>> i do. i just bought it after the beatdown >> scott, i want to reiterate, ald, is my final trade today >> i knew you were going to do that >> earlier this year, i said this was going to be the year for winnebago. i'm repeating it now >> thank you thanks for watching the exchange with kelly begins now. thank you, scott, hi, everyone, here's what's ahead this hour. adding fuel to the fire. weak economic data at home and abroad, stoking fears of a global slowdown. have we reached a point where bad news is bad news again >> the emperor has no clothes, why that may be the best way to describe apple right now how the rise of artificial intelligence could lead to a rise in fake news and especially deep fakes >> do you know about deep fakes? >> i don't i'm eagerly awaiting what that report will be >> i'll tell you all about it. >> we are now well off the worst levels of the day, only off by about 53 points on the dow

jones. off by one quarter of 1% the nasdaq composite as well only off 1/10 of 1%. one of the key sectors to watch if you will, is the biotech side of things. we're off 1 and a quarter percent for the nasdaq the shares are currently up by about -- flat for the year but having its worst week of 2019 yes, it's a young year, biotech still one sector to watch. we have two stocks of the day going in opposite directions dominos pizza off by 9%. a bad day for them, after misses on profits and sales also, concerns about comparable store sales. meanwhile, dine brands, applebees up by 10% after it beat profits and sales and showed good signs in comparable store sales growth i hop, that's a share to watch there. welcome to the exchange,

everyone i'm kelly evans, a poor reading on durable goods kicked things off this morning court orders are down for 4 of the past 5 months. existing home sales dropped back below the sales pace in january. and to top it off, it stayed expansive. not a lot of great news this morning. bob is at the nyse with more >> this is the problem we're down today because number one much of the trade deal optimism is already priced into the market more important, we are down because that u.s. economic data you were talking about has been awful. durable goods, existing home sales, all adding to concerns the u.s. may be joining europe and china as part of a larger global economic slowdown that's a big issue where does this leave us the good news is that central banks and particularly the fed appeared to be out of the rate hike business. the market loves that. and trade deals have given a lift to stocks

the negatives remain concerned about the growth slowdown. and the poor global economic data, which now includes u.s. data >> we're about to talk more about it what is bob's take on bad news being bad news again >> bad news is bad news this time the idea that we were -- the fed is out of the rate hike business what we want is slow moderate economic growth. if the u.s. has a continued string of bad economic news, forget it, it could throw the entire global economy into recession. you want to talk about a slowdown in earnings, forget it, we're talking zero growth this year if you ever go into a recession, we could have a 20% decline in earnings, a 20% decline in the stock market it's the recession concerns what you want to deal with right now. >> as bob mentions the overseas data, so far is looking worse than the u.s. figures. germany just slipped deeper into contraction territory, markets are not responding well to these

developments 50 point decline in the dow isn't terrible let's ask my guest if bad news is bad news once again nancy tang letter is here. the shoes, this is the right place to wear them we're going to be able to see them they're beautiful. anyway, paul christopher is head of global market strategy. and great to have you both here. >> thank you >> real quick nancy. how concerned are you about a u.s. slowdown. >> i'm not i think we make it -- we're going to get earnings slowdown those numbers are backward looking. if we see anything out of china, we're going to see things reaccelerate i would disagree slightly, that will bring germany out of the doll drops, i think part of this is because those numbers are looking backwards and stocks are sniffing out stronger global growth look at what's outperforming this year. >> this is what i wanted to ask you about. the msci world index, is at

something like a four month high with all of this going on. what explains that >> you've had some good news coming out of the u.s. china trade negotiations, that helps a lot. and the chinese have really been trying to pull out all the stops on stimulus, the problem is, it's not the same kind of stimulus they used in '15 and '16. they're trying to stimulate small and medium sized private enterprises. that's a lot more like hurting cats than you just tell government run companies to spend a lot of money and borrow a lot of money it's going to take a little longer in china, we agree with nancy, you will get an uptick in global growth the second half of this year, we think that in the meantime, things could get rocky here, we do look for prices to be higher the end of the year. >> both of you, when i'm asking about the u.s. oar europe, you're bringing it back to china? >> nancy, you have stocks i notice are in the tech sector. you worry about that exposure? >> no, i mean, we're valuation driven

we're buying the stocks at the lower end of the valuation we got chance in december to go into things like broad common and add to our other holdings. we bottom ticked in january. rounding out our holding you want -- these are stocks you want to hold for the next 3 to 5 years. earnings plus the valuation levels that we're seeing are not out of line. the growth is going to slow, but not materially >> what doi have priced in for the fed right now, what do you guys think they're going to do in terms of the rest of the year >> i think you get another hike. there will be a surprise initially, some negative volatility i think you get another hike i don't think the economy is as dire as these recent numbers show >> even the jobless claim series here is still -- it's hanging in there, this is like the last -- i understand that the recession might be close by the time the thing picks up, but -- and it starts to sound like we're explaining a lot of this away, but there's not yet evidence that the pace of layoffs is

picking up, anything like that is happening in the u.s. what do you think happens with the fed now. >> we agree with nancy, we think you'll see one rate hike going-forward probably not very soon maybe at the earliest midyear. and probably more likely until the end part of the year, when after all, that's when we're expecting the growth numbers to look a little more reassuring for the markets. >> should investors stay in u.s. stocks, paul >> yes, we like cyclicals right now. we even like emerging market stocks right now in that cyclical area, we like industrials. consumer discretionary, and we went overweight in november. >> in terms of the good news there is good news we just learned that u.s. oil production hit 12 million barrels a day for the first time in the weekly reports. crazy, it's up from 10, probably just a year ago, you like a couple energy names? >> yes >> tell us why >> well, because marathon is highly leveraged to the price of oil. if we do see resurgent growth

globally, we will see oil prices coming back, and they already have obviously, and we like the exposure, the cyclical exposure you get, similar to what paul just said, we're overweight, the industrials as well. >> there's a bet here that things are not as bad as they look, and we're also betting on the fact that we've never gone into a recession at a 25 basis point. usually it's closer to 2, we think even if you get another hike this year we have some room to go in this rally. >> speaking of the sensitive high frequency data. the jobless claims were good this morning we're talking about the semiconductors being on a win streak we're talking about the price of copper and other metals being at a high as well is that telling us the growth concerns are overdone? >> we do think the growth concerns are overdone. and we're looking for commodity prices to come up as the year progresses >> all right, well, we'll leave it on that note. >> we'll see >> we have a bunch of bad data, everything seems fine talking to

you guys until the jobless claims tell us otherwise, thank you very much >> here's what else is coming up today on the exchange. >> ahead, consequences that will reverberate for decades, one expert says that's what the trade war means to one specific industry he'll tell us which industry and why. the emperor has no content as apple struggles to regain its innovation crown is m & a the only answer and the tear heard round the sports world, what last night's nike shoe debacle could mean for the company.

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could today be a turning point on the trade front progress on outlines xray la has the latest >> we've seen the principles from each side going back and forth between the eisenhower building on the white house campus we're trying to parse all of the movements here, we don't have much is in the way of information provided as to what is going on in the room. i tried to ask an ambassador and the treasury secretary today

where progress had been made and what remained. what we know from our sources is that there are currently six memoranda of understandings that are currently being drafted. a few different topic areas that are of interest to the current administration, cyber theft, force transfer, these are the buzz wards we've been hearing about throughout this trade conflict the u.s. has asked china for a 10 item list, deliverables they want think that that list might include more purchases of agricultural products and the like we'll see, china can't agree to all of those things in return back home with nothing to show for themselves the question is what will fall between the cracks as this deal gets worked out.

>> the closer we get to the trade deal happening, the more skeptical people are about it having teeth would he protest if he felt like there was not a substantive deal he was looking for >> certainly that parlor game is heating up there are people who believe that ambassador light highser may white a different job within this administration so we will see where those musical chairs end up getting played over the next couple months, and whether he sticks around to see the new u.s. mexico trade agreement. >> interesting, kayla, thanks. while that progress may be underway apparel and footwear buyers are pulling out of chinese factories any how. and the consequence of that version will reverber ate for decades.

welcome? >> thank you >> why are people leaving china? >> scared. just scared. they don't know what's going to happen we can't rely on governments at this point to tell us what our business future should be. the analysts love to call you and say, what's your exposure in china. and if you're over exposed in china it's a concern because we don't know. and in our industry. which is already a heavily tariffed industry. the idea of addition altar is is panic hitting a new high >> how heavily tariffed is your industry already >> prior to all these new tar f tariffs, we already paid 51% of all tariffs collected. and now you're talking about

tariffs on tariffs a long time ago, president trump, when he was candidate trump was talking about a 45% tariff on china. you look at my woven shirt, you add 25% -- >> what happens if we went the other way? a lot of the times tariffs are being used as kind of the stick to get a trade deal. what happens if all of a sudden it says, we're all coming to a mutual agreement that those tariffs are going to zero, would something like that ever happen? and what would that mean >> it would be wonderful if 2 it happened these tariffs have been around since the 1990s. they were supposed to preserve production in the united states. today 90% of all apparel is imported so we know that tariffs don't

work they just add a tax on the american consumer. >> i heard the estimates of the tack amount, adds $1,000 a year or something like that it ends up harming people that benefit from cheap goods as this plays out, where are your manufacturers going and is that going to make the clothes more or less expensive >> what most people don't realize is, in america today 41% of all apparel comes from chine 2345, 72% of all footwear. if you have 41% of apparel coming from china. who's next vietnam is currently 14% that's 55% from two countries, add in bangladesh, indonesia, india that's 70% of our market, which means we don't have a lot of choices when we vacate china

which means that prices will go up and you will be seeing that in march whether there's an agreement or there's no agreement. we have now successfully as a country cooked inflation >> what would it take for making apparel in the u.s. to be competitive again. do we even have the wherewithal, leaving china. technologies like apple have faced a similar conundrum. the knowledge about how to make these products now lives there >> we'd love to make more apparel and more footwear in the united states. but we're talking about 3% of the market it's been growing a lot, but it's never going to hit the levels of what we currently import so you're trying to build an arc in a day when you can take a cruise ship. >> are there any markets left?

or is this an idea of a race to the bottom. >> here's some things we do really well in america we grow cotton in america. we can make great fabric in america. the problem is, we can't assemble in america because the costs per operator per day per hour is just too high. >> and going higher with minimum wage and the tight labor market. >> we have to be competitive in america on a worldwide stage that's where we are going to see our growth. >> it's getting more expensive, that's the message i'm getting from you >> thank you so much for joining me today appreciate it. >> why the next meeting between president trump and kim jong-un could actually increase the chance of war in the region. that's according to one of our next guests. and he'll make his case ahead. consumer reports annual scorecard is out, and it's bad wsoresla

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department and the sec, related to the safety of its baby powder products and coke is raising its dividend for the 57th consecutive time. the board authorizing a new purchase program coke shares are up 1 1/2%. >> kelly evans, here 'what's happening at this hour, the trump administration has broken off talks with california in that dispute over mileage standards. the add 34i7b station wants to block tougher obama era mileage standards for vehicles teachers in oakland california have gone on strike demanding smaller class sizes and a 12% retroactive raise. they earn the least of teachers in the san francisco area. apple is working with goldman sachs on a giant credit

card the two will roll out this spring it would be associated with mastercard, it will be paired with iphone features to help apple customers manage their finances a major winter storm is moving through arizona now i-40 and u.s. 93 have been shut down up to 11 inches of snow has already been reported with more on the way did i mention that was in arizona? >> it's a high altitude area >> but still >> good skiing up there. >> especially today. >> it must be wintertime or something. 30 minutes to go until power lunch. i'm joined by tyler mathison >> i've been on power lunch for years, we never serve lunch. today we're going to talk about food we have the ceo of dine brands and the ceo of dominos

earnings coming out, dominos slipping a little bit. we'll talk to the ceo there about their move into digitization and dine brands doing well today. and we'll talk about nike and the exploding shoe, and what effect that may have >> did you see that? >> i did see that, it is way too bad for duke and him >> they had just shown president obama is here. the crowd was -- and basically the first play of the game. >> took a lot of juice out of the game if you're a tarheel fan, you don't care how you get the win nike's shoe blows out at one of the most high profile ncaa games ever get ready for deepfake news. and the zzbu from the booze

world ahead in rapid fire. thank you. you could say that. i love you. servicenow works for you.

welcome back, let's catch you up on a few stories that should be on your radar today. it's time for rapid fire

here with their takes are john fort, leslie picker. let's talk about the basketball story we were just discussing. nike has been the official shoe of duke basketball for three decades, that partnership may be under a little strain. this is 30 seconds barreling into the game, he suffers a knee injury, look at his left foot, his shoe tore apart against north carolina people had paid huge amounts to watch this game, to be there the cheapest ticket last night was the same as at the super bowl is that right? >> yes >> obama was there >> he's sitting in the second row, he says his shoe broke. >> how unusual is this >> it happens every once in a while this guy is a freak of nature he would be the second heaviest player in the nba. and he jumps more than anybody

he's just a freak of nature. >> people say he's the next lebron >> what he's done on the court no one has seen before >> him blowing through his shoe shouldn't concern us i'm not concerned my nike is going to fall apart. i think everyone is completely freaking out this guy will break backboards, but we don't need to replace backboards too many. >> that's not the situation you want if you're nike. it's not like people are going to think, this is what nikes always do. they have to respond to this in some way >> 99.99999% of them are fine. >> this is one person, and i see a lot of analysts comment about whether there's product liability issues here. personal injury lawsuits that could stem from this >> this is a typical american

ambulance chaser. >> i don't know if their litigious or not >> he has to wait until he's a pro, let's say he's drafted number one he's going to get a huge shoe deal, isn't he >> whether that's nike, puma has been a dealer. >> they got the number one pick. they got a bunch of lottery picks adidas has james harden. if he wants to be the star of his own brand. >> would this sour him on nike >> it depends how they respond >> and how much money they put forth for him to sign. water under the bridge, all good, it was a misstep >> yes, they do. and they've paid big time, the steph curry shoe was a flop in the past, this could be a big opportunity for them it doesn't sound to me like kevin is throwing money at this the way he used to

if anything, we're focusing more on performance apparel in that kind of thing. >> whoever thinks he's worth it as an investment it's like venture capital, you get one of them and you hope one of them -- >> well, he seems like a slam dunk >> all these puns. >> i didn't mean to do that. reuters is reporting that lyft is planning to launch the road show for its ipo that would put them well ahead of uber. >> the most important thing for lyft right now -- the smaller of the two ride hailing companies, if you're first, you get the attention of the investors you get to tell your story first. which is important for these unicorns that are looking to get these lofty valuations in an ipo. to be the first one, you get to tell your own story. >> for a little while, for lift, that's currency, isn't it?

>> absolutely. >> i see what you guys are doing? >> i didn't mean to do that. >> the very fact that we're talking about lyft just a few years ago, everyone was talking about uber taking all. >> karl ikon. >> in a way, we'll see how this works out based on structure, lyft could be a big winner down the road >> uber right now, still as far as my sources understand going through that process with the sec. even if they wanted to go out in front of lyft, they can't do that at this time. let's say lyft has a terrible ipo. they never recover by the time uber wants to go public that's going to be the publicly traded company in the market at the time uber goes public.

people lose money on the ly lyft ipo >> it seems unlikely anything could happen >> a lot of these bankers are in new york city where uber dominates. lyft is a big player in the rest of the country >> and loyal customers feel like they prefer lift for i don't want to say cultural reasons, but it was the nice uber, personal reasons. president obama offering a warning about deepfake videos on the internet >> we're entering an era in which our enemies can make it look like anyone is saying anything at any point in time. even if they would never say those things >> president obama didn't even say that, that was comedian and director jordan peele who created that video to warrant public about how convincing fake news and manipulated videos can

be now axios has an article written by a.i. -- deepfakes to me -- this is a pretty new phenomenon. >> it's a new phenomenon the video worries me more than that axios story what bothers me is people taking things that are 99% true we've seen these -- jussie smollett things. it's real people with agendas that worry me more than a.i. that's able to come up with 1,000 stories that are probably fake you. >> think about the marriage of social media, how quickly people could jump to a completely misinformed conclusion based on something that's made up i find that terrifying >> i think that's where brands are going to matter more if all these news articles can be generated -- you think about earnings reports, most earnings reports are auto populated by

computers. the box score story after the fact >> it comes from the associated press or something like that >> the brand is what you have to trust, the computer is going to do so many articles. >> it would be great if that helps educate people about the sources. i'm not sure they're still paying attention >> you watch that video and you say, that looks like barack obama to me. unless you saw the context and the fact that it's been put out and produced as a warning, you're not going to know >> all you had to do this is the a.i. >> it fills in the rest because it's able to look at all the world's text, put it in a big database okay, if you wrote these sentences. >> who this should scare is high schoolteachers. >> writing work assignments or >> you just type in the first sentence. >> how do they combat that

>> artificial intelligence is being used to combat artificial intelligence on the internet it's a battle of a.i. that will take place i spoke with a hedge fund manager who said there's a company out there that mines articles to see what's true? >> going back to handwriting with a pen your computer generated homework assignment >> constellation brands expects only mid single digit growth in the beermarket the company was bullish on the cannabis market. what is happening to this segment of the market. >> it's interesting they're moving toward premium wines in particular a few years ago, we were talking about two buck chuck wine in general has become so popular, maybe there needs to be

some distinguishing between what's good and what's not >> i mean, boxed wine is good, john. >> i don't know what you're drinking >> why is it not selling >> is the lower part of that boxed wine market moving to cannabis >> that's the question, i would assume the lower priced wines are more for the college kids, people just out of college that are looking to that as a cheap way to have some fun on the weekends are they buying the higher priced wine? >> we talked about some of the harder liquors remember we were talking about the new demographic with whiskey? >> they're putting their discretionary funds toward higher priced alcohol. from booze news to cruise news norwegian cruise line is looking at smooth sailing. now with noroviruses, stranded

ships, who would thought they would be doing as well as they are right now. shares are up 3 1/2% >> there was just a video posted about one of their ships crashing into a harbor in puerto rico analysts say the operating environment is as good as it could possibly be right now. >> strong cone assumer. >> the supply of ships out there is constrained enough, they can really start raising prices on rooms. >> have you been on a cruise >> i have been >> i've been "a few actually many. >> would you tell people to get on a cruise? >> no one knows which brand is which brand. we as a cruise industry want all the cruise lines to go well. no one remembers the pr of -- no one knows if carnival crashes into it. all cruises look good or --

>> i've been on one with the kids it was fantastic. >> a disney type thing >> it was, you should go on a cruise >> every once in a while. >> i don't know. how many basketball players have a shoe explode versus -- i don't know, somebody do the math but anyway >> bring your boxed wine, it will be good i see what you did there president trump is set to meet with kim jong-un next week. why the meeting could increase thri owaonheorn e skf r t kea peninsula. when you look at the critical issues facing our world, what do you see? we see breakthrough medicines getting to patients in record time.

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welcome back, we're a week away from the second summit between president trump and kim jong-un in vietnam ahead of the meeting, the wall street journal has been reporting that kim jong-un has been purging elites and opponents in his country

what is his goal thank you for joining me >> thank you for having me >> what are your expectations ahead of this meeting? >> it has the makings of an epic event. the de facto peace that's held in the korean peninsula. i believe that president trump is amenable to giving north korea its long cherished goal of a dream, peace agreement it sounds very nice. but a peace agreement will have consequences it will have a necktive impact of the actual peace. the u.s. troops in south korea will probably have to leave at some point maybe even u.s. troops in japan. it will change the status quo, the balance of power in the region in north korea's favor. >> you think the president might now want to declare an end to

the korean war as part of his initiative to pull back u.s. troops from a lot of international conflicts? >> do you think that is a goal of his and it would mean pulling troops out of japan as you said as well >> eventually irdo because ending the korean war, ending seven decades of hostility. this is north korean version the u.s. is using, like denuclearization of the korean peninsula. why has the u.s. since 2005 repeated north korean lexicon, because the u.s. has assumed, we don't want to paint north korea too much into a corner after time, that becomes the terms that the u.s. has agreed to, north korea has insisted on, and now a peace agreement ending the war.

why would north korea ask for such things? they seek to dislodge the united states from the region from the korean peninsula and japan. being able to further bully, extort, sensor and prevail the far more legitimate korean state across the southern border it has a game plan, i don't think the u.s. does. >> you think the game 34r5plan d be too follow the old vietnam nod el >> i imagine kim jong-un is having daily bursts of laughter when he hears grow the vietnam model. the veed nom model in north korean state has specific meaning, it is to become an unbearable liability to the united states. and do a peace deal as the u.s. did with north vietnam in 1973

compel the u.s. to abandon the south and then march in with guns blazing that's long been the vietnam model. and i think north korea stands closer than ever to achieving that long held dream today at any point since the korean war >> why is it a lot of the south koreans, including maybe the present government there are so quick to want to improve, normalize, have relations with the north. why don't they see this threat you're describing? or do they >> all previous administrations have seen through north korea's game plan. a peace agreement sounds nice. history is riffe with peace deals that have gone awry. this current administration is more amenable to giving north korea what it wants for the sake of expediency, i think president

trump walked into an elaborate trap the moment he met with kim jong-un. the moment he agreed to meet with him last year and now the second summit is reaffirmation of the reality, that it's kim jong-un calling the shots. dictating to the united states what concessions to seek for south korea, always deescalation even if it leads to a bigger problem down the road. that is good business. that is good politics, because the south korean public has no appetite to escalate tension with north korea >> all right very important point of view ahead of the summit, thank you for joining me today >> thank you >> appreciate it very much. weg hares of tesla are movin lor. ♪

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welcome back there's some tough news for tesla today. consumer reports is knocking the company to the bottom of its automobile scorecard philip lebeau has those details. phil >> and kelly, we'll talk about tesla in just a bit. ranks number 19 out of 33 auto

brand. what's at the top of the list in terms of consumer reports annual auto rankings, brands based on consumer reviews, tests from consumer reports, crash test data number one jumping up to number one from number six last year is subaru, coming in second place, as last year's number one, genesis, both ahead of porsche and now talk about the tesla news and it has to do with the model 3. tesla's stock is tumbling following the consumer reports pulling recommendation for the model 3. remember, they recommended it last year? this year, they say there's rieb reliability issues about the fit and finish of these vehicles we asked tesla about this and it says this new data from consumer reports comes from their annual owner satisfaction survey, which runs from july through september, so the vast majority of these issues have already been corrected through design and manufacturing improvements, and we are already seeing a significant improvement in our field data

and again, this is coming based on what model 3 owners have told consumer reports when they filled out surveys and sent them back to consumer reports and here's the interesting thing, kelly, those owners also are among the most satisfied with any model with the model 3, so there's a real dichotomy in terms of what consumer reports and they're seeing also, the bottom three brands according to consumer reports. not a huge surprise here we tend to see these guys near the bottom of the list dead last ranking goes to fiat right behind jaguar and there you see land rover by the way, kelly, even though people are satisfied, we shouldn't be surprised we see some of the models or brands ranked near the bottom by consumer reports despite heavy satisfaction or high satisfaction look at jeep it's near the bottom of the list every year and again, this year, sales are soaring. >> that's true but i'm a proud, we got two subarus in the driveway, so phil say, we're number one, we're number one that's the new volvo

great job. >> safety rating. >> all wheel drive test them in the snow the last couple of cars kudos to them. philip lebeau, thank you apple and goldman sachs, unlikely team and then key to apple's future next. 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, 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.

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apple taking a beating this week first, it got dethroned as the world's most innovative company and then rival samsung grabbed headlines with a foldable phone. things have been going downhill for apple since it hit a trillion dollar market capback on august 2nd. stock down 15% since then. my next guest said deals may be the solution to apple's problems here to explain this, dan ives, john fort is back with us as well dan, what kind of deals are we talking about? >> in our opinion, it's content. that's the thing the video subscription service, ready next month i think the clock starts at 12 in terms of a content perspective. what they need to do we think studio houses like an mgm, sony, e 24 and cbs, viacom, potentially a netflix and they want to be a serious content player i think that's going to be the

first. we also have a gaming acquisition that could be there as a subscription service. >> john, in terms of these possibilities, which have been speculated about for years now, what makes sense to you? >> i think the gaming, actually a lot more interesting than general content. that's because apple needs content for different reasons than other players do. they don't need content to gather an audience because they've got a huge base and a lot of that thanks to content, itunes being in the game early they need to get people to pay a monthly subscription for something and right now, they're very strong in mobile gaming, in-app purchase, that sort of thing. they did acquisition of an ai, somebody who was good at massively multi-play games that focused on arena style, maybe leverage outside of their eco-system to create a premium business like amazon is trying to do at twitch. >> dan, we read about the recent, i don't want to call it reshuffling up top but signaled

they want to do more to feature their content including possibly featuring trailers in apple stores so i take your point about the video games, at the same time, if they want to go the content route, do they have to do something big and transformative, otherwise how could they have enough content there? >> netflix, disney, among others and i think that's why right now, back's against the wall spending a billion dollars in content a year with a rounding error and if they want to be a serious player here, they have to significantly invest in the platform in terms of having their own original content and you look at ai, week to the game and to the game and you continue to go down that road and right now, it's all about services and the installing but need to monetize and need fuel in the tank and weave the content that's why this is the year. >> these are smaller players, then, than netflix acquisition constantly banding about if they're serious about the ambitions, why not go right to

the best and the top >> investors have to be careful not to misjudge apple. this is an extremely profitable company so they don't play these market share games people talk about, oh, amazon is so innovative, look at all the echoes they don't break out the echo as a business because basically selling the things at break even people would murder apple for doing that that's not how apple operates. despite the fact others are doing this or that with ai, foldable phones, are any of those people going to buy those things >> foldable phone. >> so what about, dan, health, the watch, could they solve your growth concerns on that? >> i think health care is going to be a big initiative it's all tied to wearables and the watch and it's about content and health care. the key growth initiatives going forward and defining a period, a dark chapter they're trying to get around. >> john fort, we'll see if they

make any moves >> apparel, 6% of u.s. imports pays 51% of all tariffs collected and those may be going up that does it for "the exchange." i'll join tyler on "power lunch" which begins right now. >> yes, it does. thank you, kelly see you in a minute. i'm tyler mathisen welcome everybody to "power lunch. new at 2:00 today, stocks sinking on a slew of weak economic data but good news on those trade talks, is it time now to retreat from some of those positions you may have put on or will the market just keep on rallying? plus, shares of domino's down on weak earnings. brands soaring on its results. we have the ceo of both companies here and they brought food the fallout from nike's big shoe fail chris "mad dog" rousseau will weigh in as "power lunch" begins right now. >>