tv The Exchange CNBC May 28, 2019 1:00pm-2:01pm EDT
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is -- >> looks like the setup in disney recently. and disney ended up exploding. something very similar shaping up here. >> all right joey >> shopify awesome looking chart there going above 300 soon >> have a great rest of the day. "the exchange" with kelly evans starts right now >> thank you, scott. hi, everybody. here's what's ahead. yields are at ten-month lows and the dow is on a long weekly losing streak. this after president trump says we're not ready to make a deal with china we will break down what investors should do next a pricing menu at the hospital the president is pushing for more transparency across all of health care. not just drug prices, but some say that could actually backfire we'll explain why. and beyond meat is trading well beyond wall street's comfort zone facebook is losing precious minutes, and please, turn down the ac that's ahead in rapid fire dom chu has the numbers. >> it's not chilly here.
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not air conditioning wise but it's getting chillier. we started off up maybe 120 points early on this morning you can see here just up about 23 it's not bad but not great things are not cold but they're cooling off. the s&p 500 up 0.1%. the nasdaq up about almost 0.5%. one place we're watching, kelly mentioned the ten-year yields before we could see some lows here. we're at the lowest levels in 19 months for the ten-year treasury note yield 226 and change at one point. 227 right now. as you can see, you have to go all the way back to september of 2017 to find a lower yield on the ten-year that's taking mortgage rates down lower as well 4.05% for a 30-year fixed rate and the stock of the day, the only record low in the s&p 500 today is kraft heinz from its peak post merger, we're now down about 70% in this stock. granted, the stock has only been alive as a combined company
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since 2015 still a consumer staple stock down 5.5% today. that's dragging the sector down. watch kraft heinz. >> that's a brutal one dodgers thanks welcome to "the exchange." i'm kelly evans. home prices are pushing higher but the pace of appreciation has cooled the case-shiller index barely rose in march and showed the slowest annual growth in years consumer confidence remains strong confidence clocked in at 134 in may. that's the highest reading since november last year markets remain more abundant this month they are down more than 14% so far in may let's drill down more on these markets with seema mody at the new york stock exchange. seema? >> kelly, we're off the highs. and tech, interestingly enough, holding up relatively well, despite growing concerns about the sector's exposure to china analysts at citi slashing their apple iphones sales in half for fiscal 2020 to 16.8 million
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units over worries that desire for apple iphones could be hurt pie china's nationalist tone apple on track for its worst month this year down nearly 11%. and there are a couple of consumer driven companies that view china as a growth market, including canada goose getting set to report tomorrow investors want to know if the trade dispute and concerns of a boycott have changed the company's aggressive push into china which kicked off last summer back to you. >> goose will definitely be one to watch seema, thanks. the headlines aren't just in the stock market lately. check out bond yields. the ten-year yield is at 19-month lows. and maybe more so by the time we add things up. rick santelli is at the cme. what's going on here >> i'll tell you what isn't going on you brought up in the intro, really strong consumer confidence numbers and we've had bouts of good data along the way. but when you look up at the intraday and i bring out these
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data points you get no buoyancy in rates at all. yes, a two-year note hovering at lows we haven't closed at since valentine's day 2018 september 2017 for ten-year. but maybe the epicenter of where we should concentrate is europe and japan. but europe specifically. mario draghi's term ends in october. a boat load of big posts that have no names attached to them so this is going to go right up to the wire. in july 2016, last time bunds were here and that's the same month they had their all-time low negative three basis points lower than today's close at minus 19 basis points >> rickster, we're just three basis points off the all-time lows we've seen for germany's ten-year debt. is that the whole reason you think u.s. yields are at these levels >> i don't be it's the whole reason but it's a big part of it but many traders say, does it even matter? the way the logic goes is, bund yields, japanese bond yields, a
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lot of yields outside of the u.s. are negative or very low. much lower than the u.s. because global growth and uncertainty over central bank policy that hasn't snug like ours. at the end of the day, all of their slowing shows up the s&p 500, a lot of multinationals there it's a chase your tail type argument but we still have solid data coming out. so many are too nervous to get too short or too long on treasuries but i do say today we had a terrific two-year note auction to kick off $113 billion in supply >> we're showing the one that's bucking the trend. italy's trend is heading lower rick, thanks for that. good to see you. maybe we'll see you in new york later this week, rick. >> absolutely. i'll be there. >> maybe we'll get you on "rapid fire." four trading days left in may, thankfully. the dow has fallen for five straight weeks now that's its longest losing streak since 2011 the s&p, the nasdaq, russell 2000 all coming off their third
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straight week of losses. we're on pace to close lower for may for the first time since 2012 let's bring in andreas garcia my main question is, are yields so low because of concerns outside of our borders, and, if so, are they a steal right now if you are buying a house, if you are pricing for a car loan or something like that, is this a gift >> i think there's two drivers one is the international pressures when it comes to global growth not being what it was before and the other one is just trade tensions we've touched on this before a couple weeks back, yields started to fall. yet the equity market continued to rally one has to give. it seems like bonds are telling the story a little stronger. now equities are starting to follow rather than the other way around >> your point of view as far as the u.s. is concerned is growth is slowing down? >> not only that growth is slowing down one is we're in the late stage
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of a cycle at some point domestically, things are going to slow down. we haven't seen -- it's still a mixed signal when it comes to the data the other aspect was the trade situation hasn't improved. it's deteriorated. and it seemed like the equity markets were shrugging it off. bond markets are saying, risk has gone up a little bit >> you're saying and, jim, i'll ask you. it's not so much we're pricing in in the u.s. the slowdown that's part of it. it's more that you have to price in some outcome from tariffs more so than you might have a couple of weeks ago. is that right? how would you describe the setup for investors here >> well, i think kelly that the slowdown globally in the united states this year has brought this about and that was because of policy tightening not only in the united states but around the globe. eventually led to a slowdown i think where we're at now, it's more about fear than fundamentals at this point we've got two things and i might even put the bond market as the primary thing that
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investors are worried about at this point above the trade war >> wait. just to be clear you're saying stock market investors are worried about the bond market? >> yes yes. i think that's kind of where we've gotten to now. we've inverted this yield curve almost by a full 25 basis points from the target 250 area on the funds rate and it just keeps falling even in the face of economic news which hasn't been all that bad it's been mixed, at worst. and the stock market is wondering, what does the bond market know. if you put that together with an inverted curve, is that some -- i'm not -- i think both of our fears, if you will, what's interesting about this, it's not like the normal crisis of a balance sheet blowout that it's going to take a long time to fix. these could change on a dime you could have a 2:00 a.m. tweet and a fed cut and it would all change the outlook in a matter of minutes >> not just that but what were
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the lows for the ten-year yield in the u.s 2015 or 2016, somewhere around then the expansion didn't end global growth didn't end the bond market isn't always right. it can certainly move around but also go to extremes like the stock market we had a lot of concerns about china's growth a couple of years ago. a lot of concerns for ten-years people have said this expansion is going to end. especially at these levels if investors are worried about that, doesn't mean they hold more information >> absolutely. and i don't think either market can predict the future they're trying to get a sense of where things are going my concern was essentially that the equity market was ignoring some of the risk moving upwards while the bond market. and it may be the bond market is overshooting on the down side. having said that, i do think that if you look for instance at pmis, the development -- if you trace it with the ten-year, essentially the ten-year is following where those pmis are going.
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>> you're right. >> and one other thing that you have to take into consideration is germany has shown some really pretty bad numbers recently. germany is hit harder by the trade tensions between china and the u.s. than the -- >> china is their biggest customer >> absolutely. that affects their yields and our yields so there is some international pressure that's affecting the bond market more than the equity market >> jim, what would you be a buyer of here? >> i would be -- i wouldn't be buying defensives. i give myself longer than three or four or five months to win on this i'd say what do i want to own for the next year. it's the cyclicals and data. i'd buy the popular tech and coms >> i like that the first person who is not telling us -- everyone else comes on and says they're getting defensive. you have -- utilities are trading at 19 times. >> i would give those to whoever wants them if they can't sleep at night and i would look at picking away at what's good to your point, the bond yields
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fell in 2010, 2012, '14 and '15 and in '17 for several months while stocks were going up >> all right >> so it's not much different today. i think where all that is stimulus for a better stock market down the road >> that's the glass half empty view guys, thank you both great to get your perspectives jim paulson and andres garcia. here's what's still ahead on "the exchange" >> coming up, why e-commerce is actually a good thing for the real estate market and how you can play it. plus, the president is pushing for transparency when it comes to medical procedures. innd it work or could it have unteed consequences? unteed consequences? and why
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around investor objectives. so you can advise with confidence. before investing, consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectusciti containing this information. read it carefully. what do you look for i want free access to research. yep, td ameritrade's got that. free access to every platform. yeah, that too. i don't want any trade minimums. yeah, i totally agree, they don't have any of those. from the apple card. yeah, they say if you blanch it it's better, but that seems like a lot of work. no hidden fees. no platform fees. no trade minimums. and yes, it's all at one low price. this is "the exchange.
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uh, didn't that happen, like, 20 years ago? oh, look, karolyn, we've got a mathematician on our hands! check it out! now you can schedule a callback or reschedule an appointment, even on nights and weekends. today's xfinity service. simple. easy. awesome. i'd rather not. welcome back with interest rates at 19-month lows, this would seem to be the perfect time to invest in real estate if so, which areas benefit the most joining me is raj, the ceo of black creek group, a real estate investment management and development firm >> thanks for having me. >> real estate is maybe the top performer this year. it's been a tough slog how do you expect people to
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react and are valuations getting out of whack >> at black creek we manage and develop real estate across 32 markets across the u.s we're in touch with the demand drivers. and interest rates is a key factor in demand commercial real estates and income orgeiented asset class probably as important as to why real estate will continue to perform. >> people saying i have stocks, bonds, i need real estate and that kind of thing >> i would parse it a bit further which is institutions. they've been consistently focused on the asset class 10, 12 points of their allocations have been in commercial real estate they're going up a couple hundred basis points individuals are well under allocated. they have less than a percent and they manage $10 trillion, $15 trillion >> individuals do? >> individuals do. so we think the demand drivers, low interest rates, growing allocation >> if i'm an individual and i say, okay, i'm not going to take advantage of low rates to buy my primary house but maybe commercial really estate, what
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areas? how do you do it >> financial advisers today have a lot more tools at their fingertips to give advice to individuals. we think about -- our job is to find properties and we have a fairly bottoms-up approach so that black creek we really think about it as buying in intersections. >> literally traffic intersections or intersections of -- >> so main on main as opposed to a market in the bay area, we've not even completed a warehouse. it's 30 miles outside of the center of the city allows single day delivery to the consumer, close to the port of oakland >> for companies such as amazon or -- >> we actually have tenantse that are circling around it. it will be leased six months before completion. >> so you're building on spec because you know there's so much demand in retail to have that one-day delivery, whether you're them or target or walmart or you name it. >> we do both development and acquisitions we think it gives us a better perspective on our tenants and
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what's important to them we've been one of the largest industrial developers. and so they are -- we're able to find properties that fit our clients' needs well. >> how tight for warehouse space. what's happening in that area with every announcement, you know it means millions more square footage i read for every billion dollars of online sales, 1.25 million square feet are needed to hold inventory. >> there's a multiplier. so the tube of toothpaste that ends up at your door usually stops in three or four different warehouses and that multiplier effect has been a key driver. e-commerce as you know is 10%, 12% of retail sales. i'm sure you agree five years from now it could double >> i'm curious what the effect of tariffs has been. we talked about how trucking has been hit hard because it's throwing off the typical flow of traffic. there's hoarding and then there's delays and there's all sorts of questions about pricing. is that hurting the space? how is that rippling through the sector >> on the contrary, with the
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tariffs on the horizon, we've seen through our logistics chain an up tick in activity and that gives us a sort of on the ground perspective separately, i would tell you that tariffs, tweets, those are public market effects. private real estate is pretty resilient and doesn't have the correlations and volatility of the stock market and the -- >> but you aren't seeing any just economic fall out one way or another yet >> we haven't yet. it's early but we haven't seen it >> because you're here and your former life was as an ipo guy at morgan stanley, can i ask what you think about the uber ipo and a lot of criticism about it. it's the new poster child. it's a failed ipo. is that fair or is there -- do you think the business model itself is quite simply the problem? did they stay private too long or was there something about the underwriting process that's problematic. >> certainly my former life. i've been at black creek for a few years now. i think you have to have a long-term perspective. if you think about facebook and
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how that traded in the immediate aftermath and then today, i'm optimistic that uber will settle out as a great fundamental trade. i'm not in that business but morgan stanley did a phenomenal job of finding a long-term -- a company to support them long term >> there are $120 billion and he's going to get all this money if they hit that valuation they're nowhere close. it could be years. >> sure. look, the ipo is about technicals and the fundamentals are way out. >> all right just trying to see if there's any -- it's great to see you thanks for coming on appreciate it. coming up -- beyond meat is moving into europe and wall street is eating up the news one analyst calling it a true disruptor with plenty of room to run. is he right? they're up 8% again today. we'll debate plus more than 1,000 wisconsin dairy farms have stopped milking cows in the last three years. 200 have disappeared just this year we're going to talk to a dairy rm w is still in operation
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welcome back to "the exchange." here are some of the movers this hour shares of fiat chrysler are sharply higher after announcing that it plans to merge with renault. the deal would create the world's third biggest car company. those shares are up 7.5% in first american financial is tumbling after it reportedly exposed date af more than 800 million customers. this is a title insurance company. a giant, really. it's retained outside forensic
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firm to assess what info may have been compromised. 4.5% drop there. shares of roku are lower today. this on concerns about their increase near-term risk on that run up in the stock this year. and their higher valuation of 5.5% reset for roku. now to sue hera aherera forb news update. >> representatives of the afghan government and the taliban attending a conference on russian/african relations in moscow peace talks are scheduled for tomorrow the supreme court will not take up a challenge to a pennsylvania school district's policy allowing transgender students to use bathrooms and locker rooms that correspond with their sexual identity they rejected an appeal from students who argued that allowing transgender students to use the same facilities violated their right to privacy a train derailed in wellington, ohio, this morning 22 loaded rail cars and two
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locomotives came off the tracks causing a fuel leak. luckily, though, there were no injuries and mackenzie bezos is pledging to give away half of her fortune to charity she joined the giving pledge that was created in 2010 by warren buffett, bill gates and his wife melinda her divorce from jeff bezos left her with a 4% stake in amazon. and that is currently worth more than $36 billion you are up to date that's the news update this hour kelly, back to you >> sue, thanks we'll have more on that in "power lunch." i'm joined by tyler mathisen >> how would you like to know how to raise successful people >> can find out in a couple hundred pages. >> we'll have the author esther on she's a schoolteacher out in palo alto. long career there. but she has three daughters who are highly skilled and competent. one is the ceo of youtube. another is a physician a third runs yet another tech
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company. and she's come down and boiled down a lot of the techniques she used that she said are applicable in a business context as well. >> i'm surprised how many companies are adopting these >> mcdonald's among them a whole host of them we'll enumerate them when esther joins us >> she calls herself woj there's the basketball woj and now the mom woj. >> efts ersther will be with us here's what's still ahead on "the exchange" -- >> coming up, why three minutes is crucial to facebook's future. wall street weighs in on beyond meat uber drivers are working as house flippers and is there an ac overload at work that's ahead in "rapid fire. the ai i need? it's gotta scale across my business. starting here, in procurement, helping us find the right suppliers. then here in logistic, to avoid disruptions! here in sales.
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let's catch you up on a few stories that should be on your radar today. it's time for rapid fire here with their takes are dominic chu, contessa brewer and robert frank first up, adults in the u.s. are spending less time on social media, especially facebook facebook saw a three-minute drop in average daily time spent on
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the platform last year so now emarketer is cutting estimates for time spent through 2021 you can see the declines there snapchat also lagging. they have basically plateaued. on the other hand, instagram is climbing it's adding a minute they think every year through 2021. that's a win for facebook in another sense. >> facebook has been on this mission to prioritize meaningful content. so what i'm wondering is, does that mean they're showing me cnbc and more of someone's new flowers coming up in their garden >> it means they're showing you less of the fun -- not fun, the fake news, all that bad/good/addictive stuff >> the stuff we like to watch. >> they're downplaying that. it's a big problem for ad delivery as well >> what's interesting, though, instagram is on the opposite trajectory why is that? >> but it's not that much of a fall it's staggering they go from 38 minutes to 37 minutes by 2021. plus you consider the fact that,
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yes, they do own instagram as well and that's going up all of this just shows how teflon facebook has been when it comes to engagement and the number of people on that platform doesn't change. >> there's a connotation or an aura or a feel to every one of these platforms. for instance, instagram and pinterest tend to be more positively oriented. inspirational. these are pretty pictures. instagram falls into that as well twitter becomes a free-for-all cage match where you're engaging people in anonymous conversations. and facebook has become this gl platform that's been associated with news dissemination that may not be of the -- >> facebook has awn appreciated role as just the town square i can't avoid it now people say -- i was trying to look for garage sales. oh, they're all listed on facebook now baby gear. it shows up all the time from these free marketplace swaps everyone has going on. i heard about from parade thing
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and i had to contact another person on facebook i'm trying to stay off it's almost unavoidable and that goes to your point, robert yes, we're talking about a decline of a minute or two but it's interwoven into community life these days. >> there's no alternative. there really is isn't an alternative. you look at the advertising. the amount of money they're generating the number of sites you go on and they say sign on through facebook there's no other way to get on >> next up, wall street is biting into beyond meat today with a slew of analysts initiating jpmorgan stands out with a $97 and goldman has a $67 price target it's 20%, 25% below these levels check out these moves. beyond meat, 86. fourth best day since going public and once again, no real news flow. some news flow
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some european partnerships >> what they are looking to do is shore up their supply chain so they can produce enough beyond meat to meet all the demand out there which often is a struggle for a small and medium sized companies what's interesting about this call is we've talked so much about the idea that there could be a massive total addressable market for some of these meat alternative products jpmorgan puts a number on it $100 billion in 15 years they think beyond meat gets 5% of that market overall but in the end, they also made one big prediction and it may not be all that big for a beyond meat fan one big, quick service restaurant chain will be a client by the end of the year. >> for >> for beyond meat >> already burger king has a partnership with impossible burger new numbers show in the st. louis locations where they rolled that out, 16%, i think, increase was it foot traffic or spend >> 18% traffic into those stores so they go in. they say it's remarkable -- >> just for the month.
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and anywhere else is fell by 1%. that's a huge swing. >> and given the fact that mcdonald's has not dipped their toe into the meatless waters yet -- that's just gross >> meatless waters >> beet juice is what they call that >> it's beet juice >> that's the blood. >> the fake blood. not that you'd put a toe in that next up, a new casualty in the u.s./china trade war and it's tourism to the u.s. newly released data collected from customs shows travel from china here fell nearly 6%. what's mosterable about this, this was the first decline in years. we know how many businesses rely on this spending >> looked like it was softening before the tariffs went into effect then there was this increase in tensions with china. and we know the chinese tourists in particular are susceptible to cultural pressure from their government when china issues a travel warpg and says, hey, be careful of the shootings. if you get sick, the health care costs are going to be --
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>> odd travel warning. >> but look, in las vegas, the numbers for early spring were definitely suppressed. it brought down all of the strip gaming revenue why is that? because of a decrease in visitor traffic? the las vegas convention and visitors authority doesn't track by country of origin so we don't really know. but it's the chinese gamblers who were playing bacharach >> what happened is the chinese economy slowed the less wealthy in china are traveling closer to home that's macau, taiwan, hong kong. i'd guess when it comes to gaming, macau is up. >> the mass gamblers are up, but the vip is down. they are going to other places >> it's a great point. a lot of companies will be taking down their projections. and the people who are in charge of projecting what these companies will do will take down their projections. as evidenced by citigroup analysts who cut their stock price on apple today citing they think a possible backlash in china against apple products due
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to the fact that the u.s./china trade relations keep going on the way they do. >> and some cultural pressure there. >> the whole idea is if there is a sentiment souring in china against a certain u.s. product or demand, it will have a material impact. >> we've played that trade war song that went viral last week we should have that at the ready. that tells you about sentiment >> this is one of my favorite stories. it's a side gig for the side gig. more uber and lyft drivers are doubling as scouts for house flippers and keeping an eye out for properties that a real estate firm can buy and quickly sell for a profit. for example, an atlanta firm pays drivers up to $1500 per referral for a purchase and sometimes pays for leads >> my wife and i were in uber last week and the guy started selling us perfume >> no. >> yes there's a lot of complaints where -- >> his own or -- >> for a company he was repping a company there are more and more of these companies doing deals with uber drivers saying you have a captive audience sell them something. >> are there regulations against
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taxi drivers doing that? >> i don't know, but there's growing complaints now that multilevel marketing like nuskin, some of the amway stuff, they are recruiting uber drivers to recruit their passengers. people say, i got an uber and all of a sudden, a half-hour sales pitch. >> i got it. it wasn't perfume but i sat in an uber or lyft where they were selling me carphone sassries cords like -- >> the uber drivers are the ones subsidizing our cheap rides so they have to make it up. they're paying uber a big fee in order to be in those cars. make it up >> it's the gig economy on steroids >> the selling stuff seems very annoying this one seems brilliant i'm just not sure how big that market is. >> if you were trying to go in and identify this one home is going to be up for foreclosure soon or it's going to be up for auction soon, those are the ones you want to buy and flip because the margins are getting -- they're shrinking. >> embarrassing if they come to
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knock on your door and say your place looks so bad is it -- >> they're not knocking on any doors. they're just eyeballing it finally today, a new weapon in the cold war taking place in offices around the country a new survey shows women are more productive when it's warmer and that could help in the argument for raising the thermostat in the office so we don't have to go around and do what contessa has found all the women at cnbc are doing -- >> you included, by the way. >> this is the jacket i wear at my desk. and i think contessa has on her -- >> i am just trying to be more productive if it looks like for every degree it goes up that women's answers, their accuracy -- >> can you see me? this is my hurricane and blizzard parka, by the way but if your accuracy on tests goes up almost 2% per degree, and that's in celsius, you can get up to 15% more accuracy by being warm so my boss is going to love
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this he might laugh when he sees me the first time but who doesn't want to -- >> but guys get hot and then our productivity goes down so there's got to be a middle -- >> but casinos, you know this. casinos keep things relatively cool indoors, right? and also, movie theeaters. lower temperatures force you are or supposedly force you to focus or pay attention a little more think about long road trips if you've ever taken one. crank the ac or open the windows. >> i think i put on 20 pounds as an intern. i used to grab foil-wrapped bagels so i could hold them because my hands were so cold from typing on the keyboard that i couldn't stand it. >> these temperatures are based on a model from the 1960s. and the -- it was based on the metabolic rate of a 40-year-old, 150-pound man. >> you are not true progressives unless you turn up the office thermostat that's where this culture has taken us
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>> on the desk heaters are banned at cnbc >> they're a fire hazard >> desktop fans. so get some of those that's all i'm saying. >> listen to the woman wearing the parka. guys, thank you. as they sit in their nice warm jackets. contessa and i are freezing. dom chew, contessa brewer and robert frank canada taking the first steps to ratify the new trade agreement. could be a big boom to dairy farmers. more than 200 dairy farms have disappeared just this year we'll talk to a dairy farmer about that next.
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amd shares soaring after announcing new pc and gaming chips at a trade show. cowan saying the company stole the show the stock is up 11% today. and acti vt vision blizzard gaining 3% after goldman upgraded the stock to a buy and added it to its conviction buy list they're bullish on the new and upcoming content more than 1,000 of wisconsin's dairy farms have folded in the past two years as trade tariffs on american dairy products have taken a toll the president just announced a $16 billion aid package for farmers hit hardest by our trade war with china for more on this, in terms of the trade uncertainty on the dairy industry, broedy staple joins me he's a dairy farmer from wisconsin and president of the edge dairy farmer cooperative. what's the top concern for you guys right now >> hey, kelly. thanks for having me today we've got a couple of top concerns on our agenda, on our minds. obviously, keeping farmers in business is one of them. we have a lot of farmers that
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have left the business it's a sad reality especially me as a young dairyman over here in wisconsin. the dairy state. it's sad to see. there's some trade policies we're really trying to urge the president to continue to work on but moving product out of storage and into consumers' hand is high on our list for sure >> and it sounds like despite everything that's going on with china, the much bigger concern for you guys is the u.s./mexico/canada agreement how important is approval of that deal for you? >> i'd tell you that mexico is the biggest importer of dairy products out of the united states so it's big for us canada isn't that big of a deal, but we need that whole package to get done to get through the house. we sure hope we can get it through the senate as well and know the president will sign it as it's written currently. it's a big deal. as we are kind of stalled on the
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usmca currently, we have some time there yet, but we're seeing other opportunities open up. southeast asia is really taking a lot of u.s. dairy. in fact, they are the number two market now behind mexico and that's pretty exciting to see moving forward >> why are dairy prices so low, brody? >> you tell me that, kelly it's pretty discouraging i get my milk off the farm here. you hear talk from people that go and buy a gallon of milk for $1.50. part of that is marketing. we don't have control over what the grocers are going to set their prices at. you'd think if the prices are low, you'll move more product off the shelf, and, therefore, our price should come up because of increased demand. but domestic consumption is -- i'm not a facts and figures guy, but i'd say that our market opportunity is really outside of the border we' where 95% of the population lives. >> what about china.
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1200 wisconsin dairy farms have stopped milking cows in the past three years. 200 have disappeared this year 49 farms have filed for bankruptcy last year and milk prices down 40% over the past five years. and you guys are a swing state in terms of presidential election so final question, could china be a huge market opportunity for years they've had quality problems >> absolutely. china is a big player. especially in some of the dry products not so much on the cheese market but as we get more and more countries continuing to develop the cheese and dairy products are going to be a viable option for some of them you mentioned we're a swing state. a lot of farmers have seen their paychecks erode. not just in dairy but across the different commodities. it's amazing the resiliency you see in farmers across the u.s. and in the midwest and how willing they are to continue to support this president farmers are very patient people.
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we've dealt with weather we've dealt with politics for a lot of years and we'll continue to do so. >> yeah, you are a tough crop. brody, thanks. picturesque scene there behind you with the cows and all. >> the ladies are saying hi as well they're smiling for you. >> thank you so much we'll check back in with you >> thank you meantime, the apple card is set to hit wallets this summer that makes it the largest mash-up of big tech and big finance. is the consumer friendly card chrth the risk for goldman sas? we'll tell you which bank walked away from this deal and why. that's next. l engineering, l engineering, security, blockchain, and we will be first to market! yes. when we do we launch? unfortunately, in 2 or 3,
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mmm, mmm, mmmmm. ball. ball. ball. awww, who's a good boy? it's me. me, me, me. yuck, that's gross. you got to get that under control. [ dogs howling ] seriously? embrace the mischief. say "get pets tickets" into your x1 voice remote to see it in theaters. apple is teaming up with goldman sachs for its consumer friendly apple card. cnbc.com's hugh sohn joins me with more. tell us -- what went down here this is interesting stuff. >> i set out to find more about the negotiations between the apple card big splashy announcement with tim cook taking the stage back in march what we learned in every person i talked to was like, i ghdo not
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know how goldman is going to make on this citigroup was in advanced talks with apple on this they were going to talk about spinning out their app and basically what they came down to is, we don't know if we'll be able to make a profit on this. and they profit on this and they bowed out of this. >> citi, it's interesting because it suggested working with apple is not enough of an allure for the company, in citi's case, to make this a loss >> some of the biggest deals in the credit card space the past years and whether it's costco, walmart, basically, who has the leverage on these deals? is it the retailer the retailer owns the customer experience the customer loyalty in this case, or is it the financial services company sometimes companies get into the deal and they don't start making money until year seven. >> wow so we know for some cards like j.p. morgan, sapphire card, the ones that have the really good perks or the way to be the top card in the wallet is lose money at first and hoping to make it
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up over time so in goldman's case, why were they willing to take on the financial risk with citi and especially what they say is the first credit card? >> they try to bootstrap this big consumer retail, digital service. so who better to start this with if you think this is going the first of perhaps seven partnerships as they scale up in financial services and consumer financial services, who better to start with than apple >> what are the real differences here the innovation and it's interesting to watch this difference from very straightforward to we want to go compete with the biggest consumer brands in the country. >> they use the word tamla addressable market and going after it so basically, look at the card, no fees, right no fees of any kind. that's a huge reason why it's going to be harder to make money. lower interest rates, interest rates a few basis points below the average and then most of all, software that proactively
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tells you when your bills are due. the user experience probably the best with apple, proactively, wants you to pay down debt and when you think about how cards are kind of structured, it's almost as though you fall into an issue where you get into debt and it's harder to get out they want to avoid that whole deal. >> no, the stats are getting worse lately it's, in a way, a great time to make that entry but it will come with some risks. great stuff, hugh. cnbc.com president trump set to sign an executive order later this week to force more transparency in health care pricing it could actually drive prices 'll er weget into that next when "the exchange" comes right back. 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.
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president trump is expected to sign an executive order possibly early as this week mandating that some health care companies disclose the prices they charge. it's an initiative the white house and many members of congress say will drive down costs, but could it backfire against patients join me, kaitlin owens and our own meg tirrell. welcome to you both. meg, first of all, what exactly are we expecting in an executive order like this? what kind of transparency are we talking about? >> there's been a lot of
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discussion about the surprise medical bills that patients get from hospitals sometimes and there's been a big focus in the administration on that, as well as, of course, the focus that the administration's been putting on drug prices so an executive order could potentially focus in on the hospital side of that and we could see something, according to this "wall street journal" reporting, being signed this week of course, there is also legislation moving through congress and folks i'm speaking with say that could supersede this executive order and be more powerful, but all of it is really an example of the fact the administration and congress want to get something done here. >> kaitlin, what might this look like to the patient or the consumer on the other side >> so i think, let's back up a little bit what we have now, when you go to the hospital, when you see your doctor, i mean, a lot of the contracting between insurers and providers and drug companies, we don't know what actual negotiated rates are in health care according to this "wall street journal" report, the goal would be to make some of the prices, the actual costs of care more transparent with the motivation behind that being to get patients to shop around and, you
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know, compare prices and that, in theory, could drive the prices down. >> right, so what would be an example of how this would work in practice? if we go this way? >> so let's say you go into the hospital and you think it's a network, but then it turns out out of an anesthesiologist or somebody not technically in network and then get a big bill much more than expected. i went to an in-network hospital but then have a huge bill. some of the things they're focusing on, making sure that can't happen to you. what the executive order in terms of transparency, disclose what you pay up front but what a lot of people say and what caitlin reported, that might be difficult to do. sometimes in the hospital, you don't exactly know what's going to happen, so you can't get something up front. >> caitlin, what happens if you're going in for the, what's the word anesthesiologist okay, what happens if you're going in for that, wait a minute, here's the kind of pricing we're looking at
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>> great question. one we've been talking about here if you're in an emergency situation, say you're unconscious, you're not in a position for anyone to present you paperwork and say, this anesthesiologist is out of network, can you sign and say you're okay with that? so there are some discussions, some proposals we've seen have said that doctors like anesthesiologists, the doctor who reads your x-ray, these kind of doctors who see you without you necessarily knowing they're going to see you, there has been explicit permission for you to see those kind of out of network physicians, but that's a great example of the devil in the details. what situations are we talking about? what doctors we talking about? what patients are we talking about? so yes that's where the attention is. >> what are some of the ways this could end up harming consumers more than helping them >> so as we reported this morning, experts are worried that the industry says keeping these prices we pay for our
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health care services secretive, that creates a competitive advantage, where, for patients, that is, where one hospital doesn't know what the other hospital is getting paid that allows insurers to negotiate better rates because if these rates were transparent, if everyone knew what everyone else was getting, hospital a might look at hospital b and say, they're getting this much more than me and that could drive prices upwards. >> that's the argument we heard in the price debate with benefit managers it's our competitive advantage to not disclose the benefits but that's losing its luster as an argument and perhaps see that happen in the hospitals. >> so the case is through that transparency, people price up to whoever is charging the most at least as a first step and when is that drug price ad wee see th we see that in a matter of weeks? >> the drug industry is fighting it. >> meg tirrell, caitlin owens,
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thank you very much. that does it for "the exchange." thank you so much for joining me today. i'll join tyler for "power lunch" which begins right now. >> kelly, thank you very much. we'll see you in just a few seconds. welcome, everybody i'm tyler mathisen new at 2:00 this day, president trump is not ready, noready to make a deal with china jamie dimon warns about the trade war and the u.s. tech impact on the markets. beyond meat soaring after striking a deal to ramp up production the stock is now up 240% since its ipo. it's the anti-uber new bullish call today, by the way. we'll talk with the analyst who made that call on beyond meat. and one daughter's a doctor, second is the ceo of youtube, and the third is the ceo of 23andme. the mother, heather, how to raise successful
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