jenny, your final trade is >> b&g foods >> joe >> twitter >> cstm. bought it during the show. get it >> good stuff. thanks, everybody. "the exchange" begins now. he got that all in thank you, scott hi, everybody. sell-off what sell-off? markets are back in the green for the week despite the u.s. escalating its trade fight with china. banning huawei the president signing a new executive order on the chip sector and on the future of 5g the stock that just won't quick and we begin with this rally and seema mody.

>> here is where we stand at 1:00 p.m. eastern, higher across the board with the dow up 260. keep in mind we were up 309 at the interday high. the s&p 500 up about 35. nasdaq higher by 103 we're up about 1% to 1.3% for the major averages technology, it's in the green. take a look at a number of chip makers the trump administration's move that ban against huawei you have investors assessing the global supply change all down significantly on the day. what is helping the market two big earnings reports take a look at cisco the company talking about how it's reducing its production in china. up about 7% on the day walmart, a better than expected report, shares up 3%

in fact, about 3% away from its record high. kelly, back to you >> amazing stuff we'll have more on that soon, seema. welcome to "the exchange." i'm kelly evans. the philly fed index surprisingly strong in may hitting a four-month high, the jobs market looking strong with claims dropping 16,000 to 212,000. today's rally with bob pisani at the new york stock exchange. do we have a short-term memory what's going on? >> reporter: this has been a stunning rally in the last 24 hours. take a look at the futures s&p futures rallied 70 points. dow futures rallied 600 points exactly on what? the traders want to believe after the dow's 600-point loss president trump got the message and suddenly all sorts of happy

talk rumors on all three trade fronts talk of a delay in european auto tariffs. hopes for nafta and removal of steal and aluminum on china, the toughest of all, hopes mnuchin might return to talks. notice there's nothing definitive here. the market is buying into this hope on all three fronts it's broad, very broad uber is up three days in a row that price of $41. finally getting some action on the upside >> it's had almost a 20% rebound off monday's lows. thanks for pointing that out president trump said the tariffs are bringing in billions steve liesman is here. >> kelly, thanks if the tariffs are tax hikes,

they would rank among the largest of the past several decades. president trump, of course, having presided over one of the biggest tax cuts in years has created one of the biggest revenue increases. we don't know how long the tariffs will last. the $72 billion from the tariffs equals roughly 0.34% of u.s. gdp. you have to go back to under clinton. you can see the other first years like 0.41% for the budget act, the tax reform 0.41%. later years, the trump tariff would be the second largest after the 0.43% estimated to have been raised by the affordable care act in the fourth year of the act this is the largest measure not approved by congress

it ceded those powers to the president when it comes to tariffs. >> the founder and president of macro policy perspectives. welcome to all of you. steve, i want to ask you a follow-up question first i notice you're calling them revenue measures and not tax heights. >> it's controversial. some people think they're not taxes. you can over time get around tariffs and true of taxes. i didn't want to necessarily -- >> lump them together. >> are they taxes? they are certainly revenue increasing measures. our guests may have some ideas >> i'm coming right to you, coronado, on that. how does it look for the economy with this going into effect? >> we are seeing some of the tariffs pass through into consumer prices.

we have seen some goods prices, sporting goods, furniture, autos, we've seen pass through on the tariffs and those are areas where we've seen some weakness in consumer spending. despite a very strong job market and consumers doing generally very well, there has been some apparent reaction. that's after a weak 1.2 performance in q1. we need to keep an eye on the consumer when we're thinking about the hopium bob alluded to in valuing these companies >> where are you for the year? we started out strong. are the tariffs going to have an immediate negative effect so the second half to you looks like a 2 instead of a 2 1/2 or a longer term issue >> we do expect moderation through the second half of the year and the key now we just think of it as a bit of a tax.

a little less investment, less spending if we see these negotiations go off the rails and we start to see more fear creep in, then that's something we need to worry about. >> let's bring in john on that are you fearful with everything going on or, look, we've seen what the president has been doing. okay, maybe some of these measures are necessary where does it bring us >> well, it brings us at our shop to be balanced and diversified because we, like everyone else, don't know how the trade talks are going to go and as julia said the impacts on

the economy summer into fall it's not taking us out of markets. what's impressing us this week it's the dollar is moving up, commodities, reits this is impressive there is hopium around the trade talks. we're staying balanced >> one thing that really bothers me about the tariffs and what's important here is to think of them as revenue measures john said he's not sure how to cost this out. i think a lot of the market is not sure i'm sure the fed is not sure had this been a tax increase and a planned revenue measure that went through congress, we would have a cbo report on it, all

kinds of stuff we put together that said before we do this and enact a $70 billion tax hit that could double if the president does more here, we would at least model it it doesn't mean the models are right. it means we would think about it and understand and weigh cost and benefit. this may be the perfect thing to do about you a revenue measure of this side should have more analysis around it >> julia, final word, is the u.s. economy fundamentally holding up strong enough to absorb this headwind >> i would say the uncertainty around the outlook has risen in the last few weeks so far what we've seen is the domestic service sector is offsetting some of the global weakness you have the positive feedback but there's just a tremendous amount of uncertainty. auto tariffs, nafta, a lot of

fronts that could be disruptive to u.s. business so far it looks like a soft landing but the uncertainty has ratcheted up >> i sympathize with people who have to make these decisions now. thank you. here is what else is coming up on "the exchange. coming up, the president takes a bold step that could have a big impact on the telecom industry, the chip sector and trade negotiations plus, we work as the most valuable startup in the country and loses millions it says we're different. why? and will wall street buy in? pinterest, what to expect and is now a good time to get in? your workflows in the cloud, huh?

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welcome back president trump signing an executive order to block transactions involving information that could pose a risk to security while huawei isn't named, it will put the company on a black list how will this reverberate?

let's bring in jonathan chaplain who leads the team at new street research, our technology reporter for cnbc.com, and the economic policy analyst at the american enterprise institute and cnbc contributor welcome to all of you. jimmy, first thought, a policy question, why now? what does this mean for trade talks? how do you think china responds here >> the $350 billion question is this just another tactic during the trade negotiations to get what we want or does this signal that the president has bought into this idea this is a brand-new cold war with china that we need to have two different tech ecosystems? and this is just really one step into a full fledged technical conflict where eventually american companies won't be allowed to sell anything to huawei and, therefore, really --

i'm not sure it's a death sentence for huawei but creates a difficult situation for china's most important company >> john, on that front, if we are head to go two separate ecosystems, how is the u.s. going to function, roll out 5g without huawei equipment >> it's not going to have that much of an impact actually on the u.s. carriers. they don't use huawei today. they were told years ago if they used huawei equipment they wouldn't get any business from the u.s. government and the u.s. government is an important customer for all of them the companies it will affect are small companies. their equipment is cheap and they give very compelling terms in terms of financing to companies. small companies in rural areas have relied on huawei equipment in the past and not being able to use huawei equipment will push up their costs. >> it's interesting that could exacerbate the digital divide. there would be a policy response

on that, kate. before we get there, what are the specific concerns about this equipment and is it seen as effectively functioning for the chinese government >> thanks for having me. this is something i've talked with intelligence officials about for many years now and it's really a big picture concern. let's back up because on huawei's side they'll say the u.s. government has never come out with specific allegations how we're clueding with the chinese government and how we are expected to be spying on the u.s. the u.s. position has been that it is just too risky to build our infrastructure on something that we're not sure what will happen in the future if there are updates to equipment that exists there -- >> or the relationship takes a turn for the worse >> their position has been while we can make these with other

providers something this huge part of our infrastructure we can't do that. >> that's what i find interesting is the alternatives that are or aren't available, for years the government is telling our telecom giants, hey, be careful or you won't get any business from us who does that leave? nokia, erickson, why isn't there better competition right now available for people to use an alternative not just in this country but everywhere else? shouldn't america have these equipment giants as well >> there are plenty of alternatives in asia and europe. they happen to be more expensive in general than huawei if you think where huawei has done really well in emerging markets in africa, emerging markets in asia where the lure of cheap financing and equipment is compelling. it's a function of costs

>> this is still a significant escalation the other countries who looked at this, the western world, had or are deciding, okay, it's worth it because the cost, the importance of doing it swiftly, does that change that now? again, i'm not saying they can't function but it is going to create a more challenging business and operational environment for this key company and that's what we're trying to do, make life as hard as we can, the first step to get the other countries not to use that equipment, well, that failed that's a policy failure. that led to step two which is to make it impossible, as hard as possible to huawei to operate in this environment >> thank you i appreciate it. meat and dairy alternatives are

becoming big business. the ceo of the company that makes things like the impossible burger possible. the college board is adding an adversity score, what that means and how it couldmp iact higher education coming up in rapid fire so, every day, we put our latest technology and unrivaled network to work. the united states postal service makes more e-commerce deliveries to homes than anyone else in the country.

welcome back let's take a look at the markets. we have quite a rally here today. the major indexes are now positive for the week. that means we've reclaimed all of monday's steep sell-off of

nearly 700 points. the dow up about 281 right now we're over 300 at the highs today. 1.1% gain, the strongest is the nasdaq of 104 points or 1.3% the s&p adding 36. it's at 2887 some of the movers this hour, snap is surging after facebook says it will ax its direct app which was meant to compete with snapchat shares are up 107% year to date. they're soaring after both companies reported positive data in their cancer drug trials. great news especially if you're a stakeholder. how about stanley black & decker, announcing it plans to move production of craftsman wrenches from china back to the u.s. it will invest $90 million and shares are up.

now to sue herera for a cnbc news update. sue? here is what's happening this hour, everyone. president trump welcoming the swiss president to the white house amid rising tensions with iran it follows reports the white house contacted swift government officials to try to steb a communications channel with tehran when asked whether the u.s. is going to war with iran, president trump responded, i hope not four activists staging a protest inside the venezuelan embassy in washington for more than a month have been arrested protesters considered president nicolas maduro to be the legitimate leader. a saudi-led air strike killed at least six and wounded 41 more. the strikes came after yemen's rebels after spending more than 20 years in san diego, a mother panda along with her 6-year-old

son made a triumphant return home to china bringing the total number returned home from abroz to 17. but three giant pandas are still living at the national zoo in washington and it's well worth the trip to see them >> i forgot the pandas could get caught up. >> it could be pandemonium >> as uber and lyft struggle as publicly traded companies another unicorn is trying to differentiate itself deirdre bosa on how they are saying to wall street, think differently about our losses and leslie picker is with me deirdre, let's start with you. >> urging investors to see its losses as, quote, investments. telling me that renting a work space is actually a proven business model and in that way trying to distance itself.

critics might argue that proven business model is a stretch here wework has never seen a recession, they sublease office rents tend to fall and it's capital intensive this past quarter another $264 million. >> if i roughly do the math, losses are said to fall quite sharply for the year how important are the losses >> they're losing as much as they're making wall street doesn't like losses and they don't like losses where there's no end in sight. if the economy starts to tumble those losses could accelerate.

so what happens when that changes? they use community adjusted -- >> in different parts of the country? >> it extracts marketing, general and administrative expenses, things you would normally include as a cost they have adjusted where they extract that from their metric >> which isn't that different from the contribution margin uber and lyft use. we know investors don't buy that one thing that differentiates is its growth trajectory. it lost more than even uber last year i'm not sure the trajectory will be different warped me not to read into too much the losses. as far as we know are not behind it it is still growing 100% year over year.

uber, we are seeing a major slowdown >> we'll see if wall street is more forgiving when is that coming, by the way? >> i heard the third quarter >> we still have time. >> we have months to prepare, yes. >> guys, thanks. we'll check in with you soon here is what's ahead on "the exchange." coming up, they may be the low cost leader but will walmart have to raise prices the stock just can't stop rallying and if you've been censored on social media, the white house wants to kw eainnoahd "rapid fire." ...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.

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welcome back let's catch you up on a few stories on your radar today. time for "rapid fire." here to break down the headli s headlines, welcome, everybody. walmart delivering a big earnings beat this morning but it is warning price hikes could be on the way. the cfo telling cnbc we have mitigation strategies that have been in place for months, but increased tariffs will increase prices for customers the amazing thing is how well walmart shares have held up.

will the price hikes change that >> they have held up well so far. before we even get into what they said about the price hikes, we need to put it into context, right? 50% of sales are food. so that's a huge portion of sales, two-thirds of what they buy they buy domestically. so one-third is imparted and only part of that is china so, yes, there will be price hikes because if you go up a certain percentage it's hard not to pass that on. it could be different levels and come at different times. it's just too many products. >> they're not alone we know they're the low cost leader people like inflation -- when there's a deflationary trend it hurts margins. if there's a little inflation usually walmart can capture more

of that. >> how much do you think consumers care or will notice the price hikes depending on how big they are as they roll out the next day delivery thing? they're doing all these other things >> i think it will depend on the product and the category and how elastic demand is. if it's an item you buy all the time, then you're paying more and you're paying more more often. if it's a product you don't buy that often, maybe you're not that aware of the price or it doesn't bother you >> or you roll it into the convenience cost, that's what i do with amazon prime is it worth the extra dollar to not go to target >> $300 billion in tariffs but all these companies have to maintain margins call it 50%, so if the tariff is $5, now raise the price by $10 for everyone along the way to get their margins. the end cost will be more than the tariff cost as listed at that entry point

>> that is true. but if you're a retailer like walmart, the world's largest retailer, the power you have over those vendors and suppliers will play a very key role. >> shares still up about 9% year to date. shares of beyond meat continue their incredible run up another 6% today they've nearly quadrupled since the ipo. they're at $93 they ipo'd at $25. uber is getting traction, too, up 20% since its monday lows >> why are you looking at me >> did you ever try the beyond meat burger yet? >> no, i would not try it. >> you just wouldn't try it? >> no. >> they're putting it in the meat section is what stuck out to me. it was stocked more with the veggies and they started moving it to the meet like those breakfast biscuits that went from desserts --

>> are you afraid you're going to accidentally pick it? >> and then what >> i'm afraid it will look the same >> and be forced to eat vegetables >> change my whole philosophy of life >> people are moving to the flex category where they want to consume plant-based products in place of meat a few times a week >> that's where the plant based stuff is >> if i were shopping, and you're doing a barbecue, you want to go where the hamburgers are, it would be helpful if they're in the same place. >> regardless of what they're made of? >> there are so many different kinds. >> if you told me this would be the ipo, unbelievable. >> there's a lot of short sale it's like 35% of the float is a short. do you get one of these spikes day after day. >> the first day or couple days

that it doesn't rise, that's going to be the news at this point. a new document reveals a confidential settlement with sony paying chicago more than $1 million for the netflix tax. it expanded its amusement tax to include digital streaming it's collected from other cities and states like virginia and rhode island looking at this, too. >> as streaming becomes more popular, a smart move. i didn't know this existed it's interesting to look at some of the companies, netflix, hulu, spotify are fighting this. >> this has been around for years. this is not the first place. kentucky tried this four years ago. they lost the battle this is kind of like blockbuster will charge them

it's been popping up the companies fought back and won. this is not the same thing so forget it. >> i presented out the law and it's really clear. television shows, movies, videos and amusement tax. >> it's very clear >> you want an amusement tax, wow. they've taken a couple million >> is it based on where your credit card is is it going to be like gambling? >> it doesn't look like they pass it had along to the consumer yet >> how do you actually -- >> imposed on the patron and what takes place in chicago.

>> we're going to find out moving well along the white house is launching a tool for citizens to file formal complaints if they think they were unfairly censored on social media. this is a big problem for the social media companies so, too, is this selena gomez out at the caan film festival and remarked social media has been terrible for my generation. she says i understand it's amazing to use your platform but how exposed these young girls and boys are not even aware of the news or anything going on. she's the third most followed person on instagram. >> i'm sure she sees all the good and terrible. she suggests taking a break is healthy. courtney and i have both deleted apps off our phones and it is a nice break i'm wasting a lot of time on this i don't need the negativity. it's a lot of inundation of

information. >> come join us on the permanent ban. >> since trump was elected twitter is up 110% f it's book is up they've been outperforming despite the negative headlines >> look at what was happened with facebook, they would have a 20-year consent agreement with the government they're not going away even the selena gomez thing shows people hate them >> selena gomez works with an ambassador and i think her followers are very valuable. >> these companies are hurtling into social media. >> $800,000 for each one of her posts. >> i'm sure she's not charging that much. >> but it's valuable >> the college board plans to

assign an adversity score to every student and what the company says is to highlight socioeconomic background they're going to use 15 factors to measure adversity in the student's neighborhoods, families and schools but only college admissions officers will be able to see the score interesting. why does the s.a.t. find a need to do this the s.a.t. lass behas been crit because the scores for asians are so much higher than other parts of the population. if you're from a better wealth and education background, why is the s.a.t. getting into the game >> the college board owns the s.a.t. is a billion dollar a year revenue business and for seven straight years until last year the act had more market share than the s.a.t last year the s.a.t. had more test takers than the act so they went and bragged about it, we're beating them again because they did deals with the states of colorado and illinois. so they're out there competing and this is the product they're selling.

you can do more deals. but 200 schools have gotten rid of mandatory testing they're fighting this battle on both fronts. the demand side and the supply side >> and they tried this 20 years ago, this is an updated version of it. if the s.a.t. -- it's an aptitude test. if they think the test itself is flawed and not capturing what it's meant to capture, fix the test there's other ways for admissions or completely independent bodies to measure this >> that's a great point. this is a tough issue. i'm not sure how i feel about it the more information you have, that helps you make a better decision is this the way to go? who likes it the way it is anyway

>> they're selling a product >> they don't get access to this score but counselors would have more information about that demographic. >> all the information they need to know is based on your high school that you went to. >> it would be nice to know what the score is >> like a fico score but you don't get to find out what's in there. >> thank you all shares of pinterest climbing more than 50% since the ipo. the company is set to report earnings for the first time after the bell today we will get you the key metrics to listen for.

welcome back to "the exchange." pinterest is set to report after the bell today its first quarterly report as a public company the stock has been on a tear it's one of the other best ipo up 55% since the debut last month. what are investors looking for to keep the momentum going

let's bring in the senior equity analyst at morningstar welcome and give me your top and bottom line numbers here >> well, we're looking for indications that top line growth will be pretty impressive. we're thinking these guys are going to grow at a 35% growth and then in terms of maus, monthly active users, we want to see growth in that the most important thing in our view is how they monetize the users. the average revenue per users, we hope will be around 25% growth year over year and we expect to continue over 20%. >> so pinterest had about 291 million active users at the end of the first quarter you're saying while you would like to see double digit growth there you would like to see 25%% growth and average revenue per user how are they going to achieve

that >> a couple different ways one, they've already tapped into a very impressive growing market of course online digital advertising. the second thing is that they are planning to more aggressively expand into europe. if you look at the revenues, they're generating around 95% of the revenues in the united states in terms of international expansion a lot of upside remains especially in the developed markets such as europe where ad spending is pretty impressive in addition to that i think they will be aggressively selling more ad real estate. so i think those three things will help them continue to generate good monetization of their users. >> do you, by the way, have a buy on this? >> we think it's a little bit overvalued >> so does everybody everybody on the street has like a hold or a neutral on this company.

>> yeah. our valuation is actually $22 a share or around $15 billion. so it is currently overvalued. it's going -- it's a solid company. it's tapping into a market that has growth potential we don't think it will displace the facebook or googles. there's an advertising market for pinterest to grab. so we think they're probably going to be profitable by 2021 >> that gives them a couple years and a pretty nice market cap. thanks very much don't miss jim cramer's interview with ben silbermann tomorrow at 6:00 p.m. eastern. april housing starts beat expectations according to one ceo home builders are still facing pretty big challenges he said the end of 2018 was the worst quarter for the industry since the 2007 downturn. we'll lkheerheartsta wth t mke

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welcome back we learned that housing starts rebounded in april, but some supply challenges including land and labor shortages do remain

for the home builders. after speaking to the ceo of one of the largest home builders, what did she have to say, diana? >> reporter: she had a lot to say about demand which is high for spring so bad bad at the end of last year due to a spike in mortgage rates that builders were left holding the bag. i spoke to taylor morrison at catholic exchange event today and she described it in striking terms. >> the fourth quarter, probably ballistically, the worst as an industry we've had since the downturn, and we ended the year with the tremendous amount of inventory. in december, if you were to talk to anybody, potentially another house sold in the u.s. again it was that bad. >> people came into the year with a lot of inventory because the fourth quarter stopped you can't just pick up the machine and say, now it's time again. i need a new start. >> reporter: shortages of land and labor as well as tight regulations make it much harder for builders to react to such a

big shift in demand. kelly? >> she said we thought we would never sell another home again in december what's amazing, that's all because of the spike in mortgage rates, which, you know, historically speaking, didn't go that high but 10 year was 3.25 and enough to do the damage. >> it was a big shift. 5% on the 30 year fix and did come back down in december and down quite a bit now that combined with the government shutdown and the volatility in the stock market and just consumer sentiment fell off the cliff and it was amazing to hear a large production builder like that say it in such stark terms. >> fascinating thank you very much, diana olick. cnbc's next capital exchange event discussing global trade in washington on june 11th. you don't want to miss it. from building houses to rebuilding airports, most struggling to handle the growing number of passengers and

flights. phil >> reporter: right here in new orleans at the new orleans airport, the new north terminal. this is going to open up later this year and a fair amount of work here and they've got a long ways to go here and one reason this is so important the growth in the number of people flying in and out of new orleans between 2009 and 2017. it jumped by more than 50% the current airport, it's fine it does okay, but they're spending a billion dollars to add this new terminal because of the growth, especially from low-cost carriers like spirit and southwest. the head of the aviation department here in town says this is all about improving airline and passenger efficiency >> as this market continues to grow, we're in a better position to handle the growth in the market and also, we've done this in a way that keeps the cost to passengers on the low side >> reporter: again, kelly, this new terminal opens up later this year but we see this new york

la laguardia, l.a.x., revamping, expanding with new terminals or building all new gates and facilities because they need to do that with how many people are traveling. >> just wait until zion shows up in new orleans phil, thanks philip lebeau. from the flavors necessary to make make meat taste real to cbd molecules, one company is using yeast to create the microb microbes we'll discuss that next. ♪

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you don't chase the pace of tomorrow. you set it. nasdaq. rewrite tomorrow. lab grown cbd, plant based meat and the perfume of an extinct flower cnbc disrupter 50 company. jason kelly, the ceo of ginkgo bioworks >> thanks for having me. >> first of all, because beyond meat so in the news today, not direct customer. >> if you take a bite out of

that at burger king, it will bleed. hemoglobin into the burger, where does it come from? they took brewer's yeast like the yeast to make beer and program it like a computer. >> you can program yeast >> any plant, cell or insect and a lot like a computer. >> your programming yeast and move it into a yeast or

bacteria, brew it up and cbd oil. >> there's some controversy now about the meat and not from farms but in a lab >> one of the things you learn about biology, an enormous reuse and kind of surprising from cannabis plant and it works. we all share the same stuff. >> explain some of the opportunities out there. >> biology, if you look at it, a plant can kind of grow itself.

>> programming cells is like what you saw on computers in the last 50 years. getting exponentially better at places like ginkgo and in an apple or banana, a level of complexity at a cellular level so you can use it to make anything >> is an ipo in the cards? >> eventually. >> certain milestones you want to hit >> the way to think about it, we're a cell programming company. we already worked with 100 million deal and 160 million deal with antibiotics and cannabis and food. cell programming is like electronics, it's below everything so we don't make

sense to be acquired to make sense to stand alone. >> this is a fascinating opportunity. thank you for coming. >> thanks a lot. >> co-founder of ginkgo bioworks i'll join bill griffeth and contessa brewer for "power lunch" which begins right now. >> thanks very much, kelly we'll see you in a few minutes contessa does join us this hour. the bulls charging again is the worst over or time to get defensive? flip or flop's hgtv, he'll join us this hour "power lunch" starts right now >> welcome to "power lunch." i'm contessa brewer. stocks rallying for a third