrant as it once was. We have seen the growth slowing but still amazon has a lot of head space beyond mic microsoft. The one part about the jedi is the idea of a network affect that means theres a winner take off dynamic. You look at aws. Amazon still the clear leader in that oerve t it was as much as it might be from traditional business or commercial customer. There is a possibility that amazon could contest this decision, that the dod has made. That President Trump had a hand in tipping the decision towards microsoft. The department of justice and have started to look into this more as well as the eu i think for the aws id say less from a political bias. What does this do to the competition between the two in the cloud . Does it legitimize microsoft in way its needed to be . Im not sure it legitimizes them i think to the earlier speakers comments this is a growing pie i dont think its deal they might have been in position to lever a couple of years ago. If you think about the opportunity, theres going to be more than one winner and microsoft and aws are in good position i think for micro soft coming at the market where you are a very small portion of the overall market youre dwet ggetting to about half the size making sure people think about you as the big deals come to market i think it helps to prove again its sort of a validation of the broader strategy its funny you say that youre saying microsoft is about half the size of amazon in this business at some point, we talked about the kind of antitrust or monopoly concerns having too much of the pie here what happens if microsoft does too well i dont see th