friday >> the market is going to take a nice leg lower, especially as we've got the pending uber ipo, that would be interesting, wouldn't it? >> we'll continue to watch the market for the rest of the day the dow was down by as much as 407 poin 470 points that does it for us. "the exchange" begins now. >> thank you, scott. hi, everybody. here is what is ahead. the trade war heats up big time, but the market isn't fully panicking yet. how much is really riding on a deal or no deal. noted hedge fund manager larry robins breaks down his best idea in moments back at the sohn conference we'll bring you the whole thing live. in rapid fire, the incredible reach of amazon's one-day shipping we begin with today's markets which are off session lows >> kelly, a lot of folks much more this morning when we came

in because it looked like it could be really, really bad and it's not that it's not right now, but, still, it's maybe like your run of the mill, 1% declines on the dow industrials. at one point we were down 471 points here. down about 169 at the high right in the middle of that range for right now. the nasdaq underperforms here. many of those semi conductor stocks are at issue with the nasdaq we'll keep an eye on that trade. if you look at the s&p 500, we've spoken about this idea that we're off those lows of the session. remember, at the lows that we were down here we were down about 47 points in the overall s&p 500. so, we were off about 1.5% plus. we'll watch that trade one place of outperformance in the overall picture on a relative basis is right here with regard to the small cap stocks over the course of the past, i don't know, we'll call it year we're seeing the outperformance and today in that trade small caps doing better than large caps and maybe a little less prone to what is happening with

u.s./china trade talks if you're looking for a speck of green, look at what is happening with tyson food because this stock is actually up about 2.5% and better than expected profits and losses and they say the chicken business might be bottoming out in terms of profit margins for the year that is important. this stock, maybe you didn't know this, but it's up 50% since the december 24th low. so, beyond meat might be a big ipo, but chicken still doing pretty well. >> that is close to a straight line thanks. welcome to "the exchange" everyone i'm kelly evans. the down that dom referenced, but we have seen things improve. oil has had a major turn around. falling more than 3% earlier and now turned positive. meanwhile, warren buffett told becky quick if the long bond stays around 3:00 stocks close to all-time highs are in his words, ridiculously cheap. we begin in washington with

these u.s./china trade negotiations kayla has the latest >> president trump is trying to raise the stakes by suggesting tariffs on a third of its exports to the u.s. would double on friday if a deal isn't reached. the escalation has caused beijing to consider whether it should send its price premier for a round of trade talks that could yield a deal in principal by the end of this week. trump wasn't happy that china walked eed back some of its pr commitments. canceled a september visit when trump first put tariffs in place. china's foreign ministry said it's preparing to come to the u.s. but is looking for more information. kelly? >> kayla, on that real quick, what changed between the rumors or the source information that we were within days of a deal being announced later this week and all of a sudden the president last night saying, hey, i'm not pleased at all with how things are going >> well, two things, kelly first of all, some of the change

in tack happened in beijing last week and the information that we had reported was the expectation. the rough timeline for how things were supposed to play out. administration officials had expected that at the end of the vice premier's visit this week, this friday was the date that was essentially circled on the calendar for that deal in principal. they had called the vice premier the closer and they expected he would be the one that would come here and close this deal things changed last week in beijing, once the top officials returned to washington, briefed the president and expressed some concern about some of these commitments that china started to walk back there is, of course, also a difference in opinion among the president's advisors and which advice he chooses to take on a given day. and this time around, he went with the harder line advisors. >> and, finally, that certainly helps explain it we also got those reports last week that perhaps the u.s. administration was not going to be as tough on cyber as they had

sounded going into it. do you think the lack of ability to show progress there was a major setback? >> it did appear that the u.s. was willing to make certain concessions going into the week. but when china began waffling on the core parts of this deal, i think that is what maybe gave negotiators cold feet or gave the president when he was briefed about this after the fact we'll have to wait and see exactly what the text says because i heard both that cyber will still be a focal point of this deal. i've also heard that maybe won't have some teeth in the cyber portion. it depends on what text comes together >> thank you very much let's bring in jim karin at morgan stanley investment management along with our own bob pisani to talk more about this jim, kayla's timeline is exactly what you were saying which is at the end of last week the news started to shift but the strong job's report friday overwhelmed

it >> that is what was the distraction. this news story broke from the "global times" article in china. it was confirmed over the weekend and what is being said is correct that advisors came back to the u.s., trump got the news and then the tweets came out and the rest is history. >> so, where does that leave you on the prospects for a deal and are you surprised the markets in a way are not down more because they say we're down 5%, 200 points right now >> look, i think the markets right now are taking this in stride for the moment. so, so far the movements have been idiosyncratic this is not a systemic shock we are not seeing big shocks ripple through we have to understand this from china's perspective. you have to look at it through the lens of political stability. if this deal does go through, if it does not go through, excuse me this could shave off, we speculate to be about 0.3% worth of gdp growth in china >> in china. >> that's important. the reason that is important is because there is a speculated

level of growth that president want to stay above which is 6% right now china is growing 6% and if there are other effects, then growth could be even slower and we could dip below that and that could be very, very challenging for president xi, as well >> some urgency on the chinese side on this deal. >> that is not to say that the u.s. doesn't get hurt either of course it does. but both sides have a lot of heat on them so far i would say the u.s. side, the markets have taken it in stride. i don't want to score this like a football game because this is very important stuff but we have to understand both sides and what is at stake >> we have already seen the impact of the existing tariffs as they're working their way through the system where would you say they have hit the hardest and who is not only exposed to those tariffs at 25% but being exposed to a whole new range of products. >> semi conductors hit the hardest. we have seen poor commentary

from semi conductors including texas instruments who say the bottom in china was not it in the first quarter and weakness could continue in the second, third, maybe fourth quarter. a lot of semi conductors get 60% of their revenues outside of the united states. if the trade war expands dramatically, you'll see retailers as well on the import concerns that are out there. i agree with jim's point here that the overall impact is modest because the market doesn't believe there is going to be a trade war. if we did get a trade war, earnings are way too high and the multiple on the s&p is way too high last week 17 times forward earnings and that's just too high if there is going to be some kind of global slow down due to a trade war. >> trade war is different than trade deal okay, so, the market is not at trade war just yet but, bob, how important is it for there to be a trade deal as the first piece of how the rest of that relationship goes? >> the market is telling you two things number one, china has to bottom. that issue is a little broader

than the trade war issue but, number one, china has to bottom and some signs that has been happening and, number two, no trade war. excuse me, if there is a genuine trade war, the market is already telling you, we could go to 2,600 and 2,700 in the s&p >> we have to get out to the sohn conference. guys, thank you. larry robbins has taken the stage to present his best idea >> big pharma and medium pharma on pricing concerns and talk to you about shorting 3m which stands, i will now use pfas and at the end of the story an incredible young man named maurice campbell, a hockey player, who is using things he learned from his family and the north jersey avalanche to kick cancer's butt. i can't wait to talk to you

about that first, let's pay some bills and do the real content. you need to figure out who is the decisionmaker. stocks that have been sensitive to medicare for all or the concept of mandatory medicare have gone straight backwards since february however, you need to understand that it's not just a presidential candidate or a president that can make it happen you need both chambers of congress, including likely 60 members of the senate. right. and the president all to agree to it. the odds are extremely low we'll talk about that. where as in pharma because of something called the cmmi passed under and the president can act unilaterally to reduce drug pricing and president trump is attempting to and regardless of who the presidential candidate is or the president is in 2021, we believe all we seek to act. we believe makers are ethical companies but they made a product that causes harm and they're going to have to pay for the remediation of that. what can we see? we can see that the companies including the hmos and the

hospitals that we own are growing and growing rapidly. we see the stocks have fallen. that creates a compressed spring for all of you and the pharma shorts and triple m have done admirably or okay in the market they're facing some very, very significant liabilities. what is maedicare for all? you will replace current medicare you will replace current medicaid eliminate private insurers and 82% of the country that has chosen private insurance will no longer have that right or access to their own insurers and spend 30 trillion plus and how are we going to pay for it? we don't know. it is the taxpayer federal government single allocaturs when you pose it like that, it doesn't sound quite as good. don't pay attention to the polling numbers. medicare good for all? sure it isn't universal health care but eliminating in favor of

something new. still 28 million americans who don't have health insurance and half of them have access today they just haven't signed up. 5.5 million are eligible for medicare, just haven't done the paperwork. another $10 million at a cost of no more than $100 million a month for obama care changes and they choose not to pay for it because people were against the individual mandate people don't like when things are mandatory in the u.s how is it going to happen that you have mandatory medicaid. what is working 85% customer t satisfaction plenty of good ideas that can eliminate this coverage gap. we do think it is a goal that all americans have access to affordable health care insurance. how can you get medicare for all passed democrats have to win the white house in 2020. for the purpose of this room, we'll just say, hey, that's to 50/50. only three of the candidates which have a collective 28% share of voters of early voters

really are supportive of medicare for all right. and then you have to flip the senate from 53/47 to 50/50 and then you have to get over the fact that 15 senators that are democrats currently oppose medicare for all and then, of course, you need to get past the bird rule that says we're going to spend money 16 senators need to approve it and last time i checked, $30 trillion is spending money all right. who does not seem excited about medicare for all three of the top four democrats in the house of representative, as well as the three of the four key chairs here is their quotes overnight you're going to take 20% of the american economy and transform it like the dmv or other or the v.a. hospital system and transform it. that's not really realistic. it hasn't been good service. all right. if you guys are political, you know that 34 senate seats come up in 2020 ten of them are considered quote, unquote contested one is the alabama seat that was lost in the roy moore scandal

pretty red republican state. that means you basically have to go 7-2 if you're a democrat in the next election and contested races and, by the way, that includes the fact that three people who are running again won by 8% or more. those are very, very tall odds the high likelihood is that no matter what your affiliation the betting odds is that the senate will day republican. there are 15 democratic senators and all oppose medicare for all. right, medicare for all insurance takes away insurance from 180 million people. the number one job of an elected official is to get re-elected. you try not to infuriate 180 million people that, in general, like what they have. that's from a democratic senator from colorado. right. well, maybe even if you get that, you can say, all right, if you get past the 15 senators and you win four seats and get to 50/50. then you have to get past how do you need 50 seats in the senate.

bernie sanders one of the architects of medicare for all no, i'm not that crazy about getting rid of the filibuster which is what you need to get to 60 votes in the aca the only revolutionary health care legislation that we had in the last decade. most industry groups were actually for it because with good kaupconscious, it's a goode that all americans have access to health insurance. medicare for all today literally everyone is opposed. what happens if i'm a pollster and i say, hey, do we like medicare for all sure what if that means you eliminate your private insurance well, maybe. if it requires you to pay more taxes, now we're cutting in our pocketbooks. now seniors really don't like it and leads to delays of getting people treatments. it will take three times as long to get an mri in a single payer system like the uk as it takes in the u.s how frustrated have we all been that we can't get our kids or parents an mri in a reasonable period of time

that's a lot of calls to mom to explain it all right. what about, hey, single pair means that all of for-profit health care including insurers disappear. 67% of people still have private insurance or south korea at 77 or japan at 90 even though we're not single payer only 82% have private insurance and 18 through medicare and medicaid. we're kind of in line with the world already. what is the customer satisfaction scores? they're pretty high. people have insurance have an 85% plus positive rating about their insurance. what about states? states have an ability to decide do we want to run this ourselves or out source it to the big, bad companies known as for-profit insurers ohio saving 17%. with how stretched sate budgets are and voters are and we really need higher taxes and middle-income americans are trying to make ends meet isn't it a good idea to save

money rather than to spend more money? what does that lead to in terms of our investment decisions? it means right now as the result of the fact that the earnings are up and the stock prices are down, multiples are compressed currently trading at 17% relative multiple to the market. where have they traditionally traded when there is not a political crisis they have traditionally traded between 90% and means over a two-year period making 50% to 85% if you like the group and we like certain stocks better than the group. gee, how are the companies doing right now? we just finished the first quarter reporting period, all companies that we own in our portfolio all beat the portfolio and raise guidance they did a better job of using innovation and modern tools and scale which ultimately will be passed along next year in the form of lower premiums or premiums that increase at a slower rate than they otherwise

would. as we look at target prices, we think that these stocks should be trading at 16 to 20 times earnings in line with the 90 to 110% market multiple that leads to fancy upside cigna certainly our favorite what about hospitals if you get rid of commercial pay and commercial pay pays more for hospital than medicare or medicaid, isn't that bad for hospitals and they're all going to go out of hospitals all hospitals in the united states are suddenly going to go out of business. okay they had great numbers they raised numbers. generating great cash flow bought back 16% of their stock in the third quarter 2011. that $12 a share net dividends more than $12 a share next year and we have to be careful. aren't they going to get rid of commercial insurance you get rid of bad debt expense and increase coverage and a private market will emerge so even if you get through the 0.002% that medicare for all

happens we still don't think hospitals are that bad off what really happens is that out of those 5,300 hospitals 1,600 who are not for profits who lose money who will get driven out of business by the way, 12 hospitals in every congressional districten oaverage and, by the way, the second largest employer through the district and reimbursement to hospital procedures has gone up for next year as passed by this congress by 2.5% to 3% because so vital to engines and growth hospitals are not under attack they're a wonderful place to invest what about australia and uk where they have single payer systems? they make the same margins almost 15 versus almost 15 what multiples do they trade at? actually they trade at double the multiples. as a hospital investor we should hope that mandatory medicare happens so our multiples can double that's not going to happen between six and ten times next year's earnings. each to leverage and goals can

buy back 30% 3-0 percent of their current market cap between now and the end of 2020. they may not do that they may invest more in their business they may do andthey may have the fire power and they do that for double the growth. and, finally, right. mention uhs has a behavioral turn around which is in process and tenant health care has ongoing cost saves with visible to 2020 of growth of mid to high single digits. again between 64 and 200% price appreciation coming over the next couple years. back to normal as multiples. what about pharma? it's riskier the same drug in the united states costs three times as much as it does in other countries. so, the average joe is paying $36,000 for humaria where someone else is paying it's a trade issue we want pharma companies to innovate and create life-saving

medicines for the people that sohn care about. we want them to do it in a fair way that doesn't do it on the back of americans who can't afford their own prescriptions the ccmi gives the president the power to make mandatory changes. democrats and republicans agree on only one thing in life, and that is the drug prices are too high if you're worried about bernie sanders or kamala harris or a very progressive liberal presidential candidate in 2021 taking over and that that is going to be bad for health care, they can act unilaterally without congress' approval in order to substantially reduce the price they pay for pharmaceuticals. right, we would recommend a pharma index and etf and we have three longs and 16 shorts in pharma and high multiples and a big spread between u.s. and nonu.s. prices and we do think it's really coming finally, we know that we've seen big moves in j&j around talc

what has been less talked about in the financial press but more talked about in the legal system is the impact of pfas to the companies that made it what is pfas invented as a forever chemical designed around the manhattan project and originally used to survive anything survive a nuclear bomb it's a half life of nearly forever. it's very, very difficult to remedia remediate. we can see the quote all right, one of them from seminole public health challenges for the next decade from the u.s. cdc. what is it used for? a lot of good uses like most chemicals in innovation. scotch guard and a lot of good things that help in our lives but some unintended health consequences allegations against 3m from a variety of lawsuits. in red is what they knew in yellow is what they suppressed you don't have to be erin brockovich to realize that this is not a good fact pattern for a corporation that is being sued

by multiple states and multiple individuals and there are states in which are trying to reduce seven fold the national talked about level of acceptable pfas in the drinking supply we know that since 2015, 3m number of lawsuits that they have been involved with went up 87 fold. we know that there are accruals for environmental liabilities went up 8% so, yeah, they took a charge in the first quarter and said, oh, don't worry, it's ring fepsed. no, it's not in fact, this company 12 days after they filed their 2017 10k in early 2018, then and they had a $53 million reserve and then paid out $840 million set tlemen to the state of minnesota. let's not kid ourselves that this company is fully reserved more accurate if we track google searches it's up about ten times and doubling again we know that representatives

like the democrat representative in california cannot and must not ignore the role of large corporations like 3m and we'll talk about that in a second. all right. what are the filing ranges we think that cases filed and 3 $4 billion to $6 billion and the industrial owes $337 billion yes, that's real math. no, that is not made up. how come it is so expensive? because they're forever chemicals. when dupont spin off and then afterwards a settlement, they paid to take the liabilities and the liabilities are now kamors you should assume that that liability will stay khemours has 4 to $6 billion which is its current market cap finally, esg investing a new hot topic. who rates these things rating agencies. what does sustain aalistics rate

3m number 35 in the s&p 500 do we need a conference to talk about rating agencies, again and we should not need rating agencies to make our investments. a giant liability that will suppress and facing what we think is substantially all of its market cap i want to thank everybody for the opportunity to speak to and to support the sohn conference, once again now, i want to turn our attention on introducing you to one of the most extraordinary people i have ever met in my entire life, which is a hockey player i know named maurice campbell and i coached 15u hockey >> again, that conference is happening live all day today you saw some stocks moving on the back of his recommendations. both buy and sell. chemours probably the biggest to the downside exposed to pfas a forever chemical that could have liabilities of potentially hundreds of billions of dollars.

that was the short from larry robbins. on the long side he likes hmos and hospitals and we heard this from him for a long time specifically, he likes cigna and anthem and tenant, hca, uhs. chemours shares are now down 5%. again a big part of larry robbins' argument there going back to the hospitals and the hmos and he would be short pharma as any etf, medicare for all is unlikely, but something on drug pricing is much more so. pass unilaterally. some familiar arguments there. you can see the shares of both his buy and sell recommendations moving in the session today. tenant is now up about 4%. we're going to take a break. when we come back, president trump making a big tariff threat why aren't the designs in today's u.s. markets larger? is the trade tension priced in or is a bigger drop coming what it means for investors.

we're down 4.17 at the session lows amazon can already ship to 72% of the u.s. population within just a day. can the competition ever catch up "the exchange" is back in two.

welcome back to "the exchange." here are some of the movers this hour on a big market selloff day. officials say boeing did not tell the faa for 13 months about problems with the safety alert

on the 737 max boeing issued a statement saying it only discovered the issues after delivery begun but did not pose a safety risk petroleum has increased the cash portion of its $38 billion stock and cash bid this is in an effort to convince for the deal to be acquired by chevron. shares up nearly 4% today. and there is a look at the etf and smh for the semi conductors. renewed trade tensions are sending the stocks lower across the board. on pace for their worst day since late march still with a decline of 2.5% miron the biggest decliner down more than 3% about 3.3. ahead on "rapid fire" amazon is closer to your home than you think. apple isn't a tech company and who needs lebron "the exchange" is back in two. alright boys, time for bed.

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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 stocks well off their lows this morning. down 471 at the lows but we're still in the red this after the president's tweets on sunday threatening higher tariffs on china if the

trade deal is not finalized. crediting america's strong economy to his aggressive stance with china could they derail the deal themselves focusing on u.s. economic relations with asia. you've been skeptical all along. i want to read from your piece a couple weeks ago, derek, that you said the deal can't turn out well for the u.s why not and if that's true, is it better for there to be no deal >> i think the deal that was on the table will be better to just go away. and that's linked to the president's tweets about tariffs. the main reason i think the deal can't turn out well for the u.s. is that the chinese are not going to do what we want on intellectual property. complicated reasons for that simple reasons tied to the president's tweets the chinese do not want an agreement that say they did anything wrong until now they deny they're stealing intellectural property and deny cybertheft that's ridiculous and it shows

you what the value of the text of the deal would be that makes it very difficult for the president to aggressively say this is going to be a change and a big improvement for the u.s. when they say they didn't do anything wrong in the first place. we get a tariff threat >> what you're saying no way to really make the chinese admit to wrongdoing or come to the table to correct it. then if this is an issue that needs recourse is the only recourse left tariffs and, if so, where do we go from here >> i have never been a fan of tari tariffs. in that same piece, i would rather sanction the firms that are benefiting from threat i think we need a tool in hand not just the chinese promising that they'll do better, wink wink, because they never did anything wrong in the first place. the one advantage of the president threatening all these tariffs is we need that. we need a threat we need an enforcement threat for this deal to have any value. tariffs are not the right threat but the fact is when you're dealing with china and their ip

behavior, you do need a threat of some sort >> sanctions are an interesting idea has that ever gotten any attraction in washington and any example we can point to when we're possibly talking about thousands of firms needing that sanction and a law that requires joint ventures i can see the administration's point, hey, this is better resolved by simply having china change the rules so it doesn't mean that so many firms are participating in this behavior >> well, if china changes the rules on joint venture they would find another way ip transfer to them voluntary and involuntary is extremely important. i don't think that is the way to go we have, we're considering export control regulations and some industry that are worried they are too tight that is another way of telling american firms you cannot transfer this matter what the chinese say. that would be done better than tariffs, as well, because it

targets the firms involved >> to combine sanctions on the firms, i assume you mean the specific firms in china or some individuals who are found to have committed wrongdoing. combine sanctions with export controls on the u.s. and we might be talking about firms from semi conductors to car manufacturers to anybody who has sensitive technology and telling them they can't do business in china? >> well, obviously, there is a big, the big challenge on export controls, everybody agrees the important technology and not on mine if i want to sell it to the chinese. so, you have a challenge with industry there but, as a tool in general, export controls get right at the problem where tariffs and, as i said, punish everyone. i would like to at least try export controls. let's see what these regulations that are due from the administration look like that would be a tool to deal with the u.s. side with the chinese side, you're going to have to punish these firms or a no lose situation for

them to try to steal technology. >> that's interesting. i think the american public is more and more upceset with whats happening. sanctions on the human rights, of course, can be done alongside sanctions for poor behavior that we're discussing derek, thanks. a lot of interesting ideas here. >> thank you >> derek scissors is with aei. coming up, some winemakers have a gripe about emoji options. that is next in "rapid fire. don't go anywhere. keep up my good work. servicenow. works for you.

...or trips to mars. $4.95. delivery drones or the latest phones. $4.95. no matter what you trade, at fidelity it's just $4.95 per online u.s. equity trade. here to break them down dominik chu and bill griffeth and let's just say she found the wedding band >> i did >> excellent news. >> i did huge thank you to all the folks at the hilton bentley down in miami. >> i was afraid to ask. >> me, too >> i am glad it had a happy ending >> we had to start on a positive note amazon is apparently in prime

position to deliver on its one-day shipping promise a new report says the company is already capable of shipping to 72% of the u.s. population within a single day. recently announced plans to offer this shipping as standard for all prime members and amazon talked about all weekend, of course, out with the news that berkshire hathaway has been buying shares. >> the whole idea of having one-day shipping is fantastic. i know my parents live in a part of california where they are optional for same-day shipping in some of those and it's been a game changer the only issue i have is because i'm a numbers guy, i always want to crunch the numbers to see if it's worth it for me to do it. i'm still one of those folks. >> i am a prime member, but whether i buy things on prime for two-day shipping depends if i can drive to my local costco and -- >> what are you charlie monger costco is the company that amazon should fear because they have better efficiencies in all of this. >> a game process where i try to figure out which company or which retailer had the best

diaper prices. for a long time it was amazon and then it shifted to now it's costco right. >> here is the quote she told "the journal" i think amazon has more to fear from costco than costco has to fear from amazon costco will be more efficient and more trusted all the figures show that costco has nothing to fear. costco has seem like a natural, perfect fit for berkshire. amazon, different story. but monger, this is before the news came out. >> i think it's very interesting that warren buffett pointed out it was one of their investment managers that made this investment with amazon it's like he is trying to distance himself i never heard him do that before >> he doesn't want to be personally seen. >> i was going to say back to dom's point. the whole point about doing same-day or one-day shipping with amazon. i actually experienced it last week with something that i

bought on amazon is that this does exactly that all the retailers whether it's costco or others that you would go to the store for that last-minute purchase if you can get it the same day, and winners and losers in transportational logistics doing the prime planes -- >> winners >> maybe they're winners and some of the warehouse real estate companies, as well. versus maybe some of the shippers who have already started to see some of their business being taken away like xpl logistics. >> we have become so impatient. >> as soon as i saw it, i started ordering more. apple. tim cook telling becky that warren buffett's investment shows it is. apple is their position is now worth more than $50 billion. dom, my first thought when i saw

this, yeah, trade companies trade at better multiples but apple's multiple is so bad that even if they traded like a consumer product company. >> if you look at forward earnings, apple trades at just shy of 17 times next 12 months >> that's a little better. >> not bad >> pretty high historically for apple. >> trades at 19 times. >> is it that low? >> discretionary trades because of amazon at 22 to 23 times forward earnings if apple got that valuation, it would be more than it is right now. >> we are in the age of the emorfs business model. once upon a time you could be a conglomera conglomerate they loaned money through ge capital and made jet engines but now you have companies who let their core value evolve. let's not forget, apple used to be called apple computer they were known for their computers. now they've been known for their iphones and devices and now they

want to be known for their services >> music media >> dunkin' donuts is another example. they evolved to this company that makes coffee that also happens to serve doughnuts it's very interesting to watch this whole thing because you're watching the evolution of consumer tastes and companies had to play catch up to get to that >> if apple is, you know, looking to be more of a consumer company. they have been saying this and we had the debate for several years now. that is something that would strip out and the push to services supports this it strips out some of the si cyclicality on the stocks. not just about the iphone cycle. >> if iphone sales were not slowing down, they would not be doing this. >> for sure. >> let's talk about uber going public this week what a week. they are set to make their debut on the nyse. friday still shaking things out but it's expected to be the highest valued ipo since and

rival lift about 15% off its ipo week good or bad timing for uber? >> immune to market conditions for the most part. i mean, you never totally immune but this is one that is so highly anticipated that i -- >> its own market. >> i think we'll finish positive today anyway. >> expectations tempered even though lyft is so much smaller. the fact that it came out the way it did people are saying and maybe uber management and ownership is saying maybe we should temper expectations a bit. remember they don't sell the entire company just a tiny slice of it. we want to leave room for upside down the line. >> you guys will see this play out first hand the spat between the ceo and the founder over whether calenick will be on the bell ringing platform i think it would have been nice

if they had him up there i understand the tensions. he created the company and it just feels like it would have been a nice gesture. >> i don't know. i mean, yes, we'll see all of that play out at the new york stock exchange on friday when uber is expected to go public. we'll see how it all shakes out. also note that uber is not the only company going public. the busiest date in 2019 i think back to bill's point three or four things people are interested in. slowing top line growth, regulatory hurdles and also just the mettic ares. i mean, you have to learn what a map c is and what that means and how to measure it. >> a lot of complaints that their metrics, what they provided, are not giving you enough clarity about the business we'll have a lot on that next week disney is doing great, abc playoff ratings are high and xfl going to be on disney. we want to talk about white wine lovers who are uncorking a lot

of anger because no white wine emoji for iphone or android. tells you about the evolving consumer environment winemakers say it's impossible to hype their new on social mead i abecau meadia because they have to use the red wine emornji >> i mean, really. this is a first world problem. now after reading kendall jackson's reasoning on this, i get it so, what is the problem with making a white wine? >> kendall jackson also has a big ax to grind here because over the past ten or so years i want to say consistently ranked as one of, if not the most drunk white wine label the kendall jackson reserved chardonnay is one of the most widely distributed chardonnays in america >> explain how this works. they had to come out with this

document to make their pitch for why this should be included as an emoji >> this bureaucratic to get an emoji. >> think of a game of thrones emoji. >> you have to appeal to unicode. i remember reading about this when there were concerns about different emojis we were lacking. now this is so important to businesses it does make sense there is a process. otherwise there will be thousands of these things. >> yes >> do we know that much about the process? that is what i was having a hard time figuring out. it is interesting to see, very clearly been very subjective >> what does your father do for a living he approves emojis >> this unicode group has to go through and consider each year they come out with a few more and which interest groups should get theirs but, you know what, at some point, how many of us are scrolling through the whole catalog anyway they could put out 5,000 and the white winemakers could have theirs they care the most.

>> my feelings, a little more liberal with this stuff because we are increasingly for better or worse becoming a society that has gone back to caveman times and communicates with pictures >> hieroglyphics >> with the written word >> i am stunned that we just did two minutes on a white wine emoji. >> my favorite story of the day, i think. guys, thank you all very much. >> go back and discuss "game of thrones" now like we did before. >> please be out of it oh my gosh >> i think we've got the whole rest of the season mapped out. bill griffeth, morgan brennan, dominic chu the conference causing some big moves in thetos. 'ldrl wnn that next. ♪ ♪

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different story for two health care names tenet health care is higher today, up more than 3% today and cigna climbing after larry robbins made the case after the stocks won't be the way forward. he still likes the business, the fundamentals up 2.5% and dig deeper on this coming up in "power lunch. still ahead here, stocks falling nearly 500 points at the open on escalating concerns international strategist on why to buy the dip ahead of frid's deli adneay oh, sir. that was my grandma's. don't worry, ma'am. all of your stuff is in ok hands. just ok? they don't give two and a half stars to just anybody. here you go. what's this? it's your piano. hold this for a sec. we don't have a piano. no.. but the neighbors do. just ok is not ok. especially when it comes to your network. at&t is america's best wireless network according to america's biggest test.

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don't get mad. get e*trade and start trading today. welcome back president trump's threat to raise tariffs is ratcheting up tensions with u.s. and china with the trade wars having an effect on the rest of the world putting international markets under some pressure. let's bring in sameer semanah. welcome and first of all, who do you think hit the most right now? the shanghai market fell pretty hard. >> the debate on the chinese side, their economy is in a tougher shape. they'll get impacted more to the

extent this continues. >> let's say there's no deal do you think the u.s. markets fall further or the chinese markets fall quite a lot >> so if there is no deal, there is quite a bit of downside on both sides both economies and markets really need this deal from a political standpoint and economic standpoint. that being said, china would be the relative loser but that's also why we think emerging market equities are the right way to play because of the deal. >> this is a thought exercise. if there's not, china, the shanghai down 5.5% last night. do you think it could have a 20% correction >> it wouldn't surprise us again, the way markets have rallied and the way they put so much weight on the trade deal being done, to a large extent, discounted markets it would not sprurprise us to s that rolled back >> if there's any tougher approach to china, whether it's the sanctions we talked about earlier or export controls or even just tariffs, it would hurt

their economy in the long run. what do you think for equities >> again, going back to where you were probably in the fourth quarter of when there were concerns about this deal not getting done would be a pretty safe bet that being said, we do think the fed is pivoted other central bankers, so we don't think we're going back on u.s. equities because there is some economic strength they're doing well from an earnings standpoint and chinese equities the most vulnerable. >> who else would be the knock-on effect from all of this the chinese market of being hit by this all in one hypothetical scenario and not being a deal and the pain from that, who are we talking about germany being collateral damage or east asia or where you would look next >> germany, taiwan, south korea, large global exporters, very tied to trade and if you look at u.s. tech shares, down quite a bit. those are probably the most sensitive plays but if there is a deal, your biggest benefici y

beneficiari beneficiaries. >> very binary outcome investors have to see what conclusions they havenappreciat. that does it for "the exchange." thanks for joining us. i'll join tyler and melissa for "power lunch" which starts now >> thank you very much we'll see you in just a second or two welcome, everybody i'm tyler mathisen melissa lee is here as well and new at 2 today -- trade talks in turmoil china backtracking, president trump threatening more tariffs what's at stake for both sides, the economies of the globe and those two countries and investors like you plus, that uncertainty sparking a sell-off on wall street but after a recent massive melt up, is today a very good buying opportunity? and keep calm and carry on that's warren buffett's motto. he was on cnbc weighing in on today's drop trade tensions and his favorite stocks "power lunch" starts