>> it is a little window inside the psyche of goldman. give us some credit. we're not getting any love >> they'll get there that does it for "the exchange." i'll join tyler and melissa for "power lunch" which begins right now. >> thank you, kelly. see you in just a moment i'm melissa lee with tyler mathisen a weaker than expected jobs report leading to a big market rally. markets expecting jay powell and the fed to come to the rescue. but will they? is there a creeping credit crisis parked outside in your crisis auto loans with a record high and would you trust the walmart worker to come into your house and put your groceries into your fridge "power lunch" starts right now >> welcome to "power lunch." i'm tyler mathisen big rally as the weak jobs report makes a fed rate cut seem

more likely. that's what's cheering equity investors, as you see, the dow nearly up 300 points nearly 30 right n2 right now on for the best week of the year as is the s&p 500 we have to show you shares of beyond meat or as i like it, bed, bath and beyond meat. up 35% today $25 a share. six weeks ago. kelly, i know you've been following this. >> above and beyond. way beyond meat. any superlative. down to the floor, where bob pisani is tracking those moves and so much more >> kelly, i've been saying a lot of hope this week. hope on china and mexico tariffs, on the fed will come to the rescue of the economic numbers. and you know what? it's all working the s&p 500, the last three months 29.45. into april, beginning may, down to 27.45 and we've regained more than 50% of the losses and we still don't have any kind of

trade deal that's what i call hope and the trade related names that have been moving here in materials and semiconductors and airlines this week. we've seen huge moves. take a look at these numbers this is one week, this week. amd. broadc broadcom, essentially double digit gains. same with the material names pot was just battered for weeks, and turned around this week. just got killed. so not double digit gain but good overall and the airlines, a good play on the global trade and global movement of tourists in general all rallying american airlines in double digit area melissa, back to you >> bob, thank you. payroll numbers coming in much weaker than many had expected. 75,000 jobs were added in the month of may steve liesman is here to break down the numbers steve? >> missed the mark by a long way and raised concerns about the economic outlook and whether the trade war is already hurting the

jobs market. add to evidence ahead of the meeting showing economic policy uncertainty may be increasing weighing on growth prospects here are the numbers which the bls report, 75,000 was what was reported from 180 what was expected and then the revisions of minus 75,000. maybe a tick lower than expected here's where the jobs kind of weren't. government minus 59. liked at the detail. that's educational services for the state and local levels that could have been a little bit of seasonal stuff. maybe a little bit earlier for those, whatever happened there plus, you have construction down a little bit and manufacturing is where people thought maybe the trade war was already showing up the report with the prospects be cutting rates and cutting them soon the probabilities we've been showing you all week and they're higher now even 26% for june, which i think is a big number but there's 89

for july 97 for september but there's more to it than that the fed said it was on hold a few weeks ago. pricing in a 60% chance for the central bank cuts not once, not twice, three times between now and december >> is that what that bar chart just showed me >> the bar chart didn't show you that it was derived from there. that bar chart is the chance of a quarter point. in each of those ones, but another piece of data i used to calculate the chance of the three cuts. >> if you do it, it's in july, september. >> but anyway, the way it's priced now >> one way it stood out to me, a decline in jobs or just the slowing of the growth in jobs in construction because that has to be insulated from trade war largely. >> right and you did have flooding in the country and it's funny you bring that up. i just read a report about the construction job growth and leads to a completely different point of view about this jobs

number the unemployment rate for people with prior construction experience has fallen to like a new all-time low of 3.2% >> there's no one left to hire. >> bingo we don't know the extent to which some weakness in the jobs market may reflect a lack of hirable people people to hire, exactly. and then you want to fold in, you have some things that show the trade and the weakness, and you should be down remember, we've talked about this a thousand times. between 80,000 and 100,000 is the right run rate for growth. we've just gotten used to it and we think that's the normal >> i have a quick question we have to go, i know. monday, tariffs could go into effect if that happens, what do you expect will happen to that june probability of a rate cut? >> that's an excellent question. i believe it will go higher, depending upon how the market reacts, but it's very funny. i have to say, not funny, it's interesting to me. to see the market be quite so comfortable and quite so long,

when we can get that tweet on sunday that talks did not produce the deal i mean, it's got to be >> unless you think the fed is the backstop here. >> then the question, you can debate this for the rest of your show >> probably. >> is the fed a sufficient offset >> right >> and that's the question >> good question steve, thanks. more on this, calls for a rate cut seem to be increasing. here's what billion investor said about fed chair powell on squawk box earlier >> i have no problem with what chairman powell has done, i think he inherited a tough job my biggest thing is what yellen did. we have a booming economy, fairly early cycle i know i talk too much about the fed but at the time, they sneak one in every time they can until they get to some normal rate i deeply believe in a capitalist

system, you need rate for investment. >> mark, chief investment strategi strategist, jack mcintire, with brandywine global investment management you focus more on the fixed income side. let's start there. do you think the 10 year yield, just a couple of ticks away from that >> i think it will i don't see a lot of inflation pressures. we know the economy is slowing the last part of the economy that was certainly holding up the employment market is now certainly showing signs of weakness the markets offsides a lot of the leverage short. i think we are going to see a trade below 2 but most of the moves already happened >> you think that's on a weakening economy. what's the fundamental rationale? >> i think the reason we've liked treasuries for a while, there hasn't been inflation pressure the disinflation pressure has won out versus the cyclical.

we've had a strong dollar last year doesn't get a lot of talk but that has been putting pressure on the u.s. economy and clearly, the trade tensions are seeing cap x getting pulled back. so it's a confluence of things getting us to want to own treasuries. >> if we have low inflation, it doesn't matter what happens to the economy. unless that starts accelerating and yeah, we're going to have some tariffs but a lot are one offs, at least they look like that for now >> theoretically, unless inflation becomes a problem to have to act, it ought to be able to help to underwrite for their expansion. rapidly approaching 10 year economy that's been growing positively now and so i don't view that as the threat at the moment i think in the context of the global concern, we haven't seen any turnaround relative to the stimulative measures taken by china to resuscitate economic activity there and i think we've seen in the past, the u.s. can mitigate some of the concerns of our own global activities.

only about 12% of gdp, export driven but it can't necessarily be immunized from it because we are participating in the global supply chain and we see that suffering at the moment. i think that, to me, is what we're monitoring more closely as the u.s. economic data, which i think is a fairly decent case. this job number taking into account, of course, but one that in my mind doesn't necessarily pull the fed into a rate cut at least until this upcoming june meeting. >> were you saying that china has run out of bullets or we haven't seen the impact of the cumulative effects the central bank just said they have plenty more ammunition, so to speak, whether it's reserve or ratio cuts or other source of stimulus >> no, i think you're right. i think they have plenty of scope to continue to provide stimulus into the economy, whether it's monetarily through further reduction in the reserve requirement ratio, still relatively high and/or resort

back to the old play book, infrastructure investment, highly stimulative and could create an environment not unlike we saw in 2015/2016 because the multiplier effect may not be as strong this time around, but certainly, enough to at least stabilize economic growth there that would go a long way to feedback into other markets that depend on china for their respective economies namely, europe, japan and the other emerging asian region. >> let me turn back to you the job number and other economic statistics are backward looking. the bond market is more forward looking. and if you put that framework on it, what's the bond market saying to you about how bad things could get >> so you're absolutely right. the bond market, and being a member of the bond market vigilantes, we are sending a message that, hey, don't worry about inflation. that the curve, certain parts are inverted, historically

points towards a slowdown, sends a message to the fed, to the administration that, hey, you better be careful when dealing with the trade issues and it tells the fed that, yeah, i think they probably tightened one time too many last year and they need to be aware of that balance sheet actually does have a drag on growth >> guys, thanks. jack mcintire, mark, appreciate you joining us. >> coming up, americans are paying more and borrowing more for their cars than ever before. could the one two punch of consumer debt and tariffs for mexico spell trouble for the auto industry, plus the government crackdown mean the end of tech mega dlsea all ahead on "power lunch" when we return in two minutes and man. since i added futures, i have access to the oil markets. and gold markets. ok. i'm plugged into equities. trade confirmed.

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but yes probably. there they are. aww! americans are borrowing more money than before. experian said the average loan amount for a brand-new car topped $32,000 for the first time this year that is sending monthly payments to new records as well that may be fine now when the economy is pretty good but what happens if we see a downturn joining us now, melissa, the director of automotive credit and the chief economist of pnc financial services melinda, we ask this when the jobs report came in much worse than expected. and so can you give us the sort of contours of what this looks like the average balance seems high but in terms of whether or not

these consumers can withstand it, what's the average credit score, for instance and are these, many of these loans subprime or delinquent >> the average credit score for a new car buyers is very much prime around 7:16 and used car buyers, when you look at new cars, the majority of buyers are very prime or originations very prime, but ultimately, consumers are kind of changing what they're doing a bit in response to those really high dollars we're seeing consumers do more leasing with lower payments and we're seeing consumers move more to used vehicles. >> are they stretching because interest rates are low >> the loan amounts on new cars is over $32,000. payments in the mid 500s and ultimately having 30% of new car sales are leasing. which, again, that lower payment, so certainly speaking to the affordability >> gus when you take a look at the

numbers though, is there any concern on your part as we see a potential down shift in the economy given the jobs report this morning if you look, for instance, at 90 plus day delinquency rates in the latest from the federal reserve bank, they're actually 4.69% and the highest level since q4 2011. should we be worried about all of these dollars used to buy a car? >> not terribly worried about it overall debt burdens are low and mortgage payments, credit card payments i think consumers are doing a good job with their balance sheets there are some vulnerabilities if there's a downturn in the economy. i don't think auto lending is a big threat to the overall u.s. economy. may be a problem for auto sales if we hit a slow spot but not a big problem for the overall economy. >> we asked the question on my mind, melissa, but does it concern you that people, gus, are "a," leaning towards leasing which is often a sign that they are reaching for more car than

they can literally afford. and "b," they are extending the terms of the loans out to 72 months and so forth. >> i think the new cars are a better quality than they have been in the past so it may make sense to look for a bit longer loans on these. in terms of leasing, yeah, that's something to watch out for. however, i do think consumers have a little room to down shift. they have been buying more expensive models, been buying pickups and suvs instead of cars if the economy does get in trouble, there's the opportunity to switch to lower priced models, which could give consumers more breathing room going forward. >> what would the b the first cracks in your view you'd be watching for, any sign that the consumer may be stretched when it comes to buying a car >> i think a lot, as it was just discussed, if we see consumers change what they're bying, for the last couple of years,the crv and the bigger cars is what consumers purchase if we see the shifts in the

lower priced vehicles, those are some of the things to watch for. >> overall though, gus, the headline is the consumer is still strong i just read today, this surprised me because interest rates are so low and consumers are benefitting but when it comes to credit card percentages, those are at record highs right now. so they're paying a lot more to service that sort of debt. when you put it all together, how does the consumer look >> i still think the consumers are in pretty good shape, if you look at the consumer debt burdens overall. they're close to record lows over the past 40 years we did see a bit slower job growth but still adding 160,000 jobs per month, wage growth above 3% so more significant slowing in the economy, i think consumers hold up through the rest of 2019. >> all right, thank you so much. melinda and gus. check out shares of campbell soup up 18% this year for the best week in a decade. can the stocks stay hot or is this mmm mmm good as it gets we'll debate

a great week for the broader markets, dow having the best ayit othye st wh "power lunch."

in these turbulent times, do you focus on today's headwinds? or plan for tomorrow? at kpmg, we believe success requires both. with our broad range of services and industry expertise, kpmg can help you anticipate tomorrow and deliver today. kpmg welcome back to "power lunch. i'm michael santoli at the new york stock exchange. campbell's soup heating up after

its earnings beat this week. stock rallying 18% since monday. best week for performance in 30 years. will this piping hot staples trade cool off or not? greg johnson of pooep epiper ja and this nice rally, how do you view it from here? >> at this point in time, i would be asking for seconds at this point in time and if you look at this chart, it is constructed that we reversed the down trend off the 16 highs but from our perspective, the stock starting to get short-term overbought we wait for a pullback to 40 before we step up and try to buy this stock >> quinn, i guess you have to believe a few things if you want to bet heavily on campbell's defense stocks do better and strategically, campbell's can figure this out in a tough part of the food business >> yeah, so, mike, i agree with

craig and in full sclodisclosure own the stock and been buyers lower than here and they really face some head winds and even if they manage to sell off their international unit, that brings in 19% of their revenue. so it's going to help to shore up their balance sheet, which is in desperate need of that. they have way too much debt but it will ultimately be dilutive for earnings so if people have been along this name and looking to add, i totally agree with craig it's ahead of itself now i think you look at it on pullbacks and you watch it closely because if they are not able to shore up that balance sheet, it's not a value play, it's a value trap. so be careful. >> been under pressure and see how things play out under those asset sales that might happen. craig and quinn, thank you very much for more "trading nation," head to our web site or

twitter @tradingnation back to you. >> michael santoli, thank you. ahead on "power lunch," we'll broke down the key panels and flipping the script on house flipping they use uber to scout out homes for sale and the end of the mega deal why government pressure could stop big tech m&a? all this when "power lunch" returns. >> and now, the latest from tradingnation.cnbc.com and a word from our sponsor. >> many traders like to watch technical patterns and one of the most popular ones is called the golden cross the golden cross is where the 50 day moving average moves up through the 200 day moving average. while this pattern is not intended to get you in at the very bottom, it can often be an effective entry point for a stock or etf that's in an uptrend. i'm randy frederick and schwab is the better place for traders.

hello, everyone. i'm sue herera here's your cnbc news update at this hour. acting defense secretary patrick shanahan is weighing in on a near collision this morning between u.s. and russian warships >> unsafe, unprofessional acts certainly put our men and women at risk. thanks to their professionalism,

there was no incident. >> according to navy officials, the russian ship came within 100 feet of the uss chancellorville while conducting operations in the philippines sea. back here at home, we learn more about the west point cadet killed in yesterday's training accident 22-year-old christopher morgan was a law and legal studies major and a wrestling standout at the academy he died after the military vehicle he and several others were riding in flipped over. and two people are safe after their boat burst into flames in the gulf of mexico a nearby ferry boat heard the may day call and made that rescue and they are lucky indeed. that's the news update this hour back to you. >> thanks very much. we're 90 minutes from the closing bell and the markets trying to end a strong week. the dow and s&p, the best week since thanksgiving, believe it or not the nasdaq is also the outperformer today, up 2%. the dow up 308 right now

352 is the session highs and back up that way oils closing for the day it's been sliding lately let's get to dom chu. >> not today, kelly. second day in a row for higher prices west texas, just a hair above 54 2.72% higher brent crude futures, 2 2/3 higher modest in terms of relative terms but a breakout from the oil bulls after prices hit a 5 month low earlier this week on wednesday and that catalyst came by a saudi arabia energy minister after he told reporters at a conference in russia that opec and its partner countries should keep production cuts in place. adding also that members of the global oil cartel were close to an agreement but more dialogue was needed with non-opec countries. earlier this afternoon, the baker hughes weekly count in america dropped by 11 to 789 new interest on the trade front

with mexico and china, fears over the global economic slowdown a big part of the oil story. back to you. >> thank you, dom chu. let's get to deirdre bosa for a developing news on amazon and fedex. deirdre? >> melissa, amazon responding to fedex's decision to end air shipping contract with them, thanking fedex for their role over the years and amazon building up own air logistics and its own set of fleet and air hubs the announcement does not impact last mile deliveries where fedex serves as a carrier for amazon and in the past, fedex dismissed the threat of the growing shipping ambitions and today, noting that amazon represented just 1.3% of their total revenue. >> big jump this morning the jobs friday panel with us today. and national urban league ceo and former new orleans mayor and joe watkins, former aid to george h.w. bush

let's kick it off with the jobs number which many characterized as disappointing just 75,000, but there were a couple of not so dull spots in there. i'm not sure i'd call them bright but go ahead. >> that's right, that's right. well, down to 7.1. that was good. labor force participation rate remained unchanged african-american unemployment dipped to 6.2% and that was a good thing but bad report in general but not disastrous >> second time in the last several months we've had a report with less than 100,000 jobs these are warning signs of a possible slowing of the economy and the responsibility, i think, is the uncertainty being created by this chaotic policy of tariffs here, tariffs there, tariffs, tariffs everywhere. >> and prior months numbers also revised downward, i should point out. and not by just a little i think it was some 50,000 in

total or something like that don't quote me on that let's move on to president trump's tariffs. mayor moorial, several studies indicating that the tax savings from the 2017 bill have now, because of the tariffs, been all but wiped out on the middle income family. in other words, they're paying more in passthrough costs. there you see the comparison $930 average tax cut and 831 average costs this year to households >> so this is always been a policy of one hand giveth, and the other hand taketh away tariffs have been used not strategically but a blunt force object if you will, tariffs can canada, threatened tariffs against mexico, tariffs with china created a great deal of uncertainty with respect to the fuf of t future of the american economy the farm economy is feeling it the manufacturing sector is feeling it and i think this is

on the verge of being an unforced error by the administration's policies. if the other countries do not relent, then the american public, the people, the consume consumers, we're going to pay the cost of this. >> most members of the gop don't like taxes and tariffs are a tax paid by american importers how do you feel about it >> i agree with that i mean, most republicans, especially republicans in the senate are talking about what the effect of these tariffs would be on their constituents and they're absolutely right the republicans don't like taxes. in a perfect world we wouldn't have to levy unfair tariffs to get that kind of result from mexico that being said, i think the burden is on the u.s. senate to work more closely with the white house to fashion policy, especially tariff policy if there is to be one, that doesn't allow for such negative surprise. >> let's go into our final topic. new study from the economic policy institute finds that while this year's high school

graduates are entering a solid labor market, still worse off than similar grads 20 years ago. one guess i have, today's high schoolers are less inclined to have summer jobs, less inclined maybe to have the experience that employers want. >> well, i've long been on record in suggesting that our national government should reinstate the long standing summer youth employment program which existed between 1970s all the way up to the year 2000 to create additional opportunities for young people to learn about work ethic and what's necessary in the workforce i renewed that i think congress and the white house should work together to do something like that because the employers want employees that are more job-ready today than ever before. the other thing too we've got to

keep in mind is that the rising costs of college and post-secondary education means that many of these young people who, in fact, may want to take that step, can't afford to do it and therefore have to go get work. >> joe, you've got a quick final thought there. >> mark moorial is right a great ucutting edge mayor the kids are choosing not to go to college the political result of that is that republicans do better with non-college educated whites than democrats and right now, lead in that category 59% to 34% and 29% for republican republicans win with non-college educated whites. >> i read with great sadness this morning the death of dr. john, a fantastic new orleans musician he was in his late 70s i grew up and just reminiscence if you have one. >> right place, wrong time

we lost dr. john max revknack and lost two great new orleanians in the last week and thank you for mentioning dr. john today >> very true mayor moorial and john watt, thanks a lot bond yields today, rick santelli tracking action at the cme. hey, rick. >> reporter: hi, big bond moves. a lot of humor on the floor. uncertainty is really bullish, isn't it the two day of tens. on the day they're down 4 and what's really interesting, settled the same place as last friday bounces. the low yield close for the cycle and down 4 for the week. bund yields. trading minus 26 basis points. historic lows in bunds and pretty much many maturities in europe and finally, the dollar index. talk about a sad story this is down over 1.35% and

dollar index getting crushed down a half a cent today on the jobs front we could all debate how good or how weak it was, but in the end, it's really all about the fed or is it how much underlying strength is in the economy we will see going forward, when we start passing through the fed meetings melissa lee, back to you >> rick santelli, thank you. up next, today's tasting menu cities crippled. walmart takes delivery to the next level that's all coming up on "power lunch.

welcome back, time for a taste of other stories we're watching today city and county governments facing the growing threat of cyber attacks. governments are less prepared than corporations and less successful as competing for

cyber security talent. baltimore and atlanta have both been victims of cyber attacks since 2018 because they're refusing to pay the ransom, for example, that, so atlanta refused to pay 51,000. baltimore refused to pay $76,000 and georgia did pay $400,000 in march. >> it's crazy. i think probably local, they're cash strapped. baltimore sure is. they count on the federal government to protect them and they can't >> moving to be smart. about 7 years ago, i went to rio, considered one of the smartest cities in the world. >> in brazil >> in brazil they've got sort of a central room where they monitor everything that goes on in the city so they can, for instance, change all the traffic lights to get the ambulance faster to an emergency situation. if that were hacked, that hacker would have access to that as well as the tvs in the city that monitor crime. so >> the fact these attacks have been going on for multiple

months, going on years without being resolve associate's degree t -- is terrifying expected to approve a new set of rules next week to let sports gambling take place at four up state casinos. possibly in arenas like madison square garden and yankee stadium. the new law might stop short of mobile betting as governor cuomo as repeatedly been against the idea gambling in the garden or at yankee stadium >> i'm sure. he just doesn't want to -- >> they don't want to undermine turning stone. that's why it's so different each state has entrenched interest and the states like new jersey, they haven't had >> new sports fan. >> not used it yet >> betting for you. >> so vigorous

walmart will start delivering groceries into shopper's homes. 1 million people in kansas city, pittsburgh and florida able to order online and have them dropped off, not just inside the doorway, into the fridge the walmart employees making the deliveries wear body cams and only have access through a preinstalled smart lock. i do not like this idea. >> i would be first to sign up >> really? you want somebody walking in and putting stuff in your refrigerator >> i got people walking around my house at this very moment, doing different work and dropping off deliveries. especially my neighborhood, most of the other people, a lot of them are working home during the day. it's walmart makes me feel more comfortable maybe more than amazon. >> my wife would be so skooeeve that someone is putting eggs into her refrigerator. >> what if you had someone to do work and none of you were there?

>> the million dollar kitchen reno is still going on and there are, even as we speak, there are folks there, but you kind of know them. i don't know >> there's the promise of payment later on whereas for walmart, it's transactional. >> you can always tweet them if something goes wrong >> you could rip them. >> if you guys were on twitter. >> with a small it isasterisk. home flipping is fizzling a little bit for those flippers hot to profit, they are getting help. let's get diana olick from washington with the details. diana? >> reporter: it's getting harder to find cheap distressed homes you can rehab and that's where uber drivers come in david is a part-time uber driver in dc. and part of the time he's driving, he's scouting homes for an investor. >> on the porch, you have somewhat of a tree, a limb that may have fallen or something

growing up there. >> this says to you, this could be an opportunity. >> this is an opportunity. >> reporter: an opportunity for daniel, the investor who hired him to scout properties. he's been flipping homes for a decade has never seen the market this tough. >> as the prices are high as they are now, the margins on our flips are pretty slim. >> reporter: nationwide, saw an average return on their investment of 39% in the first quarter of this year down from 42.5% in the previous quarter and nearly 49% a year ago. the lowest return in 8 years according to adam data solutions. the number of flips are down 8% annually, so the stakes are up precisely why dejakamo has 150 drivers scouring the streets for opportunities. >> the best deals are the ones we put our eyes on and i can't put my eyes on every single deal. >> reporter: if the deal closes, the uber driver gets $500 or even more. not bad for moonlighting while you're actually on the job

back to you guys >> we talked a little bit too, who's the other half of christina from the house flipping tarik. the economics are getting more challenging, aren't they >> reporter: absolutely. because when you have high prices, low inventory, and you have a lot of people in the market, you're just not getting the deals during the foreclosure crisis or even after that. they're not even going to auctions anymore because the prices are going up too high there and lower mortgage rates are bringing more regular buyers into the market. so you have competition there as well >> di, thanks very much. diana olick. straight ahead, google, facebook, amazon all surging today, with voices on the left and the right, calling for more government scrutiny of big tech, could mega deals be a casualty of the sector's success wbrg you the story when "power lunch" returns. this is my headquarters.

this is where i trade and manage my portfolio. since i added futures, i have access to the oil markets.

and gold markets. ok. i'm plugged into equities. trade confirmed. and i have global access 24/7. meaning, i can do what i need to do. then i can focus on what i want to do. visit your online broker today, to learn more.

continuing to rebound from lows on reports that the doj and federal trade commission are divvying up anti-trust investigations into facebook, alphabet, and maybe even apple the threat of regulation take away tech giant's appetite for multibillion dollar deal

kate rooney, cnbc reporter the theory here would be these big players have been inquisitive in the past might be chilled a little bit, bigger is not necessarily better if the fdc is watching. >> that seems to be the case and on monday when these stocks were falling all the wall street analysts were saying they're not going to be broken up but the big takeaway was this is going to chill m&a and that's been a huge area of growth for them microsoft linkedin you have facebook and instagram. which at the time didn't seem to be anti-competitive but regulators now go ooh, i don't know >> google and youtube, for example. >> right exactly. >> they might be a little less -- but there's still plenty of i would think opportunity for merger activity, though it might not involve the biggest of the bigs >> this is really a mega deal. there will be other tech m&a but the multibillion-dollar deals, there's a certain threshold for when you need the

doj or ftc to step in. i think it's 90 million. so there's a possibility that they'll either go for smaller deals or see other competitors -- >> just a couple days after the investigations were in the news and the stocks, we hear alphabet's buying looker it's these couple billion dlr deal sizes we're looking at at this point >> exactly $2.6 billion is substantial but for google -- >> nothing >> exactly last year the biggest five tech companies did 30 billion in m&a. this year with that deal included it's 4 billion. halfway through the year >> so there has been a significant slowing. >> 80% slowdown. for the first two quarters of the year it was not even $2 billion. and last year it was over $20 billion. so there has been -- it's an 81% slowdown >> and the interesting juxtaposition is these companies are building up their cash

hoards at the same time and they're buying their stock finding other ways to deploy the capital, not m&a necessarily >> and the biggest area of concern is growth. that's why they've led the bull market for ten years and m&a is a part of growth i don't think it's going to hit the stocks necessarily and that was wall street analyst gene munster and a couple others saying the fundamentals are still good, people are still buying but m&a will really slow down >> all right, kate, thank you so much kate rooney, appreciate it >> straight ahead we'll ask one analyst where he sees apple's path to growth, speaking of. stick around for that. plus "check, please" is next [leaf blower] you should be mad at leaf blowers. [beep] you should be mad your neighbor always wants to hang out. and you should be mad your smart fridge is unnecessarily complicated. but you're not mad, because you have e*trade which isn't complicated. their tools make trading quicker and simpler.

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a big bull case for apple is it's going to be a services company. is this a statement on where you see apple's ultimate core business being >> yeah, you know, it's becoming hard to be a hardware analyst these days, i guess. i think apple's growth is going to be more driven on two factors. one is services, 20% a year. we think that can accelerate in

the back half. that's going to be a nice catalyst and the other is this other segment, the apple watch, the air pods i think those attach rates will keep improving in a flat iphone to slight declining environment, iphone environment, i think it's services, it's other categories that provides you the growth as you go forward >> how do you think about a potential antitrust investigation into apple and what the worst case scenarios, what the realistic worst case scenarios could be for this company? >> there are two ways you could end up with this one is do you force apple to cut the take rates from 30% to something lower? and if you can take it down to maybe 10%, 15% there's an eps implication. i would argue it's not that severe it's in the 5% to 10% kind of eps range. it's livable the other one would be if you look at what's happening in europe with spotify, right is does someone eventually force apple or tell apple we think it's unfair you're bundling everything together? a realistic bad case would be do you say you've got to spin out

apple music and itunes, some of the other segments out into an independent domain versus bundling it? those two could be the relative realistic negative scenarios out of these issues of vc right now. >> when you mention the phrase take rate you're talking about the amount or the percentage, the can cut that apple gets from the sale of apps or in-app sales that are made by the app developer. you're not talking about iphone sales where they have, what, market share of maybe 30% in the u.s. >> right absolutely i'm talking about the apple tax, full, on the apps that's implemented. >> speaking of which that's one area where if regulators say look, this is akin to microsoft using its operating system to push the browser, you have too much control it may be unfair because all along the way they never stopped it but if they choose now as the starting point and say you can't do this, what happens to the business model that's a huge part of their services revenue >> you know, it absolutely is.

and i've seechb some of this happen with android in europe i would argue. i'm sure apple's stake would be we provide a certain amount of curation, safety protection for the customers and at the end of the day it's the app developer that decides what the price is and suddenly apple charging a 30% extra rate, it's not changing the scarcity of the product, the apps itself so i could see apple having a more powerful argument saying even that 30% rate is not impeding development or cathy scarcity, so why change that or why have an issue with it. >> we're going to leave it there. thanks for speaking with us. we appreciate it >> thank you >> amit daryanani of evercore. >> check, please the passing of herbert sandler he was an s & l magnate who -- >> savings and loan. >> s & l, savings and loan not "snl." not "saturday night live." >> in case the younger audience thought something else an nbc show. >> from two branches into the

powerhouse he ultimately sold to wachovia he was criticized in the financial crisis for some of the loans that golden west sold either during or post his sale but he was also known as a fabulous philanthropist, gave away half his money, took the giving pledge, and was instrumental in the start of pro publica, which is a public -- journalism in the public's interest website and publisher that has won multiple pulitzer prizes his money really founded propublica and for that it's a strong legacy. >> absolutely. we're coming off a very big week for the markets, the best of 2019 in fact, and here we are looking at materials for the week up almost 10. 9-plus percent >> apple which we were just talking about up 7% this week. and you wonder if this is what stra tooegus was saying, china trade basket it was starting to turn positive the last couple days they're like we don't want to dismiss, it we're not getting the news per se but that's something to watch >> and beyond meat let's go back to beyond meat

400% since it's gone public. >> it's quintupled >> that is the non-uber. >> biggest ipo of the last several years. >> and jim cramer said i think something very smart he says many things very smart but he said the deal was not priced correctly >> a lot of scraps on the table. >> thanks for watching "power. >> "closing bell" starts right now. have a nice burger good afternoon welcome to "the closing bell." live from the floor of the new york stock exchange. i'm wilfred frost. we are on pace for the best week for stocks in all of 2019. a perfect week for the dow five days of gains in a row and all for indices higher today 59 minutes left of trade everything you need to know as an investor coming up. and i'm morgan brennan in for sara eisen here's what's driving the action investors anticipating a fed rate cut will come sooner rather than later after this morning's weak jobs report hopes of a potential deal that would avoid tariffs on mexico. and