market multiple and deserves more than that >> okay. >> bob pisani mentioned semis. i'm stwath teradyne. >> fed minutes in one hour we'll see what the market does kelly evans picks it up now with "the exchange. >> thank you, scott. hi, everyone here's what's ahead this hour. a big warning, china saying u.s. tariffs could be catastrophic. we've got all the details on what they're saying exactly. tesla turmoil from late night tweets to more turnover to a bold promise on autonomous vehicles and samsung may be getting ready to unveil a foldable phone. outinnovating apple, it seems. we'll have a lot more on that. and we begin with today's numbers. dom chu here >> a waiting pattern, holding patern markets relatively flat and stable only down by 9, 10 points on the dow industrials.

relatively flat. same for the s&p 500 and nasdaq as well. outpacing the decliners off by about 0.3% one of the trades on the macro side of things, despite the fact we've seen a general trend up in the value of the dollar, gold prices continue to go higher as you can see, we've seen nice gains over the course of the past 12 months not just the gold trade but also gold mining stocks as well gold by the way up 14% from its recent lows. the miners up 35%. and, of course, we'll take a look at what's happening with our stock of the day the worst performer in the s&p 500 is pharmacy benefits and health care retailer cvs shares down by 8% after it beat earnings estimates fell a little shy on sales but its outlook really disappointed. took a large charge related to the long-term care business. those shares, the worst performers back to you. >> welcome to "the exchange.

i'm kelly evans. take a look at this. global stocks have been rallying hard the msci index is hitting a four-month high. also semiconductor stocks up six days out of seven. and the volatility index at its lowest level since october let's drill down on these numbers with bob pisani. >> how much is a trade deal priced into the stock market art cashin thinks 50%. i think the risk is to the down side of no deal. look at this if a trade deal is announced on the march 1st deadline, i think the markets will rise but fairly modestly if there is an announcement, no trade deal and tariffs go to 25% on march 1st i think the markets will drop significantly. and that's the risk to the down side the s&p 500 at 2800, what could get us over $3,000 talk of the fed possibly easing

would be significant and any clear sign the balance sheet run-off would slow down. also, less talk about an earnings recession that would be really helpful but most important of all would be less talk of a global slowdown some positive europe, stable china and better u.s. economic news than we got last week with disappointing retail sales and industrial production numbers. >> bob pisani, thank you let's turn to kayla tausche in washington where trade talks between the u.s. and washington are continuing >> we know the midlevel talks are still happening at the office of the u.s. trade representative today earlier we saw treasure secretary steve mnuchin leaving the building, braving the snow there's a blizzard here in d.c this is ahead of cabinet level talks happening there tomorrow this deadline of march 1st is fast approaching for the u.s. to make a decision on a possible extension as the change would need to be implemented before shipments arrive march 1st of course, president trump is heading to vietnam to meet kim

jong-un in the next week or so president trump is suggested multiple times he'd move the deadline which china in a state-run newspaper says is proof a deal should happen soon. trump's words further stoked the stock markets of the u.s. and increased pressure on the trump administration to close the deal with china the u.s. is currently trying to extract more concessions from china in exchange for that possible extension of the deadline china is trying to deflect that pressure back on the white house and wants to save face and not look like it's giving away the ranch going into this potential deal so we'll see who ends up being the winner here or if it is to borrow the chinese diplomatic language win/win >> what are the catastrophic effects they're talking about? >> china has said it would be forced to retaliate if the u.s. increased tariffs even further because of the balance of trade and the fact the u.s. imports so much more than it exports to

china that china couldn't go tit-for-tat on tariffs from here on out and it would essentially be forces to use currency measures or some regulatory measures to essentially penalize u.s. companies operating in china, that it would choose some of those less tangible ways to retaliate. we don't know what china would do but if there's not a deal this week, if the u.s. does raise tariffs to 25% it has no choice but to react. >> and trying to figure out if they don't comply and the currency issues, a lot in that stew kayla, thank you the latest fed minutes are out in less than an hour investors are hoping to get clues on the big pivot from the last meeting from raising rates to being on hold steve liesman is in washington he's got more on what we might hear in a little bit what's important for the markets? >> the pivot to patience from gradual increases, and really, i

have a bunch of questions here i might want to try to answer from these minutes. i'm not sure they'll answer them entirely the first is what was behind the pivot. the global weakness, the trade tensions, maybe even the fear of a shutdown what about how long will the fed be on hold will the fed reduce the pace of the balance sheet run off and where will it end up take a look at the short-term reduction of the balance sheet it's down about a half a trillion dollars and that looks like a lot. it's a lot but not when you zoom out and look at it since 2009. and what you see is it's come a very long way. john williams, the new york fed president said this week that he would see the balance sheet run off running into next year but here's what brainerd told me last week, the federal reserve governor >> my own view is that balance sheet normalization process should probably come to an end

later this year. we know that liquidity demand on the part of financial institutions is much higher than it was precrisis so we want to make sure there's an ample supply of reserves to guard against volatility >> so, kelly, there's a debate at the fed we'll get parameters around that debate i don't think it gets answered until the march meeting. >> and we have a lot in there to discuss. steve, stick around. i want to go to rick santelli to check on where the bond market stands as we head to the release of these minutes >> you know, the bond mark set hovering but hovering at a spot that is, well, within nine basis points of challenging a one-year low yield close. we're sitting right now up one basis point at 264 two years are down one basis point. ever so slight steeping, but do remember, at 2.64 we're down on the year. settled at 2.68. we are up from january of 2018,

but not by much. remember, early this year, we made a low right around 2.55 so even though we're steady as she goes, we're hovering in the low end of a 12-month range. >> rick, thank you are investors at risk of getting whiplash from the fed? steve liesman is back along with kevin koron. kevin, the whiplash refers to not only the fed's pivot but markets haven't given them any shades of gray on this when they've said no more rate hikes are coming what if the minutes say something more hawkish than that >> yeah, that would be a disappointment for sure. the market has moved to essentially price any rate increase from the fed out of the market we've come completely 180 degrees from where we were back in september when the fed was talking about a more aggressive need for more aggressive monetary posture and more rate

hikes. so we've come full circle. the market is now anticipating positive things. if we don't get that, that could be a disappointment and the broad trends in the data seem fairly negative. we're sitting on the sidelines cautious at washington crossing advisers >> i wonder if one of the most significant events of the week will be the comments about the balance sheet. is the fact that she is a hawk sounds kind of dovish on that yesterday going to overshadow what we learn today about a meeting that happened a couple weeks ago? >> the whole federal reserve has moved inside this circle that i drew a couple weeks ago. and that circle is we're going to be patient. they're on different sides of the circle some lean a little towards -- i'll be patient for a while but really want to hike. some are oddly patient for a while but i really want to cut and we found that with mester when she came out.

ef esther george as well, another hawk was on the, i'm fine being patient here the inflation numbers, we have to work through this oil deflation or disinflation that's been in the system for a little bit and see what it looks like on the other side. >> kevin what do you think is more important would it be the fed says like we heard a little of this yesterday. maybe a rate hike or two is on the table but what if they are flexible about the balance sheet? what's the more significant turn for you? >> i'm not as worried about the balance sheet because on the fiscal policy side here seeing an expansion of fiscal policy and run up and increase in federal debt so i'm not as concerned about the balance sheet. the interest rates, though, do concern me a little bit because what you have got now are positive interest rates that are

moving higher and potentially encroaching upon the expected return range for equities, riskier assets in general. if we got a much more aggressive fed where risk-free rate went up, let's say, 100 basis points or 200 basis points, that would put pressure on where assets get deployed into stocks which we think are going to -- >> kevin >> or safe cash. >> what if that came, for example, with, you know, still 3% growth? i remember we were in the 3.25 range, 3.5% range and really the market was not spooked by it because it had the stronger gdp growth it had the falling unemployment rate the fed was hiking and everybody was chill about it until all of a sudden, i'm actually praying for more rate hikes because if there's more rate hikes it means inflation is firm, gdp is back and unemployment is falling. i don't think i'm hoping for no rate hikes because of what comes

with that. >> of course, as equity investors, we'd always want to put -- see growth but at the moment, globally, that's not what we're seeing. we're seeing global growth fade away over the last few months we've seen a weakening of activity in china and europe and even here you're starting to see it in things like automobile sales, softening in housing, retail sales last week were not so good. and the expected growth rate in the economy now is below what we would expect to be trend lines we're thinking 2.5% trend line and we're thinking probably below that at least in the first quarter. so we would like to see a faster economy with the fed being able to raise interest rates. right now a slowing situation. >> we're going to get you a global read on how growth is doing in just a minute but it's karen, it's not caron >> i thought it was. >> you nailed it >> you know, i try i was more concerned that for

years i had been saying it wrong. anyway, thank you both very much kevin, good luck in the snow kevin caron, steve liesman and here is what else is coming up on "the exchange. ahead -- oh, elon. late night tweets on production. more departures. and a bold prediction on autonomous vehicles. what's ahead for the company plus -- samsung may be looking to the past as inspiration for the future of the smartphone and an under the radar economic indicator that's telling us things are all right. this is "the exchange. it's absolute confidence in 30,000 precision parts. or it isn't. it's inspected by mercedes-benz factory-trained technicians. or it isn't. it's backed by an unlimited mileage warranty,

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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." concerns have been building about global growth lately and that deepened after caterpillar's earnings miss and weak guideness our next guest says they're not telling the whole story. they are holding a week-long auction in orlando of more than 13,000 pieces of used heavy equipment. ravi, thank you for joining me >> what a delight to be here >> it's a pleasure is all ours we want you to tell us what you are seeing on the ground how is demand for heavy equipment, and where is it coming from? >> so this is where -- this is

day three. we've had two great days already. the number of piece of equipment are up 10% versus last year. and we did about $285 million last year. so things are off to a great start. and the most important thing is we're the -- we have a congregation of small, medium businesses, family owned companies, entrepreneurs coming to see how are things because that gives them a sense for the shape of the economy while the stock market has its issues, the real economy is happening in orlando today, and i would say things are pretty good >> up 10% year on year so far. that on the face of it, to me, sounds pretty good why do you think caterpillar is experiencing the turbulence that it is? >> well, i can't talk to caterpillar, but i can tell you about the -- our 10% growth is how many piece of equipment we've received versus last year.

and i think part of it is, kelly, it is our business model that ritchie brothers does well in both good times and not so good times and sometimes our auctions represent an inflection point where people can see how are things going right now there's certainly questions, but when i've talked to a lot of our customers, which i do at these things, they are saying they have a lot of projects, road-building projects, underground utilities, power plants, you name it. and i'm not getting such a sense that there is doom and gloom last year was a go-go year, and this year it's where demand was fantastic. and this year, too, they are saying they have a lot of backlog of projects and a lot of local activity based on the states and so on >> i like what you're saying you're saying roads, underground, power last year was a go-go year but this year still pretty good. we know the bigger headwinds

the tariff issues. trade disputes with all of that happening, are you seeing anybody pull forward demand are they pushing it out because there might be some uncertainty. is pricing being faerktss? how is all that filtering through? >> great question, kelly so pricing is really holding last year pricing was very strong and at least so far we're continuing to see good pricing so it's -- i don't see panic arising, and demand aside because people have our customers have jobs. they are doing -- they are buying stuff and we have 85 countries participating in this auction. and we have 10,000 people, several thousand live actually in attendance and several thousand from on the internet. and this is going to be our -- we're going to set a record. it's going to be the largest auction ever in heavy equipment. we're excited for our customers because ritchie brothers

auctions is where supply meets demand right now we're seeing great excitement, a great buzz you can almost think of it like the stanley cup finals and that's the kind of buzz we're getting. >> that's fantastic. i didn't even know that ritchie brothers was publicly traded certainly a stock to watch and a story and company to follow. thank you for joining me today >> indeed. our market cap has almost doubled in the last four or five years, kelly but that's because the good will of our customers and you know one important thing for urs, we're becoming more of technology company but our soul is all about personal relationships the marriage of technology and people, and that is -- but what we do, we're kind of a microcosm of america we're the -- this is where small business and medium sized

business which drives the economy comes together and that's very exciting for us. >> thank you you're great at what you do. appreciate you joining me today. >> thank you so much it was a pleasure and an honor >> rav si the ceo of richie brothers different perspective on what's happening in the world coming up, from executive turnover to new round of late-night tweets, a look at the latest turmoil at tesla. plus, the most innovative companies are likely not what you expected fast company is out with its ranking and there are some big surprises. and why some owners of nest products just got a big surprise and not the good kind. we'll tell you what's happening. don't go anywhe. hexcng iba in two. ing. 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.

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isn't just a result, it's a responsibility. emerson. consider it solved. welcome back here are some of the movers this hour southwest airlines is grapple with ongoing mechanical problems with its fleet it's resulted in hundreds of canceled flights since last week shares are down almost 5% today. goldman also downgraded the stock to sell saying its new hawaii route could be too costly shares of magellan health are higher after reports it may be looking to sell itself this company has been under pressure to explore a sale it's about an 11% pop today. and shares of google are making a dramatic drop after epic games pulled its youtube ads due to questionable content featured on the site google has turned negative we were positive earlier that big dip lower shares are negative on the day

over to courtney reagan for a cnbc news update >> michael cohen will now report to federal prison on may 6th this after a judge granted him a two-month delay. cohen's lawyers asked for the extension to allow him to prepare for testimony before three congressional committees and to recover from recent surgery. a french court ordered a swiss bank to pay more than $4 billion in fines for helping wealthy french clients evade tax authorities. it wrapped up one of france's biggest ever tax evasion trials. ubs called the case politically driven you may be throwing out perfectly good food. researchers at johns hopkins university surveyed over 1,000 adults about how frequently they throw out food based on the date listed nearly 40% say the discard it if it was near the date and they thought it was federally regulated. but the dates are just guidelines tiger woods practicing ahead of the wgc championship this

weekend. it will be the first competition he's played in mexico. he's trying to figure out how the ball will travel in high altitude woods tees off tomorrow at 2:00 p.m. eastern time that's the cnbc news update. >> still so much buzz around him and everything he's doing. court, thank you about 30 minutes until power lunch. i'm joined by melissa lee who has never had hemp milk. >> perhaps today we shall because there was a major deal buying manitoba harvest which gets it to into the cbd market we'll be speaking to the ceo brendan kennedy. maybe he'll bring hemp milk and hemp hearts. >> what are hemp hearts? >> i don't know. i'm a hemp novice. >> you're a never hemper >> not a never hemp. i would be open to hemping hemping is the nonpsycho active part of the plant so i would be open to that >> it's legal in this country?

>> it's legal in this country thanks to the farm bill. they can distribute these across state lines. they can grow hemp here. that's not a problem and so we'll be talking to the ceo about how big of a market that could be. the fed minutes. we've got a countdown clock so you know it's really important 34, 33 minutes to the fed minutes. obviously, we witnessed probably the biggest pivot in the history of u.s. monetary policy. i may be overstating it, but it was a big pivot. >> absent a recession it was a big pivot. >> how do they talk about the balance sheet? normalization of the balance sh sheet and also global risks as we have all these headlines about brexit and uk lawmakers possibly voting against brexiting. >> we'll see what they say thank you so much. here's what else is ahead on "the exchange. >> coming up -- garmin is on the

right path why does a nest need a microphone and the walking meeting backfires. it's all ahead in "rapid fire. and to manage this risk, the world turns to cme group. we help farmers lock in future prices, banks manage interest rate changes and airlines hedge fuel costs. all so they can manage their risks and move forward. it's simply a matter of following the signs. they all lead here. cme group - how the world advances.

itin 30,000 precision parts. or it isn't. it's inspected by mercedes-benz factory-trained technicians. or it isn't. it's backed by an unlimited mileage warranty, or it isn't. for those who never settle, it's either mercedes-benz certified pre-owned, or it isn't. the mercedes-benz certified pre-owned sales event. now through february 28th. only at your authorized mercedes-benz dealer.

welcome back let's catch you up on a few stories that should be on your radar today. it's time for "rapid fire. welcome one and all. first up, garmin is spiking today after a big beat on earnings and revenue the gps-maker. how could this be? the stock is on a tear because of a bounce in smart watches and other wearable fitness trackers and they make a great running fitness gps watch among other things >> i have not used my physical garmin in years because i'm a big wazr i like to use that for getting around these are popular amongst people training for big races, athletes and things like that i was surprised to see the numbers, too >> i thought google would do away with garmin you look at their products they are an incredibly innovative company they have a smart scale which tells your body mass, skeletal

density. and i'm curious about your take on one of the products it's called a bark limiter and it limits your dog barking >> my dog sleeps about 22 hours a day. not doing a lot of barking but i'm sure if that's a problem i'm sure that's something there's an audience for. and people will spend any on their pets people love to drop money on their pets >> other surprising thing to see is the apple watch hasn't gone away with this but from experience having gotten one to run with a couple years ago there is no gps on the old version. if they're able to integrate that better on the new version without having to bring your phone. then maybe they have the pets to fall back on >> more credit to garmin they expanded beyond their core product, which was the navigational device that you slap on your car or dash board and to get into smart watches and fitness trackers where there's already a lot of competition from apple and fitbit commendable. garmin is seeing results there can they continue to expand

their market share given heightening competition. it's all about pets. >> you get into pets, the stock goes up. heading into the heart of tax season if you're confused, you aren't alone. maybe this will calm your anxiety because audit rates at the irs are down 50% from 2011 levels that's a huge drop >> i was talking to some accountants for the wealthy saying how your preparing for the tax season what your worried about in terms of audits? frankly, we're not that worried because the audit rates have fallen by half over the last seven years. you look at the number of agents it's at the lowest level since 1953 largely because of funding the funding for the agency is down by $2 billion over the last six years. so there just aren't enough people to audit taxes. >> it's one of the few areas where it seems by expanding it can pay for itself people say they got themselves into this with the politicization during the tea party era. >> it's not people trying to

cheat it's a new tax law that's 186 pages with lots of gray areas and rules that provide opportunities for gaming the system it's not that people are going to deliberately cheat but they'll test things, try things. >> they'll see your headline and say, go for it >> i'm just waiting for elizabeth warren or aoc to use this as a political tool to further accentuate the story behind taxing the wealth >> they've already gotten there. >> topic three, it's a massive milestone in the advertising world. digital ad spending will exceed traditional spending for ads for the first time google and facebook used to be the only game in town in terms of digital ads but amazon making a push to increase their ad business by over 50% a lot of this, it's a little bit of alexa but a lot of it is the buy this product on amazon when searching for something. get it in the box. >> that actionable, targeted advertising they can do in the moment when you're just browsing

through different items on amazon so their budget increasing by -- or ad business increases by more than 50% this year another interesting takeaway is the growth of advertisements on instagram within their stories which have become so popular and an answer to what snapchat was doing when they first came out i know those targeted ads work really well for me on instagram, especially if i'm in work early. do i need that makeup, these shoes? they work well and have all this consumer behavior to base this off of >> it's costlier for you to be at work? >> yes i think i need a raise >> you're losing money by showing up google revealing the nest guard which is part of a larger security system sold as nest secure contains a built-in microphone which was never listed as part of the product's tech specifications. google saying the omission was an error and the microphone was never supposed to be a secret but i'm -- i remain very cautious about bringing these devices into the house others say i didn't even know that nest, which is supposed to

help chrome control my thermostat >> as someone who owns a nest, it's frustrating to hear this but as the new iot smart devices come to the market, we're still in the early inning. this is a hiccup even amazon alexa had when it was found it was accidentally recording some conversations at home and sending it to the person the conversation was about it's just one hiccup in a longer term revelation. and consumers who want to embrace smart devices and iot maybe have to sacrifice privacy to some extent >> i think you're right. it's like the -- we talked about the dna testing the other day. oh, fun, i can see my ancestry oh, they have my dna it's a really useful thing i can save and control my thermostat bills oh, wait, they may be listening. >> we hadn't gotten an alexa in our house bah we have a lot of nest cameras and i know it has a microphone

because that's the benefit of having a nest camera you can speak through it and hear them. this product itself, which is just a little box, didn't have a microphone but i don't believe that google forgot to put in the spec when you're selling something to a consumer, you put in everything that it does. this does that it's got a microphone. and for them to say we forgot that we added a microphone to it >> but it's not going to matter. >> i do not believe that >> i would say one thing in the response the microphone has never been on it's only activated when users specifically enable the option we don't know about it it only works if you turn it on. that's something i'm sure my parents would accidentally do. if you aren't reading the fine print, it didn't all add up for me >> yet people will still buy them if it's useful. let's talk about the final topuc. "the wall street journal report"ing that in order to keep the workforce fit and production, bosses are scheduling walking meetings on sidewalks or hiking trails instead of in conference trails.

some employees like the fresh air. some claim they feel like ducklings trailing ining behinr boss. >> i felt like a chihuahua trailing a bunch of golden retrievers >> we have all these fancy standing desks upstairs. i've got nothing to prove. i've never used it once. i like to sit and i don't want to go on a walking meeting i'll exercise after work hours >> you have a special cushion? >> i like to be comfortable at work >> you have a butt cushion >> it's a back -- it's a cushion. >> this growing trend of trying to encompass fitness into our work lifestyle, especially if you are spending a lot of time at work. >> do you know anything about that, seema? >> maybe i have some experience there. but i think having these walking meetings really depends on the context. if it's negotiating your contract, probably want a desk and two chairs if it's more of a creative, let's talk about the future, maybe you want to walk and have a more creative or less formal

environment. >> you are mr. active. >> i love walking. i love this place because you can walk around a lot and get lost a lot of people talk about steve jobs he loved to walk the reason he likes to walk is because it would disorient the person he was with he'd take these windy roads around his house where they'd get lost he knew the way back walked twice as fast as everyone else they can't keep up, they're lost perfect opportunity to get them while you can. >> get up. we missed our opportunity. we're going to find kate's butt cushion. >> here we go. >> we feel better and more productive >> who is the -- seema is the duckling >> chihuahua >> "the exchange" is back in two.

welcome back fast company is out with its

2019 list of the world's 50 most innovative companies this year's cover features stitchfix ceo katrina lake the youngest female founder to ever lead an ipo when she took the company public in 2017 the list has surprising results. including the dethroning of a major tech giant let's bring in the senior editor at fast company and oversaw the making of this list. welcome. >> thank you >>aside from katrina's story herself is so innovative about stitchfix. >> it's a data analytics company that's masquerading as a clothing subscription service. thaul give you a monthly service. they'll send you clothes they taylor to your taste what they had running under it is a sophisticated data operation that finds out what clothes you like, what will fit you well clothes you didn't even think were in your style what they also do is give that data to their partners, their fashion brand partners so in a tough retail environment, they're helping the fashion brands figure out which clothes are striking with consumers.

>> i had no idea about that. every day we ask about companies they say we're a ticket company but really we're a data collection business. >> this one truly is >> want to ask about apple which used to be number one and is in what place now >> it's in the 17th spot this year last year was number one but that was coming off a huge year where it released four ground-breaking products the apple watch 3, the home pods, air pods and the iphone x. last year they didn't really break new ground with their devices and hardware sales were sluggish they moved down to 17 on the list we did recognize their investment in their processors they're making chips inhouse that are able to run those data intensive operations like ai, ar, high-end photography things that will make their devices more powerful going forward. they're laying the foundation for years. >> facebook, amazon, google, what do you see there? >> facebook and google were not on the list this year. they both dropped off. we do have amazon on there, but for twitch, not for amazon

proper twitch, it's really a recognition of twitch's growing prowess in live streaming. it's known for its gaming community and that's huge. with fortnite it was off the charts this year it's also making inroads into real world mainstream live streaming. you can watch everything from congressional testimony there. you can watch dr. who marathon cooking, fitness classes, nfl games. and the interactions between streamers and the community that's watching is really powerful >> i have to find that for c span channel i didn't know they had. you mentioned the nfl. the nba is number three on your list why? >> nba is exciting for the way it brings fans to the game it's breaking -- setting new records for fan attendance and is also reaching people around the globe. the nba was smart to bring esports inhouse. 21 teams for the nba 2k league people around the country,

around the world who never can get to a game will engage with the sports, the team and individual players and feel really connected to the sports they've also been very quick to embrace micro betting in game. the fan duel dynamic it keeps people watching the game in realtime, live not watching the highlight reel afterwards on bleacher report, but watching it live so they can place those bets so very smart, forward thinking about the way they use technology and they also embrace their players' personalities and politics and that also keeps fans excited >> you've said it all. the last thing i'll mention, number two is grab the singapore ride-hailing company. number one -- >> it's a chinese company. a one for all app. >> both of those companies started at one thing grab ride hailing in singapore and southeast asian. and then they piled on lots of other services so you can book travel, movie tickets. you can book a hotel room.

all sorts of things. they would be the equivalent of like six different apps in the states in china through one service >> it's a great state playoff of technology right now amy, thank you for coming. amy farley from fast company more outrageous statements from elon musk on tesla, including what the future of the company could actually look like, when we come right back. get kelly's daily commentary in your inbox. sign up at cnbc.com/theexchange newsletter okay, paint a picture for me.

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the turnover at tesla continues with the company announcing its general counsel is leaving the company after only two months on the job this after ceo elon musk tweeted, then revised, financial guidance for the company what's going on under the hood let's bring in carl braugher, executive publisher of kelly blue book and phil lebeau joins us a quick run through of the events of the past 24 hours. >> there's been a lot, kelly let's start with the change in general counsel at tesla dane budwinskis, the general

counsel brought in when the s.e.c. investigation was going on worked that investigation with elon musk and tesla. they got it resolved he became general counsel in december he's wanted to go back to his previous law firm in in december he's decided he wants to go back to his previous law firm in washington, d.c. says it's not a good cultural fit at tesla so as he leaves jonathan chang has moved up. he's been at tesla for seven, eight years now and immediately has the skeptics saying a-ha there must be something nefarious going on why would the general counsel leave after two months keep in mind, we've seen a lot of executive turnover at tesla, and this is just in the last 12 months not even going back over the last couple of years by some estimates more than 50 executives at the vpo higher level have decided to leave the company. bottom line is this, kelly elon musk is not an easy person to work for. he even admits he's not an easy person to work for he is demanding, and in many ways that is likely a

contributing factor to not only this general counsel deciding, you know what, i'm better off going back to my own practice in d.c. but also to other executives who have left. >> carl, at the same time musk tweeted late tuesday that tesla would make around 500,000 vehicles this year and then they say the annualized production rate at the end of the year could be around 500,000 vehicles or about 10,000 a week for the year total deliveries are still estimated at 400,000 what does kelly blue book think is going on with the production? >> i think he's slowly but surely mastering this high volume automotive production challenge, and it is a big challenge, and it's a big transition for tesla to go from really a niche product with the model s and the model "x" to high volume production with the model three. everyone knew this was not going to be an easy transition i think maybe everyone except elon, he was making some pretty bold predictions very early on i think he's learned a lot

i think the company has learned a lot and i think he's probably fairly accurate. i would bet that he's more accurate in his predictions now about volume. >> well, especially after the s.e.c. kind of wrapped its knuckled for some of the earlier weeks taking the company private. phil, i'll tell you, what really raised my eyebrows were his comments about autonomous driving. here's what he said on the podcast with arc invest. he said i think we'll be feature complete on full self-driving this year meaning the car will be able to find you in a parking lot, pick you up and take you all the way to the destination without an intervention. this year i'm certain of that. that is not a question mark. is the science really there? >> well, the technology is close. it's getting better, and they are improving, and they are improving their autonomous drive technology, but, kelly, we've heard this before from elon musk need proof go back to october of 2016 he said almost verbatim the same thing and he promised it by the

end of 2017, and then it never developed. that's because the technology is still being developed. bottom line is this. we'll -- will tesla eventually get two fully autonomous vehicles like other automakers you bet. i think they will get there. will they get there as quickly as promised? there's no guarantee we've seen this promise time and again with tesla with regard to autonomous vehicles so whenever you hear from people saying you're not giving him credit he's doing this technology he is working on that technology and we're giving him that credit all we're saying is take those projections in terms of when it's going to be done with a huge grain of salt. >> carl, you know, i understand in perfect conditions is there a parking lot in some sunny is part of the country where they might be able to demo this okay, sure, does this mean it's really going to be available for the rest of the driving public are people misled as we've seen in the past about the capabilities of their self-driving cars? should regulators come down on him harder for this kind of rhetoric >> i think -- i think the term

misled works here. i mean, there are so many variables out there, kelly there are so many different ways that a car has to be able to deal with driving, leather, lighting, traffic, pedestrians, size clists. to say you'll have all conditions solved in the next 12 to 18 months, no other company has been able to say the same and google is out there as well and they have done at this for a decade. >> thank you both. just minutes away from samsung's event in s fanrancisco where it's expected to up veiling its smartphone and maybe even a foldable phone we'll get a sneak peek next. sort of. the chef had it this morning. unfortunately he went home sick... but he left instructions with kyle! this fish is raw. do we need a minute? yes. just ok is not ok. especially when it comes to your network. at&t is america's best wireless network, according to america's biggest test. now with 5g evolution. the first step to 5g.

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welcome back we're just moments away from the kickoff of samsung's annual unpacked event in san francisco. this is where the company is expected to unveil its latest lineup of galaxy smartphones plus it look at foldable and 5g phone. could to 19 be the year that samsung snatches the smartphone crown from apple in the u.s. welcome. >> where do we stand here real quickly in the sort of war -- war is too strong, but who is winning the market right now >> the concept of the war, the

one big brand versus another with microsoft and apple samsung and apple. you know, apple eagles got more mine share and more market share. that covers a wide range of devices not just the super fancy smartphones we've talked about. >> talked about the galaxy the last couple of years and they had the big battery blowup is samsung about to come out with a foldable phone? >> they are probably going to show off today a foldable phone. they will probably bring one out on stage and say here it is and stay tuned for later in the year for more information about it. i don't think we'll get much more than a quick look and it's going to be the galaxy fold. >> that's creative. >> you know, keep is simple. of the concept itself is good. don't having to crazy with the name it's going to be a foldable smartphone do you know anything about how the screen is going to fold, how that would work? >> several companies are working on versions of this now and we saw a bench of them at ces, the

big tech trade show back in january. you know, it's a flexible screen and that's something that's been around for a long time an not in widespread commercial use and not really in any consumer product but it's certainly doable somebody is also making a giant television that rolls up into a little piece of furniture. >> wow. >> which i can see being a good feature in a lot of houses if we don't want the screens done all the time roll it up. >> like a cabinet door open and goes down 65 inches and goes down into a little table. >> who is making all these screens by the way >> i think lg is making a big giant television and obviously a lot of companies do displays and they are all working on foldable tech. >> if this is in a way becoming wide tech, why is apple on it? >> they are a generation or two behind things. make sure they do it right so they will have a 5g phone later than everybody else like they had a giant screen phone later than anybody else and once they do it, that's fantastic and the foldable phone is not something we'll see any time soon.

today they are pitching the s 10 line, the regular mainstream phones that maybe look like last year's, a bunch of new features and i don't know if they will blow anybody's socks off. >> that does it for the exchange and the minutes are about to be released we'll see you on "power lunch" which begins now >> and we'll see you in just a moment i'm melissa lee along with tyler mathisen the fed releasing its latest minutes on interest rates and investors looking for more clues as to what powell and company falloon do with the fed's $4 trillion balance sheet and we'll find out why the policy did its policy u-turn weeks ago. >> they are higher right now let's get a check on the markets as they stand at 2:00 p.m. eastern time the dow industrials are up by 53 points all three of the major market barometers in the green. the na