Pot is on sale in illinois the ceo of a cannibas company will join us power lunch starts right now welcome to power lunch on this first thursday of the new year check out all three of the major indices here the dow up about 200 points with the highs up. 63 . The nasdaq composite up three fourth the russell the outlier in the red. This is the semiconductor jumping 1 its having its best day since december 12th. Well have more on that later. Can this rally keep going in 2020 bob is at the New York Stock Exchange looking at the challenges that lay ahead. The important thing is were here but the question is can we sustain it here in 2020. I want to show you how Different Things were compared to this period last year first off, january 1st the market was pricing in an earnings recession stocks were cheap the recession didnt happen. The economy is still strong but stocks have gotten expensive 18 times forward earnings. Thats way above normal. The issue is whether we can return to earnings growth. Strategy gis strategists are expecting mid single digit growth here its about mid single growth for most of these people that would take some of the purchase off the high multiple early reports right now, well, from Companies Reporting at the end of november kind of on the big side they are seeing First Quarter earnings estimates taken down by analysts after reports some like auto zone and costco have seen increases. Leets call it a mixed trend but its lower than expected we need to get the in your opinions up. Liking at the risks in 2020, the markets, they are trade wars its bit lower because theres a risk of the trade risks are lower. The fed raiding rates decent job growth. There are some major risks out there. Buy backs, we have been seeing it for ten years it may be a limit to how far we can go the belief that Global Growth is bottoming. A lot of people think this will not happen wage growth is not here yet but a lot of people believe we should be having it in the next couple of years. That will be major issue as well lets say right now we have a very mixed picture for the global Earnings Report we need to get the numbers up bit more in the next couple of quarters back to you. Thank you very much, robert our next two guests both say stocks have more room to run a far cry from where we stood one year ago today lets bring in john lynch. Welcome. John, and then you kevin what kinds of returns range wise would you expect for the s p in 2020 john, you first. I think bob made a good point. I think the fundamental s have t catch up with the price we saw last year in the Fourth Quarter. I suspect well see by june, get some clarify on phase two at which point well raise our earnings estimate. Kevin let me ask you the same question and do you expect that much of the gain might take place before we get into the heavy political season summer and fall first, we believe well see the s p up 6 to 8 if you have to put a specific target, i would say 34. 50 is your target. I do believe well get most of the gains early on in the year if we get strong gains prior to the election, you would think the incumbent would stay in office i think the president will do everything he can to keep the market going as far as signing a trade deal and trying to push phase two along as quickly as possible to help the s p theres nothing like launching into 2020 with a sunny outlook. Let me ask you about a potential storm clouds theres a note today that the Conference Board ceo confident survey mentioned recession is the top concern. These were in interviews that were conducted in september and october before there was a time line on the table for this phase one trade deal on top of that, we have a note today about the continuing liquidity tconcerns does that mar your anticipation for a smooth road ahead . When they took that survey not only do we get clarity but we have clarity on the federal reserve. We have clarity about the ecb. Theres some Monetary Policy tail winds and then china overnight. I would think any ceo in year 11 of an Economic Cycle would be worried about recession. Thats their job i do believe that when we look at these fundamentals, if you look at gdp of slightly less than 2 , inflation driven by wages not in a threatening level, Producer Prices are declining faster than Consumer Prices arising, we think thats a good lead indicator. The only threat would be a supply shock if phase two doesnt work out and then you could have a temporary inflation fear that could cause the market to back up before the election kevin, one of the things that was odd about 2019 was practically every asset class i can think of with the rare exception whether international stocks, bonds, you made money. Its a question of how much money you made as you look ahead to 2019, are there Asset Classes that you think are vulnerable and might not make money in. Well, for starters, fixed incomes, i think in 2020 what well see in fixed income is youll get the income. Youre not going to get the appreciation that you saw fixed income have in 2019. We expect yields on the tenure to be in the two to two quarter range. We feel its going to probably be anchored there because of the u. S. Having a relative yield advantage and the fed being on hold has brought hedging costs down for international b borrowers. We think they will keep it in range bound for 2020 thank you very much we appreciate your insights on this first trading day of the new year john, same to you. Thank you an incredible escape from japan to beirut and who master minded it . Carlos ghosn said it was his plan alone to escape from japan. Phil has the latest details on this saga. Phil this is the second time we have heard from carlos and theres been a number of twom developments over the last couple of days first of all, the pilots, turkey has arrested pilots who are suspected of being lyinked with mr. Ghosn being flown out of japan. They have not been charged he did enter with a french passport which raises questions, didnt his attorneys have all his passports. Police raided his home in japan looking for more clues and answers as to how he have able to get away. Because hes heard a number of the immediate wra repomedia rep his wife orchestrated the whole thing, he said i alone arranged for my departure my family had nothing to do with it its been a wild 13 months since carlos was arrested in japan hes lost leadership of nis is a, spent most of his time in jail or under house arrest well probably hear from carlos next week. Thats the expectation int interpol did put out a red notice thaths saying to the government this is a person who we would like to see questioned. Whether or not lebanon says, okay, were going to question carlos ghosn or ignore this, that remains to be seen. Here japan said youre prohibited from talking to your wife one would think if youre under house arrest and you have that kind of prohibition that they are monitoring your communications how could plan like this be master minded if there was monitoring going on . Thats why people are saying, look, he had to have had some help from within he couldnt have just my communications were being monitored. The question becomes who inside japan assisted him with this plan to get out of the country this wasnt something that just happened overnight this took extensive planning and carlos ghosn because he was held since november of 2018 with little contact was not charged, likely wasnt going to trial until maybe the spring of 2021, i think. You read his first statement, he said this is ridiculous. Its a rigged Justice System im not allowed to speak for myself nor allowed to face the charges in court i need to do something in order to prove my snens. I read somewhere he did not have Internet Access except when at his Attorneys Office have you seen that as well yes i would suspect a fair amount of the suspicion in questioning will be of his attorneys absolutely it will be the attorneys said i have his passports and then one of the reports today out of japan is did you know he had a second french passport . The attorney said i have a lock and key and im supposed to have control of that. The kind of answer that makes you say what did you know and what didnt you know and if you really were concerned that he might be a flight risk, shouldnt you have alerted the authorities. Those are all questions being asked in japan now thank you very much coming up, 2019 was supposed to be the year of the pot stock. Didnt work out that way illinois now the 11th state to legalize weed and well talk to one ceo banking on bud were not talking beer peleton is riding high into the new year, up 4 thanks to some bullish comments the analyst who made that call will join us, next if you listen to the political debate in this country, it sounds like we have a failed society. But nothing could be further from the truth. Americans are compassionate and hardworking. We arent failing. Our politicians are failing. Thats why im running for president. To end the corporate takeover of the government. And give more power to the american people. Thats how well win healthcare, fair wages, and clean air and water as a right. Im tom steyer and i approve this message. When i see obstacles, i create opportunities. soft music when i see adversity, i find a way. When i hear never, i say now. [announcer] Southern New Hampshire university is education made to fit your goals with over 200 degree programs, flexible class schedules, and some of the lowest online tuition rates in the nation. cheering so when i face barriers, i can break through. [announcer] breakthrough at snhu. Edu. Ithat car is one of mine. And soon, its going to be one of theirs. But they would have never even known it existed. If it werent for the power of targeted tv advertising. Its smart. It grabs peoples attention. It works. Its why Comcast Spotlight is changing its name to effectv. Because being effective means getting results. Welcome back peleton is getting some love on wall street. The firm says a favorable trading set up, healthy earnings and improving margins will drive the stock. Shares of peleton down 20 over the last month rebounding this week though. Is peleton due for a pop do you think the sell off is over from december we do we see a good trading opportunity which is what we highlighted this morning really to step back we were one of the first on the street to initiate coverage with an out perform rating back in october the stock has worked since then. Weve had a bullish view of the long term opportunity. Really today i wanted to highlight what we see as a compelling short term trading idea its based on three things first, we think the 20 pull back relative to the market in december really did not reflect any fundamental concerns third we think there could be more post side holiday when you look at Brand Awareness and publicity during the month of december and match that up with the typical lead time that it takes for consumers to make big ticket purchases we think there could be strong upside post holiday. Its those factors combined along with our positive longer term use are you saying that you think people will go out like new years resolution and all of that and now they will buy peleton . Thats right. If you look at typical seasonality, more than twothirds of net member adds come in the second and third fiscal quarters, december and march quarters we see strong upsides for both of those quarters. Its partly why we out lined a pretty bullish upside case for the year in total. I have to guess that even despite the price point and ive in full disclosure, i bought one over the holidays. I think theyll show a picture of my good sport wife on the peleton. There she is mimicking the ad. Tdid you get the idea from th ad no. I know people here and elsewhere swear by them. As they are advertising extremely heavily this week, this weekend on sporting events and so forth, you almost cant get away from their ads that they will have a wave that follows through into january and beyond thats right. If you look at some quantitative measures behind whether its search interest online or the number of ads, you have seen an enormous and unprecedented amount of activity around the brand during the december quarter. We think that can drive upside for the quarterand Going Forward. Thats a key factor behind our positive call. Lets stipulate that no one on earth need, i mean needs a 2200 exercise bicycle you can put on a 50 pair of shoes and get an equivalent work out. Well it is interesting for less than 100 per month that a household can have two members subscribe with a bike fully financed that lines up pretty attractively when you look at the studio Fitness Concepts that gain popularity. We could recast the value proposition. I think thats a kwee reason why more than 20 of the ads are coming for consumers that make below 70,000 what about this thing called the mirror you follow that one . You know it. There are several that look interesting. I think peleton has opened the market for some finance companies. The mirror being one of them all right jonathan, thank you so much. Tyler, i got to ask you was this gift to your wife it was to the household, truly. It was i need it more than my wife needs it by far she was a good sport to let us use that photograph. There she is i love it i love it. Its up my my office at home. Its like when your husband gets you a couples massage for your birth day its like this is really for you. Didnt you read my gift list. Theres no gratitude here. Its fun its good. Its really good the instructors are both enthusiastic and i hate them at the same time. We have them up in the gym upstairs so upbeat im afraid to go up because youre working out with your coworkers and if you fail with the instructor then you failed with your coworkers who wants to do that its a good, fun device the music is good. Some of it is explicit youve got to watch that very delicate, i am. Coming up, this mystery chart. The best performer last year one trader says the stock will soar even more from here thank you for indulging my peon cveatn. Edgetoedge intelligenceh the, gives you the power to see every corner of your growing business. From finding out whats selling best. To managing your fleet. To collaborating remotely with your teams. Giving you a nice big edge over your competition. Thats the power of edgetoedge intelligence. Find the best instructors in the world, and tie it all together with a worldclass software experience. We ended up creating, as you all know, so much more. Peloton is truly a category of one and were just getting started. Now, lets do this. Together, we are going further than we ever thought possible. Welcome back to power lunch. The s p 500s top performer of 2018 and 2019 is kicking off the new year with more gains amd up more than 5 today after a 370 rally the past two years. Should you stick with this winner in 2020 lets bring in your trading nation team. Todd, is it gets little too rich here in. I dont think so. If you go back to 2000 youll see we have just broken that 20year period of consolidation. The scene of the crime is about 25 you pull back up to that point, i think its healthy we get off with this weekly chart and get down to the daily. Kind of hone in here a bit youll see were in a well established up trend here. I see no reason to fight it. I am long down into the 20s. I continue to hold im not looking to hedge one thing ill note you go out to next januarys options. The 65 has huge open interest. Somebody wants to buy almost five million shares at 65. Watch that and the upside as we start to move into channel resistance all right just your average 20year range thats run from about two bucks up to 50 bucks and breaking out of it. What about the field position here obviously people really do love the general semi story going into this year i think that range is really important. It highlights what a great job ceo lisa sue has done. A lot of this run up has been building off of that momentum she has managed to create. They had solid 2019 q3 numbers with 9 growth they are expected to continue to take market share away from intel. Those are all good things. I think the achilles heel continues to be the evaluation the fundamentals are extremely strong all right well see if they can keep supporting this name up here thank you very much. Back over to you ahead, high hopes. Illinois legalizing marijuana sales today. Were speaking to one ceo in the middle of this action. The road to the white house is paved with lots and lots of money. A huge Fourth Quarter for Campaign Fund raising. Well lay out the numbers. Wage wars. 24 states raising minimum wage for the year well discuss the growing debate, next all this when power lunch returns. Welcome back in an interview with nbc news, defense secretary mark esper spoke about the Current Situation in baghdad after proiranian militants ladies an gentlemen sag ladid siege the situation is stiebl iabid we made sure the embassy is secure and safe for the personnel. Health officials banning most flavored e cigarettes but with major exceptions that benefit retailers, and adults who use the devices. The fda prohibiting fruit, candy mint and desesert but menthol will be allowed to remain on a the market for the third year in a row the mediterranean diet was rated the best overall it focuses on less red meat, saturated fat while increasing produce, nuts and whole grains youre up to date. Back to you. Theres a diet of the year. This is something that should change yes third year in a row it won lets just retire the trophy. Markets near the high. The s p 500 is up almost half of a percent as well. Nasdaq almost up a percent only the russell in the red today. Time now for the first power movers of 2020 disney gaining on continued optimism about disney plus the streaming service seems conservative the company says it Wont Disclose subscriber numbers until the Quarterly Report in february wingstop falling today the companys coo is leaving march 7th. The resignation was not the result of a disagreement between him and the company. Evercore dun grading novacure. The stock is up 130 in the past year and that includes todays slide just this hour democratic president ial candidate joe biden has announced he raised 22. 7 million for his campaign in the Fourth Quarter that