>> buy high, sell higher >> spinning off on that. >> josh, we got 15 seconds >> rest in peace luke perry. >> final trade >> no. >> viacom. >> thanks for watching "the exchange" bins now. thank you, scott hi, everybody. here's what's ahead this hour. buy the rumor sell the facts the dow dropping 100 points under the prospect of a china trade deal we'll talk about refunds and retail is this as good as it gets for the tax refund season? if so some stocks to avoid and some to own. is volvo trying to control how fast you die but the stielberg/netflix flap

take a look at the market. the dow is 1.5%. just around session lows, 1% decline for the s&p 500 and the nasdaq let's put today's market action into perspective this is the market s&p 500 that had a 25% run since october. so clearly the market is taking a bit of a breather today. take a look at the russell 2000. that market up 17% in 2019 though, today it's leading the market lower, down about 1.5% which makes this move interesting is that it comes amid a rising dollar, typically this is a market that does better when the dollar is stronger technicals may be a part of the story here this russell 2000 testing its 200 day moving average let's take a look at one sector that's standing out bucking the downward trend and that's the home building stocks despite the data that show housing starts for december was

weaker than expected, pulte group, horton, all seeing a nice move >> that's an interesting one thank you. welcome to "the exchange". i'm kelly evans. oil prices have been rising today above $56 a barrel on hopes of a china deal and slower drilling activity in the u.s for all the talk lately about the economic slow down in china the shanghai index has entered into a bull market let's go to bob pisani down at the new york stock exchange. how do you read this >> this is the kind of action, kelly, that indicates overall markets exhaustion we had a big rally partly on trade talk hopes and now that it looks like the trade talks really are showing fruition, stocks are pausing on that tech is weaker with software stocks like sales force down but also transincorporates are down. seven straight days in a row,

particularly airlines are weaker also, those health care is down with big pharma like fierz and bristol, hmos are also weak. banks also down. retailers are weak as well after a very strong showing last week. consumers discretionary stocks are mixed. home builders are still strong there. now this is a big issue. how much farther can you push the markets on just the fed being patient story and the china trade deal global growth is still weak and the strong dollar is still also a big issue. now the key to getting into u.s. markets into those historic highs and remember we're only about 3% from historic highs is the stocks downward earnings trend and we just need more stable global markets. we need another trading point to put in the mix to get the markets forward. >> speaking of trading points talk for a second about the construction spending report we're down 1.5%.

this is only catalyst in sight the bigger news is construction is down. residential spending down 3.3% the slowest in six years as you said, the sector that you think is most affected the home builder, not just shaking it off today but having a great year. >> that's telling you the market is viewing the numbers backward looking a bit. they are looking forward to a better home spring buying season better spring selling, home selling season overall look at the action in the home builders remember the low rate is really the main catalyst and those rates have been helping respect >> great point well it's been a decade since the loss of the global financial crisis how does this ten year bull market stack up against previous ones let's bring in mike santoli. >> surprisingly similar is how this ten year run looks to some other ones in the past, other

decades that have followed a major, dramatic market low now i say that not because the news has been similar, because economic conditions even but just the experience of stock investors. s&p 500, over the last ten years still a bit of an annualized return of 17.7%. to my surprise it matched up with the ten year following the 1987 stock market crash as well as the august 1982 market low which was the ultimate generational low before the '80s and '90s bull market started what's interesting is not so much it's been a very rewarding ten years for investor but just exactly how the magnitude of that outperformance has been pronounced the market sort of gives you about 1.5 times the historical rate of return if you buy it at a point where it looks desperate. what does it tell us about the future in previous times when we got to this level of trailing ten year returns, it was not the ultimate peak it was definitely guesting on in

years. you had a couple of more years typically and in fact sometimes very strong bull market. >> wow all right. certainly a duration we could be repeating. mike, thank you. markets did start off 2019 with a bang and helping to feed into the numbers the dow and s&p had their best two month start in a year in three decades. not just here. china sane bull market the shenzhen up 26%. how long can these markets last? let's asking steven whiting. welcome. thanks for joining me. pretty extraordinary performance now but people always complain about this and i understand. gem 1 coincided with the christmas lows >> people are not planning their portfolios as if this is a new year's eve party they will do something at the exact end of the year.

they need nobody received permanently. they can go up, they can go down but knowing that exact moment when financial markets range around it, it's pretty key not to plan key portfolios that way. >> this is my question about they international markets the same criticism could apply is it possible to know which of them to be in for a given year should people be in all of them all of the time or not all of them all of the time >> most investors concentrate on one market where they feel most comfortable with home buyers take more risks with events going on. american investors have been best performing market and best performing economy for the past decade best performing financial market for the last 100 years but i think something that mike santoli just mentioned is very important. if you take a look at trailing ten year returns the best performing asset class in the last ten years small cap u.s.

stocks number two large cap u.s. stocks we've never seen a decade in which the asset class that performs best goes on and to be the best performing market in the subsequent ten years we have decades of data to show that >> you are saying don't pile into small caps. >> this particular one is focused on the fact that most smaller companies are more in debted it's across sectors. netflix probably in there. but the same with some of the companies that are on their way down in terms of balance sheet in this late of the cycle you want to be more cautious the opportunity to invest in lagging markets is important you just showed the china market one segment was up 26% year-to-date that's outperforming but 1,200 basis points behind the u.s. market. if you look at it over the last 12 months. the u.s. is leading confidence it's had the longest strongest economic recovery. confidence is high

>> i think buyer beware when you go into international markets. the president over the weekend said yes i'm for a strong dollar but i'm good for a dollar that's good for america does that open the path for, you know, maybe a little bit weaker dollar >> the u.s. is not looking in multiple ways to strengthen the u.s. dollar. this again is important for the coming decades performance why international markets will diversify and augment returns. look back, for example, at the decade that ended in 2011. there were very low risk strategies outside the united states that had extraordinary returns because the u.s. dollar subsided >> but you have to say ending in 2011 >> these are examples. we had the third largest bull market in u.s. history in the dollar, if we ended in early 2017 the federal reserve is no longer trying to force inflation down

like it has over most of the last five decades. very important thing that happened here, this is really critical to understanding markets now. i feel a bit more optimistic about the duration of the u.s. economic recovery but that's because we had a warning sign. that's because the federal reserve, again, was a bit over confident in 2018 with both quantitative easing and rate hikes. >> davos is overconfident. >> the warning sign helped us take the federal reserve from a point of restraining the expansion to protecting the expansion. you just reported on construction activity. last year was a down year for housing activity, housing construction we started the year weak in auto sales. we're showing signs that interest rate sensitive activity weakened last year and we have to be more protective. lower range on in rates and we need the u.s. dollar to stop going up and that's going to be for the benefit of those markets

that are hurt by those things if they went the wrong way. >> great analysis. thank you very much. here's what else is coming up today on "the exchange" >> announcer: ahead, how important are tax refunds to the economy? much more than you think caught in the cross-hairs, the four retail stocks that could get the hardest if refunds remain weak. are we finally getting close to a deal with china? a deal with china? this is "the exchange" on cnbcau through your options trades step by step until you're comfortable. i could be up for that. that's taking options trading from wall st. to main st. hey guys, wanna play some pool? eh, i'm not really a pool guy. what's the hesitation?

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get $250 back when you pre-order a new samsung galaxy. click, call, or visit a store today. welcome back sources telling cnbc china and the u.s. are in the final stages of talks on a trade deal this news comes as china's national people's congress is opening for meetings this week let's bring in the senior fellow at the peterson institute for international markets. we're wondering today if there's a little bit buy the rumor sell the facts when it comes to markets. do you think this is just more what we already thought we knew about the u.s.-china deal or new details as far as you're concerned emerging >> i think we're still lacking most of the details but i think the market is doing well in china because of an increase in liquidity. very strong in the first couple

of months of the year. the expectation that the worst possible outcome on the trade front is now a very low probability. >> there are u.s. industries that look like could benefit the most here potentially. agriculture, energy, in terms of u.s. industries. expanded financial sector opportunity with regard to china. are those three places that you think the activity will most be centered around? >> i think those are the most likely ones, energy, agriculture in particular. >> what about financial services >> well, i think that's already well under way they licensed a whole new series of firms to have either majority or wholly owned firms. asset management securities and there's quite a few additional applications in the queue. i think we'll see more of those in the coming quarters >> this comes as the national peoples congress is under way. will that complicate some of the details, the announcements maybe

that the u.s. wants to hear from china in term of the trade deal? what are your expectations what will we hear from the peoples congress what agenda items are they expected to set here >> the peoples congress is very domestically oriented. it talks about the challenges they are facing in terms of the domestic economy, the terms of fiscal policy and monetary policy but they don't get into issues related to foreign trade and investment obviously, it's a very important backdrop everybody knows what's going on. but, again, the administration in china is in a difficult position they don't want to overclaim on whatever the agreement might be. they don't know what final agreement will look like >> what's your view about the chinese currency which way is china trying to nudge it >> i think over the last several quarters they've been trying to keep the currency from depreciating the daily fix works in that

direction. the requirement they imposed for overshore forward transactions last fall was again trying to hold up the currency so i think they have, the currency has depreciated in the last come with of quarters but much less without the chinese response >> what concerns do you have about this report about this possible trade deal? >> i'm not sure i caught the question >> sure what concerns do you have about the trade deal that's shaping up, if any >> well, i think, you know, the main concern is whether or not it will deal with structural issues or if the u.s. administration settles for increased purchase of u.s. goods or whether the chinese will make some significant moves structurally, for example, reducing subsidies to state owned enterprises. the administration has talked about getting those reduced or eliminated but that's a tough ask >> yeah. i know there's a lot of

skepticism about whether it will happen nick, thanks for joining me today. >> thank you >> nicholas lardy. coming up the great refund scare of 2019 was maybe just that a scare. that could be good news for the economy. how great will the impactbe. could the future of food production look like this? our next guest says synthetic meat may not be killing cows but could kill a lot of jobs he makes his case ahead as we look at the losers "the exchange" is back in two. always three steps ahead. six steps ahead. sixteen. so many steps. you done? a million steps ahead. servicenow. works for you.

welcome back let's get you caught up on the markets because we had a rally of 130 points that has gone the other way. the dow is down 1.4%, around 400 points the nasdaq outperforming with a decline of.85% children's place is seeking today after weak earnings. the company giving full year guidance which was assembly street forecast. hawaiian holdings sharply lower after competitor southwest will begin flying to honolulu offering a $29 introductory rate from california and $29 intra

island flights no good news sales force reported its earnings and cramer saying it's a great buying opportunity if you can wait a few days. jim will sit down with sails force at 6:00 p.m. tonight now to sueherrera for a cnbc news update. >> here's what's happening the house judiciary committee launching a sweeping new probe of president trump, sending document request to 81 people linked to him. committee chairman said the probe will be focused on possible obstruction of justice, corruption and abuse of power. when asked, president trump responded that he always cooperates with investigations venezuelan opposition leader juan guaido has arrived back in venezuela to renew his campaign to topple the government of president nicolas maduro he said in a tweet he successfully passed through immigration checks u.s. backed syrian fighters

battling isralamic state militat were forced to slow down because they are using civilians as human shields. and here at home actor luke perry died today after suffering a massive stroke he was surrounded by his family who said they appreciate the outpouring of support and prayers for him. perry starred in beverly hills 09210 and riverdale. he was 52. you're up to date. that's the news up date, kelly >> so sad. thanks, sue. just about 30 minutes to go until power launch i'm joined by melissa lee. >> this is the one we were just chatting about, conscious investing. did you ever watch your portfolio with your values >> better than unconscious investing. >> apparently medal enamels do so john hancock is launching this platform called coin which

allows people to pick three impact areas pick three and drum up this diversified portfolio for you. so here's a quiz cisco, which category? >> tech company. what basket would that fall under. three choice goender equality, climate action or clean water >> gender' callity >> winner! we go through what companies fall into various target, how much it costs and whether this is a good thing for your portfolio. >> who is keeping track of whoa is in or out and why, how much that will cost we'll see you then we have a news alert on the fda. >> reporter: hi, kelly scott gotlieb announced they are taking forceful new action against retailers and manufacturers to fight against

access to e cigarettes and youth access to e cigarettes in his release he mentioned walmart. he scene a letter to that company whether there's a corporate wide issue related to their stores of violating the law by illegal selling tobacco products the reason for this the fda says walgreen's appears to be the top violator in selling illegally to kids e cigarettes under age kids they found 22%, more than one fifth of the 6350 stores they inspected have illegally sold tobacco products to minors other stores, other chains following walgreen's that violated these policies, marathon, exxon, bp, citgo and mobile scott gotlieb testified on capitol hill last week the latest is this letter to

walgreen's stock down by the way walgreen's 2.5% >> one of the worst performers here's what else is ahead on "the exchange" >> announcer: coming up will volvo be able to control how fast you drive >> spielberg goes after netflix. elon the masr teof distraction raising revenue by selling montana. it's all ahead on rapid fire k

let's get you up on a few stories that should be on your radar today. this is rapid fire welcome, everybody first up the u.s. and china are getting a deal and just not the one you're thinking of office depot and alibaba are teaming up for customers the chinese ecommerce giant would have access to office depot distribution network what does this tell us about alibaba's plans? >> it's a great deal for alibaba. office depot, office max huge presence. i wonder what's in it for office depot. clearly if the chinese start to

come in to buy office depot it might not go so well this is the next best thing or a better thing given they get to introduce this whole supply chain and logistics operation to aid small businesses behind this office depot store front >> what can they do better than the currents company essentially you say that, they would do more with it maybe than existing >> what they can do different. they hope to get into small businesses even product generation process, not just when they need office supplies, when they need office furniture. maybe they need a new supplier or manufacturing facility for some new designer idea they have the idea is they would then go through alibaba's network. alibaba is putting dollars upfront to get people to buy things from them you buy $2,000 from alibaba you get a $2,000 discount. they are investing >> there's the kind of

relationship that we're talking about, you know. now if all of a sudden things are less chilly you could see a lot of activity here >> potentially i think this is fascinating from an office depot standpoint >> why did it go up? >> i think office depot is one of those resellers that's been disrupted by amazon and has pushed further into services this highlights that essentially becomes this go-between for some of the smaller business customers that are looking to get into things like manufacturing and here's what was really interesting to me in terms of office depot and where they are garnering more of their business it's more business to business than business to consumer it provides 69% of revenue up from 49% about two years ago this is a company that's trying to re-invent itself. >> i just kept waiting for that paragraph to tell me what office depot gets

they are giving their customers to alibaba maybe there's a payment share. i don't know why the stock was up or why office depot would give its customers to alibaba and think this is a great joint venture. >> that's my question. the only thing i can think the stock is up because there's a value that alibaba sees what just a few years ago -- >> better than dead. >> existing locations. >> yeah. >> and people, the feet on the ground everybody will order through the phone. people and locations don't matter that's what office depot has got. >> wait until you hear this story. volvo is pumping the brakes and cutting the top speed for all it's models to 112 miles per hour they are considering other possibilities to limit how fast the cars travel in certain areas like schools >> here's the news, volvo can go 130 miles per hour

i mean holy cow. you can only go 112 in your volvo. i don't know any volvo driver that wants to go over 80 miles per hour >> why do cars go that speed when we know no one should be going that fast. there's a certain liberty that comes with that, right >> some of it is ego i covered cars, ferrari, lamborghini that go over 250 and owners have never gone over 90 or taken to it a track a volvo, you don't care how fast that car goes. this broader idea of limiting how fast it can go, 20, 30 miles per hour in a school zone, near a hospital that's where they are headed >> does that mean it could soon be coming to all the cars in the marketplace. >> that's the big question it feels a little big brother to me an area where this seems like a natural application something like the trucking industry especially given the insurance piece of that and the fact that you have the carriers are

essentially want to see their test drivers in the vehicle that they invested a lot of money to be driving safely. it feels big brother the other piece that's interesting is volvo has come out to have a debate or discussion about this. they are right >> every parent want one of these for their teenager >> that's true first of all -- >> then this is potentially leading to autonomous driving that tells you no. >> exactly >> that's my point >> and the car says sorry you're not getting there now. you're getting there at 9:06 that to me is the larger question netflix is firing back at steven spielberg after he campaigned to exclude streaming services from competing at future oscars. in the past he said netflix should compete for emmys there's some talk netflix got

snubbed at the oscars to make a point how hollywood wasn't happy with its distribution. >> it's pretty serious the fact that you look at the oscars this year you have "green book" versus m roma do different movies. one where brown people live in the native language. the other that a lot of people, you know, in the "green book" thought that was that movie dealing with race. more traditional type of movie won but not everybody was happy about that >> what do you suggest netflix should do differently if anything, that being the case. should spielberg be backing netflix because they showed a movie that showed a true reflex of the community >> "green book" was more spielberg's movie. who gets to decide how stories

are told spielberg is advocating for a more traditional model >> even though he hated all those superhero movies >> it's not just how stories are told it's how to distribute that. that's the bigger piece. we're seeing around this precipice of disruption how people are able to access content and movies it's not just about the shooting platforms what it does to movie theater companies and everybody else who has a stake in how that current distribution, that three month window operates. >> if we have to talk about montana we have to talk about elon musk. elon musk said tesla will be unveiling the model y. the stock today down 3% coming a few days after the sec asked a court to hold musk in contempt for his tweeting is this taking the focus on the company, saying to everybody wait a minute i got the model y

coming over here and hey look at this thing instead >> this is supposed to be 10% more expensive than the previous model. he's trying to boost margins the big question is can they go cheaper not more expense jennifer these cars all look the same to me basically the same battery, same bubble on wheels and you call it the y or 5 or x or whatever. i don't know it's not transformative for the company. this car is not getting a whole new crossover market because it's two inches shorter than the x. >> who is it appealing to? >> there's a big market for crossovers most people who are big tesla fans are already big tesla fans. now they are building this car that looks a little like everything else but smaller. i don't think it gets them a much broader market than where they are the price difference is also not that great 10% more expensive i think it's incremental

>> so much auto shame today. i think you bring up a valid point. how will they produce all this what does this do to the cash issue. what does it do to the legal issues whether it's the sec taking a closer look at elon musk or looking to close these stores on a state by state level >> john is like i'm going to talk about montana there's a petition circulating online asking for the u.s. to sell montana to canada as a way to help pay off the national debt it would only cost a trillion dollars. it would help the deficit for a year >> first of all a woman from alabama claims she started this idea alabama, seriously >> sell alabama. >> it would raise more than a trillion dollars >> i doubt it.

>> i'm too much of a patriot to stand for any piece of the united states being sold absolutely not >> does canada want montana? that's not clear to me >> there was great debate among montana legislator one wanted to pass a bill saying we're not going move to. a democrat said what about us who love maple syrup, free health care and want better teeth we want to move to canada. >> thank you all stocks selling off on renewed concerns today we have that potential trade deal with china but we'll talk about the moves you should be make with portfolio next the dow down 129 points. we'll be right back. we see breakthrough medicines getting to patients in record time. we see harnessing natural gas unleashing the promise of clean energy. we see engineers simulating the future to improve today.

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welcome back stocks opened on a strong note but selling off on the news of

week housing data and trade between china and u.s. may not have teeth jim, you know it's interesting that that construction report is getting so much attention for being weak but home building stocks are up. where do you think this weakness is coming from >> i think we've come 21.5% december 24th and we're right at a critical level look back on the six month chart three different highs. i don't want this to be the technicals the fundamentals bleed in here is that i think the market wanted real live resolution to the trade dispute to go above those levels we haven't really got that yet to see it and today technically that's a very bad thing, make a higher high and lower low. but it looks like we could close. if the next day tomorrow we take out those lows i think we go back to probably 3% or 4% down

to 2,600 and change and wait for something that's believable to come out of china. remember, we've rallied on the china thing a lot of times before even if there is some sort of an agreement we might have a buy the rumor sell the facts kind of thing. >> back to our first discussion where steve whiting talked about this rally over the past ten years and you had to be in it all along. so yes this could be the end of the move maybe we're going back it's really hard to know, isn't it >> oh, absolutely. there's a lot of people i know who make a good living know about it on short and medium time frame history does tend to repeat itself if you're talking about the long term investor the thing i think is most critical here is if we get a resolution to china and then the fed doesn't immediately flip flop back to hawkish, if they allow -- remember at the beginning of november they were on this automatic tightening path and all of a sudden it was the trade deal, brexit, little

bit of government shutdown, bad numbers coming in. so the trade deal gets settled realistically they would have reason to come back in and start talking tough again. if they do that can affect the rally. if not that's where we break through those levels >> goes back to the china trade deal as it has so many times lately jim thanks so much for joining us coming up, synthetic meats which meat grown in a lab from animal cells may soon be hitting a table near you while its good news for cows it good spell disaster for the food industry want more from your entertainment experience?

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learn new voice commands and much more. clean my daughter's room. [ ding ] oh, it won't do that. welp, someone should. just say "teach me more" into your voice remote and see how you can have an even better x1 experience. simple. easy. awesome. welcome back about 500 point swing today. we started off the week in triple digits in the green but now gone the other way the dow is down 328. that's a 1.2%. the nasdaq is down .6%. the best gainers names like boeing also the ones being sold today. there's a look at the fang

stocks alphabet or google is down as well to the point we were just having about the china trade issue a lot of names have been rallying on progress towards a deal there are ones that have been weakening a little bit in the session today. we'll continue to keep an eye on it as we head into the close >> 2019 started with many americans nervous they would be receiving a smaller tax refund turn out those fears are unfounded. le steve liesman is here now with how important refunds are tomorrow to the economy. >> jpmorgan will release a study tomorrow how important tax refunds are. here are some astonishing facts from the studies that looked at millions of chase credit accounts from 2015 to 2017 four fifths of families receive a refund

it equals a six week salary. spending for the average family receiving a refund jumps 74% in the week after the refund arrives in the mail from uncle sam. if you want to know, kelly when christmas really arrives think february not december. >> the rate was lower last year you get the benefit that way if you weren't aware you might get less than expected, different story. >> you're now into a big behavioral economics thing because people should not be getting refunds if they can help it however, it could be a method of forced savings people use. >> for sure. let's bring in a senior retail analyst. you've been looking at the retail companies, the stocks which are really geared towards this how are they performing. what is that telling us?

>> it's exactly that point you think about the sticker shock of how much money do you have that you've been thinking about the entire year versus what do you just get today and as you think to steve's point february is christmas, valentine's day, a lot of retailers that will year, last e where it looked like we were really falling behind, and i think as we had victoria's secret last month results were lackluster and now we're balancing back out. >> zim ysiemian, now we're 2% compared with last year but jury out the rest of the season >> reporter: yeah, so what's interesting, last year, last week, we peaked in terms of the average, how much people got back and now it starts coming back in. what we see next week, i think, will be really important we're in the middle of this q4 getting holiday results, a backward look on spending.

february will matter as we think about the progression of the retail tax refunds or the impact on retail, we're at parity. we care a lot about what it looks like. >> results show that the total number and amount of refunds running 3% to 4% behind but the average refund is higher one thing that's interesting siemian, you can talk about this people find out they're getting a refund, right? but they don't spend more in the time while they're waiting for the check. j.p. morgan chase data shows it's up like $90 spending in a week and after that, nobody spends the money before the check arrives. when the check arrives is when they go crazy. >> reporter: i think we prefer that to be the case. i think the timing matters i haven't seen that data but think about what is the catalyst now to spend you have to spend on valentine's day. there's no excuse saying, i didn't get any refund yet so those flowers aren't going to

come i don't know that's going to cut it if you think about after the fact, now a lull listen, maybe it's the prime amazon should start a tax refund day. july and black friday right now but i think that makes sense the notion of how much wealthier do you feel right now and now get that sweater by the way, as it's starting to get warmer it hits an interesting point of time and i think right now, what we'll wait to see. >> last question to you, to watch signet and l brands but those reliant on consumers a little bit down with the disposable income chain with ross stores. if you think refunds do poorly, and then buy them. >> reporter: the wage conversation, who's benefitting from the increased minimum wage. we talk, i think they have yet to be seen in a vacuum, i'd be valentine's day and lower income would be the most concerned about if you

believe the refunds slow down. >> do you think this will shift away we'll look back at this period where people got these tax refunds and that was a big part of the american spend every year do you think the tax code and awareness about how this works will start to move away from that or no >> i think there's bigger forces at work herement i don't kn i'll go all sorts of crazy hoops not to write a check to uncle sam. i'd rather overwithhold during the year a lot of americans say, after reading the data in the study, i'll go back and look at retail sales. i think the rhythm of the year is different than what i thought and major appliance sales. i think are a february, have to be a february or march event, if there's one thing you're waiting for, i'll get that new refrigerator, washing machine or dryer with a tax refund. >> my only requirement is that you come back here and tell us about that. >> i'll check the data. >> siemian is like, i've got to

get back to shoptalk thank you, siemian joining us and steve liesman going through the numbers. "the exchange" is back in two. your employees must love you. [ chuckles ] thank you. you could say that. i love you. servicenow works for you.

welcome back list filing going to kick off the ipo process expected to take place later this month and reviving the debate over dual class structure and founder controlled tech companies. deirdre bosa with more on that. >> reporter: kelly, it's certainly catching some attention that dual class structure and dual class structure is two classes of stock with distinct voting rights usually meant to protect the founder. over the weekend, the council of institutional investors expressed deep concern with egregious and likening co-founders to supreme monarchs in perpetuity. the cii with the call for the nasdaq to curb some listings it revises, you say, that debate over founder controlled tech companies. alphabet, facebook, those are examples it has worked out with outperforming the broader

markets but snap, whose co-founders control 96% of voting rights and seen the stock plummet, that underscores the risk in this kind of structure i keep reiterating this, we don't know what lyft's structure will look like the voting rights section is a place holder, so doesn't yet tell us how much control co-founders john zimmer and logan green will have but i'm told from a source that together they'll have slightly less than majority control and there will be a sunset provision and lyft does have an independent chair and sean, the former ceo of trulia still, kelly, this structure is going to stand in stark contrast to uber, expected to go public this year but not founder led. stepped down after shareholder revolt and the board implemented a one share, one vote system another difference, kelly, the size of the boards lyft has just ten members of its board, uber expected to have 17 when it goes public. back to you.

>> wow, 17 deirdre, i thought maybe it was a matter of degree snap so far in the extreme with 96% control that our investors may be comfortable with people having a plurality of control. maybe even 51%, something like that but snap just pushed it to 96% >> right and that's why you've seen a lot of this backlash because there's nothing really that investors can do despite the dismal performance of snap stock and important to look at these varying degrees. i'm told the co-founders at lyft have less of the majority control. we don't know whether that's indeed the case. that's going to be slightly different and that all important sunset provision and even the council of institutional investors said the sunset provision would go to address these concerns and over time, john zimmer and logan green would haveless and less control but on the other hand, lets them look at the long-term. so there's a lot of arguments as to why founder led companies

with some of these protections are built in to be a good thing. >> that's why you can't necessarily paint it as black and white but say it's closer to one end of the spectrum than the other. we'll watch it that does it for "the exchange." i'll join tyler and melissa for "power lunch"? just a moment. >> i'm melissa lee stocks deep in the red trade talks near the finish line what is worrying wall street we'll break that down. the ten year anniversary of this historic bull market how much longer will the record run keep going and the next hot pharma stocks to buy right now, a number of them are actually rallying in the red tape today we've got the list "power lunch" starts right now >> indeed it does begin right now, melissa, thanks very much welcome, everybody, to "power lunch. i'm tyler mathisen an early rally quickly