getting together, 5g, like it, they're buying calls. >> uri ceo spoke in london, i bought more. >> refineer, deled i like it. >> that does it for us, the exchange with kelly begins now [ music playing thank you, scott, hi, everyone, heerlgs what's ahead a strong market, the pipeline opposite we will vie's strong debut, 234 companies are in the wing will they keep the rally going and friend or enemies? china is wooing as trade talks stall with the u.s what china wants and whether that will further the chill on the u.s. relationship with europe plus a bold move from apple with the stock vi having its best quarter in years that's all in rapid fire we begin with dom chu on these markets. >> things are looking a lot

better, kelly, than they did, early this morning during the 5:00 a.m., we had the dow down by 190 points we were up 200-some points earlier on today, the s&p 500 very much above that, the nasdaq composite up by almost 1 full percent pacing those advances. if you take a look at the key part of the market, it will be with treasury note yields, the ten-year currently at 2.5, 2%, letter than it was earlier today. you can see that trend locals. keep an eye on those banks then far and away perhaps outside of levis, the stock to watch today has been the beating that biogen has taken now losing more than a quarter of its market value just in today's trading alone, after it and its japanese drug company decided to stage a later stage drug trial

you can see a precipitous drop watch kelly, the ibb nasdaq-biotech etf has an outside waiting in those biotech shares >> thanks. we have more on that in a moment welcome to "the exchange." a better sign, the march philly fed index rebounded nicely, while jobless claims were near historic lows and mortgage rates fell down from 4.5% a year ago they're likely headed down further after the ten-year yield dropped to 2.5% today. let's drop down more on that, rick santelli is joining me. >> reporter: you definitely pointed out the green shoots with lower rates it looks as though the equities may be leaning in that direction, too >> that is a surprise to say traders on the floor, that the separate correlations, moving in different direction, rates down, stocks up and firm

they really thought after the fed meeting that it would be treasuries pulling stocks down, but adds, as dom pointed out, it seems to be a little reverse going on, look at the two days of tens, we're down more than the shortened, if you look at a year-to-date chart, the reason this is so important is we are hovering in yieldings we closed in january of 2018 let's look at 10s minus 2s it's hovg at 12 basis points you can see the downward chift what you can see is the lowest flattest kcurve we've had since 2007 is ten basis points we're two basis points away from challenging that we all know, no matter what you think of a curve that flat means, it does affect the psych ki of traders in a negative way, finally a stellar performer, u . pup p -- up .7%

the index is at the best levels in four months. >> all yours. >> wow, markets are moving higher after starting the day in negative territory, shaking offer the fed's pretty dovish statements now, the tech sector is leading the charge today, putting the nasdaq in its position for the highest closest in five months joining me is lindsay bell at sfa research and stew yart -- i should have warned everybody about the jean jacket. >> hey, if you can't wear it today, kelly, when are you going to be wearing this >> do have you cowboy boots? >> i do, i have spurs on, the whole thing on. >> this is the one day, we should let anyone know if denim is allowed on the floor of the new york stock exchange, lindsay, let me begin with you, what do you make of the strength in micron, the semi conductors

here, the strong year, part of that was a rebound after the fourth quarter, what now especially after the fed y yesterday? >> i think we are starting to see technology really take the reigns here, the best performing sector on a year-to-date basis i think part of that has to do with what the feds said yesterday. they said, hay hey, the global growth will be slower here what you typically see is investors flock to where they need growth. they don't need the economy to drive them higher. >> that's a great point to start off january, a lot of people said, well, we had the big sell-off, so you got to be defensive, so forth. no, it's the growth working. look at technology now. >> reporter: yeah, i think lindsay on that. if the market can go higher, the only way is if it bhofs those large cap tech names that got us here before. so i think everything has to participate. but you need tech.

that's where people are reaching for growth but for me, i would have thought the mark would have been a little spooked by his gdp forecast i would have thought they would have been a little scared about that and this is surprising for me the marketing is doing what it is doing today. i will also say. >> go ahead. >> the dollar and gold, to rick's point, gold rallied yesterday, i understand that, sold off aggressively today. so i think there is a lot of head scratching moves. a lot of this is positioning right off of powell. >> lindsay, does it feel like there is a slowdown afoot? that's why i keep emphasizing the jobless claims and the nillys say, reading, understandably the headline, the gdp numbers are bad for the first quarter, do people think the fed sees or they see a turn dramatically for the worst here? >> i think the market's action, especially today, tellinging you market participants, investors don't necessarily see that 2.1% is such a bad thing. that's still respectable growth

in the grand scheme of things. >> the bar is so low, 2.1% is great news. >> the way i look at it, it gives us reason to elongate the cycle. >> that slow, steady growth is what kept this bull market growing for ten years now. >> what would you tell them to look at next earnings i guess it all depends on the there is any sign of inflation or earnings, what do you see >> inflation, we have to keep an eye on that, i don't think that's going anywhere fast i think the trade deal with china is a very, very important catalyst for this market trump was talking about leaving tariffs in place for quite some time as an enforcement mechanism. we'll see if the consumer can withstand that getting past that, that's a major uncertainty. we will see what companies aabout that in q1 earnings. >> steve, final word to you, levy's up 32% s. that fume for the rally? >> of course that ipo market is fuel for the rally it does mean risk on

but it also means that people want to get in here. because they feel that valuations and toppiness in the market, they want to lock in so that could be a counterbut five mark-- counterintuitive mat gdp is falling so buyer beware at this point. >> thank you, guys, steve grasso, great to see you both, appreciate it very much. let's talk about biogen, it's having its worst day in 14 years after saying it is halting its late stage trials of the alzheimer's drug, what is next for the company and the industry as a whole let's bring in charlie grant he's been following biogen in these trials charlie, welcome. >> thanks for having me, kelly, how are you? >> you know, i heard jim cramer saying in a way, blaming biogen, saying they let expectations run up high for this drug and these trials are they partly to blame for the

stock reaction here? >> i don't think so. in the history of alzheimer's trieltss is so fraud and there have been hundreds upon hundreds of failures in this category investors really should have known better you know, any trial can work by random chance, but blaming biogen for the results of today, it's hard for me to do that. should biogen have had a better back-up plan in place when this fell apart, that's a much more open question. >> sure. >> and more interesting debate >> and why was so much at stake on this particular trial especially for this company? >> biogen has a lot of trials on the market they are market leaders, in key categories, multiple sclerosis, spine atmospheral atrophy. controversy is heating up in those areas. now biogen suddenly has a growth problem on its hands, multiple sclerosis is slowing down, the best drug faces a patent

challenge. who knows if that will be worse. novartis will hit with a therapy druchlth maybe this ye drug, maybe this year. so this could get -- this could be a serious problem for biogen going forward and they spent about $12 billion in the last four years buying back stock now there is a new question of the pipeline of drugs coming in. >> who else has promising research in this area for people looking at what may treat or cure alls hezheimer's. >> it's scant. treating long-term care liabilities is everyone's problem, whether or not you know someone with this disease. i think any promising alzheimers treatments are years away. we have to reset the clock again, that's a bummer. >> you said here, there are a few other companies where maybe investors should look to,

acadia, neurocriminal sage which had a treatment yesterday for post-partum depression >> sure, biogen has been focused on central nervous system disorders. none of these have a lead. but at the same time, they relationship within biogen's strategy it will be a natural tuck in acquisition. at the same time, biogen may need to rethink whether the central nervous system is the place it wants to be when you see a move like this you have to ask bigger questions of what you are doing. >> are they in plano because of the sell-off? or no because of the pipeline issue? >> it's possible it's possible. cellgene was similarly down in the dumps and got bought out today. just because that's happened once does not mean that that's a viable exit strategy for every company. as you can see, the cellgene bristol meyers deal is highly contested. >> exactly >> someone could make a play, their shareholder base could

raise some objections if that happened. >> charlie, thank you so much for joining us today to break it all down, charlie grant from the "wall street journal." >> here's what else is coming up on "the exchange." >> okay. after months of waiting, the ipo pipeline opens up we will i haves hitting the take, with 234 more companies in the wings, will it be a jolt for the market plus, with no progress on a deal with the u.s., china cozys up to europe, that what they're seek and what it could mean for our negotiation also and is wall street saying good-bye to the suit this is "the exchange" on cnbc

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it handles everything, and reaches everywhere. this is beyond wifi, this is xfi. simple. easy. awesome. xfinity, the future of awesome. . welcome back the 2019 ipo pipeline is opene levi strauss surging in their first hours of trade lyft meanwhile is continuing their road show. we have this covered from all angles bob pisanti is live bob, let's start with you. what itself the sentiment after this ipo >> oh, a lot of fun today, classic ibo. it's a day of band down here on the floor.

levi strauss, price talk, 14 to 16 opens at 17, prices at 17, excuse me, option at 22.32 the timing was perfect plenty of pent up demand it was also a strong start to the year we're up 12% with the s&p. we got an iconic brand and what most people perceive to be a reasonable evauchlths don't expect this to happen with everybody else there is a ton of stuff out there. 234 ipos a whopping $700 billion valuation. they should seek upwards of $100 million. 96 billion was the number in 2000 who will buy this stuff? will they revolt stay tuned, waiting in the wings, you know what is out there. uber is the big ones, they have airbnb, pinterest, robinhood,

pelet peleton. after this debut, you can believe every single one of them will push valuations higher. >> they cone want to leave anything on the table. how much does the family who owns this stands to gain let's go to courtney reagan in time's square. >> reporter: hi there, not only is levi the world's biggest denim seller also in the u.s., it did all of that being a private company. why go public now? levi and its prospectus says it is allowing it to increase the pace of sales and investments. however, most outside the company agree it's largely about allowing the descendants to cash out their stakes so it's $17 times 21 it's changed million shares. >> that values the family's

stakes at $359 million for all of the family members that were a part of selling their shares today. but beyond that of course, it's joining the club the oldest next best competitors for denim in the u.s. and the world, they're publicly traded, too, of course, think about that benefit that it can give when they're trying to recruit employees on that competitive san francisco bay area, stock options, that's something that's a nice thing to be able to offer employees especially when you are recruiting >> courtney, i wonder about the revenue trends they have been seeing in terms of picking this year to go public. and the department store, which you'd think, okay, we talk about the department store being dead. that's where levis still does a lot of business. i'm surprised it didn't put any damper on any sentiment. >> exactly in the last two years, levi saw the total revenues, net revenues grow 14% in the last year, 8%

before that 57% of what levis sells is in a wholesale accounts, it could be a department store or a nordstrom. >> that could be with target or walmart. it could be online all of that together as long as it's not a levi-owned store count as wholesale levy said it's top ten were up 8% last year so even though we talk a lot about the trouble, the traditional retail and department stores are seeing, levi isn't feeling that necessarily. at least not for its brand sales. >> courty, fascinating stuff. now, from levy's, let's talk about lyft the company prepares for its ipo next week. what do you see, leslie? >> i do see rain, indeed, the lyft radio show is about 45 minutes under way, the lunch with investors here at the st. regis. we saw about 100, 150 inadvisors

file in a little bit ago where they'll hear presentations from logan green the ceo and co-founder as well as john zimmer, the president and co-founder and brian roberts who is the cfo of this company, i am told they are prepared to answer questions related to future profitability and cash flows and how they see a path for profitability. they lost about a billion dollars last year, which has been widening year over year, as well as explaining how 2019 and 2020 will be investing years for this company, they plan to deploy capital and ramp up their investing part of the business they will be answering questions about their insurance business they have reserves set aside for insurance, the driver, which makes modeling these companies a little different they're expecting to explain that quite a bit as well as a

breakout of market shares by city that's something that's important to investors and the company as well, kelly. >> thanks i know there are some places they're doing the number one dog. leslie picker following the road show for us. thanks, very much. we will look for that ipo next week. coming up, president xi says ciao italy bye-bye to suits, we are live at one of new york's top suit makers coming up or breaking new ground? this is the mercedes-benz suv family. greatness comes in many forms. lease the glc 300 for just $479 a month at the mercedes-benz spring event. going on now. mercedes-benz. the best or nothing.

welcome back to the exchange here are some of the movers at this hour. apple is leading the dow, get this it's once again becoming the world's most valuable company, overtaking microsoft. the stock is up 2003% this year, having its best quarter since 2017, semi stock versus also on fire on the backs of micron, which is rallying. >> that stock, which is up currently around 8%, 8.5%. it's on pace for its best day of march of 2018. the etf having its best day since january. homes are rallying mode. homes dropped, horton, lennar, leading the gains, you see about 3% there 2% for the index overall food producer conagra- beating and the snack and frozen fruits

had a 12% rally. now to sue herrera >> hello, kelly, hello, everyone, afghan officials say a string of explosions struck near a shiite shrine in kabul it left six dead and 20 wounded. three explosive devices were remotely detonated kurdish militia that captured the last strong hold are searching for strayed jihadists. the syrian defense force moved into the city of baghouze on wednesday. they are asking the judge to block the release of video that police says shows them engaging in sexual acts they say releasing the video would violate laws dollar general retail

stores, kingston pharma is recalling one lot of the dg health nationals 2 ounce bottle on concerns it could be contaminated with bacteria luckily, so far, no illnesses have been reported you are up to date >> that's news, thanks have been much here's ahead on the exchange. >> coming up, they may be free, but bread sticks and salad are paying off for darden. cvs gets on board the cannabis train. and you may want to think twice about that kale sad.la it's all ahead in "rapid fire. cal: we saved our money and now, we get to spend it - our way.

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welcome back let's catch you up with a few stories on your radar today. it is time with rapid fire, here is dom chu, julia boorstin, you were second in order, so i didn't want to screw everything up >> exactly you saved the best for last. first up, shares of darden

restaurants follow strong sales at olive 2k3w5r7bd the company's ceo says customers are responding to promotions like never ending pasta and they are strong at this point they are up shares. >> do they have that >> they do i remember being on power lunch when they launched it, they showed me to log on to buy the car, it was pretty amazing. >> was at this time pasta patch? >> they have a record september, they had chicken alfred sfochlt they have oven based pastas. >> you know, they have a very strong i think portfolio of change, red lobsters, yard house, capital grill, in addition to olive garden there is not a lot of overlap. >> they have been involved to get them optimized and make some

tweets the ceo says he watches a trade and says yeah, ail have a slihrm as a sign of discretionary selling. >> you upside them on the oldest tricks in the book if it does signal consumers are willing to spend a little more on this, we didn't hear about the cost inflation side of this that means they are considering. >> there's a lot of good nuggets. it's a beige book arc little at odds with what everybody else is saying. apple is set to announce a news is up description on monday apple wants half of all the revenue, apple usually takes about 30% the first year so half is a big move.

>> here's the thing. everyone is concerned. they are watching apple carefully. they broke up the album. they really destroyed a lot of revenue there for these different music labels i think people are skeptical and concerned because of that, the real question is if they can get people not subscribeing to start paying and paying incremental revenue. >> for some of the sub skrieshs or the papers, they don't want to lose the data, targeting. >> for me earthquake when i first saw that i thought what about the papers, you are basically making them less to the pub r publisher. >> it's papers if general. any magazine publication, you are giving up some of your direct access. >> that information is valuable.

it's not whether the die hard reader is going to give that up or have other people to pay for something new and whether that's going to be a new revenue stream. >> let's not forget, tim cook has an aggressive agenda, this would be a valuable one. >> i think between the shared performance, people will say maybe we counted apple out a little too quickly the biggest company in the world again. all right, let's talk about cannabis cvs is announcing it started selling cannabis products in stores across eight states say that say they are strictly coppicals, lotions and creams. ceo larry merlot sat down with jim cramer today to explain their decision to enter this space. >> anecdotally, we heard with customers, gee, it's helped with pain relief for arthritis, you

know other ailments so you know we're going to walk slowly we think this is something the customers will be looking for. >> again, they're annual available in stalts. >> this is the elephant in the room this is silly. the illegal terrain and some states make it legal so you put nationally chartered banks in an awkward position by the way, not only is the toothpaste out of the tube, the cannabis is out of the pipe right now. >> right is it too strange to look at this and say it's a gateway drug you got a foot in the door, a toe in the water to figure out if there the a la tent demand and you go forth with the regulatory environment you start to try to change legislation to get things more uniform. >> that's why i think the key

thing here is only topical this is like the equivalent of ben gaye >> we're not eating it they're not inguesting it. >> they're introducing creams. but the question is whether it's a gateway drug for consumers, with something that was never purchased. >> it may or may not be a guaranteed druchlth this was a gateway product. >> of course >> people become comfortable using this, it has the cbd in it there will be other products down the road. >> i think the stigma is gone. >> a war fought in the 1960s, for pete's sake, even the 1930s, what was that picture? reefer madness. >> that was from the 1930s the moment is passed and they will want unified regulations >> that interview with larry merlo will air tonight

you may want to think twice about kale one of the contaminated vegetable itself, came clocking in at number three dirty dozen list for 2019 that had the highest amounts of pesticides. >> strawberry and spinach. all of the things i thought were healthy for me somebody told me, i didn't think about it that deeply i buy bagged groceries it's not about the pesticides you can or cannot wash off it's the fact they use them and they get absorbed bety fruits and vegetables into the actual stock. >> so eating kale isn't healthy any more, what can you trust it will be much harder within the soil is contaminated every chain picture organic front and center >> that doesn't solve it they say make sure it's organic. you know, bill

>> i'm not missing anything, because i don't eat kale. >> you're a chef. >> yes, but i'm not one to go as you know for fads. >> you think kale is a fad >> i think we're past the fad stage, so kinwa and acai i tried to look it up and came up with the the american society of architect can you recatural . -- architectural >> they cost more, bananas -- >> not one of the dirty dozen. you don't need to. >> kale the out. >> you will make consumers pay more, right? >> it feel itself we have turned over every stone, is there anything exotic for us to introduce in. >> no. >> we are going back to baked beans. >> dintie moore soup.

>> upsell that to soup as well. >> see how he brought that together. coming up, next installment of rising risks. diana oleg has the climate on real estate and a quick look at the markets, the dow up 200 points up 184 we're back in two. so, servicenow put your workflows in the cloud, huh? mmhm. your employees must love you. [ chuckles ]

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. despite heavy snowfall in some parts of the country this year, experts say ski seasons year all are getting shorter because of warmer temperatures it could have an impact on companies that profit from show. more on the rising risks of climate change >> reporter: colorado may be having one of its best ski seasons this year, but all this snow is actually proof of how

undependable winter weather is becoming because last year's season was one of the worst >> that was the first delayed opening that i've seen sentence i moved here in 1991. >> reporter: they sell 1 million home, and says this year got off to a slow start. >> last year stunned people. i think a lot of people are gun shy, depot its on hotels, rental properties and everything else. >> reporter: and the winter sport season is likely to become less reliable. the amount of snow in the western united nations has seen an average drop of 41% since the early 1980s, according to research published in the geophysical research letters as a result, the snow season shrunk by 34 days. >> that had a direct effect on the valuable properties all that snow sits on. >> as far as the real estate business i own and am brokered within, what will happen where is my livelihood in three

or four years? >> reporter: ski resorts could drop 15% due to warmer winters, according to the university of wisconsin. in lower elevations, like utah, idaho, nevada and part of california, they could fall as much as 55%. it's not just the fancy homes, tourism contributes about $20 billion to the u.s. economy each year, according to researchers at the university of new hampshire and colorado state university the bulk of that spending is at ski resorts. is there a risk actually to the values of your properties if you have a shorter ski season. >> reporter: robert katz, ceo of vail resorts, it operates 15 resorts across the u.s., canada and australia. it also owns luxury hotels and a real estate company. >> we hear about again this

weather availability if i'm going to invest if veil resort, how do i know you can consistently drive results >> reporter: his answer, fight climate change from the ground up lead by example and at the same time protect the business. >> our sustainability practices are critical to our long-term sustainability as a company and the financial performance we can deliver. >> so it's relately your bottom line >> absolutely. >> reporter: since 2017, they announced to using 100% renewable energy, that means solar panels and energy efficient snow making. yes, snow guns in colorado and it's buying more property recently in vermont and australia, a geographical weather hedge. >> it's critical because what we are seeing is variability. which means every resort is not having the same weather at the same time. >> reporter: it works at all vail resorts properties, but must be purchased before the

seasons start. as ski seasons become shorter. there is one that can lower the risk for resorts and residential real estate. >> that is turning this winter wonder is land into a as i remember playground, that means investing in zip lines and summer coasters and it appears to be working. summer tax revenue was 30% higher in vail than four years before, according to town of vail >> it's critical we think we need to provide a terrific experience all year around >> so the know this year helped mitigate some of this, at least for the time being >> really this year. we will have an incredible ski season out west. you look at 9 feet in tahoe, they had to turn skiers away this bomb cyclone and you

juxtapose that to last year, it shows you the variability. >> it's great stuff. we really vould u should have you here to talk about mortgage rates. all people want to know is, is it going to go hao lower we are seeing rates for the year, for average buyers that's $150 less than if they bought in november bring it on. >> thank you so much just about 15 minutes to go until power lunch. tyler mathieson joins me now she at one of the hottest new restaurants in manhattan, ty. >> reporter: kelly, i drew the lucky straw. i'm at the thomas kemper newest of high-end fine dining in hudson yards last night was the first night the tack room served the general paying customers tonight is night number go we will talk with chef keller, really if there were a mount

rushmore of american cuisine, he would be right on it we will talk about what's happening in fine dining and the audacity that it takes to open a 200-seat palace of cuisine like this that's all coming up top of the hour on power. >> are they going to let you out of the kitchen, tiler? >> reporter: no, i'm stuck here in the kitchen it's fascinating to see. they're just getting ready the men and women will be arriving at about 2:00 not that they haven't been preparing all morning. >> right the frenzy all begins. tyler, we'll see i soon. coming up, big dress code changes are coming to wall street robert frank has more on that story ahead. s? it's not about quantity. it's about quality. no trendy stuff. i want etfs backed by research. is it built for the long-term? my reputation depends on it.

flexshares etfs are designed and managed around investor objectives. so you can advise with confidence. before investing, consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully. lies beyond the tech sector. it's about technology transforming every sector. ♪ at pgim, our bottom-up approach uses a technology lens to identify long-term winners. from energy... to real estate... to retail. finding such opportunities for alpha is the true value of active investing. and around the world, you have a partner in that pursuit. pgim: the global investment management businesses of prudential. the gis it to carry cargo...ment greatness of an suv? or to carry on a legacy? its show of strength... or its sign of intelligence? in crossing harsh terrain... or breaking new ground?

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want more from your entejust say teach me more. into your xfinice remote to discover all sorts of tips and tricks in x1. can i find my wifi password? just ask. [ ding ] show me my wifi password. hey now! [ ding ] you can even troubleshoot, 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 office dress codes have been traning for years, now wall street is really joining the trend. we have the impact that's having on those whose bread and butter is making suits. >> reporter: the traditional business suit has been going out of style for years, but goldman sachs' announcement it is going

casual marks the end of an area of an industry that dressed wall street for decades, national suit seals from 13 million in 2011 to whenever e 11 million last year. they're million in the next few years. millennials are driving the trend. >> i think it's great that places are relaxing their dress code >> wall street was one of the last hold outs for the suit. >> we said if goldman goes casual, there's going to be a problem. they are such a bellwether for the market and such a trend setter among other firms i think we'll see the hold youths quickly adopt >> the future probably looks like this, at michael andrews, a suit maker in downtown manhattan that counts dozens of goldman members as clients suits are down the past three years. they are consolidating the industry, buying up the oldest

suit maker and pushing into casual ware like blazers, jeans and jackets and focusing on events like weddings, big parties, tv and movies some say the announcement could help the business in the short term since sports coats will become the new power suit. >> robert frank joins -- >> i like the guy you interviewed that said millennial who are going to be the clients of the future for the suit shops? i thought maybe i just couldn't hear him anyway, we will bring robert back and a look at what's happening with the very, very old industry on wall street. president xi kicking off his european tour in italy could it drive him closer to european leaders and what impact will it have on u.s.-european

relations? that's next. ♪hold on, i'm comin' ♪hold on, i'm comin' ♪hold on don't you worry,♪ ♪i'm comin' ♪here we come, hold on♪ ♪we're about to save you i'm comin', yeah♪ ♪hold on don't you worry,♪ ♪i'm comin'

president trump ramping up his rhetoric against the trade practices against the european union and tariffs will stay on

china for a period of time president xi is kicking off a tour to europe he's pledged to join the one belt one road initiative joining me is fred, a cnbc contributor. welcome. first of all, president xi is going to italy this is an unusual trip, isn't it >> first visit in ten years for president xi italy is expected to mark the visit by endorsing the one belt, one road initiative that spans from east asia to europe the chinese say it will help accelerate trading commerce but it's received a lot of pushback saying it's china trying to extend its influence getting italy on board is a big win. >> we are used to themin afghanistan, pakistan, parts of africa and south america

for italy to sign up, what does that tell us >> they are making their way to other parts of the world that are important. getting italy on board, a big economy and geographically important given the presence in the mediterranean. >> good point. fred, what do you see this significance when president trump has no qualms saying the eu treats the u.s. worse than china. >> first of all, in the belt, the end of the belt, the end of the road is europe so, europe is really the goal. there was $700 million of chinese investment in 2008 before the financial crisis. it's now 20 billion in 2017. the number of mergers and acquisitions were nine times the value last year of u.s. mergers and acquisitions in europe there's huge momentum here what's changed is now europeans are getting nervous as well. the european commission talked

about china, as a systemic rival. they are tough words in euro speak. the european counsel just broke up from the meeting with theresa may, i have a little news from that if you would like it. they are going into a meeting tonight about what to do about china. they are very divided. some countries need the money more china likes picking them off one by one if you compare it to italy, a 16-1 gdp it's got the leverage. if they were negotiating with the eu, it would be smaller. >> we have talked about germany into russia's influence and the pipeline and the way that might change the dynamic between germany and the u.s. now we have china making economic inroads to italy. where does that leave the u.s.-eu relationship >> this is a time when we should be shoulder-to-shoulder with the european union it's not president trump's

instinct he's threatening tariffs with germany. he doesn't like the fact, the reason the europeans are so tough to negotiate with is they don't want to make deals over agriculture. the french block that at every turn if we negotiated with china shoulder-to-shoulder, we would be three times the size of china and have real leverage instead of being in that position, they can shape the rules and standards for the future what we forget about, this isn't just trade this is a question of what system, economic system and what governance system is going to have the commanding in the years ahead. >> there are a lot of examples where countries that took from the chinese are in a more vulnerable position. take sri lanka when they were supposed to pay back, they were short.

that is another case where sometimes the chinese do, in fact, take more than they can. >> we'll see what comes of this trip the news out of the eu meeting, this with regard to britain and brexit >> i'll be fast. it's a big deal. theresa may was with the european counsel she wanted an extension of june 30th they have given her only until may 22nd that's the day ahead of the parliament deadline, then only if she can get them to pass her deal next week, which remains unlikely then they will give a longer extension. this country, the uk is losing so much through brexit and i think a year's reflection could bring a referendum they won't give her that unless the uk participates fully in the may 23rd election. the eu is playing hardball with may and have gone into private

session without theresa may to hash out the draft >> fred, thanks for joining us and bripging us that news, we appreciate it very much. that does it for "the exchange." i'll tune in for "power lunch. >> i'm melissa lee with tyler mathisen who says venn imis bad should you get in on the action? is the ipo floodgate about to open shares are on track for the worst day in more than a decade. fed fallout. no more rate hikes a big chunk of the dow coming from apple "power lunch" starts right now as we said, the bulls are out. the bullish mood is a perfec