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 industry. "power lunch" begins right now

>> welcome to "power lunch." i'm melissa lee. stocks higher across the board at this moment the dow is up by a third of a percent. it's on pace for four day winning streak first in three months, also on track for its best week of 2019. s&p and nasdaq now in the green. boosting the index chevron and exxon are the biggest gainers. >> bob pisani at the new york stock exchange with more on the trading action this hour bob? >> reporter: kelly, we've had quite a ride this week, not just today. i want to show you the s&p 500, since the week started here. look at that straight up we've moved 75 points in the s&p, folks i'm talking 600 points in the dow jones industrial average frankly, we don't have a lot of facts but here's the key issues moving the markets we had some comments here. unsure what's happening with the mexican tariffs.

mixed messages president saying it's not enough what we've been doing here but a deal going to be reached talked about risk to the euro area to the downside, that dropped the markets briefly in the morning but not long-term. mr. powell over at the federal reserve the other day is the main mover of the market this week he said the fed will monitor trade and everyone believes there's a put from the market now and mr. mnuchin, secretary treasury, meeting at the g-20 over the weekend some hope that will help but again, look here just not a lot of news and big sectors still weak look at the transports today land star with the warning, essentially, after the close yesterday. talking about truck load deliveries being pricing, more disappointing. all the transports and logistics stocks are weak. quick news on barnes and noble right here to my left. halted briefly there are reports there could be an auction coming up and this is according to "the wall street journal. no confirmation on that, but you

see the stock moving rather quickly on that. reopened back to you. >> robert, thank you very much discussions between the youths united states and mexico under way at this hour the white house, the clock is ticking. president trump's tariffs of 5% on all mexican goods are set to go into effect monday. kayla tausche in washington with the latest hi, kayla. >> reporter: the white house meeting getting under way. the mexican ambassador said talks are proceeding and they are progressing. step by step, bit by bit this after throughout the day, there were cabinet level and staff level meetings at the state department, really drilling down on these policy issues we should note though, trade officials are signatutting thes talks out. the process to pass the usmca. mexico offered to reprogram anti-trafficking funds to border efforts and offered to set up a new aid plan for central america and move troops to the

guatemalan border, which reportedly is already doing but this morning, the vice president mike pence said mexico still needs to do more >> we're grateful the mexican delegation came forward with proposals. it was a good discussion we welcome what the mexicans put on the table but as the president said yesterday, it's not nearly enough >> reporter: a senior administration official says that the white house wants mexico to keep all acsylum seekers in mexico until the immigration can be processed by the u.s. and the white house wants mexico to accept a designation as a safe third country, meaning central american refugees would be required to be accepted by mexico before being passed into the u.s. red line and under the assumption they'll go into effect on monday and there's hope there can be a deal reached between monday and when those tariffs ratchet up again july 1st. back to you. >> kayla, thank you.

kayla tausche at the white house. no deal with mexico. the countdown is on until the 5% tariffs go into effect on monday as she mentioned and the other side of the trade war, threatened china with tariffs on a further $300 billion worth of goods. still is the dow is higher. ignoring trade worries and banking on a rate cut from the fed? asset management and tim seymour from seymour asset management. tim is a cnbc contributor and a fast money trader. tim and tom, great to have you both i'll start off with you. basically, it's a chart of what the markets expect and what actually happens with rate cuts and rate moves, back to 2008 and seems like almost every single time the market had it wrong is the market going to get it wrong this time because it seems like if it does, that historical pattern, there could be major disappointment and volatility.

tom? >> everybody talking about the fed put but you have a bond market put to the extent the 10 year at 2-1 and the market looks pretty attractive. and does believe that the fed is in the dovish stance and to the extent that dovish stance gets removed from economic strength or some kind of positive around tariffs but i think that's where investors really have comfort from the fed >> and the markets are pricing up a decent chance and ran the numbers, if fed cuts between now and the end of july would be the shortest time frame between two moves in opposite directions

since 1995 so there seems to be a lot of room if the fed doesn't come around to the market's thinking right now. >> you're at 15.5 times. not stretched but i guess i feel, i'm most worried about not the economy or the trade dynamics but about positioning and i look at where bull bear indicates and almost , at least for the short-term, bond screaming fed cuts and the fed heard, i may be in the minority on this but three in addition to powell say they see 3.8% unemployment and 3.2% trailing gdp. that's not a dynamic where the fed needs to move once, let alone twice and some people even have three times i think the market is pricing in the fed, no question about that. that explains why everything is

muted. but look at, you know, negative 23 and 10 year bunds i don't like it. >> corporate profits, because if they don't come through, the stock market isn't going to go very far no matter what the fed does, no matter what happens on trade. what do you see there and does that make you more encouraged? >> the hurdle is lower comparables to last year the third and fourth quarter they're easier beats but also, if you look at the underlying economy, the consumer is really strong so there's some strong economic backdrop but i think it puts a damper on longer term activity with cfos, cap x, more so than main street planning their daily >> hey, tim, would you buy

stocks leverage to mexico or china? >> i don't think you need to in the short run. having said that, there are some places, i mean, i think apple started to decouple from the semiconductors, for example, of being a prime trade target, but i don't think you need to take on i've been kind of wrong on mexico for a couple of years i think the peso is absurdly cheap at these levels. i don't mean anything derogatory as long as they don't really follow through on these tariffs, mexico does look interesting whether it's the shippers, ksu or some of the auto makers, i think ultimately, look, i feel comfortable owning gm right now. so i think there's been an opportunity, having said that, headlines are not a reason to buy these names. >> tom, same question to you >> gm is a good example. some of these stocks trading so cheap and the mexico, the tariff, i think, a short-term thing. it's a negotiation ploy.

and i think when this plays out, you'll find the stocks that you, basically traded off on this type of news for opportunities and risks. >> tom and tim, thank you. >> tam tim? tum? wrapping up with steve liesman and steve will join us after the break to tell us what mr. williams is saying about the potential for those rate cuts we were just talking about and bmw opens the new final assembly plant in mexico just as the president is set to, yes, slap tariffs on cars made in mexico tariffs must be slapped. we will take youhe tre as the plant opens. plant opens. stay with "power lunch." ♪ to fill your world with fun. ♪ to share my culture with my community. ♪ to make each journey more elegant. ♪

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there they are. aww! whaa , whaa, ahh! welcome back to "power lunch. i'm julia boorstin snap shares are up nearly 8% today on pivotal upgrading the stock to buy saying we don't want to miss the inflection point in the business despite our already strong year-to-date performance. analyst report points to user growth saying it prospectively turned a quarter saying advertising is moving the right direction. they're also confident in the launch of the android version of the app saying they believe it's doing well with today's gains, now the

stock up 7%, the stock is still up over 150% year-to-date. melissa? >> julia, thank you. julia boorstin new york fed president john williams wrapping up q and a with our own steve liesman in l.a. steve joining us now with the highlights, hi, steve. >> reporter: hi, melissa i got a chance to sit down with john williams and i asked him about the message of the market and whether or not he hears the message of the market at about the call for rate cuts and the concern about the economy. let's listen to what he said and whether or not he's really embracing the market or just saying he hears it here's what he said. >> so some were concerned about, especially around the trade issues and some of the broader geopolitical issues and how that spills into the global economic outlook. you can see that mood out there and i think translates into people's concerns or worries about the economic outlook which then affects their views

on policy. doesn't mean i have to agree or disagree, but just a perspective. i can understand given the concerns i hear people have about, you know, the risks of uncertainties around the outlook. >> reporter: so kind of like keeping an arm's length from that sensibility or message from the market and one reason, by the way, not pushing back against where the market's price now calling for those rate cuts but also not embracing it one reason might be he has a somewhat more optimistic outlook than say your average fed official >> i think there are more uncertainties today. i still think that's my base case as an economy that continues to grow above trend. an economy that has a low unemployment rate and inflation moving back to 2%. >> melissa, just so you know, i did ask a question the president has not been shy about giving you advice about monetary policy and i said, would you like to give the president some advice about

whether or not to put tariffs on china or mexico and he declined that opportunity to answer that question >> why is that not surprising? what did he say was the economic impact of the tariffs should they go into effect? >> he sees them as negative but he's not, i thought he was actually less dovish than say, fed chair jerome powell was earlier this week in chicago or vice chair richard clarida who said if it happens, we will react. not necessarily the message of john williams. i hear it, i see it, i'll take it into account. >> steve, thanks very much steve liesman. typically seen as good for the big banks when the fed hikes rates. why are financials rallying right now as investors are getting hyped up for a rate cut? wilfred ross is here to explain. >> reporter: banks bounced back recently even as expectations of a rate cut have risen. so first, let's explore why a hike typically is good for banks. it's because it increases their

ability to charge borrowers more without paying necessarily savers more at the same time also get more from reinvesting their securities, which boosts their net interest income. perhaps not as much as feared. the shape of the curve is also important. banks borrow short and lend long, so their net interest margin is bigger with a steeper curve given the current shape of the curve as you can see, a cut will, in fact, lead to a steeper curve if that short end comes down also, banks fees may rise from wealth management, all of which improve when the economy is stronger when the rate cut may lead to. here's a chart of fee income as a percentage of total revenue for the big banks. the investment banks like goldman sachs and morgan stanley, more likely to benefit in a relative sense to the

others either way, given back to valuations, the market has focused on the positives for all of the banks in the course of the last week. citi has the best week because of exposure to trade, it suffered a lot last week >> thank you very much wilfred ross as fears grow over trade war with china, are investors overly optimistic that the fed will cut rates to support the economy let's talk about that and more chief investment officer at pimco, oversees about $1.7 trillion in assets under management mark, welcome. welcome back >> thank you >> nice to have you with us. what is the bond market telling you this week? >> i think what the bond market has been doing over the last zefrm mon several months and this week is pricing in slower global growth. growing 3% last year, we're now growing at 2 inflation is low but most importantly, this trade war with china and the heightened potential war with mexico could

really cause the u.s. economy to grow below potential trending at 2% growth but the downside risks increased materially so the market's now priced for 50 to 75 basis points by end of this year. >> is recession a risk >> i don't think it's a risk right now because the consumer and businesses are pretty healthy. the consumer and 68% of the economy, low rates support the consumer the job market, et cetera. going into a mexico trade war could hurt business sentiment. you'll start to see job growth slow materially, particularly if the trade is not resolved with china. that will, in turn, slow the manufacturing sector so i do think the recession risks are going up pretty significantly. >> the market seems to expect rate cuts, plural, do you? >> we think if president xi and

president trump don't meet at the g-20 and if we don't see progress with the u.s. china trade front, and we see the tariffs go into effect with mexico, we think, actually, the fed could cut as soon as july. and basically, it's going to depend a lot on trade and very much motivated now about uncertainty and what happens politically but if this extended trade war is not resolved, then yes. the fed could cut as soon as july and i think they'll go 50 basis points. >> your latest or pimco's latest global outlook very bearish on credit what needs to happen for the bearish scenario to not play out. if rate cuts happen, could that actually help things in terms of companies being able to service their debt >> so melissa, it could help near term just in terms of changing sentiment and we could get a near term relief rally but what we're worried about is

longer term. politics, populism, this deterioration in the u.s./china relationship these are long-term secular issues that aren't going away. so we actually think, given where valuations are, we think equities are on the richer side. we think credit scores are quite tight particularly given the fact recession risk is increasing so any rally in risk assets, we would love ok to derisk portfol and the more cautious side of the market with equities and credit. >> let me understand what you just said very clearly if there is not progress o trade between the united states and china, at the g-20 meetings later this month, if the tariffs go into effect, undampened, unmitigated on mexico, you expect the fed to cut rates by a half point in july. >> that's certainly possible, tyler, and i think the other thing we have to factor in, will the tariffs on mexico escalate

and go above 5%? trump talked about going to 25 if we got 5% and then pressure on trump and all we got, then perhaps we're set up for the fed to be on hold but if we get escalation of those tariffs with mexico, then i think the business uncertainty will increase materially. there is going to be, by the way, significant winners and losers in the credit and equities sector. we're cautious there >> mark of pimco, thank you. take a look at tesla up nearly 5% today. 11% since monday should you hop in or will the rally run out of juice we'll debate it straight ahead on "power lunch. for the most important part of you... your brain. with an ingredient originally discovered in jellyfish,

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welcome back to "power lunch. i'm michael santoli at the new york stock exchange. tesla seeing a big upside reversal this week the stock soaring more than 16% from its multiyear low hit on monday is the worst possibly over for tesla we have john petridas.

a barrage of bad news and people downgrading expectations for volume sales all the other headlines and the stock seems to have snapped back from a multiyear low does that tell you anything? >> i mean, for the bulls on tesla, you really are happy the month of may is over and june has come what a rally in the stock. i think the stock is at a crossroads strong conviction on the upside or downside, no in between you're buying it for the long-term. you think and tesla will continue to dominate the e-car market five years from now or you think they're going to drown and burn through cash and the stock will go consistently lower. no in between here we're in the case of the bear side we think valuation is just not attractive for this capital intensive business where more competition is coming to the market >> back above $200 a share some folks feel like that maybe is passing the first test but

we'll see how it goes from here. very jumpy stop. thank you very much. for more "trading nation," head to our web site o or @tradingnation. back to you. >> ahead on "power lunch," president trump threatening another set of tariffs on china. we'll hear from the u.s./china business council plus, game on. the video game industry. all the details on its new console and pet foods so good that even people can eat it? all this when "power lunch" returns. >> and now, the latest from tradingnation.cnbc.com and a word from our sponsor. >> volatility spikes are notoriously difficult to forecast but when they do occur, they tend to be relatively short-lived. so rather than try to predict the next spike, consider positioning your portfolio for when volatility comes back down. i'm joanna payne and schwab is the better place for traders

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welcome back, everyone i'm sue herera here's your cnbc news update at this hour. president trump meeting with french president macron after attending ceremonies commemorating the d-day invasion asked by a reporter about possible additional tariffs on

china. >> i will make that decision, i would say, over the next two weeks, probably right after the g-20 one way or the other, i'll make the decision after the g-20. bill meeting with president xi and we'll see what happens, but probably planning it some time after g-20 >> apple recalling more than 800,000 three wrong wall adap fors due to risk of electric shock. it was sold before february of 2015 the company receiving six reports of other countries from consumers receiving shocks federal regulators voting to give phone companies the right to block unwanted calls without giving customers permission first. the scc move could make call blocking widespread and help consumers dodge annoying robo calls. they may charge you for it that's the nooews this hour, ba to you

>> just 90 minutes until the closing bell get you caught up. we're watching the dow very closely. if it could finish a gain here, four straight days of gains. first time it's happened in months and the s&p 500 and the nasdaq in the green here today the oil market is closing for the day. dom chu at the cnbc commodity desk. >> accelerating into the close and world benchmark prices $52.62 brent crude, $62, and downward bias and near five month lows yesterday on supply concerns and everything else with countries like russia, the u.s. and saudi arabia, continuing to put more barrels on the market. it's the demand side getting perhaps more tension traders trying to assess what a possible slowdown in the economy will mean in the demand for oil. turn to some relief for u.s. consumers at the pump, a gallon of regular unleaded gasoline

with $2.78 down from $2.89 a month ago and back over to you >> dom, thank you very much. as president trump ratchets up pressure, the german auto maker hoped the new plant would help meet demand in north america the political climate has made that anything but certain. philip lebeau is live at that plant with more. hi, phil >> reporter: talk about bad timing to open up a new plant. that's what bmw is making. second largest market in the world for bmw. built in spartanburg, south carolina the flagship vehicle for this company and it will be supplied, already is being supplied for this in san louis and not sure what happens as of monday in

te terms of how they handle will they eat it and cut into their profit margins one thing the lead executive for bmw here in mexico today said that they are sure about, they continue to invest in the united states and they hope the trump administration remembers that. at the same time here in mexico. the biggest plant of the bmw network is standing in the united states. >> if you look at shares of bmw, the company we asked them specifically, will you change your production plan will you bring the three series in from germany, if there's a 5%, 10%, 25% tariff at the border at this point, they're not changing their production plans. guys, back to you. >> phil, thanks. philip lebeau in mexico for us appreciate it very much. in the meantime, president trump gathering with world leaders in normandy today to

commemorate the 75th anniversary of d-day as chinese president xi agrees to a partnership with president putin at a meeting in moscow putin describing xi as his, quote, best and bosom friend what impact could that on trade talks and how worried should investors be vice president of the u.s. china business council and non-partisan group with 200 american company that is do business with china. erin, how should business leaders feel about this gesture that xi is making towards putin? >> many are concerned about the direction of u.s. china relations. we would hope that meeting with european allies would talk about collaborating to deal with the issues that foreign companies deal with this china, since they aren't unique to american companies, but we doubt that's been happening at this point, we are encouraging both the u.s. and the chinese government to get back to the table and start

resolving issues directly. >> in the interest of your members is that there is no conflict between the u.s. and china, presumably, they do big business in china and want the markets to remain open, yes? >> i think the issue here is less that we want no conflict but we want to see resolution of long standing issues that foreign companies dealing with in the market. the trump administration highlighted the right issues the key is we disagree with the tactics that they're using to get to resolution of those issues >> being tariffs what about tan what about sanctions >> we hope they can be kept in distinct lanes certainly with national security concerns with imports from china, be they technology or otherwise, that needs to be dealt with but we don't want to see that bleed into trade negotiations. >> the chinese government fined the four joint venture in china a fine for anti-trust concerns and a lot of people are connecting this to the trade war. what is your group saying in terms of the real fear of what china could do to their businesses and operations in

china? >> china was very clear from the beginning of the trade war that it was willing to do both quantitative, ie, tariff retaliation as well as qualitative. the challenge for foreign companies is that china has always been a difficult place to do business, so distinguishing between the challenges you're seeing right now in terms of uneven enforcement and national treatment, how foreign companies treated vis-a-vis domestic companies versus something that might be unique to u.s./china tensions it's all anecdotal most companies are sitting and waiting. >> do you think all things considered, in five years, our businesses relationships with and in china will be better than they are today or not as good as they are today >> look, i'm an optimist i want to believe the two governments are interested in coming to an agreement on the issues china was making some very useful moves prior to the beginning of may in terms of

leveling the playing field unrealistic to think we were going to resolve all the issues this year or in one trade agreement. if we can lock in the progress, i think it would be better compared to where they are today. >> what do you think happened in early may? what changed >> i think there was a miscalculation by both governments in terms of where they were and what they needed to get to an agreement when we talked to former u.s. and chinese negotiators, they all described the fact that the end game of the trade negotiation, sometimes you try to take back some things and try to put more on the table the bottom line is you can't allow that to halt the negotiations get back to work >> thank you very much, good to have you erin ennis, appreciate it. to the bond market, rick santelli at the cme. >> anyone involved in the short end on exchanges is having a

hard time. the type of volatility we've seen in these short maturities is making it hard for market makers to make markets and for some of them to hold on to their dho dough. just ponder, 281 at one point. low close was 283. that was trading today actually under for this move and now it's back to unchanged at 286 the short end just pulling the long end up with it. we are within a basis point on 10 year and remember the main reason for this is because interest rates pay a lot of attention to the durability of equities that they build wider margins to the upside and cognizant of what's going on tomorrow with jobs dollar index, unbelievable one week ago around 98.14. dropped 1.25% in a week on the dollar index that will help evaluations and finally, look at the last time we closed at this level with the

dollar index around the third week in march right around the 27th so we want to keep an eye on this line right around 97 even tyler, back to you >> rick santelli, thank you very much let's go to bob pisani who has a market alert bob? >> and tyler, we just moved 6 or 7 points on the s&p 500. just take a look there there is a bloomberg headline. u.s. delaying mexico tariffs as the time for deal runs short again, u.s. delays mexico tariff, time for deals run short. no headlines to bring you a little bit more. part of the mixed messages on mexico we've been receiving all throughout the week. president earlier saying the discussions so far have not yielded enough he hasn't made a decision on that and we've had pushback from the senate republicans and that's getting hope that perhaps something can move we have seen some movement in some of the auto related stocks. saw general motors, just saw a trade go by there. there you go slightly to the

upside jack daniels in a tariff hangover one town, they're ditching silverwear cracking down on ice cream trucks the stuff you need to know coming up on "power lunch. let me ask you something. can the past help you write the future? el calm in the eye of a storm? can you do more with less? can you raise the bar while reducing your footprint? for our 100 years we've been answering the questions of today to meet the energy needs of tomorrow. southern company

markets have popped higher on hopes of a tariff delay many u.s. businesses feeling hungover from the trade dispute with the eu. tennessee whiskey say the tariffs cost the company $125 million. europe is 27% of its net sales the shares of the company up 18% this year. the ceo said we view these tariffs as a targeted campaign against foreman and hard to say they aren't.

>> the stock is up 18% somebody's drinking somewhere. >> the next round of tariffs could be problems too because they have a tequila business and a small part of the business but incrementally, that's a fast growing part of the business so if that i feeliey're feelingt too. >> the labor jobs report tomorrow but the tightest in nearly five decades and it's pushing many businesses to rethink how they operate in the latest beige book is a report on a restaurant in richmond, virginia for workers, it replaced table service with counterservice only couldn't find enough people and silverware with disposable forks and knives because they couldn't find people to wash the dishes >> this is the story of the year i mean, not eco-friendly, turns out strong labor market is pushing people to use more plastic. i want to know what restaurant business my richmond friends we've got to find out. >> i'd be worried though, if i'm

somebody in the workforce, this could be the trend among companies. they're able to do more with less and they'll continue doing that and what does it mean in the future >> right, i mean, get rid of silverware all together? go to taco joinhat joinaco joins >> handheld food only. next time you hear the ice cream truck, it might be followed by sirens it claims to owe $5 million in unpaid traffic tickets the city already seized 46 ice cream trucks part of operation meltdown >> do they have to call it that? i mean, they literally are calling this operation meltdown and shouldn't get out of their traffic tickets. >> i don't want to buy my ice cream from somebody skirting traffic tickets. >> bad stuff >> kayla tausche has more context on that story about the u.s. considering delaying tariffs on mexico.

she's at the white house what have you learned? >> reporter: i think the word considering in that headline is really important because even though the president very much wants these tariffs to go into effect on monday, there's some logistical things that need to happen behind the scene to actually get them to go into place. there has to be a new security and computer program that's written for the customs and border protection. that takes several days, if not several weeks, i'm told. and then you have this idea that a legal declaration of these tariffs needs to be issued into the federal register and that takes at least several days. we're waiting to see exactly where either of those processes is in the mix, we've reached out to cbp for comment and haven't heard back and declining to comment on this, but it is interesting to distinguish this tariff round from the previous tariff rounds that the president has put in place those tariffs were the result of months and months of comment periods and procedures that were put in place for companies and stake holders and countries to

weigh in on this this was really done by tweet last week and so there is some concern that there's no process here, there needs to be some feedback and there needs to be some infrastructure on the back end to actually put this into place and that a matter of days is enough enough time to do that but we're still waiting word on exactly where the tariffs could take effect and whether issue in fact, they'll be delayed. >> doesn't hurt that the party doesn't seem to be behind these tariffs either and in a year, nearing the elections, kind of don't want to lose your party. >> the senate majority leader reported to have told republican members of the senate earlier this week, he was pushing to delay these tariffs until all republicans could meet with the president to understand his rationale for these tariffs and why he felt this was the right move to get mexico to the negotiating table and how long exactly he'd plan to have this in effect. president today said tariffs are a beautiful thing but certainly, the majority of the republicans in the senate do not agree with

that. >> kayla, thank you. kayla tausche at the white house with the latest. as tech gets targeted for being too big, google's gone after a new market $166 billion video game industry goog'srence anle psechge the game we'll have all the details straight ahead on "power lunch." i had a coach. math. ooh. so, why don't traders have coaches? who says they don't? coach mcadoo! you know, at td ameritrade, we offer free access to coaches and a full education curriculum- just to help you improve your skills. boom! mad skills. education to take your trading to the next level. only with td ameritrade.

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ni'm workin♪ to make each day a little sweeter. to give every idea the perfect soundtrack. ♪ to make each journey more elegant. at adp we're designing a better way to work, so you can achieve what you're working for. google pulling back the curtain on its new streaming service for video games. the tech giant hopes to use a streaming model to disrupt a

$166 billion industry. josh lipton in san francisco with the latest. hi, josh >> tyler, it's official. google's new game streaming service is coming. google stadia will launch in november in 14 countries including the u.s., uk and canada with at least 31 games from 21 publishers including ea and ubisoft. starting today you can preorder what's called the founder's edition package for $130 that's going to include a game controller, crumbcast streaming device and three-month subscription starting next year google's going to offer the stand-alone service itself for $10 per month. that's going to be called stadia pro. for that you can stream games in q4 video at 60 frimz per second on your tv, phone, tablet or computer with a chrome browser and pixel 3 and 3a smartphones there will also be a free service coming too importantly remember google doesn't really see this as a subscription service gamers should xb to buy, not rent these games and google has plenty of

competition, tyler, in this market microsoft testing similar technology with its own empl employees right now. that's called project x cloud. no word yet on an official launch date there. amazon is reportedly pursuing this tech as well. google's idea here, allow gamers to stream complex graphics-rich games right to their devices no pc or console needed. guys, back to you. >> josh lipton a lot of change coming to the gaming industry, increased competition from players like google the push to streaming constantly ephful consumer trades as we see with the explosion of free to play battle royals russ freshtick, the co-founder of polygon and player two, eric haliger russ, i'll start off with you. we know the price. we know when it's coming something that's key is we don't know how it's actually going to operate and feel i mean, this is going to be the first major offering with no console. >> people have tried to do this before, which is to say stream in a -- it's effectively a video

you're watching but you can have control of that video. but you can run it on anything, your phone they've tried it before. it has never worked as well as the companies have advertised. that is the concern here are you going to get subscribers for a service that they've never really used? it's hard to say >> then you run into a chicken and egg problem and that is attracting the developers to put the game titles in this service. >> sure. that's actually a little bit easier because the developers don't have to change the games they just put out the games they've been releasing on this service. >> eric, what's the long-term game plan for google with this service, do you think? >> well, i think google's going to eventually have to differentiate itself whether you have a console, whether you're streaming, you know, it's ultimately about the games. you can stream just as well as buying the game, but ultimately google is going to need exclusive titles and that sort of begs the question how is google going to get that are they going to buy studios? are they going to pay studios for exclusives that's going to be something to watch. >> sounds like a reason to buy

the studios, wes if there's a major new entrant and many more to come into the space. >> yeah, potentially investment in game studios is very risky you never really know when one is going to pop off and not. i think they're better off working with existing studios seeing if franchises develop out of that and then maybe expanding. but jumping right in and buying a studio is a big ask. >> erik, what does this industry look like ten years from now both the game publishers like activision and the others and the console makers >> well, i think the industry -- it's still going to be all about the games and who delivers the best games are still going to be the big winners. so i think that's not going to change from who we are now i do think it's going to go to a streaming environment. for the most part streaming helps publishers with profitability. usually you can get a better margin than you can with physical distribution >> because you don't have to have a physical disk, right you?

don't have distribution through a store like a gamestop. i can imagine this doesn't, russ, help game stop at all. >> no. this is very bad for gamestop. they've been in a bad position for a very long time they are effectively blockbuster. and more and more of these game companies are selling games digitally. you can just download it straight into your console you don't need a middleman you don't need to go to a store. so where is gamestop in this scenario like how are they benefiting the consumer they're kind of not. >> gentlemen, thank you so much for joining us russ frushtick, player one erik handler, player two >> who won >> that we don't know. that we do not know. let's take a check on the markets intraday of course we get that headline the bloomberg headline that the u.s. is considering delaying the implementation of tariffs on mexican goods. that should come on monday expect it to come on monday. we did see the markets spike higher we get about six s&p points on that headline as loan. and now we're up by almost half a percent. >> tomorrow will be an interesting day. the jobs report. we'll see if there are any signs of slowing in it

most people don't expect that. in fact, quite the contrary, they think the unemployment rate may go down another tenth of a percent. >> we'll see especially if that richmond -- zbrt restaurant. they won't give you silverware >> by the way, kansas city southern still down almost 2% today. >> thank you so much for watching "power lunch. >> "closing bell" right now. good afternoon to you. welcome to "the closing bell." i'm here at post 8p of the new york stock exchange. that is chevron's post up 2.4%. top of the dow, no less, as oil prices begin to stabilize. we have 59 minutes left o'trade, and we've got everything you need to know as an investor coming up. >> i'm sara eisen. welcome. vettes let's have a look at what's driving the action in today's market reports of the white house potentially delaying those tariffs on mexico that were set to kick in on monday defensive stocks, though, leading the market and investors are awaiting tomorrow's jobs report pl joining us for the hour to break down the