pays a great dividend. >> xp below 50 always trades up. >> many reasons to own verizon >> dow is currently down 380 that does it for us. "the exchange" with kelly evans begins right now thanks you, scott. hi, everybody. here's what's ahead as markets sell off bond market warning as yields fall around the globe should investors be fearful a recession ahead. apple has been a market darling this year rallying 22% will a global slound put a halt on that rally or will the company's new ventures help keep it thriving? >> will europe's faltering economy give restaurants here at home indigestion how weak are they or aren't back home we begin with dom chu. >> when i got this morning at 5:00 a.m. it was going to be

lower but not like this. we are down 370 points we were down about 450 points at the lows so, again, a percent and a half decline. percent and a half for the s&p 500. nasdaq 2% decline. 2815 was the level maybe support. we'll see what happens sector or market cap to watch is the small caps the small cap stocks are on pace for their worst day of 2019. sure it's a young year still off by 3% for those small stock caps remember this is the first time that they are trading below their 50 day moving average since january 23rd not all bad. check out what's lapping with tiffany. very big bright spot earning came in better than expected sales and comparable sale stores missed expectations but companies expect earnings growth to pick up in the second half of the year that's why there's green on the screen >> it's been a turn around

welcome to "the exchange". i'm kelly evans. stocks are falling sharply at this hour. we have dreadful manufacturing data out of europe that's taking a big toll and pushing the treasury yield below 2.5% home sales jumped 12%. of course now low rates means lower mortgage rates president trump confirming in just the past hour or so he will be nominating stephen moore to the federal reserve. with markets under a ton of pressure let's get to bob pisani with more on all of this at the new york stock exchange. >> what happened to our rally? remember yesterday we were all happy. we were at the top of the market 2.4% from a historic high on the s&p. what happened? what happened is we got mugged by slower global growth again. so remember the bull narrative the fed and the central banks have our back. good news. tariffs will go away good new chinese will stimulate their way out of a slow down

and the europeans, this is the bottom of the lousy economic numbers. we have a dovish fed that's now priced in to the market the president has made it clear there may be no immediate reduction in tariffs and the european manufacturing data, you heard from kelly particularly germany, so bad that the ten year bond yields over there went to zero. here in the u.s. the ten year three month curve is varying and triggered big concerns for a recession in 2020. here's the bottom line the bull narrative is running up against reality. if this week global economic growth narratives stay with us it means stocks are pricey at this level and that's a problem and you see 40% of the s&p 500 gets its revenues overseas back to you. >> bob, i just want to share this quote with everybody that i just got from bill miller asking him about the yield curve and stock market he said the real risk is if the fed tightened with the curve invert which is clearly not going to happen.

northeastward, bob, we know as we go back and look at the previous examples going into the last recession what he was describing is playing out. this time the fed is signalling they are not doing anything else for the rest of the year >> the issue now is the market believes that it's way too early for the fed to start lowering interest rates, so they are not going to -- they've done as much as they can to help the market move forward at this point what you really need is stability in global growth and the numbers today, over in europe just didn't support that thesis remember if you're getting zero growth in earnings for the s&p 500 in 2019, maybe, but stocks are pricey 16 and a half to 17 times forward numbers. market would come down a little bit to reflect that. that's what's going on right now. >> bob, thanks very much now to the bond market let's talk a little bit more about these warning signs we're

seeing for the economy the inversion, rick, what can you tell us? >> reporter: i like to look at all one week charts. we have double digit losses on the curve for the week we have twos down to double digits, 12 basis points. middle part of the curve, fives, tens, down 15 base points. 30s down 13 base points. these are big weeks. bund yields are ten basis points but the problem is they ended up in negative territory with those ten at minus two basis points. dollar index is up on the week and bob is right the inversion is something to deal with. honestly viewers do you need an inversion to know the domestic economy is slowing that's the dynamic in trying to find an equitable partnership and relationship to stocks and their strength, we all know bob is right. earnings won't be happy with less growth. but also going to be pushed and

numbered out at a much lower long runway of rates and when they get back in sync i'm not sure the u.s. stock market can't still be head and shoulders above the rest back to you. rick santelli with those yield curves invergt and weak manufacturing numbers from europe how do we square those recession signals with the mick story we've seen here in the united states. let's bring in chief economist with oxford economics and paul hickey welcome to you both. greg to you first. how much emphasis do you put on this inversion of the yield curve? >> i think it's a signal that we should not discount. over the past nine recessions we've seen this type of inversion of the ten year versus three month. it's a small we have to consider we have to keep in mind u.s. fundamentals remain relatively strong gdp momentum is still around 3%. it will decelerate towards 2%. but the fundamentals are very solid for the time being >> different story for germany which if you look over the past

two quarters, going back to the middle of last year they had a contraction in the fall. 0% reading for the last three months of the we're. we're seeing this could be a prolonged period of weakness how unusual would it be for a german recession to cause a u.s. one or how serious would it be if it causes a u.s. slow down? >> what we've been seeing in the past year is essentially the u.s. has been the sole engine that's preventing a sharper slow down in global momentum. what we're seeing in europe and germany is we're still not yet close to that bottom in terms of growth there might be some green shoots but we're still in that slow momentum type environment. and the u.s. is slowing. so that buffer in terms of global growth is mr.ing over time and will mr. over the course of a year >> going back to what is playing out now. miller said the real risk if the fed tightened with the curve inverted which won't happen.

couple of things might be different. one if the u.s. gets pulled into a slow down that would be unusual versus us causing the last one the other is the last time the fed continued to hike and this time they are saying we aren't going to do anything more this year >> to greg's opening point you shouldn't dismiss the fact that the yield curve inverted the lead time if it does happen to a recession is well over a year secondly the fed is already recognizing the fact that things are slowing and not doing anything for the rest of the year, at least they are not hiking rates towards the end of the year markets of pricing in chance of a cut but that's another story i think at this point, the market selloff today, i think when the curve did invert earlier this morning that's when you saw the losses in the markets start to accelerate in the futures and then going forward. i think a lot of it is algorithms and computer driven history does show that the markets have tended to perform well at least in the short term.

>> paul, how much more sort of runway so to speak is there? are we talking about the kind of situation now where we have just months to go or maybe the type of situation where we could have two, three, four years for this to play out? >> as far as when a recession is going to start, that's way above my pay grade i think what we do is we continually listen to what's going on in the markets. we have seen some slowing data but we've seen stabilization today just look at existing home sales. you saw the best month over month reading in years, and the second best of the cycle so i think we're starting to see a pick up in housing data as mortgage rates have come down. home builders got killed last year from the whammy of tighter fed, slowing economy, and the tax policy which really hurt housing. so those head winds are starting to ease with lower mortgage rates and started to see it in

the earnings reports of the fourth quarter for the home builders starting to see a pickup in the first quarter. so i think that's something to keep in mind and one stock we like is pulte homes to play that trend. we're starting to see data show an improvement on the housing side so i think these stocks can rebound in 2019 after a disastrous 2018. >> greg, again, is this where we're seeing brexit and the u.s.-china trade talks really come to a head we know china is germany's biggest customer there's a lot of uncertainty with what happens with britain leaving the uk or not or the uncertainty. can we eye those two events as one of the reasons why we've seen the slow down >> i think so. the ongoing linger trade dengss between the u.s. and china, the fact that we've seen a global slow down that's in part led by the asian complex is one of the reasons why we're seeing the germany economy struggle in this

type of environment. we know there are very specific one off factors in the germany economy that will dissipate. if we bring it back to the u.s. what's very important the fed is on the sidelines the fed has reached terminal policy rate. we don't foresee any more rate hikes. that's a big positive going into 20 >> thank you both very much. great stuff. coming up the regional bank. the sector is under pressure as values continue to fall. investors continue to worry about apple's dependence on iphones could a shift to sports be their future and do investors need to worry that struggles abroad will hit our shores what the restaurant sector is telling us about that. that's still ahead

welcome back we're looking at a big selloff across wall street some of the hardest hit names include regional banks we're not talking about over the past year, we're talking about this week. over the past five days. today the regional back etf is on pace for its worse day of the year let's bring in president of menden capital advisors. >> what a day we chose >> couldn't be a day they rallied 5% how fair it is for people to say i can't own the regional banks

with a yield curve looking like this >> i sort of hate the trading thinking about, it's getting worse. at the send of the day the economy is on pause because of this trade stuff there's a lot of great parts to this economy that's doing really well this yield curve is not indicative other than global pressures. >> even if it's not indicative of anything if you're a bank that borrows short and lends long, does that fundamentally disrupt the business model >> that's a mistake. banks don't do that. a really good community bank is going to have lots of core funding. not pay much in interest a lot of your viewers know that. at the end of the day they are going lend to people at prime which is floating. they are not touching those. the spread here today is intact. >> we're looking at not a fair proxy of the spread they are getting in business which is still fine could be better, though. >> well it could be. the early gains from the fed

raising interest rates disappeared. once rates got above 2%. that was it. banks margins settled in if you're a mortgage bank, have a mortgage line this business is about to take off. the refi business has been dead. it's coming back securities on your balance sheet they just gained value sell them for gains. >> what about loan demand. even with all the stimulus for the first part of this recovery demand very weak is that picking up at all. >> very interesting. if you look around this country the southeast grows twice as fast as the rest of the country. loan demand is fine in those markets. not so fine in tax heavy states. if you look at the northeast, you look at illinois, you look at california, it's tough. people are leaving and as people are leaving they are moving businesses. i mean amazon added more, as if national needed more help growing. >> it's bursting at the seams. names you want to own i presume

are in those kind of markets >> bsolutely names like pinnacle or first bank in nashville, lots of small ones banks that are not nashville want to be there one of the biggest themes this year and has been ignored a couple of big merger equals have been announced created a lot of shareholder values yields went up what you're looking for smart deals. cost-cutting and you're going to see a lot more me too kind of deals. last year two bad deals. investors reacted poorly they were not shareholder friendly these are the type of transactions we want to see. bb and t and suntrust is good for shareholders >> investors are getting them at a discount price action is not warranted. where does that leaf the big four banks do they suffer from the averaging out of all those trends you described across the country or is it because they have more capital markets exposure although like you said

marking things up. what do you think? >> i think that's right. i think if you're one of the big four banks, you can buy anybody. capital markets are really important and there's a great ipo pipeline got to see it. got to come for them to earn bunch of money they can keep cutting costs. if you're in the middle of that group you got to get bigger. that's why we saw the bb and t-suntrust merger. there's not much left in the southeast. if you go to ohio which is quiet, you know, you mentioned two today, key and huntington. maybe they get-together and cut costs. there are places that you create earnings value just simply by combining and by the way the big unfortunately are in the cross-hairs of the new house finance committee. >> regulatory issues well if you're right that's good news for even the small caps today dragged down by the

weakness thank you for joining me coming up with investor concern about what lies in apple's pipeline we got a look at what the next market that they may be targeting could be >> tariffs weighing on the beer industry and seeing a major spat between two big brewers. >> shares of anheuser-busch is down 3%. we'll look at how many factors are at play and if they are bracing for more of a slow down. as we head to the break we look at the biggest losers. nike is down yup that's what we do. and you guarantee they'll get there? yup that's great! i have two sets. you know ship sticks only ships golf clubs? right? honey are we there yet?

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welcome back to "the exchange". a big selloff on wall street as rates are spooking investors in that yield curve we're off the loss the dow dropped 450 points right now down 375 that's 1.5% decline for the dow, s&p and nasdaq is down 2%. here are some movers shares of boeing are down 2% after news that indonesia's national airline is cancelling a $6 billion order of planes pilots union will start testing 737 max software fix in simulateors this week. elon musk urging employees in an e-mail to make deliveries a priority as quarter draws to a close.

tesla shares are down under 3% look at hibit sports up 23% today on strong earnings. the athletic apparel and footwear retailer reported an unexpected jump in comparable store sales and gave an upbeat full year forecast interesting read on the forecast let's get to sue herera. >> here's what's happening president trump talking to reporters before departing the white house for weekend meetings at mar-a-lago. he, again, criticized the democrats for what he said was their anti-israel stance >> the democrats have very much proven to be anti-israel there's no question about that and it's a disgrace. i mean i don't know what's happened to them but they are totally anti-israel, frankly i think they are anti-jewish >> no decision has been made on r. kelly's request to a judge to allow him to fly to dubai to perform several concerts next month. this after his attorney asked

for more time to provide details of the trip. the performer is looking for a way to make money to help pay his child support as well as legal fees stemming from his sexual abuse charges complaints from consumers led to a nationwide recall of tyson chicken frozen strips. customers found strips of metal. tyson will recall more than 69,000 pounds of the frozen strips which have a best ifuse by date of november 30th, 2019 so check your freezers all right. that's the news update at this hour i'll send it back to you apple is set to hold an event on moan. the tech giant is expected to talk all about its move into streaming media. part of the pivot is apple's focus on its own sports war room this is a conference room housing dedicated to those watching, curating and pushing sports highlights to users on

apple tv jacob, thanks for joining me >> of course >> this is such an interesting story. i was not aware apple had big ambitions in sports. how big are they >> in apple's cale not the biggest ambition still fairly minor we're talking one room on its sprawling campus they are looking across the sports landscape hoping to curate and present fans with simple easy to fine games across the landscape. >> one thing apple has been very good in the past is that curation effect. we'll take all of your content and a good interface on the iphone what will they do for users. how would i use this sport surface that they are working on >> a great comparison looking back with what they did with music and itunes almost two decades ago. you open the tv app on your phone or on apple tv, the box that they sell and you'll see a list of games if you click on

sports it will show you what's on now, what's on later. additional when you're not on the app you'll get notifications. one click will take you to the app whether it's the espn app or cbs app. they are showing you what's on right now. >> are they looking to serve the general sports viewer or hey, kelly is interested in nba basketball but not so much college. >> right now they are in about a dozen sports you won't find all the sports but all the big ones are there when you open the app for the first time you can go in and say you're a new york knicks fan they will give you updates when the knicks start a game, when they are in a close game and they will know you're an new brunswick fan so they will get a sense of you right away. >> our team, jacob, we have some long-suffering knicks fans but you said they are one room and a pilot effort but netflix does not really do sports and as apple is looking

to maybe have a big streaming announcement next week, are they looking to try to own this conseventh it sounds like they won't be streaming the content themselves they want to point you to it so that still requires me to have some sort of cable sub description or streaming subscription >> absolutely. it's fascinating right now in my world and the sports world as we see these tech giants enter the landscape in different ways. netflix, no live sports but increasing the documentary output in sports they have a bigamy kale jordan project coming when we turn to apple they want to play middle man there are economic benefits there because they do take a cut if you subscribe for espn plus or playstation view through the ios platform it's in their best i want to sell these things even if they are not directly offering it to fans >> jacob, thank you. appreciate it very much. here's what's ahead on "the exchange". nike is slipping after reporting

earnings do strong dollars help their les. and will a strong economy keep us immune from a cold. that's up next in "rapid fire"

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welcome back let's catch you up on a few stories that should be on your radar. it's time for "rapid fire" they are here for their take it's the end of a long day >> a long couple of weeks. i'm happy to be here i love being on this show. >> 400-point selloff and so much to talk about. take a look at these pretty awful manufacturing numbers out of europe overnight. germany's manufacturing gauge hit a six year low this is the early flash reading for march. this could be the whole reason behind the nasty selloff we're seeing today germany's economy hasn't grown since early last year. >> let's go the videotape. let's go the charts. i asked the gang to build a ten year chart comparing our ten year yield to the german ten year yield ten years ago around the financial charisma our yields were about the same. about 5%

theirs were higher than ours ours has recovered germany has never recovered. it's been, you know, down for the last four years. and now it's negative again. so their economy still has struggled, has never fully recovered from the financial crisis and now they are dealing with brexit and all the other trade wars >> germany especially go back five years to the european crisis and it was all about the bifurcation, germany is strong, benefiting from the cheap euro, all the other economies are still weak but when you started germany was the sick man and now with the auto exposure with china and everything else. >> it's curious now because not only it is an issue for germany. it's spreading over to the continent as a whole not just the germany manufacturing numbers, everyone u. german is a big part of it bill brings up the whole brexit idea we spoke to a slew of economists that said sentiment in uk is being brifern by brexit.

when you have a trade relationship between the uk and continent that may be a little bit more tenuous you could have the makings of rapid deceleration >> frankfurt is getting a lot of bank that might be leaving the uk related to this is what has been happening to interest rates. germany's ten year yield went negative again overnight the u.s. ten year is back below 2.5% it was 3.25 back in november ten year yield is below the yield on three month treasury bills. that's what we're talk about the bright spot is anything that keys off these rates, housing, corporate loans that's where people are seeing this will rescue the spring selling season >> on twitter today somebody made the point that effective fed funds rate the benchmark rate, yesterday was 2.14%. so that means we're within spitting distance of the ten

year government note yield touching what the government lends at itself to the banks out there. >> one has to wonder what today's selloff means for the long run people getting jitters you have hedge funds investing when you see selloffs like this does this drive yields lower does this spook people to the extent that it causes that happen >> i'm not convinced this will help the housing market yet. i'm skeptical. interest rates have been low anyway for the last several years. as we've discussed in the past here, the baby boomers for one are still sheltering in place and not selling their homes as they might have otherwise to provide some inventory for younger buyers to come in. that's not happening the younger buyers, the first time buyers couldn't get loans for a long time. that wasn't happening. home builders weren'tbuilding

those fir time homes and they are going to the high end which is now suffering because of the salt deduction caps. so california and new york and new jersey are suffering in that regard you know there's all kinds of problems that the housing market is afghanistan that lower interest rates won't solve >> nike, shares are sinking on weaker than expected north american sales the company warned sales growth could slow in the current quarter. declining about 4.5% >> in context this had been a strong performer near an all time high before reporting earnings i want seems like a lot of traders are selling on the weakness interestingly one of the bright spots was women's sneakers which i found really interesting. looks like women are going on a lot more runs these days and sneakers are back in style >> the weak spot was, women sneakers might being a great but nobody is going retro. converse has been a weak spot

for them shifting consumer trends move, this is something that a lot of these apparel makers have to deal with. the trends change a lot. >> this tells me this is not necessarily a macro. today comes back to are we learning something about these companies that inform us about the state of the consumers >> am i the only one that think the nike report was not that bad? they are doing well in china they are doing okay here in the united states. okay not as strong as it was last quarter their digital sales up 40% their new sneakers up triple digits >> i thought the quarter was fine >> buy the rumor sell the news is what's going on let's talk about pinterest it's moving up the timetable for its person of interest it plans to debut its shares on the new york stock exchange next month. guys, uber, lyft --

>> another road show >> another road show >> pierre, plaza >> palace hotel. all covered and ready to go for the crazyiness that will be april. in seriousness april will be a crazy month. we're starting to see this rush. it feels like a rush these unicorns have been raising money privately for years. why are they coming at the same time two things the calendar for one the government shut down caused a lot of these things to be pushed to the second quarter of the year. and then also no one wants to go public in the summer time when the buy side is in the hamptons or cape cod and not really paying attention to these road shows. you want to maximize your investor attention >> spring and fall and then quiet. >> i would say this. look at this market. if, if hypothetically this kind of stuff continues for the next

few weeks you wonder whether or not companies of that size and ilk would want to go public in a more volatile environment. this is not because i know anything about where the markets are going ten weeks from now or 12 weeks from now. >> i was surprised after the fourth quarter people were lining up their ipos >> a lot of these companies have different stipulations with their private investors that require them to give them liquidity event and 2019 is the catalyst year for a lot of these companies. >> is pinterest profitable >> we may know today >> we'll get the hold -- >> as soon as today. >> either that or the mueller report >> something will drop >> finally how about the neielsn report showing time spent on mobile is rising youtube is responsible for 37%

of mobile internet traffic if you combine facebook properties they follow up at 20%. youtube was a clear leader netflix was under 5% >> there's a reason why they say the world of online advertising is between alphabet and youtube. those two guys no surprise. what's curious to me is how much more people traffic on youtube and watch videos as opposed to facebook i'll be honest for me i watch more on facebook than instagram than youtube. >> i'm not the audience. >> what i thought of i wanting web browsing is only 4.6%. when i think of the internet i think of web browsing. that's so low. >> our producer said they are on youtube all the time we're old school and go to google >> when i visited family in california they have children 11 and 10, 9, they were watching

these youtube series they were addicted to them there's a whole universe out there that we're not participating in right now >> we can give you the inside on that just trust the kids. guys thank you all very much dom, we'll see you >> i'll see you at a normal time >> what are you doing in about 45 minutes can we get you back on >> still ahead aluminum tariffs are hitting the beer industry. we'll look at how big of an impact it's having the latest in the legal fight between two big brewers. we'll look at the sectors of s&p 500, financials and energy is lagging. no surprise.

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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. we're hitting the one year anniversary of the aluminum tariffs. beer industry says it is taking a toll on members who are seeing higher costs

joining us is the president and ceo of the beer institute which sounds like a great job. jim, welcome >> thank you >> listen, this is a pretty serious topic. we remember a year ago wilbur ross famously held up the aluminum can saying it's a tiny piece of cost. a year in how much of a toll is it having? >> well, kelly a year ago i came on your air and said this would would be a $347 million tax on beer and i'm sorry to report a year later that'sexactly true brewers of all sizes are facing these costs figuring out how to deal with this tax miller has seen a $40 million impact on their company. summit brewing company from st. paul, minnesota one of the founders of the craft movement 30 years ago seen its cost increase $160,000.

this is affecting brewers of all sizes. when you have nearly 7,000 breweries in this country we see beer as the crown jewel of american manufacturing this is hurting us >> how are they absorbing that cost is it coming out of profit margin or passing it along to the consumer >> there's 6,000 more brewing businesses, many putting them in aluminum cans and bottles. they are sort of using different strategies to figure out how to deal with the cost some has been passed on to the consumer but many brewers i hear from many brewers telling me that they are basically eating the costs. we estimated a year ago that the beer industry and related industries would create 20,000 fewer jobs because of these aluminum tariffs and we are seeing that so they are not improving their physical plant they are not hiring the people that they thought they would be hiring as their businesses were growing. so it's affecting beer but also

affecting related industries as well so it's really something we would like to see repealed >> did you think it would be repealed by now. are you surprised it's been a year >> i'm not surprised the president has talked about the steel and aluminum tariffs for a long time as a victory for america. it's not a victory for beer. it's not a victory for soda makers it's not a victory for airline makers, artificial makers, any downstream user of aluminum is being affected by this increased tax, and, again, repeal, in our view the only way to go. >> to add insult to injury there's a lawsuit now from miller coors against anheuser-busch over their shaming of them for using corn syrup. these are two big important members of the beer industry which needs to be on the same page right now how bad is this. >> those are two big important

members of the beer in the united states and beer institute. i'm switzerland. we want to see the beer category grow what's happening since the super bowl is sort of an example of how fierce the competition is in beer but the aluminum tariffs have affected the bottom line for brewers of all sizes, unfortunately. >> all right they said this deliberate deception is bad for the entire beer industry. jim you got your hand full thanks for joining us. thank you, kelly coming up, the u.s. economy is holding up despite troubles abroad what is the restaurant sector telling us where things might be heading. oil is giving back more than 2%. marathon oil, range resources, some big laggards. we're back in two.

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let's ask the managing director of bush securities kate we just heard from darden yesterday about how strong olive garden was and how strong the consumer was is there any sign things are slowing >> not right now olive garden is not the only company that we heard really positive results from. i should note, they opened 29 new restaurants in the quarter from which a casual name like that is a pretty big number. they are doing a lot with value in olive garden. their comps are great. starbucks, chipotle and it seems like consumers are spending more once they are in stores, which is really important for the industry. >> not seeing any signs of a slow down. chipotle one of the most amazing stocks this year nick, appreciate you joining us. you're finally kind of getting on the band wagon with chipotle. it's at 672. do you see signs there of a

strong consumer or any weak snsz. >> well, we are seeing a relatively slow consumer you mentioned olive garden is pulling back on value a little bit because they don't feel like they have to pea as promotional in terms of the price point to get that customer to come into the door we're truly seeing a healthier consumer and a lot of restaurants benefit from trends such realty investment through the third-party delivery and apps, et cetera. chitople is one of the primary beneficiaries of those investments. digital sales growth there that are exceeding expectations so, you know, we do have a pretty healthy consumer and restaurants are doing the right things to benefit from current trends >> kate, here's a direct quote from the ceo the consumer is really strong at this point it's fascinating you go back to the great

recession going into it. you had the housing markets starting to crack and signs in the store and consumers weren't shopping like this once were and restaurants were the first thing to suffer. we are not hearing that, even in the forward looking commentary >> and we had so many concerns about what this might mefor the consumer all of the ceos said that they felt very confident about, you know, trends moving forward. i will say one that is of concern with the industry at large and that is labor. you hear more concerns about rising food costs and labor costs much more so than consumer confidence right now things can change and they'll be among the first companies to see it, feel it and tell us about it right now everybody seems fairly comfortable. >> that is a high-class problem to have. labor costs are going up and labor is a beneficiary hey, we're getting people for cheap. but that's not a good sign

>> beyond just cost, finding people the economy is so strong and the job market is so tight and notorious high turnover rate >> nick, i see here wingstop is your top pick. where would you be, where would you tell investors to be if they think a slow down is coming in the u.s. >> it going to be difficult to be in restaurant if it affects the consumer worried about a global slow down most of the restaurant revenues are domestic and also a secondary benefit in terms of lower interest rates the primarily franchise names like a wingstop and dine brands, for example, that have five, six times levels in trade as bond proxies, they tend to see valuations go up a little, as well we premier the franchise names

and also they don't have the labor cost issues, well. since they're just taking the royalties from the top line. >> nick and kate with a look at what is happening, as well. coming up, home builders are off to a great start in 2019 and with yields dropping, are they about to really take off that is next so how are things with you guys? great. thank you. thank you, sir. lunch next week? terrific. say hi to the team. will do. call my office, i will. -sounds good. alrighty. servicenow. works for you.

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stocks selling off big today with the dow dropping more than 450 point at the lows. the flip side of this is the home builder stocks, which are holding up today, why? lower interest rates and a jump in the home sales data this morning. the biggest on record lately can this continue if a slow down occurs joining me is bill and ceo and investment investment of sm eread. >> money always goes where it is treated the best there is a mountain of pent up demand that will display itself sometimes in very powerful ways. we have been on the road the last two or three weeks talking to investors and we're trying to tell them that this is a tsunami waiting to happen. you know, 40% more people.

30 to 40 over the next ten years than we had the last ten years so, 40% more people and we're told by, for example, the folks at discovery inc. that 25-year-old women's favorite show on cable are hgtv and "90 day fiance." so you put that 40% more people and the truth of it is that the dream of home ownership never went away. >> bill, let me ask you this because today a lot of the concern people will say the u.s. is slowing down. the u.s. is slowing down well, is it? or is it that we have a european and asian slow down and a u.s. consumer we just discussed is fairly strong. bill, how much slow down can you take before it suffers >> you know, you make a great point. there are 330 million people in the united states. and what we're talking about right there is the composition of what people are spending money on right. so, over the last ten years

there was a certain composition. and that composition was glued to ipads and iphones and fast food you just had a segment on that and it was, it was things that single people, rent. that single people do. that was the composition of the last ten years we're talking about a teutonic shift to a composition that is more 35 to 45-year-old couples with a couple of kids. and that is a massive shift and it could greatly affect the stock market >> but, bill, what i'm saying is for people who buy into that and it's funny, we see it playing out every day. what happens just give me a short-term time frame. how much aof a slow down can we handle on gdp before things look dicy >> we as a company believe that we're ready to be shocked to the upside on the strength of the economy. we're in the camp that thinks that five years from now people will point fingers and say, you

knew there was going to be 30% to 40% more people >> the greenspan analogy >> why didn't you get in front of it? >> thank you so much great to see you and get your thoughts time to join tyler and melissa for "power lunch." it starts now. i'm melissa lee along with tyler mathisen the market flashing the biggest recession sign since before the financial crisis could the avalanche of ipos be the last great hope for the bulls or signaling a top here. record flooding across the midwest decimating america's farm industry and it may get a lot worse. we're live on the ground with the very latest and the impact on the farmers, as well as the u.s. economy mortgage rates sinking to new lows here as we sit down in the crucial home buying season the spring selling season. how low will rates go? "power lunch" starts right now