nothing but gone higher. >> like kevin, exxon mobile, wednesday you're going to have before the house the five big banks appearing and as a jp shareholder, that's going to be big. >> earnings from jpm and wells fargo, as well "the exchange" with kelly starts now. >> thank you, scott. hi, everybody. here is what is ahead. shaking up the fed trump considering two highly political candidates as fed nominees we'll talk about what it could mean for policy and for these markets. also, a lesson learned from lyft pinterest pricing below estimates and that might not be so bad we'll explain. the teens have spoken and one brand is king and it may surprise you alexa is getting into health care and we'll tell you about the $3,000 movie rental that is all ahead in rapid fire. we begin with the markets and bob pisani.

>> with the volatility index at the lowest level of the year on friday, no wonder stocks are taking a breather. we're being moved around by a slew of downgrades of key names today. bank of america downgrading boeing downgraded southwest on the continuing boeing saga and micron and starbucks finally downgraded to neutral from buy at ubs still some pockets of strength out there. i think that's important energy is at the highest level since november oil cost $64 five-month high and bank stocks keep slowly advancing since yields bottomed a week and a half ago >> you mentioned that downgrade for boeing that stock is down 4.5% right now. >> that is the problem with price-weighted index that means 100 points on the dow and that's virtually all of the dow's underperformance right now, kelly. >> we'll have more on that story later on bob, thanks so much.

welcome to the exchange, everyone i'm kelly evans. u.s. factory orders fell in february for the fourth negative reading in five months but transportation improved and that gave markets some relief crude oil hitting a five-month high today amid sanctions against iran and venezuela and the bank of japan giving the bleakest outlook for growth and the country suffering as so many are from weak overseas demand. let's drill down on the bond market's reaction to all of this today. jim is over at the cme hey, jim >> how are you, kelly? >> good. what do you see, jim, in terms of the priorities for the market here are they focused on some of the issues with the fed and the potential nominees or looking to more try to parse the data what do you see? >> i think more about the data they're problem stillic l ilookt friday's number and they came in decent sweet spot for risk assets and how they're affecting the curve.

from 12 basis points to 16 basis points but i believe it will steepen up for a couple reasons. one, the fed stays relatively dubbish because they indicated that already they pivot completely. a signal for risk on assets and has already we steepen out the curve because there is a better place to put your money. two, we almost never talk about inflation, but if the fed is going to be dovish when the market says they probably should be a little more hawkish, well, that's a little inflationary and i know i'm alone on an island but i think that could steepen the curve, too 2.55 in the long term and 2.6 it could be a bigger move. >> talking about issues we'll bring up right now thank you. >> thank you. it is expected that president trump will nominate. taking the poll of economists to gauge their thoughts on the two men finds the majority of people say neither one of the people

should be confirmed for a fed job but when asked if they would be, half said yes. their political bias and whether or not the men are qualified for the fed to talk about this steve grasso and we have one sort of economist, greg. we have a market participant with steve and we want to ask you about this and welcome larry kudlow said herman cain spent some time and this isn't so much out of the box. >> i wouldn't say they're the most glorious appointments ever made, but, you know, they acquitted themselves adequately. but let's not kid ourselves. the fact that herman cain did sit on the board of the kansas city fed and successful businessman is not why trump plans to nominate him. trump plans to nominate him because he sees trump as a loyalist in a way that is supportive for trump's agenda and the same is true for steve moore. let's not get caught up in

whether these people are the most qualified or least qualified people let's look at the reasons why they're being nominated. >> greg, is what he's doing a more transparent version of what we've seen past presidents do which is to nominate someone for reasons or is this a break from what we usually see? >> definitely a break from the post-1992 convention under bill clinton, george w. bush and barack obama, they nominated federal reserve appointees who were, yes, usually from the same political party but had strong qualifications they were not controversial. if you look at the monetary policies, it is impossible to distinguish a partisan bias to it in the reagan era, there were governors appointed to check the hawkish tendencies but let's remember when it came time for volker to retire he replaced by alan greenspan i think the question today is whether trump plans to break

that mold and make sure that everybody who is appointed to the federal reserve be a party loyalist and that we end up in a situation very similar to supreme court nominations. >> so, steve, with all this swirling about and jim also alluded to this which is also is the bond market worried that it means you get inflation picking up again it is the quote/unquote solution people are looking for putting that aside, do market participants worry about this harming the fed and its ability to do its job well >> i heard jim and what his comments were. we are starting to see expectations rising because look at the reaction that you see in gold that will be the first and i know that we haven't had years where gold should be the inflation canary in the colema mine and it hasn't been and the market is starting to pay attention. having said that, i disagree, i

disagree with greg and the notion that i do believe that every president, i think he said this every president wants to get someone at least from their party or with the same party views, but you can't tell when they sort of enact whatever policies they would like to. youstarted off the segment saying we have one person who is an economist or economist view point and a markets based person giving their analysis. well, chairman powell is not an economist either so, i think this was something where president trump was trying to shake up the fed reserve. trying to shake up, you know, different parties and different regulations, i should say, and boards to be in his likeness that's what we're seeing right now. i do believe that, you know, people are questioning this because it's so ultra obvious when you look at it that he is trying to get someone who is partisan someone who is in lock step with him. but don't kid yourself this happens all the time. it's not as obvious in the past

as we've seen now. yellen was a former clinton, you know, backer, as well. >> so, by the way, one of the people who -- >> if i could just point out >> you guys might find this of interest one of the people in the past said should be more businessman with exposure to the fed or serving on the fed richard fisher just last hour in "halftime report" he shared his thoughts on herman cain's nomination. >> this is serious stuff and it represents a threat to the independents of the most important central bank of the world. i think the markets would really go into a frenzy and our allies, other central banks go into a frenzy if he succeeds with more and with cain. >> again, greg, that is richard fisher's point of view about what it would mean for the institution. so, we have that, plus what you were going to say in response to steve. >> janet yellen was fed chair for four years the only move on interest rates was to raise them. and, you know, needless to say,

barack obama was president when she first did that so, i think that, once again, i would return to my original point. i have been covering the fed for many, many years and whether it was bernanke or jay powell, i cannot detect a political bias i want to give them the benefit of the doubt full throated advocates for trump's policies does not necessarily mean that once they are sworn in, that is the way they will do their job i am only saying that is what trump's intention is as for the markets, look, if you're of the view that inflation is dead gone and never come back, it's irrelevant these people are d, if you think inflation is a problem, you ought to worry >> it is pretty ironic that both sides want a dubbish policy. so, i think, you know, trump is more in the democratic side versus anything else at this

side which is pretty ironic. >> someone agreed with that point of view without being a highly partisan pick thank you. shares of general electric are sinking on a downgrade jpmorgan moved the stock to underweight and put a $5 price target on it let's get out to morgan brennan with a few more details on this. >> stocks trading near session lows right now this report from jpmorgan 132 pages and pretty equal opportunity in terms how critical across ge different businesses as this company continues to turn itself around. right out of the gate saying we believe many inesthavevestors a underlying risks while overestimating the value of small positives and keep in mind before this downgrade today and the move lower we have seen in the stock it had been up 38% year to date and still down 27%, 26% over the past 12 months. he lays out five key reasons for

cutting that price target and taking it back down to underweight. free cash flow the biggest focus for him, says the outlook, is not reset. that he says there is a disconnect between eps free cash flow widest we've seen. also outlining more pain and power. very skeptical about the turn around that could take route there. ongoing services basically believes that health care monetization is the most plausible path and liquidity could come into play in the event of a potential recession kelly? >> there you have the stock move today. down 7.5% on that down grade still about double the price target morgan, thanks here's what else is coming up on "the exchange. ahead, it's called an initial public offering. so why isn't the public allowed to view a company's road show presentation plus, the outcome analysts feared boeing slowing production of its

737 max and investors aren't happy. a buy or a real warning sign and the teens have spoken. a new survey breaks count what they're eating, what they're buying and where they're boouyi it with all that usaa offers why go with anybody else? we know their rates are good, the isis "t it was an instant savings and s. one-millionth order. millionth order. ♪ there goes our first big order. ♪

44, 45, 46... how many of these did they order? ooh, that's hot. ♪ you know, we could sell these. nah. ♪ we don't bake. ♪ opportunity. what we deliver by delivering.

mno kidding.rd. but moving your internet and tv? that's easy. easy?! easy? easy. because now xfinity lets you transfer your service online in just about a minute with a few simple steps. really? really. that was easy. yup. plus, with two-hour appointment windows, it's all on your schedule. awesome. now all you have to do is move...that thing. [ sigh ] introducing an easier way to move with xfinity. it's just another way we're working to make your life simple, easy, awesome. go to xfinity.com/moving to get started.

welcome back pinterest priced below as the road show for the public offering kicks off today leslie is in new york with the very latest. hey, leslie. >> hey, kelly. that's right pinterest plans to market to investors as the road show kicks off in earnest like every one of these big ipos and start the road show process with the sales forces at the large underwriters like jpmorgan where we are here. they are underwriting this deal so so, this morning, ben silverman met with their sales force to help explain and craft a message for selling the more than $1 billion worth of stock they need to sell to investors as you mentioned, that valuation are seeking a valuation of about $9 billion, which may help compel more investors to come to the table. because at least psychologically speaking it makes them feel like

they got a discount to what private investors paid two years ago. i'm told they plan to really pitch this company as one of discovery versus that of search. and that essentially means that they think that the discovery aspect of the business model where you can look and find different inspirations on cooking and wedding planning and so forth would be more compelling to advertisers, kelly. >> we'll look more into this as this progresses, leslie. but want to ask you about the drama at lyft accusing the underwriter of short selling against it >> cnbc obtained a letter p written from lyft and ipo effectively accusing morgan stanley of creating a special product that would help free ipo lyft investors and either short the company or somehow reduce their economic long exposure to the company to hedge their

position when they're otherwise to these subject lock ups in the next six months. in that letter they may be compelled to file a lawsuit or sue them if they aren't able to come forth with any kind of documents that would can nigh their activity in doing this morgan stanley, however, gave their response to cnbc saying that they did not market or execute a sale, short sale, hedge swap or transfer of risk or value for any lyft shareholder identified by the company or known to us to be the sebje subject of a lyft sale and they didn't know about it and actively seek out pre-ipo investors to do such a thing >> leslie, appreciate it very much. beyond pinterest and lyft the ipo is filling up. bringing these companies to market is private and closed to retail investors like you just

saw with leslie. joining me now bob chairman and former nasdaq chairman thank you for in joining me. >> how are you, kelly? >> why is it you're doing a public offering of a company the whole point is to sell to the retail public. why not let the road show, especially in this day in age be streamed, available for public consumption? i'm not saying they couldn't do it to the underwriters first >> i would take that question in two ways important to realize that management would love that outcome. if they would have one meeting and sell a billion dollar worth of stock, that would be a great outcome for them unfortunately, it doesn't quite work that way. you really have to focus on the large investors. the large investors insist on one-on-one meetings. they refuse even to go to a group lunch meeting and the reason they do that is in their

questions, it will reveal either their interests, their concern, their excitement about the perspective ipo. they want to keep that quiet so you end up at the road shows primarily because the investors are emanding that kind of time frame. >> the lyft ipo highlighted this because the people who kngot th stock at $82 and if your first chance was to buy it at $87 and since has gone down to $72, doesn't feel so great. was there some information that the insiders had access to and why couldn't we have seen these documents? >> no, i don't think that would be the question. the question is why does retail not get more of an allocation? they typically get a certain amount of allocation and the ipo could be higher and when you have a publicly known stock such as lyft, you can guess what

would be the ceiling there with the retail investors a common perception or misconception that they tend not to be long-term holders and they tend to be flippers on the stock. the empccompany is trying to pla billion dollar worth of stock and do it as quickly or efficiently as possible. and second to have a group of investors which will hold for a longer period of time. rightly or wrongly, retail investors do not have that brand. >> of course, they shouldn't ever be required or maybe you could. maybe they could say, look, you could participate if you hold it for a year if i'm the sec and i know people have access to an ipo and flip it on the open, that would seem like a potential bigger black eye for the, matplamarketplace. i believe it was spotify and maybe now a few others, is there something in there where even the companies who are trying to do a direct listing, not even raise any additional capital, but some of these maverick type

of silicon valley companies might say we would like to do something more directly offering this to the public any reason in the public interest why there shouldn't be more access to this information and ipos >> direct because they're not trying to raise funds. anybody could come in on the ekd isary market you could argue that is fair and democratic because institutional retail doesn't have access and they could trade on the secondary market i don't think that is the point of change in practice. i think when you think about stocks a big brand retail image. right, that's the place where the underwriters could say, let me give retail a greater share of the pie the important point you have to get past is the concept that retail investors will churn quicker than institutional investors. you know, i'veseen different studies that show different results on that. but clearly the branding is that retail will tend to flipmore frequently and that's why you don't give them a larger allocation >> and it's interesting, i take

your point on that even if that were the case, would it be so bad would it be so bad that maybe the retail investor could say, hey, i might get a chance to roll the dice and win on this and that takes us back to 1998 and everyone started to look at these as lotto tickets. >> where i'm coming from the former ceo of an exchange. we like volume retail was trading in the marketplace is seen as a good thing and the same thing it likes volatility. when i talk about this, let's retail and take a bigger stake and we'll see. >> we'll see if it goes in that direction. bob, appreciate you adding some context. >> thank you. meanwhile, shares of roku have doubled and stock is sinking on a downgrade from citi saying the space is getting re d more crowded, as we know that is ahead in rapid firepers

at those men and women in the room. because they did it with technology less powerful than any smartphone. think of that... it's what inspires us all to get there first. i became an engineer because of them. now i'm part of the team at verizon building an incredibly powerful 5g experience for america. we call it 5g ultra wideband. it's wider for ultra-fast speeds and ultra-low lag times. when i think of it... i think of what people might do with it. i think of where people might go with it. i think of... them. (man over radio) ...go for landing. ♪

so, you're open all day, that's what 24/7 means, sugar. kind of like how you get 24/7 access to licensed agents with geico. hmm? yeah, you just go online, or give them a call anytime. you don't say. yep. now what will it take to get 24/7 access to that lemon meringue pie? pie! pie's coming! that's what it takes, baby. geico®. great service from licensed agents, 24/7.

welcome back to "the exchange." here are some of the movers this hour sony is jumping on reports that low was targeting the company. the stake would be the second time in six years this is the case the stock is up about 8%. snap is jumping up with a $17 price target the stock has been on a tear this year. more than doubled. still trading just over $12

today. symantec with a 5% gain after they raised from buy to neutral. shares up to about 24 bucks. and about 30 minutes to go until power lunch. i'm joined by melissa lee with a little preview. >> gas prices on the coast in some areas have hit five-year highs. we're seeing a double whammy the midwest floods hitting the ethanol industry and pushing up the prices on the coast and also oil prices at five-month highs we'll talk to john about where we can go from here and then we're going to talk about the empire of lebron james >> yes, we are >> and "space jam. >> apparently "space jam 2" which is critical to lebron's post basketball acting career. we have 40 minutes for me to go to read all about "space jam" but he is big business, lebron

is >> huge. >> we'll talk to this espn >> brian winhorse. he's the guy >> he's the expert. >> great details on how much he has made on beats and the way he structured his deals >> really inest theteresting st. here's what else is ahead on "the exchange. >> alexa, read me my blood sugar results. it's not a pretty picture at the gas pump amazon takes yet another crown and $3,000 to rent a movie? it's all aadn ap fhe i"ridire. ♪ to inspire confidence through style. ♪ i'm working to make connections of a different kind. ♪ i'm working for beauty that begins with nature. ♪ to treat every car like i treat mine. ♪ at adp we're designing a better way to work, so you can achieve what you're working for.

♪ ♪ -it's all about the big picture. with miguel, our certified financial planner™ professional, we looked at business insurance, our mortgage, even our plans to adopt. -it's not about this fund or that fund -- it's about us. -welcome to our complete freedom plan. -it's all possible with a cfp professional. -find your certified financial planner™ professional at letsmakeaplan.org. -find your certified financial planner™ professional oh, wow. you two are going to have such a great trip. thanks to you, we will. this is why voya helps reach today's goals... ...all while helping you to and through retirement. can you help with these? we're more of the plan, invest and protect kind of help...

voya. helping you to and through retirement.

welcome back to "the exchange," everyone. here's what's happening. the u.s. designating a guard a terrorist organization the action will, in part, restrict financial transactions. mike pompeo says it will take effect a week from today >> with this designation, we are sending a clear signal a clear message to leaders including that united states is bringing all pressure to bear to stop the behavior. >> a preliminary hearing is

under way for former michigan state university president lou anna simon it will determine if she will face trial in the wake of larry nassar scandal and target is going to hold a car seat trade-in event from april 22nd until may 4th consumers can bring in all types of car seats damag or not and target will recycle them a 20% off coupon towards a new car seat you're up to date. that's the new update this hour. back to you. >> thank you very much let's catch you up on a few stories on your radar today. it is time for "rapid fire." and here is courtney reagan, bill griffeth and contessa it can now manage tasks like

tracking shipments and doctor's appointments and reading blood results. >> alexa would be able to transfer sensitive, personal, health information what could go wrong? >> they had problems where people's voices got out, they weren't supposed to be recording. >> i want some privacy assurances i know apple is very large on privacy and they make that known to us. i would feel more comfortable knowing exactly how this is protected. whether or not this is hiipa compliant or not tell me how. i think we need some technology to help improve our health care system, but it has to be iron clad and i don't know if that is really possible. >> but banking is safe and secure and we trust banks to safeguard our information. >> do we >> do we >> enough to use them. >> i am going forward with that. amazon says this new software is

hiipa compliant and it meets the regulations and, listen, for people who are suffering various degrees of disability this could be a huge boost and regardless of our privacy concerns, this is the wave of the future this is what apple is doing. this is what google home assistance are doing this is going to be where money gets made in the future. so figuring out how it works my question is, how accessible is this really how easy is it really? if you give me, like if shopping is any indicatiuction >> amazon smart speaker market share has fallen they were first mover in this space and i wonder if they're trying to build a mote around it >> i just know what is going to happen alexa give me my blood sugar reading and instead she will play "pour some sugar on me. >> i was looking up some twisted

sister songs over the weekend just for you >> thank you. teens spend an average of $2,600 a year on food and clothing every year they do this survey to find out what are the favorite brands. basically the number one place for people to shop, correct me if i'm wrong, drumroll please. amazon >> by a factor of ten fold so, when they ask these teens, it's 8,000 teens and they do this actually twice a year they have a really nice treasure-trove of data for 30 some years what is your favorite website? amazon number two is nike, but at 5%. i mean, that's a huge jump what is interesting is the private option has jumped from 70% of households to 76% of households and teen families still having a big increase, which was surprising because that is the market we would have thought would have been saturated. >> i'm just curious. if amazon is the number one go-to spot where are the teens hanging out?

>> you know, that's true >> i'm with you. i saw what you did there >> teens are spending more on food over time that's a bigger share of their wallet so, chic-fil-a is number one still for the last three surveys. >> it's twice a year, right. >> starbucks chipotle is up there and so is mcdonald's the one thing interesting for beauty, 90% of the teens went instore. ulta passed sephora for the first time in the survey but those two get a 64% share. >> we all believe teen shoppers are so fickle and chal change at the top of a hat chic-fil-a is still number one after those three surveys and nike is consistently their favorite apparel shoe manufacturer >> apparel and footwear. i want to flip to this sneaker heads actually 31% of the males consider themselves sneaker heads and 22% of the

females. they say they own eight pairs of shoes and will buy eight more this year. that is a ton of shoes and nike, very popular >> where are they getting all the money? >> they're not getting it from saving on gas. because the average price has jumped 12 cents just in the past two weeks. this is a new lundberg survey. the national average is now up 5% we were lower a year ago and we passed that inflection point >> the summer blend is coming our way right now. opec has been or saudi arabia specifically has been cutting production and, in fact, now, they believe that it's at some point now where they don't have to cut much more because prices are going a little higher. they want $70 brent crude and i think it will be here before we know it. >> all the floods are having a factor on that, as well. >> ethanol. >> crude is up 50% since christmas. this is going to put president trump in a tough spot because he wants to tighten the ratchet down on iran with these

sanctions. you have these wavers that are coming due for about eight countries that we will continue to buy from iran he either gets to put it to iran and see gas prices go up or figure out a way to lessen that. this is his core voting base >> he is trying to tweet against, and theteresting and frustrating. why is ethanol in there in the first place and the political answer to that, you know, when you talk to people who are before you could drive a newer car that was better formulated for it ethanol blends are not great so, awful what has been playing out in the midwest one of the eare mireminders thif is pervasive and we have to take that into account as well as crude. >> ethanol is as much an economic issue as it is a political issue. it does help performers in that part of the country. not just about corn. switch grass is also a huge proponent especially in brazil

to make ethanol. >> i didn't know you knew so much about switch grass. >> he knows a lot of things. >> he knows a lot about the gas price, too that much i know quickly, roku shares are sinking today after a new note from citi which downgraded from mutual to sell the shares have also doubled this year. >> content is number one, for me tell me what, how i am going to watch something. i don't care how i get it whether it's roku or hulu or smart tvs or whatever it is. >> what does the griffith household generally use? >> if we're not watching traditional cable television, which is not through the cable we're netflix and amazon it all comes down to what do you want to watch. you know, you say, so what do you want to watch? you don't say, how do you want to watch it doesn't work that way >> it's becoming more complicated as we're

transitioning. >> too much choice >> too many platforms. >> that's the point. yes. amazing roku has done as well as it has >> roku stock up 110% before this year. >> before this year, right >> before this reduction >> this is kind of the flip side of things. this is a movie ticket subscription they're saying for the 1%. i mean. >> for the 0.1%. >> allow users to watch new movies as soon as they hit theaters from the comfort of their own home you need a minimum credit card limit of 50 grand to apply for the service. >> your boys are going to love this >> as a method of going back to your point do you want to watch the content and how are you doing that even if this is just a very small subset of the population >> talk about immediate gratification. i don't want to deal with those who might attend a movie theater. so let me spend $35,000 to set

this up. $3,000 to rent the movie >> but people are saying they want to watch it at home and not go to the movie. would you agree or not that is the conclusion. >> between three weeks and three months you can watch it at home. you just have to have patience which is where the whole, i want it now and i'm willing to pay for it comes in. >> aside from a james bond movie, i cannot think of anything i would absolutely have to see the weekend it comes out. >> they say they only need 4,000 subscribers. >> they're not looking to make a huge profit. you know, when you slice and dice it, you have to have what is, net assets of $2 million in order to qualify to get this and 46,000 people qualify to get this and they figure they get 10,000 of that and call it a day. >> this is just the extremely fancy version of netflix they're showing what everybody else across the country. >> and something like this has been tried before more than once, the difference here is the

folks behind it are ingrained in the hollywood community and they think it will work with the content. >> guys, thank you, all. appreciate it, guys. shares of boeing are falling today on concerns about the 737 max production after it cut production rates late last week. one rm sugng tfihrgihat off and staying bullish. we'll tell you why, next do you being the global norm, d not the exception. we see homes staying cooler, without the planet getting warmer. at emerson, when issues become inspiration, focusing core strengths to create a better world isn't just a result, it's a responsibility. emerson. consider it solved.

delays after boeing cut the production rate of the 737 max late last week shares are down nearly 5%. it is weighing on the dow. phil lebeau has those details. >> they are cutting by 8%. not only are we dropping our rating down to neutral, but we believe that when you look at the earnings expectations for boeing, they're going to be under pressure they're looking at the 737 max disruption, if you will, not to

be just three to six months which is what a lot of people thought it is going to be. now people are saying six to nine months of disruption and as a result, lower free cash flow and lower margins from boeing. bank of america also says if you take a look at shares of boeing that its profit estimate, what they expect the company to make through 2023 is substantially lower. cutting it by $13.7 billion. kelly, i've read a number of the analyst notes and they all have the same theme free cash flow under pressure and margin is going to be under pressure and we expect that overall earnings at least as we look through all of 2019 to also be under pressure. >> let's ask one about that. sheila is defense and aerospace analyst with jeffries. how much of an impact do these production cuts have on your numbers for boeing this year >> sure. it is a significant impact that we are moving our 737 rate from 52 a month to the 70 something

through september and assume a pushout. so, we are cutting 2019 free cash flow and eps estimates and we view the 737 as a transitory issue and they will eventually deliver the 5,000 backlog. we are keeping an eye on the longerterm story here. >> what about the liability issue, sheila? unlike the dreamliner, we're talking about 400 fatalities and lawsuits thatt i believe in some cases have already been filed. >> insurance claims and lawsuits and that will be handled i think for q2 we will assume some profit losses you are cutting volumes and you are cutting aircraft and you will not earn on that we are focused on the free cash aspect of the moment >> we also see not just boeing but american and southwest for example, southwest was downgraded this morning due to nearterm earning risk related to the grounding of the max fleet which that analyst believes will

run into the umsummer months. how much of a headache for the airlines >> for southwest 4% of their fleet. will that kill the company no, it's not going to kill the company. but it is certainly a factor in the q2 earnings and that's why you see the shares under pressure and remember the summer travel season is the peak travel season now as we start to see the max potentially being off the books and motfnot flying in june or jy as some people are starting to talk about, that becomes a bigger issue >> isn't that what southwest was using for their new hawaiian route? the 737 max jets >> they fly only 737s and the question is whether the max was going to be on the hawaiian routes they could adjust their fleet so it's not like they are not going to fly to hawaii it just means overall they're going to have fewer frequencies on certain routes. >> sheila, for boeing, in a way i guess we should say the lack of impact reflect what the fact that there is no good

alternative to these planes. what about airbus? why is it that this seems so contained to just the very near term loss of the production of these planes >> sure. so, boeing's backlog is 5,000 aircraft, that stretches close to seven years and airbuses are longer there aren't many options. so that is why this appears to be a transitory issue. what we watch out for longer term risk is the certification that is expected some time in 2020 how that progresses for right now a shifting free cash flow from '19 and doing our best to keep 2020 in tact. >> sheila and phil, thank you. appreciate it. some breaking news out of washington let's head to the white house. >> president trump has fired his director of the secret service randolph ailes was appointed two

years ago by president trump he has now been fired by president trump. not clear exactly what the president's reasoning is here but you remember there was a breach in security about ten days ago at mar-a-lago, the president's resort in florida during which a chinese national was able to gain access to the mar-a-lago compound. at the time officialsm official saying no harm done there. but some questions are swirling around whether this incident at the firing of the head of the secret service has to do with that incident. also, i just talked to some white house aides here who are unaware of the president's reasoning for firing the director, but comes just after he fired kirstjen nielsen. those two events coming in very quick succession here. kelly, back over to you. >> eamon, thank you very much. philip morris making a surprise advertising move warning op tpeleo stop smoking

warning op tpeleo stop smoking we'll have those details, next warning op tpeleo stop smoking we'll have those details, next you've got near real time inventory updates... ...& he'll find the same shoes in your store that he found online... ...he'll be one happy, very forgetful wide footed customer... at&t provides edge to edge intelligence. it can do so much for your business, the list goes on and on. that's the power of &. & if your customer also forgets.... socks! ...& you could send him a coupon for that item.

woi felt completely helpless. trashed online, my entire career and business were in jeopardy. i called reputation defender. they were able to restore my good name. if you're under attack, i recommend calling reputation defender. and consider joining their groundbreaking campaign

to give every american the right to remove old, inaccurate search results by going to righttobeforgotten.org. vo: if you have search results that are wrong or unfair, call reputation defender at 1-877-492-6705. mno kidding.rd. but moving your internet and tv? that's easy. easy?! easy? easy. because now xfinity lets you transfer your service online in just about a minute with a few simple steps. really? really. that was easy. yup. plus, with two-hour appointment windows, it's all on your schedule. awesome. now all you have to do is move...that thing. [ sigh ] introducing an easier way to move with xfinity. it's just another way we're working to make your life simple, easy, awesome. go to xfinity.com/moving to get started. phillip morris urging people to stop smoking cigarettes part of a big investment in a new

alternative tobacco product. >> phillip morris international, the maker of marlboro outside of the u.s., not the nicotine delivery businesses. they're running it in the uk one tag line reads, if you smoke, quit. might seem surprising for a company that made about $25 billion on cigarettes last year, but not when you realize cigarette sales slowly but steadily declining and phillip morris international, a $6 billion investment in a heated tobacco product that heats it up rather than burning it like a cigarette. >> the interesting thing here, the verbal distinct is don't smoke, but inhale this nicotine substance differently. is there a proven difference in the sort of health problems that come from just inhaling heated tobacco versus smoking snit. >> that's a great question

ai aiko's product is under review by the fda the cigarette sales are 3% down last year while sales of aiko up by about 14% for them, there's obviously a lot of profit motive and then a modified risk product. a way to say while it delivers nicotine, safer than cigarettes. >> that's why juul says it helps cigarette smokers, altria, owns ikos in the u.s. >> phillip morris owns the ikos brand but in the u.s doesn't sell any products here in the u.s >> thanks, a new market obviously, that even the fda is coming to terms with appreciate it vcery much more companies turn off the tv and movie models on their heads. how the race could create xtother set of billionaires is ne

welcome back the content arms race is heating up and with more producers signing 9 figure deals, who will be the first to get that billion dollar paycheck? a lot of people think it could actually be jj abrams.

on the cover of "fast company" talking about his future in the industry for more, bring in one of the writers, kasey, associate editor there. >> thank you so much for having me. >> thank you for having me. >> we've seen up to $300 million for ryan murphy at netflix, and then $400 million for greg b burlante but jj abrams, a billion dollar signing who would do it? >> when you look at the trajectory, he's absolutely on track to get even more considering all the things that his production company is doing, so they've grown well beyond tv and film doing games, music they just signed with mattel to do their first toy product one of their first original things they're owning and the story behind that is amazing he's doing so many different things so he's really on track to surpass all of those high figures we've been seeing and it's anyone's game like hollywood's favorite parlor

trick to see >> okay, if you were to look at the box office of movies and translate into a value for a content company, i'm just going back and adding up from 2008 to 2019 with star trek, mission impossible movies, "star wars" and so many other things i think i'm roughly here seeing a billion and a half or two billion at the box office? >> yeah. >> how much is that worth to a company and would it be a company like apple or netflix, who do you think >> if i were advising jj, given all the things he wants to do and the fact he has such a strong foothold in the theatrical experience, all of his movies are so big and bold so for him, i think it's going to be disney, honestly because if you look at the disney, they have the infrastructure to do a lot of the things he wants to do. so they have the merchandise, the theme parks, film, obviously, theatrical releases but with disney plus getting

ready to launch, they can do tv shows, streaming, all those type of things so i think with what jj is looking for. all he wants at the end of the day is as many avenues for story telling as possible. >> is he the biggest of the big? someone behind him who could top this or really the biggest we see for a while? >> i honestly feel like it's going to be really hard to top this one because like i said, he's got his hands in so many different things that you have like huge players that have come to the space like oprah signed a deal with apple and these big names but i think because he's a big name, and because he has all these other things going on, it's just a sweeter deal with him. >> we'll see if it hits a billion. is that what people are saying i'm putting you on the spot. >> the number i'm hearing is about $500 million but you never know, you never know. >> not these days the way it's going. kc, thanks i learned a lot from reading it.

an associate editor with fast company. thank you so much for tuning in, everybody. that does it for "the exchange" and we'll see if jj abrams crosses, what, $500 million? a billion dollars? unicorn content producers? i'll join melissa in just a minute for "power lunch" which begins right now >> i'll see you in just a minute, kelly. melissa lee, new at 2:00 earnings season on the clock setting up to be one of the worst in years will it derail this year's big surge? pinterest kicking off the ipo road show and lyft, threatening a major lawsuit against an underwriter over short selling what it means for uber and others preparing to go public. espn's brian winhorse with the new look on the king, lebron james. "power lunch" starts right now >> a check on the markets right