Faceoff what that means for you and the media landscape. A slamdunk edition of power lunch starts right now good afternoon, everybody. Welcome to power lunch. Im Tyler Mathisen stoc stocks trading in a narrow range. We could have our ninth Straight Record closing high. Boeing, apple, walmart, the biggest winners. Check out some of the other movers Rockwell Collins trading at an alltime high. Dom chew just reported a little bit about it de deere also at alltime highs and mylan going lower, hitting levels not seen in four years. I am Michelle Carusocabrera north korea vowing to teach the u. S. A severe lesson if they launch an attack against pyongyang. Security council vote was unanimous. A strong statement against north korea. New sanctions are in response to north koreas two intercontinental ballistic test in july. It could slash our 3 billion annual export revenue by a third. The intention which bans u. S. Members from banning coal, iron, iron ore and seafood are to force them to sit down and negotiate an end to their Nuclear Program. North korea still in the spotlight as the president starts a week of a working vacation Kayla Tausche i live reporter the focal point of many of the president s conversations. He had a roughly hourlong briefing with secretary of state Rex Tillerson traveling overseas in asia as well as general john kelly, his new chief of staff. The white house hasnt provided any details from the call. A readout from the call looked much like the call he had last week with japans abe. We will wait and see what the white house and the senior policy advisers to the president have decided on how to proceed with regard to north korea he does have many members of his National Security team on his working vacation in bedminster senior counselor, kellyanne conway, as well as mike pence, will be joining him. In terms of what they will be expected to discuss, north korea, National Security, top of the list the white house staff says tax reform and health care will be discussed later on ahead of his trip to new york for the beginning portion of next week as you can tell from behind me, guys, it is very much indoor weather on this working vacation we see the rain coming down, kayla. Thank you very much. Lets bring in fred kemp, president and ceo of the Atlantic Council north korea, unanimous vote for punishing sanctions against them and what could bring in far less revenue for the country how significant a step was this on saturday . Its a huge step diplomatically potentially, a very big step economically this is the biggest diplomatic victory of the Trump Administration lets give credit where it is due. It was brought about partly because the chinese are worried and increasingly worried about the North Koreans from the two icbm tests of the last month and nuclear tests. The russians are worried about them breaking out and they are worried about donald trump, that President Trump could do something a little bit less predictable than his predecessors in that way, the very famous mad man theory, gee, he might just do this. They also wanted to preempt financials sanctions by the u. S. Which would hit them, even if they were unilateral thats been forestalled as well from this standpoint the manman theory isnt about the leader of north korea it is a reference to the unpredictability of donald trump. The theory and this goes back to Richard Nixon and others and if you are unpredictable and if your adversary doesnt quite know what you are going to do, they cannot deal with certainty against you. In this case, because there is all the sabre rattling about potential u. S. Military actions which i think are unlikely, there could be much harsher unilateral sanctions from the u. S. , which could come along, than the chinese and russians have to act in unity with the you nated befo United Nations how do these sanctions get enforced who enforce them what happens if they find ways around them . What is the mechanism there . That is the problem you have isolated it there have been sanctions before on north korea half a dozen times. The chinese, russians and african countries alike have danced around them the realtest is going to be to what extent particularly the chinese enforce these sanctions. The greater certainty for that is they are troubled as well the chinese always care more about the stability of north korea than their Nuclear Weapons. Russians have cared more about this Nuclear Weapons now, you have had an uncle of kim jongun killed, executed by his nephew, kim jongun, and the uncle was the liaison to the chinese. You had the brother being assassinated he was under the protection of the chinese. There is lots of reason for the chai nose to ha chinese to have lost patience. At what point do you say the sanctions work this is a regime that is willing to let their citizens starve and they say they are never willing to put this on the negotiation table as long as the u. S. Has a hostile policy the whole meaning of his state rests on Nuclear Weapons capability they have even changed the constitution so it is being described and described themselves as a Nuclear Weapons state. The problem is, can he keep his regime together . He has to have enough foreign currency to pay off the people around him to keep the economy going. At what point does someone around him decide, this is really too much . It looks like a very stable situation, particularly as he has purged so many other people. I think the first test will be, do we see more icbm tests . If he stops testing, that will already show some progress if he then comes to sixparty talks that the u. N. Is calling for, that will be the ultimate test dont expect him to stop access rating h accelerating his path to a Nuclear Weapon there has been almost no market reaction. We have to wonder when and if there will be. Prediction, north korea will be a state, a country with Nuclear Weapons and the world is going to be forced to live with it i think if you had to bet at this point, you would say over time, they would become a state with Nuclear Weapons in 1964, there was a chinese leader and the soviets wanted to combine with the u. S. To stop him from going into a nuclear direction. Kim jongun and north korea argue that libya is their best argument for Going Nuclear it is not whether they hang on to the Nuclear Weapons they have or develop a missile over time, which they probably will but will we be able to deter them, contain them and hold them in place so they are not a danger to their neighbors or us i think my prediction would be they will get there i thought they already had a nuclear capable. They do but they cant deliver it anywhere near us. Fred, thanks very much. The battle of the billionaires, leon cooperman on cnbc and fast monefast money, in on the health of this recordbreaking rally. Scott is joining us. Lee cooperman nor afor all ou that dont know has served on the board for 20 years he calls his activist Campaign Just now on the Halftime Report inappropriate and foolish. I know and respect bill acorman. I consider his behavior in this instance somewhere between foolish, inappropriate and irresponsible. I feel it is my job to speak out. I dont think he appreciates that their Business Model is hightouch, high Customer Service which costs money. I dont know where he is coming from he says adp can improve by 50 , hasnt laid out his entire plan yet he plans to hold an investor day to do just that. We spoke about the market with lee on cooperman he said he thought it was fairly and fully valued we asked mr. Cooperman, the legendary investor, where are stocks today i think the market is fully valued on a fundamental basis. I think we are heading to normal zatio ization, 4 nominal. I think the fed fund will be 2, not 1. The tenyear government ought to be 4, not 2. 25 it may take another year to get the fed funds raised. We asked him where are opportunities in the market, if there are any left some very notable investors have been speaking out about where they think the markets are howard mark is included. Lee said there is still value to be had he has a long list he showed us a list of stocks that he ani that he thinks is ripe for the taking the point of his appearance today was to take issue with what bill ackman is trying to do in adp even though we dont have the full plan laid out before our eyes maybe we will find out more later today when the actual 13d is filed with the s. E. C. The inside is extra fascinating. He was probably on the board when bill ackman initially had his stake and tried to agitate for change back in 09 to 2011 and thats why he takes this a little bit personally. He said they spoke on the phone and Lee Cooperman sent him an email while i am praising of you as a person or intellect, if i agree to Say Something about this adp position, it will be supportive of the company and critical of you. When you serve on a board for 20 years, you have a distinct opinion about what the company is all about Lee Cooperman knows many of them and knows theformer ceos as well that he has spoken to as well there is a lot ahead simply, we dont know much of what bill ackman has planned we havent seen the 13d he hasnt laid out his whole investor case. Still, a new battle of the billionaires thank you, scott. Still ahead, a big week for retail, nordstroms, kohls, jcpenney, all due with earnings this week. Plus, another recordsetting day for the dow on track for its tenth straight day of gains. Leon cooperman thinks the market is still valued but where can you find value we have that next. Most etfs only track a benchmark. 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. Thank you so much. Thank you so were a go . Yes we got a yes what does that mean for purchasing . Purchase. Lets do this. Got it. Book the flights hai si si ya ya ya what does that mean for us . We can get stuff. Whats it mean for shipping . Ship the goods. Youre a go you got the green light. That means go oh, yeah. Start saying yes to your companys best ideas. Were gonna hit our launch date scream thank you goodbye let us help with money and knowhow, so you can get business done. American express open. The dow once again over the moon you heard the words from leon cooperman weighing in on the state. He thinks the market is still fully valued but where can you still find value its something he says he can find we have joe and mustaka here. Welcome to both of you let me begin by asking you, do you expect the second five months of this year are going to be as positive for equities as the first seven months were . I wish i could say yes. Nothing would make me happier than to be wrong here. I suspect that the gains this year have really been front loaded any time you have double digit returns from Global Equities in the First Six Months you have to sort of faketake a step back ank yourself, is this sustainable . The earnings have been driving the bulk of the games. I have a hard time believing this pace will be sustained. Mustafa, how about you . Is that a pocket where you can still find good value . I believe so. When you look at the small caps on an absolute basis, they look to be more expensive they provide much higher growth expectations, about 18 Earnings Growth compared to 11 12 s p given their superior Earnings Growth prospects, i believe small caps is a better place to be why havent they participated to the same degree as the Big Companies . In regards to the u. S. Small caps, look at it i think earlier on after the trump rally, they participated with the expectation of a lot of tax benefits and bigger beneficiaries of trump thats why small caps rallied quite a lot. When expectation starts to come down, small caps significantly started to lag right now, there is not much expectation of what the trump train will do. Still, they have good earnings and evaluations. Joe, why do you want to stick with technology . Joe, joe im cautious in the back half of the year, because volatility has been incredibly low. You have a Federal Reserve tightening monetary policy, a shift in what we have seen over the past ten years in addition, you have val weighing evaluations which are a little bit stretched. Volatility is likely to creep up, specially when you think about what we have in store from september. The underlying economy is still in a good place. You look at a lot of data points here in the u. S. And abroad. We think the odds of a recession occurring within the next 12 months are still quite low does this mean if you think the market has a stumble because of higher volatility, that technology will still outperform even though it is the best performing sector this year . If you think about what technology is and the opportunity it creates for investors is continuously disrupting the world, yes. I do think technology can do that thats not the only sector when we look at u. S. Financials, they are in a good place given higher Interest Rates and strong Balance Sheets and you have the Consumer Sectors on the discretionary and the staple side when you think of how healthy the Balance Sheet is today. You are essentially saying, you and tyler were talking about the small caps you are also saying stick with what is working in technology as well as health care. What would be the bear case you are concerned about for these two sectors, though . I would be also concerned about some of the evaluations we are paying for granted, at this part of the market cycle, usually valuations dont matter Earnings Growth matter when the growth stops, you have to focus on valuations, because that will determine the extent of the market. We have to be very data driven whenever we see Earnings Growth is starting to come down and become negligent thif, that watn the stock. We need to look beyond fang stocks there is a lot of good Earnings Growth specially in the i. T. Services sector. You can buy them at relatively attractive valuations. Superior, more growth than the average. S p, you can buy it at even lower pes. Those are the type of things we need to be a little bit more disciplined about, not to overpay for that growth out there. Joe, mustafa, thank you very much for being with us today appreciate it. A big week for retail. A slew of names getting ready to report p earnings how amazon and google and facebook could soon be ting akon the Major Networks for sports tv whats up for grabs and whats at stake next. But it doesnt cover everything. Only about 80 of your part b medical expenses. The rest is up to you. So consider an aarp Medicare Supplement insurance plan, insured by unitedhealthcare insurance company. Like all standardized Medicare Supplement insurance plans, they pick up some of what medicare doesnt pay and could save you in outofpocket medical costs. 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