market capital, they got a great trading division on every market that's my final trade. >> pioneer, natural high quality name, doesn't have its momentum yet. it will. >> thank you >> that does it for us on "halftime. "the exchange" begins right now. >> thank you, scott. hi, everybody, here's what's ahead. another proceed to hauwei, u.s. companies are forced to stop doing business with tellco, markets brace for retaliation, we ask if this could actually help get a deal. big troubles for tesla, the stock falling below $200 bucks it has dropped 40% this year we will talk about what elon music needs to do to turn things around the alarming new stats that show americans are struggling with debt on a number of fronts. we have those figures and what it means for the economy we're trying to stage a comeback, it may be failing.

>> it got so close, kelly, it really did at the lows of the session, the dow was down about 203 points. we got within just around 12 points of break even so that's the range today, skewed towards the positive side the s&p off by about 16 points, one-half of 1% the nasdaq deposit, the real laggard down by 1 and one-quarter percent. the technology has to do with computer chip stocks, kelly mentioned this idea that hauwei is at the center of this a lot of companies are not allowed to do business unless they're exempted by the government you see here, the semi conductor take it off by 3 and a quarter%. remember, this is down 15% from a record high we had around the third week of april. semi conductors ones to watch. a stock of the day if you want to look at one is apple. another part of that china trade discussion has been factored in a lot. remember a 50% run off the lows we saw earlier this year

all of a sudden we are down 15%. so apple certainly a focus one of the biggest weights on the dow today. back over to you have we'll have more on that in a missouri welcome to "the exchange." i'm kelly evans, president boastic tells cnbc he does not see a market rate cut this year. the ten year is back above 2.4%. dividend payments were up. they rose to a new record high they're on track to hill $1.4 trillion this year let's dig down on these markets right now, joining us is bob pasani >> once again, trade, particularly with china is the largest single source of downside risk to the markets, semi conductors, china, all trade related, all down today, in particular, we are seeing continued weakness in key trade names, apple as dom mentioned, also, intel, 3m, caterpillar,

they were down mid-single digits last week and today. it's the same with retailers, the etf or xrt is near a four-month low they're susceptible to china imports. 70% of the footwear in the u.s. imported from china, j.c. penny's, kohl's, bed bath & beyond all down into the teens, dividend payments are up that's true, the stocks are not outperformeding, dividend shares, alift krristocrats have performing as many tends to be the expensive names, the one exception, utilities the new high, back to you. >> thanks very much,bob pisani at the nyse. new trade war with china, u.s. tech companies now breaking ties with hauwei, the biggest one being google, which will no longer provide them updates for the android operating systems.

to talk more about that let me bring in jim seymour, a fast money trader chrissy crosby is here with plushl financial derrick rounds things out with us tim, we are seeing pain in certain parts of the market like we just heard, apple down down 9% this months you think investors are too quick to shrug things off or not? >> it's traded in lock step with ali baba since this announcement as much as we know that tim cook stressed china and stressed emerging market weakness in two earnings quarters ago, i think the bicker issues for apple are really where i think these guys can transition their businesses into a services story. look, if you want to look around the world, it's very clear, you can look at the headline markets in the u.s. and say, ah, not so

bad. if you look at emerging markets, they have been down 11% over the last ten days, the most important stat is em is trading at an all time low relative to the s&p. if you divide the spy by the eem. it's after they were out much of 2017 et cetera, et cetera. it tells you the markets right now. >> so u.s. markets are holding up better than emerging markets right now. what do you think about the reaction and decision by companies like google to cut ties with hauwei, what itself the significance of that as far as you are concerned >> well, they have to do it now until they get a license i would say that people treating this like the ends of the u.s. relations with hauwei are jumping the gun. the administration explicitly considered it a denial order it did not do that you can get a license deal to deal with hauwei both sides have cut off trade talks. they haven't done that if we do get one, you are going

to see licenses issued for hauwei business. >> do you think this move helps or hinders successful deal on that front in other words, does it start a chain of events, where we should have the chinese to retaliate and this thing es ka lates, or even if that happens, it continues to put the pressure on both parties to come to some deal >> eventually they will retaliate, of course i think your point is well taken. we seen the two sides get together without pain felt by either one i say all the time, chinese exports rose, that's a strange trade war. maybe they need the pain this is a forcing action that will cause negotiations either to you know move forward or break down it's risky you can actually increase the likelihood of a deal >> quincy, you point out that google searches don't know how to pronounce hauwei. >> they have it's gone beyond the financial community, trying to figure out how to pronounce it so

apparently it's spread all over the world of how to pronounce this it's interesting to hear you know foreigners tell their citizens how to pronounce it >> well, but what it really gets at is how important this company has become to doing business around the world >> that includes if you are an investor it includes if you are trying to figure out if china should be one of your examiners, right >> well, absolutely. europe doesn't have as many chip stocks you see the pressure on those stocks as well the question is, how deep does this go? how long does it go on and whether or not, you know, you start to see dpem shsee exes probably the small companies, they may get an exemption, but the president hinted at this some time ago and this shouldn't be somewhat of a surprise, hauwei we believe has been storing chips, what it needs. >> stockpiling >> believing that this -- >> which in a way can be bad for

chip companies, they pulled it into demand. are you guys changing investment strategies because of this >> no, we have been using the barbell strategies, very conservative, taking on risk in tech as the share prices come down focusing on quality names, dividend players, good cash flow >> that includes tech phone e companies, by the way, cloud names that are very strong, not much interface with china. i think that's the way to go until this clears up >> are you happy to name any names or i don't know >> well, there is one major name out in seattle that's out in washington >> microsoft >> that gives you, you know, the cloud, it gives you a good dividend it has strong cash flow. but by this same tone, take a look at the banks. this is interesting. a lot of insurance companies on that list doing very well in today's market you wouldn't think it was fear of the tender yield coming down. >> i name it you don't get in trouble >> if you name it.

i blinked. >> tim, i'll circle back to you on this with the same questions, do you think investors, whether they're in the financials quincy mentioned or the cloud companies can rest assured the u.s. is the one holding up relatively well >> i'll tell you, kelly. we have a dynamic really going into last fall where we had the same setup. it's the trade partners and certainly asia and most definitely china, which is 40% of the min index were taking it on the chin, people felt it was this whole story, we were talking about the rest of the world. at one point it would feed through. i think when you give ceos some cloudiness in terms of what they can do, in terms of their enterprise spends in capex i think it will roost here in at least some way where we were already in a bit of a temporary call this, we were seeing some green shoots around the rest of the world. people were encouraged by that markets right now to me if you look at the s&p.

it's about the multiple you want to pay in the environment f. fed is the most important dynamic to all of this. i actually think the fed is probably your friend and equities get a higher multiple in this environment. >> all right guys, we appreciate it tim seymour, quincy crosby and derrick scissors from battling in the trade to the class roomt each year china's economic high school students come to new york city to compete in the counsel for education, national economics challenge. our andrew ross sorkin is live at the competition this year where he is hosting four championship rounds, mr. trebek, i mean andrew. >> calm down hey there how are you? we are live now at the council of economic education's 2019 national economic challenge. there are 11,000 students that competed to be here today and we're about to kickoff the david ricardo division finals. high school students who have been now completed one semester of basic economics are about to be quizzed on their knowledge of these principles and apply it to

real world events so now we will officially after all of that, guys, we are going to officially get started. so is everybody ready? >> yes, we are >> you have your buzzers we're ready to go. let's start here, what economist is credited with developing the concept of conspicuous consumption. >> thornson -- >> please wait to be recognized by the judges before you answer, but that is correct. [ applause ] >> okay. will that do it? >> what does the price of roses, sorry, why does the price of roses increase before valentine's day but the cost of beer does not increase before the super bowl even though - >> olympia, i'm sorry, john, have you five seconds to answer, you may not confer >> because demand for roses before valentine's day increases

but the supply is what increases before the super bowl. >> that is correct [ applause ] >> we'll get a lot more from the national economics challenge coming up in just a couple minute's time. that was a quick answer on that and the roses, too anyway, we will be following this along this hour and next as i mentioned. here's what else is coming up today on "the exchange." >> announcer: coming up, tesla's stock drops below $200 and issed in red for the ninth day in the last ten what's got investors so worried? and can musk -- lyft caught in the crosshairs, investors are suing the company over its ipo why? and do they have a case? and one nation drowning in debt. this is "the exchange" on c n b

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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 tesla slipped below $200 for the first time since december 2016 today. it fell 49% from its 52-week high from last august. bush is pushing the price target for a second time in a month and called into question nearly everything about tesla its growth, consumer demands for its vehicles and road to

profitability. joining me are the editor of the revs institute and our own phil lebeau it's not just today tesla has been sliding this thing is down 40% this year and almost half since last august why are investors no longer giving the stock the benefit of the dow? >> i this i the simple questions are mounting a lot faster than the answers. if you look at today's news reports, you know, cash burn is a very big issue for this company. tesla just raised more than $2 billion in new capital, yet notice elon music is saying at the currents run rate, that can be consumed in ten months. not a lot of time so that's a big issue. then there is model 3 demand by the way, the continuing issue of manufacturing issues with the model 3, which really haven't been resolved, it's hard to say, how much is supply, how much is demand the engine firing reports out of china, san francisco, et cetera.

then you know elon musk stretched a little too thin with all its projects the answer we seem to be getting is fought really a coherent plan as much as trust me i'm elon. >> right >> i think the market is getting suspicious >> phil, tesla has been through plenty of tough times before what does he have to do this time around. the difference now everyone realizes is there is lots of competition out there. there are great electric vehicles that are sexy, cool, made by other manufacturers that people want to get their hands on, is the plume off the rose when it comes to tesla's uniqueness and cool factor >> well, the uniqueness factor, certainly, the plume is off the rose tesla has great brand equity out there. there are people that say if i'm interested in an electric vehicle, i will look at tesla as anyone else. >> that is certainly a favorable position for tesla the problem is, as paul was getting to, we are looking for

more answers here, we're not getting them for elon music, in the past he was pulling certain levers, he had pulls he could manage whether it was look we have the electric pickup coming, a model y, electric semis coming, differ things he would roll out from time to time >> that would make people say aha, that's the next leg of growth that's what's coming what is he going to do at this time his moves are somewhat limited he can do certain things that would reassure the market. i think people are looking around saying, what itself the next step going to be? >> paul, you mentioned the capital urn, it will get more and more expensive, who would want convertible debt here and at what price? what yields is he going to market at if they need more money. what kind of prices if they have to do another equity rate? >> the simple answer is hi basically any exam they will want to raise is going to be

very expensive for tesla that's the way it is given the current situation in which the company finds itself again, with more questions than answers just now. >> the demand issues, phil, are kind of the new wrinkle for tesla in 2019. it would be one issue if they can't ramp it up quick enough. that's a high class problem they could have is there anyway other than the blog and bean counters out there that try to guesstimate what's going on any more official way of figuring out how strong demands is >> not official. there are people that look at the vehicle identification numbers. they sit there and extrapolate this is where we see production. this is where we think demand is keep in mind tesla has never gone through a recession if you will, an automotive recession where the market pulls back. that's not to say the sales will drop they may not grow as quickly as the company has frosted. elon musk has already pretty much for the most part burned

all the equity that he can get with people in terms of buying into their estimates he has met lofty people in the past they haven't met them. now when they come up with certain amounts of goals, there is a okay, let's dime it pack what do you think we think is coming from tesla, let's say three months, six months from now. >> the more people are on the road, the more they are able to get that water cooler talk, what was it like getting a tesla? what was it like getting your service? can you drive it in the snow is that contributing to some wariness that people might feel about making this purchase >> you know, i'm not really sure that's the case. the car is from my experience are absolutely terrific. it's just problems around them it's more the corporate issues, the production issues, the financing, et cetera, et cetera. i don't know much about the fire situation per se obviously, that's very disturbing but every time i have been in one of those cars, it is fun

>> that's still important. guys, thank you. appreciate it. we'll leave it there for now coming up, we're checking back in with those students, the national economic challenge. round 2 of questions quick i kicks off live next. plus, we'll talk about impossible burgers new partnership with little ceasars could be too tall of an order. that's ahead

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welcome back to "the exchange." here are some of the movers, dish is down on pace in over a year this is after news it will acquire echo star satellite business they're shares are down 9% key technology is on pace for its first day on record after being downgradeed from neutral at rw bears. the u.s. trade companies are weighing own sentiment key sight is down nearly 10% shares of michael's companies are also developing. morgan stanley downgrading from equal weight to low weight it will possibly change in the near term, michaels is down nearly 5% today. sue herrera is here with the cnbc news update >> voting in india's election

begins with the count on thursday to determine if prime minister modi and his partners remain in power. they voted a marathon six-week election in the world's largest democracy. french president macron meeting with president donald tusk to discuss the upcoming european elections it takes place over a 28-member block to fill the apartment. the world health organization spent nearly 192 million dollars on travel expenses last year with staffers breaking the agency's own rules on travel. that's according to internal documents obtained by the associated press that was 4% less than the year before when officials vowed to reign in travel abuses but that could still deter donors from giving to the agency on a lighter note, take a look at that that is the paper airplane finals if austria this weekend. they drew 156 competitors from

58 companies, american jake hardy wowed the crowd with the largest throw measuring more than 185 feet. it was more than 14 feet further than the second place finisher >> and they say we've lost our technological aid. >> that's right. we have not. probably was a physics major, anyway back to you. >> 185 feet. >> sue, thanks, very much a similar theme. in 2018 the challenge quiz bowl is heating up, students are being tested on macro and microeconomics they are halfway through the first round, let's go out to andrew ross sorkin >> hey there, we are in the midst of a finals, the division where students have been completing one semester of economics so far, we've had a number of interesting questions asked. we have a score keeper over here, where are we at? >> we are just over halfway through and mount hebron has a

7-5 lead. >> a 7-5 lead. and the most interesting part by the way was the wifi questions about hotels and i thought the discrimination answer was a good one. okay we will go to question number 17, here it is, guys if a country experiences political turmoil, what is likely to happen -- >> andrew you have 5 seconds you may not confer >> depreciate. >> that is incorrect i'm going to complete the question if a country experiences political turmoil, what is the likely to happen to the inflow of capital into that countries into the domestic real interest rate >> >> increases and decreases >> can you be specific, which is

which? >> the capital inflow increases and the real interest rate decreases. >> that is incorrect >> what is the answer? >> the answer is, capital inflows will decrease and real interest rates will increase >> okay. question 18. >> okay. if the real exchange rate increases, what is likely to be the outcome with respect to exports. >> mount hebron, you have 15 seconds, you may con fer >> net exports decrease. >> that is correct >> the score is now 8-5. mount hebron >> please read question 19 >> what theory predicts that the country that experiences inflation will also experience a depreciation of its currency

>> mounted hebron, have you 15 seconds, you may con fer >> mon ters theory >> that is incorrect please reread the question for olympia. >> okay. what theory predicts that a country that experiences inflation will also experience a depreciation of its currency >> classical theory of inflation. >> that is incorrect the correct answer is purchasing power of parody. >> oh, i thoughts that was a tough one. i mean, just say it's how it works. we're all keeping track of our

scores back here we'll be checking back in, in the next hour, see how that competition is going you will see those u.s. students pair off against china here's what's coming up next on "the exchange. >> good news for telecom today, millennial's are having a crisis what could be the greatest graduation gift of all time? impossible burgers unlikely partnership that's all ahead in "rapid fire." many people living with diabetes

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welcome back let's catch you up on a couple stories that should be on your radar today in "rapid fire" are bill grit it's, dom chu and all male "game of tloerps" illusion going on >> kelly is out numbered >> you will always business our queen, for now and forever >> no spoilers >> if you haven't watched by now it's too bad, too late, come on. >> you are so obsessed with "game of thrones," bill. >> yes and no my son kept me in, i was so confused by the end you had to be. >> i remember stories of people

taking off work today. i watched it, i'm here at work. >> you were here at 4:00 a.m. >> i was here early, not that early. >> i have watched nothing. >> you seem happily. >> let's get to the real news, shares of t-mobile are higher that they will give them the go ahead for that $26 become merger they think it will speed out this is the most important part. the rollout of 5g technology in the u.s. they need approval from justice among other places, sources are telling david faber the doj could have anti-concerns they have to digest boost. thank you. it's interesting at&t and verizon shares rally on this as well, primarily, they would suffer from a beefed up third competitor >> so we impose all kind of restrictions on hauwei on friday and then on monday we say that we're going to improve. >> i see where you are going with >> the t-mobile-sprint coincidence or no?

>> it seems odd right now only because for such a long time the line among u.s. regulators, especially on the consumer competitive front was that you wanted to have four major car years be able to service the public now with these agreed upon possible divestitures agreements to roll out 5g, more access to rural communities. creating jobs as opposed to cutting jobs and companies merge, this is better for consumers. if it goes down that way, you are wondering as a consumer whether my bill does go higher >> of course if you look ahead into the 5g deployment, it was sprint and t-mobile has the better customer set. you have to marry the two, really have a strong rival to verizon and at&t or to have somebody who can really build out 5g and that left alone, they'd be somewhat stranded on that >> good for them for making the successful argument.

this is american industrial policy there was a great line rather than making china more like the west in these talks. we have become more like china. >> i don't want to hear that. >> we are using companies rather than to benefit the american people and the public. we see it as a growing point of strength we will have a politically backed or government backed policy that shapes the way companies do business. >> that may not be healthy >> cheryl sandberg says they may bake up tech giants but carolina is not breaking up their giant. investors are suing the company lyft saying it made false statements to lift the stock price. stocks is down 26% since its public debut i wonder if they read the s1 which usually has -- >> little to no profitability. >> i wonder if there would have been these lawsuits if the stock price had gone up? >> probably not.

>> would they have cared >> too much profit >> no, not at all. all it takes is for people to lose money in an ipo the problem is it was one of the first ones out of the gate that was so hyped and so over subscribed and everybody who got it at the high ticks of that first day are now under water let alone a couple days afterwards, so it's a little intriguing right now the lawsuits aren't maybe a big surprise in this kind of a situation. >> they're also really lame. when you say we lost $3 billion in mark cap because of a bicycle recall. >> right >> wait. explain that one to me. >> part one of the features of the suit is that there was some kind of recall, bicycles, skool scooters and that that, therefore, was not flagged in the s1. that's not going to be a big part of why the businesses -- >> leslie i shot reported one of the shareholders worth of stock. it go es to show, these effectively ambulance chasers in a way, it has that feel to it.

>> or what was the analogy >> bicycle chasers, scooter chasers. facing something >> lyft is in the green a little bit now today. now this, it's the billionaire investor with the big wallet and bigger heart giving students greatest graduation gift they can ask for. take a listen this is my class, 20 2019 and my family is making a grant to eliminate their student lo s loans. >> that was vista equity ceo robert smith pledging to erase the student loan death for 400 graduates of morehouse colleges 2019 class it's estimated to be worth tense of millions of dollars this is exactly where i was

going with this. the publicity he's gotten for a 400 million gift something like that is multiples over much, mump larger awards i imagine no one has done this yet. >> it's incredible he had given 50 million to kornellprior in this and barel got this my guess is between 10 and 20 million. >> that low? >> 400 graduates >> if you assume all of them have $50,000 in debt, that's 20 million dollars. many students quoted have 10, 20,000 one guy has 200. typically morehouse graduate versus total combined student loan of 10 million a huge amount of money but what's cre yaft is it was so spur of the moment, it was such a surprise, that oprah moment. you get a loan you get a loan at a time when everyone is talking about what to do about the students loan crisis it solved the problem for these students in one da i. >> it wound up being from "gam of thrones" last night is you

can't kill a good story. >> you can kill a good character. >> when you have 400 million people affected in a massive way, it's a lot different than having a 50 million glant to have a school named after you after a prestigious ivy league university i only say that because it'sy alma mater that's fine w. 400 people like that you are having a personal impact for every one of them everyone has a story to tell >> i think the logistics might work out are these considered gifts tax wise >> it's a good point >> part of the problem is how do you devise how much each of them owes, who do you pay back? >> it's going to be very complicated. all of them should do a documentary and how lives could change because of this one da i. >> i bet we're going to see a lot more of this, especially given it's actually relatively lo e. >> i hope so they challenged other alumni to do it. >> it doesn't solve the other problem, though. >> if you stay tuned we'll have more on that.

this kind of release a new piece of the "wall street journal" that highlights how millennial's are headed towards middle age, in worse shape than any generation ahead of them that's roughly the millennial's have less wealth, own less property, have lower marriage rates and are having fewer children since the great depression. >> yes okay i'll give them that. you know. >> that's not a lot. >> we movers i entered the working market in the late '70s and we were in a stagnation inflationary period the job market was lousy, the outlook for our economic well being was not all that great things change and the same thing maybe, but, yes, thank goodness for mom and dad. i don't say that in a bad way. but you know, there are an awful lot of millennial's out there who are still tied to mom anded that in some regard. >> and will inherit large amounts of money >> that's the issue, though, some people feel as though

america's evolved to a point where children need to rely on their parents more because of these situation, including no one will be able to afford a house or pay for college without their parents so it doesn't change the underlying issue like you said maybe there is something that can be fixed so that children of younger generations don't need mom and dad to live in their house. >> pay college >> pay off student debt. >> finally, little caesar's pizza chain announcing a partnership with yes impossible foods. they will offer a plant based software pizza they haven't tested this, dede will test this in san francisco. >> reporter: hi there, this is the first time impossible foods launched an impossible burger. little caesars unveiling the impossible supreme pizza with plant-based markets at three test launches. if it's successful, it could be rolled out to stores as early as the end of this year

keep in mind, impossible foods says it's having trouble of meeting the existing demand of its impossible burger. it says it's increasing the production capacity and its sausage is made at a different location. >> i this i that will be the main issue. >> i would try it. >> do we want to know what's in it what's in the sausage? >> do you know >> the fundamental thing that itself in all of their products is what they call this heem molecule which is what satisfies our deep cravings for meat that's what they say differentiates them from other companies like, for instance, beyond meat. i can't tell you as far as the nutritional information is that if you compare a quarter pound of this sausage versus traditional beef sausage, traditional beef sausage, they say, has about 12 grams of satch waited fat this one has 1.5 grams. >> i'm trying to be more of a

flexitarian and eat more vegetables, i would say this i tried a vegan sloppy joe's this past week. it wasn't all that satisfying. >> and a normal is >> i love sloppy joe's. >> you should have come to our house, we had burgers, marinated chicken. >> is that an invitation >> yes >> i think on the nightly business record, i wonder if this is a fad or they're on to something? i think they're on to something. something bigger is going on here >> we'll see with the ipo. thank you all, gentleman. >> thank you, queen kelly. >> thank you, domenic chu, robert frank oil prices are climbing as tensions between the u.s. and iran escalate with trump tweeting a harsh warning to that country. s will have the latest detail and what it means to the energy market straight ahead. 10-k? what's an etf? an ipo? 401(k)? where do i start? empower yourself with the free tools and resources on investor.gov. before you invest, investor.gov.

your daily dashboard from fidelity. a visual snapshot of your investments. key portfolio events. all in one place. because when it's decision time... you need decision tech. only from fidelity. welcome back oil prices are climbing higher as opec indicated it's likely to

min tain production cuts this as the u.s. tensions with iran have escalated. president trump tweeted if iran wants to fight, that will be the official end of iran, never threaten the united states again. >> welcome. >> thank you >> you know it's ironic. you don't often get a threat that strongly worded from an american and in a way have the market reaction be fairly muted. >> absolutely. >> what do you think the going on >> i think it's pretty clear the markets have not had prices sprinkled in it's how difficult the situation is becoming. when i speak to senior arab officials, they say what we get from the trump administration is general schizophrenia. we hear another from the pentagon and the state department their sources deep feel they necessarily have the backing from the administration to go out there and stay what they mean for example what we have going on right now, tomorrow, secretary of state mike pompeo as well as the acting defense chief as well as the head of the

joint chiefs of staff and basically talking to iran and the senate one of the main things, of course, will be whether or not they have complete evidence that it was iran that sabotaged these shifts and the general feeling in washington, frankly and abroad is that, of course, it was iran and what's really interesting about this is that so far the uae and saudi arabia haven't come forward and said this, what they are trying to do is to get a consensus, not just from washington. also from other international, european leaders they want a consensus. they don't want to look like they are warmongering, at the same time, this is intelligence. >> the oil price amid all this then what? >> frankingly shocking, nothing has been moving. frankly what we seen and jetta was really there was a slight uptick it seems to be calming the markets. what you had was a scerebral saudi arabia, you can self

report to market so what does that mean going into vienna? a good question. >> how much time do we have? >> a good question there are rumors they will be going to judgment. the treasury secretary steve mnuchin will be holding a summit in bahrain, which could be the summit he is flying out. >> there is a few things going on >> just a few things >> hadley, thanks, appreciate the intel. see you later this week for sure taking advantage of your new york trip. record levels worrying central bankers. we will look at america's growg btriinde csis on the consumer side and the potential economic fallout oh hey, servicenow frees us up to do the work we want to do. so we're digging out from all the work we don't want to do. ugh, getting rid of so much paperwork. oh, doug. i didn't know you still worked here. i called for help but no one came. [ laughing ] classic doug.

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welcome back to "the

exchange." credit card delinquency rates on the rise and one particular group is hardest ages 18 to 29. 8% are past due by 8 days or more the same facing mounting student debt for more, bring in dan, business editor at axios and analyst of credit cards.com welcome to both of you and dan, this issue is getting more attention but do we know how severe the financial situation is for this cohort and how unusual it is to see these delinquencies rise >> it's unusual because in part, when you think of this particular cohort, the group of people who didn't take on debt kind of raised in the financial crisis, so they didn't take out a lot of the debt. we don't own generation, but what we've seen, the economy is good for the past decade and taken on more and more debt. so for this group, it's really surprising to see the delinquencies rise, in part, they didn't use to take on so much debt in the first place. >> what does it tell us about

overall creditusage among this age group? >> credit card usage is up and you want to be in the 40% of card holders paying your bills in full every month. i think this calls to mind this sort of all news is local thing because a lot of households are doing great. there's already a lot of households that are debt-free. the fed said the overall debt to income ratio is at the lowest point since 1980 a lot of people doing well, but there are more people falling behind on their bill >> what do we know about those people >> interest rates going up, i think that's what's driving a lot of this. the average credit card rate now is 18% and that's, people with good credit. if you have lesser credit, you're paying 20% to 25% and the fed series of rate hikes it's really important to make your personal credit card rate zero with a balance transfer or paying in full. >> amen to that. dan, is this the same, so especially this cohort that's under stress and falling behind on balances, is this the same to

deal with a lot of student debt because we saw obviously, this splashy move by robert smith to pay off the debt of morehouse grads is solving that issue something that solves the delinquency issue or no? are those different groups of the population >> it's largely the same group it solves part of it, i guess. so i spoke last night with david thomas, the president of morehouse and asked him, look, robert smith has offered to get rid of the college debt but what if they have other financial needs, more pressing with that money and his response was in part that getting rid of the student debt in their case allows them to do is make different choices. it just gives them a lot more flexibility than they would otherwise have are you going to start a business if you've got a ton of student debt or lower paying job? you won't, so what smith did is highlight a pretty big problem. >> i've always talked about how i got a great start because i was able to take on an internship when i graduated. i was debt-free.

otherwise, maybe a more secure but less attractive job. so do you know much about the overlap between the falling behind on your credit cards and having high student loan debt? should we assume that is a pretty solid relationship or no? >> i would separate them just because i think student loan debt is a good debt, in the sense that you're building skils, you're hopefully building wealth until the long run and the interest rates a lot lower credit card debt is really hard to get out of because with that average rate of about 18%, we found more than half of people who have credit card debt have been in debt for more than a year and 37% have been in debt for at least two years and these are people who are just trying to make ends meet most people didn't get into credit card debt because they were irresponsible for most people, it was day-to-day expenses or some sort of emergency. >> medical >> home, car, yeah, all of those. >> they get in and then can't get out. it's basically the same for this population as it has been for

every population dealing with this thank you, appreciate your insights and that does it for "the exchange" today. i'll join tyler and melissa for "power lunch" which begins right now. >> thank you, kelly. see you in just a moment i'm melissa lee along with tyler mathisen new at 2:00, stalemate over trade talks and u.s. tech starting start ing to comply with huawei. chips getting closer to bear market territory the sector caught up in the trade war but with the strong run so far this year, is this a group worth sticking with? and tesla tanking. shares tumbling on a bull and that analyst calling tesla's situation a code red when investors need to know right now. "power lunch" starts right now >> hi, everybody welcome to "power lunch. welcome to a new week. i'm tyler mathisen glad you could join us here at 2:00 stocks under pressure right now. tensions with iran