Do you recognize this pose . Legs crossed. Welcome to power lunch. Im michelle carusocabrera. First backtoback losses in more than a month. Utilities, technology are leading the way while energy lags. Another rough day for snap. The stock is down again. Trading well below the price of 21 a share. Ouch. Ouch, indeed. Snap, crackle and pop. Tyler mathisen here. Trade deficit jumping to its highest level in nearly five years as oil prices pushed up import costs in total. Zte Telecom Giant has agreed to pay the u. S. 182 million for violating iran sanctions. And clean up is under way in missouri after two tornadoes touched down last evening. About two dozen people were hurt but none have lifethreatening injuries. Jampacked two hours of power lunch coming your way. Brian sullivan is with us today from houston. Brian, what do you have on tap . Weve got a lot on tap, tyler mathi. Sen, thank you so much. We have a bunch of ceos for our cnbc audience. Conoco phillips, pemex and bp. Not just pricing but political strategy, border swruchlt tadju. Plus earlier today, we did a live, exclusive interview with the chair of saudi aaramco, opec compliance, whether or not russia was cheating and maybe that 2 trillion ipo. A lot more to do. Looking forward to it, brian. Meantime, health care front and center today. House republicans finally unwrap their plan. President trump backing the proposal and taking a new swipe as well. Drilling down on the gops Health Care Plan in a moment. Lets start with the area of market thats moving the most. Meg tirrell, pressuring bio tech stocks once again. The president wanting to remind people that drug prices arent mentioned explicitly. No plan to lower drug prices, the president has not forgotten about it. Check out the tweet. Working on a new system where there will be competition in the drug industry. Pricing for the American People will come way down. This follows a lot of comments going back to december, to january during the big jp morgan to last week, maybe softening a bit, maybe we should work to bring down the artificially high price of drugs. Some folks telling me what he has been saying has been shifting a little bit and maybe focusing on part b of medicare. We pay for drugs in a couple of different ways. Part d, drugs you take at home and part d, biologics, things you take in the doctors office. Among some of the biggest drug companies, most exposed to any potential changes in part b that may be coming. On the flip side, positive for the drug industry, two names, esperion and alexion, potentially benefiting from any sort of moves to accelerate, moves through the fda. Cholesterol drug theyre working on. Thats been rising in recent weeks. Alexion, president focusing on that quite a bit in his speech. Ys . Thanks, meg tirrell. Capital markets. Good to see you. Through the different tweets donald trump has tweeted throughout the months or so. 6 away from a 52week high. Tell me how investors are thinking about the threat of managing drug price iing and wh the valuations are. Thanks, meg. I mean, thanks, melissa. Youre seeing on one hand that investors are figuring out that donald trump will come out with scary headlines and ultimately the market wants to brush it off. And there could be compromise. On the other hand he might talk about accelerating drug approvals and moving part b to part d. They look how bad it is over the past year, a lot of it has been priced in. Not a worst Case Scenario and youre seeing the market move higher on this. I say to you, michael, give me what the most likely scenario is in your view when it comes to drug pricing and tell me which are the most exposed to that scenario. What do you say . Sure. In that case, amgen and regeneron are exposed there. The financial implications of that arent so significant and the stocks are priced in a lot of that over the past two years. What does it mean to increase competition . How do you see thatunfolding . Faster paths to market, what . Or less patent protection . Sure. I think all three of those makes sense on an extreme case, cutting patent life short. However i think donald trump is pretty proinnovation. Unlikely scenario but could be on the table. Puts more of the drugs into the hands of the pbms to increase access. So theres an increased call for pbms to negotiate. On the extreme positive end, accelerating more drugs to be approved faster would increase competition. That didnt fit in 140 characters. Those are all possibilities, right . The fact is that we still dont really know. Obviously theres a meeting with Elijah Cummings coming up this week as well where theyre talking about getting prices down. Medicare part b to part d is one way. Stocks can still move higher because that is not a worst Case Scenario. Michael, thank you. Lets get inside the gops Health Care Plan. Kayla tausche is on capitol hill. Reporter members of the administration are trying to coalesce support for this new draft, tax reform bill that seeks to create a platform under which americans can buy their own insurance using a new structure of tax credits that will vary. Many of its tenets remain. A press conference where chairman kevin brady of ways means were holding this press conference, had to defend themselves in the face of whether this is actually obamacare light. Relief to americans from this terrible law and restoring state control and the free market. These are big measures moving forward. We certainly met the tests of the president , and secretary price, who believe this is repeal and reform. To those two congressmen saying this isn important and necessary first step toward Broader Health reform effts sought by the president. Vice president pence is here on the hill, participating in a working Senate Luncheon to discuss this policy. But moments ago, senator mike lee of utah expressed his concern about this bill. How many people would use this new tax credit, we dont know how much it would cost and if this bill would make health care more affordable for americans. Make this into law. Supposed to be the most straightforward health care reform. Well see if they face opposition. Guys . Certainly tough. Thank you, kayla. Lets talk more about the republican plan to repeal and replace. Tevy, good to have you here. I want to put aside the issue of medicaid, one big issue. And instead focus on this core question. You werent getting enough young people to sign up. They were healthier. Hence their money was supposed to help offset the cost of older people. Im trying to understand, im a younger person. Now the Insurance Company can charge older people much more than they charge me, a younger person. Im pretending im younger. Theres a tax credit i get of 2,000, right . And its only cut off if i make 75,000. Speaking with someone on the hill, theres a lot more flexibility in the plans that will be offered on the individual market, presumably making them cheaper. Is that eug to get young people to come to the table . Its certainly a good start. Thanks for having me. The idea is to try to incentivize people by making it cheaper, more flexible, by giving them more options in how they Purchase Health care. The Affordable Care act did not do that. I think President Trump and others have said this is only one part. It lichlt limits what republic do in this particular piece of legislation. It gets rid of the most of the aca and creates this tax structure but other steps are coming. As i understand it, the ten basic coverages that were how do the policies get cheaper, number one . How does this plan address the issue of competition across state lines, county by county, state by state . Sure. I dont think this plan is the be all, end all. Nor are they claiming it will. Republicans have a larger package theyve been talking about that includes purchase across state lines and expanded hsas, more flexibility. The cbo did that years ago during the obamacare debate and found it would, overall, reduce the premiums. Its one piece in a large packet. How do you think its going to go down politically when it said okay we can charge people who are older much more than younger people . It makes sense, actuarily. They cost more money. Will it ultimately work, do you think . Youre right, older people cost more money. It just takes the realities of the pricing sm into account. However, you are pointing to a good issue, which is that old people do vote in large numbers and policymakers tend not to want to alienate them. It is complicated, as weve learned from some people. Tevi troy, thank you very much. Thank you. Rick santelli is tracking the action at cme. Rick . Tyler, we had our first auction of the week, 24 billion threeyear notes, 1. 63, a smidge higher. Great at the auction for demand. C minus. 49. 4, also a little light on indirects, 52 and finally 8. 4 versus 9 on direct. 9 , of course, ten auction average. Primary dealers take over 42 of the auction. Should be a lot more fun as we move down the curve. Back to you. Power lunch gang. Rick, thank you. Coming up, is the cia hacking your television to spy on you . The explosive new claims emerging from a fresh round of wikileaks documents. Full details ahead. First, lets get back to brian in houston for more on whats coming up from there. Bri . Our viewers already know, because the tv is looking at them, tyler. They know whats coming up. More big interviews here for the conference. After the break, conocophillips ceo wil join us. Talk about the price of l, their dividend, Capital Spending and maybe even michelles favorite topic, border adjustment tax and what it might do to Conoco Phillips. Welcome back to power lunch. Were pleased to be joined noi now by Conoco Phillips chairman ryan lantz. The mood a little more optimistic. You are still cautious and we could go lower camp. How come . The unconventional revolution going on north america despite the opec deal and capacity sitting in opec. We look at our portfolio. Reduce decline rates and what people have done to bring more oil on. Demand has been pretty good. We watch that pretty closely. Its difficult to set up a company right now betting on higher prices. You cant have prices bail out your business model. Were thinking lower, longer. And a lot of volatility. Weve got to be prepared. We may see 70, 80 in the next couple of years. If we do, well see 40 on the back end of it. Why . The cure for higher prices is higher prices . Absolutely. Couple extra Million Barrels coming not from around the world or opec but the United States. Thats the revolution going on here. What we would have thought two, three years ago, would drive million barrel as a day might take 70, 75 today is probably 55, 65 a barrel brent. Thats what the technology and innovation has done. Weve got to be prepared to not only survive, but thrive. Are you budgeting in the 40s . For the next couple of years, were thinking low 50s. Weve done a lot of work to now fund the capital in a 50 and below. Lowest breaking costs in the business today. Weve had to get there because we think thats the place that makes it a competitive advantage. 66 i believe it was, last couple of years during the downturn. You raised it by 6 . You said its your number two priority. Yes. Is 52, 53, 52 buck a barrel oil enough to raise your dividend in the future . Yes, it is. Were forwarding a new pathway. Were focused on Free Cash Flow generation, focused on returns. Were trying to get down to where we can Free Cash Flow money as low a price as possible. You look at our third and Fourth Quarter results and think where the company is at today, were Free Cash Flowing. So what you do with that Free Cash Flow . Invest back in the company, grow your dividends, second. Third, repair the Balance Sheet. We did borrow money last year, over the course of the last couple of years through this downturn in order to fund our capital programs through that. Those are our top three priorities, in that order. Okay. B. A. T. For cop. Let you said its not good for conocophillips. Explain why its not, and whether or not you think it will happen, ryan. Some portion of border adjustment tax might go. Independent producer here in the United States. The way its constructed today would be good for our business. Were a global producer and on balance its probably neutral to sligly not as good for the any. But what i say is Pretty Simple kind of view of it, the problem with the border swruchlt tax today, you have industries and segments of the business that might benefit very well. And industries and segments that will lose quite a bit. That disparity has to be narrowed a little bit. I dont doubt that some sort of tax might be able to come through. Taxing imports and benefiting the exports. You have to start narrow that gap between the haves and ha haveno havenots. We have a secretary of state who runs this Company Called exxon, based around here. Very pro oil and gaS Administration. Do you see anything changing your industry . Were 47 days in. The conversations around what the Congressional Review Act has done, what congress is taking up in terms of the methane rules, the dodd frank 1504 rule. Throwing numbers at me now, ryan. The point is, there have been some tangible things that have helped our industry, that keeps us more competitive in the Global Landscape and those are really good. That certainly happened with the dodd frank rule. If they take on the infrastructure, regulatory reform, we do tax reform, those are good for industry. They can take it on. Will they get it done . I think they will. I think theres enough momentum and enough silly things that happened over the last eight years in our business that just really dont fundamentally make sense. They dont have a cost benefit associated with them. I think were looking forward to it. Thank you so much. Thank you, brian. Appreciate that. Thank you. Its interesting, michelle, a few minutes the ceo of pemex. Talk about aorder adjustment tax, trade war. Maybe no oil company in the world will be as impacted as pemex. That will be our next guest. Lets not forget that the guy who runs the ways and means committee, who will write a lot of the tax legislation, hes here. Money and politics intersecting all the time, brian. Youre right. See you in a bit. Chevron ceo john watson at 3 00 pm eastern time as well. What millennials are doing that is coming to a very big surprise to the housing sector. Plus another look at todays mystery chart. Some supersized returns this year, even though they dont want you to be super sized. Hint, hint. Thats too much of a hint, michelle. The stock is up 40 . The answer is coming. Power lunch. But dont eat it. Well be right back. To win, every millisecond matters. Both on the track and thousands of miles away. With the help of at t, Red Bull Racing can share critical information about every inch of the car from virtually anywhere. Brakes are getting warm. Confirmed, daniel you need to cool your brakes. Understood, brake bias back 2 clicks. Giving them the agility to have speed precision. Because no one knows like at t. Hello, my name is watson. I am helping 8 million taxpayers get the largest refund they deserve. One Million People can benefit from precision cancer care. 197 million passengers can fly with less turbulence. I am on my way to working with one billion people. I look forward to working with you. Welcome back to power lunch. Buffalo wild wings, the company reiterated it has identified about 10 of locations it owns that could be sold to an existing franchisee or a new operator. This is something the company had mentioned during its Fourth Quarter earnings call. It lost more than 5 but slightly higher in tads trade. Melissa . Seema, thank you, with that market flash. Airlines gearing up for a battle in the skies. Ceo joins us live on power lunch with how exactly they plan to take on the competition. That story is next. You always pay your insurance on time. Tap one little bumper, and up go your rates. What good is having insurance if you get punished for using it . News flash nobodys perfect. For drivers with accident forgiveness, Liberty Mutual wont raise your rates due to your first accident. And if you do have an accident, our claims centers are available to assist you 24 7. Call for a free quote today. Liberty stands with you™ Liberty Mutual insurance hi, everybody. Im sue herera. Here is your cnbc news update this hour. Wildfires have claimed the lives of at least five people in oklahoma, the blaze burning 1,056 acres. And three ranch hands have been killed in texas, trying to protect a ranch from wildfires. A trinew Research Suggests nearly half of all deaths from Heart Disease and diabetes appears to be linked to the kinds of food we consume. Sodium and red meat leading the way. Not eating enough polyunsaturated fats like walnuts and flax seed also a contributor. British coroner says pop icon George Michael died of natural causes, resulting from Heart Disease and liver damage. Michael died at his home in england december 25th. Initial autopsy failed to determine the cause of death. That is the news update. Back to you, michelle. Thank you, sue. Battle in the skies. Phil lebeau is live in honolulu with the ceo. Take it away. Im joined by ceo of hawaiian airlines. I told you we would get out here eventually to talk about the growth. You guys fly under the radar a little bit but have had pretty impressive growth the last several years. Weve grown a tremendous amount, four times larger than we were, say, six or seven years ago. Thats all been organic growth. Weve do that by growing principally to asia, new aircraft, employing more people here locally and bringing the aloha spirit to the pacific rim. Intern