Lunch. Im melissa lee. Stocks are holding steady. The nasdaq hittinging yet another record interday high today. Tech and industrials the best performing sectors Consumer Staples and financials. They are the laggard. Down 2 on a big miss, mastercard is up two and mosaic down 7 after missing the top and bottom line. Brian . All right, melissa, thank you very much. And i am brian sullivan. We are coming to you live from day two of the milken global conference in Beverly Hills, california, speaking with the worlds top thinkers on the market and economy. Politics, which is encapsulating everything today, eric cantor being former House Majority leader, chris aailman and dr. O. Welcome, everybody. As michelle mentioned twitter popping this hour thanks to comments from billionaire investor mark cuban. Its up about 4 right now, and we will get to those comments in a moment. First the air is coming out of the auto bubble, it seems. Gm, ford, fiat, chrysler all taking big hits today. Lets go inside the numbers now with phil lebeau. Are these numbers as soft as they seem, phil . Reporter yeah, theyre soft, tyler. Were not look iing like a huge tumble but they are slowing down. Take a look at the numbers for april. You mentioned fiat, chrysler, gm and ford reporting weaker than expected sales. A negative month for toyota which was the only automaker of the big four that actually posted sales that were not weaker than expected. The numbers within the numbers, thats what worries investors. Look at the inventory levels right now. Theyre close to tenyear highs. At General Motors they have 100day supply of vehicles. Now some of that is because theyre building up their supply base when it comes to certain pickup trucks as they transition later this year but no doubt that its taking longer for vehicles to sell when theyre sitting on the dealer lots. Thats been measures. Were looking at levels that you have to go back to 2009, 2008 and finally, guys, incentives. More than 3,300 for the average incentive last month in order to sell a vehicle. That is close to a record high. So its those numbers within the number that worry investors and a lot of people are saying at this point do we see production cuts in the second half of the year . Were not looking at a huge falloff in auto sales but enough of a falloff that people are going to say, okay, lets start to see the cuts in production. You can see the numbers playing out. Phil, thanks so much. Now to the comments sending twitter shares higher now. Listen to what mavericks owner mark cuban had to say to bob pisani just a short time ago. The key to Artificial Intelligence is data. And twitter hadnt been able to harness the data to be smarter how they deliver tweets and use information and how they deliver ads. Now theyve started to hire the right people, are starting to get smarter. You see that in the results rather than chronological, things that are relevant that make a difference. Twitter shares are up about 25 in the last week alone. Theyre high er by nearly 5 today. Lets bring in the analyst at morning star. What do you make of what mark cuban said there in terms of their ability to harness the data that they have . Whats he talking about and what does it mean for twitter . Actually we do agree with him. Its the data in order to enhance their Machine Learning capability on twitter so basically they analyze the user interaction, User Engagement over what topics, what times during the day and Machine LearningTechnology Comes up with the best ad to present in front of you and that helps them to monetize their users. Its also changed me the tweets that im going to see, the content has changed. Is that true . It is. The content in addition, of course, to the advertising but the content youll see absolutely will be more relate ed to what youve shown your interest to be based on your behavior and your user interaction on twitter. Theyre doing that to make sure that they keep the users on the twitter platform again to attract advertising dollars. If the user base doesnt grow, though, ali, does the Machine Learning get any better . Isnt it only as good as the data you have . If your user base is going to remain static which it essentially has, how much smarter can the machines get for twitter in order to enhance the experience, increase engagement, attract users back . Thats a very good question. We think its a combination of two things, right. Its not only the user the growth of the user base but the growth of the user interaction and or engagement. You have a lot of devout twitter users that continue to interact and engage and spend time on twitter. The problem is user growth. Yeah, thats one of the reasons why weve kept our valuation on the company or fair value estimate at 17. Were still wait iing to see mo consistent user growth. So that does make a difference. You prestaged my next question. You have a hold on it. A threestar rating and your fair value is at 17 and the stock is at 18. What would make you change your rating . Well, a few things. First, we want to make sure that these guys get rid of the tele part, the retargeting side of their advertising business, pretty smoothly. Second, we want to see more effective monetization of the new content they brought forth or the agreements they signed with some publishing and content providers earlier this week. And third consistent user growth going forward. Once we see that we think that possibly the valuation could go up. Of course the stock has performed well. Weve had the 17 fair value estimate and its gone up from 14 and change to where it is now. Not the a lot of people saw a 23 change including yours truly. Thanks, ali. The street is focusing on the iphone 8 which launches this fall. Our next guest is the most bullish analyst on the street with 185 price target, believes apple remains among the most underappreciated stocks in the world. Brian, great to see you. There are more and more analysts who agree with you in that there could be delays to the iphone 8. We have Deutsche Bank coming out, south koreas kgi securities saying that there are going to be supply constraints in the channel that could delay the launch of the 8. Does that matter . Do we need to hear about an on time launch on this Conference Call . Were undergoing a major shift in apple. Were still in the very early stages. The iphone 8, the 5. 8 inch comes out in november or early october or september, i really dont think it matters. Theres really four pillars driving the stock. Iphone 8, whatever the timing is, valuation, capital return, and a lot of media buzz about new innovations and i think that it will keep driving apple stock. So in terms of some of the things youre list ening for, obviously sales of the iphone 7 should start winding down ahead of a new launch. So what are we listening for . Do we want to hear about china . In the last quarter tim cook said remained a challenge for the company. So china was down 12 last quarter, down half that in constant currency. I think it will probably be down anywhere between 8 to 12 this quarter. You have to remember the comps are impossible. China should start to grow in fiscal 18. For the full year fiscal 18 all people want to see is they got by an okay quarter, nothing around margins that was concerning, i think the outlook may be soft. I dont think its a huge deal because these four pillars are what people are looking forward to. Iphone 8 sales, capital return, which i assume you mean the repatriation of overseas held cash, 250 billion. Of the three, how do you look at that one in particular and what do you think of the best Case Scenario doesnt materialize and stays sitting there overseas. Is it a catalyst, a nothing, what . Well hear about the program. Thats 250 billion through fiscal march of 2018 and theyve used up 201 billion. Im hoping for a higher dividend and also obviously we have repatriation on the table and they have about 230 billion of their 246 billion is overseas. Regardless were going to get an update i believe on their capital return and i think investors want to own it for that. Brian, good to speak with you. Still ahead, President Trumps tax reform plan has been tried before in kansas. The question is did it work . Analysis next. First, back to brian in Beverly Hills. Brian . Listen, tax reform, a lot of discussion here at the milken conference about that, infrastructure, a lot of discussion about that. Will we get anything done . Will the gop deliver . Well find out. Well talk about the global deal making markets. Our guest live right here from the milken global conference after this this short break. 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. I am totally blind. And i live with non24, a circadian rhythm disorder that can throw my days and nights out of sync, keeping me from the people, places, and things i love. The people i love have always been there for me. And now, im there for them, too. Talk to your doctor, and call 8442142424 to learn more. Welcome back to power lunch. Im tyler mathisen. The broad principles arent new and have been tried before in kansas. It didnt exactly go according to plan. Ylan mui is live with the story. Ylan. Reporter tyler, thats right. The white house is taking a page from the playbook here in kansas where the governor cut the rate all the way to zero. That was supposed to be a shot of adrenaline that paid later on in growth but instead has blown a hole in the state budget and the hit to schools in particular is turning public sentiment against these cuts. We dont have the resources to pay. Thats been a huge challenge. Reporter a Third Generation family farm that makes Food Processing equipment. They say theyve saved 18 million from the tax cuts reinvested in new it technology and new jobs and Sam Brownback told me thats evidence that his policies are working and the white house should be paying attention. If they want to grow jobs and want to grow small business, these are some of, i believe, the best income tax cuts you can make. Reporter kansas lawmakers will be debating whether or not to repeal the tax cuts so, guys, well see how much longer the kansas experiment can last. You talk about the hole in the budget. Is that because revenues fell or did spending not decrease enough . What happened to tax revenues from when these tax cuts were implemented to now . Reporter revenues fell substantially, michelle. Supporters say the Government Spending cuts that were supposed to go along with the cuts didnt happen. Theres a policemen on both sides of the Balance Sheet. Thanks, ylan. Back out to brian in Beverly Hills at the milken conference. Brian . Thank you very much. Get this, earlier President Trump tweeted out the following message. The reason for the plan negotiated between republicans and democrats that we need 60 votes in the senate which are not there we elect more in 2013 or change the rules to 51 . This is what is getting attention. The country needs a good shutdown to fix the mess. House ma rt jojority leader. Eric . I think the reality this week is there is no shutdown. This president likes to keep people offbalance and theres a lot of uncertainty. Theres no shutdown this week. A lot of people obviously dont spend a lot of time steeped in the rules and the procedures in washington. I think thats reflective of even the president saying, hey, im not from that world. Im not used to those things. It doesnt sound right. All right, tax reform, infrastructure, all these things. First off, lets start with tax reform. Will we get it . I think were going to see tax reform and i think well see Health Care Reform. What does it look like . Its not going to be one page. You know that health care has to get done in order to get to tax reform. Why . Because, number one, politically we republicans have been promising as a party to get rid of obamacare for the last 7 1 2 years. The president has moved past that. If tax reform is pursued there will have to be another budget taken up and if another budget is taken up, it removes the privilege of 51 votes health care enjoys right now. So if a decision is made to go to tax reform, then youre not going to see Health Care Repeal and replace which i think you will need to see in order to have a delivery on the promises that have been made. Need to see and will see are different things. Will we see Health Care Reform . Yes. Its not dead. No, its not dead. Its just going to take some time. Everybody is very anxious because the thought was we were going to see that very quickly. Washington, unfortunately, doesnt work that way. No, weve learned that. Infrastructure also a huge topic here at the milken conference. Theres a lot on the gops plate. Are we going to get an infrastructure as well . Infrastructure is something that will demand 60 votes. As per the president s tweet, items that it demand 60 votes are in accord with existing senate rules. Now the president in his tweets suggested that perhaps if we cant get more senators elected change the rules. Thats what hes proposing. Do you think well get it . Weve interviewed them on cnbc, some democrats are onboard with infrastructure. Do you think we will get the 60 votes relatively easily . I do because infrastructure is not as partisan of an issue but, also, if infrastructure happens at the federal level we really need to go and see some implementation at the state level. I mean, if you look to see some of the funds that are talking about potential ly investing at this conference its about risk its the risk premium and the Political Risk associated at the state level and the federal system that we have that weve got to address. So youre hopeful we do get it done. Its going to happen. Slow. Its all about sequence. We have health care, tax reform and infrastructure. Eric cantor, its a real pleasure to see you. Melissa, there you go. Optimism still that these things, tax reform, health care, infrastructure will indeed get done. All right. See you soon, brian. Check out shares of a in mgen. Stock is up 11 but plunging 8 in the past two months. That is ahead for the company . The ceo lays out his growth plan in a power lunch exclusive next. With e trade you see things your way. You have access to the right information at the right moment. And when you filter out the noise, its easy to turn your vision into action. Its your trade. E trade. Our 18 year old wase army in an accident. 98. When i call usaa it was that voice asking me, is your daughter ok . Thats where i felt relief. Were the rivera family, and we will be with usaa for life. Welcome back to power lunch. Developments with Molina Health care, those shares up by about a percent. The companys board has dismissed the ceo and cfo, the two of them together, again, ceo molina after what they call, quote, disappointing Financial Performance in the company. The chief accounting officer is now taking over the role of the interim ceo and cfo, thats joseph white. They the board thanks them for their service. The molina brothers were Second Generation managers of the company. Their father had founded Molina Health care in the past. Melissa, an Interesting Development from Molina Health care, a big insurer tied closely to medicaid. Back to you. This stock has halted. The print there is before it stopped trading on this news and this is a stock down 11 over the past three months. Thanks, dom. Speaking of health care, over to meg terrell. Meg . Thank you so much. Were joined at the World Medical innovation. Bob, thanks for being here. Happy to be here. The focus is cardio vas scholar disease and you have a big new cholesterol drug people expect to be a big moneymaker but it hasnt been taken up and paid for as quickly as investors hoped. You presented some data showing that it reduces heart attack risk. Have you seen a change from insurers based on that data . Maybe take a step back and reflect on what we learned from the large, robust outcome study that we recently reported on. And, as you know, the data was robust and demonstrated we were able to lower ldl, the bad cholesterol, and as a result of profoundly lowering that bad cholesterol we were able to significantly reduce heart attacks, stroke, and the things stents and coronary bypass surgery are required. If you look at the data after 12 months those subjects experienced a 35 reduction in heart attack, a 24 reduction in stroke and 28 reduction in the need for coronary vas scholarization after 12 months on the drug. So the effect of this medicine is quite profound and that travels in tandem with the fact that its so significantly lowers ldl leading cardiologists to observe that lowers better or some have said even here lowest is best. So were excited about the data and what they it tell us about how to reduce the risk of these events in patients who are at high risk and were excited to educate patients and physicians and payers and others in the community about the longterm benefits of adopting an Innovative New medicine like this. Have you noticed a change even in the last month since the data came out . Weve noticed from prescribers and patients and then in addition from the Payer Community is a recognition that these are important data and that these data need to be incorporated into the thinking for guidelines and the thinking for utilization management by the payers and so we are seeing a recognition that these are clinically important data for what is the most troubling disease in so ciety today and thats cardiovascular disease. You have a lot of cash particularly overseas. What should we expect from amgen in terms of buying . We have a strong Balance Sheet and we h