>> healthy food actually >> all right, joe? >> chipotle pushing toward 700 650 to 760 >> thanks for watching that does it for us. "the exchange" with kelly evans is up now. >> thank you, scott. hi, everybody. here's what's ahead. bond yields are dropping again and stocks are still following along today. should we fear what the treasury market is telling us, or could there be a silver lining in plunging rates also boeing's big day. the company showing off its software update to pilots on the west coast while facing congressional leaders in d.c we'll get the latest plus eu regulators making another big move against big tech are airports the new shopping malls? and is casper's ipo a warning sign that's all ahead in rapid fire today. we begin with the markets. dom chu is here. >> we were at one point up about 100 points in the dow at the

highs. down as much as 232. you can see right now down about 137 right in the middle. that 2,800 level remains a focus in the s&p 500 with the nasdaq off about a full percent right now. one of the biggest decliners watch the nasdaq composite industrials, ironically enough here, a cyclical sector outperforming. and one of the big reasons why, the transportation stocks which you can see are up 0.5% in an otherwise down tape. the top five stocks in the s&p 500 industrial sector to the upside they are airlines, alaska, southwest, delta watch those airline stocks and those transportation stocks may be rolling over a bit. and then the stocks of the day, the best and worst per foformern the s&p 500. wellcare getting acquired. up 10% it's a cash and stock deal that centene will pay that's the reason those shares

down 7%. those are our stocks of the day. >> dom, thanks welcome to "the exchange." i'm kelly evans. overnight in china, industrial profits shrunk by the most since late 2011. then germany had its first auction of ten-year debt with a negative yield since 2016. and the u.s. ten-year yield dropped to 2.35% that's helping housing weekly mortgage applications up 9% refis jumped 12% and the trade deficit narrowed in january. let's drill down more on the sell-off and how markets are digesting this with bob pisani at the new york stock exchange >> hello the bond yields are smacking around the stock market. it's a problem stocks began to weaken midmorning as bond yields began moving down. semiconductors, energy stocks, emerging market stocks they're all trading lower.

banks had a one-day rally. they've resumed their downward trajectory fractionically. for stocks to resume the breakout, bond yield need to stop falling traders have believed we can't have stocks going up in the u.s. with bonds weaker and pure european and china data. the markets can rally because global growth is bottoming out but there's no evidence that's happening right now in europe or china. what would help? maybe some brexit resolution but a trade deal would be the most immediate help and there's a problem with that as well. there's no evidence that tariffs are going to be rolled back. maybe an agreement not to put new tariffs on, but the enforcement mechanism will likely leave existing tariffs in place. where does it leave us in limbo the fed cutting gdp estimates. europe is cutting gdp estimates. china cut them earlier in the year still no bottom on the global economy.

if you look at the s&p 500, when it hit 2800 about 10:40, the market took another leg down and that's the key here. technicals really matter the 28 level very important. >> bob, stuff to watch, thank you. markets are moving lower under the weight of economic worries. investors are tracking falling treasury yields and the benchmark ten-year hit its lowest level since 2010. craigical hon is icon adviser. and mike santoli craig, let me ask you what the falling bond yields make you think as an equity investor. >> they clearly make equities more attractive than bonds if you look historically that the real return for a ten-year investor, they are getting 2.38 today. and inflation outlook is around 2. so i can't imagine them being content with a disappointing real return of only 18 basis points >> but everybody seems to think it's going to get worse.

that inflation is going to get worse, growth is going to get worse. what you're presented today is much better including in the bond market than what you'll get in six months or five years or ten years time >> we're not seeing downward revision in earnings in terms of being an equity investor there are fears of slowing but we're not eag it hit earnings yet for the next few quarters. >> we're not seeing the ten-year yield back at the lows of this cycle. we're still a full percentage point above that is there room for yields to keep moving down? do you agree with how craig is analyzing it, which is not so much it's a warning sign for the stock market but makes stocks more attractive? >> i think both of those things can be true. it supports stock valuations first of all, even on a real basis it makes debt costs. and it amplifies this message that the world is going to struggle to grow much in the first half of this year. so i don't necessarily think those are in conflict. it's more about the bond market is maybe a little more of an extreme version expressing the anxiety that we have in stocks

by the way, yes, bob was talking about fighting out this battle during this year, we're up, you know, whatever it is, 12% for the s&p 500 at this point year to date. you've only had 2% to 3% pullback it seems severe, but the overall market is staying supported in part because of those sectors that do really well when rates are low. >> like technology >> where would you be? what is the correct positions for investors in this environment? >> the leadership over the ten years of this bull market has been financials, consumer discretionary, technology, industrials and we expect that to resume. we're value investors and we can easily find value in those sectors. >> did i hear you say you think financials are going to resume leadership that's been a hard-hit part of the market >> people worry a flattening yield curve is bad for banks i totally disagree i think banks can take money at one point.

their profit margins and interest rate margins have increased the last four years while the yield curve has been flattening they can do just fine. >> we'll talk to key bank coming up same thing we were told the other day about investing in the banks. you mentioned technology, consumer discretionary i'm not hearing you say look at the defensive parts of the market is that because the valuations are too high you don't think their growth as attractive >> probably both people are clinging to them to be defensive so we don't get the values there we get in the more out of favor consumer d and industrials >> we have some of the all-time high names in stocks dollar tree, starbucks, ulta, pepsi. and adp and paychecks. that's a good sign for the u.s. economy. >> that's true and also very kind of steady growth companies so the market has really been gravitating to these areas not just companies that have dividend yields and you can get income but essentially some

resilience to the earnings growth over a long period of time these brands that travel like starbucks and nike have been very good. it reminds me a lot of 2016. you mentioned when treasury yields made their lows it was also after a big market shock late '15 and '16 nobody was sure if this recession was going to last. and this is exactly what happened yields stayed low. the defensive parts of the market held the tape together for a good stretch of time and then after that, in the middle of the year, brexit and finally you have earnings inflecting higher. that's probably the bold case right now is we're biding our time the defense is on the field trying to preserve the lead and maybe go to offense. >> we're shifting into baseball season now >> you're right. today, literally >> craig, finally, people will say, okay, we understand mathematically why low bond yields help stock prices is it just something kind of a bubble it's because of europe, china or

the fed's fault it's going to inflate the stock market beyond what is fair value how do you think about the value in the mark snets you said you're a value guy >> we never use p/e or price to book we compute intrinsic value we find it to be about 9% below fair market value. we think it can be very supportist of higher prices over the next year. >> how do you get intrinsic value without using those. >> take earnings, project them going out into the future and discount them back to their present value. very fundamental >> so 9% below >> yes >> nothing is looking frothy to you yet? >> we've not seen the behaviors typical of market peaks. >> mike, we'll see you later for rapid fire a new round of u.s./china trade talks is set to kick off in beijing tomorrow. one expert saying it could take until june to get a deal done. kayla tausche is live on capitol hill with more >> a meeting between president

trump and president xi is expected to be the culmination of any trade deal. the only meeting is at the g20 at the end of june one expert says it could take that long to actually get a comprehensive deal that resets the u.s./china economic relationship he made comments to cnbc on the sideline of a forum. he said if we did not have more stops and starts given the wide range of issues at stake and the complexity i see late may/june as the more realistic time frame than i see anything in april. we should note, though, we just attended a briefing with senator chuck grassley who runs the senate finance committee here on the hill his expectation from the discussions he's had with the administration is that there would be a deal by the end of april. we asked grassley about whether he sees like the president sees the tariffs should stay in place

for a substantial period of time he said no he said if there's a strong enforcement deal, he thinks those tariffs, all of them, should come off. the trump administration's top two trade officials will be in beijing for one day of negotiations those are expected to happen overnight u.s. time tomorrow with another round with the chinese delegation here in washington next week kelly? >> kayla, thanks white house economic adviser kevin hastet saying that he believes china negotiators wouldn't still be working if they weren't making a lot of progress on trade talks. with all that happening, let's bring in john rutledge >> kelly, good to be here. >> tlet's talk about the timeline if we're talking late may or june, should the u.s. consumer, should investors just shrug this off and say it's all right they're still getting a deal done or does that mean it's longer and longer that the tariffs stay on and you start to wonder if we're going to get

this deal? >> everybody is inpatient about it i think there will be a deal done i think as long as you see gradual progress, warm fuzzy words and good press releases every time they meet, the fact they're meeting once a week now is a good sign i met with our trade team. they are very coherent they all agree with each other i didn't get any dissension inside the team. peter navarro wasn't at the lunch, but -- who is the dissenter. but i think they're going to get what they want they'll sell a bunch of stuff, which is what they want to do. that's easy. >> that's easy that's the easiest part. >> ip protection is the most important thing for us there's two parts of that. one is stop cheating the other one is start enforcing some set of laws they need laws passed. they parsing a law right now to do that. unfortunately, the court system in china works where if there's a violation, the local court tries it and the local court is influenced by the mayor. and so recently beijing has passed penalties on those mayors

for doing that so they are trying to figure out the enforcement. >> we had a guest a couple weeks back from aei who believed that we're going to get the deal and for a year and a half, china was going to act differently and we'll feel like we won something and then it was going to revert back into the same old, same old. is this really going to transform the protections american companies can be granted for doing business in china and the trade relationship >> there's three protections one, please stop stealing my stop that's a question of enforcement. and the chinese government has to do that the second part of it is, will i be able to go there and have the market open? i think that's part of this agreement. and companies like visa will benefit from that or jpmorgan. that's definitely going to happen because they've already done it for the swiss bank, for ubs. so -- and then the third part of it has to do with whether long term we cooperate in filing and enforcing new laws that's very important because

china's basic plan that we're whining about is they want to go from assembling iphones to making high margin tech things you can't do that without intellectual property protection there's a huge lobby inside china to get ip protected. >> so american businesses -- >> that's why it can be done >> they can trust this is real then >> absolutely. and it will be real. and i think it's a big mistake to make any sort of blanket statements about the chinese there aren't chinese there's a billion and a half guys there one of them is mr. xi. one of them is li he the currency dropping and a tariff going up wipe each other out in the u.s chinese products in the u.s. today are not more expensive than before the tariffs came in. >> there's an interesting point and i wonder how long these tariffs stay on and if tariffs start to go back on as part of enforcement tactics. what should businesses and

consumers here be expecting in terms of how long we're going to be dealing with these? >> i think if they go back on in these trade deals fail, we're dealing with them for a very long time. the chinese currency is determined by capital flows, not by the trade balance and when bad things happen to china, capital flows out of china and our trade team knows that china has actually been propping the currency up, not pushing it down. and so what we should be doing is finding ways to help them prop it up by making their monetary policy better the internal problem that's causing chinese growth to fade is not tariffs it's the fact that small businesses have been denied credit, working capital because the shadow banking system got killed last year by the government and there's no alternative to it so until you can get real money in the hands of those private businesses you can't get any real growth to happen. >> maybe with the help of the u.s. >> that could be >> i can see how -- you make it

come together nicely here. >> it's complicated. >> it's complicated but has a certain elegance if we get there. john rutledge. here's what else is coming up on "the exchange" -- >> ahead, pilots, regulators and the media getting a look at boeing's plans to update its 737 max. we're there live with a look at what's ahead and how the competitive race may have gotten us here. regional banks are under pressure as yields fall. we'll speak with keybank's ceo about the state of the industry, the economy and lending. and ipo madness isn't just for tech companies mattress firms want in on the action as well this is "the exchange" on cnbc a. so that if your customer needs shoes, & he's got wide feet.

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shares of boeing are under pressure again as the company meets with pilots and regulators from around the world to demonstrate a proposed software fix to the 737 max we just got this statement from boeing customers have been informed that aoa disagree alerts will become a standard feet our the 737 max. it can be retrofitted on previously delivered airplanes for more on the company's response we're joined by a reporter at "the new york times," along with our own phil lebeau at boeing's delivery center in seattle. phil, first of all, this is

boeing's charm offensive today now we have this statement where they are trying to explain this update with the sensors. what's the latest? >> well, as you mentioned, in the statement they indicated they will now be making the disagreement alert if you will within the flight control display, that will be a standard feature, free of charge now, for airlines who are flying the 737 max. remember, last week when it came out that some airlines, which fly the max, did not pay the upgrade that would be required for the crews to be alerted when the angle of attack sensors are sending information that disagrees with each other, they would have to pay for that some were not paying for that. and as a result, there's been fierce backlash against boeing from people who have said, wait a second, shouldn't that be standard for all airlines? and that's why boeing put out that statement within the last half hour saying, okay, woor not going to charge for this this will be standard. >> jack, you and your colleagues

had a piece over the weekend explaining how the 737 max came to be. how it was a response in part to the success of airbus' a-321 how american airlines in 2011 was about to place a big order that boeing didn't want to lose and this 7 7 max aircraft became very important to them it's become their best-selling plane. has this been a competitive setback in the last couple of days we've seen china order some airbus planes. is there a longer term threat to boeing here? >> surprisingly, i think we'll see the longer term effect limited. that's in part because we really have two players in the global aerospace industry airbus and boeing. and it's not really easy for airlines to get out of their orders the 737 max quickly became the best-selling aircraft model in aviation history there's more than 5,000 airplanes ordered. and only 376 of those have even been delivered yet

so we've got an enormous number of planes to be delivered and only one carrier, the indonesian international carrier has said it's going to try to cancel but it's not easy to try to cancel these planes you have to put a deposit down they've made investments in training and it's not easy to just pull out. and so i think, surprisingly, despite the bad press and despite the numerous investigations, likely that are going to go into boeing, we may not see a big competitive hit. >> that may explain why we haven't seen too much movement in the shares lately even this morning an upgrade to the stock. what about the regulatory threat three different investigations opened into boeing and this hearing on capitol hill today. >> i think you'll see these investigations continue. look, some of these on capitol hill, kelly, you could have predicted this the minute that boeing said that it was having some problems with the 737 max so some of these, while there will be a lot of noise in washington, i donts think there's going to be a long-term

impact what you need to focus on if you are a boeing investor is whether or not this company ever changes its production schedule for the 737 max which is at 52 a month right now. scheduled to go to 57 by the end of this year if you are an airline, why would you cancel your order right now? you may not be happy with boeing do you want to get in line at the back of the line with airbus and wait another five, six, seven years for an a321. you are, to a certain extent locked in here that's why i don't think we've seen a lot of movement with the shares, even despite the talk about investigations or senators and congressmen saying we're not happy with boeing. there need to be changes >> consumers, as soon as this happened, were the ones leading this push to say, i don't know if i want to fly on this aircraft until we find out what's happened. has that moment passed as boeing has been able to clarify a little bit about what happened or not or are people still waiting for sure to get a definitive answer

about whether these planes are safe in the air? >> i think it's likely we'll continue to have certain portion of the flying public that does feel uncomfortable about flying on a max i think that's certainly as we've seen with past accidents, that passes quickly. and also the airlines, even throughout this crisis for boeing, have basically stood behind boeing, particularly the u.s. carriers and said they feel confident in the airplane. and they are all certainly saying they feel confident with this software fix. so i think once this -- these crashes kind of lose from -- disappear from the news, i think you'll see less concerns from flyers >> phil, the fix is coming when now is the latest estimate >> well, they'll probably send it to the faa by the end of the week that's the plan. the people i've talked with in washington think it could take one, maybe two weeks but more than likely justice a week to certify this software. they've been talking with the faa all along. it's not like they're sitting there going, what's going to be

in this update they know to a certain extent what's going to be involved. >> phil lebeau and jack nicas, thank you. coming up, leonardo dicaprio and 50 cent are investors. soon you could be, too mattressmaker casper is eyeing an ipo is this a sign that things are getting too frothy, or could this truly be a sleeper stock? what heavy machinery tells us about the economy is this an indicator to pay attention to and get signals about what's happening we'll be back in two minutes with more.

welcome back to "the exchange." here are some of the movers this hour airline stocks are moving to the up side. this despite a warning from southwest this morning that airline saying it lost $150 million in revenue from the 737 max. hawaii has a 4% gain today and southwest is up. papa john's got an upgrade they believe the turn around has entered a phase where investors believe the worst is behind for the company plus they like the addition of shaquille o'neal some other consumer names notching all-time highs include dollar tree, starbucks, ulta beauty now to sue herera. >> speaking before a house appropriation subcommittee, secretary of state mike pompeo defending the administration's

pared down budget request, including slashing the state department budget by more than $11 billion. >> it will protect our citizens at home and abroad and advance american prosperity and values it will support our allies and partners overseas. you should know there are difficult choices when budgets are to be made you face these constraints, too. >> a caravan of migrants in southern mexico is on its way toward the u.s. border mexican officials say it includes about 1200 migrants from central america and cuba. the route has been followed by previous caravans heading north. and avis is making it easier to find a parking space for your rental car it's teamed up with arrive to add a new feet are that makes parking more simple. customers can instantly, book and prepay for parking you're up to date. that's the news this hour. >> handy sue, thanks. about 30 minutes until "power lunch." i'm joined by tyler mathisen

>> we'll pick up on a couple of themes you're exploring, including boeing we expect news to come out in the next hour on boeing. but we're going to put together those two dear old friends, mr. santelli and mr. liesman to talk about the fed and the presumed appointment of steven moore who has called for a half point cut in interest rates. we'll look at that, and it will be a lively debate, i can promise. >> he's saying we should undo the last two rate hikes. >> yeah. >> and people say is that one of the reasons bond yields continue to plunge worldwide? >> worldwide and worries about the economy. we'll also explore the stocks versus bonds conundrum today yields coming down stocks coming down, which they have been doing for the past few days but for most of this year, stocks have been going up and yields have been falling down. we'll take a look at that and more on "power lunch." >> tyler, see you then here's what's ahead on "the exchange." >> coming up -- home builders

are giving buyers hope a shift to a casual corner office giving lulu a boost is a mattress in a box worth a billion dollars? and luxury has a new home. the airport. it's all ahead in "rapid fire.

women's amateur golf let's catch you up golf is not one of them. but it's time for rapid fire here with their takes are mike santoli, our baseball guy, morgan brennan, what's your -- you got a sport? you are the amateur female golf sport for me today >> okay. >> and bill griffeth the first thing we want to talk about is online mattress retailer casper which may be looking to get in on the ipo fever that's gripping the start-up world sources familiar with the company's plans say casper whose investors include leonardo dicaprio and 50 cent >> i wouldn't be surprised if they look at the chart of wayfair from 20 to 150 in the last five years and say, okay, disruptive online provider going after the quasi furniture

market maybe not a bad thing. it's a bad business if you are in bricks and mortar but if you are -- >> mattress firm this is the one they fold up the mattress and put it in a box >> yeah. >> so there's a nov elelty fact. >> i have two of them. it's a decent mattress it came in a box and it was very affordable they do have a lot of competition and so i do think this idea of, you know, looking to ipo may be first to market type of advantage like we're seeing with lyft but also really interesting. this whole old is new again because they are an e-commerce company but now part of this is -- >> brick and mortar. >> which wayfair is doing. >> picking your spots as a showroom as opposed to blanketing the country with lots of retailers >> i guess people worry more about the long-term viability of the casper business model more so than -- is this a sign that things are getting frothy?

>> i think people are being opportunistic. you've seen the market is receptive to new names, and it makes sense. it's a bull market acting like a bull market. how many ipos in the last couple of years >> maybe we're being a little too cynical. but it's the beginning of the froth. >> moving on the european union passing sweeping copyright laws and sparking a massive controversy online. the most contentious part requires online atforms like youtube to filter or remove copyrighted materialor be liable for copyright infringement >> and that's wrong because why? i mean, for me, i don't know the europeans have been way ahead of us on regulating online stuff to begin with. as far as privacy goes and data use and everything now they want companies like youtube to just do their job. >> but is it possible to -- >> and if not -- >> that's youtube's problem. if you're going to be a platform for video material, you better

make sure that it's legally posted, right? that's the same thing. >> but the devil is in the details here you have sweeping regulations. not necessarily a lot of detail. the criticism here is that it's been too broad and some of the pieces of the rules are very open to interpretation you have the so-called meme ban which is getting a lot of attention. >> also they want to make sure news aggregators pay the publishers for using snippets of their material what a concept >> that's why google news shut down in spain once they passed their version of this law. it's getting more onerous. >> it's where the burden falls here, if you notify youtube there's copyrighted material, they'll take it down some day could it be digitally tagged in some way that essentially prohibits somebody from putting it up there it's clear in europe they don't have the same rules here of better to beg for forgiveness than ask for permission. it's the opposite. >> is it possible youtube pulls

out of europe if they can't police it properly or just ask for forgiveness as they go along? >> this seems logical this is what companies should be forced to do anyway and you figure out how to do it. if technology is the solution where you can tag something -- >> that's me guessing, but -- >> i would think it's possible >> let's talk about mortgage rates which are falling and it couldn't come at a better time for home builders. lenar missed kb homes they are up today. the mortgage app data this morning looked good. >> who is it going to help i think it will help refinanciers a friend of mine was telling me a mortgage broker she knows says they're coming out of the woodwork that rates have come down first time home buyers,there's not enough inventory out there the home builders aren't building the first time homes because the lumber is too expensive. the land is too expensive and they can't find the skilled

labor to build those things. mortgage rates report going to help the high end all that much because they can afford it anyway but it just seems -- i'm still a cynic, skeptic on the housing market >> but we've had this broader affordability crisis diana olick has been reporting on it. if you have lower mortgage rates that means a lower monthly payment. factor it in with prices that aren't accelerating as quickly as they were and then a strong job market and wages increasing and, you know, the recipe for a better market. >> the builders are up like 4% this week already. >> stocks have been fighting their way back obviously you have these low rates. along with the best employment and wage growth numbers for the cycle. so it should be a decent mix for giving a little lift if affordability is the problem, and it is, this eases the pressure a little bit, but it doesn't really incentivize that supply >> we'll see if the cynic is

wrong as the season goes along topic four, luxury brands have slowed their expansion plans nearly everywhere except in the airport a new report shows that top luxury fashion labels opened 33 brick and mortar stores in airports between 2016 and 2018 and luxury spending at department stores fell 4% last year at airports it rose 7% >> have you ever seen anybody in these luxury stores at airports? >> yes, me i've done it when i'm stuck at the airport. >> every time i walk by it's the sales people looking at their watches. >> that's true >> who buys in there >> i think you have tourists you have people stranded a lot of international buyers who have maybe in the past been looking to take advantage of currency swings depending on the country. >> where did you get that lovely bauble >> i got it at newark airport. >> what? >> and i would say here in the u.s., there's been a big sort of stall out in terms of infrastructure spending on a federal level.

one area you've seen tens of billions of dollars poured into infrastructure has been airports westfield acquired not that long ago is one of those developers that doubled down on airports. >> i'll eat and drink when waiting for a flight but i don't know that i'm going to shop for -- >> you won't buy a louie vuitton handbag? >> a lot of times they're citing the tourism trade has tradraine away obviously, it's an important piece of the customer base you have them captive for a little while walking through the airport. lululemon is hotter than a bikram yoga studio in august the stock is up and barclays says there's plenty of room for growth as they move into men's wear and sparks a debate between eamon and joe about whether the pants are appropriate in the office >> i think there was a little bit of a gap in the understanding of what these lulu pants are perhaps.

they're not really yoga pants or sweatpants >> are we going to look like robin hood >> they are more going to try to displace something like khakis >> there's a photo they look like nice gray slacks. >> that's generally the idea >> but it is interesting because it's simply because lulu considered to be narrowly focused on athletic wear for women. multiply that if the brand travels to men >> somebody in the office said what if we start selling to men? >> at lulu, right. we've talked about how goldman is relaxing the work place dress code maybe lulu lemon is doing work pants in a better, more comfortable way. >> you are looking at me i'm not going to try these pants on curious what you think and whether you'll test them out >> you know what the issue is? the logo >> on the ponts? >> i think it's on the leg in the back, which is a deal breaker. >> what a turn around story from a couple years ago

the stock is up 80% as they grow this area of their business. >> they can remove the logo on the back when bill griffeth shows up wearing them, either one of you -- >> why would that be a revolutionary moment >> do you have a pair? >> i do not -- yet >> when you, do we'll know it's -- >> and buy them at the airport >> i'll buy them at the newark airport. >> mike santoli, morgan brennan and bill griffeth. theresa may will step down once a brexit deal is agreed to. this would allow a new successor to take the lead on future negotiations it's expected that a third vote on her deal could be proposed for friday but potentially big news there on brexit out of the uk coming up -- with no raise and possibly a cut in interest rates on the horizon, regional banks have been feeling the pressure keybank's ceo beth mooney joins us next. how she's navigating this enroen vinmt.he exchange" is back in t.

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welcome back regional banks have been under plenty of pressure the kre, the etf that tracks them, is down 11% over the past month. with the fed's dovish outlook those losses could continue. let's bring in cnbc's deidre bosa alongside keybank ceo beth mooney diedre >> thank you very much beth, thanks for being with us today. kelly just highlighted some of the irmt and one strategy that has been thrown around for regional banks is consolidation. we saw one big merger. the largest bank merger since the financial crisis creating the sixth largest bank in the economy. do you think we'll continue to see this consolidation and should we? >> i look at the markets and think they're disconnected from the actual performance of the banking sector of our clients, of our consumers so i think we came into the end

of 2018 with market jitters about growing -- slowing growth globally, whether or not there was going to be a change in interest rate policy, uncertainty around trade and tariffs. so we have a market uncertainty that is not yet reflected in what i call the real economy so i think the prospects for regional banks are actually quite good i don't see a recession looming. but when you think about the recent suntrust/bbt merger, it's a very interesting deal and it's important that we see larger banks starting to think about whether or not they can consolidate since the financial crisis but again, i think as regional banks, we have what we need to compete. >> where's the disconnect? perhaps you're seeing something the public investors aren't. maybe they're too negative where your optimistic given the trajectory of interest rates, the macro environment. the impetus for financial stocks is in the past so what makes you optimistic >> some piece of what you saw at the end of the year was a swoon

in stocks. then the earnings season and earnings were solid. there was growth in revenue. there was benign credit quality, well-controlled expenses so again, the disconnect is, i think it is more fear driven than fact driven at this point so i don't yet see that the core economy has cooled to the point where the pressure that you've seen in the banking sector on the stocks is merited through the financial performance of the industry >> kelly has a question for you. >> it's kelly evans back here at headquarters i just wanted to see if you could elaborate on that for us we've had a couple of guests over the past couple of weeks say that we're looking at the wrong thing when it comes to the yield curve inversion. that's not reflective of how banks make your money. you borrow overnight you can still lend it. let's call it 3% can you give us more detail on what your profit is in -- even in an environment like now with this yield curve that we're looking at being so flat

>> you know it's interesting we have just in 2018 was the first year you really saw rising rates. and it was beneficial to the revenue and the profit of the industry but the pressure on interest rates or even a lowering of interest rates does not change the profit outlook of the industry per se. so, to me, again, i think this is way too much focus on the rate environment and not enough focus on the fundamentals where we still have our customers performing well. our balance sheets are strong. and as you said, the way we manage our asset liability position, we can be profitable and continue to grow regardless of the interest rate scenario. >> okay. so as a follow to that, what do you see in loan demand which has been the one factor lagging a lot of this expansion? are you seeing a pickup in that at all >> interestingly enough, that is the one piece of the story that is true is that as we went from late '17 through '18 you saw

loan demand was not as robust as many had thought and so that has been the one lagging piece of this part of the economic cycle is that we wt loan demand as many of us would have anticipated, particularly with tax reform and so forth so again, to me, it's a matter of degrees it doesn't mean the economy has stopped. but demand has slowed and that still means there's a path forward where you can compete. you can grow with your customers because again, their businesses are strong their demand for loans have not been as strong as we would have anticipate so to me, i look at this i'm talk iing about a time frame of the coming year i still see a solid economy and solid companies and solid consumers. >> beth, it's great to hear from you. thank you so much for your time today. >> thanks, kelly >> that's the ceo at the event out there with with her. zblncht still ahead, a look at the under the radar economic

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welcome back an economic indicator could help gauge the temperature of the economy. sales of heavy equipment it includes big machinery like cranes, diggers and industrial trucks joining me now is ravi, the ceo of richie brothers, a lead ner the auction iing of used heavy equipment. the recent auction in orlando, florida totalled $300 million in sales in six days. welcome. good to see you. >> thank you so much >> the last time we spoke was the big auction that you had done in orlando. things were up about 7% from the year earlier 85% domestic, 15% international. 7% growth sounds good. is that still holding up in these latest auctions? >> yeah, i think we're still

seeing pretty good growth in our auctions we've had a number of auctions since then just. we had one in dubai. so around we're seeing pretty good traction. even on our online auctions. and actually, supply seems to be loosening up i think i mentioned it and that's a sign for us that when there's a little bit of economic potential slowdown, it actually people stop releasing more equipment to us. >> sure. so you're seeing a little bit of that now >> i think in the u.s., the rate of growth which i mean last year was a troe year. right? for infrastructure, et cetera. this year, a little concern. some of it may be perception as opposed to reality. still strong slightly different story around the world. >> what are you seeing, what are the weakest spots right now? >> i was in turkey and turkey's definitely an issue and real slowdown there and because the currency is

devalued and so to give an example, normally, they do about 10,000 pieces of new equipment slowdowns are 2500 there's about 100,000 used machines, big machines i think only 30 to 40% being utilized so there needs to be people need to stop thinking about what how do they clean up their balance sheet. >> sure. >> and obviously can help them out. >> what about europe we've seen signs of slowing in germany for example. >> germany still for us, what we're seeing is it's steady. i don't think it's a major problem. we also deal there in agricultural market and we had an auction and did extremely well so but sudden a problem. >> italy, greece >> italy, spain, real issues the u.k. rm, despite all the issues with prex it, so far doing okay, but anxiety

beginning to come in and so kelly, it's really, it's you know, the global world outside the u.s. is -- every country is different so based on the situation, like australia doing okay >> well that's good to hear. we'll see if the u.s. can hold up this year, but appreciate your taking us around the world telling us what's going on and join iing me here. >> pleasure indeed >> that does it for us i'll join tyler for "power lunch" which starts now. >> thank you very much and we will see you in just a moment welcome, everybody, to "power lunch. new at 2:00 today boeing unveils a fix for its 737 max jet at this hour m we'll take you there for that president trump's fed nominee calling for an immediate half a percent rate cut is he right? and mortgage rates dropping. mortgage applications soar iings you might expect housing, is it going to rescue the u.s. from an economic slowdown stocks are in the re