board member mark stevens, the man in that video right there, pushing kyle lowry last night during the game. the former sequoia capital partner, also on the board of nvidia having no comment as they reach back out to us moments ago. that does it for us. the exchange begins now. hi, everybody, here's what's ahead a market tug of war. the talks with mexico no deal. bonds are flashing a warning sign still we'll talk about who's got this one right in just a moment it's also tug of war between investors and the fed. we'll hear from john williams in a minute we begin with the markets and birthday boy don chew is here with the numbers >> there's a lot of green on the

board forethat i appreciate that, it didn't look like it was going to be green across the board today we thought maybe modest losses at least for now, the dow is up modestly a third of a%. same with the s&p 500 the nasdaq just about flat as well. an underperformer in the u.s. indexes. these names, pepsico, mcdonalds they're indicative a sampling of some of the consumer oriented names at record highs today. at some point. so you can talk snacks, soda chips, fast food look at those names. and then we'll end on shares of tesla. there's been a runup, can you see how long it's taken for it

to go down it's off a low base, but it's up 16% from those lows we saw we're still down around huge 54% of the stuff has been lost there's optimism that deliveries could be better in the coming months we'll see if that happens. have been moving to the down side about 54% of their value we'll keep an eye on those particular shares. and consumer stocks out there as well >> welcome to the exchange everyone i'm kelly evans, the dow is on pace for its fourth straight day of gains now our trade war shows no sign of coming to an end the president of james research. welcome to you both. >> barry, just starting with you, look, we've had a lot of news thrown at us in the last couple weeks here on the tariff

run is it making a change in positioning of stocks? >> we have been edging away from things impacted by china there's some in the technology area like an apple or a qualcomm that have a lot of imports there. the manufacturing area, from the caterpillar to the whirlpools of the world have some exposure there, it will impact their earnings we lowered our industrial waitings that we have, and we're trying to focus more on things that have most of their sales and production right here in the united states. >> this morning, whirlpool got an upgrade because the firm said the tariff impact they mostly passed along to the corn assumer. they managed it so far and now they're costs are going down a little bit. we know anecdotally, oil is down too. is a lot of the bad news priced in >> i think a lot of it is, but it hasn't hit the consumer yet you don't really see them

reflecting that. business is reflected. it's apparent to them before the cost whirlpool estimates are 250, $300 million maybe that's not that much to some folks that's a hit on earnings i think it could be, as consumers, if we don't have the job growth they've had, they could stop buying as much as they were as well >> where do you think the investors should be focused right now, is it on china? quietly our china basket is starting to out perform, meaning better signs in terms of a resolution there you have the mexican tariffs as well what do you think should be most important? >> i think there's an offramp for the tariffs. three part way they can get out of this, number one taking the asylum seekers it's going to be tough because they're so overwhelmed on the mexican side of the border to

start with if they agree to do that to increase the patrols, and to increase the checkpoints on the route the refugees are taking. that doesn't serve the long term problem. the problem is central american governments who aren't providing for the basic needs and safety of their citizens and mexicans as well. in terms of china, i think that's going to be a bigger problem. solving the mexican problem is going to be hard on china, i think we're in for a decades long systemic competition. even if you solve or come to some sort of a trade agreement now and the chinese are drawing more and more red lines about what they're not willing to accept which is change of the law, change of the system, change of their subsidies. i think it's not going to fundamentally change that we're going to be in a battle that investors have to watch for many years to come. >> let's interrupt this for a moment, don chu has breaking news on the fed.

>> this is new york fed president jong williams saying low neutral interest rates are here to stay that's because slower population growth and productivity growth are translating directly into slower economic growth he's speaking in new york, and he warns that low rates leave little maneuvering room, and fiscal policy needs to do its part to secure growth. he's citing central banks around the world, including the fed, need to reassess the tools they need to achieve their goals. such as the fed's two% inflation target steve liesman will be handling the q & a portion of that speech we'll hear from him in the next hour >> we'll carry that right here it's interesting, because just this morning, we had confirmation that productivity is turning a corner here, and it is looking better. it's the long term trend still as bleak as williams describes

it >> possibly. >> higher productivity means lower unit labor costs which means less inflation therefore, that would begat lower interest rates >> there could be a case for low interest >> at least in the short term. that will mean less wayne pressure then they'll want a cut. but longer term, i mean, the fact is quists never know when these rates occur. the fed's going to air more on the side of accommodation talking about symmetric inflation. they're willing to tolerate it above 2. >> when he said the lower neutral rate, the fed has hiked rates as much as the economy >> maybe even more so. the fed has raised rates too

much that's why housing and autos have been so weak. the yield curve has been lagging. the tariffs and the fact that it might lead to easing sooner has steepened the curve. >> there's a lot of cross currents do you see mixed messages between stocks holding up okay, at least today bond yields as low as they are? or are they the same story because low yields for all of the reasons you described are supportive of higher stock prices >> it's because the fed rhetoric shifted. it's now expectations of a strong expectations next month that are well, the markets pricing and it's not inconceivable that if you had an azp like report tomorrow, we price the june cut, and the fed

is panicked into cutting >> if we come out with the 250 number, that's going to delay that a few months. >> a little bit. it's very asymmetric >> again, i thinkstock investors are trying to figure out whether they should be listening to the bond market or whether low rates are supportive of higher stock prices >> low rates really support companies with higher valuations we saw that the last three months companies with low valuations did awful. that's kind of unusual but nonetheless, low interest rates to support the market of fed easing would support the market however, we do see risks rising. the consumer for instance about half of their gains from the tax cuts are being wiped out by these added tariffs. there's some stopping points along the way.

we've seen risks are higher today. we're lowering equity levels and have a good stake in bonds >> do you have a call where the 10-year is going or just lower than here. >> they got down to 1.4% it has room to go, and when you look at bonds, typically, the interest rates, they get into a mood and they stay in that mood for an extended period of time until something significant acts to make it change. we don't see the change in my mind we look at the velocity of money and it's nowhere near the up tick >> moulson, coors. and they've even stepped into

nonalcoholic cannabis drinks so who knows >> we'll give you the final word here then. how does that impact the u.s. consumer in the long run >> well, let me go to trade first, it's connected to the fed. i don't think i heard the fed chair powell earlier this week say that the trade war could have an impact on what he does on interest rates. he did say that this week. even though he may resist president trump saying, you have to keep rates lower. he may not be able to resist the force of president trump's actions. i think i'd watch that very close. >> we're ahead of schedule with the fed john williams, thank you all. if you are fed president john williams, taking questions from steve liesman in new york right now. >> right now we're somewhat

below that target. we've had softer targets in the last few months, i think with the strong economy we'll achieve this -- >> i'm going to ask this more directly is low inflation something that should be addressed? >> so do you think inflation is obviously -- we have dual mandate goals, maximum flexibility. we have set increase -- we need to achieve that on a sustained basis. i do think the fed policy is one of the aspects of -- one of the decisions we need to think about. and we've been doing it that way pretty cone sift endly right now, the inflation data it's coming softer, i think when i look at policy over the next few years, i'm going to say

watching, how does it behave that will be one of the factors. do we have monetary policy in the right place? obviously on the other side of the mandate, watching as the economy evolved in the way consistent maximum employment. those are factors. on both sides of the coin trying to manage those two goals. >> there's a lot of stuff that's in flux right now. sometimes -- want to put that aside for a second want to come back to that. give us your base case -- say for the rest of the year as much as 2020? >> sure. one of the funny things, often when i'm introduced. people read this description of my bio and i spent a lot of time doing research on monetary policy under uncertain.

if you ever thought that was a good preparation, it was the other question i get, what is my fed policy under certain you know, let me give up the -- here's where things are. obviously the economy grew about 3% last year, about 3% the first quarter of this year so we've been seeing pretty strong economic growth really strong job growth unemployment down to the lowest level in 50 years. coming into the second quarter, the economy has been on a very strong trajectory in both gdp and employment so when i look at the first half of this year, my forecast is well above what i think as a trend rate of growth i expect inflation to move gradually back up to 2% but -- so that's in the rearview mirror, this is the data we have

on hand, which is pretty strong. by the same time, looking ahead. monetary policy has to think about, where is it going to go in the next year or two, in the last month i think, you know, there are more uncertainties i still think that's a good base case the economy continues to grow above trend. the economy that still has very low unemployment rate and inflation will be back 2%. no one has a before crystal ball and there are uncertainties around the global economic outlook. it can shift the outlook for growth and ennation in ways. my baseline is a very good one at the same time, we obviously, as always need to be prepared to adjust our views and work what's happening in the economy where the economy is likely to go and think about, what's the right policy to keep this

economy on a good strong growth path >> since earlier, the first part of may there's two new trade issues the threat of tariffs on china, and mexico tell us how you fold that into your base case scenario. >> as you hopefully all know, the fed reserve does not make trade policy or fiscal policy. we make monetary policy. we try to take those developments into account. we have a lot of economists who studied this carefully i think a few things that come to mind, one is the trade clearly does affect trade flows of exports and imports research from economists has shown that higher tariffs show in terms of higher consumer prices that's boosting inflation a

little bit and a drag on growth on some dimensions i would probably broaden this to what we're hearing if you look at the beige book. were we to attend the meetings we have with business and other leaders and communities across the country. this is very much on people's minds. people are concerned about how do they plan for the future. the uncertainty about what happens around trade and when business and other leaders are uncertain about things, the tendency is to take away the attitude. maybe hold off on some investment or employment decisions to see how this clarifies. we're seeing signs mostly anecdotal about businesses concerned about wanting to see how this is clarified, before they're willing to invest. we're also seeing invest in data itself i think those are signs it's clearly have an effect on the

economy slowing growth somewhat. but in -- i think this uncertainty part is an important part >> john, you may not know what you're going to do next. but the market knows for sure. it's quite incredible. markets have priced in a plus 60% chance of three rate hikes this year. >> i don't think that's right. >> no? >> three rate hikes. >> rate cuts sorry. >> maybe i really want tighter -- >> three rate cuts, okay greater than 50% chance of a rate cut by july are you comfortable with where the market is priced >> this is a question. >> that was pretty good.

>> are you comfortable. >> this is an issue we deal with in the world of course people are global fans what the fed does matters a lot. so i do follow what happens in the views of investors and markets. you know, and then we have our own views. and it doesn't worry me really one view is held by one group of people another view by others there are lots of investors on both sides i do think that market participants who i talk to people and other business leaders. there is no -- some more concern issing about trade issues. and the broader geo political issues and how that spills into the

global economic outlook. u.s. businesses are very involved in global trade this has a pretty diverse position it doesn't mean i have to agree or disagree. it just is a perspective i can understand about the outlook they're coming to their own views. we all get together in a couple weeks. we'll discuss the debate >> another side of that same coin is the yield curve. which is the three-month and 10-year -- is it pretty substantial? and you guys at the new york fed have this thing called the new york fed recession that essentially uses that

inversion or that spread and calculates a probability which i looked at this morning you now have a 30% increase -- >> actually, the new york fed economists back in the day -- back in the '80s on yield growth and recession. it's one of the factors i and many people look at. clearly, it's a strong statement in the markets they think there is a perception that rates are going to be lower

in the future. obviously the risk of outlook. i do take that seriously what are the markets telling us about where the economy is likely going where the risk distribution is i don't take the inverted yield curve. i don't go to oracle and ask us -- tell me the answer there are some special factors the fed's down still i think it is like other market indicators that are telling us there are heightened concerned about the outlook. something to take into account when i think about not only the baseline view of where the economy is but where the risks are. >> heightened uncertainty about how this economy is going to evolve over the next year or so. i think that's what the markets

are seeing and telling us as well >> i'm going to ask this last question and then open it up to the audience >> we began by talking about the bases. then we had a conversation about the risks out there and some of the singles being sent by the market i guess i have to ask this is it lower now than it otherwise would have been. >> this has been an interesting last 12 months i'm going to answer your question, back in september, i was seeing growth at probably 2 1/2% this year then we -- late in the year in december clearly very significant signs of slowing globally.

some signs the u.s. economy was slowing a bit. then we got down to the low 2s, and we got some pretty good data that was suggesting growth would be closer to 2 1/2 this year i think the lesson we take from this, my own base case is in this area probably 2 1/4%. we're getting a lot of mixed signals from other indicators. business investments weakening what's important for us from this is to just keep an open mind and keep being data dependent in how you assess this data, how we assess the risks to the outlook. and how you write policy decisions. yes, my forecast is still above

trend growth i'm not going to put it to conviction as we go through the next coming months and we'll get some clarity in the slowdown how various aspects of the trade negotiations play out. >> i lied, i'm going to do one more question. >> last time the committee spoke, it was in a wait and see -- they would be patient for some time. is that still the recommended character as to which direction rates need to go and where policy is in. >> first of all, i'm going to go back to a speech i gave here i talk about normal monetary policy the point of the speech was, the last decade, whether for me as a practitioner or economists at --

who study -- people in the markets or the general public. the last 10 years is not normal. we had zero interest rates for seven years. we had this very tell graphed normalization. for all of us, we have to relearn the monetary policy. the normal monetary policy doesn't mean saying we're going to stay constant for the next three years. it means reassessing your outlook, changing your views as the data and evidence changes. and really trying to calibrate or address policy as appropriate to achieve our goal. i think we're in the normal monetary policy world. where patience was a bit of the stage -- the last stage of normalization. and i think the world we're in now -- we may need to keep

interest rates the same or we need to approach it from that way. this has been a long ten years of unusual monetary policy now we're just more -- adjusting policy -- >> let's take a few questions. >> and that's steve liesman in new york they cover aydelott of things. did williams move the ball >> he's part of that research that goes into it. the fact that it's showing a relatively high recession meeting is meaningful. the fact that policy, getting back to normal the thing is, rates across the globe are very low they're negative in europe

and the fed chair talked about revisiting the zero bound at some point in the future normal is going to look a lot like the last 10 years i think you want to get out ahead of things sooner than later. when the markets have these expectations that are this strong there's not been a time at least since greenspan ran the fed. when the fed didn't actually capitulate the markets >> if we come out, let's say we have a strong jobs report tomorrow morning and then for the next month if that starts to turn >> sure, i can tell you, kelly, when you got -- you have to string together a lot of ifs it doesn't work that way the momentum at least in the short term is still downward >> there's the dow up about 90 points on the back of all. >> coming up, good-bye to robo calls. and five below may have to be sibew.x lo instead of waiting for your uber, how about waiting for your

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wells in her floral -- >> my wedding white. >> yes also, look at the pearls everyone bringing their a game today. shares of five below are down on news the company will start pricing its items above five to offset the cost of trade tariffs. they're testing price hikes in several stores they're thinking about moving to 5:15 or $6 >> i'm excited about this. the journalist in me and the nerd in me wants to know what happens when you raise a dollar store or dollar type store's prices that much will it really affect demand people have been speculating all the time about whether you would change people's interests in buying certain things. when we raise prices on lower

priced items, this is what happens. then we'll know, and air press accident will be set the next time around. >> this is clearly a population that is more price sensitive i would think if you saw gasoline go up, people would be like, oh, my god more than -- 15% of the stuff in the store is being impacted. >> it's not a huge portion dollar tree, for example is that going to have to be 2 dollar tree. >> don't put a cap on the brand name of your title five below, dollar store >> there's something about walking in and knowing everything in there is going to be really cheap prices >> this is the thing i would watch as an investor yes, prices are going to increase for consumers they're also working on shifting

their production and renegotiating contracts. that is in many ways the bigger story. it's not even so much tariffs. it's the uncertainty around the tariffs. >> i think they should absorb it it's only 15%. say to people, no matter what happens, we got your back. >> shareholders will love that >> doing channel checks. >> let's talk a little beyond meat the stock has quadrupled >> isn't that supposed to be refrigerated >> it's not meat you know it's going to go bad, it's not meat. >> but the question, you're supposed to cook these at room temperature. >> don't they put them in the refrigerated section of the grocery store? >> yes, but you're supposed to bring it to room temperature where do you put them in the

grocery store. we were talking about this earlier today. they want them in the meat section. and in some places, you can find it -- where i bought these today, the whole foods near bryant park. they were in the vegan section so it's not the target audience. >> of course they have a vegan section. >> remember how much controversy was around there when almond milk was being called milk how often was there backlash on soy milks. i wonder if the meat producers are saying, you cannot call this meat >> who's getting into this >> by the way, for the earnings today, they're looking at a loss of 15 cents a share of revenue >> sales of 300% since the ipo >> it's down a little bit today. >> how about this, the fcc approving new rules gives phone companies more power to block

unwanted robo calls. giving the green light to auto enroll customers this is going to be important in call blocking services instead of you waiting for you to sign up on your own you can block any calls not on a contact list that could backfire. >> which is why i'm very mixed about this whole decision and this vote today. going from the new york stock exchange to out here in new jersey i had two spam calls, one of which was in chinese mind you on the way here i love to see some of those robo calls go away? yes. if you're picking up the phone and you're having a hard time getting ahold of them because of that >> or your kid is borrowing someone else's phone >> they have to be pretty specific with how these programs are going to work. >> there's another thing they approve. that the fcc is making these phone companies employed shaken and stirred which will force them to verify where a call is coming from, so

you can't spoof it any more. >> am i a robot. click all the pictures with a taxi in it, and make sure you're not a robot. >> it always looks like someone's calling from my number >> the number would have to be real not great for law enforcement or private eyes >> i got a call from social security again >> i would love to see that happen as opposed to too broad of a ban skipping right along, why drive when you can fly uber is launching a service called uber copter kicks off in new york city taking passengers from lower manhattan and kennedy airport. the one way flight is about 200 bucks. here's the reason why we love this story, in new york that's a bargain to get to the airport. and it would be quicker than what we're dealing with. this is not some high

falutant -- i dosht know how they can make money on it in new york >> it's incentivized to be able to sign up initially for this service. you have to be a certain tier for other uber services. >> i have zero points because i just joined today. >> but aren't you more likely to use uber over lyft >> i'm more likely to use uber eats now because you get points for that. >> over a six-month period you have to get 500 points to be a gold member. i think you have to be diamond or platinum just to use this >> all of these platforms, whether it's eats. just your regular uber everything else contributes to that ecosystem ranking it becomes like itunes because it's going away. it becomes like the ios or app store. >> it's very clever. i'm not the market for

helicopters, but -- >> nor are 99% of people >> ground transportation is included in the price. >> you wait for it to be full. >> it's someone's birthday today, and i have an idea about what she might want to get you. >> a helicopter ride >> a helicopter ride to the airport. >> bug assault oh, wait, you already have one >> that's coming up next thank you very much. from bmw's to avocados, how the trump adniraonmistti's planned tariffs could have effects on consumers and not just at 5 below.

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talk between u.s. and mexican trade officials continues today. both consumers and businesses are racing for tarrives. phil lebeau is in mexico at the final assembly plant with how the automaker is planning to

wage these tensions. local economies are readying for these increased costs. contessa >> kelly, i'm here at the far international bread. 10% of what we import from mexico comes across that bridge. let me show you the line of commercial traffic right now, wait time is about 45 minutes, they closed down this to any kind of car traffic today to prioritize the commercial traffic coming through on this side of the border is the center for those factories that take raw materials and turn that into parts and finished products for exports on this side is mcallen texas which is a hub for trade and distribution you have companies like whirlpool, panasonic, black & decker who are already complaining that the china tariffs have added to their raw

materials costs. the customs brokers here, that i talk to say they have no mechanism in place to enforce this tariff, to collect the tariff, and in fact the pacific association of custom brokers emailed president trump and said, when these trucks come through, we don't know how to collect it last year of that $352 billion number one by far was autos and auto parts you had electronics, computer electronics. you have a washing machine and dryer. vegetables in fact, this is the top part port in the nation for avocados coming through, and all these companies bracing for a lot of uncertainty trying to rush stuff across the border now ahead of that contessa. >> there is some increased traffic, but not as much as you might expect the company says, it was a surprise to us, we can't figure

out the logistics quickly, how to move items off an assembly line off the trucks and across the border >> thanks very much. we'll see how they collect it if it's imposed >> let's get to phil lebeau now looking at how they plan to handle this in position. >> they're not exactly sure what they're going to do. the three series, the ones you see behind me are coming off this assembly line, they're headed for showrooms in the united states. today as they officially open this plant secures from the board of management for bmw said we still plan on shipping these three series up to the u.s in terms of production plans, do they plan to shift that if the tariff goes into place they said, no, we're not changing those production plans. and they're still determining how to handle the border tax will they pass it along to consumers, eat it, cut into the bottom line. they're going to wait to see what happens next week in terms of this conflict between mexico and the u.s., the ranking executive had this to

say about this dispute. >> this is an issue between the mexican government and the united states government of course, we always look for conflict resolution, and not conflict escalation. >> take a look at in chart, i think this says it all, in terms of how the auto industry is looking at mexico. you look at vehicles sold in the united states. not just built in mexico, built anywhere and sold in the united states, more than a third of the parts come from mexico, and those auto parts suppliers as we talked about, many of these go back and forth across the border, multiple times before they're put into a finished vehicle and sent to the united states it's going to be a mess if this goes into place on monday. >> such ironic timing for that plant opening. summer bbq season is upon us, that means burgers, hot dogs and flies. jane wells is here to zemin straight a device that will take care of those bugs without

ruining your foods. >> i'm locked and loaded, kelly. the most addictive fun way to make your picnic safe. >> we'll talk to the maker of that bug assault about how he's made millions. and whether he could lose from and whether he could lose from tariffs when we come back. and improves memory. - dad's got all the answers. - anncr: prevagen is now the number-one-selling brain health supplement in drug stores nationwide. - she outsmarts me every single - checkmate! you wanna play again? - anncr: prevagen. healthier brain. better life.

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before the break we showed you our bug assault. the self-made millionaire behind this product which brought in $30 million in revenue last year his products are made in china joining me now the maker of the bug assault. >> how much is this assault gun? >> how much is it? >> 40 bucks? >> 40 bucks basically, yeah. >> are you going to have to raise the price 25%? i'm curious, i know you spent two months in china developing this thing how are those higher costs going to impact us >> right now, we haven't had any tariff impact at all so we'll see what happens. >> so the bug assault must not be on the list >> right, it could be on the

expanded list. >> go ahead. i don't think there's a toy tariff right now, so we'll see what happens >> yeah, it is a toy, i guess, a weapon you could call it how well does it work for people to shoot bug salt i think if it were me, lorenzo, i would have a very hard time actually hitting one of these little guys. >> if you're gun handy or take time to learn, it's pretty simple i could go 10 for 10 obviously because i'm the inventer but it takes a little time to get used to but if you're used to a gun or a bb gun or a paint ball gun, you shouldn't have a problem at all. >> jane, our own dom chu has one of these and he said his friend gave it to him because a lot of people don't want to use pesticides or raid, anything like that inside their house if they have kids or pets and this is a different way you can attack these guys. i'm wondering about the salt

debris it might leave anywhere but it's an innovative approach. >> and easier to clean up that way. i think you buy this for fun and you think it has a use and then addicted to it you told me, people have their doors and windows open what i love about lorenzo's story, a guy who dropped out of high school, became an entrepreneur, and built this company. he just had this idea. you don't have to go to harvard business school, you know what i mean and he's become a multimillionaire because of it and you can see he still looks living the life in l.a. >> lorenzo, i thought it was interesting you took money out of your wallpaper business to start this and had an angel investor how good is business >> how good is it? it's very good i mean, it's a great way to kill flies and it's entertaining and fun. and it's exciting to market because it's completely ridiculous i don't know, i kind of got something going here, i think. >> i thought it was interesting that kick starter rejected you

but indy go go took it raised more than half a million. how many you think you'll sell this year? >> probably about the same, maybe a little more. we'll see. >> and you'll take it? >> yeah, i mean, it's constantly growing and constantly doing research to make them better and that's kind of exciting, going back and forth to china. >> absolutely. >> always working on something hard to sit still. having a hard time here. >> don't worry, we'll let you go if you missed the fly in the hot dog, gets more sodium. just in case >> got salt in it. it's all salt. just table salt. well now, ai've got to do it right. i can't get the salt in there. see? i had it earlier >> safety. you've got the safety. >> there we go >> clusters of salt all over the table. this is a good place to wrap >> addictive >> thank you very much

lorenzo, congratulations and thank you for joining us today. >> thank you >> appreciate it very much we'll continue to play with the bug assault and look at why cloud cannibalism can be the next shoe to drop in the tech wreck. wreck. back in two. right now? what's now? he says they're surveying our property now they're probably at the wrong house i don't see any hovering his name is hovering? look up? omating claims with machine learning and analytics, cognizant is helping insurance companies advance how they serve even hard to reach customers. cool ♪

welcome back cloud air sinking more than 40% after reporting mixed results and guidance yesterday not just there nu tannics and pivotal software also hit hard lately cloud is the third pillar of the tech wreck alreka, portfolio manager. steve kovach, tech editor. here as well to help translate in case i struggle to understand cloud infrastructure ulreca, this is fascinating. with del, what's going on with this sector? >> i think what we're seeing is the have notes and the haves when it comes to public cloud. those companies that embraced the public cloud earlier

like cloudera. >> what is going on there that all of the sudden, they're getting side swept >> with amazon, microsoft and google now offering storage for rent, you really don't have to buy infrastructure anymore just need a credit card and you can buy terabytes of data storage and compute. and so it's a real risk for infrastructure vendors that are catering just to a data center >> what would you add on that? >> on top of that, you were talking before that they're also getting into the physical infrastructure as well amazon announced a couple of months ago, they're getting in this space and that's what's causing what we're seeing right now with cloudera and top of that, a big announcement from google google fallen behind the big three. amazon and microsoft and now they're literally saying, we're going to make our biggest acquisition in five years in order to get more market share and really grow this segment that hasn't been growing for us. >> where do you, ulrike, think

investors should be for the next phase of the rollout >> i think you have to think about what's the public cloud strategy of any infrastructure that's sort of the main paradigm that we're thinking about going forward, but you also have to think about that public cloud vendors not only taking new work loads in the cloud but also coming to compete in the data center and you had google just recently announcing a platform that competes direct ly with solution of pivotal not only the threat and the public cloud but now also competing in their own territories, data center. >> is it fair to say as we're talking about a regulatory crackdown maybe on these big tech players, that the cloud is one area where they are taking a lot of share from a lot of these smaller areas, is that what we're seeing play out right now? do you think there should be some kind of pushback against that or is this just the nature of the beast >> i think that's the nature of

the beast for now. but they're also realizing that not all the work loads are moving to the cloud and saying, look, we're also going to be happy to support any workloads in your private data center. so i think that's their strategy to respond to that question. >> when it comes to what the government is supposedly going to start looking into with all of these anti-trust probes, we're not hearing stuff about the cloud. we're hearing stuff about google search dominance, apple's app store, that's not the main business for amazon. amazon people are looking at their e-commerce business more than cloud business even though they have a third of the market share right now. so i doubt that's going to come up it doesn't seem like that's what people are talking about as much as going to come up with all of these anti-trust probes. >> it is an area where they are doing big business i just think it's not as headline friendly. >> for sure. >> finally, could people just camp out in these big tech names? you mentioned mon ggo, are ther other places they could be >> native to the cloud, those

are very interactive and going forward, a couple of small companies or smaller companies going fast that fall into that category >> you don't want to name them >> i think there's so many good ones i don't want to pick favorites. >> acquisition targets >> like you just said, yeah. >> elegant way of getting out of that guys, thank you both good to see you. that does it for "the exchange." time for "power lunch" which begins right now >> kelly, see you in just a moment good afternoon, i'm tyler mathisen with melissa lee. new at 2:00, no deal with mexico, not now at least, new threats of tariffs against china as well. the markets are holding up are trade fears overblown, at least for this day or are the markets counting on the fed to bail them out we'll talk fed and the economy ahead of tomorrow's big jobs report and as google faces heat for being too big, it's trying to disrupt $150 billion video game industr