>> up 13.5% since you bought it. stay with it >> absolutely. no desire to sell any of it. >> how about the upgrade of pinterest. $33 target anybody? >> part of that is what's going on with snap when you have a community that's that big, people want to monetize it. >> the exchange begins now >> thanks, scott welcome, everybody i'm bill griffin in for kelly. here's what we're working on today. mario and trump to the rescue. the president says that a meeting with china's xi is on now. and the ecb's mario draghi leaves the door open for more stimulus measures. will the fed give the bulls a trifecta with a rate cut tomorrow we have a debate on that coming up plus, everybody else is doing it, why not us we're going to look at the case for why the federal reserve should consider its own digital currency >> and rates may be very low right now, but so is inventory

would a rate cut really boost the housing market or is the foundation not there to support we have that coming up we begin with today's big rally in the stock market. dominic chu with the numbers >> rip roaring action. if you thought things were good in the u.s., we were up by almost over 400 points at the highs. that means we're about about 1.3% for the s&p 500 the s&p falling back a bit, about 1% to the upside nasdaq up 1.5%, pacing the advances there remember, between president trump talking about mario draghi, mario draghi talking about european rates, and then of course, what's happening overall with the specter of chinese trade talks, all of that good and positive for the markets here, at least for right now. one of the places to watch, the semi-conductor index the etf up 4% today, and that's off its highs of the session nearly all of the members of the top performing s&p 500 stocks today in the microchip industry. if you can see here, that move

higher maybe a little bit bullishness coming from u.s./china trade talks, and interest rates. you mentioned how low they are here in the u.s. rates creeping down towards that 2% area for the ten-year note yield. at least for right now, you can see at these low levels, you're talking going all the way back to 2017. if we go below where we were here, you have to go back to november of 2016 to find lower rates. let's not forget, bill, as low as they are here, 2.06%, french ten-year, government bond yields, went negative for the first time in history, albeit by a hair, and german ten-year bund yields minus 32 basis points you have to pay the government for them to borrow money back to you. >> that's always astounds me how that works thank you. we'll get more on that first, more on this apparent meeting coming up between president trump and china's president xi kayla tausche joins me, not from washington, but you're at hq welcome back >> thank you for having me, bill this is a meeting that the market has been looking toward,

will they, won't they. the president has been willing it to happen, president trump, by all of his public remarks and references toward his desire to meet with president xi at g-20 over the last couple weeks all the while, we learned president xi had cold feet, but the two leaders spoke today. a read-out from the white house said they discussed lots of different trade issues they discussed regional security, and they discussed this upcoming meeting. president trump in his tweet said it would be an extended meeting next week at the g-20 in japan. we don't know what expanded means. will it have many cabinet members or will it be extended in the sense that it's multiple hours long that's one question we have. the other question is what happens on monday when vice president mike pence is expected to give a speech at the wilson center it was expected to be an extremely hawkish speech, really ramping up the rhetoric against china and there's now an internal debate over what exactly that speech should say and whether it should happen at all.

>> so many questions still we'll get to that in a bit stick around the other event, wall street is waiting for the federal reserve and what's going to do with interest rates tomorrow. until then, we check in with steve liesman with the results of the latest cnbc fed survey. steve, you know, trade is a big part of the survey, but what did respondents say about it >> when it comes to china, the only thing the markets care about is as howie mandel would say, deal or no deal, and the answer is for now, no deal look what's happened to the response to will there be a trade agreement with china 77% thought that back in april that is all the way down to 30% now. the no deal part of tariffs, only 13% say there will be new tariffs. the 50% number, continuation of talks. that's where the market is priced right now, at least what our respondents say. what will happen if there are new tariffs or the existing tariffs? 78% say they'll increase prices. 89% say a weaker economy and it's going to shave .2% off gdp

in '19 and in 2020, and it ranks, not surprisingly, as the number one threat to the u.s. expansion. 37% peg it as the protectionist trade as the number one threat that's up about ten or more basis points global weakness and geopolitical risk now take a look at what the fed expectations are for this year 67% say it's going to be a rate cut this year, at least one. that's a big reversal from the last one 22% say rate will be on hold 11% say a rate hike. one is the average of everybody. for those who think there's a rate cut, they think two, bill >> i said earlier, i have never seen such a wide spectrum of forecasts on the fed before a fed meeting like this. before you go, these reports that surfaced today, again, about the white house exploring the legality of demoting fed chair jay powell, here's what larry kudlow said about that a little while ago >> i'm not going to confirm or

deny anything. i'm just not going to comment on it because it allegedly happened six months ago, and it's not happening today. and therefore, i have nothing to say about it it is what it is >> demoting jay powell how would that work? >> i don't know, honestly. bill, it's a great question. i don't know that they could actually do that i guess that's why they were exploring the legality of it, but you know, one of the reasons i might offer that we are the world's preeminent financial system is we have a very good and independent central bank, and a way to introduce third world volatility into the american financial system might be to play around with the fed's independence >> indeed. thanks, steve. >> a pleasure. >> see you later >> so the trade talks seem to be improving. europe is open to more stimulus. would fed chair powell give this market an extra jolt by cutting rates tomorrow as jim grant has forecast?

or at least give us a hint of that joining us, art hogan has joined kayla and me on the set. he's chief market strategist, and also with us is bryce doty, the senior portfolio manager of fixed income at sit investment associates welcome to all of you here here's another day, art, where two markets seem to be saying different things stocks going higher, anticipating a trade deal to help the economy, yet our bond market is producing almost three-year low yields right now. >> right, and that's the real conundrum. as we look at the two catalysts this week, clearly the view that the fed is probably a bit more dovish than they were a month ago, and certainly more than they were in december is true, but there's not enough evidence for them to be making a move in june or july the real conundrum is if we make more progress on the trade deal, they will be even less likely to see a need to cut rates. >> bryce, is the bond market

responding or anticipating what is happening with our economy or what's going on overseas, the slowdown with china, and now with mario draghi talking about to slow down the growth as well? >> definitely, the comments out of draghi brought rates down here because it's relative looking at our rates to their rates. but you know, i just scratch my head and think, what are they really going to do they're talking about maybe reducing ten basis points. they don't have a lot of room to go they don't really have anything that can be a game changer for them over there. whereas thankfully here, the fed has some more room to move we still don't think they will tomorrow they don't want to be seen as being weaponized in this trade war with china or with anyone, for that matter, that any time there's an announcement of a new tariff that markets start to expect a cut and realistically, what can they really do about the supply chain issue anyway dropping rates a quarter or a half percent certainly isability going to solve that problem. >> one wouldn't think so this is what happens when you

leave washington we have to break for a moment, when there's a shakeup in the president's cabinet. eamon javers is here with that >> president tweeting in the past couple moments, the acting secretary of defense is taking himself out of the running for consideration to be the permanent secretary of defense here's the tweet from the president, acting secretary of defense patrick shanahan who has done a wonderful job has decided not to go forward with his confirmation process so he can devote more time to his family the president also tweeting that he thanks pat for his outstanding service and will be naming the secretary of the army, mark epiler, to be the new acting secretary of defense. i know mark and have no doubt he will do a fantastic job. this coming shortly after usa today posted a story this afternoon, the headline of which reads, fbi examining 2010 domestic fight involving acting secretary of defense shanahan. accounts differ on aggressor the usa today report saying that the fbi has been examining a violent domestic dispute from

nine years ago between acting defense secretary patrick shanahan and his then-wife as part of a background investigation into his confirmation so that might give you some context as to why the timing of the announcement coming today, but the president saying shanahan has decided to take himself out of the running >> yet another happy family in washington that gets to be spent more time with thank you very much. see you later. kayla, back on the fed and the trump administration on the one and, you know, they have to be able to say that the trade war is not impacting the economy. larry kudlow just said a little while ago that the tariffs have only had a, quote, mild impact on consumers in the united states but at the same time, they have been jawboning the fed to cut rates. >> and the president has said i'm a low interest rate guy. he has said over and over again he wants the fud to cut interest rates. the irony being by only stoking this trade war has there been enough deterioration to get the fed to consider doing this but we'll see what the next two weeks bring because on one hand,

you could get an agreement in principle or some sort of decision by the u.s. and china to have a productive state of discussions for the next several months but the u.s. has signaled it's not willing to take tariffs off just yet that might mean this next round of tariffs doesn't go into place, but it's hard to see the existing tariffs being taken off any time soon. i think the u.s. wants to make sure that china flushes out the deal they had a couple months ago before being willing to do that some of these economic pressures are likely to remain >> the stock market is not waiting for that deal. they're acting today >> yeah, and it's interesting because we overreact quite a bit in the market, especially this year and we saw that in december. we certainly saw that after the may 3rd escalation of trade concerns but i think kayla makes the most important point here what is it that the administration wants to get done here do they want to drag out this trade war so they get a rate cut? or is it, you know, can they get to a point, kayla's point, can they get to the point where there's no more escalation we're not going to go with the additional $300 billion and 25%

tariffs on that, and the fed can say we need to throw insurance at this. that's going to be a tough needle to thread >> bryce, that's what people have been calling for, is an insurance cut, whatever that means. something that would support the market in the meantime before we take the tariffs off or get a trade deal of some kind. does that make sense >> you know, i understand the theory behind it i just -- and i know it would make investors feel a lot better it's not going to totally solve the problem. i think what they want to do, to that point, is really set people up to say, all right, we're not doing anything now, but we definitely are monitoring the situation and get people to be ready for a july or september cut. in the past, you know, we have cut rates because we have been in dire situations, there's been a recession, serious issues, and the rate cuts have been big, like half a percent or 1%, we're not in that same scenario right now. so i think they're going to try to hit a glide path that's only like a quarter point every other

meeting. kind of like how they raised rates a quarter point every other meeting. that's going to be, as you say, a tough needle to thread >> do you have a sense of the relationship between the president and jerome powell. we're told they meet like once a month at this point, right >> i think that jerome powell has a good poker face. i think he respects the independence of the institution that he runs and i think the president has made his anguish over the pick and over his letting secretary mnuchin control that pick, he's made that very well known, but i think jay powell is very good at staying in his lane here >> well, tomorrow's the day. get your popcorn ready settle back into the barcalounger thank you all. art, kayla, bryce. thanks for joining us this particular segment >> here's what's ahead on "the exchange." >> coming up, if facebook is getting into the digital currency space, why not the fed? ahead, the case for why that could be a good way to shore up

our banking system plus, will a potential rate cut give the housing market a boost? or will the supply drought keep a lid on any potential breakout? and fear versus fundamentals after a rough earnings season that saw some stocks drop more than 20%, we'll dissect the retail sector for a look at what to own and what to avoid this is "the exchange" on cnbc l nervous about buying a new house. is it that obvious? yes it is. you know, maybe you'd worry less if you got geico to help with your homeowners insurance. i didn't know geico could helps with homeowners insurance. yep, they've been doing it for years. what are you doing? big steve? thanks, man. there he is. get to know geico and see how much you could save on

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welcome back to the exchange you have probably heard by now, facebook has unveiled plans to launch this digital global currency how does it work how does it differ from other crypt okocurrencie cryptocurrencies julia has been gracious enough to step in on this story for us right now. julia. >> well, bill, that's right. the currency that facebook is helping launch is called libra it's set to launch in the first half of next year, and it will actually be run by a nonprofit based out of switzerland facebook will not have control over the currency. so how will this actually work unlike bitcoin, libra will be backed by real money a basket of currencies put in a dollar oranother currency and get a dollar's worth of labor out this creation reserve aims to

limit the currency's volatility. facebook also has created a subsidiary called calibra. this will operate on top of whatsapp and messenger and as a stand alone app. calibra is designed to enable anyone to store money for free and allow people to send and receive libra instantly around the world with no fees to make money from this new currency, facebook plans to add other financial services such as loans. facebook's larger goal is of course to get people to spend more time on its platforms that, of course, means more exposure to ads on its platforms. and they also want to make it easy to make purchased from the 90 million different businesses that have a presence on facebook's different apps. now, facebook tells us that it is working with regulators it does expect calibra to be approved, and they do expect to be able to launch it with that government approval by mid-year next year. guys >> julia, thank you very much. see you later.

enjoy cannes >> so facebook is bringing digital currency into the mapestream, it begs several questions which i'm going to ask, but there's at least one, is it time for the fed to consider backing its own digital currency our next guest has been a proponent of that. sheila is a proponent of digital currencies overall he serves on the board of a blockchain company, and omniax i'm so glad you're here today. i have so many questions what do you think of libra >> well, i have a lot of questions. >> don't we all? >> yeah, so it's not dollar for dollar with the u.s. dollar. it's backed by a basket of different currencies how that exchange rate works is not clear. plus, what are they doing with the money? if i give them some dollars to buy libra, they're kind of being fuzzy about that in the white paper. well, it's going to be in government securities and banks and other investment grade

investments, so what's that about? i think, you know, the strength of the collateral is something, another question i would have about it >> put your regulator hat on what's your first question >> that's my first question. >> okay. >> yeah, they're saying it's stable value it's money good. so are the investments behind it they have to do something with the money. it's like a money market fund, right? we had a problem like that during the crisis. they said it's money good dollar for dollar and investing in things like lehman brothers debt, but it turns out we're not so money good. they need a lot of transparency and more explanation >> who is going to regulate this >> that's another question it's not a bank, not a trust you mentioned paxos, which has a stable coin, but is regulated by the new york department of financial services what's the oversight, what's the capital behind this. those are the kinds of regulatory questions >> you have written an op-ed about the fed perhaps creating their own digital currency why? >> yeah, well, it just would

it would democratize monetary policy, i think. banks have reserve accounts with the fed. the technology exists, i think, to make the reserve accounts broadly available to households. and it would give people a safe way, a very safe way to make payments we don't have to worry about the fed defaulting they can print their own money you don't need the network fees, the checking account costs there's some downsides, too. will you disintermediate the banking system i think you need to put limits on how much central bank digital currency would be issued but i think it's got tremendouss potential for monetary policy too. we tried to drive the great recovery with monetary policy. it's been very uneven, but paying that interest directly to households when monetary policy dictates would make it more effective. >> the tools they have have an intended effect, but there's no guarantee the effect is going to happen the way they can put it into effect, right >> exactly

>> where's digital currency going? i mean, this is by far libra is the most ambitious project yet >> yes >> and it's most fully formed to this point, although it's not by any means fully formed where is this going? >> i told you what i think the risks are. let me say for the benefits, good for facebook for trying to make this new technology, which is very exciting, more broadly accessible it can get a lot, if properly done, it can get a lot of frictions out of the system. there's a lot of cost to making payments these days, particularly making international payments there are a lot of unbanked people throughout the world. technology is there, but it's just a matter of do central banks do it, does it opt out, does a company like facebook do it if we let private companies do it, what kind of regulation do we need? those are the questions we haven't answered yet >> the problems exist, money laundering, drug deals, all those things >> the anonymity of it is an issue, but again, i think the

blockchain, it gives you a clean audit of ownership so there are some advantages from fighting money laundering as well, to using blockchain technology >> you're going to hate me for this question. do you think this gets off the ground >> oh, boy i'm a little skeptical, i gotta tell you >> okay, very good former fdic chair. >> coming up, some disappointing data on home building out today, but it's not all bad news on the housing front overall. we'll look at what to expect from that still ahead. plus, one retail analyst has slashed his price target on not one, not two, but a dozen retailers today. he'll join us with some of the names and the reasons why, and what it means overall for the t w.il industry righno the exchange is back in two minutes.

exchange." i'm bill griffeth in for kelly today. stocks still in rally mode, off the session highs, though. the dow briefly rallied more than 400 points early on the s&p is now less than 1% from its all-time closing high. here's some of the movers. the industrials among the best performers, with boeing, ge, and deere leading those gains. boeing finally landing its first order at the paris air show earlier today. gaming stocks, they're soaring on optimism about trade talks with china melco, washington sands, wynnn

up 5%, and shares of snap have jumped after they raised their price target on the stock by $5 up to $20. the firm said that the street's expectations for user growth and revenue are too low. that stock is up 165% this year so far somebody likes it. >> now to sue herera with our news update. >> hello, bill good to see you. hello everyone here's what's happening at this hour on capitol hill, u.s. trade representative robert lighthizer on the hot seat during a senate finance committee hearing as senators question president trump's trade policies >> but i don't agree that tariffs should be the tool we use in every instance to achieve every trade policy goal. i fear continuing to use tariffs in this way will undermine our credibility with our current and potential trading partners >> west virginia teachers protesting at the state capitol as the house of delegates reconvene for the special

legislative session on education. educators filling the state house halls to speak out against a sweeping senate gop proposal which would allow the state's first charter schools. and a new study from harvard says suicide rates among young people continue to rise. according to government data, teen suicides are at the highest levels since the year 2000 males were foour times more likely to take their own lives than females you're up to date. that's news update back to you. >> thanks very much. see you a little later here's what's ahead on "the exchange." >> coming up, as the red hot ipo helped fuel this red hot rally small float causing a huge jump? lululemon stretches beyond clothing >> the half a billion dollar producer >> and no bones about it, technology is changing our bodies it's a aadn pifihe orad re feel ?

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stories on your radar. it's time for rapid fire what am i doing over here? >> on the wrong side of the table. >> this is really weird. i'm playing the straight man

today for these three clowns courtney reagan, dom chu, and leslie picker. our first topic, the stock market, the big rally today. president trump had that tweet out early this morning saying he and president xi of china had a very good telephone conversation, and would be having an extended meeting next week at the g-20 the dow is -- the s&p is less than 1.5% from its all-time high right now. >> this is great, guys there's no doubt about it, my 401(k) is doing better, everyone's is doing better, but it's come down to an idea that a 1.25% advance for the dow or s&p is good and it's nothing to sneeze at. but it's still measured compared to what it was in the past when the president tweeted about things like, hey, we're imminent on a deal, or treasury secretary mnuchin saying at the conference that we're in the final laps of a trade deal with china. these things are having a more muted effect as they go on it's not to take anything away from the rally, but when you have mario draghi making

comments from the european central bank that they could put more monetary stimulus in play, that's when you get it france up by 2.25% and the german up by 2% those terms are bigger than what we're seeing here. >> foreign investors whipsaw all the time with the headlines and the tweets like the boy who cried wolf or the president called bull run. just as a citizen of this country, but also as someone who watches the markets, i want to see real progress before i get excited. i'm just starting to get a little hes tbt >> the rest of the world does too. >> i think you could see it to the downside too it used to be if the president tweeted there was no deal imminent, we can take the opposite, that the markets would move significantly to the downside now, when there is a negative loin, it's kind of a blip except for the rare one off cases >> nobody cares what i think let's move on. beyond meat shares briefly

trading above $200 a share this morning. >> where's the beef? >> indeed, the stock well off those highs but still above the price targets of wall street analysts this has a float of 46.7% shares outstanding. 57 million shares. very small >> way less than that when you account for the shares that have been locked up for the next -- well, at this point, five months or so, since the stock has gone public it's interesting right now, it's down about 2%. you can see that huge differential before the market opens, up 18%. now it's looking negative for the day. a lot has to do with momentum. investors in the market are wondering who is the marginal buyer still out there at this point? >> come on, these are day traders, aren't they at this point? i'm not picking on you day traders. i don't want to hear about this on twitter, but you know, with the number of shares that are shorted. >> right >> the volatility we're seeing right now. >> but there's your marginal buyer, right the marginal buyer is the person

who is short the shares. you get a sense -- >> every time somebody mentions beyond meat -- beyond meat -- i thought we had an agreement. i guess not. >> so, i mean, the where's the beef was going to happen i was waiting for it, but if you're looking, you get a sense that the trading dynamic right now in beyond meat shares is less about fundamentals or even momentum chasing it's much more about the technical factors at play. which is to say if you are short shares betting on a decline, like many ople would be, if it goes higher, you're feeling pain therefore, you have to buy the shares back to cover that position so if you're looking for the marginal buyer here, it's the reason why in trading action today, the early action was very fierce to the upside, and all of a sudden when the marginal buyers disappeared >> again, it happens every time someone mentioned beyond meat -- >> where's the beef. >> who is pushing it higher in the first place? because at some point, i think a

lot of people in the market were expecting this thing to course correct to the downside, and it hasn't really happened down 2% today isn't really anything to write home about >> we're talking about these technical issues we don't talk about the beyond meat >> and the one fundamental is the announcement they're going to sell in groceryreez, i thinkr further upside if you have expansion for distribution >> enough of the beyond meat >> where's the beef? >> all right, topic three, lululemon stretching beyond the yoga mat launching a line of personal care products, including a dry shampoo, deodorant, face moisturizer, and lip balm. the products, of course, come with the lululemon steep price tag, i guess >> i was just going to say that face moisturizer was like $48. the dry shampoo is $34 the little steep for me, but when they started testing this in october in 17 stores, they said that it did very well they believe this is a white space category they can play in.

lululemon thinks they want to own all things sweat life. when you're done with your yoga class, i guess if you don't have time to wash your hair, you use the dry shampoo and grab the lip balm, which comes in a very soft container so it doesn't rattle around and annoy you in your gym bag. that's another key thing >> dom was just telling me about that >> i would say this. this is targeting a very specific part of the market because these guys aren't the first mover when it comes to high-priced skin care or personal care products i remember going to a mall and seeing a kiehl's shop where they sell men's moisturizer for $48 a clip or bath gel for $35 a container. there are people out there who will pay them. i don't pay them i tend to buy the body wash at costco, whatever is available, or suave, or whatever it is for my shampoo, but there are people who will pay it. more power to them if they can tap that market. >> that's the type of clientele going into their stores. if you're willing to pay $120 for yoga pants, what's another $50 for moisturizer if you

already trust the brand and believe that moisturizer is best suited for your active lifestyle. >> very holistic approach to merchandising. >> ask joe kernen next time you see him whether he likes the abc pants and whether he'll dry the dry shampoo for $48. >> put the lip balm in his pocket >> and maybe we'll ask him about beyond meat as well. >> where's the beef? >> thank you >> up next, producer/director j.j. abrams has left his mark on the star wars and the star trek franchises as well as creating hit tv series like alias and lost now his production company, bad robot, is close to signing a reported $500 million first look deal with warner media and parent company at&t. you're shaking your head >> i think, i mean, more power to j.j. abrams i would say we have come a long way since the days of felicity, i guess is the one thing i think of and the idea that you could have a producer worth half a billion dollars is not out of the realm of reason, but boy, those tv shows and movies better be darn

good >> i'm sorry >> i was going to say, i wonder for $500 million, if you get the right of first refusal for any of the production or content that comes out of bad robot, is he also allowed to go somewhere else if you turn down -- >> first refusal happens - >> that's how that works, yes. >> for $500 million, i would say we get all of it if we don't want it, you can't put it out somewhere else. >> i think j.j. abrams has been clear about that, that if you don't like it, i'm taking it somewhere else >> that's a lot of money this price tag is largely a byproduct of the tremendous amount of competition that's out there with all of these streaming services and it's becoming increasingly more expensive to find content that will bring people to the table. now, the question is, does $500 million buy you star wars, star trek or does it buy you something else i think that is the big concern if you're putting half a billion dollars into one production company. >> it is j.j. abrams, by the way. >> also at&t >> i know. yeah, well, they have to do

something. go big - >> or go home. where's the beef >> everybody get your iphones out or whatever mobile device you have >> we all have two >> you all brought two i have two but i brought one because i didn't want to show off. according to a study, our mobile phones are giving us what's called text neck doctors discovered that a previous rare bone spike on the back of the skull is becoming far more common. and everybody reaches for them right now. they're becoming more common in people ages 18 to 30 i'm safe researchers believe -- >> me too. >> the spike forms because we're hunching forward to read our mobile phones, and the body is responding by adding new layers of bone. evolution at work here, folks. >> i thought one of the best things the new ios came out with was the screen time, it tells you how much time you spent on it if it's up or down from the previous week. i now consciously spend less time on the phone. >> i will tell you, i didn't bring out the one device i could

not live without is my ipad. you know, i love my old movies and i have the tcm app so i will sit there for an hour and a half to two hours glued to my ipad, watching an old movie, and i will tell you that, you know, my neck gets a little stiff after a while. >> when i first read this, i thought it makes sense then think about before we had phones, we're looking down for books. >> or newspapers >> but you know what the difference >> you're handwriting everything >> the difference, i think we have become so focused on this device that we don't move. i mean, how often do you suddenly look up and say, wait a minute, it's 30 minutes later? where did the time go? >> my little niece is glued to the ipad her attention span is zoned in on that. a tornado could be happening >> i don't look at it in the night. there would be a time, if i was at all awake in the middle of the night, i would check my phones >> your wife thanks you and your neck thanks you. >> my wife is more guilty than i am >> thank you all, courtney -

>> great job on that side. >> thank you very much, and thank you, clara beyond meat >> where's the beef? >> great >> tech executives telling cn brx krbc they want more regulation in the industry, but have little faith in the government getting it right. details coming up. my degree from snhu has helped me tremendously. the flexible class schedules 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. we are the ones who break through.

welcome back to the exchange let's get you caught up on the markets. it's been rally day. the dow, s&p, and nasdaq all sharply higher the dow was up 414 points at the session high the nasdaq up more than 2% technology, industrials, financials, they are all leading the market today the tech sector is now on pace for its best month since march of 2016. >> meantime, tech executives have weighed in on what they see as the most important issues facing the industry right now. the first cnbc technology executive council survey

jon fortt asked an awful lot of questions in the survey and has the findings for us now. >> not just me, our whole team at cnbc, bill. today, we have those results from the first cnbc technology executive council survey and the council so far is made up of about 100 top tech executives from some of the world's largestcompanies acros industries and sectors what keeps them up at night? the threat of cyberattacksering according to respondents, the threat of cyberattacks is the single biggest risk to their companies this year, and the need for vigilant cybersecurity is vital as companies continue to store and process just an unprecedented amount of data 70% of respondents also say their firms are now making use of more than half of all the data they collect. and tech executives aren't expecting law enforcement to shield their companies anytime soon 62% say they have no confidence in the u.s. government's ability to protect organizations from cyberattacks for more on the executive

council, head to cnbc.com/tec. >> they're going to try to protect themselves rather than allowing the government to do it >> understand they have to protect themselves and that partly explains why you see an ipo like crowd strike do so well we also asked them where their fearing the attack coming from mostly from individuals and crime syndicates versus nation states relatively low, lower than i would have expected is rogue employees although that sometimes can be an issue for companies too. >> very interesting, jon, thanks jon fortt with the latest on that survey. >> may housing starts fell unexpectedly, but there were signs in today's data that falling mortgage rates have started to juice this market whether the summer season will continue to heat up, we will ponder that when we come back.

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welcome back a drop in housing starts in may caught some people by surprise, but there are some signs that lower rates may be starting to juice the housing market meanwhile, the ten-year treasury yield is inching ever closer to the 2% even level. got to 2.0167 this morning the last time it closed below that was election day in 2016.

joining us to talk more about this, skyler olson is back with us good to see you again. welcome back >> thanks for having me. >> this has been a very hurky jerky kind of housing season this year, hasn't it why? >> yeah, i mean, i think one of the ways we started this home shopping season was really different than the previous year in that the previous year, prices were still moving really quickly. very few listings had price cuts this year felt much, much slower home value appreciation is sloet slowing down in the expensive markets. the percentage of listings that have price cuts have shot up a the housing market starts to transition and a lot of sellers are caught with outsized expectations of what their homes can sell for things are slowing down in a significant way. >> cost of building has gone up. shortage of workers. the cap on the salt detention. it's been there for a while, not going to change any time soon,

so are lower rates enough to try to juice the market beyond those hurdles? >> well, the recent drop in the hurt-year mortgage rates gives us a reason to believe this slowdown won't last very long. i mean, it is advantageous for buyers in order to lock in the much lower rate in terms of their monthly affordability. and because slowing housing markets often means that overall inventory rises as more homes are left over from the month before, that means the buyer might actually have a better experience and can spend more time in order to make that decision so we might see more and more buyers actually returning. and that will stabilize things out again. and we might see home values increase by the end of the year and get back to hopefully a more stable pace than what we had experienced over the last three years. >> then we have, it's not quite a trend yet, but we are seeing some of these major corporations, amazon is doing it in seattle now google in silicon valley, where they're putting much -- a great deal of money into build

homes for their workers and for others, for those who couldn't afford it otherwise, bring in more affordable housing to some of those areas we're going to leave it to the private sector, the non-home builders to try to solve this problem, are we? >> well, i mean, i think the really big rub is that builders aren't really building at the same pace they had been historically we're really at a low rate of construction for a lot of fundamental reasons. you mentioned them a bit earlier. the cost of construction, the cost of land these things are hard to overcome and so we need some kind of intervention to change the course of things, where the course of things was down payments getting more and more prohibitive, as home value appreciation outpaces incomes. this kind of intervention is trying to address that issue, whether or not this would even be enough to address housing affordability is actually a big question you know, in some ways, getting more denser makes it easier to build closer to jobs on a much larger scale than what we're seeing now is really what's

needed getting that done, that's a very open question. >> that is very much the open question skylar, always good to see you >> thank you for having me >> you bet the retail etf has been climbing higher today as president trump struck a bullish tone on trade talks with china but one analyst still sees other risks in that sector he lowered his price target on a huge chunk of retailers this morning. he'll tell us why and name some names coming up. is where people first gathered to form the stock exchangeee, which brought people together to invest in all the things that move us forward. every day, invesco combines ideas with technology, data with inspiration, investors with solutions. because the possibilities of life and investing are greater when we come together. ♪

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welcome back the threat of tariffs and rising wages have weighed on a number of names in the retail sector, while some will be able to ride out the storm, others might not fare as well our next guest cut his price target on a slew of retailers today. weeding out the winners from the losers and joining us to talk about that move, simien siegel, senior retail analyst i have the list there, there are 12 of them american eagle outfitters, abercrombie and fitch, gap, tiffany. we don't have time to talk about all 12, but what happened? >> i think the reality is sometimes you can learn from what we have and sometimes you learn from what we do not. what might be more interesting

is the names we didn't cut this reflects an earnings season that was the absolute worst fundamental earnings season in a long time. what's interesting about it, the stocks have come to reflect that i think there's actually some opportunities. i know this is supposed to be a very negative segment, and there are plenty of cuts there, there there are also this barbell of names that are not >> the ones you cut, and by the way, this is not supposed to be a negative segment how much of this is attributed below to the tariffs, the higher cost that's bringing, squeezing their margins or if they can't pass it on to their customers, which theoretically is only temporary here >> the interesting part of this is that this is a structural challenge that retail has been facing for years and i think that 2018 was a little bit of a head fake. the first list of companies that you just mentioned that we went through, the common denominator, they're in the mall, and no one is surprised to hear the mall is challenged i think that what was interesting is there was this

optical head fake on terms of inventory being clean last year that made these others look more attractive than perhaps they really were. when i think about tariffs, when i think about wage, my team put out a big report on wages yesterday, when i think about promotions in regular inventory because the consumer demands deals, retailers are facing a challenging moment because they have been facing a challenging moment, and i think that's going to persist >> three companies at least you think can weather this nike, amazon, and tjx. the parent company of tj maxx. why those three? >> let's barbell, take some consistent, strong outperformers, and the reality is the companies that you just listed, so that would be the left side of my barbell, are these large companies that can get through. companies that generally benefit from dislocation companies that benefit from their size tj from an off price perspective, let the inventories inflate. tj is where people will go amazon taking that share, i think that will continue and then nike, the reality is

that the checks they write for their athletes make it very hard for others to compete. on the flipside, so if we want to get a little more in the weeds and willing to take a little more risk, i think these multinational brands are priced a little bit too far we're going back to the priced for death mentality. tapestry, capri, even ralph lauren and pvh, where there's a lot of complacency in the u.s. >> nike has a big exposure to china. >> the point is, is it temporary? the reality is if tariffs are allowed to last for multiple years on a prolonged basis, the entire sector is in a lot of trouble because i don't think that the consumer is going to be willing to take that price >> we're back on -- i mean, you mentioned last year being a head fake quickly, two years ago, record number of store closures on pace to do that again this year, aren't we? >> yes i think if you and i were starting a company, i don't think we would want for it to be a retailer i think weep want for it to be a brand in this world. you want to have control, you want to know where you can sell. as long as you have a marketing

dollar to push, nike can get a lot of people to buy a lot of shirts and shoes >> always interesting to talk to you. thanks >> good to see you >> tats it for us on "the exchange." kelly is back tomorrow mercifully "power lunch" starts right now >> thank you, bill i'm melissa lee along with tyler mathisen new at 2:00, rally on. president trump set to meet president xi next week at the g-20 smit. will we avoid another round of tariffs? are we close to a trade deal the other catalyst, a surprising call out of europe about rate cuts and stimulus. could this put more pressure on powell to cut? >> it is called one of the most important moments for big tech facebook launching its own digital currency what it means for facebook and the crypto world "power lunch" starts right now >> hi, everybody welcome to "power lunch. i'm tyler mathisen nice rally at this hour. the s&p about 1% from its all-time closing