Right now. Indeed it does, everybody. Welcome to power lunch. Im tyler mathisen. Glad you could join us on a beautiful spring afternoon in the new york area. The three major averages struggling for gains this hour. As you see right there the dow down 36. The nasdaq basically gnat. Still, the dow on course for its best weekly gain of 2017. And the s p and the nasdaq both on track to close out their best week since the beginning of the year. Lets check out major movers on earnings right now. Colgate under pressure. Mixed results there. You people have to brush your teeth more. Thats the only problem. Goodyear tire up about 3 . Royal caribbean hitting new alltime highs up about 9 today. The companys ceo will join us later in this program. A lot to drill down on over the next hour, two hours basically. But we have an hour with Mario Gabelli, our guest host for this first hour of power well get his take on the stocks he likes now. He has been following all the earnings, and hes going to share his insights with us. First, though, the earnings parade front and center. Amazon, alphabet popping on the back of their results, big oil also reporting numbers today, chevron and exxon mobil. And you see gains there. Bob pisani has the numbers. Breaking it down for us at the nyse, bob. Reporter hello, tyler. Its about tech and energy, and thats whats moving the markets. The sectors that are up today, tech and energy, and lagging are most of the rest of the sectors, materials and banks, for example. Tech earnings, lets start with alphabet. Huge revenue, better than expected earnings. The stock is up as you heard there. Amazon, big earnings beat. Revenue edged past expectations. Both are up. Microsoft better than expected earnings. Maybe a miss on revenue slightly and thats why its down. Intel not sure why its down. Boosted their qforecast for 201. Take a look at energy. Now big oil coming in. Exxon and mobile good numbers. Exxon more than doubled its earnings and the revenues went up 30 . Its a very simple reason why. Look at the price of oil in the First Quarter of last year. It was 31 on average. Last quarter it was 51. Thats a huge difference and thats why they did better. Here is the bad news. Exxons price is down 10 this year. Theyre all terrible performers because the price of oil has been trending down even with opec trying to cooperate. That fire hose of Shale Oil Production keeping a lid on the price of oil. Capital expenditures are down, production is down a little bit for them as well. Thats a major problem overall here. So here is the bottom line, take a look at the misery of the Energy Stocks this year. The main energy index down 10 . Oil services are down 15 . Oil and gas exploration. Whats going on here is the street itself is starting to take earnings estimates down for the full year because oil and natural gas arent exactly cooperating. Great news for consumers, not great news for energy investors. Guys, back to you. We have those Oil Rig Numbers out. Well get to those in a second. Lets get back to your top stock story, amazon and Alphabet Google and both earnings beats. Aaron kessler covers both for raymond james. He has an outperform on alphabet. Just raised his price target to 1,020 from 950. Welcome to the program, aaron. What is it going to take for you to raise your rating on amazon . So we just lowered our rating this week on amazon. I know. The results came in fairly as expected. Beats on operating income. Operating income was flat year over year. We want to see greater operating leverage. We expect that in the second half of the year. Its a 450 billion market cap. We think investors will demand to see higher income. We think were a ways away from that. We need to see greater increase in income before we get more positive at these levels. So last nights numbers were not enough, in other words, for you to revisit the ratings change. You just made a few days ago. Correct. And if you looked at the q2 operating guidance as we expected they got it bloep the street for q2. So i think that continues to be a concern. Investment cycle is longer than investors expected. We do think shares are fairly valued. You see more competition, growth was in line with expectations but we are seeing a deceleration and operating margin was down about two points from q4. If you listen to googles call, good strength on the cloud as well. Do you think its getting more competitive on the margin there. Weve got Mario Gabelli for the next half hour to an hour. Dont go anywhere. Mar mario, i know you own just a smidge of amazon stock. Are you thinking about adding more . Do you regret not having added more . You think of history, the model 2 ford changed manufacturing. Jeff bozos adds to prodk tift in this country. We look at what jeff does and his annual report. The empowerment. Hes very good. But on the other side of the coin as we talked about we have a company with half a trillion dollar market cap. We take apple, google, or alphabet. Amazon and one other company, you have 2. 5 trillion of market value. How do you think of these companies . Amazon is a retailer, a cloud company, a media company. Apple is a manufacturer, a cloud company, a Services Company and also a media company. All of the above. Dupont tried to put a number on that. Is it an environmental company. Does it matter . Well, at some point it will because if you go back to other dynamics, there may be 400 Portfolio Managers and i go to a meeting for x, y, z and the same business, maybe theres four. So we look for bargains and stocks that are not necessarily well covered and followed. So you cover your four big ones that are 2. 5 trillion. The stock market is only like 30 of the Global Market of 70 trillion. Its wonderful to do. Its nice to talk about. Aaron, lets go back to you and Alphabet Google. So hard to call them alphabet. The stock is up more than 4 . Youve been right on the call. Whats the next growth step for google . Can they continue to exist just really primarily still on add words ad words, the ad platform . Are one of these google moon shots going to pay off big time anytime soon . I think your two big initiatives are mobile search being the key driver as well as advertising and programatic advertising. You have youtube continuing to grow at strong rates. After that we think its the Google Cloud Program as well as hardware. Still relatively early phases but both could be tens of billion dollar businesses over the next several years. Aaron kessler, raymond james, well leave it there. Thank you very much. Appreciate that. The Oil Rig Counts are in and theyre up again. In fact, baker hughes reporting that nine more oil land drilling rigs added in the past week. Weve doubled the number of oil land drilling rigs year over year. We needed five to hit that doubling mark. We got nine. So the number is up year over year. This is the 15th week in a row that we have seen gains, perhaps very good for jobs, perhaps not as good for production and prices. Quickly, demario, back to you. You referenced oil. Are you a believer in the u. S. Shale story . Ive been a believer for 15 years. America has to have their own independence. We probably can produce over 50 . We had a strategic reserve. American technology and capabilities in that area are important to our fundamental being. It cuts down on the amount of net imports which helps our balance of payments. Secondly its important for with regards to our technology and it works. Its also important in terms of national security, it would seem to me. Look, im dreaming about the guys from m. I. T. I know are working on fusion. Just think about it, 1859 the whales were saved. Youre talking about coal fusion creating energy, from energy no net loss. Theyve been in the works for that for 30 years. So . So . Somewhere, somehow technology will develop to create a new way that we dont have to worry about a carbon footprint. Thats what you should be praying for, brian. I remember seeing you on a panel about eight years ago and the question of fracking and shale. Ive rarely seen you as excited about anything as i saw you that day. Thats interesting. If the knicks were able to win. That would make you excited. I remember it distinctly, you were on with one other guy and both of you saw that as transformative. It was and it will continue to be. You obviously have to be concerned about certain fragile ecosystems. You have to learn about the technology that is migrating to the north. And what we like to do is own the land on which who owns the leases, and so we have companies that do that and so on. Who else makes the equipment. You mentioned fusion. Random side note, youll like th this, 1994 i wrote a novel about the guy who discovered coal fusion and was murdered by the energy industry. It was terrible. Did you wake up from that nightmare . No. Didnt go anywhere. You didnt publish it . No, it was a piece of crap. You were afraid of the dark hands of the coal industry . Let me go. Boy, talk about bad news. The beardstown ladies made a pick in our draft yesterday. They have scored very nicely in one days time. They chose amazon. Com with i believe it was their first pick and facebook with their second pick in the stock draft. Joining us for a quick update is buff if i tilottpratt, one of the beardstown ladies. Buffy, welcome. Congratulations on a good pick. You could it could have gone either way. Amazon came out with its earnings yesterday. They were very nice. You did well. It could have gone the other way, right . Yes, we know it could have gone either way and we were happy yesterday afternoon when we heard they beat their earnings estimate. Do you follow these companies and those Earnings Reports as close closely as, for example, mario may . In other words youre really watching them. Well, actually we follow them but none of us can quit our day jobs to do this, so we dont follow them as closely as you do. So what would you like to get out of your investment . Obviously our contest will run for nine months to the day before the super bowl next year. What kind of returns would you like to get . You have, what, about 5 in amazon already. No, well, as of now we have just short of 2 in amazon. Facebook we have a little over 2 . I think we get to combine both stocks for the total return. Were really happy. We represent the man on the street investor or should i say the woman on the street investor. Were doing this, were studying. We dont have as complicated ways of analyzing companies as you do but were also looking at the product and how as you mentioned earlier amazon is changing the way people buy. It goes back, hashirkens in way that you buy what you know. Im sure that lots of you folks use, as many of us do, amazon. You understand it. And facebook you understand it. We have your hats here for amazon and facebook. We have the mailing pact ready to go. Expect your hats, buffy till t tillittpratt. Youre going to look good. Sounds good. Their average return, because we have a spread sheet, 2. 05 . Up next mr. Wonderful at just 0. 4 . Theyre up. One day, wed like to quit now after one day. We know we have to go the long run. Hopefully the stock slayer. Thank you very much. We appreciate you being with us. Thank you. Lets turn back to our guest host, Mario Gabelli, chairman and ceo. What do you think of the market right now . A nice run so far this year. Well, the market started right after the election when capitalism with all of its ugly forms were brought back and as a result of that organizations around the world said the United States even with the rule of law, the free market system and merit okays was the best place to invest and so the dynamics of reg reform, tax reform, everything is in process. And itll take a while. 2018 is good or not. So the market itself, to me, has no margin of safety but its okay. Earnings are okay. Better in 201718. Because of currency changes being less of a negleative and, tyler, in addition the only negative is the multiple because Interest Rates are going up. How do we solve that concern . On may 10th, on may 10th, 2010, the market had a real crash and that was a tiny sample of what can occur in the 2350u tour because of the untested etfs, the untested trading, the untested absence of a buffer known as specialist both upstairs and downstairs so it goes back to what happened in 1987 and that is leyland obrien reuben steen was selling portfolio insurance. If the market is down 10 we get you out. The market dropped from 2700 to 1700. Youre going to have one of those pockets. I cant tell you when or what triggers it but thats why you have to be prepared. Etfs could have a big affect on the market in the next year or so. What happened in 1987 was not economic. We made a lot of money because we figured out it was kind of the mechanics of the market. The same thing on may 10, 2010. It was in 30odd minutes you had stocks go from 70 to 40. Stocks i followed went from 90 to a dime. How do we invest the pro protect the investor . You make 5 or 7 . And well come back and talk about the places youre pinding values because youre known as a guy who looks for values in underreported pockets. Its everywhere. Come on. Ill give you what i recommended in barrons and you double your money. Well be back in just a minute. President donald trump signing an executive order to help u. S. Farmers compete globally. Tom vilsack, governor of a state in the agriculture belt, now president of the u. S. Dairy export council will weigh in on the president s trade policies and much more with investor Mario Gabelli all coming up here on power lunch. Most etfs only track a benchmark. Flexshares etfs are built around the Way Investors think. With objectives like building capital for thfuture, managing Portfolio Risk and liquidity and generating income. Thats real etf innovation. Flexshar. Built by iesrs,for in. Before investing consider e Funds Investment objectives, ris, charges and expenses. Go to flexshares. Com for a prospectus containing this information. Read it carefully. Anything worth pursuing hard work and a plan. At baird, we approach your Wealth Management strategy the same way to create a Financial Plan from generation to genation. Well listen. Well talk. Well plan. Baird. When it comes to trade talks and nafta, believe it or not milk has become a rather, well, sour issue between the u. S. , canada, and mexico. Yesterday several members of congress sent a letter to the president urging action against canadas protectionist dairy policies. They argue are hurting american exports. Bring in tom vilsack, president and ceo of the u. S. Dairy and former secretary of agriculture under president obama. Mr. Vilsack, thanks for joining us. Before we get into sort of the details can you explain to our audience in laymans terms what exactly canada has done that is creating this outrage which for most people i would imagine kind of came out of nowhere. Canada limits the amount of milk that can be produced and processed and has a control on pricing for Dairy Products and they have reduced the cost or the price for milk powder which has created an opportunity for canadian milk powder to be dumped on to the Global Market which will impact, in effect, american producers and producers around the world. They have a very close system, not Market Driven but government driven and it conflicts with open markets. I thought when i heard this, this might be a small gift to wisconsin from the president because its one of the states that turned to help get the president elected. I didnt realize mexico a far bigger market at over 1 billion a year up more than 500 since the passage of nafta, you used to work for obama. Do you agree with what this republican president is doing . Well, yes and no. I certainly agree with the Strong Language the president directed towards canada. Im concerned about the uncertainty hes created with his nafta discussions in mexico. It supports 30,000 jobs here in the United States for dairy. Its the number one market for u. S. Dairy. We want to preserve and streng them the relationship in mexico and open up the markets in canada. So what would you do to make sure theres a fair and level playing ground like weve talked about with lumber, like well talk about with dry wall in the future, with dairy. What do we need to do . We need to look at some of the tariffs that currently canada has and create a system and structure where they cant change the rules in the middle of the game to ben fit their produ producers at the expense of the worlds producers. If we had more consistency, more transparency and more stability, wed be able to have a Market Opportunity in canada we dont have today. It is contrary to wto, to nafta, to uruguay agreements. Its an opportunity now with renegotiation of nafta to open up that market and have a fairer system for everyone. And canadian consumers will benefit most of all because it will bring the cost of their products down. We were speaking with a dairy farmer a couple days ago, and he talked about how much milk there is on the market. I gather weve not seen this level of production of milk ever. Why . Were certainly more productive and efficient and innovative. No question about that. Not just in the United States but the world. Thats why export markets are so incredibly important to the u. S. Dairy consumption in this k country continues to go up but not at the rate that we produce milk, so we have to look for other opportunities and there are tremendous opportunities in asia, southeast asia, and china just got back from a trip convinced there are opportunities there. Terrific opportunities to continue to grow consumption in mexico. Hopefully transitioning from soda to Dairy Products in that country, opening up the market in canada creates tremendous opportunity. Mr. Vilsack, thank you very much. We appreciate your time today. Thank you. As we move to the second 100 days of the Trump Administration, what should the president prioritize to get his economic agenda through congress . Were talking to former press secretary