Midwest. Will be b here to give us a consumer check as power lunch begins right now welcome to power lunch. Im contessa brewer. Check out where we stand after hitting record highs the dow mostly in the red thanks to boeings move lower the s p barely hanging on to the green. The nasdaq again, still in the green, but barely hanging on to the gains. Take a look at these tech heavy weights which have been b leading the rally. Facebook up half a percent dpo google up a half a percent the dow crossing 29,000 for the first time today though it is off that level right now. A handful of stocks responsible for this latest leg of the rally and bob pisani is taking a look at those names hard to believe it was only a couple of years ago we were at 20,000 so i want to show you whats responsible for moving the dow from 20 to 29,000. Concentrated, but not as much as you might think. Apple not surprisingly 15 of the gains is through the apple. Boeing, 13 . United health care, visa and microsoft. B about 55 of the gains from 20 to 29,000 is due to these five stocks the leadership has gotten even narrower and more concentrated 28 to 29,000 was only a few months november of last year. Apple is 32 of the gapes of the last thousand points dow, united health, 18 goldman sachs, 16 put these three stocks together, twothirds of the gains of the last 1,000 points of the dow 30 stocks is due to just these three. And sometimes, really narrow leadership is associated with market tops and thats what got people discussing what might be going on here. The narrow Equity Leadership s p 500, pe ratio now 18. 5 thats the highend where its been the last 20 years where people start saying gee, you got prices up and earnings still coming down for 2020 thats a dangerous situation what happens next . Roughly in line jobs report. Thats the problem here. January 15th, president said he would sign the trade deal. The fed will be meeting. But is there enough investor enthusiasm to move the market forward for these events theyre good, but theyre priceded into the market and thats what people are having to face whats the next catalyst, likely earnings and any kind of reinvestigation. Weve got to get them up a little bit the numbers have to stop or the markets going to have some problem down the road. Back to you. Like you to stick around here stocks below their all time highs after crossing that 29,000 milestone in been a red hot winter for the market. The s p is up 8 since the beginning of november. So what can you still by at record highs if youre in for paying top price lets bring in ron, cnbcs seep yor analyst and come tmentator you heard bob there just talking about whos driving up the markets overall and the dependence on earnings what are you expecting to see as we see the banks come out with their earpings reports theres not a broad consensus theyll be very strong, however the year over year comparisons are b probably better this year over last and we have as bob said analysts guiding estimates lore makes itier for not only financial, but all companies to beat expectations. Some depressed activity in the Manufacturing Sector in construction and we saw that with one homebuilder yesterday so i think we have to keep an eye on earnings. The markets have gone up very fast in a short period of time you touch these numbers like 29,000 and theres a bit of a pullback so wouldnt be surprising to see the market digest these gains and take a breather given the torrid pace of appreciation weve seen in the last several weeks and months you mentioned the jobs report coming in. Maybe slightly below expectations here. Moodys came out with a statement about the jobs report saying if the employment continues to grow steady after the tenth year of economic expansion, it would still paint a relatively robust picture. How much of this is just an upward climb for investor optimism or where we are because we have tough comps against 2019 we had a great year last year. Yeah, the important thing is a lot of the issues that were preok pie iing the market throughout 2019 are less of an issue now. We kopt to have a strong consumer decent job growth. We continue to have a neutral fed thats out there thats been there for the last four, five, six months we continue to look for signs of a global bottoming in the global economy. Still very debated its murky now, but there are some signs that the decline we saw in the middle of last year has stopped. So a lot of uncertainty has been removed. I think the biggest concern is that the market is so pricey the its subject to a big shock. If any of those events move away ron, lets turn to next week, the beginning of the earnings season a lot of the big banks will report then the parade continues on and on. Last year, earnings were flat. It was up more than 30 . The p was higher e was not. Dont we have to have good e this year . It would help given where valuations are selling about 19 times forward earnings depending on which earnings estimate type of indicator you use, if its the cyclicly adjusted price that bob schiller uses, were at the highend so yeah, definitely need to see earnings improve but not sure were going to get it at an economy thats growing around 2 . Its difficult to see revenues taking off so i think selecttivity is going to ivity e a key going forward. You have to pick your spots. Big Cap Companies have run up a lot but they have product cycles that are going to kick in this year and they make them interesting. Again on a name by name basis. So i dont think this year im going to deviate philosophically from where i was last year which is upping the quality of your port fofolio. Two interesting pieces in the wall street journal this morning. One of the listed companies are losing money so you have to be careful there then two, within the junk bond market it, were seeing a real bifurcation between those credits that are reasonable and those that are tanking. People have to be a little careful and know better what they own when it comes to their fixed income investments as that might become a more pronounced factor in market behavior this year bob, chime in here because yesterday, you took us through the valuation arguments that ron just touched on. You did very carefully and wisely i thought but you also just mentioned the idea that the market at these levels is maybe more than normal vulnerable to a slip that could be an earnings miss yeah i think thats where its if we suddenly see a spate of companies coming out and not essentially affirming the higher end expectation of the most bullish analysts and theyre expecting about a 9 increase in 20, i think thats going to be an issue the main argument the bulls have is simple. In a chronically low Interest Rate environment, what else are you going to do . If you believe the ten year yield is hovering for the next two years then tina is a real thing in the stock market then the bulls have a point say iing look, were elevated up here, but rates low for long periods of time, the fed continuing to add liquidity and continuing to remain neutral is very powerful incentive to continue to own stocks even at higher valuations bob, ron, thank you, friends. Appreciate that. Thank you zblnc zblncht new sanctions on Iranian Companies and announced by mike pompeo and steven mnuchin. Eamon javers is at the white house with the details i told you u earl wrer in the week to keep your eye out for the b possibility of secondary sanctions and thats pretty much where we landed today. The iranian sanctions, there are also designations here for a beijing based company, shipping firm and others. A company in oman. There have also been designated under this round of sanctions. So the administration here trying to clamp down on entities doing business with the iranian and that has implications for europe i asked the treasury secretary mnuchin in the White House Briefing room today what his message is for the europeans and what that means for an entity called instacks, which is been put in place in europe as way to try to get around american sanctions by engaging in transactions with the iranian without using the u. S. Dollar. I dont believe theres been any instacks transactions as weve made clear, we are working on a swiss channel that we have approved for humanitarian transactions well continue to allow hum humanitarian transactions. Weve warned instacks and others they will most likely be subject to secondary sanctions depending on how they use that so mnuchin there saying theyve issued a warning to the europea europeans they could be subject to sanctions based on any transactions if they do that hes also saying that through a swi switzerland based entity, theyre trying to couple up with a way to have humanitarian transactions go back and forth, but what they dont want to see here in washington is commerce happening between the europe ps and iranian. The europeans presumably disagree that rather strongly. Now a point of tension here tweep the United States and many of its allieallies we have a news alert on casper filing to go public on the New York Stock Exchange. Lets go to diedra for more there. Thats right. Casper slate the direct consumer Mattress Company revealing its ipo perspective, planning to trade on the New York Stock Exchange under cspr Morgan Stanley, the lead underwriter. Welcome to the sleep economy, valuing it at more than 430 billion globally they have 1. 4 million customers since 2014 losses here as investors glow patient with the growth at all costs model. Caspers losses are increasing looks like the race of those net losses is deaccelerating in terms of risk, they list it history of losses. Competition, its need for exp d expanded brick and mortar presence and social media. Casper was last valued at just over a billion dollars glittery list of investors here include ashton kuchar, kevin spacey, scooter brawn and leo decap row. Thats a lot of name dropping going on there i couldnt resist its great. Diedra, thank you for that appreciate it. Coming up, a boeing employee says clowns and monkeys made th 737 max more on the embarrassing internal messages. Plus if youre driving in the midwest and need a donut, a pizza and tank of gas, you might just find yourself at caseys. Coming up, well talk to the ceo and hear what hes seeing omfr the american consumer. Mobile app so you can quickly check the markets . Yeah, actually im taking one last look at my dashboard before we board. Excellent. And you have thinkorswim mobile so i can finish analyzing the risk on this position. You two are all set. Have a great flight. Thanks. Well see ya. Ah, theyre getting so smart. Choose the app that fits your investing style. Ceo ease feeling down while Consumer Confidence ticking up our next guest is here to give us the pit stop pulse. He runs Caseys General stores gas stations, but not really just gas stations. Its the fourth Largest Convenience store in the country, also the fifth largest pizza chain. They have more than 2,000 stores in 16 states, mostly in the middle west. Here now first on cnbc, the president and ceo of Caseys General stores hows business and how has it changed over the past two years . Business has been great thanks for having me we just reported our most cent Second Quarter 23 earnings share growth. Our sixth consecutive quarter of 20 plus percent r, 20 ebitda. How do you do that . How do you make that happen . I dont know what your product mix is between gasoline sales and food and other convenience item sales, but gas prices last year were not moving higher. Larly. Yeah. The great thing about our business is were in three businesses in one. Were in the gasoline business for sure but were in the Convenience Retail business and really in the Restaurant Business with our pizza. So on the gasoline side, the retails will go up and down but the margin that you make on that is pretty consistent so we dont get too hung up on the sales on the gasoline side on the inside sales, really its all b about differentiating our product assortment to meet the needs of the guests in our local communities. We operate primarily in smaller towns in some mid sized cities so we enjoy a pretty favorable competitive environment compared to the large e metro areas weve talked a lot about s r starbucks. I know youre pursuing a similar focus. Why . What could drive your return on investment in those areas . Well really what we see from the consumer is they want convenience and it comes in a lot of different forms and part of that experience is really being more technologically enabled. So our guests want to have an e Commerce Platform where they can order that great famous caseys pizza we all know and love and get that online. About six months ago, we launched our new mobile app then just this week, we launched our rewards program as well. So now were rewarding our guests for why is that important to your bottom line . Z because it builds loyalty and frequency. So again, what we like you get discounts and earn points like you do at starbucks. The way the Program Works is you based on purchase, you earn points and whats you neek abounique, it for cents off of gasoline or convert it into caseys cash thats fine, too but we have a unique twist because of a role we play in communities we serve you can convert those points into what we call cash for classrooms they can convert those into cash and donate to a local school in their community so they have the opportunity to support their local community. So you said i think you said earnings per share were up 23 can you tell me what the increment within that number came from your mobile app . Its really too early to tell because the mobile app has been transformtive for dominos, for example, people call it a Technology Company with a pizza chain attached to it were early days on that, but were seeing really accelerated growth on our e Commerce Platform weve got a long way to go only six months into it and the rewards program Just Launched on monday can i ask you, 21 states on january 1st, have raised their minimum wage what is that doing to yours and how much of a role is automation playing in your future plans were feeling pressured from a wage standpoint but its not necessarily being driven by states changing their minimum wage laws. Its being driven more by low unemployment and having to compete for talent so we are seeing wages rise up and we are taking a look at different technologies that can help off set that. But one thing that we do in our stores thats very dimpt is we make our food from scratch so that pizza, we have people in there mixing the dough and rolling it out and putting our 100 whole milk mozzarella cheese make iing it fresh we have donut makers that come in and make them fresh its the made from scratch element that makes the quality of or food im going to ask a question from left field and forgif me for not knowing the answer ahead of time. Do you sell vaping product sns. We do and how is the change in that world going to affect you . Is it a material matter or not a low percentage of our sales, about 1. 2 of overall sales are in vaping products we voluntarily discontinued the sale of the flavored products a while back to make sure we werent inadd ver tantly attracting young rer consumers and were complying of course with the existing laws and now that age has changed to 21 but its a small part of our overall business thank you very much for being here today this is your first interview on cnbc we hope its not the last please come back. Thank you im a cnbc junkie, so this is a big day for me if im ever in the midwest or iowa, ill stop in ill buy you a pizza. Hold you do it. Darren, thank you. Coming up, a new proposal in vermont would make cell phones illegal for people under 21. What and nvidia hitting a new all time high today. Up 70 this year and now analysts are getting more bullish. Can this stock really keep going up and there are literally a million podcasts out there because theres big money to be made and everybody is trying to a ecpie. That story and much more coming up on power lunch. Dont get mad. Get e trade, dawg. Now you can, with shipsticks. Com no more lugging your clubs through the airport or risk having your clubs lost or damaged by the airlines. Sending your own clubs ahead with shipsticks. Com makes it fast easy to get to your golf destination. With just a few clicks or a phone call, well pick up and deliver your clubs ontime, guaranteed, for as low as 39. 99. Shipsticks. Com saves you time and money. Make it simple. Make it ship sticks. Nvidia can now outperform the rest of the semiconductors over the next three months stock has a head start outpacing the group this year. Lets bring in the trading nation team. Mark newton and john mark, nvidias been outperforming the semiconductors since about august although not yet back to highs from late 2018 so how is it positioned now . It still looks like it should continue to outperform the group as a whole so i expect this relative strength over the rest of the semis to continue i dont know that i would nic initiate new buys in the stock technically here its gotten very overbought and it was overbought throughout all of 2016. Youre starting to see evidence of negative momentum divergence which is happening to the group as a whole now momentum is not really following suit on a shortterm basis. Id be looking to buy a pullback to b about 220 its still a very good thing and we didnt see that all last year the top ten performers, nvidia was not anywhere in the top ten where as in the last six months, the stock was up over 53 so it started to make some enroads and i think thats a good thing so one would want to stick with that john, there was a time when nvidia was seen as people in all the perfect spots in the Semiconductor Industry including bitcoin money. Thats no longer really a driver or catalyst. So how u do you think the fu fundamental set up looks yeah, i mean i think nvidia sa perfect microcosm of the market because in the longterm, if you believe in augmented reality, virtual reality, gaming through the graphics side, nvidia is an interesting way to play that. But in the shortterm, the stock is trading at 34 times earnings. Its not cheap but its a reflection of the overall tech sector which has rallied over the past couple of years so i think longterm, the stock is a great way to play some compelling longterm investment themes, but shortterm, i wouldnt be surprised if theres a pullback because valua