last week. it blinked for the morning and has rallied ever since you get this at half the peg ratio of mcdonald's. >> for those of you who aren't looking at the screen and at the time of the screen and see marriott, why marriott >> the consumer's best friend is chairman powell. >> thanks, guys, for catching. "the exchange" begins now. thank you, scott hi, everybody, here is what's ahead. the countdown is on. the fed is set to releets its decision on interest rates in just an hour after the president calls for even bigger rate cuts. how will they respond to that? we will ask. plus, a breakout day for apple. tim cook delivering earnings beat and talk about china. apple is up 35% this year. we will look at whether it's time for investors to hit the sidelines. and the most-liked part of instagram could be going away. plus, the court is telling the ceo he needs to go back to

school but we begin with today's markets and don chu is here with the numbers. >> it's starting positive but momentum is there. the dow had a triple gain at one point but now up only about 30 points we will see if we can pick up the bullish momentum in the second half of trading here the s&p just about flat, and nasdaq up by one third many. macro, which we're watching closely, it was a sharp decline, about 1% it was much more for crude oil you can see the move is plus 61% at one point for the december lows but we're rolling over a little here. why? crude oil inventories the past week, build of 9.9 million barrels. we're at the highest crude levels of inventory in the u.s. since september of 2017.

how about estee lauder shares, which are at a record high after the cosmetics company came out with a better-than-expected earnings and sale and strength in asia pacific and higher-end products like skin cream powered its results. back to you. >> don, thank you very much. i'm kelly evans, welcome to "the exchange." the semi conductsers up gaining more than 9% adp said private sector jobs added 275,000 positions last month. that was well above expectations and most since last july, but -- and this goes back to what don was saying about the markets dsh the ism manufacturing gage disappointed as may kicks off, investors may be thinking about the adage tell in may, go away

bob, this hasn't been true for years, has it? >> it has an anistonishing record it doesn't mean sell in may, and may will be down it said may to october underperforms, sell in april this is the best six-month strategy, has become legendary on wall street investing in the dow jones industrial average between november 1 and april 30th each year dramatically outperformed the do you from may 1 to october 1. look at the numbers investment in the dow from 1950 to may 1 to october 31, a little over $11,000 gain measly but the same funds november 1 to april 20th with have returned over $1 million. this is according to the stock traders almanac. you can attribute this to lower trading interest in the summer and end-of-year trading strategy to beef up performance it didn't mean may will be down

necessarily or may to october will necessarily be down but just tremendous outperformance over time from the period of november through april back to you. >> i just want to meet the guy who got rich of this if ray dalio said he's getting $2 million selling in may, i will listen up >> it was discovered in the mid-'80s at the stock traders almanac. >> it was a huge breakthrough at the time bob, thank you very much the fed decision on interest rates is due out at the top of the hour investors are expecting no change on rates but will be looking for any shift of tone from the fed steve liesman is in washington with more. what are you looking out for >> the fed is meeting on strongly mixed signals on growth and inflation. weaker manufacturing, construction reports, blockbuster gdp and yet inflation now running just 1.6% below the fed's 2% targets

that has the funds market predicting rate cuts 40% chance of cut in september, 56 in october, all the way up to 83% in january lou reed of drw says -- how does powell the fomc treat this inflation level? and then there's president trump calling for the fed to cut interest rates his commentary is calling to stimulate the economy like china. president trump said the u.s. economy has, quote, the potential to go up like a rocket if the fed cuts rates. we will see if chairman powell believes that in a little over an hour. >> we will see you then for the big news, steve. thank you very much. for more let's bring in kelly cully, economist at preliminaryingio and the founder of macropolicy perspectives. >> there's not much in the way steve framed it, i would say patience is still the key word

i think they are concerned about low inflation but meanwhile we've got the job market doing great, data better, stock market trading near all-time highs. that mix says let's wait and see how the smoke clears and the deeper question is, are these forces weighing down inflation, something they can address can arate cut do anything abou that >> like she said, we had much better data, markets are back at all-time highs patience would seem like the last thing it should be except every time you get an inflation report, it's kind of surprisingly low. >> the low inflation is an existential issue for the fed. the federal reserve has broken down so we have sturdy growth we have low inflation. we have the market now discounting fed easing and if they were to ratify that rhetorically, not obviously but literally, row ftorekly, the market is going to explode.

>> like a rocket. >> rate cut you're saying. >> exactly so i think they will use the word patience a lot, with patience being symmetric so they will crush the notion of symmetric. we're not going to be hiking and we're not going to be cutting is the mess age they want to get across. >> how did they go four times last year saying we're not doing anything -- what changed so dramatically, is it the inflation picture? >> i think there are two things. number one, they got wall street's attention big time in the fourth quarter, which tightened up financial conditions. >> was that a mistake? >> i don't think it was a mistake. i think they wanted to get to neutral and they knew neutral when the market basically said you're at neutral. so they listened to the market as well as listened to their own internals because they have gotten to neutral and then the market exploded on them. i don't think they want to fuel another big leg up in the marketplace. but at the same time they want to acknowledge that their models

of inflation have broken down and, in fact, they're having a major strategic review about that right now so that's the existential issue. they need to get through this rhetorically today. >> in a way at least they're showing flexibility to say instead of sticking with the models and all of the stuff we've been trained in, at least we will be flexible enough to say maybe the market is right here, maybe this is neutral. >> right. >> we don't know why it's not responding but it's not responding so we're not going to go any further. >> right, absolutely remember the other element of the pivot was the global slowdown season eight lot of policy risks that are still there. i mean the trade issues, the brexit issues, the uncertainty, that's still very present. and could weigh on the economy as the year evolves. so that hasn't completely gone away yes, they are trying to dive deep and figure out these inflationary issues and how is it best to address them? i don't think it's a near-term issue. it's a medium-term issue for

them to really evaluate. >> this is what makes the discussion about what the president is saying and nomination to the fed so interesting because in a way even though steve moore himself is controversial and political, even though it's unheard of for a president to be tweeting you should cut rates by a point, the conversation you're having is that idea might be right andth fed itself is considering what to do now. so it's just ironic that the outrage about what's happening on the political side of it actually is kind of separate because the substance of the discussion is -- >> in line, yes. that's a fair point. that's a fair point. i think the issue with moore's nomination is partly because he is more overtly partisan and it's sort of a test of congress' authority to keep a check and an independence of the fed. so far it looks like his nomination is in trouble and congress is going to decide that there are certain standards you do have to exhibit a certain independence of thought to serve on the board continue looks like we're going

to get congress doing its job and serving as a check it and balance. >> let me ask you about one more thing that happened yesterday, basically central banks are so afraid of recessions they will throw anything on the table to make sure that never happens again. take a quick listen. i'm curious of your response before we go. >> the odds there's a recession any more in any western country in the world is almost next to impossible now save a complete financial externality that we can't forecast central bankers have lost ul intestinal for the to intestinal fortitude to put a country through a recession because it's regenerative and useful to have the wherewithal to do it, the infrastructure will politically absorb that intent. >> i haven't heard this in a couple of years now, this idea recessions can be good quick thought? >> i was just thinking of the quote you just were having us listen to, it's not a matter of

institutional fortitude, it's a matter of what is the right policy and this issue that inflation is no longer responsive in a material way to resource utilization is a really, really big issue. and the irony as you mention it is that it's happening when we have mr. trump in the white house, and while i have nothing kind to say about mr. moore as his nominee, i will pound the table in support of mr. trump picking whoever he wants to, because clearly the fed needs to undertake this strategic review. >> they need different voices? >> they need different voices who acknowledge that the economy has got more room to run than consensus. and that the feds' mission is not to hold the economy back. >> all right. >> not to hold the economy back. so i don't think mr. trump is

necessarily wrong in his intent. he's just uncouth in how he goes about it. >> guys, we will see you soon, thank you both very much we get the fed's statements at 2:00 p.m. followed by chair powell's press conference at 2:30 and "power lunch" will be all over it. here's what's still ahead on "the exchange" -- >> coming up, apple roars back china is strong. services are strong. and the stock is on a tear is cook the comeback kid and if so, how do you play this turnaround with a slew of stocks going public this year that are losing money, are we setting up for a repeat to 1999 or will this time be different and with the feds' comments could mean for the housing market and your next mortgage. when you rent from national...

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no matter what you trade, at fidelity here'sshow me making it. like. oh! i got one. the best of amy poehler. amy, maybe we could use the voice remote to search for something that you're not in. show me parks and rec. from netflix to prime video to live tv, xfinity lets you find your favorites with the emmy award-winning x1 voice remote. show me the best of amy poehler, again. this time around... now that's simple, easy, awesome. experience the entertainment you love on x1. access netflix, prime video, youtube and more, all with the sound of your voice. click, call or visit a store today. investors were skittish going into apple's earnings reports but the fears were unfounded. the stock is up over 7% and crossing the 1 trillion size after beating earnings tick come made a universal move in china saying he's excited about the trends there today's trends puts the stock up

35% this year. here to talk about whether that's sustainable is cnbc's tech editor. and, dan, your first thoughts here as we look ahead, 35% gain for a company transitioning to services, is that a platform that people can expect continued gains off of >> yeah, look, i think this is just the first step because the street is starting to give more cred to the services business. we believe $450 billion is at value on the services size the big thing is china heaters are out there. even a new york city cab driver was negative on apple go to print. >> first, you took a cab and not an uber? second of all, your driver saw the stock response and was negative >> look, i could tell you, i have been in cabs in new york city and guys are negative on apple and fundamentally it speaks to every investor i have talked to is negative on this. so you have to see the forest

through the trees. right now it's the 1-2 punch and cook is bringing the mojo back to cupertino. >> let's talk about the services piece first. a lot of that is from the app store. warranty and other things in the mix. in other words, is this a growing part of the business that is not going to be under competitive threat as it gets bigger can it be counted on to put up strong numbers year after year >> it sounds so. they surprised us with guidance. i think it was a billion or two over what street was expecting so that shows we're seeing momentum there steve said we saw momentum towards the end of the quarter and that's when they announced new services, which went live on the first day. they're clearly seeing signs these services are going to start to take off. and once they launch with the new apple card later this spring and apple gaming service and then tv service later this fall, we're going -- they really feel confident even just a small slice of the billion iphone users out there can really move the needle.

>> dan, do you just like the fact they're not an iphone company anymore? as an analyst, for investors too, does that mean they will be a safer company to invest in does it mean the returns are less attractive or more so >> i think more attractive because the frustration has been over the year you have a massive install base, 900 million active iphones, you want to monetize that right now on the services side they're putting a fence in the backyard and montaging the services that we believe is only 15% penetrated if you compare to amazon aws, when aws came out on the margins and bezos came out with that, that's when amazon got rerated very similar what's happening with apple, once you saw the services margins and what's happening now, i can tell you my investor top holders, now you're getting that service business valuation. >> bob pisani pointed out earlier, they have been a buyback monster so to speak and it makes their earnings per

share look great over the past five years but they're net income has been trailing that. the net income figure is up 61% from 2013 but earnings per share up 110%. aps more than doubled but a lot of that is the buyback that's not a problem per se but how much growth does there still need to be left in this company, pure net income basis, for it to still be attractive? >> i think on the 5% side. which is why we talk about the streaming services business, what they do on the video side, we believe 100 million consumers in the next three years is possible and that will be key for growth we believe that can add about $15 per share to the stock that's why right now this continues to go from a glass half empty to glass half full. you see rerating, half in apple. >> disney's launching their service, you have come cost

coming, hue lu putting up pretty impressive number. are people expecting too much of apple entering that field? >> out of the streaming stuff? >> i don't think so they have this huge platform not just from the iphone but apple tvs, they're moving into smart tvs. you're going to kbie a new samsung tv from best buy, it will have the apple tv app on there and you can subscribe to whatever channel bundles you want, starz, hbo, so forth and tack on their own original shows on top of that still a lot of questions whether that will be free or not another thing we're missing here is the wearables category, which has been exploding that's another huge area for growth beyond services you can't walk down a street in new york city without seeing half a dozen people wearing air pods. >> apple watch. >> yep. >> that's a huge category for them plus the beats brand. >> that's a good point they've got a lot of levers to pull here after the earnings report dan, what's the price target

>> $235 and i think that's just for starters. >> they got about halfway there today. thank you guys very much coming up -- the s&p having its best start to the year in more than three decades. are there any opportunities left we will take a look at what to buy now. plus, wynn may have lost a court battle butts c ieo has to eat some humble buy. "the exchange" is back in two. when issues become inspiration,, creating a better world isn't just a result, it's a responsibility. emerson. consider it solved.

welcome back to "the

exchange." here are some of the movers this hours. shakes of take two interactive are jumping after an upgrade to outperform by cowan. also upping the target price to $113 they're setting up a performance for the summer months and intro of new consoles. shares up about 2 1/2% garmin beat on the top and bottom lines but slight decline in profit margins is sending the stock down more than 7% share. and shares of cvs are up after earnings and beat estimates. it's benefiting from the buyouts of its insurer aetna shares up about 6% right now over to sue herera for an update. >> hi, kelly hello, everyone. here's what's happening at this hour officials have identified all six victims, including two who died from their injuries at the shooting at the university of north carolina-charlotte all were students. the suspect andrew terrell is in custody and charged with murder.

president trump is asking congress for an additional $4.5 billion in emergency funding for board security the request said the funding will not be used to build more of a wall but to handle the, quote, humanitarian crisis marriott is facing backlash over an event honoring brazil's new president at its times square hotel. he has a history of making inflammatory comments about days, women and indigenous groups, leaving several partners, including delta, to pull out of the event. marriott said it stands behind its decision on a lighter note, happy birthday to the empire state building the iconic 102-story skyscraper was dedicated 88 years ago today by then new york governor al smith. fantastic historical video there. that is the news update. kelly, back to you. >> quite a feat at the time. >> absolutely. >> thank you very much, sue. here's what's still ahead on "the exchange" --

>> why hulu may now be a real threat to netflix. an embarrassing moment for the wynn ceo why the light button may be disappearing and the fashion statement for the summer may be crocs and a fanny pack it's all ahead in "rapid fire. many people living with diabetes

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let's catch you up on a few stories that should be on your raid rar today n "rapid fire" here to break down today's headlines are morgan brennan, bill griffeth with the best -- >> everywhere i go today, if i had known this, i would have worn this a long time ago. this is what we used to call a babe magnet! i can't call it that anymore i can't call it that anymore. >> let's talk about hulu, which has announced it has more than 28 million subscribers in the u.s., giving us a good figure. a couple interesting thing, hulu added double the number of subscribers this year than net flex has and also more subscribers in 2018 than netflix and marvel shows are coming to majority disney-owned hulu. >> yes, they add the more

subscribers, dropped the prices for most of their services so more aggressively taking on netflix, especially here in the u.s. and adding on deals for marvel it seems like julia boar steen has been reporting that hulu, majority owned by disney, is merge, more as the adult-focused streaming service with the movies marvel, enterprises, franchises than disney plus, which is more family oriented. >> i had a little personal insight a little while ago my original argument was going to be we know comcast, our parent company, owns 30% of hulu and they're getting ready to sell that to disney so it will be wholly owned. i'm thinking why do you need both a disney plus channel and hulu channel, right? why not just combine them. all contraire, and then the inside hit me, that's two different revenue streams. you still have to compete pricewise with everybody else so why not have both channels competing and beating in the same revenue stream?

>> and their revenues, depending on where people are in the subscriber part of it, they're still bringing in ad revenue too at the base level. let me tell you what, i'm on the base level, there's a lot more ads on the hulu programming that you watch. if watch old homeland episodes, you're going to get a lot of advertisement. >> pretty annoying, right. >> you get what you pay for. >> as kate rogers said yesterday, the whole panel basically agreed, it keeps the cost down overall it's probably not a bad tradeoff let's talk about instagram this i fine shocking they're going to test hiding the number of likes on posts instagram is saying this is part of an effort to create a, quote, less pressurized environment on the app by creating less competition as facebook unveiled a ton of new initiatives at its developer conference. >> you mean people's self-worth is based on the number of likes? [ laughter ] the fact contessa has exactly 100 more twitter followers than i do -- >> exactly

>> does that bother me at all? am i bugged by that at all why would she have 100 more twitter followers than i do? >> i was an early adopter. are you guys all on instagram? >> yes. >> i got hacked by ukraine and they posted porno pictures on mine so i had to cancel it on. i haven't been back in. >> it's good there are not any likes. >> yes. >> for the two of you then, the likes go away? will it encourage? they want more engagement or interaction? >> if you're only competing with yourself, you can see which posts really resonate with your followers and which don't. but other people can't see how many likes you have. >> the thing is for the other account, you would have to hand count them then. it wouldn't be visible as a cumulative total but you could count them yourself if you want to i would do that. >> and you do have all of these influencers making money through ad dollars and the like by demonstrating and showing some of these different products and

things they're posting about on instagram. what happens then? >> maybe no coincidence in introducing buy-now feature, a whole other way to get revenue let's talk about wynn resorts, legal victory for the company. they get to keep the massachusetts gaming license, only have to pay a $35 million fine an odd twist and kind of embarrassing one, contessa. >> they slapped the ceo with an individual fine of half a million dollars. his salary is $2 million a year and they ordered the board to pay for an executive coach for him for leadership one gaming analyst called it a knuckle wrapping and told me it's really embarrassing for him. but this was not a unanimous decision. >> is it common for a judge to say, okay -- >> he's not a judge. massachusetts gaming commission. no, it's not common. >> get someone a coach >> the company fought back and said your job is not to decide whether our kree has the leadership skills necessary for this job our job as the board

your job is to determine whether he's suitable. it wasn't a unanimous decision he was suitable to hold the gaming license as an individual qualifier so they went back and necessity said already, here's a half million dollar fine because there were failures and because he struggled to answer questions from the commission like what are your new policies having to do with human resources? >> be that as it may, there's no way they would take way that gaming license because massachusetts wins as well. >> they would. >> this is an exercise drama that had to play out so the gaming officials could say they're on the job and they wrapped him on the knuckles and got their fine. >> $35 million. >> am i cynical? >> and no pun intended it's a win-wynn stocks are trading up. it could have been absolutely

worse. and now it's in the rearview mirror. >> i will watch for coaches coming up in other settlements will mark zuckerberg have one? let's talk about clorox. those shares are plunging after q3 results posted earnings and revenue miss in bigger competition in disinfectants and those wondering if clorox is offsetting prices for logistic strategies are people going private label on brands they otherwise wouldn't have for cost reasons >> i would marriage thatimagine of the situation here and also i would imagine a key part of the earnings conversation in general more broadly this season, the idea you have higher manufacturing and low jestics costs and companies raising prices to offset that. some 2k3457bds are more durable to realize those price games. >> that's what makes it interesting, you would have thought clorox would have been one of the brands. >> right. >> very stroenng, long history.

>> but premium brand. >> but you have like salad dressings, brita walter fillation products are up. they do good. >> that makes up 17% of its portfolio so that's pretty significant for them but it means to me people like to eat more than they clean salad dressing over clorox. >> um, i do. >> i also think we do the kirkland trash bags, they are great. i wonder how much that plays into it? >> they are good. >> let's talk about our favorite story of the day really, crocs is launching a shoe that now will include fanny packs we're not kidding. they're there, i can see them back of the shoe, they're blue >> belts pack, is that the word for it >> i'm a fan of the show >> it's a collaboration of the japanese braunds beam. it will be called the pocket croc >> here's my point, people who wear crocs can care less what

critics think, right they're after comfort, not after fashion. and instead of criticize them say why can't you be like me and wear what i wear instead of looking silly. >> i disagree and here's why, i think it's one of the things you're seeing with other fashion trends and crocs fall into this category, things are maybe absurd, considered absurd, you have younger generations, genz ebb leaning in on that as a fashion statements. >> it's the 13th most popular brand for teenagers. >> bill seems troubled. >> morgan has never disagreed with me before. >> okay. >> if they can develop this so it fits the phone, credit card and lipstick, i'm in count me necessity. >> it's inevitable that's coming. >> and if you post it on instagram -- well, you will know >> we will get you more twitter

followers, darn it. >> before we go, what's the name of the hotel where the ring is >> hilton bedly. >> we beg the hilton bedly miami beach, please find and return morgan's wedding ring. >> i think they're trying right now. >> please, try very, very hard. >> you're a trooper here she's suffering. >> she is. i understand. >> yes. >> morgan -- don't cry contessa brewer with her shoe fanny pack the ipo set to price right on the heels of we works parent company filing to go public. and just with uber, are we at ip overload that's next.

welcome back to "the exchange." check out what's happening with shares of h&r block and intuit shares following precipitously on reuters headlines saying new

york governor andrew cuomo called on state regulate laters to look into tax preparers for allegations and tactics that would reduce access to free tax filing returns for low-income families they've also had issue with the fact that some of these free sites are not available or visible to google and other search engines intuit as of last week changed that policy to make it more evident to the search engines but still, those shares are moving on the heels of those headlines. i should also note, kelly, we reached to both h&r block and intuit for a comment we will let you know when necessity get back to us meantime pinterest, zuber and lyft are gone public and now beyond meet and uber are on deck according to "the wall street journal," this could top the record haul from '99 when 547 companies raised over $900 billion. is this over the top let's bring in the co-founder of slated and our own leslie picker to discuss and debate this

welcome, guys. i am curious what you think, i heard people talking about this now there's a rush to get ipos out because the market is at a peak and the message in there is beware to the public, or if you think those fears are overdone >> it's a bit of both. first of all i don't think what's going on with it ipo is anything like the go-go days of the '90s where it was stratospheric and about capturing audience and there wasn't enough revenue and profit to go around for those companies. these companies are far bigger with huge topline revenue growth but what they all have in common is they doen't have the profits to justify multiples of 20, 30, 40, 60x revenues i think the market has gotten frothy with dotcoms and the people talking them up the most are venture capital firms that want a big exit to cash out. i think new investors are piling

in and are getting dollar signs in their eyes and they want to get rich quick too and i think all of these companies, you will have to be ready to hold them for many years to see that return. >> actually, leslie, you have data on that that's interesting. go 20 years after the dotcom frenzy, average first year gain 14%, arm three-year gain, 21%. >> so you get seven percentage points on top of that. if you look at it on a market-adjusted basis so whether you get any over a three-year time period, turns out you don't. it's exactly equivalent to where the market is over that same time period. so most of the gains are actually made on the first-day pop which is why investors attending these road shows play such an importance in getting the allocation of the ipo. >> but they cannot get in on the offer price only once it started trading. so we saw this with lyft, it opened as $87, thact was the

chance the public had. if you sold at $72 and got out, would you have done all right. but for many companies that mature it's worse if they're still not profitable but there are bright spoets. the fact slack and airbnb don't have to raise money, slack has apparently a year and a half's worth of cash on hand and its burn rate and a there's been a number of software companies doing well in a way the most high-profile ones are the worst offenders, aren't they? >> yesack and zoom are much more enterprised companies and also much smaller in terms of revenue in losses or small profits. but they're still getting these outsized valuations of 60x revenue. i think even they will say a right-sizing post ipo. but the worst offender by far is uber they are the 800-pound gorilla and also the most overhyped and

they're losing $3 plus billion a year so they will burn through it and try to compete in a no margin business against lyft and other competitors and i think uber will be a company that crashes and burns for a couple of years before they prove they can generate billions in profits i think they're going to be the ones that will get investors into the most trouble. >> they're coming next week. guys, thank you both leslie picker, stefano, good discussion we appreciate it s&p and nasdaq at the record hiegz today. s&p having the best start to a year since 1987. where can investors still find opportunities at these levels? we've got some names yeah, that too. i don't want any trade minimums. yeah, i totally agree, they don't have any of those. i want to know what i'm paying upfront. yes, absolutely. do you just say yes to everything? hm. well i say no to kale. mm. yeah, they say if you blanch it it's better, but that seems like a lot of work. no hidden fees. no platform fees. no trade minimums. and yes, it's all at one low price.

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i can see who's online. i'm gonna sweep the sofa fort. well, look what i found. take control of your wifi with xfinity xfi. let's roll! now that's simple, easy, awesome. xfinity xfi gives you the speed, coverage and control you need. manage your wifi network from anywhere when you download the xfi app today. welcome back nice start to a new month of trading. the s&p and nasdaq continue to trade at record highs. that christmas correction is a thing of the past. if you dig a little deeper, she said, you'll see around 95 % of s&p stocks are in the green this year, 95% if you've been out of this market, can you still get back in with me now is neil hennessey, ceo and portfolio manager of hennessey funds. great to see you. >> thank you. >> monopoly ties.

>> stocks, real estate, bonds. >> yes. >> you have a couple of picks. before we get into that, do you think the market overall is valued >> absolutely not. if i told you we would have low 3%, 4% mortgages, historical cash flows and cash on the sidelines, strongest banking system we've seen in such a long, long time, unemployment so low, you put all of that together and you would think we're going into a bull market but it's just we've been in this market now for nine years and people think it's over certainly it's not, kelly. >> they've been thinking it's over the whole way one top-level question on this, we were just talking about ipos and whether that's sign of the top. because there are venture capital guys who are afraid if they wait a year, neil, the markets won't be open for these. is that pessimism undue? >> i think you have to go back in time and look at the late '90s if you look at that time in the dotcom arena, they had pet.com, i don't know what it had to do with the internet but they had a

pet.com. a lot of companies became public, raising $5 million, $6 million and didn't even have a product or revenues. what you're seeing with lyft and uber, you're looking at huge revenues they just haven't been able to break into the profitability column but they can if you think about it, if you use a $10 uber to go someplace, and they raise it to 13, if you going to quit using them no essentially they have a lot of pricing going forward. it's going to take years to get there. >> would you buy into that ipo >> i would not when you're losing $3 billion a year, i'd rather take that and buy something like land star or restoration hardware >> tell me why restoration hardware is on your radar. >> well, it's bucking the trend. everybody is getting rid of brick and mortar and you're looking at a company with .9 price of sales, $0.90 for a

dollar they earn $9 in revenue. essentially it's a destination now. so people who are going there have very little online revenues in sales people are putting in high end restaurants. they're doing things differently to bring customers in. when you look at a company not paying a dividend, you can see what's going to happen in the future >> and you also like land star we talked about casey's, american eagle ideas for investors afraid they might have missed it >> neil, thank you >> it's driven by san francisco based tech companies it's widely expected to boost prices why is san francisco in the biggest slump in years that's next. what do you see? we see breakthrough medicines getting to patients in record time. we see harnessing natural gas

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for the most important part of you... your brain. with an ingredient originally discovered in jellyfish, prevagen has been shown in clinical trials to improve short-term memory. prevagen. healthier brain. better life. welcome back from napa to san francisco, recent data shows home sales in the bay area plunged nearly 15% to the lowest march trading since 2008 what's behind the drop with all the ipos >> affordability

the market completely overheated you have a lot of homes available for sale on the high end of the market. on the low end of the market, even the medium range of the market, people just can't afford to get into these homes. >> the high end everywhere seems to be wilting. is there a tax theme there >> that's market based you have on the east coast, new york, greenwich and other places and chicago even the tax issue because people can't deduct what they used to be able to. other issues in california, you know, the high end, yes, it's slumping again, it comes down to the affordability issue. that's why we see this incredible sensitivity on mortgage rates they're only up about a half a percentage point and now we're seeing sales pull back >> even today the 10-year was back you're saying that alone might help the markets out a little? >> yeah. you want to see the lower interest rates and affordability. what we're seeing in san francisco is prices coming down. it's a great sign. it's terrible if you own a house, but it's great if you're

buying prices always lag sales. we're finally getting to the point where prices are coming down it's been a hard struggle. >> on time for the new millionaires to come and snap it up >> thank you that does it for "the exchange". the fed decision is coming up in a couple minutes we'll cover that at "power lunch" it begins right now. welcome to "power lunch" we're moments away from the fed's latest decision on interest rates the fed expected to remain on hold wall street will be paying close attention to what policy makers say about the economy and about the president's demand to cut rates by a point and embark on qe the dow is higher by 20 points the s&p 500 ditto there. not eve an 6 .5 rise in shares of apple can move these. nasdaq is up by a third of a percent. joining us alicia lavine, and

paul mccally we are in an interesting place today, david the gdp was better than expected >> i think the missing part of this is asset prices we've seen a huge rally in markets since the start of the year if you look at what's killed the economy in the last 25 years, it hasn't been inflation. it's been asset bubbles. i think we'll see some statement out of the fed particularly in the press conference talking about the danger of fueling asset bubbles and that's one of the reasons why the federal reserve has to not kus interest rates even though inflation is low. they want to prevent asset bubbles. >> i have to agree with david. this is an interesting meeting for the market because it's kind of set up to be neutral to negative for the market the market is pricing in a rate cut by the end of 2019 we won't see that right now and i think powell is going to emphasize flexibility and being data dependent

the rate cut is not in the cards. >> the markets want to know what the bar is for the fed to cut rates at this point, especially on the heels of donald trump's tweets saying the fed should cut by a point what is that bar, the threshold that the markets are saying already a december cut >> i think mr. powell will be religious about not telling you where that bar is. that's the last question he wants to answer, because wall street will look at it like pav love's dog if he does so i think he'll probably upgrade a little bit on the economic outlook versus last time he will do the soft shoe in a big time way on inflation. and then he will provide an ode to symmetry with respect to patients where patience with respect to hiking and patient with respect to cutting i think he wants to get out of there without saying anything but saying what he does say eloquently >> david, talk about inflation the readings -- how is the fed

supposed to describe this and what's going on in the economy >> they're going to have to say if you look at the consumption deflation number, this has been the ka dun drum all the way through. that's where we are. again, it's not just about inflation. it's about inflation and asset prices and it's very important the fed controls that because markets have gone up a lot this year they don't want to fuel it further explosive rise in markets. that's why the fed has to sound hull kish. >> they also risk popping that bubble we're just at the levels prior to the big downturn last fall. so it's -- we have seen the 17 % rise in assets we also saw a prior huge decline in assets. >> that's right. and the rise in the market in this year has been predicated on fed dovishness own a fed on hold i think the market could be disappointed as we go forward during the year. it's not going to be so simple for the feds to keep this hold position indefinitely.

>> what sectors are we watching closely? >> financials will jump off the interest rate expectations i think this may mark -- we've got treasuries rallying going into this. i think they could back off after this and it could be positive for financials. . >> fed decision dropping let's get to steve liesman in d.c. >> maintaining the existing funds rate to 2.5% it will be patient in determining its next move and giving up a hint of which way it will go here on the economy, however, the fed broadened the concerns over inflation being below its target it now sees core and headline inflation having declined and both running below its 2% target in the last statement the fed only made that comment about headline in -- core inflation. the labor market remains strong. economic activity rose at a solid rate job gains were solid o