Right now. Thanks a lot of red on the screen heres the question. Is a summer stock swoon starting were down across the board. The once red hot nasdaq at its lowest level since midmay stocks bringing us down on tesla. Worst performer on the nasdaq 100. Well tell you why huge downgrade for ge. Why one analyst urges you to sell that stock and answers our question of what is the biggest mistake ge has made. Thanks. Im michelle carusocabrera. Heres what else is happening. Microsoft officially announce being its cutting 3,000 jobs. Liberty media buying the rest of hsn. 2 billion deal brings the nations two best known Home Shopping outlets, qvc and Home Shopping network and despite a soft first half for auto sales the outlook remains strong welcome im Tyler Mathison we begin with the president s big overseas trip a very consequential one. He spoke early this morning point land and a short time ago landed in germany and his first face to face meeting with russias Vladimir Putin. Eamon javers is live in hamburg with the very latest reporter that meeting with Vladimir Putin will come tomorrow here in hamburg but today President Trump has landed in air force one and just met with Angela Merkel, the chancellor here in germany that meeting so much anticipation for it given the fact that there was this little diplomatic snafu between two leaders in washington, d. C. Where Angela Merkel went in for a hand shake, donald trump didnt see it or acknowledge it, didnt look at her today we got a hand shake between the two leaders. Take a look at some pictures that just came in, the two leaders meeting here in hamburg. We got the hand shake, a direct look between two leaders thats also being commented on here in the press. Earlier today we saw this fascinating moment in warsaw where the president was with the president of poland. There a much warmer reception from the leader in poland and also from crowds in the streets there. The president making comments about lng, Energy Exchanges between two countries, military exchanges between two countries. He praised the fact that the president of poland is a tough negotiator heres what he said. First shipment of liquified gas arrived in poland last month and more is coming hes a tough negotiator. The president joking key do an lng deal in a short period of time, looking for staffers to draw up some contracts onthespot. We can enter a contract for lng within the next 15 minutes, do you have anybody available to negotiate. It would take about 15 minutes were becoming a great exporter of energy. Very soon well be a very great exporter of energy and weve taken a lot of unnecessary regulations out of our process and were doing things that we havent been able to do for a long time. Now a lot of reporters here in germany were after an opportunity to get whats called a pool spread between Angela Merkel and donald trump at the end of their meeting, an opportunity to go in with cameras and see the meeting. The german side turned down that request. That possibly because theres so many flash points between these two leaders when it comes to immigration, climate, trade. All of those things Angela Merkel has a political incentive to embrace donald trump and point out her differences with him at the same time shes welcoming him here to her country. All those diplomatic sensitivities may be in play to not allow pictures at the end of that meeting where we saw pictures at the top of that meeting earlier today. Back to you. In Europe Energy is power russia holds much of the energy. Which means russia has much of the power. It is responsible for 30 of europes gas needs a full 13 nations rely on russia for 75 of their gas germany takes in the most by far. But even poland where the president spoke today and talked about Liquified Natural Gas is reliant on russian gas every year much of that gas accident to europe through a massive pipeline which snakes across russia through the ukraine into Continental Europe controlling ukraine is important. But russia and germany want to change that. They are currently working on a Second Generation pipeline bringing huge volumes of gas from a port in Western North part of russiadown through the baltic sea and into northern germany. Its called nord stream two. It would double the capacity of the current pipeline but also bring in more russian dominance of gas and energy which means russia would wield own more power over russia well talk about that and more of President Trumps energy plan and his g20 challenges lets welcome in executive Vice President of the German Marshal Fund he was assistant secretary of defense under president obama. Welcome. Lets talk about energy. First lets start with the president s speech in poland this morning which took on a bit of an apo ok calyptic tone. Do you see it that way what did you make of the speech overall as a walk up to his ameliorating tomorrow with mr. Putin . Well, in many instances the speech was a tale of two speeches the president said some things many europeans were hoping to hear about u. S. Commitment to nato, u. S. Commitment to a strong defense, u. S. Commitment to our mutual security that was all good. But the president also cast a pretty dark tone in much of the speech along the lines of the american carnage part of his inaugural address talking about the civilization struggle were in, revealing perhaps more revealing than the speech of what he said before he was defensive about the russian meddling in the election, took some shots at the u. S. Press influencing nbc and that could have been a defensive posture. Lets talk about two specific items there. One is did he make explicit, which he did not do back when he met with european leaders in may or nato leaders in may, i should say that the United States would view an attack on any of the nato allies as an attack on all and would respond. Thats question one. Did doe that he did. He referenced article 5 of the nato charter which is that the mutual defense clause of our commitment to nato and to russia he went in a couple of directions there one as you pointed out he was a little equestion vocal whether russia and russia alone was responsible for election meddling i want you to talk about that and what you think that tees up tomorrow but he was explicit was he not in saying that russian interference and mischief in other parts of the world including the ukraine, presumably and also its support of rogue regimes in syria and iran needed to be adressed again, the tough language on russia was what he read in a speech that was clearly written noirm. It was important that he said what was said. Many europeans were hoping to hear those words he had not said that it would have been big news that was good. But on the other hand what he was asked in the press conference and speaking off the top of his head he suggested a lit more hesitation on pointing the finger at russia when it came to meddling in our election lets go back in time for a little bit and then look to today. Considering what many thought President Trump would do when it comes to russia versus where we are today, the administration has been far tougher on them than most people expected, hasnt it . Again, it depends at what youre lacking at. When you look at our defense posture, general mattis, secretary mattis has articulateed a policy thats in continue without the Previous Administration there was a prediction sanctions would be gone. Not so soon people were unsure thats why were looking at this meeting tomorrow we know president putin will have offered certain things to President Trump whether its cooperation in syria against isis or a discussion about ukraine. The question is what price will he ask in return President Trump has talked about having a Good Relationship with russia and something we should desire thats sensible and easy to have a Good Relationship with russia, just do everything putin wants you to do. What is putin going offer. What will he ask for in return and what does President Trump find tempting enough to consider well find out. Thank you. Down day for stocks. How much stocks playing into it. Dominic chu is looking into it whether stocks slid as a whole or etfs have more of a sway you can argue with the popularity of fefs more investors are going that route and therefore they have more influence over the overall markets. Bank of america, Merrill Lynch noted when it comes to Fund Management the number of dollars being managed has doubled since 2009 it now represents 37 of all u. S. Based equity tied funds thats big only about 19 from 2009 you take a look at how much this index investing mentality has taken hold the s p 500s total value as a market cap is now almost 7 controlled by just vanguard one of the biggest etf and index investing companies out there. Back in 2010 it was about half that amount. Huge move into passive investing. Among southeast stocks that took most their float, available shares for trading are now owned by etfs. They point out 23 stocks in the s p 500 have at least 20 of their total floats in etfs le get and platt, peoples United Airlines bank, newmont, cincinnati insurance kroup as we talk about the implication the idea here is with all of these etfs there could be unintended consequences with regard to market liquidity and volatility that could play in if f etfs continue. A lot of people believe the herd mentality when it comes to etfs lets bring in two strategists guys, good to have you here. Is it a coincidence that on this day where we see Interest Rates rising again that we see some of the highest multiple stocks particularly the tech stocks selling off . Do those two things go handinhand what do you think . Well, obviously, theres a correlation between the two, but im still not believing this higher Interest Rate argument because quite frankly were back to where we were a month ago in terms of the ten year and 30 year we still have seven European Countries with a negative two year yield and japan with a negative two year yield. On a long term basis we have a long ways to go before it has a Significant Impact how about you i think Interest Rates when they rise remind you that discount rates when it comes to equities are important and paying too much is not a good thing from a longer point standpoint very often when Interest Rates rise or something happens in the market to remind people they need take a look at their portfolio they tend to shy away when some of their Portfolio Holdings have risen much too high what do you believe right now . So presumably its safer to buy southeast stocks how about you its slow rise of rates not strong inflationary pressures. Steve, can i go back to the previous piece on etfs quickly isnt there a risk, forget about the herd mentality that bad company with bad management and bad models are seeing their stocks go up because if youre a company thats misma nagged in a bad industry your stock is going to go up does that frustrate you . Right well, it is frustrating. Think about it if all the money is pouring in to a passive index and your portfolio deviate from that index, mathematically youll be behind the eight ball. Yes. Certainly theres an impact there that is maybe not the best economically for the market but at the end of the day, given the expense slice of these passive investments i think it will be a while before we see this trend end. But also the child an eight year bull market. Put money in the s p it goes up every year at some point when theres a bull market it will put a wrinkle in the game plan the etfization, a tricky word to say, is that when there are stocks outperforming, we have talked about this market being a narrowly led market in that the big cap tech stocks have been the market leaders decidedly so far this year. You say the money pouring into big etfs could have pushed those stocks higher. So when youre taking a look at equity risk premium and seeing Interest Rates go higher thats where the unwind is the hardest isnt it bruce is that justified in this instance tonically when things turn down thats right. In the meantime, those corrective pull backs in the market often temper that and its very common for fairly few issues to lead the market at any one point in time and then you rotate to soelgs sometimes off the correction, sometimes merely rotating from one group to another is this the time for rotation in your view ortoo early given where Interest Rates are and even though weve seen a rise in the past week in the broad context of things, they are still low . Theres typically an ongoing rotation thats fairly frequent from group to group. I think its a little bit early to give up on the tech stocks entirely from that standpoint. But i think having some rotation is probably a sign of health within the market and it means that everything keeps advancing and keeps the breadth at levels thats reassuring. Thank you, gentlemen. Coming up game changer or gimmick . A giant vending machine that dispenses cars meet the company thats selling used cars in a different way talk about doing things differently. Would you let total strangers manage 50,000 of your hard earned money one man is doing just that gealng fli after jp morgan lowering its price the trend a. Hey. Hi. Hi. You guys going to the Company Picnic this weekend . Picnics are delightful. Oh, wish we could. But were stuck here catching up on claims. But we just compared historical claims to coverages. But we have those new audits. My natural language api can help us score those by noon. Great. See you guys there. We would not miss it. Watson, you gotta learn how to take a hint. I love to learn. Flexshares etfs are built around the Way Investors think. With objectives like building capital for the future, managing Portfolio Risk and liquidity and generating income. Thats real etf innovation. Flexshares. Built by investors, for investors. Before investing consider the Funds Investment objectives, risks, charges and expenses. Go to flexshares. Com for a prospectus containing this information. Read it carefully. Ge the biggest loser on the dow down by 3. 2 jp morgan cutting its estimates on stock joining us now, the analyst who made this call great to have you with us. It almost sounds like you think there will be a onetwo punch for investors on General Electric where there cube kitchen sink moment for the stock. Then whats broke isnt that easy to fix. Yeah. Absolutely i think the new ceo announcement is a positive because i think hell come that with a clean sheet of paper but, now, last 16 years, you know, theres been a lot of investment perhaps in places where there shouldnt have been and so to fix that kind of structural overcapacity and kind aflac of earns growth in the industry they compete in, its going to take a lot of time so what we think will happen the 2 number thats the anchor for street over the last two years, as they move towards a gap estimate which more fairly reflects the dollar of free crash flow that they generate currently that reset is not in the stock at 27 and we see a price target of 22 one of the frustrations for many investors is the perception General Electric made all sorts of deals at terrible times whether exiting the financial business at the wrong time or getting into the oil and gas business at the wrong time how do they undo that or do they to undo that will take resetting expectations for investors and then second of all given they are currently paying out almost 100 of their dividend in their free cash flow, you know, theres not a lot of extra cash for them to kind of do things in a creative way. Site will take i believe a heavy amount of cash restructuring thats not in our numbers. We kind of estimate at a high level somewhere in the 5 billion range over the next several years to kind of adjust capacity again, thats kind of the point of the note. Theres missouriy way out of this a lot of blocking and tackling and ultimately a number thats lower and not growing as fast. Do they cut their dividends whats going to happen i do not think they cut the dividend but they cut the buy back, which is diluted how far along are they in that buy back . About 7 billion and a five cent cut to our estimate theres no extra cash accruing to be used for creative purpose. How long does this take place. You have a 22 price target. Its now 26. How long does this transformation take. I think they are currently discussing it. We wont hear anything on the Second Quarter youll get something somewhere around september maybe october as late as november when you hear the land for the next several years from the new ceo thank you stephen tusa a big warning about the American Housing market from one top fed head what he said that atught everybodys attention ths coming up youre watching power lunch. Were back right after this. At fidelity, trades are now just 4. 95. We cut the price of trades to give investors even more value. And at 4. 95, you can trade with a clear advantage. Fidelity, where smarter investors will always be. And at 4. 95, you can trade with a clear advantage. If only the signs were as obvious when you trade. Fidelitys active trader pro can help you find smarter entry and exit points and can help protect your potential profi