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tv   The Exchange  CNBC  July 2, 2019 1:00pm-2:00pm EDT

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products, a lot of organic growth we'd buy it right here. >> the joes trmb, software name. >> united air requesting to goi great quarter. >> cyber, logistics, everything. "the exchange" begins right now. >> thank you, scott, hi, everybody, here's what's ahead of us. second half, headwinds, european tariffs, a slowdown in buy backs zero expected growth in this earnings season and global hot spots. will one of those dominos eventually fall? we'll get into all of that. and on the wrong foot, nike is finding itself in the hot seat over a new shoe that it has now pulled why does the company continue to get itself in these controversial situations, and what's it mean for the stock plus, biggest is still big when it comes to auto sales. is bitcoin getting ready for a bust. and the rolling stone knows who their audience is these days we begin with this rally, dom
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chu is back with a number. >> our audience probably wants to know after you have a record high in the stock market, and this is pretty much what happens. red across the board, but not by much we're talking 2/10 of 1% to the downside for the dow, a similar percentage move for the s&p, and a similar percentage move for the nasdaq, so yes, historic highs for the s&p 500. yesterday taking a bit of a breather today one place to watch, though, is what's happening with the treasury yield side of things. global yields are taking a little bit of a leg lower including our ten-year treasury note which is below that 2% area 1.979 the last trade there we got as high here in the cycle as 3.25%, and now we are languishing at 1.97. this is the lowest level we've seen since november of 2016 or thereabouts. so watch that trade and if you're looking for more signs of a slowdown in this bull market for stocks, wti crude now down 3% today, a big move lower energy stocks, the vanguard
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energy etf also off nearly 2%. why? there are concerns that demand may be slowing down around the world. watch that oil trade, kelly. back over to you. >> thank you and welcome to "the exchange." i'm kelly evans. investors bet that the fid will cut rates in july dipped slightly today, now stands at 77%, which is still pretty high. speaking of the fed, loretta messager of cleveland saying that rates should be kept where they are for a while share buybacks fell for the first time in seven quarters with companies spending $205 billion that's down from the record 223 billion in the fourth quarter. let's drill down some more on these markets and the fallout from all of this with seema mody at the new york stock exchange we've got earnings coming up >> we certainly do, and kelly, earnings estimates have come down dramatically. perhaps most concerning is that it's being led by tech, the rninst estimates are calling for ea from technology companies to fall nearly 8% in
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the second quarter year-over-year now, that raises questions about whether the tech sector can continue to provide leadership in the second half of the year if earnings do in fact disappoint now, the tech rally has been highly concentrated fueled by facebook, apple, amazon, microso microsoft, all up more than 30% this year. remember, microsoft alone contributed to 15% of the s&p's gains last quarter it's worth noting that growth-oriented stocks as a whole continue to outperform value-driven stocks. that can certainly change if the outlook for tech earnings deteriorates due to factors like tariffs, a stronger dollar and a china slowdown kelly, back to you. >> thank you seema mody stocks soared in the first half of this year with the dow, the nasdaq, the s&p all posting double-digit gains can that be sustained? especially if buybacks dropped a little bit and the threat of a wider trade war with europe. let's bring in the chief investment officer henry and
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wall wash. markets famously climbed the wall of worry. the longer the list the better they typically can do, but we are coming off a strong first half. >> the strongest first half in over 20 years following the strongest january in over 30 years. the question then becomes the longest economic expansion on record, the secular bull market has lasted ten years where do we go from here i think we have to be a lot more selective. >> people have been saying this for years. how long have we been saying this exact same thing about this recove recovery ignore the fact that we were at lows on christmas eve. we just happened to turn the calendar at basically at the very bottom. the broader context is not that the market is as good in the first half as it appears. >> but there's two tail winds that are still in place and should still be in place at least until 2020 those being lower corporate tax cuts and more lax regulatory environment.
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if that leads to a more confident consumer that continues to spend, we know that 70% of gdp is made up of what, consumerpending. that should bode well for the economy and stocks if the fed remains dovish. >> you both have some areas in particular that you would have people look. jason, before we get into any of these picks, you know, we are marking this anniversary of the duration of the expansion, the longest one we've had. again, for most of it, it's also been one of the weakest and slowest we've had. you could also say we're just getting started? >> you could say that for sure i think there's a couple of elements to this one, we really have gone a fairly long way both time wise, which is important, but also from recovery and gdp perspective. so this is akin to the recovery that we saw in 2001 through 2007 from a recovery perspective. it's taken a lot longer, but that time horizon, that length has also allowed some excesses to build those excesses really coming from in my view the fed's very easy monetary policy. >> what aboueurope
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we talk about what our fed may do, but they're trying over there to ease and support the economy, and german bund yields, i feel like a broken record but with each passing day they keep hitting new lows the fact that all global bonds end up being linked to those moves is crazy why should u.s. corporate bonds be affect bd i that, but they are. >> there's a bull market somewhere in everything. so you look at the european, the ecb and what they're trying to do to support their economy, which is chronically weaker than the united states, you see very, very low rates and now with the ongoing kind of manufacturing recession or challenge in europe, which is being reflected globally and a bit in the u.s., you're seeing them try to explore what do we do from here? if we make rates even lower, is that going to help we've really extended credit as much as it's going to be extended here. >> your picks include the cme group, china mobile, jpmorgan, royal dutch shell and you would
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stay with those regardless of what the fed does here >> look, those are cash flow jennertive companies or companies that work in volatile times. in other words, they benefit from volatility. you talked about share buybacks, jpmorgan announced they're going to be buying back about 8% of their shares that's because they have really good capital don't fight the last war from 2008 you have a very different situation here. >> and kevin, which i also love -- this is on the deal making which has also been a record this year, e-commerce, bio tech and smaller cap technologies we have some breaking news we've got to get to, guys. we'll leave it there, thank you so much. kevin mahn, jason brady. dom chu, what's going on >> a formality at this point, but christine lagarde has formally been nominated to take over the presidency of the european central bank, so if you take a look at the ecb overall, all of the leaders have now agreed that her nomination should move forward with this particular move, it now goes to
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the full e.u. parliament for voting on this particular situation. they need a full majority in order to approve her and the slate of nominees for the kbkbee positions at that group. a big development formalized christine lagarde head of the inf. >> that's pretty surprising, a politician, not an economist, not somebody with that trained background. >> sure, but the former finance minister in france, one who's had a lot of experience on the international financial stage. one that's been featured in places like the world economic forum. her name had been floated around for quite some time. now it looks as though she could be the one that takes over the european central bank. >> frankly, that tells you what kind of position it is these days. >> right >> dom, thank you very much. interesting stuff. president trump has been very vocal about lowering drug prices here he is last august. >> pfizer last week raised substantially the price of their
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drugs and i wasn't happy about it novartis also and others, and we made some phone calls, and they brought it back down to what the price was, and i think you're going to see a reduction in drug prices. >> he may be picking up the phone again. drug makers launched a new round of price hikes let's bring in meg tirrell for more on this who's doing it and by how much >> a lot of companies are increasing prices. it's pretty standard to see twice a year price hikes we're seeing those july 1st price increases, about 20 companies raising prices on 40 different drugs. this is according to data from rx savings solutions you can look at it in terms of whether that political pressure is working, in terms of the number of price increases we saw in the first half of the year, it's up 3,400 in 2019 versus 2,900 in 2018. you can also look at the size of the increase we got that data as well the size of the increase on average, and these are list prices, has declined in the first half of the year versus last year. and a couple of the examples of the drugs we're seeing, a lot of these are drugs that are in shortage and hard to
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manufacture. so drugs that isolate saline solution more than doubled a testosterone injection more than tripled from rising pharma, but glaxosmithkline raised the price of a cancer drug by 5%, and that's a much higher priced drug astrazeneca raised the price of its cancer drug by 1.5%. the actual prices of the drugs can differ quite a lot it's important and the industry will always say, list prices don't matter net prices are what matter after discounts. when you look at that, net prices are actually dkecreasing. in the first quarter the decreased be 4%, versus a decrease of 6% in 2018. >> are we talking about a 10% net decrease in the cost of prescription drugs. >> in the first quarter. it's hard to combine it in that way. political pressure does seem to be working in that way this is price increase growth going back to 2010 hillary clinton tweeted about this in 2015
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ssr health attributes it to her and her pressure on price increase growth over time. >> if that doesn't show you the power of the pulpit, and she didn't even have the presidential pulpit. that twitter was powerful enough holy cow, that's fascinating, meg. thank you so much. don't go anywhere, here's what's still ahead on "the exchange". coming up, the pause that doesn't refresh. why morgan stanley's head of u.s. public policy says don't expect this trade deal to give us a boost or solve the other looming economic issue plus, does the u.s. need a manhattan project like strategy to get back in the game when it comes to wireless technology and nike's new controversy, a real mistake or a good opportunity to capture the headlines again? iss th i"the exchange" on cnbc
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2050 marketing and a cnbc contributor. it's great to have you both here confirmed that colin kaepernick was involved in this this is "the wall street journal"'s reporting but if this sequence of events is true, does it suggest the internal power that he has, or did they just realize in retrospect that they were going to move forward with something that they didn't realize was offensive? >> it could be a lot of different things i think the reporting is highlighting the fact that a lot of people probably don't realize that that slogan, that logo, that picture does have this connotation in the modern environment, neo-nazis in the last ten years have used this imagery at rallies i think there's even video that we have of one being used in south carolina so this was used by the american nazi party well before our lifetimes. there is a little bit of that history floating around, but i don't think a lot of people know about it, and certainly now people know today but probably before two days ago most people
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didn't. >> mike, what do you think about nike's decision here should they have known should they have made a different call when it comes to the shoe, or are they and colin kaepernick being far too sensitive and in fact, empowering white nationalists to claim this as a symbol of their own instead of saying it's a shared part of american history? >> well, the issue kind of goes back to 2016 there was a high school in michigan that students were waving the flag. it got a lot of publicity, as you've pointed out, nationalists have kind of adopted that flag and used it as kind of a theme so nike being very culturally relevant and significant, you know, they should have known that it was going to evoke emotion one way or the other. >> so, again, i will say i did not know this had those connotations today, mike, specifically the way it's been used in those kinds of rallies what if the company had stood up and said, look, this is a -- america today would not exist if it weren't for the 13 colonies we're here to honor betsy ross
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and that heritage on the fourth of july, that's it, full stop. could a different company have made that choice is nike making sure that it stays on the right end of this discussion whereas for somebody else it might have made sense to take more of a stand against it? >> yeah, i've been asking that question all day i really don't understand, you know, what nike was trying to accomplish, you know with that symbol obviously to my point, you know, they've got, you know, creatives. they've got designers. they should be well aware. this is not just some ad campaign they're launching there's a product development cycle that goes back months sourcing the product as well so somehow, some way nike should have known that this is a symbol that's being used, and i think they're making a smart decision by pulling it because they just don't need the controversy because flags have different meanings in this day and age that we live in unfortunately.
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>> right, but now they have a controversy of their own you probably saw the arizona governor tweeting that he's going to remove some incentives for a plant that he had previously offered the company others who have written for the local paper saying that nike's sort of kowtowing to this is disgraceful. does this mean if you're saying they've done the right thing that it's inappropriate for any company to use the symbolism now of the original flag with the 13 colonies on it >> i just think that because it's been adopted by these nationalists and they're kind of using it to their advantage, i would be safe to say that, you know, nike and other companies should just shy away from some of these symbols, even though as you pointed out in our history they did not connon tate a negative feeling unfortunately you've got this whole under culture that basically has adopted the symbol
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using it in very negative ways, so nike, they don't really need to go there. there's a lot of other things that they can do i just also found it ironic and one of probably the most, you know, biggest stages in soccer today with the u.s. women playing in a number of nike, you know, well-known athletes like megan rapinoe, they could have done 100 different things and i have no idea what motivated them to put a flag on the shoe prior to the fourth of july. if they're going to use a flag, they could have used the 50 state american flag. >> right, again, that's a very -- i'm sure they're looking back on that now through a very different lens. >> mike, thanks, appreciate it. what does trump's reversal on huawei mean for the future of 5g andrew sorkin joins us live with more on that. would you let your insurance company monitor the way you drive? if you're a good driver you have nothing to worry about, right?
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welcome back the president's stance on huawei has changed so much that it could give you whiplash. first the company was banned from doing business in the u.s. over security concerns, and just this week the president suspended the ban on u.s. companies supplying equipment to them as part of the trade truce. the question is what does it all mean for the future of 5g here in this country.
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andrew ross sorkin joins me live for more, andrew there's basically two avenues that are crucial here. one is the equipment which huawei was majorly involved in, and the other is the spectrum which you could say the u.s. kind of -- it needs to sort that out for itself, doesn't it >> it does there are two issues here. maybe three issues the first is effectively is huawei a national security threat that's really probably the first and central issue because either you're a national security threat or you're not, in which case you're a trade pawn in this case we've chosen, or at least the administration's chosen trade pawn for now. the larger issue, and i report on it, there was a dod, department of defense record from their innovation committee that was written actually just about a month and a half ago, really got almost no coverage, but if you read it and you should go online and read it if you're interested in this topic, it really goes into quite a scary almost narrative around what huawei could become in terms of a national security
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threat it's not -- you know, we had secretary of state pompeo on our show on "squawk box" about a month ago, and he's been going around the country and the world talking to our allies saying do not use huawei devices they are dangerous, and now here we are and we've emboldened them that's one issue the second issue as you just mentioned is a spectrum issue, which is to say that in europe and in most of asia, there's been a little bit of a better effort, a smarter effort in terms of using -- what might be described as low bandwidth versus high bandwidth spectrum high bandwidth spectrum, very fast it's super fast but doesn't have a lot of coverage. low bandwidth coverage gets you very far that's the big issue in the united states. we really thus far have allocated the high bandwidth spectrum or the high band spectrum for 5g. that gives you, as i said, super fast and some of the stuff that
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verizon and at&t and some of our own technology companies, qualcomm, they're doing super fast stuff, you can even say they are the leader in that respect, but longer term in the sort of broader context of how this gets rolled out, how fast it gets rolled out, how much it costs to roll out, we are at a distinct disadvantage. >> right, and that's a problem that we, the u.s. could solve that there just needs to be a better way of reallocating that spectrum, maybe getting more of a market price on it, not doing these periodic auctions so much at everybody has to kind of wait on. but that aside, andrew, that at least we can sort of figure out for ourselves. the, you know, supply, the production issue okay, so there's nokia, there's ericson and huawei what do we do to just -- >> this goes back to a very interesting question about market economics and sort of what we as the united states want to be and how we want to think about it right now huawei is the clear leader by a far shot in terms of manufacturing these micro cells,
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right? then there's ericsson, and then there's nokia. we are nowhere to be found, we basically quit making this stuff, back when lucient, we're just not in that business. if you listen to secretary pompeo going around the world and telling our allies, look, the back door of the internet is going to be these devices. that's the anxiety because these devices are going to be all over europe, they're going to be all over africa, they're going to be all over asia, and irrespective of what devices we have in the united states, from the perspective of our own national security, they're going to have to use these devices themselves too to the extent that we believe the chinese would actually use these devices to get at our information, that's the question now, there's no evidence by the way, it's worth saying, thus far, publicly that they have done this, and by the way, there are skeptics in china who will say, look, if the u.s. ever goes to war, you don't think that they're going to call the qualcomms and the intels and everybody else
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and maybe they will. these are the issues, and i'm not for central planning at all, but to the extent that we care about our national security in some of these issues, sometimes when some of these mergers happen -- a full thought process around all of it. >> i'm going to ask joe if he thinks you're not for central planning. >> by the way, i am for national security, and if you're for national security, you've got to figure out a plan. >> for sure, for sure. >> and the problem is we don't have one. >> andrew, great column. thank you for joining me now to sue herera for a cnbc news update. here's what's happening at this hour. a fire e respecterupted on one russia's nuclear power deep sea sub missables. the blaze broke out monday while that vessel was performing tests in russia's territorial waters the sub is now back in port. there is no word on how many crew members were on board. south bend mayor and democratic presidential
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candidate pete buttigieg addressing tensions between plus and the african-american community in his hometown. he spoke after a private meeting with jesse jackson in chicago. >> one of the things i really need to continue conveying to our police officers is that it is not anti-police to be pro-racial justice on the contrary, we absolutely can and absolutely must be both. >> vandals targeting two iconic chicago landmarks overnight, the bean along with maggie daily park being hit the kidney bean sculpture was vandalized by a group that calls themselves the 35th street crew. seven suspects are in custody. you're up to date. that's the news update. >> thanks very much. here is what's still coming up on "the exchange. coming up, tim cook says don't believe the headlines on internal divisions bitcoin comes back down to
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earth. big cars are still in big demand. and people are paying others to help them calm down >> remain calm >> it's all ahead in rapid fire. the military family and it really shows. with all that usaa offers why go with anybody else? we know their rates are good, we know that they're always going to take care of us. it was an instant savings and i should have changed a long time ago. it was funny because when we would call another insurance company, hey would say "oh we can't beat usaa" we're the webber family. we're the tenney's we're the hayles, and we're usaa members for life. ♪ get your usaa auto insurance quote today. but prevagen helps your brain with an ingredient ♪ originally discovered... in jellyfish. in clinical trials, prevagen has been shown to improve short-term memory. prevagen. healthier brain. better life.
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welcome back let's catch you up on a few stories that should be on your radar today. it is time for rapid fire. here with our takes and to break down the headlines, kate rogers, dominic chu and morgan brennan welcome, everybody first topic is apple's tim cook lashing out at that story published by "the wall street journal" that alleged that apple's design chief made the decision to leave the company after he grew frustrated by the greater focus on operations under cook cook said the story is absurd. a lot of the reporting and certainly the conclusions just don't match with reality to which we would simply also say this now makes it a second day story, guys, as well for what i'm sure cook would like to see go away. >> this is for the longest time it's been about hardware we know that tim cook has been tilting towards software and services that's the reason why they're making such a big push to get the apple pay stuff going up, itunes, the whole ecosystem there.
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you wonder whether or not this was just a situation as apple matures as a hardware company if it can be that next step that gets somebody in that role to design things that are going to be even more blockbuster than the ipod itself or the iphone. >> and not sort of -- i mean, coincidentally but it's interesting this timing comes as samsung's chief has said he pushed the galaxy phone before it was ready we know they had those problems, they had to recall it's not on the market, but does this show us the culture clash and i wonder which investors would rather have, a samsung culture that comes out with the fold phone and tries it or the apple who sees so cautious that they wait until they can get it just right. >> it looks like waiting to get it right is the right move you talked about a second day story with this. how many days did we talk about the folding phone did being a disaster we're still talking about it weeks and weeks later. i think you have to appreciate that apple wants to make sure it gets products right. things like the watch that didn't sell as well as they had hoped and there was some tension
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between ivan and cook in that wall street journal article about how that rolled out and who it should have been marketed to and the higher end watch not selling as well as it should so like you can see the caution there, but i think from an investor perspective, don't you want them putting out products that work well and that people love and doing what apple's always been known for? >> yeah. if you look at the company that is one of the most valuable companies in the world, it is apple and also just note on the cook e-mail, unusual move, but also noteworthy that he didn't actually outline anything that was wrong with the wall street journal report he just criticized it. >> should he have responded at all? would it have been better to let the story be what it was and go unaddressed without that official comment >> i think the fact that he responded speaks to how this hits at the core of the debate around apple in general. this idea of operations versus design and whether this is a company that needs a next act and whether services is the right direction for the next act. >> it definitely meant that it
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struck a nerve denied or otherwise. >> yeah. moving on, if you haven't seen it check out the price of bitcoin. just as soon as we had almost hit 14,000, we are now back below 10,000 earlier today it's reclaimed that level a little bit that's a $4,000 drop since the 17-month high. interesting to glean from this macro signals if any, when bitcoin had its big climb lately it came at the same time the market in all asset classes. >> gold. >> now that it has plunged are we simply to read into that? >> it was $3,500 not that long ago, and it's maybe just below 10,000 if you talk about the price moves here, this has just become a trading mechanism. it speaks to your point this idea that it's just maybe -- it's where the volatility is and it's where the opportunity can be for people to make money on these swings or get creamed. the idea here is everything has been a slow grind, even the
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market'sclaiming historic high have not been on massive moves they've been on these up 20 basis points a day, down 20 basis points a day situations. bitcoin is a place where people are making money or losing money. opportunities are there. >> we just finished the first half of the year we just finished the second quarter. there's probably some positioning there because bitcoin is up something like 200% so far for the year also those u.s./china trade walks. some market watchers had linked all of the china angst to the surge in bitcoin as well. >> we're going to calm down after all of that. this one is just for kate. the meditation app and official tech unicorn calm has raised another $27 million. that's on top of the 88 million they raised just in february one thing that is helping to fuel the interest is the success of their sleep stories where celebs like matthew mcconaughey and steven fry read to you to help lull you off to sleep. >> i want to clear something up, matthew mcconaughey does not lull me to sleep at night. i do use this app.
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i meditate pretty much every day. they have guided meditations, which i find really helpful. it can be really hard to sit there and unplug and not let your mind race and think about other things they talk you through it in and out, which is really nice, and they have a light rain melody that i like when i can't sleep at night >> i used to have those rainfall and thunderstorm cds when i was a kid. i loved those. is it really $70 a year to subscribe or is there a way to do it for free >> you can get a free trial. then i started meditating every day and i liked the guided meditations and i figured out that's not a ton of money a year. >> now i can understand the business model the question is how sticky you or others might be, and also just how big -- >> it's just a disney plus subscription by the time it's done it's just a netflix subscription >> just another subscription it's not a big deal. >> and i think the fact that you do have so much competition in the meditation space is why they are raising this money to become a holistic mental wellness hub
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you listen to cds or tapes of thunderstorms. i listen to louise hay for my guided meditations, which means i'm really dating myself. >> is that a person or music >> i just don't listen to anything for the drive home. that's my meditation. >> i have road rage. i need to get into the zone to drive here. >> matthew mcconaughey doesn't do it? >> he doesn't do it. she's the one who writes the guided meditations. >> as long as no one's paying $70 a year for the peace and quiet, if that ever happens. >> as an adult, i'm like this is a little much. some people are paying for it. i haven't tried those yet. >> moving right along. just about all of the automakers except ford reported second quarter sales today. a big question is whether suv truck or crossover sales would slow or not, but it looks like big is still big we bring in phil lebeau with some expertise on this we're thinking about making the suv move ourselves. >> right
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>> big is still in, and you can get a good deal out there because nobody has cut production yet when it comes to crossovers and suvs. plenty of selection there, so for you as a buyer, this is still a good time, especially as we go into the summer months here >> what's with the -- >> in terms of big being i demand, pickup trucks are red hot. look at ram, up 56% in june. it outsold silverado, second quarter in a row that it outsold silverado. ram is hot right now. >> what about the incentives i'm going to put on my buyer hat here for a second. can i get a great deal on one of these suvs or crossovers or ram trucks >> ram's messaging is connecting they're saying 15 to 20% off msrp that's the key here, it's msrp, but that's a message that people can sit there and say, yeah, that makes sense to me as opposed to what we usually get which is $4,500 off. another thousand in dealer cash. oh, by the way, if you're a veteran, here's another 500. at some point you need a calculator for some of these deals and i think ram has been
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effective in saying look, it's 15 to 20% off. >> wow so that to me sounds like an incentive. so now putting the investor hat back on, i'm not sure i like the sound of that. i'd like this to be hey, it's full demand at full price. >> well, it's never been like that in the auto industry, and look, their average transaction price, which is what you want to watch, it's up $3,000 year-over-year so they are making more money, and these are the high profit vehicles, pickup trucks are where the profits are, especially for the big three. >> that's the big hit, right the idea that the demand is there for the highest profit margin items that an automaker would make. >> absolutely. >> it's like the perfect storm. >> and we've got the $100,000 pickup truck coming, the real reason we have you here is to talk some rolling stones so if you would, the rolling stones are on the road for their no filter tour with an interesting new sponsor. they are being bankrolled by the alliance for lifetime income it's a trade association that promotes the sale of annuities, phil, and apparently the stones
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concert going demographic, which includes you, is the exact -- >> i went to the first show at soldier field. >> target audience for the annuities. >> i went to the first show at soldier field and believe me having a retirement firm sponsor it makes a lot of sense. you saw a lot of people hobbling my son, this is my son griffin in this picture before the concert, he said these guys are great, but they're ancient i said yeah, they are ancient, but that's the way it goes look, they're hitting the demographic. i was on the young side there. griffin was really on the young side there, but they can still -- they can still put on a heck of a show, an incredible show. >> that's a selling point, right? income for life. that's the annuity, right? >> how many people do you think are googling annuity now it's making insurance sexy. >> or how many of those commercials said they would never buy an annuity or. >> nothing says rock and roll like our target demographic, 45 to 72-year-olds with investable assets between $75,002,000,000
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>> that's right. >> that is an edgy crowd right there, man that is the edgiest crowd. >> we're going to get a lot of tweets >> i was moving faster than most of the people leaving that place. >> we'll say -- >> they're the toughest ones on twitter. they really come for you. >> this is all in good fun you know who's getting the last laugh is a, the rolling stones, okay they have done incredible -- the more the years past the more you realize how special they are of course people are going to pay up for the privilege of seeing this while they still can. phil, what's your son think about them >> he hadn't really listened to them until i said you're going to the concert with me, and he said they're good. they put on a good show. >> what do you know? they're good phil, thanks and thank you all as well, kate rogers, dom chu and morgan brennan. stocks climbing yesterday on news of china and the u.s. reaching a temporary tariff truce at the g20 it doesn't mean the trade tensions are over. isl rivestors should seldung
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welcome back to "the exchange." peter navarro says trade talks with china are heading in the right direction after the two countries agreed to a pause at the g20 summit how will we know if we're actually nearing a deal? head of public policy at morgan stanley, michael, you're saying buy the rumor sell the fact, so to speak why don't you think that this deal is something that investors, the market, everyone should take and be off to the races with >> yeah, i mean, i think we have to concede that it's good news that both sides are back to talking. i think what's more important is the things that we didn't learn as a consequence of the g20. we didn't learn what progress was made, if any, on the key issues that were dividing both sides ahead of the may 5th reescalation, and so this is now the third time by our account in the last year or so that this conflict has been going on, that
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there's been some type of pause, and the last few times ended in escalation because crossing those differences is really, really difficult, so to us the key takeaway is that there's no credible path at the moment, anyway that we know of that can make those tariffs come off anytime soon >> right. >> the existing tariffs are still putting a fair amount of pressure on the economy, and there's still the lingering threat and the backdrop of the next round of tariffs going on. >> but so the existing tariffs are already priced in for better or worse my question to you is does it matter what happens in terps terms of getting to a final deal on the trade talks all that will ultimately matter to the markets is does the president come out tomorrow with another tweet that says if we don't have a deal in six months or 12 months or what have you those tariffs are going up again. absent some kind of threat, we are in a status quo situation where why does the final outcome even matter? >> obviously if the next round of tariffs went on, that would be a clear negative to us. that is a trigger for making a
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recession a base case in 2020. i disagree with the notion that the existing tariffs are priced in i think there was already some evidence that this was starting to exert pressure on the economy, if you look at any fed or other business conditions surveyed, they were starting to decline meaningfully, and there's kind of a multiplier feed through effect that hasn't really we think been fully identified yet that weighs on business confidence, and we're already at a point where s&p 500 earnings were in a recession. >> right. >> now that you don't have the existing tariffs rolling off anytime soon, there have to be investments made in supply chain management and other types of capex to deal with that. >> but is there at least is the trade truce also creating a moment of certainty, you know, for the time being you know, businesses can at least say, okay, i might want to relocate my supply chain from china, but that's the only factor i really have to consider >> i think that's fair, that's
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why we're not calling for a recession at this point. we're just calling for further fwro growth slowdowns we've got gdp in 2020 decelerating earnings growth is going to continue to decelerate so that combined with the fed, we think now is going to cut about 50 basis points in july in part to help deal with this, you know, all those things can kind of help growth bump along at a lower level, but we wouldn't describe that as necessarily really positive, a positive backdrop for risk assets. >> sure, understandable. michael thanks for joining us. thank you. insurance companies are betting instant feedback will make you a better driver contessa brewer is on the new jersey turnpike with that story. >> reporter: well, i've switched now to the garden state parkway. for everyone who lives in california, they're like who cares. it just looks like a highway here's the question, if your insurance company will give you a discount, will you download an app that tracks your driving
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behavior who's the winner who's the loser, and kelly i don't want to spoil the surprise rebuth a ss m an excellent driver we're back on t"the exchange" rt after this g harsh terrain... or breaking new ground? this is the time to get an exceptional offer on the mercedes of your midsummer dreams at the mercedes-benz summer event, going on now. lease the gla 250 suv for just $329 a month at the mercedes-benz summer event. mercedes-benz. the best or nothing.
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welcome back insurance companies are using devices and apps as a more accurate way to price coverage based on driver's driving habits rather than histories. contessa brewer is doing extremely dangerous things, talking to us while driving but claims she's getting good scores on the app >> because they're not tracking whether i'm doing a live report on television. they're tracking things like am i hard braking, am i driving too fast, how much time am i spending behind the wheel, and what time of day am i driving. it's called usage based insurance. ubi, or telematics insurance companies are offering discounts to drivers who download the apps. not everyone is convinced. ♪ i'll never forget you >> as a backup singer with the alman brothers, keith england shares his fois with the world, but he doesn't want to share how
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he drives. >> it's kind of a personal thing, where you're going, how fast you're going. >> the vocalist download thd app from his car insurance company, all state, to pay his bill more conveniently he didn't realize the app was also capable of monitoring his driving. >> i had no idea it had the tracking app within the app, no idea >> the ads highlight the savings. >> keep it running in the background and drive safely. >> that appeals to some drivers. >> i would do it because i'm a really safe driver >> if it could save me a discount, i'm for it >> the flipside, bad drivers could see their premiums go up this data-dependent system is designed to benefit insurers >> there will be some savings and premium, but they'll see more on the back end on the profit side, either because they play out fewer claims and less in claims or they see an increase in premium because people who have poor driving habits enjoy a higher rate >> what research has found is
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that using the app alone actually changes drivers' behavior their scores go way up, and in fact, they saw 21% less hard braking in the people that they studied for 26 weeks who had downloaded these apps. the real concern here on privacy is whether the monitoring becomes mandatory. will you be able to get car insurance in the future if you don't let them track your driving, kelly >> absolutely. and by the way, i saw a guy pass you hanging out of the window with a video camera. i hope that was cnbc related >> yeah, he gets paid to do that that's a photographer. >> i'm thinking, what's happening on the roads these days >> it's a chase car, and you know what. i'm thinking it might be more interesting at this point to start a high-speed chase and see what the all state insurance app does to the premiums for the producer who has it logged on to her phone. >> the other people looking at your car right now are going, oh, my lord.
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it would be interesting to find out at maybe 3:00 a.m., contessa maybe on a shut-down highway we'll find a safe way. >> a closed track. >> contessa, thanks very much. drive safe all of you out there contessa brewer. >> chinese buyers have been snapping up residential real estate in the u.s., but that trend is slowing dn owbigtime. what it means for the housing market is next d at this? had a coach in high school. really helped me up my game. i had a coach. math. ooh. so, why don't traders have coaches? who says they don't? coach mcadoo! you know, at td ameritrade, we offer free access to coaches and a full education curriculum- just to help you improve your skills. boom! mad skills. education to take your trading to the next level. only with td ameritrade. did you know that americans who bought gold in the year 2005 quadrupled their money by 2012?
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the chinese have been the largest foreign buyers of residential u.s. real estate for several years now, but it looks like that tide is turning. diana olick joins us now with more of those details. >> in the first quarter of this year, chinese buyer inquiries for u.s. properties on a chinese real estate site were down 27.5% from a year ago, while they were up for properties in canada, the uk, and australia. they call it, quote, the trump effect a combination of anti-chinese political rhetoric, a clamp down on visa processing, and tariffs. it's also hurting demand from chinese students, especially in california where we spoke to one chinese investor >> students come to america,
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they feel close to america's spirit, america's lifestyle, but after the trade war, they have to go back they have to go back to china, to go back to their country. so they stop to invest in properties >> it's also getting harder for chinese citizens to get their money out of the country, especially to buy u.s. properties kelly. >> wow, and as you said, you know, the chinese had also said, i guess students they were looking at as maybe a leverage point in trade talks if the students come back, you're talking about a chain of families and money in those areas. >> that's a primary reason families were coming here, california, texas, even north virginia, because they wanted to send their kids to school and have a house to live in after. very much dependent on students in the u.s >> we'll see if the numbers fall further than they have already appreciate it. >> and that does it for the exchange thanks for joining me.
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i'll join tyler and melissa for "power lunch" which begins right now. >> thank you very much we'll see you back over here in a few seconds. i'm tyler mathisen welcome, everybody, along with melissa lee. new alt 2:00 today, president trump's trade hawk, peter navarro, on cnbc, sounding bullish on talks with china. he also took aim at the fed, the fallout is ahead plus, this is now the longest u.s. economic expansion in history but two pillars holding up the markets are showing signs of weakness we'll explain that one >> and finally, manhattan real estate sales surging for the first time in more than a year, but is the rebound for real? we'll explore that and more on "power lunch" for a tuesday. >> and welcome to "power lunch." i'm melissa lee. stocks have been struggling at this hour, but off the session lows the s&p 500 has been in a tight 14-point range for much of the session. it's been a


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