Is there freedom of speech when you work for a big company not. Well debate the profits go to pot quite literally. Cnbcs marcus limonus goes inside californias market he is going to give us a sneak peek power lunch starts right now welcome, everybody, to power lunch. Im Tyler Mathisen i am never disappointed when jeff done lunlop is on fasfas one more time, the dow is at record, 22,135 on the verge of an 11day win streak and potentially its tenth Straight Record close. The s p 500 joining the party. Record interday high there up three points or. 14 check out some movers. Fibrogen, up 50 and on pace for its best daily performance ever, overwhelmingly positive Clinical Data on its lung fibrosis drug flip side, dean20 meanwhile, chipotle, lowest level in four years at 336. 50. Trouble more for chipotle. Brian . Hey, tyler, im Brian Sullivan in kenosha, wisconsin. We are here for one reason there is no state that delivered the presidency to donald j. Trump more than wisconsin did. There is perhaps no county or town that delivered wisconsin, that delivered the white house more nan kenosha 200 days into the administration, we wanted to come here to a manufacturing facility in a manufacturing hub in a town that went for trump to find out if they are happy, what they still want to see get done and if the agenda is on track. Where is the American Economy headed wisconsin has a pretty good success story. We have a couple of ceos and youll meet some millennials that are getting into manufacturing. They want to work and learn a trade. We always hear people are sitting on somebodys couch. These men and women are spending time learning machinery and manufacturing. They are proud of it we have a big show coming up in the badger state for the next couple of hours. We can see all the activity right behind you as we mentioned in the open, marc marcus limonus is here with us he will take us into the sophisticated highly business of pot. It was an interesting experience i still dont know where i land. I will let you know tonight. Cool. Were looking forward to it. Our top story. Americas banker, jpmorgan ceo, jamie dimon going oneonone with our wilford frost our infrastructure is broken, the headline jamie dimon announcing that jpmorgan is making a significant investment in this Robotics Technician Apprenticeship Program in chicagos south side. I dont want to blame any one person half the kid in an Inner City School do not graduate thats a disgrace. A lot of kids who do graduate both high schools, vocational schools and community colleges, they should have a livelihood when they get out. He would like the economy to deliver those jobs on its own but at the moment thats not happening. Whats embarrassing to me is our inability to get infrastructure done properly we havent built a major airport in 20 years. China has done 75 in the last ten years. I mentioned education. We dont have a competitive tax system i trail around the world and meet president s and prime ministers. Everybody knows they need a Healthy Business environment to create jobs and wages and to have that, you need a competitive tax system our taxes are becoming less competitive over the last 20 years. Everybody has improved theirs. We simply havent. The other key takeaways, guys, he wont call it a bond market bubble but he would not buy tenyear Government Debt anywhere in the world right now. He said that wall street beats Silicon Valley when it comes to gender equality. Jpmorgan has more work to do in terms of racial equality at the company itself today jpmorgans stock price hitting a record alltime high wall street is a lot older than Silicon Valley. I remember but maybe you dont if you worked at merrill lynch, you were probably Irish Catholic and if you worked at goldman sachs, you were jewish and if you worked at morgan stanley, you were white, protestant catholic thats probably not true anymore. Very, very significant context, michelle. I quite agree. Jamie there talking about jpmorgan itself, saying 3 of 9 of the executive committee are women. Over 30 of his direct reports are. Admitting there is more work to be done on that for him too. Did you want to Say Something . No. This Movement Towards racial equality shouldnt be such a hot topic. It should be a topic every day it shouldnt be todays topic. I am still confused on why we arent making it a bigger priority from the beginning as opposed to after the fact. What do you do in your companies and where do you stand on racial and gender diversity i dont think about it a lot. We hire great people we look for more females than males by design. I happen to believe that fee mea females are better in a sales oriented position. I dont want to hire specifically people because of who they are or what they look like i want to find qualified people and foster their talent. Wilford frost, if you are still there with us in chicago, we will be discussing your interview with jamie dimon from the big picture and the markets and another day of record highs for the dow and s p 500, a short while ago, Jeff Gundlach, ceo of doubleline capital, told Halftime Report that he thinks the market rally could take a pause i believe the market will drop 3 at a minimum sometime between now and december from whats now a grindingly higher level. Lets bring in margaret portrano how are you . Im good. How are you . Im going to raise your seat there after a little while if i can. I feel like im towering over you. What do you think of what Jeff Gundlach just said i dont think many would be surprised if we took a 3 breather i think it is clear we are in the later stages of an Economic Cycle. Before you batten down the hatches, we can be in the later stages of an Economic Cycle for several years. S p fundamentals were okay one of the other things that jeff said was he doesnt see any signs of an economic slow. It wouldnt be surprising to see some volatility. Let me ask you tactically two questions. What is your average Holding Period for a stock i ask that in the context of what he did say there, which is im beginning to move to derisk in those areas that have gone up the most are you doing any of that . Two questions our average Holding Period is several years. We are longterm investors. We have also been pivoting the portfolio a little more defensively. I see large cap growth intact. Many of the megacap tech names, it is hard to argue they are inexpensive. We have been looking a little bit lower for names that offer good value and good growth of your top five holdings, the biggest holding, nearly 5 , is amazon. Com. Have you been lightening up or are you sticking with that we have sold amazon, trimmed amazon four times in the last two years. And not added. And not added but you cant help yourself it is hard to argue that amazon is undervalued. A terrific business and a Terrific Company you have large cap growth managers that 70 of large cap growth managers avoid the fang i want to get a little more clarity. You said it is clear we are at the back half of the economic downturn give me some substance behind that i dont want just a feeling. You are starting to see signs that productivity is rolling over you are starting to see a consumer that is now spending less they are saving less but also spending less. Where are we seeing them spend less in general. Where specifically . You are seeing it in retail . You are seeing it in retail you are seeing the consumer using their savings to pay off their credit to pay off your normal day to day costs. Health care costs have risen they are buying fewer cars. They are buying fewer new cars new cars. The manufacturers arent subsidizing as well. What a wonderful problem to have with amazon you are trying to trim it. It still ends up being a bigger portion of your portfolio. It goes up more than you trim. I wish my holdings had that problem. Being a little bit more defensive has not worked to our advantage. The top megacap stocks have outperformed the market. We are not as overweight as some of our peers my hope is being a little more defensive will pay off over the next few years we have talked in recent weeks about the future of media. A couple of your holdings happens to be our parent company, comcast you also have a big holding in disney, which will report later today. How do you think about the future of television, cable, media delivery as you evaluate these stocks first and foremost, think about Consumer Discretionary if you have an option of owning and being long on traditional retail or media. I would argue that media, despite the transition problems, it is a more defensive place to be as you think about the media space over the next couple years, it is clear that folks are watching more content. That is proven and factual whats less clear is how they are going to watch it . How and where the Business Model question is, do all the Media Companies continue to make money when folks are watching a mishmosh of traditional cable bundles, online streaming and sports packages and how do they adjust their cost structure the nice thing about a comcast is that they have some diversification. They have content and the cable business they have the broadband business if consumption really does shift to over the top, they have a hedge against that disney has a lot of different lines of business too. We have to leave it there, margaret thanks come back. Well get you a higher seat. Google has fired the employee behind the controversial memo on gender josh lipton joins us with more googles ceo didnt pull any punches. He wrote a memo to employees blasting james derori, the reported author of that divisive memo he said the engineer had violated the companys code of conduct. That says googlers are expected to do their jut most to create a Workplace Culture that is free of harassment, bias and Unlawful Discrimination he supports the right of employees to express themselves. He believes he violated that code whether he wrote that memo. Remember, he argued that innate differences between the sexes could, in part, explain the lack of women working in tech even before the firing, a former senior googler said he thought he should have been escorted out of the building by security. Others disagree, though. He also argued in the memo that google alienated its conservative employees commentators on the right have come to his defense. Rich lowery said it is one thing to disagree with the memo and it is another ning to beliething te views therein should be forbidden. With us is danielle cambia s she advises women of color in tech were they right to fire him . Absolutely. I think it send a very important message. Silicon valley is a small place. With all the focus on gender and diversity, i think google needed to send a clear message to the Tech Community i bet if he had written a memo saying these are all the reasons why women would be superior engineers and tech workers, he would have been lauded, right . Ten pages of that, people would have thought it was great and he was standing up for great things, right . I think thats not likely although, that would have been great. It would have been okay to express that opinion but not this opinion i dont think so. We are working toward being a more progressive and Inclusive Society and we need to focus on equality people of all backgrounds have equal opportunity and equal abilities to excess in any field. Marcus said earlier, he hires women for sales because they are more empathetic and better listeners. If you say that, why cant you say women maybe arent as good as engineers here is my issue. In this case, equality and diversity should be a constant my problem with this gentleman is that he used the voice box of the company and the companys access to people to have an opinion that is not authorized by the company and the company chooses to engage in or not engage in any sort of view unless it is coming from there that is my issue very fair point there is no freedom of speech for corporations these are dictatorships. Not on the companys memo however, he does raise this issue of gender differences and why they exist you acknowledge they exist when you think women have specific characteristics. Let me ask you this. You can see the numbers at google this is the tech breakdown 80 , men, 20 , women 39 asian, 53 white, 1 black, 3 hispanic. Those are pretty incredible. Look at what women get degrees in top ten masters degrees for women, mba, education, social work, elementary education, curriculum and instruction, educational leadership, special education, counselor education, nursing, reading, tech and teacher education. Mba was number one. Look at the men mba, number one, then, Electrical Engineering, education leadership, business commerce, education, accounting, public administration, computer science, mechanical engineering, computer and Information Services if google wants to fix this, it is too late at this point. All these people have already graduated with degrees that are not applicable to google its not too late you do have an issue with the pipeline problem thats absolutely true as someone who works with women in tech and women who are entrepreneurs, what i hear from women is that through the entire education process, both undergraduate and masters, women are weeded out you have a lot of harassment you are one of the few people in your class you are bullied. So its not a great environment for women to stay in it is not that women arent interested in these fields they are weeded out. Weeded out because why . They selfselect out did this happen to you it is a combination i would say it is a combination. One of the things that you see now, there are so many programs where women can learn to code. Women and people of color can learn to code at any age you see a resurgence of women going back, getting training and realizing they can align tech with whatever field they are already in and find their way into positions you are seeing a lot of coding boot camps, carly klaus has a great one. There are a lot of fantastic opportunities like that. So often the things that you study in school dont necessarily translate to what you do in your career. Im a live can example of that let me come in here. This individual who wrote the memo didnt get into trouble because he talked about the pipeline that feeds into google and that there are obviously not as many electrical engineers, women are not choosing Electrical Engineering root and they are getting higher degrees in other things. He pointed to what, as i understand it, what he thought were innate differences in men and women that led men to be superior in the fields that google does business i would say thats a lack of education. There are women who are responsible for creating computer coding. So there have been women all throughout the history of coding and computers and tech but when you look at the picture of the founders of apple, they are actually women there but they are cropped out. I think you see that all throughout there is a lock of women as part of the narrative of tech and Silicon Valley i think thats a big part of the problem. Men have the impression women havent been a part of creating it is there a system discrimination issue in Silicon Valley why are you limiting it to Silicon Valley thats what we are talking about, google and Silicon Valley there can be systemic discrimination in lots of fields specifically, Silicon Valley, which you are familiar with, do you think there is that . Absolutely, absolutely. There is a bro culture i should qualify by saying i have also worked on wall street. There is a bro culture on wall street any challenging field, you are going to have a bit of a boys club it is fair to say it is there. I know the control room wants to kill me i think one of his complaints was that constantly the message is given that it is 100 discrimination, the reason why we dont see more diversity in various whether it is technology or others it cant be 100 i think it is systemic. We talk about these things a lot. People feel like because we are talking about it, we fix these issues the reality is that it takes time to implement these changes and have them roll through companies. The percentage of women, you read off at the beginning of the segment how many women are actually represented in these companies. It is small. It was what an average of 20 . Until you have 50 , these changes havent actually been implemented. Thank you, daniel come back thank you, i will straight ahead, the profit, marcus lemonis, he is here and take your questions. Please tweet them to us using the asktheprofit. Made in america, brian is live in kenosha, wisconsin the president won the election by flipping pennsylvania, michigan and wisconsin. He did that by promising to bring manufacturing jobs back to pennsylvania, michigan and wisconsin. He doesnt make manufacturing jobs the people at facilities like this do. We came to the source to find out how things are going 200 ys in. Thats coming up when power lunch returns on mi came across this housentry with water dripping from the ceiling. You never know when Something Like this will happen. So let the Geico Insurance agency help you with Homeowners Insurance and protect yourself from things like fire, theft, or in this case, water damage. Cannonball now if i had to guess, id say somewhere upstairs theres a broken pipe. Let the Geico Insurance agency help you with Homeowners Insurance. Call today to see how mu