Welcome with bei, everybody power lunch. Glad you could be with us on this rainy thursday. Im tyler mathisen. Stacks hi stocks higher today after yesterdays midday swoon. Heres a nice stat. Four dow stocks have gained more than 10 this year. Apple, boeing, visa and home depot. Those names are mixed in todays session. Twitter under some pressure on news that one of the companys founders, evan williams, is selling 30 of his shares. There you see that chart reacting, in part, to that news. Home builders, a notable standout. Home builder etf, hxb, having its best day in about a months time, since march 15th. Im michelle carusocabrera. Heres what else is happening at this hour. Devin nunes temporarily stepping aside from the house committees Intelligence Committee after the House Ethics Committee announced it was investigating mr. Nunes for possibly disclosing classified information. Representative nunes calls those charges entirely false. Jobless claims falling by 25,0 25,000 last week, the biggest drop in nearly two year. And sunoco is selling its 7eleven. There is a lot going on today so lets start your coverage with the most important meeting, President Trumps term so far, the one with chinas president , xi jinping. The two are about to meet as the president s membersonly resort in maralago, florida. Thats where we find kayla tausche. Reporter the president is wheels up from washington, d. C. On the way to palm beach, florida, where the highstakes meeting between the president and his chins countese counterpl be taking place. President xi is expected to arrive in 20 minutes, met by secretary of state Rex Tillerson. Remember, Rex Tillerson and president xi had a meeting in beijing last month when tillerson went on an asia term when tillerson used the term winwin in terms of how he wanted to pursue a u. S. china relationship. It was a phrase directly borrowed from the bay beijing had hoped to approach it. We will see exactly how that changes when the president lands and the two are set to meet for the very first time. President has said it will be a difficult conversation, of course, given all of the criticisms that each government has been lobbing at each other. Were told by the white house heres whats on the agenda. First and foremost, north korea, defuse ugg the situation with chinas neighbor as it gears up its Nuclear Ambitions and continues to build up this program and fire test missiles of varying degrees. Then, trade and tariffs. Of course that has been a controversial talking point of the president. Finally, the South China Sea but we are told by the white house not to expect any resolutions on any of these issues in one day. This is merely establishing the relationship going forward. President trumps first face to face meeting with president xi could be tense, as kayla noted. The president s china rhetoric over the past yearandahalf. We dont have victories anymore. When was the last time anybody saw us beating, lets say, china in a trade deal . They kill us. We are going to enforce all trade violations s against any country that cheats. [ cheers and applause ] this includes stopping chinas outrageous theft of intellectual property. Were going to stand up to china. Were going to stop their currency manipulation and product dumping, which is killing us. And they dont follow the rules. And if they dont, were going to institute tariffs. Theyre going to obey our rules so quickly, you have no idea. Lets bring in the president of the u. S. China Business council. Sir, good to have you here. Good to be here. I dont know if you saw the president yesterday in the News Conference with King Abdullah but he was clearly a man whose position had evolved when it came to syria. Do you have any sense that he has evolved in any way on china, given what he said while on the campaign trail, and now the reality of being in office, and also knowing that theyre his best hope when it comes to dealing with north korea. Well, theres that, but i think theres also an enormously important American Economic interest in the relationship with china that is being looked at and realized. It has a lot of complexity. Look, klein is a 400 billion market for the u. S. Economy now. It is our secondlargest overseas market after canada. Trade with china supports about 2 1 2 million american jobs. You dont have to convince our audience of any of those things. But do you think the president knows that at this point, and is that going to change what would have been the dialogue otherwise . Well, what i was leading to with that is i think that the president has realized that the relationship is much more complicated and he is taking, i think correctly, the time to understand all the complexities of the relationship before deciding who you to proceed with policy to get the results to the very real issues that are out there. What do you guys want the most . You want them to be labeled a currency manipulator . Do you want them to stop dumping . Do you want tariffs in order to protect u. S. Industries . What do you want . I think for the American Business community the two most important issues are greater access in china given that it is the Fastest Growing economy in the world, delivers more to Global Growth than any other economy, including the United States. Market access is extremely important. But the second thing is to have that level playing field. I think in terms of this summit, what we would hope is, given that it is the first meeting, it is early in the administration, it is important for the two of them to establish a relationship. I think this summits going to be more about tone than substance, but they ought to be setting up the process to deal with the very real issues so that second meeting does address more of the substance. You heard the tape where we had soundbites of thencandidate trump talking about china and perhaps some sound bites when he was actually sworn in. What is your greatest concern in terms of an issue that he could sort of misstep on . Hes wanted to call china a currency manipulators. He says we are going to make them abide by the rules they wont even be able to handle it, theyre going to abide so quickly. What are some of the missteps they are looking for in terms of particular issues . Well, i think the important thing is to make sure on Something Like currency we follow the procedures that are in place as the treasury secretary has said. He, by the way, will be down in florida as well meeting with his counterpart. It is not just the two president s who will be meeting. There is going to be a large entourage with them that will also allow a lot of side conversations that will be helpful. As far as acrosstheboard tariffs, we have to be careful not to do more harm than good. Getting into a trade war wont help the chinese economy or the u. S. Economy. What wed like to see is them addressing very real concerns not just retaliatory, defensive moves, but more of a proactive effort between the two countries to try to put a better framework for dealing with whats the most important bilateral relationship in the world. Dont want to get you out of your comfort, john, but is there a possibility, a way for President Trump to marry his concerns about north korea to the trade issue . In other words, if you dont cooperate with us to address north korea, there will be trade consequences. U. S. china busy counciness c is wed like longterm separated from political issues. We have a history of china sometimes blurring that line, with south korea more recently in regards to the place of Missile Defense in south korea. And then china taking actions against korean companies. You start to marry those issues tocchet, i think they can quickly spiral out in ways that will do more harm than good. John, thank you very much. We appreciate your perspectives today. John frisbie. Earlier today on squawk box, black rock Ceo Larry Fink spoke about the market in somewhat ominous terms in light of the possibility that the trump aagain today may take longer to play out. Here is his bottom line. Because of the uncertainty, then i would say the market is the u. S. Equity markets are probably higher than they should be. Higher than they should be. So says larry fink. But what are the charts telling us . Dominic chu has taken a look at that. Tyler, theres no doubt that the markets here are, again, near record highs and pretty extended by sta titistical mesh shus th meshmeasures. One level that some traders are watching right now is the 50day average price for a stock. Weve put a few examples up here on the board just to give you an idea of what we are talking about in terms of support for the overall market. Dow first of all, that pinkpurple line is the 50day average price for the dow. You see we have been trading right around it, above it. Its holding that level of support. Something to match. Maybe if it can hold that, the trends stays intact. Watch whats happening with the s p 500 as well. The same pinkish line there, were holding right around those levels. If we can hold there, perhaps things are still intact for the bull market there. The nasdaq has been holding fairly solidly above the 50day average price as well. One place we do see some concern is in the second biggest sector out there, the financials. We have seen a breach of that average price over the course of the last 50 days for this big etf that tracks financials, the xlf. One part of the market to watch, financials, for sure, to see whether or not we can hold these levels the 50day average price just one factor traders are watching. Dominic, thank you very much. Given all this information what should you do with your money right now . Lets bring in dennis gartman, ed itor edit editor. Richard, let me start with you. Looks like the mark is riding along on a nice, high plateau, not moving very much up, not moving that much down yesterday even when there was a dramatic falloff. What should i expect the next few months and what should i do as a result of that . A large part of the market move since the election, as we all know, has been anticipatory. The new administration and tax reform and potential deregulation. So thats baked in the cake. Obviously the markets are going to be watching and seeing how quickly that takes place and what the bottom line is. But the market is clearly gotten ahead of itself in that regard. If you look at the economy, no major forecaster in the u. S. Globally has increased real gdp forecast for the u. S. Since the administration came in. We have not seen any clear evidence of real Economic Growth so far, and we wont until, if and when the new policies come in to play. So weve been doing and recommending for our clients is to take a more prudent, conservative approach. We are not buying into this runup in equities, socalled trumpup. Rather, were taking the profits, rediversifying, preferably overseas. I hear what dennis says. But i also note apparently profits this quarter will be as good as they have been in many, many, many quarters. Is that already baked in to stock prices. Thats one. I know you know currency. Weigh in on this debate whether china is a currency manipulator or not. Tyler, the second question first. The answer is the president is absolutely wrong. Chinese are not manipulating their currency downward. If theyve done anything ive argued this for months and months the chinese have been supporting their currency instead. If they are manipulating to weaken their currency, theyre doing it 180 degrees in the wrong direction, and somehow i dont believe that the chindz are that illogical and that silly when it comes to foreign exchange. They are not currency manipulators in the manner that the president would have us believe. Lets put that one aside for right now. What they are, dennis, is major holders of u. S. Treasuries. The thinking is, how much leverage do we really have over the chinese, no matter how ticked off we may be at their trade policies. Do you really believe that theyve kind of got us where, if they start dumping treasuries, theyre going to spike Interest Rates. Thats always been their sword over us. Is that a false tell . I think that thats an improper concern. They hold a huge they are i think they are the largest holder of treasury securities in the world outside of the Federal Reserve bank at this point. Well, do the chinese have any intention of dumping securities to do damage to their own portfolio . The answer is no. They will probably do exactly what the fed does whether it comes to ramping down its Balance Sheet, which if they get if they become disturbed about whats going on, they will let those securities roll off. There would be no chance i shouldnt say no chance. My wife always says, never say never and never say no. But in this instance i think the probabilities of them dumping securities in anger would be illogical and ill defined and probably not going to happen. So i dont lose sleep at night worrying about that. What i find interesting is everybody is concerned about the fact that they hold so much of our paper. Let me think. What a great trade. We buy goods from them, and we give them paper. Thats a great trade in my opinion. I think were on the strongest side of the question, and thats a part of the question that people dont seem to understand. Dennis, you do lose sleep over the n. C. State wolfpack. I know that. Yes, i do. Dennis and rich, thanks very much. We appreciate it. On deck, the bold call on tesla that sees the stock nearly losing half its value. Thats right. Half. The analyst who made that call coming up. How one of the smallest and most isolated countries in the wlorld world is leading the world in one of the most important aspects of research. Live to iceland, next. But first, our mystery char the of the day. This stock up more than 20 this year. It is a Software Company and it is based nowhere near Silicon Valley or even seattle. Can you guess what it is . The name and the ceo interview next. Who do you work for . Your boss . Yourself . Your family . Our Financial Advisors are free to realize a plan to fit your familys unique needs. Well listen. Well talk. Well plan. Baird. Im vern, the orange money retirement rabbit, from voya. Im the money you save for retirement. Whos he . Hes green money, for spending today. Makes it easy to tell you apart. That, and i am better looking. I heard that. When its time to get organized for retirement, its time to get voya. Dothe only thing theyut cant handle. T you. Dominic toretto just went rogue. I dont know what shes got on him, but that wasnt dom. It aint too late to stop this. Come and get it. [ grunt ] now i know what it feels like to be every cop ever chasing us. Dom is that a torpedo . Take the wheel. [ grunt ] rated pg13. Experience it in imax. Welcome back to power lunch. Weve got breaking news on lyft, the company. Ride sharing service has raised a new round of financing of about 500 million which now values the company according a private stock market site at 7. 2 billion. Investors in this round include fortress investments, and carl icahn as well as chinese ride hailing service. So again, Interesting Development here. A new 7. 2 billion valuation for lyft. Big news there, thank you very much. Time to reveal todays mystery chart. Shares of this Software Stock on a tear up more than 20 . Hats off to those of you who guessed it. Redhat, the north carolinabased Software Company, up 50 in the 90 days, doubling since its 13 lows. Jim, two questions for you. One business, one political. Ill start with business. You are a lot of people probably dont know this. You are the arc connectihitectu amazon. Com. How much of amazons run has benefited you . Do you think your stock or business is tied directly to amazon . I would say our business is tied pretty closely to the growth in cloud overall. Certainly amazon is a great partner and amazon. Com on the retail sides been a great reference customer for us. More broadly, our Technology Runs on all the major clouds. When a large enterprise wants to move their operations to a cloud, it is easiest if they run it on our Technology Stack. Our Technology Stack runs across the clouds. Certainly public cloud and the growth of public cloud has been great for red hat. It is one of the reasons we continue to see accelerated growth rates. This is 2017, so you arent getting off without a little bitle ka question. Of all the things the president has spoken about, Corporate Tax reform, immigration, whatever it might be, is there anything you would heard that would either be very beneficial to red hat or perhaps detrimental to red hat . With that im thinking any limits on immigration. Well, when i look across the things that hes doing, i do think Corporate Tax reform would be helpful. When i say reform, im not even saying cuts. But i do think balancing a Corporate Tax system where we and others arent motivated to move around where we do operations for tax reasons so we can really work to make sure that we put our operations in the most efficient place would be very, very helpful. Certainly Immigration Reform could be helpful, especially to visas. Were going to hire people wherever we need to hire them. Were global. Wed like to require more people in the u. S. And that will require dealings with the immigration system. You rekecently reported your Fourth Quarter results. Analysts are excited about the momentum in the large orders. Your first deal, over 100 million. What are you seeing in the beginning of this quarter and do you think that there is momentum specifically because of the animal spirits, the optimism readings at record highs, is that translating to new and big deals . It is hard for us to directly tell what has to do with just our momentum. Were in the sec