payrolls and compare it to the same of the months under the obama presidency, there are more under obama, not a lot, but there are more it's unbelievable the twilight zone that we're sort of living in, where people just say things, and it gets repeated i think that's -- it's probably we're numb to that because of social media. >> you've said a lot, and it's going to get repeated. >> i'm sure. >> but we appreciate it very much >> good to be here. >> appreciate it as always jeffrey gundlach, doubleline that's it for us "the exchange" is kelly evans begins right now thank you, scott hi, everybody. here is what's ahead today -- the trade war cometh stocks are sinking as investors fear that tariffs on china are going up in less than four days' time we'll look at how deep the sell-off could go and just how the economy will be affected plus, we have lyft on deck the company is set to report its first earnings results since going public after the bell today. can it avoid the potholes that other new listings often hit we'll ask. and wall street is worrying

that higher tariffs will hit retailers in particular hard this time around we'll tell you who is most at risk but we begin with a look at today's sell-off and dom chu has the numbers. >> kelly, it always feels worse, the soarness on the second day, and that's what we're seeing today right across the board the dow off by 418 points. we are just off the worst levels of the session with regard to the s&p 500, that broader measure of stocks, at the lows, we were down 51 points so again, better than the worst levels but still decidedly bad you can see the nasdaq composite off by nearly 2% the real underperformer among the major indices. one of the places we're keeping a close eye is the chinese stocks the ishares china shares etf, almost down 3% at this point we've rolled over a bend over the course of the last week or so, lost 7% on this fund that china trade a big deal in this market. and also another place we're watching, semiconductor stocks, specifically many look at it as

a bellwether for u.s./china trade relations. you can see this particular etf almost down 2.5% and over the last week and a half or so, this fund is down about 6% so as we watch, these gradual near-term rollovers happen, the question for many traders is are they a sign of a deeper pullback to come, or will folks buy the dip? kelly, back to you. >> welcome to "the exchange." i'm kelly evans and this sell-off is overshadowing good labor market news this morning u.s. job openings rebounded in march to 7.5 mill yop, a near record high. but german bund yields went down after they say the downside risk looks prominent. and the vix topped 20, hitting its highest level since late january. let's begin in washington with china's top negotiator still planning to attend trade talks, despite these rising tensions. eamon javers is live at the white house with the very latest eamon. >> reporter: kelly, we're told it's full speed ahead here for a tariff increase later this week. at 12:01 a.m. on friday.

we're also told that the u.s. trade representative plans to file a federal register notice later this afternoon that would be published later in the week it will go public on their website. that will trigger the official behind-the-scenes process to make that tariff hike happen on friday it's all contingent, of course, on how the negotiations go over the course of the rest of this week, and we are expecting liu he, the top-ranking chinese officials in these negotiations, just below xi jinping himself, of course, to be here in washington to continue those talks through the rest of the week so, we'll see how that goes. and we got this briefing late yesterday from lighthizer and mnuchin, the trade representative and the treasury secretary, explaining what was behind the president's tweets on sunday that rattled the markets so much. they say that the chinese side walked away from certain commitments that they had made already in writing as part of this ongoing negotiation and that something happened to erode their confidence in a deal leading up to the weekend.

that's what prompted, they say, the president's tweet. but no word here from the u.s. side on what exactly it was they are alleging the chinese reneged on here. so we don't know exactly what was at issue in all of this, but we do know it's a high-stakes negotiation going into 12:01 a.m. on friday. >> eamon, the cyber issue has also been an important one i don't know if they're denying or -- obviously not confirming from your reporting, that that's what the chinese reneged on, but it seems like that's one of the most important guarantees that the u.s. was looking for, was some kind of protection on intellectual property. >> reporter: sure. >> and it's unclear what kind of protection is shaping up in this bill that now -- this deal that may be going nowhere. >> reporter: well, look, that's at the absolute core of what's going on here. the u.s. side says the chinese has been stealing american intellectual property through cyber theft for years. it's been crippling companies, not only that do business in china, but that do business around the rest of the world there was a report last week that the president was prepared to drop his demand that the

chinese stop hacking american companies. i asked the vice president about that on friday last week he didn't confirm or deny that report so no indication yet of where the president stands on all of that but ultimately, that's at the core of this debate. if they go through with a deal that doesn't have a hacking ban in it, that will be very significant for american business. >> sure. eamon, appreciate it thanks so much, eamon javers the threat of tariffs putting some pressure on stocks. let's get down to bob pisani on the floor of the new york stock exchange bob? >> kelly, we are hitting the lows of the day. stocks are having several problems today because of steve mnuchin's comments, as eamon mentioned. that's woken investors up to the fact that the odds of a tariff increase this friday are much higher than the markets has appreciated in the past. even with the chinese vice premier coming on thursday you see all the trade stocks moving to the down side today. the market is just off historic highs because sentiment is positive around the four key factors that have moved stocks this year. first, the fed pivot second, a trade deal and third, china's stimulus

program that's creating the perception that china's economy is bottoming and finally, a strong u.s. economy. no trade deal will force investors to lower earnings estimates for 2019 and into 2020, and it will also force them to assign a lower multiple to the markets because global growth will be slower. so, the risk here is to the down side look at this the market might gain, perhaps, 100 points at the s&p if there is a trade deal, but if there's no deal and there's a lot more tariffs in the next several months, we could drop another 300 points very quickly, and you could see here, kelly and i, art cashin has been talking about 2,600, 2,650 if the tariffs increase for months on end back to you. >> and we're hitting session lows as you speak, bob dow's down about 450 points. bob pisani so, what should investors do here as we discuss the likelihood of a deal joining me is art hogan, chief market strategist at national securities and fred kempe is president and

ceo of the atlantic council. welcome to you both. fred, from eamon's reporting, it sounds like the wheels are already in motion, these tariffs are going up, aren't they? >> well, as they say in german, yine, yes and no you could have relief again. you could have another tweet coming out, but we're in for 40 or 50 years of tough negotiations with the chinese. and what markets are talking about is a trade deal or not a trade deal and what markets have trouble with is political and geopolitical risk. and we now have political and geopolitical risk in the u.s./chinese relationship, the most important economic relationship in the world, of the sort that we haven't had before so, even if the markets can sigh in relief by the end of this week by a positive tweet that one can reach a deal -- and you're right, the odds of that are lower than they were before saturday -- i think it could be a short-lived and very expensive sigh of relief, because i think we're in for tensions with the chinese for a long time to come,

and they could be even more pronounced on the technology front, where we'll be fighting for the commanding heights of artificial intelligence, 5g, biogenetics, all of the rest. >> right so, art, hearing that, do you want to avoid sectors like tech, or do you avoid some of the big-cap companies in the dow industrials that we talk about all the time that are trading as proxies for this deal, like caterpillar and boeing, or not >> well, the problem is, we have to make an assumption that what we learned over the weekend is completely new information than what we've heard for the last month or so has been completely wrong. and there's probably some truth somewhere in the middle of that. i think we're further down the road in getting something accomplished something, you know, upset the delegation somehow last week, and we're trying to resolve that but if we resolve that and all of a sudden you said, okay, we need to short semiconductors or we need to sell cat and boeing and apple, then you're overreacting to one data point i think i'd rather see how this week plays out if we learn exactly what it is that is troubling in the negotiation process, and to

fred's point, we fear this is going to be a much longer game, i think it's certainly time to get out of the way. >> let me ask it this way. if what fred's describing is a period of many years where these issues are contentious so that anybody caught in the middle, which are those companies that we're referencing, is exposed to that, maybe that means they trade at lower multiples maybe it means a little bit of an earnings hit. why not wait for the clarity that the deal is going to happen to buy these names, instead of having the exposure to the possibility that one doesn't and that things turn nastier >> right and what you're actually talking about depends on the time frame of the investor, of course, right? so if you're putting new money to work, would you do that this week in front of what looks like could be a steam-roller? no, absolutely not, especially involving the china-related names. but if you're talking about kelly evans who's not going to retire for 60 years and has a 70/30 portfolio -- >> that's optimistic, but thank you. >> making a change today because of this is a wrong thing to do as well. so it depends on your time horizon. yes, i completely agree with

you. >> fred, also, there's a difference between a long, potentially fractious relationship between the two countries and tariffs going into place in 3 1/2 days' time. the president over the weekend, which initially triggered the sell-off yesterday that we recovered from, but then still the concerns today -- the president had tweeted about expanding the existing tariffs on about $200 billion worth of goods to the rest of the 300-plus billion, fred that we still import from china. so, those would be brand-new he said they'd be 25%. what do you think the odds are, beyond friday's tariffs? it sounded like they are being put into motion, that we expand these tariffs to all chinese imports to the u.s.? >> well, i think the odds are higher than they were a week ago, but i still don't think they're above 50/50. so, let me talk quickly about the politics, because from the chinese side, they're betting that donald trump needs a deal he hasn't got a big foreign policy win he's going into an election campaign he's got some issues on the domestic front he needs a win

from the trump administration's side, they're calculating that this hurts the chinese economy so much, sooner or later they're going to have to cry uncle and it seems as though the differences are over issues like the enforcement mechanism, over issues about how much would be made public when you air out the deal over intellectual property. but what really gets at president xi are things that reach into structural changes and force china to change law. don't forget, trump sent out his tweet on sunday. may 4th was the 100th anniversary of the student protests in china, western protests against national imperialism. so there is a lot of nationalism playing in this. what i would do quickly on investments is, if you're thinking long-term -- if you're a long-term investors -- if you're short-term, play the ups and downs because there will be a lot of that. if you're a longer-term investors, look at stocks where american companies deeply invest in china and almost reassess them one by one.

then take a look at where else they may hedge their bets and move manufacturing to even perhaps cheaper locations than china as china's costs have gone up. >> that's a pretty -- i mean, you're talking about a huge change, art. if he is right, then there's a lot of exposure even for companies like starbucks, which today was trading at all-time highs. >> starbucks, nike, apple. the list goes on and on. and most american corporations hope that they get more of that exposure and have hoped that for the last 20 years. that impression, what market you want to go into, may change a bit in the next decade, but right now in the present, that's a market that everybody that makes things in the united states wants to sell into. to fred ice point, i think this administration is emboldened by a stronger economy and made the move because of that. >> do you think we'll have these tariffs in effect for many years, no matter how this plays out? >> i think answers going to have trade tensions and trade battles and trade negotiations for many years. and one of the tools in that is going to be tariffs. but there are going to be a lot of other approaches as well,

including sanctions on third markets that are going into 5g and battles in third countries. >> i do wonder if sanctions could be an alternative to -- we spoke about that yesterday but we'll leave it there for now. guys, thank you very much, fred kempe, art hogan appreciate it. ahead on "the exchange," lyft is going public, again. the company is set to report its first quarterly results after the bell what to expect and why one analyst thinks it could rally 25%. and stocks are under pressure as investors are worried about higher prices on goods hitting their bottom line. we'll look at who is most at risk. a look at the dow 30 map, boeing, caterpillar, the worst performers there not a single stock in the green.

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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 to "the exchange." the losses accelerating at this hour all ten sectors of the s&p 500 are lower, led by tech, health care, and industrials. tech is now down 2.5% for the week, and the dow jones industrial average was just down more than 500 points amazingly enough, lyft is holding up okay this afternoon it reports results after the bell it's lower by only 0.5%. still, the stock is down about 16% from its ipo price and even more from that first open. let's talk a little bit about what's coming after the bell joining me now, michael grant from canacor genuity

and deidra boas, who covers lyft for us when many companies go through their earnings after going public, they hit the speed bumps, but lyft has already hit one. >> i think it sets up well for the earnings report because we had have this -- you know, the original filing range for lyft was in the 60s and they priced the ipo at $72 you know, the stock was volatile shortly thereafter and has sort of come under some pressure. that's very much not unusual for these tech ipos. i think investors will get the first look at lyft's actual fundamental performance today, and i do think it will be solid. it really shouldn't come as a huge surprise because a lot of the stuff that was happening during the quarter they were talking about already as they were going through the ipo process. >> sure. but still putting it out there in black and white has been -- what are they expecting roughly speaking i know the estimates are hard at this stage of the game. >> right. >> but in terms of -- i was going to say earnings, but let's say losses. >> losses.

>> presumably in revenue. >> it's interesting, there shouldn't be any surprises there shouldn't have been any surprises all along, yet there have been. you see it priced at a certain amount and watch it fall back from 20% at its peak in terms of losses, we're expecting more of the same, just like we saw from uber for its first quarter. losses in the ballpark of $270 million adjusted that's on par with what we saw last year that we already know investors haven't really responded that well to so that's what i wonder, will they be able to look past those losses and maybe not take that as a surprise this quarter and look at things like contribution margin, active riders, what's happening with the drivers we'll see. i'm not too optimistic given what we've seen in the last weeks. >> michael, you have a $75 price target, so what do you think that implies for -- when do you think they get to earnings what does that mean for revenue multiples? >> so, we have a $75 price target it's based on six times revenue. it's back ed up with a dcf model. the reason why we're focused on the multiple is because the

company won't turn profitable in our model until 2023, give or take. >> give or take. four years from now, give or take. >> well, and the reason for that is it's very much a land grab here in the united states where lyft operates right now. you know, we think that only 2% of all passenger miles are currently being traveled on these shared transportation networks like lyft and we think that's going to go a lot higher one of the really -- >> right, but is it going higher in a profitable way in sn and one of the criticisms about uber's filing as the ipo looms is that investors aren't getting enough clarity on the stuff that really matters break out uber eats for us from just the ride-sharing business help us compare it apples to apples with lyft, because you mentioned these are adjusted losses and adjusted revenue. you can't even look at these two sister companies and get a clear sense of their financials run compared to the other. >> you're right, and i think we know a little bit more about lyft because it has gone public, we have quarterly earnings and it's a pure play in ride-sharing uber has others and there are

not a lot of details in the s-1. the eats business is grouped in with ride-sharing. we really know nothing about its last mile business, scooters and e-bikes. so what we see from lyft, i wouldn't be surprised if it raises questions about uber at a critical time, just days before it's expected to go public. >> michael graham and deidra bosa, thank you. and lyft is a relatively outperformer given the markets. and the $2 million children's drug from novartis. did they just put a target on their back with the scrutiny over drug prices. and uber and lyft don't want to drive yours is that a lost opportunity we'll debate that. here are the most-searched stocks on cnbc.com so far today. alphabet, the ten-year treasury and boeing lots more straight ahead ♪ feel that? that's the beat of global markets, the rhythm of the world. but to us,

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welcome back a big sell-off across wall street the markets are having their worst day since january right now. the nasdaq is the worst performer with a lot of tech leading the way down the nasdaq is down 2.1%, has fallen below 8,000 energy also today is one of the decliners. oil is down and falling below its 50 and 200-day moving averages before recovering somewhat, and that is hurting the energy names pioneer and chesapeake the worst performers with declines of more than 4%. we'll keep an eye on it.

let's get to sue herera for the "cnbc news update. hi, sue. hello, everyone. here's what's happening this hour a planned meeting in berlin between secretary of state mike pompeo and german chancellor angela merkel has been canceled at the last minute the state farmt says the talks need to be rescheduled due to what it calls pressing international security issues. french police say an armed kidnapper has taken four hostages in a convenience store, the abduction taking place in a town near the city of toulouse and the airport there. as of now, authorities are not certain of the hostage--taker's identity or demands. advisers to the world health organization have recommended speeding up vaccinations to combat the ebola outbreak in the democratic republic of congo changes include cutting the dose of the existing vaccine from drugmaker merck and expanding the population then eligible for vaccination. and a new jersey high school yearbook adviser who was suspended after photos of two students were altered to remove

president donald trump's name on their clothing is now suing the town straep district teacher susan parsons says school officials requested the changes in 2017 but then set her up to, quote, take the blame she says the district created a hostile work environment that led to harassment and death threats against her. no comment yet from the district superintendent you are up to date that's the news update this hour, kelly. back to you. >> all right, sue. thank you very much. just about 30 minutes until "power lunch." i'm joined by tyler mathisen, and we are down about 505 right now. >> well, and that decline has steepened in the past few minutes. of course, we're going to spend basically the whole hour talking about what's going on in the markets, what's going on in trade, and what the consequences of the imposition of potentially 25% tariffs on an additional $200 billion worth of goods, maybe, ultimately, $500 billion of goods and we'll take it through the lens of a couple of industries, one that could be hit very hard. that would be retail we'll drill down on that one

and the other one is, carrieding to one analyst, at least, an underappreciated beneficiary of a trade resolution if we get a resolution, he says this industry could go up. i'm going to tease her. >> and as we know, anything could happen before the end of the week. >> 72 hours is an eternity in these things >> see you top of the hour. here's what's ahead. retail is bracing for a potential new round of tariffs we'll have a closer look at who can be impacted and where you might see the highest costs. plus, beyond meat, soaring beyond expectations? uber and lyft say no to your kids and if you can't regulate big tech, just tax them. that's ahead in "rapid fire. the dow is dowabt 5 n ou52-- 518. stay with us back in two. ♪ there goes our first big order. ♪ 44, 45, 46...

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all 30 dow stocks are trading lower right now. some are holding up a little better than others you can look and see there mcdonald's, proctor and gamble, walt disney, american express and verizon are down less than 1% here's the flip side -- boeing, apple, united tech, home depot

and caterpillar down more than 3%, more than 4% in boeing's case, all with significant business in china. let's get you caught up on stories that should be on your radar, "rapid fire." deidra bosa, dom chu and leslie picker are here to help us beyond meat is hanging on to an out performance today. it was up 10% at one point bernstein initiated coverage with an outperform, saying they've developed a considerable mote that could make it challenging for other brands to play catch-up. i think their price target has already hit. the tock's up 11% and the market's down 500! >> so, it's a funny thing. it's making its way on at least my social feed society that the spoke investment group put up this stat, saying if you would have chased the beyond meat ipo the day after it went public and missed out on the 163-point run, you'd still be up another 23% at this point now and if you were to have put the money in the s&p 500, you'd be down a percent this is speaking to the idea that these markets are in so --

i guess it's rife with opportunity, i guess is the best way to look at it, because you think things are going one way for one group, but it's not wholesale for everybody, and these hot ipos maybe it bodes well for uber, but i don't know. >> now we know about your social feed as well, dom. >> way more markets i think than there should be. >> but you can't have more of a difference between what's been happening at beyond meat and lyft, right? you see them go a totally different direction. >> absolutely. >> and we talk about uber. what's uber more likely to trade like, lyft or beyond meat? i think the answer is lyft and it's interesting, when it came to market, it's narrowing its losses while having the double growth, like we saw zoom do so, clearly investors are concerned with this path to profitability. they don't want to just bet on something far off in the future, but they're willing to accept losses as long as they're getting better. >> this is crazy i don't know if we have the photo, but robert frank was out in a manhattan diner over the weekend where they charge $7.5 for a regular burger you'll know -- this will -- >> i live in the same neighborhood as robert frank. >> uh huh. here we go, $7.50 for a beef

burger, $11.75 for an impossible burger, and those were sold out. >> wow >> yeah. >> so, that's what's impressive here another thing they said in the note today, that bernstein said in this note, which is really causing some of the price momentum to the up side today, is that beyond meat, one of their biggest moats and benefits here is that they really, from their r&d standpoint, it's not like other plant-based food like almond milk, for example, or other, like oat milk and other types of plant-based substitutes. beyond meat, they really -- i can capture this market because it's all based on r&d. impossible burger, of course, is the big competitor in this space, and there are some others with big food giants, but it enables them to be a little bit more price insensitive and charge more because of the lack of competition -- at least viable competition so far. >> so far. >> but leslie brings up an interesting point. she brings up almond milk and

oat milk and all of these things one of the theses behind that at bernstein is they are looking at the growth in market of those other types of products. so if the market for alternative meat grows the same way that it did for almond milk or soy milk or everything else, then this could be a $40 billion market by "x" year, and that's the reason why they're looking -- >> final point comparison for those who think this is a healthier alternative -- check out the nutrition facts, the difference between an 8-ounce beef burger and an 8-ounce beyond meat burger it is not much difference. there on the left is the beyond burger. >> the sodium number -- >> sodium. dom, do the math what is that, six times? five, four -- anyway, it's a multiple and the saturated fat, still 5 grams versus 9 -- >> it's processed food at the end of the day. >> and they're high in sodium. >> i know. but it's not meat, and there's the opportunity. let's move along big headache for busy parents could be a big opportunity for ride-sharing speaking of uber and lyft -- new

ride-sharing companies are moving in to capitalize on the youth market lyft up today, still down 15% since the ipo. has this been an issue for you at all >> my 2-year-old daughter riding in an uber by herself? no, it's not for me. but i do live in an area where some parents would appreciate the convenience of being able to have their kids, if they were stuck in a rut somewhere or were late getting from school because they were stuck in traffic, they could get an uber or lyft. they can't maybe there's an opportunity but as a parent, i just don't know that i would want my child getting in a car by themselves at the age of 13 with somebody i don't know. >> my neighbor asked, they have a daughter, i said would you send her in a lyft herself >> my son is 3 years old and can't say i had thought about it i could not even if i wanted to. but this is the new car-pooling. and the question i have is what's the opportunity for an

uber or lyft do regulations prevent them from doing so and perhaps what's the technology because i might feel more comfortable -- >> what's the liability? >> in hop skip drive, they require their drivers to have five years of child care experience -- >> what? how many drivers do they have? five >> exactly you've got to have a supply issue from that standpoint apparently, the drivers can also baby-sit after they drop the kids off if you want them to. >> okay. >> but then again, i was surprised by the cost of this, because you've got these specialized drivers that have this extra level of certification to drive them -- >> not very expensive. >> it's still only about 20 bucks for a seven-mile ride. that seems like -- >> but i assume that's unsustainable. >> exactly >> the good old ride-sharing model. it can be sustained for many years -- >> subsidize -- >> they never have to make a profit just put it in your s-1. >> an asteriskon this, ooven with uber eats, it says your order's coming on a bicycle, and

it's never a bike. it's a car turns out you have to be a certain age to have uber and be a driver with a car, i guess 17, 18 so they all sign up and say they're on a bike, but they're not. so, there's a lot of dodging around these rules on these platforms. anyhow, topic three -- nobel prize-winning economist paul roamer floating a novel idea in "the new york times," saying rather than regulating big tech, google and facebook to fix some problems with privacy and hate speech, he proposes taxing the targeted ad model that has incentivized some of tech's biggest headaches. facebook and google both getting slammed by the market downturn today. facebook shares down about 2.5%. this a longer-term threat? >> it's a panacea, right if you don't like something, just tax it. that's pretty much the way you tackle all these problems. the idea that you could do something like this is not out of the realm of reason, but it then calls into question whether or not you do have a sustainable or really actionable plan to solve this longer term, or is it going to change behavior and to your point, how long

before companies are willing and able individuals find out a way to game that system or find out ways to get around the loopholes and everything else? so, i'm not surethis is the best idea for tech, but -- >> well, good tax policy creates incentives that can limit bad behavior and i don't understand how a blanket revenue tax on social media limits the bad behavior. it seems to have a fundamental misunderstanding of why the bad behavior exists, which isn't really tied to ads per se. it's the fact that people are able to publish their own content on these platforms and it's really difficult for facebook and twitter and others to patrol that so, i think if you can find a way to tax it in a way that discourages people from putting personal stuff -- >> instead of just discouraging revenue. >> exactly but look what's happening now, the ftc threatening facebook with a fine that could be $5 billion. that's a lot of money, but it's still somewhat of a drop in the bucket for a facebook. >> oh, sure. >> so, you know, the debate that's going on certainly in silicon valley is do you let these companies regulate themselves or do you have the

ftc do it? and it does feel like another sort of band-aid solution. how do you get a whole culture to change, and what does that mean for privacy >> yeah. i don't think anyone here is offering a ringing endorsement of this strategy, but it's just -- it's a hard problem to fix and anything across the board feels like it might do mo harm than good. let's talk about our final topic of the day, though smart speaker owners who love their devices to play music or remind them of appointments -- well, how much data are we really giving up amazon keeps a record of everything alexa records after it hears its wake word and the amount it hears is surprising consumers. amazon, like a lot of big tech names, is down today almost 2% but this "washington post" story is raising a lot of eyebrows the question is, does it change behavior >> i mean, i guess you can always unplug your alexa if you're worried about it listening to you and plug it back in when you need it what i always find so surprising with these stories, alexa or nest or some of these other, you know, tech, home-enabled systems, is this idea that, you

know, why are we just finding out about this stuff now why is it that when we buy this thing -- like, we should know from the beginning as consumers -- >> listen, guys, i just assume that it's always listening. >> i'm with you. i'm totally with you. >> and if i was really that scared, i would just not put it in my house. >> you hear tim cook talking to becky quick earlier this week and getting on his high horse and saying that we care about privacy. there is siri, and i don't think we understand fully what they're doing with that information either. >> agreed. totally agree. do you have an alexa device? >> i do, but it's currently unplugged because i keep reading about all this stuff and i'm like, well, i don't know who's listening, what they're listening for, how it's going to come back to haunt me some day, so i'm going to unplug it until i need it -- >> all i ask is, "alexa, what's the weather tomorrow?" that's basically all -- >> dom, i don't think that's worth it for what she might be listening to thank you very much. stocks are getting slammed the dow is down more than 500 points after a top trade official warned higher tariffs on chinese goods are coming at the end of the week.

we will check in at the new york stock exchange and the action in the bond pits, next. the s&p is having its worst day since early january. here's a look at the biggest decliners. mylan losing 20% of its market cap right now. mosaic down 9%, pioneer natural nearly % lower and regeneron down 5%. the perfect soundtrack. ♪ to make each journey more elegant. at adp we're designing a better way to work, so you can achieve what you're working for.

welcome back we have a more than 500-point sell-off in the dow jones industrial average right now that's a 2% decline. down 2.3%. the russell 2000s, which are supposed to be more immune to china trade issues, also down 2.2% s&p down 2% as well. bob pisani is at the new york stock exchange and rick santelli at the cme, keeping an eye on all the action bob, what do you see >> well, hao here's what's important -- people need to understand that there's a very, very broad problem here. we tend to say, trade issues, let's put up semiconductors and

they're down because they have a lot of revenue exposure to china, or some retailers import a lot of stuff from china. therefore, they're going to be affected but this is much broader than it put up some of the consumer staples names today like conagra or colgate, those kinds of companies that are out there, or kraft heinz. put up some of the other ones, the consumer names they don't have any appreciable revenue exposure to china at all, but they're all down right in line with the stock market, 1.5% to 2% and the reason that's happening is if this china trade war goes on for months and you have more tariffs, whole global growth scenario has to come down -- earnings have to come down, the multiple has to come down, all of the assumptions around future earnings for all of these guys, look, they don't have exposure to china -- they're all going to be wrong, and that's why the whole market is coming down. pretty broad issue here right now. >> all right rick, what would you add to that, especially we know some of the pressure in the bond market started overseas after the weak

german growth numbers this morning? >> yes you know, you hit a key point. our yield curve is definitely leaning more towards flattish with the long-end yields dropping a little more aggressively than short-end yields, but you hit it if you look at a one-week chart of bund yields, they're back in negative territory, at a 4 1/2, 5-week low but the important thing is open the chart up july of 2016 is when bunds made their biggest negative close, down 19 basis points we're not that far away. and yes, factory orders for march were up 0.6, less than half they were expecting they were expecting 1.5% the european commission is downgrading growth in the eurozone now, granted, most of these commissions don't really do a very good job of forecasting like our fed but the point you hit on, kelly, is a good one, that if you can't demonstrate that maybe trade is going to pick up and germany has a lot invested in trade -- one of the big export economies in the eurozone -- the stock market might not be the first choice.

the first choice is going to be to buy bunds, because more easing, more stimulus in order who would buy negative yielding instruments? everybody who thinks the government's going to keep putting yields lower. >> i know, it sounds crazy, rick as you brought up, germany is one of the most exposed if the u.s./china trade thing really takes a turn for the worst, right? i mean, anything that hurts china's growth hurts germany, doesn't it >> oh, absolutely! i can't stress enough. there's huge multiplier effects within all of the chains and channels that trade moves. some are so indirect and not obvious. but yes, if right now we signed a good, verifiable deal with china, the german economy would definitely draw investors back into the future possibilities. >> bob, what were you going to say real quick >> i was going to say, about 35% of the european union's exports go to china, and that's why today over in europe you saw the weakest sectors were automobiles

and the banking industry so, yes, it's an important aspect for the european union as well. >> and for their major industries thank you, bob pisani, rick santel santelli. retailers here are also getting slammed after a top trade official said higher tariffs on chinese goods are coming in just a couple of days. a look at which companies could be hit the hardest and whether consumers will be paying higher prices that's next. and there's only one gene therapy on sale in america right now, but novartis' latest innovation to treat a rare disease will soon be available and could fetch a seven-figure price tag. that's coming up. here's a look at the nasdaq, down more than 2.3% right now, the largest drop since late march. mylan, kla and jd.com all major decliners. alright boys, time for bed.

listen to your mom, knuckleheads. hand em over. hand what over? video games, whatever you got. let's go. you can watch videos of people playing video games in the morning. is that everything? 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 to "the exchange." retail stocks are lower today. the etf, the xrt, at session lows and falling deeper into correction territory with a decline of more than 15% from its recent high. analysts across the street today highlighting several retailers that could be hit hardest by these proposed tariffs, set to increase on friday let's bring in courtney reagan for more on this along with jan

niven, founder and ceo of jan rogers niffin worldwide, and a cnbc contributor welcome to you both. general, you say electronics and automotive aftermarket >> yes, of it imported and if you look at diy, do it yourself home stuff, hardly gets hit at all everything is somewhere in the middle but in general across retail, doesn't have any tariffs so far. >> that's what the president referred to on not not necessarily what goes into effect friday. >> that would basically cut the growth rate while we adjusted to it in half and if he really puts on 25% and it was across the board, it would get the growth rate to zero until we adjusted to it. >> you mentioned electronics and like autozone, o'riley so the fixed retailers, dollar

tree, five below, and then maybe big lots for furniture exposure. >> i think this is going to be a stock picking game in six cases and what the companies have said and planning for dollar tree, for instance, guiding their earnings for a planned 25% increase five below wasn't. they were just looking at 10% and what you're talking about, those fixed price points, if you operate on a retail model that's sort of this low price, how do you mitigate the prices? you can't really raise them if you're a dollar tree or dollar store. >> that's what makes an interesting window with how it affects the economy. you're saying consumer shopping at dollar tree are looking for that really good value and in many cases, the household staple in the case of dollar general, a different pricing structure but those will hit them hard it's difficult about why everybody is bracing and selling off at the idea of this happening. >> we talked over time about retailers trying to diversifying their supply chains away from

china and maybe doing it before president trump was in office because we know it was getting more expensive to do it in china but this takes a long time years, in fact, you can't make changes within a week. some of these players were already doing it and some more exposed than others for a variety of reasons whether they were planning for it or had the fixed price points furniture is a big area that's potentially hurt by this if it happens, if it goes 10% to 25%, so restoration and hardware williams sonoma. you have to look at where they're sourcing and selling. >> in terms of apparel, look for names like american eagle and carter's to be more hurt by this, whereas i think a nike, lululemon, obviously, places like the pricing power there can hold up a little bit better. >> sort of right but what's really happened in the apparel and accessories side is that we used to be 50% coming out of china and now 15% coming out of china. that's how fast we've moved over

the past three years it will just accelerate that and a lot of these people, like you said, that sell internationally, they'll just transfer what they're selling into the states into thailand or someplace else, what they're getting out of china into europe or back into china. >> avoid the tariffs. >> i think that people are probably too negative on apparel and accessories and especially the higher end ones like you mentioned. >> good stuff. guys, thank you very much. jen kniffen. at nt.ould you b uy uy th'sissues facing our world,cril what do you see? we see a billion more people breathing free. we see access to fresh food being the global norm, not the exception. we see homes staying cooler, without the planet getting warmer. at emerson, when issues become inspiration, focusing core strengths to create a better world isn't just a result, it's a responsibility. emerson. consider it solved.

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shares of novartis are down 2% today as the latest gene therapy set to hit the market. it could come with a hefty price tag. meg tirrell is here with the staggering numbers. >> this is a potentially revolutionary new therapy, gene therapy, that aims to treat the disease and cure the disease with just one treatment but with a one-time treatment comes a potentially huge sticker shock $2 million is the price tag that folks are talking about for this therapy. it's for a devastating childhood disease called spinal muscular

astrophy are we going to see more of these coming down the line >> let's ask michael yee about this he joins me now. michael, on a difficult day overall for the market, i'll ask you that in just a moment, but listen, if you say what's the price of a human life? $2 million is a lot for a single drug but maybe not for a human life. >> i think you bring up a good social debate. the alternative drug that's out there right now from biogen is $400,000 to $800,000 a year. it's getting reimbursed around the world pretty well and as meg referred to, it could cost $2 million or more, a life-saving therapy. these babies, these infants would be essentially nowhere in a year and now possibly being normal children living a normal life pretty impressive. >> michael, yesterday, larry rob boro robbins. the etf index, however you want

to do that, because what they do in other parts of the world. we hear this all the time. is novartis going to walk right into political fire storm here >> i think that in the big picture, the large companies like you're referring to are going to continue to be in the target zone, in the bull's eye for a lot of these politicians and i think that on a relative basis, you've seen it with large biotech companies which haven't done anything for the last year or two, haven't done anything. we'd be focusing more on the small and mid cap companies, the xpi, up 20% this year. those are the small innovative companies that are coming up with some of these great drugs and there's been a lot of acquisitions and mna we think that's where people should be focused on >> is there any way to know the right price for these gene therapies that will increasingly have these kind of price tags? >> that's a huge debate. there are independent groups, one called icer, that tries to do the pharmaceutical economic

studies. and then you are arguing over how much should a life be valued especially when it's in babies who might die before their second birthday. so these are the kinds of arguments that are going on. drug companies are putting one price tag. icer often coming in a lot lower than that and so that's happening and now we're talking about different pricing models instead of paying $2 million at the same time. could you spread that out? it's complicated. >> no one could afford $2 million so i'm sure they'll come up with that it's a great story we'll have more. i want to briefly ask you, michael, would you be buying pharma on the sell-off today it's indiscriminate. >> it is health care was an o outperformer. the drg are big performers we'd be focused on the small and mid cap companies or the xpi index. continued innovation and gene therapy. that's where we're focused on. >> taking the other side of the

larry robbins trade. great stuff. appreciate it very much. meg tirrell. thanks everyone, does it for "the exchange. i'll join tyler and melissa for "power lunch" which begins right now. and we'll see you in just a moment i'm melissa lee along with tyler mathisen new at 2:00, get ready for a wild hour of trading the threat of higher tariffs on china fueling a sell-off on wall street time to look for cover or should investors look past this trade drama? and if tariffs do go into effect, the american consumer could end up paying. how is that going to hit retail earnings and the one group of stocks underpriced right now if we do get a trade deal and lyft reporting results after the bell, first as a publicly traded company, stock down 15% since its ipo. time to buy or to bail "power lunch" starts right now >> thanks, melissa welcome everybody to "power lunch. i'm tyler mathisen it is a doozy of a day