the dow falling 200 points today, a little bit more than that beyond meat ipo soaring 150%, steve moore is out, his nomination to the fed has been pulled that does it for us. nancy davis, always great to have you thanks for being here once again. "the exchange" starts now. thank you, scott hi, everybody, here is what's ahead in a very busy hour. way beyond expectations. what that huge surge in today's beyond meat ipo is telling us about these markets and investors' appetite, why he, appetite, for risk also we will talk about a bombshell at the fed just breaking steve moore is withdrawing from consideration from the fed board, the president saying moore will work with the administration. same paycheck two days early. one online bank is changing the way workers get paid and it is catching the attention of wall street and silicon valley. let's begin with today's markets and this move lower, dom

chu here with that. >> overall markets have less appetite for risk on a broad bases, red in the markets spreading throughout the three major indices, the dow industrials at the high, just about up 24 points, at the low was down about 249 you can see right there in the middle of that range right now more towards the down side, the s&p down about half a percent, the nasdaq composite off by half a percent as well. one of the reasons why you are seeing some negativity in the marketplace has to do with oil prices and the energy complex. a sharp decline in crude oil prices the key level that some traders were watching was $62 per barrel we got as low as $60.95 for west texas intermediate that's right around that 200-day moving average for oil prices. that's a level to watch next as well we will keep an eye on energy markets. if you are looking for a stock, check out what's happening with under armour shares, they are off their highs but still up about 3.5%, a nice move higher, about 37% higher since the lows

in december for under armour shares, but still, remember, this was near a $54 stock back in 2015. a long way to go, but still trending in some direction to the upside, we will see if the bulls latch on to that. >> thank you so much welcome to the exchange, everyone, i'm kelly evans. president trump tweeting just about a half hour ago that stephen moore has with drown as a fed board nominee. moore this morning said he was, quote, all in. we will have more on this shortly. jobless claims stuck to a three month high hitting 230,000 for the second week in a row that increase likely due to spring break productivity, this was a big headline this morning, soaring in q1, it's the fastest yearly gain since 2010 and handily beat estimates. markets are not taking all of this well. let's get down to bob pisani with more on the new york stock exchange. >> hello, kelly. we have a few headwinds today, oil off the high, 65 throws to

61 bigger issues for the markets to deal with. we have moved 50 points in the s&p 500 over the last nine days to historic highs, that's 500 dow points a lot has to go right for the markets to keep going up like this the markets moved so much the path of least resistance is sideways to down right now and you see that in the last day or so the risk to the rally include no trade deal, in fact, there is some debate today about exactly how well the trade talks are going right now, that may be part of the market dynamic today. with the fed you saw yesterday the market wants a rate cut but powell seems unwilling to provide it that's a bit of an issue with he also need china to keep recovering data has to keep getting better there and we need earnings to keep staying in positive territory. the biggest problem the market has right now is it's expensive. earnings are expected to be up only in the low single digits at best for the next few quarters and that means we are about 17, 17.5 times forward earnings. that's way above the norm of 15 to 16. expensive. back to you. >> bob, thanks so much

bob pisani it's one of the hottest ipos we have had this year and actually in quite some time and it's maybe not the one you would have guessed look at shares of beyond meat jumping 123%, about 130% right now in the first couple hours frankly of trading it priced at $25 a share last night which itself was the high end of the range it's at nearly $58 right now let's break this down. joining me now brett thomas, co-founder of cavu venture partners an investor in beyond meat, he is here with leslie picker and a deety roy has a look at the fierce competition that beyond meat will face. brett, let me start with you and, i mean, what do you make of this trading that we're seeing >> i think if you look at beyond meat and what's going on in the world, right, obviously there has been a secular shift in health and wellness, people want to feel better about themselves, people want to upgrade their diets as well as what they put in their body and on their body. so i think, you know, the

adoption of plant-based is getting more and more mainstream by the day. >> sure. >> if you use an analogy, right, you know, dairy category, for instance, is a $16 billion category in the u.s. and the plant-based adoption for that category has been about 12%, 13%, so $2 billion or so meat is the largest category in food and beverage, about $270 billion alone in the u.s $1.4 trillion globally. >> okay. >> if you extrapolate the same type of adoption that's happened in plant-based milks in dairy, that's potentially a $35 billion category in the u.s. alone and $180 billion globally if it can get the same adoption. >> that gives us a sense of why investors are salivating, leslie, i can't resist some of these puns today this priced to $25 last night, is not profitable yet and now it's one of the few companies because you go over the past decade there is really only a handful that have doubled on their opens. why this company given the

economics? >> i spoke with some sources close to the matter that had a sense of what was driving some of the book building the range that they priced it the high end of was one that they had actually boosted from the initial range that they had south. i'm told there was a lot of pricing sensitivity from investors. they did not care what this thing was coming out at. >> how could they not care >> it was 30 sometimes oversubscribed at the first change, 30 times oversubscribed at the second range. all of the investors who had basically given their indications of interest at the first range not a single one die effected with the second range i think a big reason is you've got retail and consumer investors who have used to slow growing stodgy food retail consumer companies and here is a company that's got its top line growing, doubling every single year for the last three years. >> just signed up with burger king. >> they see the potential for other partnerships. >> was that -- let me bring in a deety.

you have some reporting that gets right to the heart of this. beyond meat might have an incredible category and great growth story, but there are a lot of other players in this space, right >> yeah, there's some fierce competition out there filled with big named backers that are all going after this $1.3 trillion global meat industry. their current competition is impossible foods, it's valued at just below a billion dollars the plant-based impossible burger will soon be available in all 7,200 burger king restaurants, it's already in 7,000 restaurants worldwide including red robin and white castle chains. the company says it's ramping up so quickly it's having trouble meeting demand beyond meat has backers, snoop dogg and lindsey vonn. one of beyond meat's investors, tyson foods, pulled out of the company recently after announcing it will be creating its own plant-based proteins and

another competitor down the road could be memphis meats, it's backed by tyson and cargill, it has created meet mauls duck and chicken using starter animal cells in a lab we are not sure what the timeline is for those products. >> brett thomas, let me bring you back in on this. anecdotally people will say the impossible burger is better. is beyond meat the lift to impossible's uber? in other words, can it compete in a category once consumers know all of these offerings and start to pick their favorites? >> yeah, i think so. listen, the numbers we talked about how big the category can be, i don't think there's going to be one player here. this is transformational, we always look to back category creators, beyond meat is the category creator here, they've got a huge first mover advantage over competitors like impossible and others that will come to market if you take a restaurant they are in, a & w, for instance, in canada, their same store sales grew 10% quarter over quarter

based on them offering beyond meat on the menu i think that first mover if you are an a & w why would they switch you out if the brand is working and you are able to produce great sales. >> could mcclenddonald's be next >> there's rumors out there. burger king went with impossible, mcdonald's is still out there, it forces their hand potentially at some point. i think mcdonald's will add something to the menu, we will have to wait and see. >> leslie, here is an interesting question, first of all, beyond meat has left a lot of money on the table. >> sure did. >> they presumably could have raised twice as much funds as they did last night. is that going to be a competitive problem for them as these other ones start to come to market. i'm sure the underwriters will say look what they did. >> the use of their proceeds for this ipo a lot of it is going directly into r&d. if you are talking about a pop of it, last i checked it was up 125 or so that's about $300 million that you've left on the table theoretically that you

could, therefore, pump into r&d or hire better engineers and better chefs to create these products they are still making a lot of money off of this deal, but there's always a little bit of fomo when it comes to these things. >> brett, you have a huge portfolio of companies like this do you mind going out on a little bit of a limb and telling us who you think might be next to come to the public markets and if this might accelerate the move to go public by a whole lost of brands. >> 100%. i think it will. i think traditionally consumer hasn't been a big avenue for ipos, small and mid cap growth, especially food and beverage you would have to go back to annie's who was the last high profile with a great ceo i think this will open the door as an opportunity and outlet there is a lack of small cap, mid cap growth consumer stocks that are out there and investable so when something comes along that has high growth, it's really appealing to the buy side

and to the street in terms of entering into it i think this path will continue, i think you saw chewy's filed which is -- obviously was acquired by pet smart and they're spinning that out. not profitable i think going back to beyond meat a little bit, they actually have a path to profitability, it's not just a concept stock that doesn't have a path to profitability. 26% gross margins in q1. >> your portfolio we also called the seema mody lunchbox around here you've got things like hip peas, buy, kettle and fire which is a bone broth soup, pet food, cold brood coffee, vital pro feens for people who eat collagen these days there are a lot of up and comers here and we will see especially if today accelerates their move into the public markets. thank you all. appreciate it very much. those shares up about 130% we will continue to watch them. here is what else is coming up on "the exchange." >> announcer: ahead. tesla has a plan to recharge its

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♪ welcome back shares of tesla seeing a nice pop today, still up about 2% after detailing plans to raise $2.3 billion in new capital. my next guest writes in the "wall street journal" that tesla will need more than that to recharge its battery while $2 billion might help pay the bills it won't be enough to pay the investments. charlie grant, joining me as well is robert frank welcome to you both. charlie, why do you think the market -- or tesla shares are up at all on this news? >> well, i think having $2 marlie hall that they didn't have yesterday is certainly good news as far as it goes, tesla has a working capital deficit of about $1.7 billion ending at last quarter and we haven't seen any sign that a big sales turn around is under way in q2. tesla's balance sheet has been a problem for a long time. this at least kicks the can down

the road a little bit for them. >> how expensive is this financing? obviously the equity is the most rational path to go down given where the share price still is their existing debt is trading at pretty high yields. >> that's right. the unsecured debt which is not apples to apples comparison trades north of 8% this money we're going to have to see where the conversion rates come in. i think this is probably going to be a harder financing for them than it's been in the past. i'm not expecting today's enthusiasm to last much longer >> robert, investors perhaps liking elon musk is putting his own money to work in the stock. >> he's putting $10 million in to buy stock so that gave the stock a boost today. one of the issues with tesla as it relates to disclosure is how much stock has he collateralized for margin loans he hasn't sold any stock, he owns 20% of the company. he doesn't have any liquid source of wealth to buy more stock. what he's done is he's leveraged stock to get cash, he's also got

some mortgages and private homes. this amount is right -- as of 2017 was around $600 million that he had leveraged. we don't know what the number is for 2018 but it's likely a lot higher he's worth 20 so we shouldn't worry that he will be down to his last buck, but you look at what happened with chesapeake energy, you look at world come, adelphia these were all cases where founders who had a lot of stock, leveraged, had margin loans and when the stocks fell dramatically and quickly they had to cover and they were trying to cover stock with selling more stock and that's a downward spiral. >> we've seen this time and again. you wi you can have a high net worth but not necessarily cash on hand. >> what about the $20 million move by elon in terms of elon's overall relevance to this company, that's not a huge amount. >> it's a drop in the bucket, i mean, it's a token show of confidence and that is nice as far as it goes i would be much more focused on why tesla did not raise money

last december when the stock was at $375 and the capital needs were more or less the same what they are today i think it tells you a lot about the tesla shareholder base that that question is not being asked this afternoon. >> why didn't they that was around the time he was talking about the stock going private at 420 >> he said he didn't want to he didn't want to. is he going to make due -- there is a phrase you raise when you can, not when you need to and tesla needs to. >> what hashappened in other words is what we've seen in the first quarter the trends we've seen since some of the demand side issues have put them in this bind that he did not anticipate >> that's right. there is a terrific piece on cnbc.com right now how tesla is offering loans to employees affected by regular shifts nothing is run right here. everything needs to be rethought here. >> this is how he's always kind of run things, so certainly the

investor base knows this, the reaction maybe tells you that they expect him to continue to pull rabbits out of his hat. >> we are in such an amazing lending environment right now with interest rates and the fed where they are that, you know, for the foreseeable future this is a company that can continue to raise money despite all these questions. >> and even though it would have been better maybe a few months back. >> thanks so much. >> robert frank and charlie grant. thank you guys appreciate it. one of the most followed fed watchers on the street says there is still a case for low rates. he joins us coming up. and results from dna testing in law enforcement could take months typically but new technologies are working to deliver results in less than two hours. we will head to a crime lab later. to managing your fleet... to collaborating remotely with your teams.

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welcome back to the exchange let's get you caught up on the markets. stocks are still in the red, off session lows, though, the dow was down nearly 250 points, down 144 right now and the dow is the worst performer with a half percent drop, the s&p and nasdaq are down a quarter percent right now. some of the biggest movers, way fair is sinking after its results, revenue did beat but the company posted a wider than expected loss hurt by high customer acquisition costs, we know those commercials so well in our household down 11.5% zinga moving higher after beating revenue expectations,

the company giving better than expected guidance saying it's confident in core franchises and recently launched games. shares up about 5% dow ask falling after its first earnings release since being separated from dow dupont. revenue beat but core earnings down 24% from a year earlier, hurt by lower prices that 5% drop weighing on the blue chip now to sue herrera for a cnbc news update. >> for the first time in a decade the house has passed a climate change bill, it would prevent the trump administration from pulling out of the paris climate agreement, something president trump said he would do back in 2017 the vote was largely along party lines. >> the boston celtics announcing that their general manager danny ainge suffered a mild heart attack last night in milwaukee where his team was playing the bucks in the nba playoffs. the celtics say ainge received immediate medical attention and is expected to make a full recovery. long term mortgage rates have fallen after four weeks of

increases. if eddie mac says the 30 year fixed rate mortgage proved from 4.1% down to 4.2% due largely in part to slightly weaker inflation. and mortal combat has been inducted into the video game hall of fame the game was launched in 1992, it was the subject of capitol hill hearings a year later on concerns that it was too gory and violent for kids also inducted today, colossal cave adventures, super mario cart and the solitaire game built into microsoft windows times have changed that's the news update >> it starts with outrage and ends up with the hall of fame. >> right exactly. >> classic >> exactly it is. it's like have they seen mortal combat any way, they're honoring it. here is what's still ahead on "the exchange." >> announcer: a not to bright day for event bright competition catches up to

square an inside look at starbucks innovation room, and the rise of the unhappy meal it's all ahead in rapid fire you should be mad at forced camaraderie. and you should be mad at tech that makes things worse. but you're not mad, because you have e*trade, who's tech makes life easier by automatically adding technical patterns on charts and helping you understand what they mean. don't get mad. get e*trade's simplified technical analysis.

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it's the rubber match for jobs after a weak february and a surprisingly strong march report, will april confirm weakness or strength "squawk box" tomorrow.

inside out, we will get to that let's catch you up on a few stords in rapid fire here to break down the headlines are dominic chu, seema mody with the lunchbox and robert frank. it is the seema mody lunchbox is the new hot ipo portfolio. >> one day. >> bright shares which is also wild today, the event ticketing platform and they are tanking with a drop of nearly 30%. stock is on pace for its worst trading days ever since the company went public ba in september. a weak outlook, wider an expected profit loss for q1, higher operating expenses and administrative cost. it is a cautionary tale for all the excitement around these new ipos. >> it has to be. the idea is we've talked about all the companies out there that are going public with a good amount of hype and tail with end from investor sentiment but that don't produce profit when those profits are no longer profits but bigger losses that becomes a real issue event bright came out with a

decent amount -- hype is maybe the wrong word but did come out with fanfare the idea is it's a cautionary tale for investors out there as we see a stock like beyond meat go the way it has so far today. >> if you can clearly indicate to investors your path to profitability which seemed to be a concern with event bright, revenues up 9% but operating expenses were up 23% so that's a big concern and that brings the question of when is this company going to be become profitable. >> robert, that's why we've seen this time and again, the first quarter or two it's sometimes more after you go public are the real tells for how these stocks will trade. >> they are all growing revenues and investors love growth, but look at the business model what are their costs you look at all these companies, it really comes down to what are their costs and what are their profits. i just feel like we are going back to 1999 in a big way because this company the costs, the losses it's just hard to see where it ends up it's so competitive that field. >> yes, and, again, now the investor base has a chance to

get in at quite a different pre. we look at these day one trades, go i have it a quarter or two. >> not just that anybody who remembers facebook or snap ink or twitter even, we've seen run ups even if they were run ups in the beginning for the first maybe one month or two months, there is not inevitably, but in many cases there is a downturn where there's a lot of shakeout happening. that's not to say that that's not a wealth creation element because we know people who bought facebook back when it was 16 bucks a share are probably rejoicing right now. >> one of my college friends bought it, she said i thought it got too cheap. >> these are timing elements this is not one where you have to buy right now it's a reason why a lot of experts don't like investors buying into ipos on day one or day two. you have to let things work out. >> it's a similar story, square has been another great performer, in i go in fintech lately but the shares are sinking today. top and bottom line beat but

forward guidance for the second quarter. weaker than expected profit volume in one. >> there was a lot of talk from analysts which i've been bullish on the stock that the market placement is becoming much more competitive for the payment space, but we should point out square has been trying to broaden its payment processing platform, they are also now offering lendings to small businesses through square capital, but the question is over time do they have to invest more in order to hold on to the market share that they have when you have all these new players coming into the -- >> i think it's a great question. >> also interesting that all these companies that were built on virtual cash, what is venmo doing? credit cards what are square doing? >> lending. >> cash. they're going into hard cash transfers. >> it's funny they dress themselves up as fintech to get all this money and go back to crash an credit cards. >> or they come of age in the post evil banks period to go

maybe there are some advantages. let's talk about starbucks because summer is just around the corner so starbucks will roll out the seasonal menu these shares have been an incredible performer lately. all time highs almost daily. their summer menu has a mango dragon fruit refresher and the s'mores frappuccino. who is the brainchild behind the drinks it's not kate rodgers but she is there in the innovation room in seattle. how is it going? >> hey, kelly, i couldn't miss my favorite segment, rapid fire. we are here at starbucks, trier center the company is 48 years old but this is a 20,000 square foot new facility and they are trying things differently here. they have a bunch of tools behind me, all of these coffee maker prototypes, this he even have a 3-d printer, this is for rapid prototyping. this facility opened up about six months ago and here they're taking projects basically from idea to action within 100 days

ceo kevin johnson says this is basically a new way of working at starbucks they are bucking the corporate trend where ideas can take months or even years to get to market >> it's a mindset. it's a mindset that says let's pick a problem or an opportunity that we're going to focus on and let's try something, let's get it out there and let's learn and adapt. >> right now ideas are being generated via an online crowd sourcing platform. if you are an employee at any level you can submit a project to be voted on, potentially tested at the trier center, eventually they will roll that out to their employees across the country, potentially their suppliers and maybe even customers one day. >> i thought this was going to look like willy wonka's chocolate factory. >> it looks like my garage. >> it has -- >> go ahead. >> it has a ton of different projects that are being worked on throughout the center, there is a cloud pop, you know, pop up bar where they're testing ne

beverage innovation which you mentioned at the beginning of the hit. that's been really important to the company's acceleration and the same store sales in the past few quarters they do have a workshop, a bunch of engineers working on different things, with he saw a prototype for a single serve pour over machine they made on this 3-d printer that will be in five stores in may they are moving quickly here and doing something for sure. >> they have color changing cups that everybody is going crazy for. >> the secondary market is going nuts for those. >> are they really >> if you cannot get them there you can imagine they will pop up on ebay. >> 60 bucks on ebay. >> to be fair to us she is standing right in front of a craftsman tool wraeck. >> kate, stay right there. >> we are going to go from a feel good story to you tell us what you think about this. burring be king is using its rivalry with mcdonald's to raise awareness during this mental health awareness month they are releasing a line of

remeal boxes in five different mood boxes encourages people to feel their way because no one is happy all the time yes, it's a shot at the happy meal they are available as part of a whopper meal at select locations while supplies last. >> yeah, it's sad. >> no. we are not always happy, that's the thing, right it's okay to have -- >> it's a way that you call a mention to mental health awareness? >> some people don't always want -- don't always reach out when they're feeling sad or having anxiety this is a way to maybe get some attention from a friend. >> there is a dgaf box and those people out there might know what that means, i'm not going to say it right now. >> i have no idea. >> exactly we will move on. there is a box that is dgaf but it's not something that's typically kid friendly. >> the video they released as part of this, i think we can show a couple of seconds of this

snippet. yeah, it's just an interesting way, guys, to try to draw awareness to this issue. i don't know what role burger king has to play in doing this. >> or why not? maybe it is the places we frequent white often that should be standing up for mental health or finding ways for us to talk about it it's on version, unprecedented a unique move. >> ms. rodgers, you are our fast food expert here who is better for mental health, burger king or mcdonald's. >> i can't tell you which is better but restaurants across the board are trying to create viral moments, they are important for branding, social media has become more and more key as they roll out mobile order, pay and delivery, that's really important being relevant online and doing different campaigns like this or like what starbucks says with its viral drinks those things wind up matter.

>> the guilty meal after you've had the fries and the burger you need the guilty meal. >> there is a yaaas meal so, i mean -- >> that's supposed to be a mental health -- that -- >> that's a mood it's a mood. >> yaaas. >> to be fair to burger king and restaurant international we are sitting here talking about it right now. >> i don't think it's going to be a big -- >> yaaas, we are i pooh-poohed the bacon at mcdonald's i'm poo-pooing the mod boxes at burger king kate rodgers, and thank you guys as well. if i know tech firms are looking to shake up traditional banks and both curse midwest and inveorsts are typically buying in check at chime, they want you to get your paycheck early that's next. creating a better world isn't just a result, it's a responsibility. emerson. consider it solved.

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tomorrow is payday, but does it have to be most payrolls are actually processed on a tuesday, but traditional banks don't make the money available to you until friday one challenger bank says they can deliver your paycheck to you two days before your other coworkers get theirs joining me now is chris britt, ceo and co-founder of chime where payday is on a wednesday welcome. >> hi, how are you today >> my main question about this is are you actually making the money available sooner or are you doing some sophisticated engineering in the back office so that it just appears to me sooner but isn't really there until friday >> maybe just some setup chime is the largest and fastest growing company in the challenger banking space with he offer our members fdic insured checking accounts, sachgs accounts and a visa debit card one of the key features consumers love about the product we give them their payday up to two days early # 0% of people that sign up for

chime and redirect their payroll into our account we can give them their payroll a few days early. your employer usually starts that process on a tuesday night and initiates the transaction through the federal reserve's ach system and when we get a notification on wednesday that you're due to get paid on friday, we release those funds immediately. >> basically it's an advance, right? what you're doing and there is no reason other banks couldn't or shouldn't do the same thing, but it's an advance, right you're making available the money available to me but in a way you are taking some of that risk, right? >> it's a no fee advance on that -- on that payday for that paycheck and it's really minimal risk because once a transaction is initiated by an employer and runs through adp or one of the big payroll systems the chance of the money not coming through is very low. i mean, to date we have advanced over $4 billion of paychecks to members using chime and we haven't once had the money not show up on friday.

>> because it would be the risk that the employer not pay. why stop at wednesday? what if the next bank comes out and says chime will give you your paycheck on a wednesday, i will give it to you on a monday. >> we are definitely looking at new ways and new services to offer to our members beyond just, you know, a low fee checking account that doesn't rely on monthly fees and overdrafts we recently acquired a company called pinch that's in the credit building space and we've made a couple key hires over the past six months or so, so definitely look to us adding additional products and services around credit and lending over the next few months. >> i will come back to that. i have a question on overdrafts. let's say my paycheck is $500 and i get it on a wednesday and i spend $600, hey, that's an overdraft. how does chime treat that? >> well, the first -- we would

let you transact up to the $500 in the account and historically we would simply stop the transaction at $500, but we are actually looking at launching a new service that will let you go negative in the account without having to charge a $35 overdraft fee like pretty much every major bank in america does today. >> how would you -- i know you don't want to give away any competitive thoughts here, but it does feel like this is an area ripe for innovation, how would you do that, provide overdraft services without the cost >> well, we would use our balance sheet and only offer it to consumers that had been with us and that we have a deep relationship, they're getting direct deposit and so forth. you're right, it's a huge opportunity. if you look at the amount of overdraft fees paid in america it's over $30 billion and all of the big banks they just reported earnings in the last, you know, week or so, they all generate between a billion and a billion five a quarter in fees from overdraft fees and service fees on deposit accounts. it's hard for them to change

that even bank of america actually announced last quarter they were going to reduce -- they sort of madetheir overdraft fees a little bit more lenient and reduced their fee income by 4% and the result was the stock was down 2.5% after earnings it's very hard for these larger institutions that are so reliant on fee income to make their checking account economics work to wean off. i think it's a huge opportunity for us and probably other innovators as well. >> we will see if that new business model allows for different kinds of products. you guys are valued now around a billion and a half as of the latest fund raise. is an ipo next >> that's not on our short-term roadmap. our real focus is adding additional products that help our core consumer which tends to be an every day american that is just fed up with paying big bank fees they tend to be a little younger and value being able to have the control of getting access to their checking account and managing all of their money right on their phones.

they always know where they stand and it's just really resonating having a brand that is authentically trying to help our consumers get ahead and not be so reliant on fees. we also have services that help our members save money automatically and that's something that people really, really love. we live in a country where there's limited amounts of savings and so we help people do that more effectively by using technology. >> if i know tech is so hot right now, wall street is watching, that's for sure. chris, thanks for joining me >> thanks for having me. >> chris britt is the co-find you are and ceo of chime. up next we will ad theo kentucky's state crime lab for an up close look at how technology is changing the way police catch criminals but to us, it's the pace of tomorrow. with ingenuity, technologies, and markets expertise we create the possible. and when you do that, you don't chase the pace of tomorrow. you set it.

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welcome back police departments across the country are using new technology to catch criminals we are in frankford, kentucky, inside the state police's crime lab with that story. rahel. >> reporter: hi, kelly supporters of this technology say it could revolutionize police work. you see this device, it's essentially the size of a printer and it can test dna and get you results within 90 minutes. they're using this in cath to

test for sexual assault cases. upstairs in this lab is a conventional testing and that takes technicians at least a week to get results and to do the process. now, the devices what's genius about it the founder would say is they automate the process and that's what makes it so much faster law enforcement that we spoke to say they're really excited about it >> to put a name to a potential suspect, yes, that's exciting. that is ground breaking stuff. >> reporter: so this is still a pilot program. for kentucky it's still free of charge but consider this, if they were to use this for all crimes that involved dna it would cost up to $7 million a year they're trying to get some funding for that to of course offset those costs but the state's lab director tells me for conventional testing it's about $2,100 per sexual assault case for a rapid dna case like the device we are here it's about $2,450 there is also some critics of this device who are concerned

about the collection and use of dna and we spoke to the founder this have very machine who tells me the results are really no different than a fingerprint there's debate on both sides, but what i can tell you is that it seems like most peopl with this machine instead of the traditional way? they get the same kind of results? >> reporter: actually, the founder would tell you that the results are more accurate. when i spoke to the state lab director, said it's as accurate but what i think their selling point is it's happening a lot faster it's as accurate and it's a much quicker process. >> any other applications outside of law enforcement >> reporter: they used this in the camp wildfires in northern california they were essentially testing the remains in the fire and testing and matching that to people who were looking for relatives that were missing. so they saw quite a bit of success with that. the founders of this technology, of course, would like to see more applications but still

relatively new outside of law enforcement, kelly. >> great to have you on "the exchange." forget human resources department because robots and algorithms are now hiring, assigning and even firing workers. those details are next steve liesman will be live from the hoover institution at stanford university tomorrow for first on interviews with james and loretta. don't miss it. back in two. control. control. it's gotta let new data integrate with data from our existing systems. ♪ ♪ be able to pull from reservation platforms built 20 years ago. and also be able to use apps to book super-personalized trips on shiny new phones from the future. plus, i need freedom to move my workloads wherever, whenever - but manage it all from right here. and that's the cloud i want. simple, right? expect more from your cloud. ibm cloud.

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steven moore will withdraw himself from consideration chief economics commentator for the "wall street journal" and peter is chief investment officer at blakely advisement group. welcome to you both. what do you make of herman cain out and who's eventually named to be on it? >> it will depend on what lessons the white house takes from these two setbacks. the reason mr. cain and moore forced to withdraw, a lot of baggage from past.

in the case of mr. cain, allegations of sexual harassment and mr. moore, very impoliticked comments about women coming back to haunt them. the economic community and real issue is they weren't qualified. they were deeply partisan people whose views on monetary policy not always coherent. does the white house conclude that it's okay to nominate a partisan person not especially qualified so long as they don't have baggage or go back to the drawing board and use a formula that's worked so well to date and find people really qualified like chair jay powell or rich? >> that, peter, is what i was going to say and the main issue with them is that they were overtly political candidates and that made people uncomfortable so is there, i'm sure there's plenty of people out there who ideologically fit what the president is looking for but have the right pedigree, so to speak and would be heard by the colleagues on the board and might not be controversial in the nominee.

>> i think what they need is the non-ph.d. economist pedigree to add other opinions and add people that have been in business for a long time and have people that actually dealt with not from a regulatory standpoint but a business standpoint and got a loan from a bank or a business loan. i think that's what they need. while cain and moore were not the right people, i think the theory though is correct in that let's get some non-ph.d. economists or more of them in the fed. >> any names of people come to mind who might bring ideological diversity to the existing fed but maybe the administration looking to advance >> not offhand but i would point out that president trump did not pick either of these individuals because they're not ph.d. economists with the view but partisan supporters of hissing a and confident they were going to vote in lower interest rates in the hopes of getting him elected. so the question is -- to

basically dictate your opinions and your opinion into the fed which could be quite scrvaluable >> this is the interesting thing of what happened yesterday federal reserve holding rates steady but all the discussion about rate cuts was not responded to by chair powell in a way that acknowledged that peter, he said, we think this low inflation is transitory, so to speak and markets sold off on that and more hawkish than they previously assumed so what is the diagnosis right now for where interest rates should go in a strong growth low inflation economy? >> the inflation question, the fed has sort of brainwashed everyone to look at one number, pce. and they've made that, worshipping at that altar and ignoring the cpi and talk about the dallas fed measure cleveland has one. the new york fed has an inflation gauge.

all the other inflation gauges are at or around 2% and some above 2% this pce core is this outlier. while it's moderating, there's no question. for everyone to just focus on the one number because the fed told them to, basically saying, we're not just going to react because inflation fell 20 to 30 basis points in a couple of months. >> greg, there has been a low inflation trend which is interesting especially in the last year or two as growth has started to pick up still remains something of a puzzle. >> it has. but i think the chairman was pretty clear yesterday there's a lot of transient factors going on like asset management, going to be reversed like the remeasuring of the prices nork prices, not going to be repeated i think the problem for him is that if he had leaned into the idea we're going to cut rates soon because of the low inflation, it would have, number one, are you responding to the president with pressure and what if they start up in the next few months and i think if he understands, not ready to share

this yesterday but he understands there's a medium term issue they're likely to have low inflation of 2% and more transit and technical factors and may in the time have policy. >> didn't work so well with the bank of japan desperate to get higher inflation just lowering rates and more qe doesn't result in the higher inflation in the number you choose to look at. >> is it possible we just don't need a higher, there's no argument for a higher rate simply because >> the 2% is an arbitrary picked out of thin air number it's not necessarily what's good for the economy. it's what the fed thinks is good for them and implies a higher fed funds rate with future downturn >> i want to ask you about how the robot overlords have arrived. but we're out of time. >> this actually segues into it.

companies like amazon so good at applying technology with productivity but a downside. amazon's technology will decide when their workers are not meeting the product need to be terminated so might explain why people aren't feeling so great about a lot of the strong economic numbers we're having. >> you fit it in like a master that does it "the exchange." "power lunch" begins right now see you in a moment. fear and uncertainty on wall street what is fueling it fed up, president trump's controversial pick to the federal reserve withdrawing his name the fall-out ahead tesla looking to recharge cash pile and elon musk pitching in what it means for tesla investors and mark zuckerberg with an historic threat to the pou power. "the exchangshow "power lunch" now.