Happy friday, welcome to power lunch. Im melissa lee. A look at the markets this hour. Its fairly quiet ahead the threeday weekend. Marginal gains for the dow which is up by three hequarters of a point. S p level. Nasdaq is up by two. All three indices up more than 1 for the week with the nasdaq leading gains. The defense stocks keep on rolling. Boeing, general dynamics, lockheed and northrop all at lifetime highs. Im courtney reagan. Here is what else is happening. The second reading of First Quarter gdp at 1. 2 despite beating estimates its the weakest reading since the First Quarter of 2016. On the economic front durable goods falling for the first time in five months dragged down by orders for transportation equipment. A new forecast from t11 to 17 named storms during this Hurricane Season that would be above normal. Courtney, welcome. Lets hope they are wrong. It is championship time. The Pittsburgh Penguins are heading to the stanley cup finals after an unbelievably dramatic game seven, Double Overtime win over the ottawa senators. Also the Cleveland Cavaliers will take on the Golden State Warriors for the Third Straight year. Hey, we didnt want to get left out of the championship hoopla so we set up our very own faceoff friday. Here is how it works. Two stocks in in various categories going headtohead working to find the best p picks. The matchups are set. A. Mazon versus googles alphabe. Nike takes on adidas. Apple takes on facebook. Analysts take their pick between mcdonalds and shake shack. Our teams pick their winners. Which would you pick, america . Let us kick it off with your first faceoff and that is amazon versus alphabet. And bring in paul meeks, ceo and Portfolio Manager at sloy dahl and holst. Were having friday fun in a friday faceoff. You probably like both of them, but thats not the point of this ex ercise. If you had to pick one of those two, which one would it be . Id pick alphabet just because i see a higher upside because right now the google Computing Platform is buried in other revenues and once that is revealed and its a smaller business than amazon web services, i think theyll have a nice pop in the stock ala what you did when amazon first started breaking out its cloud revenues a couple years ago. Yeah, okay. So youre going to pick alphabet there. Thats not a knock on amazon, its just, again, i imagine you live in seattle. Youve seep the growth firsthand. Does 1,000 a share matter . Were in the media. Were simple people. We like big, round numbers. Do they matter . The numbers dont matter. The interesting thing about google it does have the juicy Digital Advertising margins to support it. Once you get past the google enterprise and into amazon youre in it a situation they have actually pretty pull try, very small margins offsetting the business. Theyre both going to be leaders in the cloud with any significant dip i buy all of them. Paul, whats your strategy for getting in when we are at such very high levels . The gains weve seen from amazon and google alphabet, am i wa waiting for a pullback at a certain rate or number . All these stocks over the last couple of years youve seen nice support if you put your technical hat on at their 50day moving averages. So all three of those companies alphabet, amazon, microsoft, i even like sales force. Com for its domination of the software as a service business. All those companies when they retreat are better buys. In terms of alphabet, though i almost said google out of force of habit in terms of that stock, though, paul, what else are going to be the catalysts . Were at a point all these stocks are trading so robustly in terms of valuations and everyone is looking for catalysts beyond the quarterly reports we just got. The fundamentals are great when you peel back the onion and look at their cloud business. The break that brings us a dip, that brings us to the 50day moving average support the buy is probably something external macroeconomic that is more this market related dip. Thats a dip thats going to bring the whole markets lower in your view. Thats right. The volatile tech names. Everyone knows tech has done extremely well the last 12 months to date. Even though i may be a longterm tech analyst the tech secotor deserves a little comeuppance and when the stocks go down, buy them. I wrote on my Facebook Page how im a little worried, not wary, paul, that so few stocks are driving so many of our market gains. Ir pi your pick is in for alphabet. Best wishes. Thanks. Speaking of technology, according to facebook, amazon, microsoft and alphabet half of this years gains and investors seem to be piling into the names they seem to be leading the overall market, 10 billion just last week. Northern trust Asset Management the chief Investment Officer with assess management. Great to have you with us. Tom, ill start off with you. You say we should be mindful this could be the seventh inning of the expansion. Does that necessarily mean the stock markets run is close to an end . No, it doesnt. We do a lot of work and our best guess is were probably eight or nine quarters away from recession. The stock market can move higher beyond that. You Like Technology and we were talking about small caps. This is a group a lot want ed t like and maybe they do still like saying theres going to be a steepening yield curve, rising rates. Theres going to be deregulation, et cetera. What are we waiting for to snap this group back in line with the markets . I actually think its the factors you listed. The rate hikes are delayed. The last fed statement confirms well see 25 basis points in june. We believe we get three hikes next year. We still believe we will see some additional relief. Its delayed a little bit as most of the legislative agenda is. Were still in the delay camp. Jim, you think the market is not giving enough credit to policy. So why do you think that is . Spending, health care, et cetera . The distinction i would make is the investors are way too focused on politics and not enough focused on the real economy. Also the focus of what the administration is actually doing versus what they are saying. The outlook on trade has been much more benign than people had feared. So when we make the distinction its around what the administration has done versus what theyve been tweeting and the environment actually has become more probusiness than some feared. At the same time, jim, you like european equities, emerging markets more so it looks like than the u. S. Equities. At this point bank of america had a recent fund manager survey i think last month and it seemed like everybody favored european equities. That was the favorite amongst fund managers. Does that matter to you theyre quote unquote crowded trades, that you should beware because so many people want to get in on that particular trade . I think its young in the longevity of the trade. U. S. Stocks are up 95 . European stocks are up 50 . Emerging market up 19. Theres a lot of ground to be made up. The momentum in europe is stronger and shockingly the political environment actually looks more stable in many investors minds. Tom, quick question as we wrap it up going back to politics on a scale of one to ten, ten incredibly important and one not at all, how important to the market is the socalled trump and gop agenda . Id give it a six. I wouldnt put it in the unimportant camp but i do think as jim was saying the fundamentals are actually stronger than the politics and we believe thats what you should invest for, the fundamentals. I think a nice tail wind out of washington but i would put it above a five or a six and say its not as important as the headlines indicate. Have a great weekend, thank you. Now lets check in with a news alert. Hi, courtney. The big takeaway u. S. Oil drillers continue to add rigs. According to the latest figures from bakers hugh they added rigs for the 19th week in a row. The number increased by two to 722 up 406 rigs from a year ago. Crude prices, well, they remained there although still under that crucial 50 mark. Thank you very much. Have a good weekend. Still ahead, thinking of buying a german car . Well tell you why you may want to consider doing it sooner rather than later. Plus, the race to 1,000. Ahead were talking about the race to two hours. Its a friday faceoff between nike and adidas. I joined the army in july of 98. I did active duty 11 years. And two in the reserves. Our 18 year old was in an accident. When i call usaa it was that voice asking me, is your daughter ok . Thats where i felt relief. It actually helped to know that somebody else cared and wanted make sure that i was okay. That was really great. Were the rivera family, and we will be with usaa for life. Usaa. We know what it means to serve. Call today to talk about your insurance needs. Hey dad, come meet the new guy. The new guy . What new guy . I hired some help. He really knows his wine. This is the new guy . Hello, my name is watson. You know wine, huh . I know that you should check vineyard block 12. Block 12 . My analysis of satellite imagery shows it would benefit from decreased irrigation. I was wondering about that. Easy boy. Nice doggy. What do you think . Not bad. Welcome back. President trump today saying germany is, quote, very bad on trade and specifically calling out the german auto industry. Weve got phil lebeau on that angle and dominic chu. Dom, lets kick it off with you. The numbers are staggering with regard to why trump is focusing on germany. Lets take a look at some of the numbers behind it. Germany does have a sizable trade deficit with the United States. Last year 114 billion of u. S. Imports we buy versus 50 billion of stuff we sold the trade deficit about 65 billion. Its big but lets put it in context. Some of the other big trade deficits made with other trading partners. 2016 trading goods, china, a whopping 347 billion deficit there. Japan the second biggest at 69 billion. Germany ranks 65 billion. Third place and mexico is 63 billion. Perhaps why donald trump is focusing a lot on those four countries in particular canada included although not to the degree that mexico, germany and japan do. Now lets put it in context with the biggest trading partners out there. China by far in terms of total imports and exports added together the biggest, 579 billion. Canada and mexico part of the nafta agreement also up there about 500 billion and then japan and germany as well. So thats the reason why President Trump is focusing so much on germany and of course our nafta trading partners as well and some of the trade talks are getting under way with china and japan. Phil lebeau, i think this one took everybody by surprise. A little bit. What dom was pointing out there, the trade deficit, consider these numbers. Last year the u. S. Imported 21. 6 billion worth of vehicles from germany and exported 6. 1 billion. A 15. 5 billion trade deficit there in just autos alone between the u. S. And germany. A lot of people are saying, well, arent the german automakers build iing more in t United States . Arent they adding jobs . Yes, they are and are expanding. When you look at how many vehicles are built here that are sold here, theyre well below the big three average which is 66 . Daimler at 39 . Bmw, vw at 13 and in terms of whats brought into the u. S. And is sold here from german automakers, youre primarily looking at your higher end s sedans and sports cars and thats why you have the trade deficit youre looking at now just under 850,000 were imported last year that work out to just under 5 of all the u. S. Sales. Thats what youre looking at in terms of immorted vehicles from germany and now lets talk about the plants in the south, vw, mercedes, bmw. They are expanding their operations. German brand plants built just over 800,000 auto last year. A good portion of those, by the way, have been exported. So that does help in terms of z u. S. He can ports. This has become the base for suv and crossover sales or manufacturing and sales around the world. Take a look at shares of daimler and general motors. Were going back to the election of President Trump roughly trading in tandem, if you will, when you look at these two and, guys, this is going to continue in part because not just with the trade deficit in germany but, remember, german automakers are also using existing or building plants in mexico to import cars here to the u. S. So, phil, just in january President Trump, maybe then president elect trump, threatened bmw with a 35 import tariff. Does that have any will legs whatsoever or just an empty threat . I think most people say that would be devastating, increasingly within the industry, very few people think it will happen. They think there might be an adjustment in terms of the trade policy but do not think theyre going to see 20 or 30 tariff put on these vehicles. I assume theres a reason mercedes and bmw came to the you states in the first place. If you go down to spartanburg or tuscaloosa, alabama, greenville, is one of the hottest cities in large part because of what bmw and michelin have done for the entire area. Its not just about trade, is it . Theres a lot of halo, second and third derivative benefits. The ancillary industries out there, something volkswagen with its chattanooga facility about the stuff they do there. Remember this is a currency play as well when you have strong dollars in play it does perhaps behoove you to have manufacturing certain parts of the world to help kind of hedge or counterbalance some of the effects of currency as well. So, i mean, just that spartanburg plant for bmw they make just about every sport activity vehicle they have out there and they export a lot of those vehicles, right, phil . Absolutely. Thats their largest plant in the world. The largest plant in the world and its getting bigger in spartanburg. Guys, thanks. Dom chu, phil lebeau. Its a rough year for the Energy Sector down 12 . Any names worth buying . A fund manager gives you his top plays. And all aboard as the Summer Season officially kicks off. Lucky landon for a look at the business of voting. Landon . Reporter hey there, melissa. Things are getting busy here. Boat sales are on the rise. Who is buying and who is not coming up next on power lunch. Its been over 100 years since the first stock index was created, as a benchmark for average. Yet a lot of people still build portfolios with strategies that just track the benchmarks. But investing isnt about achieving average. Its about achieving goals. And invesco believes doing that today requires the art and expertise of highconviction investing. Translation . Why invest in average . Weve done well in life, with help from our advisor, we made it through many market swings. Sure we could travel, take it easy. But weve never been the type to just sit back. Not when weve got so much more to give when you have the right financial advisor, life can be brilliant. Ameriprise i just saved a bunch of money on my car insurhuh. With geico. I should take a closer look at geico. Geico can help with way more than car insurance. Boats, homes, motorcycles. Even umbrella coverage. This guys gonna wish he brought his umbrella. Fire at will howd you know the guys name is will . Yeah . Its an expression, ya know . Fire at will . You never heard of that . Oh, there goes will bye, will ths not h name take a closer look at geico. Great savings. And a. Welcome back to power l lunch. Boat sales are at their highest level since the recession. Are millennials who cant afford homes going to be able to buy boats . Landon dowdy is live in florida. I think she has some answers for us. Landon . Reporter hey there, courtney, good afternoon. Here at the new smyrna marina boaters are ready. We talked to the manager. He expects all these slips to be filled for the weekend and that could be because boat sales are at a post recession high. The industry says theyre having a hard time reeling in these millennials. Firsttime buyers account for a third of all boat sales down 20 since 2005. Yesterday i visited a manufacturing plant here in florida and they say its all about the technology and being connected to lure in the younger generation. Features like blue tooth, navigation systems, and docking, a boat becomes like a video game controller thanks to the help of a joystick. What about the cash strapped millennials . The executives say its the millennials can take out the boats like the pontoon and Strong Demand in the segment, in fact year over year sales pontoons are up 11 for the month of april. Guys, im doing a live shot driving a boat and telling you about the boat sales, they would not let me drive the 72foot yacht. I just got the pontoon but not a bad day at the office. First, landon, the ultimate boondoggle, number one, good for you, though. Why are you doing a segment and sitting on a party barge made for people my age . Well, because this is what theyre doing. The boat sharing is all about the pontoons. You can fit more people on it. They make them now to where they have bigger engines so that you can actually waterski. Theres more to do and its affordable because youre boat sharing. You dont have to buy the boat. You join this club and you get to take the boat out as much as you joined the club for whether its the weekend or whatever that might be and a pontoon is not a bad boat, i have to say. Were enjoying ourselves. Is the boat sharing program run through brunswick . Who runs the programs . How do i sign up for this and can i get a pontoon with a slide . Reporter there are different types of programs. Its not through brunswick but they do give their boats to the program so you can rent their boats. The pontoons are what theyre doing and the smaller brunswick boats, millennials are not buying these 200,000 boats which i did get to drive yesterday. The it technology that they have on these boats is absolutely amazing. I was able to dock the boat myself. Its a little bit of a joystick. And thats how theyre reeling them in. As far as the cash strapped ones, these programs, thats the way to go. Its much more affordable for them. Are they hoping by allowing millennials or getting them interested through rentals that they will convert those to buyers . Reporter melissa, thats exactly right. You even see that with harleys. Its about the experience and they say once they get a taste of it they have to have it. Unless they have that taste, they have to experience it and then that makes you want it and thats the hope that they buy more boats. They say its working. I have a feeling by