>> trex. love the move from wood to composites. >> jp morgan thiss the stocks you want to own. >> watching to see if walmart can break out. buy more citi. >> "the exchange" starts right now. >> that's right, scott, thank you very much. here is what is ahead. getting decimated. that's what the president says about china's economy. and he thinks they'll be forced to make a deal but is he right? with one trade battle seemingly over and the market posting their best of the year this week, buying stocks heading into the summer and beyond belief 600% return not in ten years or ten months but in 27 days. the stock and why it's been sizzling ahead all right, let's kick off your monday with more on today's rally. continuation of last week and now what is a six-week win streak for stocks.

dom chu? >> the market is sizzling but not as much as beyond meat is. later on that in the show. dow industrials up 137 points, s&p up by .75% and the nasdaq composite led by technology names up by 1.5% the real standout there in the nasdaq if you take a look at some of the other ones we're looking at in terms of industry groups, check out what's happening with retail this specific etf, xrt is the spider etf of a lot of retailers is up about 1%, outpacing the market remember, this stock is still down pretty markedly, about 21% from its highs we've seen over the course of the past 52 weeks and the stand-out stock of the day, microsoft shares, a $1 trillion company remember, those shares up about

1.5% optimism about the new gaming console. x-box, powered by an amd chip. that's led that stock to go up 42%. brian sullivan, since the end of last year. mega cap technologies holding strong microsoft, the only $1 trillion company in the s&p back over to you. >> i like it microsoft stock has certainly excelled. >> see what you did there. >> love you, man brian sullivan in for kelly evans. it's a big day for market, big day for trades and a big day for big deals. bob pisani is at the new york stock exchange bob, it's a roller coaster since the early may highs. >> it is and we're reversing that thing again that's what we mean by a roller coaster. five straight up days right now. the leaders, it's all the trade stuff, transport stocks, retailers, industrials they're all outperforming. what a roller coaster it has been highs in early may, s&p dropped

7% into essentially the next month on the china and then mexican tariff wars. last week it's rallied back up 6%, knocking on the door of the old historic high by 2945. we crossed 2900 today. that's the good news the bad news, stocks aren't cheap anymore. they're pricing in a lot of good news right now remember, we do not have a china deal yet even though the market is acting like there is one. sound familiar and we've not had great economic numbers out of the u.s. or europe recently. weaker global growth is an issue with or without trade. back to you. >> bob, good to see you as well. thank you very much. decision to slap tariffs on chinese imports,the president says the chinese will eventually be forced to make a trade deal he explained why on ""squawk box."" >> the china deal is going to work out do you know why? because of tariffs right now china is getting absolutely decimated by countries leaving china, going to other countries, including

our own, because they don't want to pay the tariffs and china will, in my opinion, based on a lot of facts and a lot of knowledge, china is going to make a deal because they have to make a deal. >> john rutledge, cnbc contributor, and our own seema mody with us as well great to see you john, we know this forget about china sovereign nations as a group do not like to be backed into corners and made to think that people are making deals mainly because they're being forced to by the leader of another nation. china, a proud country do you believe they will make a deal, or are they going to push back even if it hurts their own economy? >> there has been a deal there for months, and it could be done very easily. the problem is they're not getting what they really want.

what a discussed with wilbur ross, what does the china leader need out of the deal he needs face, f-a-c-e, acknowledged that china is a world class economy, that they sit at the adult table and get treated with respect that's the easiest and cheapest thing we can give them we can trade that for real benefits instead, we're slapping him in the face and we're causing great internal damage inside china from the people. the's now a view inside china that this is not a trade war this is not a tariff dispute this is the beginning of a new cold war of confrontation between these two countries. that's a very, very damaging situation. >> does china have the economic firepower, john, to withstand this kind of economic cold war >> china is growing something like 6%. china is either the largest or second largest economy in the world. they'll survive whatever happens. there are difficult things happening inside china tariffs are not really one of

them r & b has dropped enough to offset the impact of tariffs on prices inside china. excuse me, inside the u.s. but u.s. goods sold in china have both the tariff and cheaper r & b to deal with they're much more expensive. the big trouble china is having is trying to get finance to private-owned companies. nothing to do with tariffs they've been trying to solve that all year. secondly, businesses are leaving china, southern china. that's been happening for some time moving to places like vietnam. originally because they could get cheaper labor there. but now it's because they're trying to go there to avoid tariffs. >> yeah. >> mexican exports to the u.s. have increased almost dollar for dollar with the decline of chinese exports to the u.s you can push on the balloon, but it squeezes out some place else. >> john touches on a great point, the use of its currency chinese currency is down about

8%, brian, over the past one year we have this china trade data that came out this morning, which actually showed a rise by chinese exports. a lot of economists say don't read too into this data. it's likely because of depreciation of the currency that allowed more companies in the u.s. to buy more chinese goods. plus ahead of that 25% tariff you saw more companies trying to front load and buy more inventory from china to get ahead of that tariff but this chinese currency and the depreciation effects could have unintentional conflicts, as we've seen in the past if they lower it too much, there's a risk of capital outflows that, of course, is a longer term. >> i called it before, the economic bazooka. >> yes. >> but they don't want it use their currency as a weapon it might signal some type of weakness, we have to cheapen our own currency. >> right. >> there might be a natural floor there?

>> we have a floor -- >> it's a great point, though. >> seema then john. >> seven is a psychological level to watch if it were to weaken further than that, that could lookly inspire some larger conversations about whether there's some domestic troubles that are really taking place inside the country. >> yeah. john >> we need to flip this currency conversation exactly on its head the chinese currency has not been being devalued by chinese leaders for strategic purposes the chinese currency has dropped because foreign investors have been frightened out of putting capital in china they sell the r & b and the r & b drops. the chinese government has actually been supporting the rnb not pushing it down. furthermore, be the u.s. trade team knows that. i've talked to them about that they're aware of that. the statistics show that. >> and nobody is saying they're pushing it down. i agree with you you can look at the off -- most chinese -- i don't want to get in the weeds chinese currency is fixed.

couple percent that free flows out there in the market. >> absolutely. >> isn't there also a ri that there's a currency cold war? the u.s. decides a weaker dollar policy is in our benefit as well suddenly, we get this race to the bottom in currency valuation. forget about trade currencies are trillion dollar industries. >> yeah. there's a name for that, brian it's called mercantilism it's really a dumb way to run policy but absolutely, if you try to devalue your currency, you cause competitive actions. problem is, a big country like the u.s. can move our currency around by buying and selling assets, but for china, it's much more difficult because the inflows and outflows of capital are controlled by people outside of china and the chinese central bank uses their reserves to offset them. every time you see the reserve requirement change in china, it's done in order to sop up or

free up reserves that have been pushed in or pulled out of china by international investors. >> and that's why a lot is riding on this g20 meeting happening at the end of this month, brian both sides have not confirmed their attendance at buenos aires when president trump and president xi met and they delayed that tariff hike. the market anticipating something. >> john, appreciate your view. seema mody, you as well. thank you very much. trade on our southern border that ratcheted down over the weekend that the president said he's satisfied enough that mexico stepped up immigration controls to avoid tariffs on imported goods from mexico not everybody is satisfied with it or the way it was handled they're not even sure if there will be an it. jorge, you got knowledge of

insight on all sides of this deal we appreciate you coming on "the exchange." are you happy with this semi deal with your home nation first? >> well, yes there are no tariffs today i am happy about that. i would like to see us not intimidate each other as a result of that i'm optimistic about the future. >> you just tweeted out about 20 minutes ago, every time trump is backed in a corner, he kind of goes after somebody, maybe mexico the mueller report stuff keeps trickling out. do you think the president could use or has used the trade fight as a way to get other things off the headlines, jorge >> i suspect that is the case, brian. not just the trade but the trade and immigration fight. he always resorts to those two crutches, trade and immigration. mind you, mexico being a neighbor, one that deals a lot with the united states on trade

and immigration, is a prime target for that. >> if you're china and you watched what happened with u.s. and mexico in the last week, what was your takeaway what did you learn from the strategy in trump's dealings with mexico that you can use for your own benefit in beijing? >> that's an important question, brian. when i was in china, i spent six years there and every time i addressed the chinese government there was always this assumption on their part that mexico had a special relationship with the united states to the point they sometimes referred that mexico was acting under instructions from the united states that, of course, was not the ca case they always realized mexico had a special relationship with the united states. they're watching what's happening to mexico and they're seeing how mexico risks being humiliated as a result of these negotiation. and that's something the chinese leadership has got to be very concerned about, regardless -- >> why did yo you say that why? there's no tariffs maybe both sides come out ahead.

how is mexico humiliated >> you see the tweets this morning. he's saying that if we don't act, will he reimpose tariffs, going all caps by the way, we have to buy a lot of products. that's not true. the government does not -- cannot commit to buying act products because the government doesn't buy act products the fact that i didn't just reach an agreement i vanquished my counterpart. that concerns the chinese. maybe they don't have much leeway domestically. mind you, every foreign leader has a base to deal with. >> jorge, what you know is that mexico has more power over the united states than china does economically more imports, our supply chains may depend on it more than they do with china. do we have more -- does the united states have more leverage with china >> i think that, yes, without a doubt, united states has much more leverage with china than it

has with mexico. nevertheless, the fact that the united states was willing to risk its relationship with mexico for a marginal victory has to give pause to the leadership because they know they're in a weaker position and they have to be considered how much they are willing to concede in these negotiations and no, i do not think the chinese economy is hinging on this trade deal. this is something that clearly they want, they need i don't think their economy is hinging on this trade deal so they do have the option, as most countries do, of walking away, to save face and face is important. >> it is well said there. former mexico ambassador to china, jorge gallardo, pleasure. >> thank you here is what else is coming up >> announcer: coming up, a possible fed rate cut and a trade deal with mexico done do investors have the all clear

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welcome back to "the exchange." president trump pulling no punches this morning on "squawk box," saying that it put us at a disadvantage. >> they raised rates too fast. that's number one. number two, they did quantitative tightening, taking in $50 billion a month $50 billion a month and they have now eased that but it's still $25 billion a month, which is ridiculous. >> the markets seem to agree with him, investors pricing in at least two rate cut this is year does that give investors the all clear heading into the summer? joining us to talk about it, jim paulson, chief investment specialist te don't see any rate cuts this year what do you see the fed doing not only later this month but the rest of the year >> you know, brian, i think there has been a lot of stimulus introduced here this year i mean, everything from twos to

30s are almost down 100 basis points there's been a lot of yield cutting done by bond vigilantes already. it's gone from 1% to 2%. gdp is 1% higher than it was at the start of 2018. costs are down for corporations. real wages are rising for the household. i think there's enough juice in the system i think we're going to have economic improvement in the second half, despite the ongoing trade war. but -- >> are we too obsessed with the trade war? are we too media focused on those trade war headlines? >> i think so. i think it would have to be in place for a long period of time and probably in a much bigger magnitude than just with china, for example, to really have meaningful impact. and what doesn't get enough coverage is how much policy stimulus we have introduced this year not only us, but around the

globe and with the leg of about six to eight months you're going to see that start to improve, i think, conditions here, china and in europe. i think that's what's going to happen i am worried, brian, about the inverted yield curve causing a lot of panic among investors, myself included if it lasts. such a great recession indicator. i think the fed, if they do cut rates, number one, they've got cover. growth reports have gotten weaker bond vigilante is giving a strong message they need to cut. more importantly, if they cut, i think they remove that inverted yield curve out of the mind-set of investors and you reduce the risk of a panic freeze-up in the financial markets. >> we have to make it clear, though, that the yield curve you're talking about is the mini curve, right it's the puppy, three-month, ten-year it's not the two-year, ten-year, jim. there is a difference. there is a difference between

what those two things may signal. >> you're exactly right, brian we have not had the two-year, ten-year inversion, which you normally would have. you can see taking that ten-year down to 2.08% there last week, you can see the panic there is, surrounding that yield curve, i think, in my view. and the fed can eliminate that risk, which i think is almost a bigger risk than the trade war, taking the fundamentals down if they do that and you have already got agreement with mexico, i think there's an agreement waiting yet with china. if the economy picks up and earnings estimates start to rise again, you could have a heck of a rally as this year progresses. >> yeah. you know what? go to the mall of america, jim i don't hear anybody out there saying, we can't buy the jeans, there's a trade war going on we'll see. jim paulsen, thank you. >> thanks, brian.

posted their biggest weekly gain in 30 years at some point that could lead to a massive drop in prices we'll explain why. first insys, first pharmaceutical company to file bankruptcy and other companies that might be at risk coming up. so, every day, we put our latest technology and unrivaled network to work. the united states postal service makes more e-commerce deliveries to homes than anyone else in the country. e-commerce deliveries to homes the flexible class schedules d me tremendously. allowed me to go to work full time, run my catering business and be a mom and parent. when i reached this accomplishment, it was like, it's here, it's happening, it's now. we at southern new hampshire university are the ones who succeed.

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and welcome back to "the exchange." raytheon and united technology we need to talk about them they agreed to an all stock merger this morning to create an aerospace behemoth annual sales of $74 billion and be called raytheon technologies. the deal is expected to close first half of next year. microsoft says the companies chips will be used in amd's next generation gaming consoles massive run of 85% and up another nearly 5 today tesla's move higher continues today. a heavy $340 price target. firm saying demand concerns are, quote, overblown tesla up 4% right now and now up 15% in the month of june now over to sue herera with

our cnbc news update. ken cuccinelli has been named acting director of the citizenship and immigration services the former attorney general is known for being an immigration hardliner. secretary general of the united nations is urging all countries to implement a u.n. arms embargo against libya gutierrez says illegal weapons transfers are fueling fighting in that oil-rich african nation. pope francis says he wants to visit iraq next year, though he did not specify a date. the pontiff revealing his desire to go to the war-ravaged country and he also criticized of leaders who speak of peace but then sell arms for foreign wars. a new experimental drug may be able to delay the onset of type i diabetes in those at high risk of developing that disease. high-risk people undergoing 14

days of therapy with the drug delayed development of that disease by a year or more. little bit of good news there. that is the news update this hour. >> always nice to end with a little good news, sue herera thank you for that. meantime, here is what else is ahead on "the exchange. >> announcer: ahead, ridiculous, insane and just playing the shorts that's how wall street is describing the move in one recent ipo why molson coors is losing its buzz are we seeing the death of the wall street power lunch? now may be the best time to buy a rolls royce. 's all ahead in "rapid fire.

all right. welcome back it is time for "rapt fire" with dom chu and the aforementioned bill griffin first topic, beyond me what else? on pace for its third best day ever and now is up 600% since its ipo in less than a month beyond meat now boasts a market cap of $10 billion

take a look at longstanding companies that are now worth less than beyond meat. chesapeake energy, lot of debt there. wendy's, nordstrom mylan they are worth less than beyond meat. dominic chu? >> all right this is what i did i tweeted out there are now 75 s&p 500 stocks that are worth less than beyond meat. s&p 500. not small caps, not mid-caps, the largest companies in america in that index. this is not a -- i understand the argument about the runway. how big the total dressable market that alternative meats can be i just don't know if this is one of those situations where, my goodness gracious, people have gotten euphoric about this stock. >> bill, you said this is silly. here is my beef with this company. they have 57 million shares outstanding. put that in perspective. mylan has 515 million.

there's no stock supply. >> exactly and this is part of the problem. it's not liquid enough to handle the demand from these shareholders who are so interested in this area. >> are you saying it's a secondary? >> they need a tertiary. >> 5 billion market cap. most companies at 5 billion have, i don't know, 150 to 250 million shares outstanding your world is biotech. beyond meat is starting to trade like a biotech with a promising drug. >> it will trade like this and that, too. >> you have to be worried when things get this big. biotech, the lessons are when you have dependency on one product like that, it's tricky. >> i like the beyond burger. >> i've not had it. >> where do you get it >> true story friday, we're joking she says she's a vegetarian on

the air. how does that work, tongue in cheek? peta reached out to us brian, can we send you some beyond burgers i was like, no, thank you. but peta pushing the beyond burger. >> i made a bolognese, what i call a fool-ognese sauce. >> meat alternative, something that looks or feels like meat it doesn't necessary ily appeal to me i have no problem saying i'm going to eat more vegetables or fruit in their fruit form or veggie form. >> isn't that much healthier, by the way? lot of fats and items in there that do help with the flavor. >> there you go. faux-lognese you son of a gun underperformed rating, fancy speak for sell and $50 price target analysts saying, quote, we believe the company faces significant hurdles in overcoming its portfolio exposure there's no question the beer

market trends are simply challenged, volume is declining. between the wine boom, cocktail culture, hard cider. is anybody drivenking beer >> they are but it's become so saturated. just like beyond meat, novelty is a big deal. and everybody wants to try these different novelties. so they leave behind the old legacy beers and molsen coors especially has a pretty limited market out there not surprised they're falling behind here. >> when was the last time you had a coors light, meg >> probably college. >> my beer of choice in college. >> but not anymore >> it was. no, no, if i was to have -- >> no, i'm making a serious point. >> it would be miller light or coors light. >> in college? >> no, even right now. if those are available that's fine to bill's point there's a reason

samuel adams went after, there's a reason there's consolidation within craft breweries you start to see these companies develop these brands because they have loyalty to them. >> biotech, meg. you'll have to see molson coors, i'm not kidding, even if they're untested, unproven, they'll need to be cool again. >> and beer is one of the earliest biotech company. >> is that true? >> yes. >> she knows. >> there you are you have something like that you're not going after coors light. >> let's go after insys therapeutics filing for bankruptcy after they agreed to pay $225 million to settle charges over opioid sales. is this a one-off or one of many >> it's unique in that it had a huge business around this

substance. there are other companies in the cross hairs of this opioid situation, johnson & johnson is in oklahoma in an ongoing trial. you're hearing phrases like if you oversupply, people will die. that is what the state of oklahoma is saying happened with the opioid epidemic in that state. these companies flooded the state with these pills and that led to the epidemic. we'll see a lot more of these court cases play out this company, insys, did have the most exposure. but other companies have exposure teba huge company lot of issues going on we'll see this play out. >> at what point, dom, do you start going after doctors? >> well, i don't know, but that would be huge, right but you have to prove some kind of affirmative negligent. >> read "american pain." gambling debts, all this -- they're basically prescribing this stuff like candy. >> if there was a time where the iron was hot for folks who have an ax to grind against the

opioid industry it's now, even when folks like president trump who earlier on this past year addressed it full on by himself. >> why wouldn't you have an ax to grind >> of course chris christie as new jersey governor, same situation there's almost -- i wouldn't say a blank check but there's an ability for these guys to do it at the political level as well. topic number four, grand reopening, four seasons restaurant is closing for good one year later it opened in 1959 in the seagraham building became legendary as home of the power lunch in the city's elite and was a power lunch spot you've hosted shows. it's not the same place. >> no. >> that place is now called the grill. but if this management team can't make it with that name, what does it say >> there's a lot going on here first of all -- >> they have some issues. >> i'm just sick about this whole thing. this came out of nowhere i was there last week for lunch and there was no hint at all of

what was going on. "new york times" says that the investors spent $30 million on the new place. i heard it was much higher than that expectations were very high. they're not giving it enough time, i don't think, to do that. that's number one. number two, they needed a star chef the old place, you went because it was such an incredibly -- >> it was a scene. >> famous location. >> henry kissinger, every time you go in there. >> exactly now they need a star chef. taking nothing away from the new chef, diego garcia is a trsk guy, done great things with the menu but he's no -- >> and at those prices you need -- >> exactly that needed to be the draw and it's not happening i'm very, very sorry this is happening. >> you were going to take meg out for congrats the fact that she has a new baby to the family you can't take her to the four seasons. where are you taking meg

>> restaurant dynamics in new york city are hard doesn't matter if you have a great restaurant. >> exactly. >> the rents -- he bought a chain of restaurants and one of the rents was like -- i think i'm going to misquote him, 40 grande month and the landlord raised it to $125,000. >> what was the rule of thumb stat what's floating around the restaurant industry and has been is that 60% of restaurants in america close within the first year 80% close within the first five years. >> any small business. >> but restaurants in particular, because it's very driven by location and rent economics. new york city is a very hard situation. >> even by new york standards, the prices have gotten stupid at some of these restaurants. >> a really interesting op-ed about this in the times years ago where he said new york needed some kind of protections for businesses if it wanted historic businesses to get established and grow over long periods of time. he compared that with london i thought that was interesting

how much do you want an economy to flourish on its own and how much do you want protections to get these longstanding businesses >> danny meyer pioneered the no tipping policy do you think that's hurting? even if you pay the same, let's call it $150 some of that is your tip psychologically, does it feel different? >> no. if you're going to a four seasons or something you don't care what you're paying for the tip anyway cutting-edge cooking going on, a lot of things happening in the world of cuisine and these legacy restaurants are suffering as a result of that. >> philly and chicago have better dining scenes. >> the philly scene is great. >> the rent is cheap enough that you can take a risk. new york, you have to have the same stuff. >> hit the ground running. >> hit the ground round running. from dating to e-sports, facebook is continuing to diversify. could that land the social media gutoany in hot water with relars the trouble facebook could be facing, next feel that? that's the beat of global markets,

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kind of become a jack of all online trades. will regulators try to make it a master of just one president of two rivers research and contributor to "wired" and cnn contributor. julia boorstin. >> video games you can play on there, e-sports for watching games. there's so many different things you could do on facebook the key thing here is that regulators are watching to make sure that facebook is not going to use its dominance and leading role in social media to disadvantage its competitors in these other areas. so, facebook will have to be

very careful that it doesn't, say, promote its own dating service or own virtual reality headset over its rivals who are maybe also advertising on facebook. >> should facebook proactively break themselves up now? like the kid telling their parents, don't punish me i'll punish myself and, therefore, i'll avoid the harsher of the two stories. >> i think for what it's worth, what i think is so likely to become a proximate reality we should lay that out there. facebook, amazon, google and maybe even apple, should voluntarily propose some sort of self breakup plan. industrial companies do this all the time units become big, investors have a hard time pricing them so they spin them off. dupont converged and then broke themselves up last week. companies do that for both financial and efficient reasons.

regulation is coming to julia's point there's a degree of awareness on this, on the part of facebook and others. how could there not be, given congressional hearings and concerns over privacy? there's a good bit of denial or scoffing, thinking if we spend a lot of money on lobbyists, we'll be able to shape the regulation and downgrade it historically, these companies are really powerful, incredibly wealthy. regulation is coming get in front of it. >> julia, that could be genius whatever industry you're in, if you effectively regulate yourself, write the rules through your lobbyists, you can block competition because you build the framework of the regulatory scheme that other smaller players who maybe want to become the next facebook, they can't do it they can't even afford the regulatory compliance measures. >> well, this is the key issue with regulation. mark zuckerberg has said explicitly he wants other people to write the rules because he has recognized if facebook

regulates itself and does not get actual, you know, federal legislation, that they'll be criticized for creating rules that don't really limit them or aren't really sort of effective in any reasonable way. i think what situation we're in right now is zuckerberg has made proposals for things that facebook believes would be useful as rules of the road for this -- these new range of industries what's really challenging, and zuckerberg has even pointed this out. you don't want to regulate so much that it limits regulation but also in ways that are predictable or useful to facebook. >> zach, you get my point. it's false kindness on the point of these companies saying regulate us, please. >> and i think that's going to backfire on them the reality is, there is this game going on where they've been so loosely regulated that as much as people are saying this is going to happen, it happened to railroads, utilities and telecommunication firms. it's going to happen by sheer concentration of power and

platform, there will be animosity/concern about the public sphere. and the only way this will be done without it being incredibly messy is if these companies start to do some of that themselves whether or not they get criticized on one hand or another, what will be the most frictionless for these business models you could make a very big argument for why you should break these companies up zuckerberg can still control companies do this. it's not the end of the world. if four companies split into 15, i'm not sure that would do much for competition but would sure do a lot to ted off the regulatory framework. >> julia, real quick >> zuckerberg is doing so much to integrate the back end of these companies, the more time goes by, the longer time it takes to discuss any potential breakup, the less likely that is to happen. what we're much more likely to see in the near term not a breakup of a company like facebook but rules to ensure they're not unduly favoring some

of their services over rivals. >> they want to use the data from all platforms, to julia's point. thank you very much. the housing market had a quiet spring could it be a red-hot summer for home buying? why it clde,exou b nt. the cloud? it has to keep up with sales, supply chain, inventory - ♪ ♪ it needs to track it all, from cincinnati to singapore. ooo! ♪ ♪ and protect it all. customer records, our financials, they better be secured. but i also need easy access, to manage data across my clouds - no matter where it lives. ♪ ♪ so if an auditor shows up, i can be a step ahead. that's the cloud i want. is that to much to ask? expect more from your cloud. ibm cloud.

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welcome back to "the exchange." i'm contessa brewer. president trump's comments on the trade deal are boosting casinos. mgm, las vegas, melco, and wynn, the leader on the day. mgm resorts doing well david katz put out a note from jeffries this morning saying these casinos will ultimately need accelerating gross gailing revenue growth to perform well, which at the moment, is predicated on the outcome of the u.s. china trade negotiations. a trade deal would be especially welcome news because these casinos have licenses due for renewal in 2022, brian. >> contessa brewer, thank you very much. in the meantime, the housing market could have a little more juice over the summer than it did over the spring because mortgage rates continue to drop. diana olick joining us now with a look at what realtors are

hoping is a true story, diana. >> yeah, absolutely, brian it was a pretty unremarkable spring, but the housing market just got a potential boost in the form of those lower mortgage rates. rates took another dive on friday 3.86 on the 30 year fix. that rate up around 4.25 throughout much of the spring market if it stays here or even lower, that gives buyers a lot more purchasing power of course, the flip side of that is the reason rates are so low to begin with because of concern in the economy the trade war with china, and then mexico last week, the weak jobs report on friday didn't help either and the concerns made people nervous about making their single largest investment, that is, a house the supply of homes for sale is rising and consumer sentiment in housing is also improving thanks to lower mortgage rates according to a fanny mae survey. the people said it's a good time to buy rose in may compared with april, but slightly lower compared to a year ago and a lot lower than the last several years. brian?

>> it's a good question, diana yields and mortgage rates don't track exactly, but how closely related are they how much more might mortgage rates fall >> well, basically, they don't track exactly, you're right. they do track closely and could fall more if the 10 year treasury yields does fall and has to do with investors getting into mortgage-backed bonds, a lot more in that >> diana olick, real pleasure, thanks crude oil falling more than 12% in the last month. the supplies out there, they continue to build. big time up next, a look at the one thing that could bring investors back into the oil and gas sector. that's next. "the exchange. back in two. i don't know what's going on. i've done all sorts of research, read earnings reports, looked at chart patterns. i've even built my own historic trading model. and you're still not sure if you want to make the trade? exactly. sounds like a case of analysis paralysis. is there a cure? td ameritrade's trade desk. they can help gut check your strategies and answer all your toughest questions.

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hey would say "oh we can't beat usaa" we're the webber family. we're the tenney's we're the hayles, and we're usaa members for life. ♪ get your usaa auto insurance quote today. welcome back a little good news if you're planning a road trip like millions of americans are this summer, gas prices are falling. at the same time the oil prices are sliding. that trend could actually continue get this last week, the total amount of oil, gas, and deez l inventories rose by 22 million barrels what does that mean? that's the largest one week increase in nearly 30 years. in other words, america literally is flooded with oil.

my partner at sea port global securities i think, mike, that inventory build shocked even the most inventory billed bulls out there. how shocked were you >> yeah, shocking, brian i was out marketing last week, one of the deals between meetings you look down at your phone and see the number that can't be right. and then look at what the stocks are doing and what oil is doing and said, i guess that was right and extremely disappointing, to say the least. >> when we get full, and if we get full in inventories, nowhere to put oil at a discount, are we almost there where are we >> i don't think we're there yet. the last month, it's been a blood bath the total about-face and reversal, gasoline inventories, as you mentioned a month ago, we were 5% below the five year average and now 2% above the five year average in oil inventories were 7% above the 5 year average we still got room, but it has been a pretty nasty reversal

over the last month. >> we talk a lot about the faang stocks on this network the original diamond back injury the ticker symbol. names you like, managing through 50 and 52 and $55 oil. >> the key for those names, in one of the lowest cost basin these guys can survive and thrive at a $50 price environment, diamondback is one that is poised to grow 2x with the average emp is going to do and they have returns that are about twice as good as everyone else too they'll be just fine pretty similar boat as well. >> is there any sign any of these producers out there, mike, are starting to slow down their production or literally every sort of, you know, producer for him or herself and that's going to drive the price continued down if everybody keeps pumping because they need the cash flow,

you see where that goes. >> well, it depends how you look at it. scary if you look at the macro implications, but we've had the rig counts down 200 rigs since really, the end of last year yet oil production is still up 1.5 million barrels year over year here in the u.s these guys are just getting good at their jobs, more efficient, doing more with less it's kind of the mantra out there. in u.s. production, it helicopters to grcontinue to grow. >> mood in houston, cautiously optimist snick. >> i wish we could go there. it's pretty optimistic town, but it is out oil this weekend first time in a while, literally the point of depression. so it's pretty ugly, the mood right now. >> it's been a couple of weeks since i've been to houston need to get back there we'll have a drink thank you very much. appreciate that. diamondback energy, two names

could operate in this environment as prices come down. opec meeting, theoretically, in a couple of weeks. that does it for "the exchange." i'll see you tomorrow morning at 5:00 a.m. on "worldwide exchange." "power lunch" with tyler and melissa begins right now hi, bri. thank you very much. good to see you. i'm tyler mathisen melissa lee is here and new at 2:00, president trump on cnbc earlier today weighing in on the trade war with china and the threat of tariffs on mexico. also taking aim at the fed yet again. plus, rayt hrheon the president raising a few concerns about the deal. $4.5 million for a baseball jersey babe ruth's personal memorabilia going up for auction with lots of other items we'll give you a sneak peek at some of the mostinteresting things play ball. "power lunch" starts rightow