the reit space. >> i just wanted you to say collocation. jon najarian >> cvs a lot of upside calling today. during the show i have an order in that i'm trying to buy right now. >> thank you for making it easy on me. i appreciate it. that's it for "halftime. "the exchange" with kelly evans begins right now thank you, brian welcome, everyone, and here's what's ahead this hour a meet york rise the major averages are up more than 18% since the christmas eve lows, 18%! are there any bargains left? our guest still finds plenty. plus, shaking up our retirement system. is it time to refresh, maybe reinvent the 401(k)? we'll tell you what that could look like. and an executive shake-up. if you want to know what may be next for apple, just look at the executive roster we'll do just that. but we begin with the markets, dom chu with the numbers. >> so, they are green. we didn't like that way to start the day. we were marginally in negative territory when we started this trading week, this holiday-shortened week, but we

are now up about 25 points on the dow jones industrial average. not much, but 0.1% to the upside similar percentage gain in the s&p 500 and the nasdaq up about 0.25% as well. more of a risk-on feeling than it was earlier this morning but still not rebustly so. big story in the markets today on the macro side of things. copper prices up 2.5% as growing optimism over a u.s./china trade deal starts to foment a little bit with trade talks going on this week in washington, d.c as a result, freeport-mcmoran, gold and copper, up 7% a weaker dollar play in that as well and our top stock story of the day is walmart the biggest brick-and-mortar retailer in america by market value, up 3.5% by the way, since the christmas eve lows, that stock is up by 21%. better earnings, better sales, better u.s. comp-store sales growth and 43% year-over-year growth in u.s. e-commerce.

back to you. >> we'll talk more about that, dom, and see you soon. thank you. welcome to "the exchange," everyone i'm kelly evans. the cleveland fed's loretta molester was on the wires just a short while ago saying a rate mike may be needed and she doesn't expect a recession today oil hit a three-month high before pairing its gains let's drill down more on the markets with bob pisani at the stock exchange markets looking pretty strong but traders a little more cautious. >> and they should be, kelly so, the markets are starting off with a somewhat defensive edge today, but the overall trend has been remarkably positive in the last few weeks just take a look breadth, the advanced decline line, how many stocks are up or down every day, has been advancing almost every day since the december 24th bottom other internals are also strong, the new highs are expanding, selling pressure is low, and the dow is riding an eight-week win streak now, the market leadership is tilted very heavily toward cyclical stocks, which market bulls always like to see in the leadership position, but many

strategists are cautious now because the good news of trade talk momentum, the fed being on hold, and the strong market momentum i just talked about has been offset by very clear signs of slower global growth in europe and china and even in the united states. and u.s. earnings expectations that are near zero for the year, and that's causing a lot of people to say maybe, maybe we should take a pause here back to you, kelly. >> yeah, you've been focusing on that for some time stay with us, bob, if you would. we want to talk more about the markets today, which have been on a tear since the christmas eve lows the dow is up nearly 19% since then, 18% for the s&p and the nasdaq up nearly 20% is the rally long in the tooth, especially with bespoke saying 70% of the s&p is overbought, and that's a three-year high here to answer that is neil hennessy, portfolio manager at the hennessy funds welcome! >> thank you, kelly. >> overbought? are you worried? >> not at all. >> too fast here >> no. what we saw october 3rd through december 26th was just a correction we've had 20 corrections since

2010 14 were between 5% and 10% six were between 10% and 20%, but interesting enough, what happens was people bought into indexes, then indexes were fine when the market's going up and up and up, but when you get a flat market, down market or a volatile market, it doesn't work as much. >> you mean the buy-and-hold crowd. >> correct so essentially what you're seeing this year as it came back, people were looking at value, just not the overall market you can buy 500 stocks in the s&p, but not all of them are good >> yeah, as is always the case, neil so, but what you're saying overall is that the decline we saw through christmas eve was the aberration, not the snapback here that's been pretty quick and dramatic. >> correct what you saw was the market was up like 2,200 points going into october of last year, then went down 5,400, and then snapped back 3,400 but the reality of the situation is you've got over $5 trillion in cash on the s&p 500

companies' balance sheets, you've got earnings are up, cash is up, cash flow's up, unemployment's low, people are spending money look at walmart. i mean, everybody's looking to see the new headline now is recession. well, kelly, you can't have a recession when everybody's employed it just doesn't work. >> you're not committed. before we get to your stock picks, bob, have people said, maybe we got too much ahead of ourselves with this recession talk >> well, look, i think people were really surprised by the strength of the rally. you put up the numbers there, 20% off of the bottom there. the market clearly telegraphed the earnings slowdown and the global growth slowdown way back starting in early october. so in that sense, the markets really are working well as a discount mechanism for figuring out a future stream of earnings growth i think the market was very successful in telling us exactly what's going on. i think the problem now is if you look, neil was mentioning value, the value hasn't outperformed in this period since the bottom we've seen really growth do better, high beta's done a

little bit better, so people have sort of gone back to the old story. >> right, tech names. >> gee, growth is hard to find, let's get it. >> bob, you're absolutely right. and i don't love the distinction between growth and value, neil, anyway so let's talk about the good companies you think right now are trading at an attractive price. >> we try to look for companies with a sales-to-price ratio of 1.5 or less, so we won't pay more than $1.50 for $1 of revenue. when you look at something like casey's general stores, they're like one of the biggest pizza operators in the world, but they concentrate in markets of 5,000 people or less, and they have a price-to-sales ratio of 0.5, so you're buying $1 revenue for 50 cents. that's one area -- >> and that shows you feel good about the consumer. >> very much so. you can look at american eagle their price-to-sales ratio is 0.9, and -- >> why does neil hennessy want exposure to a teen mall retailer, albeit that's had a hit with the bralet, neil, but why is american eagle so interesting to you >> i've got five church and another one on the way

they've got to shop someplace! but you know, retail is there. consumers' confidence is there the products are there you can get them online, go to the store, do what you need to do, but there's so much value out there. i guarantee you 90% of the audience out there hasn't heard of churnity industries. >> and why >> they have good dividends, price-to-sales ratio is one. that's good. but people won't know that they do rail cars or make rail cars or barges, but they will know them when they hit the guardrail on the highway, so -- >> they'll go, that's what trinity does. >> exactly. >> hopefully, that's not happening too often, though. >> no, that's why we go with uber or lyft. >> but you like trinity why? >> because essentially, it's -- everything has to be replaced. and if you look at the united states and you look at how far we are back-tracked, or far behind on infrastructure, that

money has to be spent there. >> all right. >> going forward. >> we have to go, but neil, can you explain to me what this is >> that is terry neilsen, who is the president of the company, decides to make fun of me every year, and that's the avenger >> i don't know if we can get a close-up there we go. this, i want everyone to know, arrived for christmas in a package, and i was very delighted. neil, stick around we're going to talk about walmart. bob, thank you very much, bob pisani. walmart's stock having its best day of the year after u.s. comp sales, revenue, and eps albeit estimates e-commerce is up 44% in the quarter. joining me is karen short, managing director and retail analyst at barclays. karen, what jumps out to you about the quarter? >> well, i think there are a lot of things. i mean, i think the first thing is this is the best u.s. comp they've done in 36 quarters. i mean, there was a little bit of benefit from snap, but that would be the first thing the second thing would be that the core u.s. operating profit had its best quarter since the second quarter of '13. and people should not be dismissive of that, because

they're definitely at a tipping, or i guess an inflection point in terms of getting leverage and actually having flow-through in the core u.s. business while they're continuing to invest in price. and i guess what i would say is i look at my coverage universe, there are very few names that i cover where investors are conditioned to understand that gro gross margins will be down, but very few companies that are as far ahead as walmart is in terms of having an ability to get leverage on operating expenses, and that can be a very powerful model combined. >> neil, is walmart a company you like >> yeah, i think so. if you look at the consumer and the amount of people that are getting jobs, it's not the high end, so it's the middle america, and that's where they're going to shop is the walmart when you take walmart and you stack it up and look at their price-to-sales, which is about 0.5. but interesting enough is do you want to own a 30-year treasury, right, guaranteed 2.9%, or buy walmart that's raised their dividend 46 consecutive years at

2% i'd rather buy walmart >> and karen people have said, well, you know, we've got amazon, who's obviously doing as much as it can to get product to most of the country as quickly as possible, even with all the investment it's doing, can walmart keep up? >> i mean, absolutely. think about it no retailer has the dominance that walmart has in food obviously, they're the number one food retailer in the country. that means that they have a frequency play that amazon just doesn't have and frequency from their perspective that people are going to their stores to buy food and are then generally buying something else that's in discretionary. so that's a very powerful advantage that walmart has against amazon but more importantly, or equally important, amazon has not solved for same-day or two-hour delivery, and that's what walmart's doing, and i think that's an underappreciated competitive advantage that will continue to build as walmart gains more and more experience with these delivery tests that they're doing. >> karen, all that said, it's trading around $103-$104 today

your target's only $113, right >> it is i would say looking at guidance -- just to comment on guidance if you've noticed, they've beaten raise two or three quarters in a row, yet haven't changed their actual guidance, which is off of a percent growth, as opposed to an actual earnings number. so i mean, i would argue that maybe consensus or guidance, sorry, is a little bit conservative and we raised our price target consistent with what was charged in terms of ebitda or ebit and eps. >> and neil, you mentioned you like casey's general, walmart is attractive here. does that pretty much mean all of retail is open for business or only those who have shown they can be good operators in this environment >> i think any company needs to be a good operator in any sector you happen to be in. just because one sector's running doesn't necessarily mean you're a good operator but you're not playing with a child here it's sort of what karen was saying they get that impulse buy, like costco that's why they keep moving the merchandise in, but you're going

in for food. and so, walmart, you know, is a well-known company and going to continue to grow in my opinion. >> guys, thank you both. good chat. neil hennessy, karen short. >> thanks. >> talking walmart today and again, if you're lucky enough, one of these might show up what are you standing on top of? is that the stock exchange >> the new york stock exchange. >> okay. neil, a pleasure. >> thank you. here's what else is ahead on "the exchange" -- >> announcer: coming up, is it time to forget the 401(k) and completely reinvent the retirement savings plan? we'll debate. reimagining apple. what the recent executive shake-up could be telling us about what's in the pipeline for the company. and the hottest thing in technology right now, elder tech we see heating breakthroughs clearing the air for billions. at emerson, when issues become inspiration,

creating a better world isn't just a result, it's a responsibility. emerson. consider it solved. servicenow put our this changes everything. you're right sir... everything. no not everything, i mean you're still blatantly sucking up to me gary. brilliantly observed, sir. always three steps ahead. six steps ahead. sixteen. so many steps. you done? a million steps ahead. servicenow. works for you.

americans are living longer, which is great news, unless you're worried you won't have enough in the bank for retirement a column in the "wall street journal" is encouraging investors and lawmakers to rethink and refresh the 401(k) let's bring in jason, who writes the intelligent investor column for "wall street journal," my favorite thing to read every week thank you for joining me. >> great to be here, kelly. >> first, what prompted the column what are the main flaws with the 401(k) >> well, there's a bunch

it's kind of inflexible. it's hard to carry around with you. it's also basically inadequate most people are likely to come up short on the amount of money they're going to need to save for retirement so, this brings together a bunch of ideas on how to augment retirement savings and also how to make them easier. >> so, what is the main way people can augment because i mean, shy of saying well, you should have started 30 years ago, had better market conditions or had someone else start it for you what options do you have >> well, today in the existing options, probably the best thing you can do is if you have any moonlighting income, which a lot of people do -- >> like uber tutoring >> well, yeah. let's use tutoring it's probably better you can set up to 20%, typically, of that, aside in a separate savings account, and you can sort of form your own 401(k) >> so, the 401(k) is largely for employees of big companies what about everybody else? i mean, is part of the issue that more people need access to

a product like this? because states and all these different -- there's lots of initiatives to make sure that, hey, the problem is just that you need access to something like this. >> right. >> and then even if you have access, then still the issue of not having enough in there. >> well, fewer than 70% of people in the private sector are covered by a retirement plan at work, so there's clearly a lot of effort that has to be put in to getting more people covered and there are various proposals to do that you know, some involve just making plans, kind of universally portable it would follow you through all your labor income, whether you have self-employment income, whether you've worked a bunch of odd jobs, whether you've stayed at one employer for a long time and then left. the money would follow with you wherever you went. >> we all know the difficulty when you change jobs itself of trying to roll it over or combine everything so, some have said lately, especially, in order to fund other types of things, it should be easier to tap the money in your 401(k). do you adhere to that school of thought or no?

>> i think that behaviorally, this is a really good idea it really matches the way real people think about money one of these proposals calls for what's called a rainy day account, which would sort of subdivide your retirement savings into a short-term pool and a long-term pool and if you had a legitimate urgent need for the money, you could tap the rainy day account, which would keep you from busting into the long-term money, which would get replenished while you spent down the rainy day account. >> so, of all the things you looked at, before i change topics, what do you think is the most important change that needs to be made to the 401(k) >> well, i think the single most important thing we need to do is we need to make it easier for people to withdraw money over time after they retire in stable, monthly increments and various longevity annuity proposals would help with that, and there are companies that are starting to implement those. >> why is that such an issue for people

>> well, it's an issue because most people will probably live longer than they expect and will save less than they need, and when you combine those two together, it's not a very good scenario for a person in, say in their late 80s. >> we'll see if, then, there's any progress on that front meantime, i want to ask you about something. what happens if the tax rate on dividends is increased it's only been lowered to 15% or 20% since 2003 i hear now people saying it's not fair that that unearned income is taxed at a lower rate than earned, ordinary income what happens if it goes back up, do you think >> well, so, there's a few things to think about. first of all, the tax rate used to be much higher, as you pointed out, kelly you know, whenever tax policy changes, companies and individuals will change their behavior in response and if we tax dividends more heavily, companies will just find other ways to return money to shareholders. >> but how will they do that if at the same time we're cracking down on share buybacks, if you believe in the rubio proposal?

>> well, we don't know yet for sure i think a couple possibilities are more companies may choose to stay private, particularly if that aspect of the tax law is designed to address public companies. now, that's a loophole that congress could easily close. >> that's a fascinating point. >> yeah, but that's something that policymakers should really be careful of as they design this. >> is it as simple of if you tax something -- will less people have access to it and does it matter for the vast swath of americans? >> well, it does i think there's a misperception that dividends are received and earned only by rich people, and in fact, they're pretty widely part of middle-class taxable income as well and there are a lot of middle-income americans who would miss getting dividends if dividends shrank as a result of tax policy. >> we'll see if we go that way there are so many being batted about right now. we'll see if one of them stick

or all of them and the unintended consequences. appreciate, jason. jason zweig of the "wall street journal." >> thanks, kelly. huawei is getting the cold shoulder from the u.s. why that may not matter so much to the controversial chinese telecom giant. plus, it's the generation that grew up before the digital age and it's having a tough time catching up. now silicon valley wants to change that. one start-up is focusing on elder tech we'll be right back.

welcome back to "the exchange." here are some of the movers this hour hsbc shares are lower following a profit miss. the bank blames higher costs and weaker results at its trading businesses they are also warning that slowdowns in china and britain could weigh on results this year the shares are down more than 3%. homebuilders are moving higher today they're led by william lions home and lgi homes the national association of homebuilders confidence survey this morning showed an increase for the second month in a row and you can see a 3 1/2 pop in shares of william lyons. papa johns downgraded to sell, pointing to declining sales and the cost of subsidizing franchiseies, but a tough go for pizza of late, down 3% today now to bill griffeth for a cnbc news update. here's what's happening this hour house speaker nancy pelosi says the u.s. is reaffirming its commitment to nato and the european union, this following a

visit to belgium and germany with a congressional delegation. >> democrats and republicans, members of the house, members of the senate, all of them here reaffirming our commitment to the transatlantic alliance, our commitment to nato, our respect for the european union meanwhile, "the new york times" correspondent david kirkpatrick was detained for hours yesterday after arriving in cairo before egyptian officials forced him onto a flight back to london. the move is seen as an escalation of a severe crackdown against the news media under egypt's current president el sisi. good news for our economy. the federal reserve bank of new york says its data shows u.s. consumers are expected to spend more money this year compared to last year. the average growth expected to rise 2.8% compared to 2.3% in 2018 that is the "cnbc news update" this hour.

i'll see you in just moments, kelly. >> looking forward to it we have 30 minutes until "power lunch." i'm joined by tyler mathisen. >> that's what he's joining you for, "rapid fire." >> when are you coming >> in 35 minutes on "power lunch. kevin hasleassett with economic advisers, is our guest today so much to talk to him about, the resumption of the trade talks, which have moved back to home court in the united states. that's number one. we'll talk about the economy overall, income growth, some of those controversial taxation proposals that are floating around, a tax on wealth, high rates of tax on income and we'll also talk about the challenges that some people are finding as they receive smaller-than-expected tax refunds. >> this is the biggie. so much anger and concern about it and i feel for people. you have to come up all of a sudden with a ton of money you weren't expecting or thought you would get "x" and you're not getting it. >> i think we can anticipate the

answer if we ask the question did the new tax law work of course he'll say yes. >> right. >> but for a lot of people, the jury is out. and this is tax season i have my appointment in about two weeks. >> good luck. >> thank you see you in a half hour. >> thank you here's what's coming up on "the exchange." >> announcer: ahead, is facebook a digital gangster and the extreme actions amazon is taking to protect its new shows. shows. 'sit all ahead in "rapid fire. creating a better world isn't just a result, it's a responsibility. emerson. consider it solved.

welcome back let's catch you up on a few stories that should be on your radars today it's time for "rapid fire. here with their takes are dom chu, leslie picker and bill griffeth, and now i know the whole matt kuchar story, so thank you. and so does leslie. >> now we know phil mickelson has ripped calves, too, by the way. >> because you can play in shorts now this will be our golf edition of "rapid fire. >> yes, it will come up later down the line. >> today we're talking about the dollar index, down a little bit, but basically is near two-month highs that we hit on friday. many u.s. companies are starting to feel the currency crunch, namely mattel. shares on friday saw the

sharpest drop in 20 years on a weak outlook from, yes, currency fluctuations coke last week also cited currency headwinds this was interesting, because we had just talked about the strength of barbie they were hit by the currency issue, leslie. and if we're just now at two-month highs, of course they'll have an issue with this hanging over it. >> this is an important factor, because according to state street, about 40% of u.s. earnings from u.s. companies are affected by this they have multinational earnings that come in the door. so, you could have all of these wonderful factors here in the u.s. economy the u.s. economy could be, you know, the best house on the block -- >> and in a way, that's a bad thing because it means the dollar's stronger. >> exactly exactly! and so, it sounds great, but then when you factor in what's going on with the dollar and how it impacts companies' bottom lines, it can make a big difference. >> my hope, though, is that a chief financial officer of a fortune 500 company is not looking only two months down the road or six months down the road the reason i say this, if you look at a longer-term chart of the dollar index -- let's go back five years, let's say. >> sure.

>> what has the dollar done in that time? it's gone sideways, basically. so, if i'm a cfo of a company and i see that maybe for the next month or two i'm expecting the dollar to rise that time, i'm looking even further down the road -- >> so the messaging is part of the problem. >> and anticipating that we're going to see a decline at the same time. >> those are always just fluctuations, too, right it's hard for a chief financial officer or a corporate treasurer to say let's hedge it, because there's a cost to hedging it. >> absolutely. >> and then you don't get the benefit if it goes against you. >> it makes sense if you're going to hedge, say an agricultural company. >> right >> yes. >> exactly. >> but there are plenty of -- how do you hedge barbie sales, you know >> right. >> you're just -- >> or ken? i don't know. >> and which currency? >> you're beholden to -- >> do you have to make a call about europe or asia >> exactly. >> it gets complicated so yes, maybe investors give them a break, but they didn't on mattel, and that may speak to their still concerns about the underlying business. and coke and pepsi went two different ways. >> yep. >> it creates a lot of

headaches. next up, uk parliament calling facebook digital gangsters and in immediate of more regulation. the document is the culmination of an 18-month investigation where british lawmakers say they found the company intentionally and knowingly violated prichs and anticompetition laws there dom, i think the headline packs a punch, but there's not much more, frankly, in terms of fallout for facebook what do you think? >> so, with the fallout from facebook, i mean, we know that the europeans have been going after data privacy issues for quite some time now -- >> very stringently, yes. >> absolutely right. >> yes. >> with large-cap technology, mega cap technology stocks, this a road many of them have gone down before. you can view it almost like a rite of passage, because microsoft went through it back in the day you saw alphabet/google go through it with facebook, it's different because there's more of a lens put on social media, because of the social impact it has, because of the way that it may or may not disseminate quote/unquote news, all of that sort of thing. >> microsoft didn't cause depression or spread fake news. >> yeah, and you don't get that

kind of thing with microsoft as much maybe you can argue a little bit with internet-based companies like alphabet, but facebook is very much in the spotlight because of this behavior. >> social media companies need to be regulated, for data privacy reasons, for fake news reasons, for all of the things that have come up in the last couple of years. >> and they know that. >> it is a classic situation where the technology got ahead of the regulators out there. >> but how do you regulate the news >> that's the key. >> that's what i think is real interesting. >> and they say here, they describe digital gangsters as being, you know, beyond the law, beyond the scope of the law, but i'm not a lawyer here, but for all intents and purposes, it doesn't appear based on that report that these social media companies actually broke the law because -- >> what laws are you talking about, right >> -- the law hasn't been written. >> i wouldn't say broke the law, but they were remiss in how they handled some of the news that showed up on there, just as we are. a lot of these news organizations are regulated by the fcc to make sure that what we report out there is the truth. >> but we say we are news

operations they say they are not. and so, the longer-term thing i think would be not so much if they get shook down for fines. fine, they can pay it, it will shore up their position, frankly, dom but if they end up changing the classification of what they do, much bigger problem. >> that's the great unknown. and regulators will have to provide a lot more clarity on that >> let's talk about screen time, speaking of which, for children under the age of 2 it's more than doubled since 1997, no surprise. that's according to a study in the journal of the american medical association. daily screen time jumped from 1.3 numbers in 1997 to over 3 hours in 2014. tv accounted for more than 2 1/2 hours of that. the most recent data was from five years ago, so i think it's safe to say it's going to be even more, tablets, phones -- >> it could double again. >> it could double again, you're right. >> just because of the scope of technology that's come out in the last five years since this report came out. >> are we going to have a moore's law of screen time >> there might be, but i'll tell you, one of the best things that -- i'm an iphone user

i have multiple apple devices, but the latest ios version that tells you what your screen time is every week, it's made me hyperconscious of how much time i stare at my phone or -- >> whoo-hoo, i'm down 15% from last week. >> i'm down 21% from last week this is fantastic! >> what's everyone's average screen time per day? tell me, dom. >> mine's horrible. >> just on my devices? >> what does it say to you when you get that report? >> on my devices, it says two to three hours a day -- >> mine's six hours! >> but that's not counting the computer time i have i stare at a computer all day, charts and everything else. >> absolutely. >> but it's kind of crazy. >> why is mine double? i think i'm answering a lot of e-mails. >> but i am from the original tv generation, okay i grew up watching roy rogers and, you know, all the kiddie stuff that we were watching in the 1960s, and everybody was wringing their hands over how the boomer generation was going to be, you know, turn to vegetables because we spent too much time in front of the television >> so, you're saying --

>> maybe they were right i don't know. >> it's going to be fine dom, you can park him in front of the videos. it's going to be fine. >> yes. movie studios are reportedly doling out tens of millions of dollars in a win at all cost strategy for this year's academy awards they're sunday, correct? the oscars "the new york times" says netflix has spent $25 million on the oscar campaign for "roma," twice the movie's budget so we talk about content cost. we don't talk about oscar marketing costs. >> i'm not sure what the return on investment calculation is for this kind of thing, but it happens every year, though all of these studios, not just netflix, will spend money to market these things to the viewing community and hold them to the voters, right >> and if you don't do it, you're not winning. >> i thought about the same thing. but you have to believe that they wouldn't do it if they didn't think they would get a return on their investment, but maybe i'm overestimating their expectations there. >> what i think is considering about roma in particular is traditionally, the return on investment has been additional box office dollars "roma," i watched it last

weekend, you can stream it on netflix for no additional cost. >> does it make you a stickier customer or bring anybody in that's what they're looking for. >> maybe it does. >> these are all unchartered waters because you have no metrics -- >> but the fact that they're spending on it makes you think they think it's worth it. and amazon is broadening its film strategy after a series of struggles. the head of the movie studios says it plans to produce 30 movies a year, including sexy date night movies. that's a direct quote. >> i kid you not i googled "sexy date night movies," just to see what would come up, and i -- >> what came up? >> i am not making this up the first article said 18 dirty movies on netflix for couples to watch on date night. >> on netflix. >> and they called them dirty movies. >> they didn't say go to the theater. >> right, well, yeah it was on netflix there. but there was one there. number one was e2mamba -- >> not "fifty shades of grey"?

>> no, but there was one i missed number five was one called "bang gang." >> okay, that's enough. >> have you seen any of these? i have not, for the record right now, i have not seen any of those movies. >> moving back to what amazon's trying to do here -- >> she said, steering us back to the topic. >> that's good that's why she's the anchor, brings us right back to where we're supposed to be. >> apparently trying to make sure after a series of recent flops that it figures out. which movies would be better for streaming and which would be better for theaters, exactly to point you're talking about some of these don't need to go to theaters at all. >> look at this, amazon has found out that producing motion pictures doesn't always make money. it's a crapshoot a lot of times, and they're going to find that as she said, they're going to try to change lanes and go where the customers are and find out what they want to watch. and i don't think it's a mistake -- >> if any company's going to know what my viewing habits are going to be, it will be my use of amazon -- >> amazon, right >> absolutely. but netflix, and that's the

term that's become the verb, and that to me says amazon still has an uphill battle. guys, thank you. learned a lot today. >> always a pleasure. >> leslie picker, dom chu and bill griffeth. from executive shake-ups to hardware changes, apple is working on reinventing itself. we'll tell you what it means for the company and if the revamp the company and if the revamp will be successful ♪ ♪ let's go from being on-call... ♪ ♪ to being on-line. american express can help move your business forward with loans, vendor payments and buying power. chat with one of our 4000 specialists and let's make it happen. the powerful backing of american express. don't do business without it. i'm not really a, i thought wall street guy.ns. the powerful backing of american express. what's the hesitation? eh, it just feels too complicated, you know? well sure, at first, but jj can help you with that. jj, will you break it down for this gentleman? hey, ian. you know, at td ameritrade, we can walk you through your options trades step by step

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and improve customer satisfaction. i detected fraud and helped reassign a new credit card. honey, they're overnighting us a new card. woooo!!! woooo!!! for ai that works with tools you already use, choose watson. hello! the best ai for the job. welcome back to "the exchange." apple adding a new member to the team with cnbc.com's christina far breaking news over the weekend about microsoft veteran sam jadallah revamping the smart home business. now we have more on a piece on the revolving door at apple and what that tells us about the future of growth there let's bring in tripp mikell along with tech reporter christina arr. great to have you both here. tripp, let me begin with you, because when we saw the departure of angela ahrendts, i thought to myself, is this a one-off or not you're saying it's part of a

specific strategy, and what is that >> it fits into a broader trend going on at the company right now where you're just seeing a lot of changes within the senior leadership ranks, and part of the reason that sticks out is because that's abnormal at apple. you don't see -- it's a company that usually has a lot of stability in the leadership ranks. and part of the reason we're seeing changes is because this is a company that's positioning itself for a future beyond the iphone. >> are they doing it successfully, tripp, so far? because it sounds like even though tim cook has been working on this since 2010, you now, they're actually, it sounds like from your reporting, they're not doing much with the car from here the smart home speaker is not getting a ton of traction. what kinds of new things are we talking about? >> it depends on which aspect of their business you're looking at, kelly. if you look at their services business, there's no doubt that they've made a lot of headway in terms of growing that business when you peel that back and look at some of what's beneath that, a lot of that's driven by the app store sales that remain

strong, by the licensing revenue that they bring in from google the big question looking ahead through the rest of this year is what's going to happen as they roll out new services, this movie feature opportunity and tv opportunity as well as some of the news subscriptions that should be coming later this year. >> christina, meanwhile, they have only a 6% share, as i understand it, of the smart speaker market what is this new executive who's being hired trying to do >> yeah, it's a great question, kelly. i do think that they have needed someone like sam jadallah, who they just hired to come in for a while now. i've been wondering what's taken them so long to bring in someone to revamp this home business and figure out a strategy so they can compete with the amazon echo and google home, which are just so much further ahead when it comes to penetration into the home i do see some really interesting overlaps, though, between what apple's doing with its health care business, where it's really

focusing a lot of energies and actually is ahead in the tech industry and on home and you can see a lot of parallel there, you know, with the potential to do things like take the apple watch, which has a fall detection feature, and maybe bring that into the home so that you can have this peace of mind, especially with older loved ones you might be concerned about if you don't see them as frequently and they're living independently so, i see him taking on a lot of different areas that have potential in the home and really building that out. >> that's a great point. so, tripp, will that potentially be apple's next big thing? because i know they're trying to look at a post-smartphone world, but frankly, we're not there yet, or at least apple's not there yet in terms of going from creating the mac to then creating the iphone. >> right no doubt about that. and in looking at a post-iphone world, it's, you know, also about kind of sustaining the iphone world as ell. and all of these smart home features that chrissy's talking

about, those kind of tie and lock you back into the iphone world as well. same with the services and those subscriptions. anything they can do to kind of maintain that loyalty to the iphone that they have 900 million users of is going to help sustain that business long term as they look to transition to other opportunities in the future. >> all right, guys, thank you. tripp mickle from the "wall street journal" and our own christine farr thank you. huawei is facing headwinds in the u.s., but it may not be that important for the company to main inroads. we'll tell you why after this. >> announcer: get kelly's daily commentary in your inbox sign up at sign up at cnbc.com/theexchangenewsletter we help farmers lock in future prices, banks manage interest rate changes and airlines hedge fuel costs.

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what you love. that's what inspired us to create america's most advanced internet. internet that puts you in charge. that protects what's important. it handles everything, and reaches everywhere. this is beyond wifi, this is xfi. simple. easy. awesome. xfinity, the future of awesome. welcome back to "the exchange". phil lebeau with breaking news on ford. shares of ford moving fractionally higher after announcing it will be exiting the heavy truck business in south america, taking a one-time charge of $460 million why is the stock moving higher well, this has pretty much been expected news, kelly they've been losing money in south america for some time, and jim hackett has said, look, we have got to get our business together around the world, and a

big part of that is fixing what's wrong in south america. again, ford getting out of the heavy truck business in south america. kelly, back to you. >> okay, phil. thank you so much, phil lebeau. u.s./china trade talks are inching forward, but prf bar all chinese companies from applying equipment from future u.s. telecom networks >> reporter: in an extremely rare interview, huawei's founder ren zhengfei. >> translator: the world needs huawei because we are more advanced. >> reporter: he's right. the biggest markets are asia, middle east and africa and smartphone sales are surging up 23% last quarter and widening the lead over apple. also described the arrest of his

daughter ceo as politically motivated. but the fight over huawei is really a fight over 5g technology u.s. lawmakers and allies have long argued that using chinese equipment to build out the network could be a tool for the chinese government to spy. even so, many carriers from u.s. to asia are using huawei gear and cautioning a ban could have major costs for them countries may be pushing back. cyber security center said any risk involving huawei can be managed while the german government may let them participate with the 5g networks despite u.s. warnings. >> deirdre bosa joins me now last week, there was a regional telecoms executive in the u.s. who said if he can't use huawei equipment, it will take him a couple of years and millions of dollars to find another way to go. >> that's right. you've heard similar things from the big carriers as well

in the uk as well as soft bank in japan and countries have to decide whether these national security concerns outweigh the economic ones. if they don't roll out 5g, huawei allows them to be the most advanced networks and lowest cost. what do they sacrifice there it's a balance that countries and carriers have to decide right now. >> also, the uk, i think i read recently said it's found a way to make sure there's no spying by huawei equipment. should americans, should other nations feel comfortable then saying, fine, we're using the equipment, sorry, u.s. this is an issue between you and china. >> i think that due diligence is done now and what the uk cyber security experts found is there's a way they can manage the risk i think the u.s. is far from that but also remember that huawei is used as a sort of bargaining tool in trade talks as well as the fight over ip

rights but huawei spends $13 billion a year in 2017 in research and development that is a huge number in terms of the biggest u.s. companies and the other chinese companies. what they're developing, the most advanced networks at a lower cost so as you see countries do this dill jen diligence and the benefit of a huawei network, they might be okay with it. >> it's tricky until we know if it can be used to spy. deirdre bosa looking at some of the risks. elder tech is the hottest thing in silicon valley right now. 'll speak to a company capitalizing on the trend after capitalizing on the trend after this i love you. servicenow works for you.

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all in one place. because when it's decision time... you need decision tech. only from fidelity. what are some of the most exciting things you're seeing? very early stage things that the rest of us haven't heard about yet. >> the big trend i'm excited by and it excites me especially as a rise of elder tech technology solutions built for the elderly. for this generation that has really not really been taken care of in terms of software and tech 20 years old are building stuff

for other 20 years old. >> that was alexis ohanian this is tye stingecolm thank you for joining me >> my pleasure. >> is there a boom in elder tech right now? >> i think definitely seeing a lot of it and i think it's an attractive market. lots of people, obviously lots of money to be made. >> that's how you got involved what's your company do >> financial services targeted towards seniors and in particular, if you're starting to experience memory loss, if mom is starting or dad is starting to experience memory loss, there's a lot about banking that just kind of stops working. so we can kind of take over the other bank stuff working, enabling somebody to spend their own money safely and maintain a high quality full life and i

think that's what you're seeing a lot in, tech targeting older adults is just, you still deserve a high quality full life >> and you're talking about a debit card effectively that costs $10 a month and lets me, and mom and dad, not talking about just yet, but theoretically, i could say to them, here's your debit card i tell the company they're allowed to use it for x, y, z things here's a couple of things they're not allowed to use it for. how much have you had on this so far? >> i think it's been pretty tremendous and in particular, people are talking about the kind of life changing effect so suppose mom is maybe losing track of sweepstakes and tv shopping, charitable contributions, magazine subscriptions, maybe dad met a new girlfriend on the internet and he's sort of repeatedly transferring cash to help with immigration paperwork and of course, that's sort of a fake thing going on and your existing bank might say, you know, it sounds like mom or dad is having trouble

managing money and can't do it anymore and that means you have to take away the debit card, the credit card, the checkbook and that means dad can't get coffee with his buddies anymore and that's really kdevastating. it means so much more than money. it's about living a full life. >> you also, and this makes sense, can extend to addicts and that's a big part of your growth but going back to the premise of why this works, kai, what happens if the big banks say, great idea, we're going to turn on this feature too? >> i would love for, you know, wells fargo, bank of america, citi, capital one to care so much about the aging demographic that there's nothing we can do that they can't. i would love to see that happen. i think that, what have we learned over the last seven years? there's no substitute for really caring and i think that people

can see the difference if doing a great job becomes a core part of wells fargo business, i would be so happy. >> kai, thank you for joining me built company for his own grandmother. i'll join ty on "power lunch." thank you. >> kelly, thank you. i'm tyler mathisen welcome to "power lunch. new at 2:00 today -- trade talks. the american economy and taxing wealth president trump's key economic adviser kevin hassett just moments away walmart with the best holiday quarters in years. retail right now and what's in your plain vanilla index fund? much more than you might know. the dow, in the meantime, the green and the nasdaq trying for a seventh straight day fof gains "power lunch" begins right