>> good stock. >> brenda. >> sherwin williams. leverage to the consumer free wash flow story >> we talked about software and tech oracle this thing is going higher >> safe travels. "the exchange" with kelly starts right now. thank you, scott hi, everyone here's what's ahead this hour. tech roars back. the sector is on pace for its best week of the year. it's up for 11 of the past 12 weeks. shakeup at facebook. with the loss of its top executive and why investors are on edge. >> the business of college advisors apple tells its privacy and the self-lacing fail all ahead on "rapid fire". we begin with today's markets. >> kelly, this could be the break out. maybe the bulls are looking for. we have a green screen across the board. highs of the session dow is up by 200 points.

three quarters of 1% more importantly we're above that 2815 level, 2828 the last trade on the s&p which means we're just above that break out level perhaps good signal another leg higher nasdaq composite up by a percent. another sector to watch. best performer last year and worst this year. health care. microsoft shares a big focus as well you can see here with this particular move the health care versus the spider, that gap something we watch let's talk about microsoft we're at an all time high. i'll put a little star there for microsoft. all time high. up 25% since the lows we saw back on december 24th. and this stock is riding a six day winning streak kelly, it's well above its moving average leading the way higher for the

market back to you. >> we'll talk more about the tech sector. welcome to "the exchange". i'm kelly evans. u.s. job option in january rebounded to 6.6 million crude today crossed above $59 a barrel then it retreated on reports of soaring production boeing jumped on reports that a soft grade would be available in ten days for those 737 max 8 jets it still expects a fix in the coming weeks let's get back to the markets. bob pisani is new york stock exchange >> boeing helped fuel a rally in the dow and the s&p. we're above that 2815 level where we have failed several times, five times in the last six months this is a very positive if we close here in earnings the first companies with quarters ending in february are coming out

mixed results. bro broadcom had a slow down in china. we're sitting at a historic high for broadcom oracle, it was down earlier on but now it's positive. just shy of historic high. adobe revenue guidance on the weak side. what does this mean? after the fourth quarter numbers came out earnings were cut fast and heavy three months ago particularly for tech. too early to tell but looks like any earnings cuts would be more modest micron and fedex next week back to yo back to you. >> you say these are names to watch for whether we'll see that come through or not for the first quarter. >> right now we're just on the cusp of being negative for the first quarter. right now we're down 1%. i think the numbers next week depending on micron and fedex

could turn us into positive territory. i think right now the probability of an earning recession is fairly small, but i want to hear from fedex because that's the real key. two big global ones next week. >> fedex had a tough go of it lately bob pisani, thanks very much some movement on the trade front. chinese vice premier spoke to treasury secretary mnuchkin and robert lighthizer and both sides made concrete progress does this mean a deal is at hand welcome derrick. we have a nice rally on wall street today i don't know how much people expect a deal to fall through at this point because the rhetoric has been fairly positive what do you make of this latest news >> i think we've been on track to have a deal since back in november as long as the president want as deal we'll have one. doesn't mean that there aren't

important issues to get over last week people were wondering whether the president still wanted a deal. the commitment is still there. will this deal last or fall pay part due to political problems in the u.s. in the 2020 election i think a deal is likely >> how much does the outcome depend on the summit between president trump and president xi and when it happens, whether it happens at mar-a-lago, the optics of the china wanting some other kind of state visit to make it seem they are just not coming here for our sake how does that feed into what deal does emerge >> well the chinese are not going to come to mar-a-lago. xi jinping will not come to mar-a-lago unless the deal is done if you get that announcement we have a deal and then some parameters will be added or not added, but we have a core deal if xi jinping comes to mar-a-lago if they meet somewhere else or in another format that says

president trump and the general secretary they need to reconcile some things before we're finished with the deal so the chinese don't want to come to mar-a-lago without a deal in hand if you get that announcement we have a deal -- if you get an announcement of a meeting elsewhere that doesn't mean the deal is dead or in trouble that just means there are some issues to be closed >> how do you think u.s. business will change in the wake of this deal from what we know at this point. is there a lot that will change technology and financial institutions operate abroad or even consumer companies or not what do you think >> well, i'm a skeptic of this deal lasting i certainly am a skeptic of the idea we'll have a deal that will change our relationship with china for ten years. if that's what the market is looking for i think that's unrealistic. we'll get more chinese purchases on an intense purpose. we'll get a truce on ip and tech

transfer which will benefit america business in china for a year, year and a half. i think over time reality will set in that the u.s. an china have a lot of differences economically, politically, militarily even, and what you're going to get is happy days for about a year, maybe a little longer and then we'll get a reversion to where we are now for most american businesses >> that's a reality check. thanks so much for joining me. the markets meanwhile have had a stan out year and tech is leading the harrington the nasdaq is the best performer with a 16% gain this year up for its 11th positive week out of 12 ross, what do you think about the tech rebound it's a little unfair to talk about the year-to-date gains because those were so close to the low. how do things look to you now? >> we've had a lot of change since q4 with the fed and trade making a lot of progress this is predicated on a trade

resolution i don't want to get too excited yet because with trump you don't know what's next i think that there's so much risk for xi and trump if this deal doesn't get done that it will get done. that's what the markets are saying this is a done deal. technology will be gainers here in china because there was a lot of abuse of our tech companies in china and that was a big part of the trade relationship. but also these are the best companies in america and people would rather buy, you know, cash rich, profit rich, you know, tech companies than the ges and sort of the industrials of today. >> ross mentioned this but the fact that the federal reserve, every couple of a minutes now we're seeing notes coming out about how congress isn't expecting as many as rate hikes. >> it certainly factors in because it presents a tail end for investors and valuations and

whatnot. speaking of those valuations the reason why you can have valuations escalating the way they are for technology, the markets overall is because the fed may be on pause. i mean, ross mentioned the idea that during the loss we had maybe overshot a bit at that point the s&p tech sector was trading at 14 times forward or anticipated earnings. that's pretty good for the technology sector from a valuation -- pretty low, it's a value. these days we've been up to about 18 times forward earnings so it's not like the markets haven't been aware of what's going on the question becomes 18 times next year's earnings it's still a good buy i would argue the best companies in the world can demand that >> no shortage of a tax on them these days >> the anti-capitalism attacks, i think, make good rhetoric but what reality is why would you want to hurt the best companies and most important companies for american growth? and let the chinese have an even

bigger advantage in technology to me those attacks are really, really short sighted and almost ignorant you know, we've got to really accept that companies like amazon and google and apple and microsoft are just an a-plus position business wise and really just about whether they can scorew it up like facebook. >> will they sell off more if federal reserve is back in the picture which granted it doesn't feel like these days with any more prone to selling off on that news than if there's a failure in the trade deal, for example? >> no. i think the whole market would sell off on the fed anyways. trade is really important to technology these are global businesses. and the disruption in the trade thing is creating a lot of issues for a lot of company, small and large in so many areas that you sort of don't expect because of the global supply chain and so, you know, we got

to resolve this so businesses can make cap x spending and have confidence decisions they make, makes sense. that's the problem with this stuff. the market hasn't gone anywhere in a year. we're back to where we were. this is really the inflection point. can the market move high center can we get a trade deal? we have a nice rally >> you're an owner of these names. how does this stack up against other sectors? >> it's a value compared to other parts of the market. you look at consumer staples or consumer discretionary they are trading on an elevated basis even technology or communications services. so there's an underlying bid in valuations for some of those defensive sectors but you wonder whether that wears off given the fact that the markets have reclaimed this resistance point that bob pisani talked about if that's the case, maybe those com services and tech companies

become >> appreciate it guys. speaking of tech how is this for a set. amazon stock is now rated a buy by all 45 analysts included in factset. that should have made us nervous. there are all rating it a buy. >> announcer: ahead, facebook on pace for its worse day since 2018 this after the highest executive departure in its history. will it change the direction of the company? plus the big business of college admissions advisors. 8,000 nationwide charging up to $15,000 a year details of this growing industry and home prices are cooling, but rents are rent hot we'll tell you why and where they are growing most. is is "the exchange" on cnbc

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facebook losing two key executives in the wake of its big announcement this week the company saying private encrypted messaging is its future chris cox leaving saying

facebook needs leaders who are excited to see the new direction through. let's bring in kevin delaney co-founder and editor-in-chief at quartz. how is facebook battling to protect and grow its core business welcome to you both. kevin, i want to begin with you. you say chris cox's departure is a crisis moment for facebook snooirts big deal. mark is trying to start a new chapter for facebook chris cox is a trusted conif i dan of mark. he's been there for a long time. his departure of dan rhodes. facebook is not tesla in terms of executive departures but more turnover at the very top than we've seen this is start agnew chapter. it lends some weight, to what markets have been saying about private messaging.

mark and chris suggested that there's a difference of opinions around that. we've been trying to figure out how serious mark is about this new direction. this suggests it's pretty serious. >> what does that mean facebook investors are nervous shares are down 5% since this announcement was made. they've come back a little bit this means maybe dampening the news feed. still have access to user data that they can sell they have instagram to place a lot of ads is there a reason why this would hurt the business model? >> the move to more privacy focused future for facebook is really more conceptual at this point than real. so it's too soon to tell what it means for its business model i don't think the ad model is going anywhere i think facebook was faced with a predicament, they got these two incredibly popular platforms, instagram and what's app but have not monetized

successfully either one. advertisers are not moving over there as quickly as facebook would like they haven't monetized it as quickly. what's app is barely monetized given the currents landscape i don't think facebook could say we're rolling out massive ads across these private messages. they are trying to have it both ways they are going the privacy route yes explore other business models it doesn't mean there won't be ads on what's app or anywhere else on the fabricate universe >> is this the biggest issue for the company on a week that have seen their worse outage. potential criminal charges a criminal probe into some of these data deals with elizabeth warren calling for their breakup and then more sort of rules from tuck and from the eu coming. >> i think they are two issues for facebook right now and both issues that you highlighted.

the first one is clearly governments, regulators, politicians are coming at them and there is some nonzero risk they will find themselves regulated in a much more serious way even if it's short than what elizabeth warren is proposing. that's a significant risk to the business second thing is where is facebook's growth coming from. they have over 2 billion monthly users. at the same time what we've seen in the more mature markets their growth is slowing. that's an issue for facebook because those are the markets that have the highest in their ability to sell advertising. that's the second thing. mark in this announcement and potentially with chris cox's departure those are both linked to these two issues trying to get ahead of some of the regulation and also figure out what's the next chapter much growth for facebook. >> and the way people will use facebook and the way that it will impact the 2020 election. we talk about issues with spreading fake news on the public platforms

what happens if that is spread privately and encrypted. what happens if law enforcement wants more access to these messages when they need to prosecute crimes and that sort of thing >> this is going from one hot mess to potentially another. i think, you know, it's not just the potential implications with law enforcement and governments and how do you deal with that as we saw with apple and other companies. this is a huge issue and only going to grow. it's also, you can spread misinformation through what's app very effectively and recently facebook cracked down on the number of forwards that you can effect with what's app messages just because something is a little bit more one to one doesn't mean that it can't be used for nefarious purposes. >> absolutely. we'll see how they battle that thank you guys shares of tesla also falling nearly 4% today after elon musk

unveiled the model y last night. some call it underwhelming walmart is taking extreme measures to keep its health insurance costs down those details are straight ahead in tayod's "rapid fire". stay with us what do you see? we see a billion more people breathing free. we see access to fresh food being the global norm, not the exception. we see homes staying cooler, without the planet getting warmer. at emerson, when issues become inspiration, focusing core strengths to create a better world isn't just a result, it's a responsibility. emerson. consider it solved.

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but issued weaker quarterly. zillow dropping. barclays say the worst is to come for zillow. shares down 1.5% ge is dropping 3% after the company rallied yesterday on that 2019 guidance stock is up about 36% this year, that includes today's 3% pull back now to bill griffith for a cnbc news update. >> american airlines announced it suspended all flights to and from venezuela in the wake of the unrestthere. the move comes after the carriers pilots union said to refuse any trips to venezuela since the state department warned citizens to leave the south american nation. ford is taking steps to reduce costs in europe the automaker plans to eliminate 5,000 jobs in germany.

cuts are also coming in the uk although number of jobs affected in that country has yet to be determined >> the u.s. announced new sanctions on russia related to ukraine. the state department says this is in response to what it calls an unjustified attack by russia on three ukranian naval vessels back in november six russian individuals and eight end fits are part of that sang zoo in berlin showcasing another new polar bear which was allowed to venture out of her indoor cage today for the first time the cub is 3 months old. those who have been to the berlin zoo remember kanute at the died an untimely death at the age of 4 we wish her well >> thank you for the polar bears. >> a little color there. >> just about 30 minutes ago

until "power lunch". i'm with tyler mathison. >> we'll talk to a couple of college admissions counselors and find out among other things why they charge 950 an hour to start to help your child to get into college we also have two-time nba champion david west. >> formerly of the golden state warriors great career he is working with some investors to start a new basketball league for young people who will get paid to play and will as part of their compensation get a college scholarship to boot. they would not play in college because they would be getting paid to play -- >> watch out ncaa. >> but an interesting wrinkle on a very current debate on whether ncaa players should receive compensation >> is virginia playing today >> they play tonight they play florida state tonight. >> we'll see you then.

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welcome back let's catch you up on a few stories that should be on your radar today. it's time for "rapid fire" welcome everyone how many all at that beauty surging today after beating on the top and bottom line. they blue away estimates for same store sales and the new cosmetic line from kiley jenner so the self-made billionaire >> self-made with big quotes there. >> sister of kim kardashian. >> she started with nothing in the kardashian family. >> started from bottom >> she's part of the entire reinvention of the cosmetic space where the traditional players missed the boat when it came to social media social media is driving the

business >> for generation z and makeup that had a big effect. >> i will plead ignorance here i did not know who james charles was. until i started to read about what the cosmetics line that he has. it was new launches by james charles and kiley jenner it's not just that it's a he. he's redefining the way makeup is used. >> for women or men? >> for both. which is interesting >> so all of a sudden you have this situation developing where you're attacking these different markets and getting growth and getting called out on earnings reports. >> it's the best performing stock since the very bottom of the s&p 500, alta beauty.

>> some analysts point to it gaining meaningful market share. >> tied to j.p. penny. >> we won't talk about cody. >> let's talk about collegeed a major leagueses. the scandal is casting a spotlight on one of the fastest growing industries in education. the college consulting business. there are 8,000 private educational consultants in the u.s. right now that number is 4 x from five years ago. you've been reporting anthony today. we're talking about 1,000 bucks an hour. >> this is a booming industry. part of it colleges, the acceptance rate is solo, under 5% from many of these top schools. the process is so opaque it is unclear what it actually takes and what these colleges want so this industry is just exploding. >> here's my question for you. how many people wrote their own college essays who have a college admissions counselor how much basically cheat is going on even -- it's an editor,

is it? >> there's an arms race now and it is fueled by money and the goal is to get into school this scandal aside, the wealthy have all of these advantages whether it's prep for your test, your tutors, whether it's these counselors there's a spectrum in terms of how involved they get with your process. they may guide you on the essay or write it. but clearly there's these haves and have notes in the world of education. >> the counselors will say we want to help level the playing field. really you're going to level the playing field at $1,000 an hour. you're going to grow the gap who has access to $1,000 counselor. not low-income people. >> one of those catalysts that will change the way of higher education as we know it. this idea that you do not need a four year degree from an ivy

league school to do well in life the economics of higher education were bad enough to begin with toss on the fact you may have to bribe somebody $15 million >> that may be true in this job economy. when we go back to a recession, where you went to school will matter >> how it is in this country do you obtain elite status. you get it from the schools you go to. >> the question is how do these educational institutions respond to this college exam the college essay get the editor to help out or gain the standardized test by having somebody take the test for you >> i hadn't been asked where i went to college in a long time until this story came out. >> those who go to harvard they make sure you know >> they are telling me we have to move on

let's talk about walmart walmart is one of the companies taking extensive measures to keep health care costs lower we're talking about flying one walmart employee for a second pinto another doctor that saved walmart $30,000 because the guy didn't need spine surgery. he had parkinson's the diagnosis, it was essential he get the proper diagnosis not get a back surgery he didn't need for walmart yes you get the savings. it goes back to this idea that they need to improve the quality and the cost of care >> sort of a feel good story to show how employers and corporations are making health care more effective. i looked up research from the national academy of medicine showing 12 million people on average are misdiagnosed i've seen it in my own family. the prevalence of being misdiagnosed >> it's important. companies pay half of the health care costs in this country and yet they feel like they have no control. this is a company stepping up

and saying if we're going pay half the bill we want to have more say in how this process works. think of the hundreds of billions or trillions of dollars in term of the health care industry in an operation of that size it is not overly efficient. there are going to be ways you can arbitrage. the health care business in this country and maybe the world needs fixing >> there's not a lot of win-wins in this case it's a weird one where the employer and employee benefitted not because of the diagnosis but at least they don't give him a back surgery he didn't need. apple releasing a new tv ad touting how privacy is its biggest priority if privacy matters in your life it should matter to the phone your life is on. this last month we had news about-face time security bug but apple is trying to differentiate itself i think this will get harder now

facebook will push people to encrypted messaging. >> the time is certainly notable. comes as regulatory scrutiny on google and facebook. they are they trying to set itself apart do you watch this tv ad and thinking i'm happy i think this is a marketing ploy >> this is step one. if they want to get in the health care where the money is there's no more important value of -- which company will i give all my health care information to the one that's the most secure this is apple setting the stage for saying we are the privacy company. we will keep your data locked up in a vault so when it comes to that health care platform that they are going launch at some point they will be trusted >> the other thing is to watch the apple/facebook back and forth because facebook in announcing its privacy thing this week said we're going to go to only put our servers in country where we trust the privacy and human rights record.

apple has its servers in china mark zuckerberg and tim cook have gone back and forth who has the moral upper hand i think facebook is now going to try to say we're a privacy company too, and apple better make sure it's not being hypocritical >> that's a tough argument wherever your server is facebook has a challenge. >> you open a window to talk about huawei or 5g networks. >> privacy is the hot word >> great ad. very funny ad. >> i like that >> how about this? nike's new self-lacing smart sneakers they are not too smart a feature in "the washington post" details some consumer horror stories including how a software update corrupted the shoes lace engine leaving it unjalk to tie manually nike fixed the issue >> lace engine your shoe has a lace engine.

we have too much engineering in this world >> some would say to your point about apple's health care stock. this is real this is something that helps orlando population but better not have any glitches >> yeah. >> kicking around your own shoes because of a software connection >> oit with the amazon alexa device >> when cars are connected >> these products need to stay in research and development a bit longer basically using us as guinea pigs >> president trump tweeting about aircraft and how complicated they are and i'm saying maybe just lacing up your own shoes is the way to go simplest is the best >> opt-out while you can thank you all. >> have a great weekend guys san francisco is the most expensive big city in america. with public offerings now and ipos coming from lyft, uber and

many others, prices could get even higher. that's next when "the exchange" comes right back

welcome back a nice game playing out across wall street. dow up 178 points. the s&p, the nasdaq up 1% actually so that's leading the way. russell 2000 remains in correction territory but up about .8%. leading the dow right now, microsoft, intel and apple -- an overheated market to be primed to show josh lipton has more diane oleck joins us why rents are rising across the nation josh to you first. >> reporter: so, kelly, lyft is expected to launch its road show for its ipo next week kicking off this wave of mega start ups that are going to make their

public debut that could mean a bonanza new wealth for those employees and some wealth could make it right here to the san francisco housing market that market has recently cooled. zillow said home ovals dropped by $35,000 in the past month first month to month drop in years. still the median home value here, kelly, $1.4 million. that's the highest of any big city in the nation patrick carlisle, the chief market analyst gives us some data to think about. he says the 12 months before google as ipo in 2004, san francisco median real estate prices in neighborhoods favored by techies climbed 12% but in the 12 months after they jumped 23%. you'll remember that was at the height of the housing boom before real estate agents popped the champagne bottles. zillow economist jeff tucker asked what if these stocks go public but don't rally investors and their stocks sink.

in fact zillow estimated year to year growth in home values of less than 2% this year the question is what's the impact of these tech ipos on that forecast. >> josh, i know we're about to talk about this with diana not just the home buying market but rents too, right >> reporter: that is absolutely true so, kelly, as somebody who is desperately trying to move here, finding a new place to rent, i can tell you that's challenging too. i actually had the guys at zillow crunch those numbers. they tell me median rental price for a one bedroom in san francisco, that clocks in at $3,500 and that too they told me the highest in the country >> $3,500 to rents a one bedroom apartment? >> reporter: that is accurate. now you see my dilemma >> your studio works just find but it doesn't josh, thank you so much. diana, you have a different way of looking at the rental market

not just obviously in the hottest parts of the country but elsewhere too? >> reporter: i'm looking where everybody else lives get ready to may more rent home prices might be cooling off but rents are heating up after taking a breather last year. rents for single family homes and apartments are now rising at the fastest pace in nearly a year according to zillow the median monthly rent of 1472 an increase of 2.4% annually for the typical renter this means about 400 bucks more a year this after rents fell last fall for the first time in more than six years. now, of course, all real estate is local rents are significantly higher than a year ago in orlando, phoenix, riverside, california, tampa and pittsburgh though not so much in san francisco yet anyway rents are unlikely to rise as fast as they did three years ago when demands was soaring because more millennials are buying more homes and home ownership is

rising robert kraft getting caught on hidden camera in the florida human trafficking investigation. cnbc investigated the way police obtained those videos. those surprising details are those surprising details are next well sure, at first, but jj can help you with that. jj, will you break it down for this gentleman? hey, ian. you know, at td ameritrade, we can walk you through your options trades step by step 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? it's just complicated. step-by-step options trading support from td ameritrade

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cnbc investigation is revealing how police can actually break into a private business and install hidden cameras to document illegal activity that's the case in a recent high-profile human trafficking investigation into massage parlors in florida how is this legal and what are the privacy concerns contessa brewer has that story >> reporter: this is hidden camera video inside a south florida massage parlor which captured customers getting sexual favors from employees normally you would expect complete privacy in a businesslike this. but this secret videotaping is actually legal it's done by police. the same hidden camera technique was used in the recent human trafficking investigation at south florida spas that's led to more than 300 prostitution related arrests including new england patriots

owner robert kraft caught on hidden camera at this spa in jupiter, according to police records. kraft has pled not guilty to two counts of soliciting prostitution martin county sherif martin county sheriff secretly installed hidden cameras in five of the eight spas under investigation. through what's called a sneak and peek warrant. >> there was no other way to complete this investigation without having the court ordered surveillance in place. >> posed as employees in other occupations to get into the massage parlors. >> the trisk to the public's perception of privacy was outweighted by the need for us to continue the criminal investigation. >> reporter: the sheriff says extensive surveillanceoutside the spas preceded getting those warrants the detectives monitored the video from a secure room at the sheriff's office >> i think you'll see we went to

extraordinary lengths to protect the privacy of the people who were innocent. we went through extraordinary lengths to build probable cause so when the judge issued the warrant, he could do so and i think the public will also see how hideous this is. >> reporter: delayed notice search warrants have been used since the 1970s, but were formalized as a tool for law enforcement as part of the patriot act after 9/11 the hidden camera video obtained by cnbc gathered inside this south florida spa raises the sort of privacy issues facing law enforcement. jonathan rich, a cleveland martial college of law professor an expert on sneak and peek warrants. >> the whole idea of the amendment is some place we can retreat back to our homes, we can relax, be ourselves and the government is not there, they're not watching us.

>> the fourth amendment deal with unreasonable search and re sh seizure, the right to not have that happen. the constitutionality of these sneak and peek warrants. the real question is what is your expectation of privacy? it's one of the reasons we don't see surveillance cameras for shoplifting inside dressing rooms or in bathrooms because you have an expectation in those places for privacy and yet in this case, if you were a legitimate customer going in for a massage, there were cameras in those massage rooms that could have picked you up they were very clear the sheriff's department said for instance, the it was a woman that stopped at that moment monitoring activities in the massage room but you can see privacy concerns for both the business and the customers. >> but also, so if they were concerned about somebody shoplifting out of the dressing room, does that mean they put cameras in the dressing room >> and many places around the

country, the courts have been clear that they can't do it because there's an expectation inside the dressing room of privacy. >> people would think they had that if they were getting a massage, when you're often unclothed. >> these sneak and peek warrants, you heard the sheriff describing it there. you felt like you had people who have been allegedly sex trafficked and that the need to rescue them and break up this ring outweighed your right to expect privacy in the massage parlors because the supreme court hasn't weighed in, but formalized within the patriot act. it's allowed to go forward there have been cases before, for instance, in georgia where they said, it doesn't apply in georgia. so therefore you can't use it. your warrant wasn't properly obtained in seattle, just in the past week, we saw a case where a sex trafficking ring, an alleged one was busted they did so without hidden cameras and just through about three years of surveillance. >> there might be other tactics but we'll see if this goes to the supreme court because it

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elon musk revealing the model y last night at an event tesla headquarters in california addressed some of the questions lately including manufacturing. >> the difficulty of manufacturing is underappreciated it's insanely difficult, relatively easy to make a prototype and extremely difficult to mass manufacture that prototype reliably and at scale. >> joining me with more is philip lebeau. tesla shares aren't looking great here and why are some analysts saying they were underwhelmed >> this event didn't really give any answers about what's driving the stock right now and that's model 3 production look, when they did this unveiling last night at the tesla design studio in california, they brought out the model y and it's a fine looking vehicle. they told us when the vehicle will be coming out and that's going to be built in u.s. and

china and its range between 230 and 300 miles. in terms of deliveries and when that will happen, a couple of dates to focus on. fall of 2020 when we get the long range, du dual motor, and in spring of 2021, the standard version, the base price, if you will, that model will go on sale with delivery starting at $39,000. here's elon musk talking about what he expects in those deliveries >> i'm confident that it will be of any mid sized suv, it will be the one you want and yeah, i think it will probably sell, do more model ys than s, x, and 3 combined, most likel likely >> this is what's driving tesla stock right now. what happens with deliveries this year. just for a point of reference, last year in delivering a little over a quarter million the expectation is between

360,000 and 400,000 vehicles to be delivered this year shares of tesla under pressure we haven't seen since last october and what's driving this stock is what happens with model 3 production. >> the shares down nearly 5% but it was telling what he said about manufacturing. that it's actually pretty easy to build a prototype but it's much harder to ramp up is there some case to be made for tesla finding or scaling or grabbing on to somebody's manufacturing capacity that could help them deliver the model 3s people are so focused on >> i think there's a number of people who have wondered if ththa thatha that's possible. it's not tesla's style to say y you've got extra capacity, can we partner with you? they've shown they want to do this on their own and i would be surprised, stunned, really, if we ever saw elon musk turn to an established auto maker somewhere else around the world and say, can we use your capacity and can

you help us with manufacturing >> anything could happen with tesla. thank you, phil. philip lebeau with a recap of the y launch shares down nearly 5%. that does it for the "the exchange." i'll join tyler and melissa for "power lunch" which begins right now. >> indeed it does. see you in a moment or two i'm tyler mathisen with melissa lee. new at 2:00, bulls are charging again. should you jump on back of the bull and ride the rally or the gains almost done? plus, facebook flounders the shares there dropping as two top executives leave are more departures coming what does it mean for the company? a thousand an hour to help your kid get into college the booming business of college entrance consultants "power lunch" starts right now welcome to "power lunch. i'm melissa lee. we've got a rally on the street today. dow getting a nice l