going to be live in about 30 minutes here on cnbc do not want to miss that let's do some final trades >> fortune brands. bright spots of the economy. >> i'm selling emerging markets eem. >> goldman sachs. >> "the exchange" begins right now. thank you, sco hi, everybody. here's what's ahead today. a live interview with boeing's ceo dennis muilenburg. his word to investors as the stock continues to fall. also tim cook is taking the stage. the apple developers conference kicking off right now with that stock and a bear market. will today's presentation give investors a reason to jump back in we'll look and faang is in the cross hairs big time google, facebook, and amazon all sinking on reports of a regulatory crackdown this is pushing the nasdaq into construction today we'll get you the latest we begin with today's markets. dom chu has those numbers. >> that's the epicenter in

stocks at least. the nasdaq as you can see here off by almost 1.5% that is, again, the worst performer of the u.s. major indices here and the reason why kelly mentioned those names. we'll talk about those in a second and the dow industrials off their lows of the day still off by about 0.25% everyone is watching what's happening with interest rates. we did hit a low of about 2.09% earlier in the day that mean it's a 20-month low for that benchmark longer term interest rate in the u.s a huge move again. september of 2017, that's when you have to go back to see those numbers. and kelly mentioned though faang stocks facebook, amazon, netflix, alphabet the parent company of goog google those names you can see here netflix the outperformer no regulatory concerns there it's taken down with the rest of it amazon up 5% you can see that trade playing

out with the nasdaq especially 10% below its record highs >> thanks. we'll have more on that in a bit. twom "the exchange," everyone. i'm kelly evans. yields are plunging again today. the ism manufacturing report on the u.s. fell to a two and a half year low. the 10-year yield below 2.1% earlier. and the german bund at negative 0.2%. positive day for transports finally. could be their first positive day in eight bob pisani is tracking that for us at the new york stock exchange >> hello it's really hard to rally when the ism number was so disappointing and you have such strong trade head winds and the tech names that dom talked about. this is a lot broader than that today. traders are marking down key growth stock iing in growth stock iing intocks. the ishares growth etf down more than 1% today. value etf up 0.3%. and it's not just faang names

but other big growth names i'm talking about twitter, adobe, mastercard, paypal. these are all down noticeably. meanwhile, more value oriented names. those with slower growth prospects, that's value, are up today including retailers like target steel names like nucor and some of the consumer names like ka l campbell. >> thanks so much bob pisani tim cook is taking the stage at the dwofers conference just moment. ago. our josh lipton is right outside where cook is speaking whap are investors listening for? >> reporter: so apple's big annual software show is just now kicking off. we expect a lot of news today. one, a new mobile operating system it's likely going to be called i

ios 13 and talking about adding the store directly to the watch. it would make the watch a more independent device and finally we do expect apple to allow developers making easier and simpler for those app makers to move their ios apps to desk tops. that could mean coming to the mac platform investors of course pin their hopes on the faster growing services business. success for that business is really going to depend a lot on the developers who are right behind me here they're the ones who are going to create those compelling situations for the app store which makes up an estimated 35% of the total services segment. one final note, there are reports that apple is now planning the end of itunes and replacing it with separate apps for music and video and podcasts that would certainly be

historic itunes really started it all but now apple apparently thinking about moving on kelly, back to you >> josh, thanks. we'll check back in with you nancy, are you an itunes user? >> yes >> what will you do with your library? >> i don't know. i just learned how to use it finally. >> let's talk about these markets. may was a wild one to the downside the nasdaq finish l well in negative territory we turn the calendar to june and the trade wars so know signs of coming to an end craig callahan is here as well craig, i just wanted to start with you because you've been so consistent on this theme that interest rates are too high, the fed is too tight now the market is kind of fully coming around to your point of view but, you know, we might hear from fed chair powell tomorrow as i understand it are you saying they need now to go ahead and say, open the door to a rate cut?

>> i believe they do with inflation, very sensible forecast for it to be 2% the next three years a fed funds rate of 2.25 of 2.50 looks too much >> and what if they don't do that would you stick with your investments? >> yes i still think this bull market is intact. people are forecasting a slowdown of course they've been doing that for ten years and been wrong. i remember when they were worried about double dip recessions we didn't have those so we still think we're in a bull market. >> are your stocks any of the big names hit today facebook, amazon, google >> no. we don't have big exposure there. so we're other places. >> and those places are, craig >> we like consumer discretionary and industrials would be our favorite. some technology, but not so much the big names. >> okay. nancy, i know you're in some of those big names. so how are you feeling about

reports on a regulatory crackdown? >> so we've written about that and talked about it on your show about a year and a half ago saying technology was to this administration as oil was to the previous administration. and so we did pair back our holdings of course, being in the investment business is like a perpetual state of dissatisfaction. i wished i'd sold more but i think that this is an over-knee jerk reaction. but we will see some tampering of growth, i think, going forward. >> you mean you think it's going to hurt their growth prospects or the whole economy >> i think their growth prospects. it's going to increase costs just like with facebook on privacy. and then we'll see some slowing growth as competition. usually what happens is that the regulatory practices end up benefitting the behemoths in every industry so i'm not running for the exits. i think this might be an opportunity if it extends to pick away at these things. >> although, what about the microsoft example where people say, look, that distraction for

ten years meant they didn't get in on mobile they were way behind they were taken kind of way out of the game. are you concerned that's going to happen with these incumbents now? >> i mean, it's a risk, right? that's why i don't have maximum positions in the stocks. and i think the governance issue is also a big deal at these companies where you have single ceos, the company is only as good as that ceo i think that's a problem as well and so we're watching and looking -- we've been looking for opportunities to exit and we'll wait >> today not being one of them >> and if they get cheap enough, we'll be in there picking away at them. >> craig mentioned he would be in consumer discretionary, industrials. what about those areas of the market right now >> yeah, those are some of our most interesting names at the moment so consumer discretionary, starbucks, home depot i think are two places where you might want to be adding to holdings. i'm very interested to hear what

mr. muilenburg has to say today. that's one of our holdings and we're overweight in health care >> speaking of boeing, what are you trying to figure out right now whether it's worth hanging onto what are you going to be listening for? >> i'm going to be listening for contrition and for a plan in tells of a sustainable plan about getting the max back up and getting credibility back i feel that management could have done more in this situation. we did not add to holdings after it sold off. we owned a healthy position. it's not all that cheap. so it's going to take a lot, i think, for investors to return to the table we were in it for the dividend increase and for growth and the dividend increase is on pause. >> all right we'll leave it there thank you, both, very much good to talk with you this afternoon. here's what's still ahead on "the exchange" -- >> coming up, boeing ceo dennis muilenburg joins us live when will production of the 737 max get back on track?

are they going to have to change their business model what's the impact on the bottom line and how will he turn this stock around and one trade war may be okay. two trade wars wall street thinks we may have a problem. where we stand, what's next, and will anyone cave [ sitar music playing ]

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top trade negotiators from the u.s. and mexico are meeting today. the talks are an attempt to slow or avoid the imports from mexico to the u.s president trump has threatened and this comes as the battle with china continues china saying overnight the u.s. is an untrustworthy negotiator and the u.s. were the ones that back tracked dan, welcome >> glad to be with you >> you know, the point has been made that mexico and china substitute a lot for one another. what happens when we take them both on at once >> it's bad news for the u.s. economy and our trade agenda it's u.s. consumers that pay the full price for these trade bars. if we have tariffs on goods,

you'll see them go up for appliances, electronics, automobiles, and trucks. then of course we know retaliation is probably inevitable and we export twice as much, more than twice as much to mexico so they have a very rich target list it's ironic we just lowered the steel tariffs and got rid of the retaliation. now we seem ready to do it again. the final lesson is it doesn't necessarily bring them to the table. the chinese position seems to be hardening by the day i'm afraid we're going to take what's been a good relationship with mexico and push them into a corner and make cooperation on immigration and other issues even more difficult. >> okay. let me bring in derek as well. he's a resident scholar. derek, i thought it was interesting that you said, look. we're fighting a sort of id logical battle with china in a way. mexico has been a winner of that we crack down on mexico now china wins at the margin

and you said only one of these two countries is a brutal dictatorship >> that's right. there's a problem with the border i'm not an expert on immigration. i can just watch videos and see it but for my money, we have a much better trade relationship with mexico than with china that ignores the political aspect of this china is not going to have an election for a long time if xi jingping has anything to say about it i just think using the same tool against mexico that we do against china is a mistake right off the bat. >> and you said before you think sanctions are a better way of dealing with china what -- i know this -- mexico isn't your specialty, but what would be off the top of your head a better way to get their attention seriously on the border issue >> well, dan and i agree on some things

we don't like tariffs. if we have a problem with mexico letting asylum seekers cross their territory, let's address that problem directly. what we do is hurt ordinary americans. we're not getting directly at that issue you know, with ip, we would sanction chinese firms benefitting from stolen ip >> what would you add to that? >> i agree this is an abuse of the 1977 emergency trade law that the president is citing. it was never intended to impose tariffs against friendly countries. it's been used to sanction and freeze the assets of rogue regimes like iran. chairman grassley has pointed out we shouldn't be mixing trade and immigration. this goes far beyond congressional authority. so it's creating all sorts of

problems and ironically it's going to jeptize passage -- this year that's why lighthizer internally imposed the tariffs. >> again, what -- if everybody acknowledges there's a problem but nothing seems to be done to solve it, the president may be using an imperfect tool, but is there something else you could recommend that would catch the attention of the mexican government and really force them to address something that congress so far refuses to address? >> well, first immigration is a separate issue secondly the mexican government has been cooperative they tried to enforce their southern border although that's heavily -- it has a lot of jungle and rivers. it's hard to enforce they have accept eed on their se of the border. fundamentally our immigration problems are american problems

we need high skilled and low skilled immigrants to enter the united states. i think you'd see these problems of illegal immigration greatly reduced. we had much less of a problem under president obama than president trump. >> meanwhile, we'll see if the weakening currencies take the sting at least for now out of some of these tariffs. gentlemen, thank you both. appreciate it. coming up, boeing shares are under pressure following reports of yet another problem with the grounded 737 max planes. did production speed trump quality? we will ask boeing chairman and ceo dennis muilenburg live ahead. plus calls for a fed rate cut are growing louder and louder on wall street. the boldest call coming from barclays for three rate cs.ut the man behind that call joins me coming up supplemental insurance. medicare is great, but it doesn't cover everything -

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welcome back to "the exchange." semiconductors soaring after agreeing to be bought. that transaction worth about $9.5 billion the stock up 24% on that news. teva is also getting a boost after oppenheimer upgraded to perform. the stock has been trading at a 19-year low. it lost 40% of its value last

month. and some recent ipos looking got today. lyft, uber, and luckin coffee all in the green although look at beyond meat couldn't hold onto it gains. tripling is good enough. let's get over to sue herera for a news update. >> hello, everyone here's what's happening at this hour president trump and the first lady joining prince charles and his wife at their official residence for afternoon tea. a bit earlier, the trumps met with queen elizabeth and had lunch together the queen will be hosting them at dinner tonight at the palace. nato chief stoltenberg success they are ready to welcome macedonia as its newest member he spoke after meeting the country's top leaders today. >> our visit sends a clear message. we are ready to welcome you into the nato family. in february we signed the protocol for north macedonia

it was a historic moment for your country and for the whole alliance i commend you for your leadership in solving the name issue. >> back here at home, confirmed cases of the measles continue to creep up the cdc is reporting that there are now 981 cases in 26 states that's an increase of 41 cases from the previous week more than 800 of those cases are in new york. the majority of those are not vaccinated you are up-to-date kelly, back to you >> thanks. apples worldwide developers conference is underway here to discuss the latest, lindsey terentin nerks and ed lee. welcome, guys. have they said anything about itunes yet >> not yet, but we're expecting that format basically is going to be going away look if you've bought music as i have over the years, don't worry.

you can still play them on the music app. but it's -- again, it's a shift towards services that's a big part of the apple narrative. what is services recurring revenue. music streaming services hopefully this apple tv thing they're also announcing are getting into a little bit as well that's what they need to move into more of >> how much do you think you've spent on itunes over the years >> fi look carefully, it's not a pretty picture >> thousands probably. >> the hard part is i can't remember where all my music is either. >> i have no idea where any song i've ever bought is because i don't think i bought one in like ten years. are there practical implications beyond the library that will affect users going forward >> well, there are some users who are artists or creators who really use itunes to back up what they do but it's really a miernnority i think on itunes on the computer is when they accidentally plug in their phone and it launches itunes to back up their phone apple wants to get rid of that

messy software that's hard to support over time. and this is the conference where developers learn how they can help with that process and what they're going to do to bring services to all of the products in apple's suite of devices. >> now, josh earlier said a couple of things to watch for include ios 13 which means more aggravating updates on my phone overnight. app store on the watch, i can see that being interesting and portability of apps to laptops. none of this is earth shattering stuff, is it >> it's not. it's a little inside baseball. but all this means all the syncs you used to do would be more simplified there are apps available on your mobile devices that don't necessarily appear on your laptops. it's a harder thing to manage. so if -- they're trying to bridge that, ultimately. i think that's where they want to go. how that plays out, we'll have to see but that's why this is for developers we need your help. >> and finally, lindsey, what

are you looking for? shares are down 20% from recent highs. there's a lot of concerns about china exposure can an event like this trump all that >> i think that it's going to be hard for an event like this to pull up the stock dramatically usually apple's stock drops during events like this because so much has leaked and expectations are up. they just announced the watch will have its own app store. it'll stand alone. but we all knew that was coming. it's sort of baked in. i don't think you're going to see a big bump after this for apple. but i do think you'll see some happy developers who get to work on some things they've wanted to work on for a long time like independent apps on the watch. >> buy the rumor, sell the fact. thanks we'll check back in with you here's what's still ahead on "the exchange. >> ahead, a live interview with boeing ceo dennis muilenburg what's his message to investors as the stock continues to

struggle and the company faces a new warning from the faa plus the doj reportedly preparing an antitrust probe against google what do they want and what does it mean for the company? that's all ahead on "the exchange." many people living with diabetes

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welcome back to "the exchange." boeing shares are under pressure again today. this following news that some of the wing parts of the 737 max may be defective the stock is down 23% in the last three months as the company deals with the fallout from the 737 max crashes and subsequent grounding of the planes. let's talk about all of it with the chairman and ceo of boeing dennis muilenburg. he's live in chicago with our phil lebeau. phil >> thank you, kelly. dennis, thanks for being here today. >> thank you. >> let's start off with the latest issue with the 737 and the wing slats, if you will. these parts within these wings that you're going to have to inspect. is this due to your own internal investigation in terms of what happened here? and it brings up the question, are we going to hear more of this in the future not just with the max but 737 overall? >> first of all, we start off with safety and quality. this is something we discovered

as a supplier quality issue. as soon as we discovered that, we brought to it the surface we've been coordinating with the faa over the weekend this is a process that's well defined and well understood in our engineering discipline and we're all over it with our customers. >> you've got the 737 max already down but the other models are flying right now. somebody will hear this, they'll hear 737 and they'll say, here we go again. something else is wrong. are you worried that it makes people uneasy about flying the 737? >> well, certainly it's something that we regret the impact to customers. any time there's news on the 737, it goes to the top of the list we're paying close attention to it this particular issue of the slat tracks is a well understood one. it's something we're going to stay coordinated with customers.

we want to minimize the disruption >> let's shift to the 737 max. you're preparing far certification flight then filing application for recertification. this is something that we've been told or conditioned by various people that, hey, it's ready. it's ready it's ready you've already finished the software is there a delay in filing for th this >> safety is a paramount importance here. we're working through this in a disciplined fashion. we have completed the software development work we're now in the process of answering questions that the faa has that include some sessions in our simulators this week. we hope to schedule the certification flight soon. then after that a decision from the faa to return to flight. >> is the faa pushing back are they saying you're not ready yet? >> the faa is working closely with this. also being disciplined and deep

in their analysis. i think it's a good thing. to make sure that we're doing everything we can to ensure safety and i'm very confident that when this process is completed and the max is back up in the air, that it'll be one of the safest airplanes to fly >> all of this brings up the question of whether or not boeing and the faa because of the certification process you work too closely together. and that you have people that who are saying, wait a second. how do you know the information you're getting from boeing is correct and is accurate? and it has people saying, wait a second are these planes going to be safe when they're recertified if they had these problems in the past >> we're confident in e overall process. over the last 20 years, aviation has been the safest form of transportation around the world. and the ax rate has been reduced by 95% because of the processes that the faa has put in place. the idea we work closely together to attack expertise

while looking at the process, i think the process is very effective. that said, we're learning as we go through this current situation. both the faa and in my own board committee at boeing are taking a look at our certification processes. and if there are any improvements we can make, we'll make those >> we've seen the stories. it's been a steady drum beat of stories that have come out and time and again it appears you were making changes in a plane too fast without enough people being notified. in many cases your flight test engineers or pilots were saying wait a second. we didn't know about the mcas situation. you have to know the public looks at this saying how do we know this isn't going to happen again? >> well, we certainly regret the impact this has had. without question, we're sorry for the lives that were lost in these two accidents. we know it's impacted the trust and confidence of the flying public we take that very, very seriously. i can tell you we've taken a deep look at the max development. it was a six-year development program with more than 1600 flight tests

we followed our certification processes but we know where we can get better this is all about safety and the track record after safety and aviation is as strong as it is because we never stop improving. so we're learning from these current situations but i want you to know we're investing everything we can in the safety of these airplanes. we know that today 5 million passengers will fly on boeing airplanes today. their lives depend on it we take that seriously >> with all due respect, that's been that way for years. and we know that boeing has a culture of saying we want to make sure we're right. but how do you know this won't happen again given the fact that it did happen? >> well, couple of things we're doing. in this particular case with the improvements we're making to the max software, we've taken a deep look at how we can build additional redundancies into that so-called mcas software we've done 280 flight tests with that new software. the certification process around

this is being done in depth. we're also working with our customers to make sure we understand the impact to them and working closely with them on return to service planning so that can be done in a safe and efficient way. and we're looking at our certification processes so we can continue to improve for the future >> dennis, i know kelly has a question or two for you. >> thank you one of the things the public and even your investors are saying they're not hearing from you is contrition are you admitting to any wrong doing or fault >> well, first of all we are very, very sorry for both of these accidents. and as i've expressed and will continue to express our deepest sympathies to the loved ones and the families of those lost, that will never go away and that will weigh on us heavily forever. what that has done is it's really reinvigorated our continuing emphasis on safety and quality and integrity. and i can assure you that we're

learning we're going to be improving. we know that there are things we can do better. the mcas software improvements are a clear area we're improving. we know we can make improvements on training and education. we're mang those investments we also know that our communication in some cases was not as effective or not as complete as it should have been. and there are areas where we can improve transparency and that's part of how we'll increase confidence of the flying public and the customers out there. so we know we have work to do. >> sure. does improving those systems mean that you did something wrong. >> well, i think one example that i've mentioned before is on the angle of attack disagree alert that was in the news recently we made a mistake on the implementation of that we are fixing that as we go forward. so we are in approach to how we do our business, we're always seeking to learn we're always looking to improve. and we have fallen short in the past and i've admitted that and acknowledged it. and that only makes us more resolute in the commitment to safety going forward

>> and you're clear about this now, but for months investors in the public have wanted this clarity. were you ham strung from speaking out by regulators did you personally want to be able to give people more information? were you not allowed to give that information >> well, i think part of the challenge we've had is the investigation process around aviation accidents is controlled by something called -- it's important to us that we protect the integrity of that investigation process. so we've been doing that at the same time we've been trying to share as much information as we could throughout the process and that has at times been a balancing act. but frankly we owe information to all of our stake holders in this process we're doing everything we can to be transparent, provide that information. again, i know we could do better and we are focused on that going forward. >> are you the right person for this job >> yes, i think i am and certainly i'm committed to our objectives as a company

around safety and integrity and quality. i think it's important that i continue to lead and lead this company in a way that's consistent with our values i've been at boeing now for 34 years. i started at the company as an intern i have a great pride in our company. it's frankly a privilege to do the kind of work we do around the world. we know that people's lives depend on what we do whether it's commercial airplane customers and passengers or servicemen and women around the world who use our defense products we are committed to excellence in the work we do. i'm proud and honored to work for this company i look forward to continue >> based off what kelly was asking you on whether you're the right person to lead this company. one of the criticisms out there which is a valid one is there's not an independent third party that has said -- that you've hired and you said you have free reign. you interview any engineer you want to, any pilot find out what's happened here.

why not bring in an independent third party and say find what you need to find and we will hold those accountable >> in fact, we are doing that in collaboration with our customers as well. as you know, the u.s. government has initiated some independent reviews. we're supporting that review process. i've also asked my board to independently set up a committee to -- >> will you release those results including names of those who have done wrong? >> we will release those results and that committee is bringing in external experts. that is not only an internal view, they will bring in external experts whatever we learn from those committees, we are committed to implementing those improvements and we will make those improvements well known. >> the president thinks you should rebrand the max we understand for certification reasons, you can't just rebrand the plane and everything but you know the name right now is toxic with travelers. they don't want to fly it. they're worried about the safety of it. why not say we're not going to call it the max anymore? at a minimum to change the

perception when it comes back into service >> thing the most important thing here is being committed to safety and getting the airplane back up flying safely. i don't think this is a pr process or advertising process this is about safe travel. and we're investing in making the max as safe as possible. i think the kbloouchimprovemente making on software, training and education, how we communicate, that's what's going to matter. as we get the plane back up and flying and flying safely, that will rebuild customer confidence and we're going to be working closely with the airline customers. they understand the flying public very well and we know that we're going to have tailored work with them to rebuild that confidence over time this will take time. we know we've damaged trust. and we have to earn and reearn that trust of the flying public. we are committed >> when are you telling airlines to probably expect to see this plane? august >> we're working actively on that day-to-day. as i said this week we're in the

simulator with the faa we hope to schedule the certification flight shortly after that that will be followed by approvals from the regulators to get the airplane back up and flying i can't give you a specific timeline on that, but that is all work we're doing daily, hourly we also have our teams deployed with our customers helping them on return to service preparation. so these are all near term activities while i can't give you a specific timeline, ki tell you it's a very active day-to-day engagement we're going to spend a lot of time with our customers to make sure they're confident in the plane. >> are you ever out and hear people talk about the max? airport travelers. do you know what they're saying? >> yeah i've heard those comments. >> and what's your reaction when you hear people say, i'm not getting on it? >> well, first of all, we deeply regret the impact. we're sorry for the lives that were lost. this will always be with us as a company. it weighs heavily on us every day. when i hear comments from the

traveling public and you might guess i spend a lot of time in airports i've heard these comments. they're tough. they wear on us deeply as a company. we know their lives depend on what we do so our work here will never be done but i can tell you we're only more resolute in our commitment to safety and quality and integrity as a result. >> last question you're at 42 a month in erm it is of 737 max production when do you get back up to 52 and can you get to 57 as previously expected by the end of the jeer? >> the long-term plans will not change this is all paced by the most important thing is getting the airplane back up and flying safely and help take the grounded fleet and returning that to service safely we're investing in our supply chain health so it's ready to go when we are. stepping back up to 47 and 52 a mor month is something we plan to do but only when we're ready.

>> do you get back to 52 by the end of the year? >> i won't put a time on it because it's about return to service. the most important thing is to focus on safety. when we ramp back up productionwise, we will. the long-term market says the world still needs 43,000 new airplanes over the next 20 years. >> have you had a single order for the max yet since the grounding? >> no. >> okay. dennis muilenburg, chairman and ceo of the boeing corporation joining us here today. >> and before i let you guys totally go, dennis, my last question on this is do you think the 737 max is going to be back up in the air by the end of the year >> i do. i can't give a specific timeline we're working closely with the regulators these are day-to-day activities. we're working with the right pace all of this will be gauged by the investment in safety the most important thing here is safety we'll be back up and flying when ready. we'll do that jointly with the customers and the regulators.

>> thank you thank you very much as well. coming up, a regulatory crackdown is sending shares of google, amazon, and facebook lower. now apple as well. we'll have the latest on the story there. and what impact it could have on the companies longer term. as we head to break, look at the dow. it turned after dovish comments from james bullard he said a rate c mutay be warranted soon we're back in two.

welcome back check out what's happening in tech today shars of facebook, alphabet, and amazon are all lower the battle against big tech is raging on. the justice department is launching an antitrust investigation into google. the ftc has secured rights to lead an investigation into facebook and amazon. in the last few moments the department of justice has been jurisdiction over apple if there were to be a probe now that stock is on session

lows on the news let's bring in senior technology reporter from politico and we welcome back contributor ed lee. nancy, this seems like a divvying up on the cake. what are the implications. if you're the company, do you want the ftc or doj on your back >> that's a good question. some of that remains to be seen. i think with some of these companies google in particular that kicked off the weekend with the news the doj was taking over the google portfolio, that's arguably bad news for google because they've been through the ringer with the ftc before they came out of that case unscathed. it's not something they want to go through the process of learning a new regulator which they'll have to go through now >> interesting so you're sort of saying they have learned the ftc ropes now it's the department of justice. is one as the other seen as tougher on big tech? >> we don't know yet this is a brand new day. both of these agencies haven't got a ton of oversight the big sort of story when we

take a step back now, the big story is these federal regulators haven't done oversight of these companies in the past there's no real record to draw on reading the tea leaves, you mie not want to go to doj. so i think if i were one of these big tech companies and to h to pick the regulator i'd probably big the ftc >> and ed, we heard the analogy made earlier that tech is to this administration as oil was to the obama administration. >> right. >> do you think that's true? is there a sense because you're hearing as much about this on the 2020 democratic campaign trail, probably more than you're really hearing from this white house right now. >> it's one of the few areas of actual bipartisan sort of -- you know, that they share on both sides. elizabeth warren, one of the leading candidates of 2020 has been calling a breakup of facebook and a closer look at tech companies specifically in this antitrust framework. back to the other question which would you face doj or ftc, i

think the doj is a tougher pill to swallow he reason why is the lead antitrust executive, he favors as a conservative a structural remedy we tend look at that in term of acquisitions and mergers. point is that he likes it when you get rid of stuff you break it apart i'm sure they're opening to taking fines as well but that could really hurt these guys they're going to face and say, you know what, this new service and business you have, you can't own it anymore >> i think that gets to the heart of the angst for investors. so nancy, this issue ed raises about will it be fines or selling parts of your business, i think plenty of investors would say, look, we'll take a fine you know, that's a quarter of profits, so to speak we can't be talking about anything too massive on that front but don't want a break-up of the business and ironically, normally something the companies don't want is what would be good for the public but on this front, how would it change the

operations of some, fror example if they broke up what's app and instagram, they'll have data sharing issues and news problems i don't understand how that helps or hurts one way or the other. >> kelly, both you and ed are correct. the idea of breaking apart their component parts and you mentioned with facebook, they purchased what's app and instagram, that's a big part of their strategy and they buy competitors. what silicon valley is known for right now. if the federal government steps in and says, that's really going to change how they go about conducting their business. the impact on the user, again, i hate to say, we need to wait and see. but we need to wait and see a little bit, but these platforms are, you know, you have people who use facebook and what's app, instagram, don't know those are owned by the same entity so i don't know how much is going to change for users in the immediate but the long-term, they might have very different experiences when they're using that aren't sharing on the back

end. >> it's early days but you can see the anxiety on wall street today. nancy scola and ed lee sticking with tech, worldwide developers conference is under way as we speakful we've g fuls. we got some highlights from that josh lipton? >> kelly, a lot of news already during this big annual software show apple introducing new mobile operating system called ios 13 a lot of focus on performance of this operating system. everything you do is faster with the things you do most, apple is saying for example, unlocking face id 30% faster app launches, they say, up to two times faster maps, as part of this update, also going to get an upgrade here for example, new features to the launch screen. you're going to be able to add favorites, like places you go every day. better to try, it looks like and compete here with google maps. apple execs also emphasizing privacy here the dedication of privacy and

there are protections built into this new os. for example, you can share your location once with an app but then if they require it, you have to give them permission to ask again. basically, they're saying, you should have more control in the words of apple executives over your data. messages too getting interesting updates here with profile pics and names. in other words, you text somebody, they'd get your picture and name that was kind of described here by the what's app-like feature quick, kelly, some of the updates to the operating system. watch got an upgrade here and they are going to bring the app store directly to the watch. that's interesting because it does make the device a bit more independent. one step removed from the iphone remember, of course, apple doesn't break out watch units but ventures estimates they've sold more than 71 million watches to date. back to you. >> that's a lot of watches thinking about the new one josh, thanks very much josh lipton. coming up, my next guest

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welcome back wall street is expecting the fed to ease monetary policy after

president trump vowed to slap tariffs on mexican imports opening a new front in the trade war. the biggest call now barclays now that sees 75 points. the bearded michael, his chief u.s. economist michael, welcome it's good to see you again >> good afternoon, kelly. >> 75. that implies three rate cuts are you expecting three cuts of 25 quarter point or all at one type of thing? >> we're just looking across two cuts so 50 in september and then 25 in december. so 75 by year end across two cuts >> explain why, to the economists' mind, takes until september and then a dramatic half point cut what gets us to follow that sequence of events >> there's three reasons, i think, we took this path one is that strength in business spending has been weakening over the course of the year looked like it was a government shutdown story early on, but subsequent data, industrial

production, the durables report, the trade report, all suggest much weaker trend. equipment spending we're tracking in negative terms underlying softness in the data. already prepared to make some downward adjustments to the forecast on top of that, you get the news on trade, which to me, feels like an important shift and escalation in the rhetoric and then finally, i think you can argue that if this is true and things slow, even if inflation is expected to rise, the funds still well above current rates of inflation so you might argue the monetary policy setting is too tight. >> yeah. >> the argument is, look, if you're going to go, the market's already pricing in 3 to 4 cuts over the next year just deliver that up front in a way to deliver what it needs in

a way that's preemptive. >> i saw these comments. a rate cut may be warned soon because of global trade tensions and weak u.s. inflation but he's not powell and we'll hear from them together. are we going to see a change in rhetoric this quickly? >> probably not. i think it's hard for the fed to move that quick without evidence things are slowing our view is a prospective one. the data will accumulate over time that's why we're thinking september and not necessarily sooner we think it will take time for this case to build you could get the fed to react sooner if markets took a sudden risk offtone we don't feel that's the case yet. that's why we're thinking september. >> we've got to go but what if it's all fine? 75 basis points is a lot. >> it is i get it maybe we're overthinking things

here, but we just feel that's what's coming. >> that's all right. to be guilty of that thank you so much for joining me appreciate it. >> thank you >> michael gapeman from barclay. don't miss 1:00 p.m. eastern time with rich clairda i'll join tyler and melissa for "power lunch." >> kelly, see you in just a moment welcome to "power lunch. i'm tyler mathisen with melissa lee and new at 2:00, tech getting wrecked. facebook shares slammed right now. regulators reportedly preparing to investigate whether the social media giant is hurting competition. and anti-trust anxiety, alphabet plunging, close to bear market levels now the justice department may be gearing up to investigate its subsidiary google. we'll tell you about the fallout ahead. apple also in the cross hairs. webig event getting under way.