move we don't talk about it every day. >> and everybody is talking about the competition is right there, the competition is right there. people aren't dropping off the service and they're raising prices. delta, flat for the year. >> lululemon reports i think it will be good. "the exchange" with kelly begins right now. >> thank you, scott. wall street holds its breath a new bill on the hill is aiming to tax transactions. and a reality check, the spring housing season upon us and the data is all over the map. we'll look at what's happening on the ground. watch out, netflix the big threat that investors aren't taking seriously enough but we begin with bob pisani with today's markets hey, bob. >> hello, kelly. we're searching for direction, but there are several movers out there, including gamestop, up

almost 2%. it's been in the news recently, gamestop is one of those buy-back monsters, in the last few years, and i mean a lot. gamestop has cut shares outstanding by 38% since 2010. this new buyback would reduce shares by an additional 25% if fully complemented wow. elsewhere, we're kind of in groundhog day, stalling out around 2800 on the s&p good after rallying since december, and the keep leadership groups have stalled out look here, semiconductors have been flat in the last seven days the small cap rutle 2000 is down 1%, another key group, as are the banks and the industrials, which often moved on trade news, but they haven't moved at all as word of a potential deal finally leaked out the one part of the world that is move is china

shane high up against overnight at the chinese government has announced wave after wave of tax cuts and stimulus, including more last night. kelly, back to you. >> thank you, bob. welcome to "the exchange," everyone the ism nonmanufacturing index come in above expectations with a reading of nearly 60 the new orders index was the strongest since 2005 november sales the month before revised sharply lower, and we'll have more on housing later china says -- for more on that, eunice yoon is joining us. >> it kicked off buffett wiggest political he events of the year says 2019 will be a tough

struggle he said that the gdp target has been lowered to a range to 6.5%. cpi is expected to be manageable the economy will create 11 million new jobs, because it's down from the actual number that the economy generated in 2018 at 13.6 million the premiere said that stability will be a guiding force, so the deficit was rose to 2.8 purse. to help companies survive the slowdown bank lending will be a priority and the government is green lighting local bonds, 59% more from last year, which a lot of economy i found surprising to fund infrastructure. kelly? >> eunice, this definitely has my attention investors have been asking,

don't they have a stimulus problem? >> yeah, well, you know, that's up for debate right now. there's a lot of economists who are taking of line of the government, which has been significant. these are targeted measures, but then more and more i've been hearing kind of like what you're saying, more economists were current about that this could be a greater stimulus, and that it's all going to add up to one big stimulus package. >> you know, it's interesting to ask what is happening on the ground in china. on the one hand there's quote/unquote still 6%, which is good on the other hand there's been individual indicators with lousy numbers lately what can you tell us with someone who's had so much experience there, what are you feeling these days >> well, in terms of what you're feeling, especially anecdotally, you feel like things are slowing down the restaurants are busy, but when you're in the restaurants, the conversations are more about

what's happening with the economy. also within the tech sector, just wave after wave of job losses, this is a sector in the services industry, supposed to be a sector that's supposed to be picking up the job losses in the manufacturing sector even today the premier acknowledged that the trade dispute was having an impact on the technology >> eunice, thanks so much. great to see you eunice yoon in beijing tonight. how much longer can that continue let's ask samir. can it keep going if the economy is weakening like eunice suggests >> we think so we expect it to be the leading indicator. if we can get some resolution on trade, again, it might be a bit

of a hit, but over time, you know, it gives businesses both in china and the u.s. more clarity on how and whether to invest in china. so that will probably be a bit of a bump. right now a lot of countries have been wondering whether to base more of their marketing in china. we they the fed's pause, the ecb's pause et factors in poifl. >> whfor the most part we're saying it will he continue to slow >> so you say the people can take the 25%, and -- so chinese stocksively 25, maybe po%, you think that can continue?

probably the big reason behind the underperformance was china ease reforming if for the short term they're tutting those aside and tism lating their economy, that will be a big deal. that's been the headwind that kept them from performing. now, you raise a great point as far as eventually that will lead bag into the debt levels being too high >> yeah. it sounds like a better story in the short term than in the long term we'll see. they have a tricky one to navigate now even the u.s. is, you know, distancing itself, expressing its displeasure with what's been happening there, u.s. companies have gotten singed do you think people are exiting

that market? >> it's possible they do tend to rotate and come in and out of favor. there was a load of euphoria with modi getting elected, and so you start to see geopolitical tensions start to rise you start to see tensions also rising with china, because they are on the side of paxson, so maybe we have reached a peak in india. maybe there's a rotation back to china. >> let me ask you about the u.s. before i let you go. we had a similar phenomenon after trump was elected, and we've since had a reset. what happens next? can u.s. stocks continue to outperform do they need another catalyst? is the number we found on the ism this morning could mean there's more left? >> we they outperforming that is

going to be tough. a lot of what's good for u.s. companies will probably also be good for emerging markets. >> but they've been cheap for years, samir, and they're cheap for a reason i guess we're learning >> so, again, i go back to the one thing that's change is the chinese are out-stimulating, whereas before they were starting to do the reforms the fact they backed off those reforming is the key difference. >> samir, thank you so much. here's what's ahead a "the exchange." >> a new big being unveiled, what it could mean for investors and wall street. purdue pharma may be considering bankruptcy as the lawsuits file up will taxpayers be left holding the bag for the claims and with the spring housing season kicking off, what can

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. welcome back house democrats have reintroduced a bill that had reintroduce a levy tax, with

alexandria ocasio-cortez. >> the bill is called the -- the tax would be 1% -- 0.1% every the israel of all transactions of stocks, bonds, driver tiffs, and apply to any transaction that takes palace in the u.s. or involves u.s. firms or citizens. the only thing are initial issuances and short-term debt. the bill is also projected to raise big bucks, $777 billion over a decade, kelly that could help pay for the broad expansion of the safety net that the democrats are touting on the road to 2020. >> let's bring in the former chair of the house committee and

terry did you havy great to have you both here. welcome. you've got a front row seat to what would happen with financial transactions how would this work, do you think? >> first of all, thanks for having me, kellykelly, but they tacking about $800 billions, when you were to levy in in type of transactional of cme trades, the spreads would widen. when the spreads widen, let me tell you what happens. when the spreads widen baas a tax is imposed, the consumers ultimate will you bear the cost. risk management becomes much more expensive in return that hurts the consumer so the bill that's being introduced by the gentleman from hawaii, he even said this is not a bill to raise revenue. that would only by a side benefit. this is a tax on liquidity or

high-frequently trading. what exactly what market participants or market makers, what tools would they be able to use to form a market-making liquidity. if you had a texas instruments calculator and i had an abacus, i assume you would be faster than me. you can take it down to the lowest common denominator. this is the worst thing i have heard in a long, long time and it's an issue that never goes away >> we have a couple issues here, as terry said one of the goals is to crack down on high-frequency trading and so forth. is there a way to do so, congressman without a negative blowback across investing of all types? >> first, i agree with terry this is a uniquely bad idea whose time unfortunately has not

come it's a bit like whack-a-mole, and it keeps raising its head. they're looking for revenue to finance the socialist man i fest. >> as you know, congressman, that would be barely a down payment. we're talking about a program that could cost tens of trillions. >> well, precisely i also might add that high-frequency trading has brought transactions down. a trade that cost $100 back when i was in college, you know, is pocket change. it's adding efficiency, adding liquidity. this is a tax that, again, is aimed supposedly at wall street that's going to hit main street. you know, i just think about two large employers in my neck of the woods here in dallas,

texas -- southwest airlines and american airlines. this will make the cost of hedging more expensive for them. about over half 6 the money investmented in the market is how 1 401(k)s, pension plans, all of that will be costly. it's a bad idea whose time has not come unfortunately we have president trump and a republican senate to make sure it won't happen, but it's regrettably increasing momentum behind it it's interesting to note a n better of nations have tried this in the past, and many of them, i think were are we're up to half a dozen or eight of them, have gone back to repeal it they found out they were driving a lot of transactions overseas, they are hurting their own economic growth.

>> mr. duffy, what happens to people who say, c'mon, we're talking about such a small cost for everyday transactions, even if it makes it a teensy bit more expensive, it will it won't have an impact for consumers. what's your response to that >> that's not being educated on how the markets work the makers today are working on very thin margin if you were to tax them on -- you talk about losses they incur, too, it's a high percentage, 0.01% seems small -- >> but then what happens

foot, everybody goes higher. when spreads widen between buyers and sellers, and there no intermediary, that will fall on the consumer when they reference other cunning around the world, kelley, jeb was spot on. they have failed there's not been any tax on a derivative around the world that's actually not been harmful to the participants of that country. >> congressman, it does seem like a tea party move that ushered in president trump you mentioned, look, there's a republican now, this proposal would go nowhere is it gives us a glimpse of what may be to come whether a democrat wins in 2020 o. 2024, or the democrats have more control of congress, even if it doesn't work today, it sounds like it might work in the

future >> of course, those on the left are very patient they have been building on this. most americans are enjoying the greatest economy they have ever enjoyed. one of the reasons is we have the deepest, most liquid, transparent capital markets. we're the envy of the world. to think we're going to somehow tax that system more heavily and make it less competitive that will hit the paychecks of every working american, but again it's one more idea aimed at wad that will clearly hit main street in the -- >> what jeb said is extremely important. if we can get congress to hold congressional hears, that's how the american people get educated. >> thank you coming up google as annual pay study found that some pen

were underpay. also shares of the homebuilder are down today we'll look at what's causing the leg lower, and what it means for the spring season. that's still to come

how about kohl's it's on pace for the best day of the year after beating on the top and bottom line. comps coming in above estimates. speaking of kohl's it's also partnering with planet fitness, hitten an all-time high on the news now, loose at shares of ge, which are down on news that the ceo is speaking at a conference right now. s. in the meantime to sue herera for our news update. hello, everyone. kurdish fighters clashing with isis as they took on the group last -- video showing reported fires at machine guns at isis-control territory students marching in the

capital of algeria to oppose preside president's decision to seek a fifth term he's been in power since 1999, but the 82-year-old has hardly been seen since on 2013 stroke the fda has announced a recall involving blood pressure and heart failure medication india as hetero labs are -- the tablets were found to contain trace amounts of an impurity that's a possible hundred carcinogen. and two prizes will be awarded this year, the nobel found made that announcement earlier this morning you are up to date that's the news update this hour back to you. >> thank you very much, sue. just about 0 minutes to "power lunch." >> a busy and fascinating hour

we'll talk with dr. john torres about three pieces of news in the world today. one is the fda going after tobacco sellers in a serious way, some of the major pharmacy chains number two, deaths from alcohol, drug abuse and sue sued at a nearly 20-year high. that's why life expectancies have fallen, and we'll look into the case of the individual who seems to have cured of hiv we'll look at that in light of potential advancements in biotech and other things and tarek of "flip or flop" will be here to talk about the market, and a full recapof "the

bachelor." >> did uva win >> they did. >> my dad will be crushed. morgan brennan has a story shares of pge are plunging, this because ceo and chairman lar larry culp set cash flow will be in negative territory. also stepping up restructuring in power and elsewhere these headlines coming out of the jpmorgan conference right now, industrials, aviation, et cetera, conference where larry cuilp is sitting down and up low to mid single digits. also the effects of non-headwinds to cash flow to meaningfully lessen in

2020-2021, but that free cash flow negative is what's sending the shares lower we'll continue to monitor it and bring you any headlines. thanks we'll have much, much more here's what's still coming up on "the exchange. >> announcer: coming up, why one analyst says netflix could be in danger harley's new target -- children and congrats to kylie jenner at a aadn apth'sllhe i"rid fire." yeah, have fun! thanks to you, we will. aw, stop. this is why voya helps reach today's goals... ...all while helping you to and through retirement. um, you guys are just going for a week, right? yeah! that's right. can you help with these? oh... um, we're more of the plan, invest and protect kind of help... sorry, little paws, so. but have fun! send a postcard! voya. helping you to and through retirement.

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welcome back let's catch you up on a few stories. it is time for "rapid fire." contessa brewer, bill griffeth and leslie picker are here first, they saw a 12% comp last quarter, saying the lingerie company is too late, and maybe a little tone-deaf. >> potential barrington may have a pont

analysts say bath & body works accounts for almost the entire valuation. so spinning off victoria's secret, however, barrington has less nan 1% stake, less as of today. so the company's response seems pretty muted in terms of agreeing with what they want to do so we'll see if anything becomes of this. >> it's kind of we're that it's tone-deaf, a lingerie company versus people selling scented lotions and candles. >> but you don't show naked women to sell candles. >> if victoria's secret would stott printing words on the butts of their underwear, maybe they are -- >> my wife binge watches old

episodes of "ncis. way back to 2003, some of the jokes there would not be welcome. we forget how we have evolved over this period of time into the me too era that's why i have i victoria's share is going down. >> it's amazing they haven't done more to recast the image. whether netflix's days of numbers, needham analyst joined us earlier today >> on netflix, what we worry about is this -- they're spending $3 billion a year on content. apple and google, facebook, their annual cash flow, apple's alone is $60 billion if they decided to throw $20 billion, they could basically put netflix you've had business three years. >> yes and no.

spending money doesn't necessarily mean success now suddenly it will be like old hollywood, you'll have they billing studios mass produces movies and television shows, but not all of them are going to be a success. >> people tend to just add on streaming services they're not saying i'm going to choose between netflix and amazon they're like i have shows that i like on both what's another $10 >> i just think it depends on the shows that apple produces. >> i don't watch for the service, i watch for the -- >> but then they're saying, if apple comes on to the scene, something else gets bumped off there's room for all of t. i think, as long as quality productions are coming out of these studios so far. >> topic three, take a look at this video ♪ >> yes, those are -- thomas is

4, luca is 3, and they are on motherized scooters and harley davidson is acquire the maker of these two-wheelers for kid hog has had a tough run of it. what do we make of this move >> so i understand the desire to move out of the your core customer base, but the second a kid falls off of that thing and gets seriously injured i mean -- or there's some kind of -- >> no, they already exist on the market what harley is doing is seeing it's losing its customer base, they're aging out, getting in with early branding. >> would you let the boys ride one of these >> i'm not a good -- yes, i would, if it would get them out of my hair give me a break. yes, i would let them ride them, but as a business venture, because they already exist, bulk

that market exists for small, tiny little motorcycles, bicycles and skateboards. >> how do they -- my brothers had them when i was young. >> this is a smart business move, plain and simple the safety issues might be a problem, but they can solve that what they can't solve is the democrat graphses getting away from them. what i was telling you earlier is the annual biker rally? sturgis, south dakota, gets a half million people every year, and the average age is probably about 60. >> and most of them don't wear shirts that's just the women. [ laughter ] >> regardless, i haven't seen little kids on these bikes, but if they come zooming around hitting the stroller, there would be a problem going the finding it underpaid men more than women. >> you know how big the headlines are about there? they've been underpaying women

for how many years >> i knew it. >> you find one study they were underpaying men so they could pay the token women something? >> i agree look how quickly they rectified that they pent 9.5 million to repay the 10,000 guys they had underpaid. compared to what, right? >> why is everyone assuming this isn't true. >> no, no, it's true, but it's been true for a long time that women have been underpaid, and it took them how long to figure that out, right? >> a company like google that has all these different algorithms, it take unit 2019 that -- >> there's a lot of companies doing studies about pay parity, but let's not forget google is the company that paid out a gazillion money to somebody with crennel sexual harassment claims >> when women have families they

work less overtime, when men, they work more to me it's la it totally different story. >> if you said to diverse fit your job force, women engineers at that level are in high demand, and they might have to pay them poor to get them there. >> this is level 4 engineer, a very specific jobs within google let's see what the other jobs entail. >> let's indeed. a heated one. "forbes" is out with billionaires list and kylie jenner is the official youngest billionaire ever he her cosmetics is valued at $900 million, but because she's a car darnian, they say you're not real le self-made. >> say what you will, but i looked this up on google -- >> oh, no -- >> last time he said that.

>> "keeping up can the kardashians" is in their 11th season they have monetized being famous for being famous that doesn't just happen for her to be a billionaire at this age, you know, there is a business mind behind that. it doesn't just happen overnight. >> you know what kylie is thinking right now snowe what p what up, oprah >> she has the benefit of big the judger sister of kim kardashian if oprah winfrey was the younger sister of someone, sure, she would have had help. >> she is has seven employees total? >> it's like instagram in 2013. >> i can't believe i was defending the kardashians. >> contessa brewer, leslie

picker and bill griffeth, thank you. they're facing on lawsuits, and who will get stuck holding the back that's next.

. join us me is katy, a "the washington post" report, covering this op jody story. how likely is it purdue will be allowed to file bankruptcy >> it's unclear. you know, it would be very significant, because the bankruptcy experts we spoke with

said it could potentially bring a halt to civil litigation, also make it much, much harder to plifs to get awards out of a bankruptcy court rather than a civil court, and it couldbe used in the negotiation about what awards could be it's not clear whether or not they'll actually do it right now. it's an offense on the table. i wonder how much they could be on the hook to pay out? is there any indication from the early trials about the sums we are tacking about? >> there are no early trials what in and out. the lane cap is there's a huge case in cleveland, ohio, a federal case, about 1600 plaintiffs in federal lawsuits that are consolidated under one judge. what they are doing right now is they're all negotiating. the trial that's set to go forward in october, but the judge in the case has been very clear that he wants a settlement out of this. we don't know any of the details, because there's a gag

order, but the judge wanted a settlement last year there wasn't a settlement last year, so the negotiations continue more currently -- there's also a bunch of state attorneys general that are suing purdue, and the first test will be in may in oklahoma where a case brought by the oklahoma attorney general is excelled it will be televised, so there's a possible if it's not settled before, it could be broadcast across the united states every single day, and people are looking forward to that trial to see what these claims -- whether the claims will stand up in court and what a jury of oklahomans will does i when it comes to pursue and other manufacturers and the opioid crisis. i think mike is the name who did the tobacco agreement. he's going after the distributors my sense is he knows or thinking

that's where the money is to pay out a big settlement do you think why he's looking at them in particular i think the public might be wondering is will a bankruptcy allow them to basically get off the hook. >> i think that all remains to be seen. we do know that any settlement would be in the billions of dollars. one lawyer i spoke with said this is the most complex litigation in united states history. this involves cities, involving towns, involves municipalities, and also involves dozens of corporations pursue is one corporation in this lawsuit in cleveland that is being sued. this is extremely complex. it involves people from all over the place. that's why these awards cob in the billions. >> katie, thank you. we would love to continue to check in with you.

katie zezsma from "the washington post. it may not be enough to keep america's 5g landscape safe. we'll tell you why, after this n historic trading model. and you're still not sure if you want to make the trade? exactly. sounds like a case of analysis paralysis. is there a cure? td ameritrade's trade desk. they can help gut check your strategies and answer all your toughest questions. sounds perfect. see, your stress level was here and i got you down to here, i've done my job. call for a strategy gut check with td ameritrade. ♪

5g is the future of telecommunication, but it poses new threats, even if equipment from china is banned we have a look at what could go wrong. never trust, always verify that's the principle behind cyr owe trust, one of the biggest themes at rsa this year. it assumes that every actor is malicious, giving access only on a real time, as need basis. >> this idea of zero trust is being ability to create security from your device all the way to where you're going, where you don't even have to care about where it goes in between. >> reporter: security experts say it will play a critical role in the new 5g landscape from cars to homes, but also more security dangers like turning those devices into weapons rsa participation say a potential chinese ban won't keep

america's 5g landscape safe. they say the zero trust should act as an do any basis based on zero trust, even though i like the idea of that protection. >> reporter: it is sort of the strictest interpretation of security but what's existed in the past has been this castle and moat mentality, certain people within a perimeter that have access and they can build networks, even if not in the u.s., elsewhere in the world and if you don't have that zero trust application, you're not going to be able to protect that data so it is very strict, but things like biometrics and a lot of the topics being discussed here meant to make it easier to implement that concept. >> even if we were using american made equipment or, you know, something from europe being able to be assured people

aren't hacking our cars and everything, it's going to be a huge topic de deirdre, thanks. 2018, slightly higher housing since the previous year. we're going to check on that right after this - hello, i'm brad castillo. did you know that americans who bought gold in the year 2005 quadrupled their money by 2012?

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the year end numbers are in and sales of newly built homes came in just slightly higher than 2017. big question marks with the year's spring market just starting diana olick is here to drill down on the datd fa for us what are you seeing? >> mortgage rates. sales down 2% annually in december and november's read revised down significantly why? because the average rate on the 30 year fix charged over 5% in november but it started falling after that and now back to the same level as last year that is a mixed bag for all home prices prices ran up really fast in 2017 on the back of lower rates, but those gains began to shrink when rates rose, especially last fall

so you have this kind of double edged sword. now that rates are lower again, prices could gain steam again. >> it's all relative even though still very low bring in fred blake, ceo of areva. what are you seeing so far in terms of the spring season >> reporter: well, in the northeast, it hasn't defrosted yet. so we don't know out west here, what i'm seeing and i just got two e-mails this morning from two different large home builders in southern california that were offering incredible incentives, not guilty to buye-- not to buyers a estate agents saying bring them to me, not that guy, that shows there's a lot of competition because things permitted a couple of years ago are finally getting built. there's going to be some competition out there and i really don't see prices being extremely high you're not going to have people climbing over each other like they did a year ago. >> so what you're saying, fred,

the builders have finally gotten the homes up now they need buyers and the buyers are not waiting if line f -- in line for these things but incentivize buyers to drive them maybe you can extrapolate but it is regional, isn't it? >> of course yeah i mean, you're seeing problems in seattle, the values have come down both rentals and sales and it all has to do with jobs. if there's going to be a job increase, if amazon decided instead of a second home for their headquarters, they decided to build more in seattle, it would be insane there. so what's happened, it kind of goes along with the whole economy. things are good, but they're not like unbelievable and there's no anticipation that it's going to get that much better we're kind of at this plateau that's going to go a little up, a little down and it's going to be extremely regional and extremely area sensitive and the good markets are going to do good and the bad markets

are going to do bad. >> this is a tease of what we're going to talk about next hour. the flip or flop show next hour, the trends he's seeing and i see he says there's a lot of concern about a slowdown out there in the market by buyers, by sellers. even if fred is saying, look, it's pretty good, why is everybody involved has this kind of uneasy feeling about it >> because of the numbers, kelly. we see the sales numbers come down you have very short supply on the low end of the market where the vast majority demand is and home flippers going to see much lower returns because home prices are very high the costs to renovate and then flip the home are very high and you don't have a lot of sellers out there willing to pay the moon for a nicely renovated flipped home you're seeing a slowdown because of low supply and then demand, a lot more supply on the high end but lot less demand, of course so in some of the bigger markets, of course, all is local and some of the bigger markets with higher priced homes, you see that real strong slowdown. in the lower priced markets in the midwest, the south, and

parts of texas, the slowdown not so much because of high prices but simply nothing for sale. >> that's a great sign that is a high quality, high class problem to have in those parts of the country where they experience that demand, that population influx and can't build fast enough to keep up where are we in a situation to widen the gap between the housing markets are doing very well and others starting to look, and again, i'm in the northeast, where things look a little softer. >> is that for fred or me? i was going to say, you are definitely seeing this divide because already, we see that wealthier buyers are going to get bargains and the low end are not going to get bargains on homes. there is going to be this increasing divide between the have and have notes, what's available for sale on the high end and fred, i would say to you. you're seeing the builders drop prices in some of your pricier areas. would you see that happening as well >> i think what they're trying to do is they love that base price and keep that base price,

you know, they'll, first of all, give you options build an extra kbrgarage for fr. give something away on a mortgage incentive i think you'll see that first before the base prices start coming down, so they can advertise the lowest price possible and probably start building a cheaper unit so they can advertise from x so it looks a little more attractive to live in this better location for a cheaper price. i think that's the first one >> all right >> and then who knows. >> that's how it feels fred glick, diana olick, thank you. here's my final exchange for today. 21 years old and $1 billion. the fact that kylie jenner made the forbes list of billionaires at the lowest age ever tells you about the power of social media these days it means something can trend and not just do it in a small way, in a regional way. can create a billion dollars worth of valuation in just a couple of years time the power of compounding usually, you need a couple of

decades to play out. power of social media is like compounding on steroids. that does it for "the exchange." time to join tyler for "power lunch" which begins right now. >> nice phrase, the power of social media it's on steroids thanks, kelly. see you in a moment. i'm tyler mathisen right now at 2:00, shares of general electric are tumbling this hour after comments from its ceo, to analysts, the details of that straight ahead and more troubles for the one time most valuable company in the world. china slashing its growth targets and warning about a hard struggle ahead is it time to sell out of stocks and bet on bonds plus, a cure for hiv major breakthrough in the aids epidemic that has biotech buzzing. and the real read on real estate, the "power lunch" exclusive with tarek el musa