pe, i think they have a strong pipeline good technology. >> good to have you here as well today. >> there's no premium in baba. >> walmart >> that stock is ripping up 1.5% again today. great weekend. "the exchange" starts now. thank you, scott hi, everybody. here's what's ahead of us. tensions escalate, ten minutes from striking iran when the president called it off. we have the latest from washington, and why the market seems to be shrugging it off. and a story that's never been told before how the biggest deal in trump's pregnancy involving china hasn't delivered, what it can tell us about current trade talks. travel industry on edge and deaths in the dominican republic continue the industry is starting to see impact we begin with the markets. dom chu has the numbers. >> not on edge for investors markets sit near record highs, hit them yesterday in the s&p 500 and we're just about flat.

couldn't get much more flat than where we are now do you industrial is still up 50 points, and nasdaq off by one-tenth of 1% as well. key place to watch in the marketplace as things stand, the s&p 500 overall, remember that massive run we had so far on a year to date basis, up around 18%. the reason it is important is because we are on pace for the best first half of the year since, get this, 1997, back in that year, first half of the year yielded 19 plus percent gain we worked off a low base after fourth quarter last year stocks to watch. car max, better earnings, better used car sales walmart, costco, dollar tree up. put check marks next to them all. they all hit record historic highs in trading some say there's a theme used car sales, walmart, costco, perhaps the budget shopper is

doing better than the other side of thespectrum >> thanks. welcome to "the exchange." i am kelly he haevans. we begin in washington, following the shoot down of a drone. eamon javers and amanda ma see us working sources at the pentagon the president just speaking with chuck todd. >> that interview wrapped up a short time ago the president went through his thinking around calling off the air strike on iran last night. here's what he said. >> did you green light something or had you said if we do it, i'll do this what was the order >> nothing is green lighted until the end because things change. >> you never give a final order. >> no, no, no. we had something ready to go, subject to my approval they came in, came in a half hour before this, said we're about ready to go. i said i want --

>> were planes ready to go >> no, but they would have been soon, to a point you wouldn't or couldn't turn back so they came and said sir, we're ready to go, we would like a decision i said i want to know something before you go. how many people will be killed in this case iranians. i said how many people are going to be killed sir, i would like to get back to you on that. great people, these generals they said, came back, said sir, approximately 150. and i thought about it for a second, i said you know what, they shot down an unmanned drone, plane, whatever you want to call it here we are sitting with 150 dead people that would have taken place within a half hour after i said go ahead. and i didn't like it i didn't think it was proportionate. >> reporter: the president saying largely what he said earlier, the contemplation of

death toll from a possible u.s. strike that weighed on his conscience as he considered whether that was proportion at retaliatory strike in exchange for knocking down a u.s. drone the president also saying there were no planes in the air yet at the time he made the decision not to go ahead with the air strike, saying they were just about to the point it couldn't be turned around when he ultimately called that off. >> there are two ways to read this one is we are maybe facing imminent action against iran of some nature that could escalate tensions in the region, the other is that the president has de-escalated tensions, depending now on if we pursue further action >> sure. look, this appeared to be a president yesterday trying to de-escalate. he said in the oval office he rum enated, maybe it was a mistake, could have been an iranian general that went rogue, without authorization to do the strike, therefore the whole thing could be a big mistake the president seemed to offer them an off ramp to the tension,

and then today again by calling off the air strike last night, explaining it was because of fear of killing 150 iranian soldiers or civilians, he said ultimately that's why he backed off. also, kelly, i should say the president said in a series of tweets the united states put in new sanctions on iran last night. we have been working with the white house and treasury and others to identify what those sanctions are. so far no details or information from the white house as to what the president is talking about in his tweet in terms of new sanctions on iran last night. >> sure, andhow they might respond to that. amanda, what are you hearing on the pentagon side? so much involved the president negotiating with his generals. >> reporter: i would add there are acting titles in the trump administration, but i've never quite seen a vacuum in leadership at the pentagon secretary shanahan is resigning and handing the keys over so to speak to acting secretary mark esper, that happens this sunday.

esper is off to nato tuesday when i talk to sources in the pentagon about what the potential strike could have looked like with iran, they gave me guidance it might have looked similar to the strikes in syria last year, a lot of naval s a et cetera -- assets, and a lot of surveillance aircraft headed to the region to make sure prior to the strike and after the strike that u.s. assets or vulnerable allies would not be harmed in the wake of such a strike. >> is there any more information about location of the drone? is the u.s. saying it was definitely in international air space, despite the iranian claims, and is it true there was a manned aircraft alongside it not struck >> reporter: those are contradictory reports out of washington and tehran. last night the pentagon put out a new graphic that showed where the drone fell into the water

and its flight path, and didn't at any point cross into what iran said was their air space. again, more speculation on who is on the right side of this >> sure, but from the u.s. side, they say it looks clear. thanks appreciate it very much. and despite this tension, the market shrugging it off, choosing the deescalation theme as trade and the fed dominate sentiment, dow is up 40 points s&p 500 and nasdaq are fractionally lower bob, you emphasized some developments with china in particular here as helping us get to new highs earlier >> what moved us earlier was trade talk news essentially, so vice president mike pence said he will hold off on a policy speech on china scheduled for next week, amid what are reported to be positive signs of progress with china. a little move up in the middle of the day on that i remind everyone, we hit record highs, we had a big double

whammy one confirmation that trump and xi will meet next week, and this is important, euphoria over ecb and fed comments we have seen this week. the markets are ignoring the iran story for the moment, oil is a little higher, ignoring signs of slower growth some analysts are not. atlantic equities downgraded caterpillar. they noted global macro data is weaker, tariffs, a weak europe and china are all impacting earnings on the big multinationals what they're not sure of is whether the slowdown is temporary or not for the moment, they say no recession in 2020. after 7% runup in june, kelly, stocks are overbought and due for a pause as we await earnings commentary the next few weeks. want to point out something, quick call for pg&e, reopened a volatility hall. >> bob pisani at the new york

stock exchange do the markets have a breaking point or can nothing derail this president of world markets at tia bank, and founder and ceo of zoe financial. great to have you both here. does this all go back to the fed rate cut or decision this week, even this morning with commentary from neil cashcari pushing for half point rate. >> if you think of valuation, it is the fact that buy price and earnings, that p is effected in a positive way of expectation of cost of capital coming down. ultimately, that e matters, and earnings this year don't look appealing compared to past years, something to keep in mind as this dies down and go back to reality -- >> but theumbe n, this is an amazing june just getting our heads around how bad may was and sprung back

up up 8% on the dow apple up 16%, only two-thirds of the way through. for anybody looking to say hey, this was a buying opportunity, did they miss it, does it make sense we're at all-time highs? >> it does the economy is generally good for companies, low interest rates and fed's going to stand behind us. we do think we'll drift higher, but there are risks, and forward earnings is the big risk and where they're going to go. we think there are better opportunities, perhaps in emerging markets and where a lower u.s. dollar with lower interest rates should support the economies in the emerging markets. >> the dollar is wker this week you mention a strong economy, this is one of the puzzling things about this, even today. you have the federal reserve basically citing downward conditions in the economy as a reason for more accommodation. at the same time you have the data this morning, existing home sales, holding in there, people

saying the housing market looks pretty good, ten year yield moved down on this anticipation. is this whole talk on cuts and slow doun slowdown deserved? what happens if data stays firm? >> it is a mixed picture one area they could point out things deteriorated is inflation expectations, right, which is maybe what the bond market was looking at, not just here but europe and the united states, they've come down significantly. i think if they want to point to something, they can say we have a dual mandate. >> this is the thing this is the argument that neil is making, pointing to university of michigan study and others saying look, these are at record lows. we never hear the fed talking rate can you tell us when the economy is fine and market is strong they could have made the case on low inflation, maybe not with expectations this low, but they didn't, they were raising rates. it doesn't seem intellectually

consistent to me. >> inflation was hanging in around 2% goal, so at the same time we saw actually several indicators in markets to indicate that the u.s. economy is very strong, so there was a case for them to start moving rates higher last year they've obviously done 180 degree turn. now they feel maybe an insurance cut, certainly markets are pricing in, insurance cut is necessary. >> back in march, no one was seriously talking rate cut that's an abrupt change. quickly on the trade issues and iran tensions we talked about a moment ago, there's nothing you can do about that as an investor, is there, other than moving to the sidelines. >> there are some hedges gold, we have seen a good move in gold now, and it is a hedge

against that volatility and what can happen on geopolitical risks. we're seeing investors moving back to precious metals, in particular gold. >> would you add to that >> i would say the dollar is going to have big implications interest differentials here come down versus where they were before, the dollar gets weaker, that helps commodities and markets. >> and the president would be happy. thank you. have a great weekend don't go anywhere. here's what's ahead on "the exchange." >> coming up, former national economic director larry lindsey says the fed is still data dependent. if that's true, will today's manufacturing numbers give them more reason to cut we'll ask him. plus, a cnbc investigation how the biggest deal done by the trump presidency worth $84 billion is stuck in neutral. and sky diving

no mountain climbing. no flying a plane no it's a debate happening in some board rooms across the country should ceos be barred from taking part in risky behavior? this is "the exchange" on cnbc

welcome back this week's fed decision showed members are split where rates go from here. the minneapolis fed president revealed at that meeting he advocated for a half point rate cut. how likely is that joining me, president and ceo of the lindsey group, former fed governor and national economic director larry, welcome, good to see you back >> thanks for having me, kelly. >> what stands out to you about this whole discussion, gives me a headache frankly, you have on one hand everybody talking about low inflation as the reason for rate cuts but on the other hand, they quite clearly mean we cut if there's a slowdown, we won't if there's not where does that leave us >> just look at fed history. rates are cut because of problems in the real economy, higher unemployment. rates are increased because of higher inflation

if you start confusing that, then you begin to run into trouble because what you end up doing is kind of looking far into the crystal ball. the fed did that in december, they said oh, my gosh, inflation is coming, we have too many people working, we have to raise. we now know that was a mistake i think if they cut now, if they don't have data to justify it, they'll be making another mistake. >> you don't think rate cuts are justified, despite the fact that inflation is low and then inflation expectations are near historic lows. >> well, let's talk about inflation, low inflation i bet if you conducted a poll and asked people do you think inflation should be faster, 99 to 1 they would say no the only people that want faster inflation are central bankers because when you have a little inflation, you have more wiggle

room so let's be honest >> if you ask people do you want higher wages, 99 out of 100 would also say yes people forget it is not just the price side of things, it is wages, too that's why the fed, they're concerned. they said they don't want to be japan or europe where it looks like wages are going nowhere and the population is hurt by that in the long run. >> wages are going up. employment is going up my indicator, what i would look at, look at july 5th when the employment report comes out, see how much the number of workers goes up, see how much wages go up and i think if you add those two together, get a number over .3, there's no reason at all to cut. if you give households income, they're going to spend it. in the last 12 months, household wages or personal income has

gone up 4.4% well, what the fed thinks inflation will be 1.5, that means you have 2.9% real growth in consumption by the fed's own arithmetic 2.9% real consumption growth is not by any means justifying recession, it is actually pretty solid. that's the number i'm looking at. >> you don't think the economy is slowing what about trade >> well, i think the chairman answered that question very well at their recent conference, which is he said we don't know what it is going to all mean we're looking at it carefully. that's exactly what they should do they should monitor what's happening in the economy as a result of trade very, very closely. that's fine with me. but that's different than saying oh, my gosh, there's a trade conflict, therefore we need to cut rates.

that doesn't make sense. >> that could change on a dime as well. i hear from people that say low rates are destroying savers and older population's ability to live off the income. the longer we have the situation, the more you hear that the rate the fed is setting is different from the 10 or 30 year which fluctuate wildly my question is is there an element of truth in that, is the fed to blame for rates being so low, does that cause harm to the economy? >> well, it certainly does hurt savers, hurts older people, no question but there's a more pernicious effect of long, low rates. you end up turning the economy into a zombie economy. anyone that can afford 1% business rate stays in business. you never get creative destruction that's necessary to get sustained economic growth. so the fed is keeping everyone in business. in addition, the fed is making

things worse because most of the low rate effect went into asset prices that's why there's such cheering on wall street for cutting rates. if you do something that only effects asset prices, primarily effects asset prices, you worsen inequality in america. so yes, there are a lot of people that get hurt by this that's why you should be very careful about making any change without having good solid reason to >> larry, always good to get your reasoning thank you so much. >> kelly, can i say one more thing? >> very quickly, yes. >> i think chairman powell is doing the job he needs to do, i think it was wrong for the president to ask him or to suggest that he be fired you don't want to fire a fed chairman, it's a bad idea for the country, bad idea even for president trump because the reaction would be strong so mr. president, if you're

watching, stay the course. >> larry, thank you. appreciate it. larry lindsey joining me today with his views on the fed and chairmanship of jerome powell. coming up as more tourists keep dying in the dominican republic, travelers are starting to reconsider their plans, the industry is starting to feel the impact details ahead. plus, remember this. that's elon musk on that plane, wing walking should ceos be forbidden doing dangerous things like that when "the exchange" is back in two. t? it's not about quantity. it's about quality. no trendy stuff. i want etfs backed by research. is it built for the long-term? my reputation depends on it. flexshares etfs are designed and managed around investor objectives. so you can advise with confidence. before investing, consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully.

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welcome back to "the exchange." here are some movers this hour shares of consulting firm korn ferry are out. there's the earnings we were just talking about analysts noting political uncertainty, including brexit and trade will weigh on revenue and margin performance the next few quarters, shares down 16.5%. chewy, that hot ipo falling today by 5% now, down 7% this week negotiating coverage on a name with a neutral rating like the growth profile, now is not a good good entry point and crocs, a robust sandal pipeline, planned collaborations, international opportunities. that's good for them to hit

nearly $20 with a 9% game. here's what's ahead on "the exchange." coming up. goldman, sachs sees calmer waters ahead for one stock it says can rally 34% americans' knowledge of finances getting worse and mondopoly thwi no paper money? all ahead in rapid fire.

welcome back let's catch you up on a few stories on the way to close out the week time for rapid fire. here with their takes, leslie picker, dom chu, courtney reagan welcome, everyone. goldman, sachs making a call on a name we don't hear about, seaworld they're upgrading them to buy with $39 price target, they think they're in better position to compete with "star wars." >> i don't know about the competition per se maybe i'm the only one that worked at a theme park >> i have not worked at a theme park >> i was a singer and dancer in

the rock and roll review in high school it was before youtube. i'm grateful for that every day. interestingly, there's another story here as well, that they had an activist investor that settled last month, got three seats on the board, hillpack capital, 34% stake in the company, they're pushing them to be more focused on marine life entertainment, trying to get them to move past some of the scandals they faced in the past. >> blackfish it has been a long time. >> what is the argument for competing against "star wars"? >> that's wild looks like aten dantendance is disney up 4.4% ticket prices, seaworld price for one day, one tilcket $85, disneyworld, still 109

>> i know this firsthand as you know, i just got back from disneyworld we paid the $109 for day pass for three days, kids under three are free, at least our daughter was free on that. maybe it is arising tide story if more flock to orlando and disney area, what it does is gives more opportunity to the other parks in the region. seaworld is one of the main attractions, despite what the blackfish saga put at it maybe there's opportunity to capitalize on more traffic going to places like universal, owned by comcast. >> but you're right. disney a few days. >> you can only do so much magic kingdom in my mind >> next, americans getting dumber about their money as finances recover from the great recession. new study shows only 34% of adults could answer four out of five financial lit resee questions correctly. down 8 percentage points from

2009 hardest topics, inflation risk and interest rates we at cnbc do the ready set grow thing with acorn, to educate people on financial literacy, it is a bad sign. you would think with all of the news coverage the last ten years, you would have ancillary benefit from that. >> it is wild. this is not an original idea i am one of the believers we should teach financial literacy. i had a wonderful teacher, mrs. jane alter, she taught business economics it was an optional class you could choose to take that. she taught us to do our taxes, we learned about interest rates, what it means if you overspend on your credit card. it is not free money, it is expensive money. after the financial crisis, we lived in an interesting period, right, when we had very low interest rates, we haven't had crazy inflation cycles perhaps that's part of the reason, or at least that's pointed to as missing some answers on the tests it is not an encouraging sign. >> we're investors in acorn for

a reason cnbc and nbc universal are strategic investors. there's an untapped market there's a massive gap in information for many americans out there with regard to how they handle personal finances, for that reason there is the ability for places like cnbc and other news outlets to give you an idea how to better your position. >> if you're looking for it. i think it is interesting that it hasn't gotten into the bloodstream in the past decade, that it has gotten worse that surprised me. >> i agree interestingly in the report they show more americans are setting aside three months of emergency funds which i find somewhat comforting 49% of americans had three months of savings that they could set aside for an emergency. they may not know what to do with it, what the money means, but they have more money set aside, so if there's an emergency, they won't be caught. i think following the financial crisis, a lot of people realized they didn't have ample savings

to get through hard times. >> need more mrs. alters in school >> but not more financial crises after nine american tourists died and dozens more have gotten really sick at resorts in the dominican republic, travelers are changing vacation plans, going elsewhere. moments ago, saw the first price target cut for a travel stock because of dominican republic risk where is seema, we need you to walk us through this have they discovered what the problem is >> no, unfortunately not yet the fbi is conducting an investigation. a lot of reports point to tainted alcohol but right now officials are saying they're isolated incidents, but certainly has broader implications for the travel and leisure industry as a whole. they have been investing more in the caribbean island in the past couple years as it becomes a growing destination for americans. over 2 million head there every year. >> one of the producers was there at the end of april before a lot of this was in the news, i

asked him would you go back now? he would say i would never go back >> i heard the same with conversations with friends and families. >> this is just as the caribbean at large has recovered largely from zika. remember four, five years ago >> saw visitation decline to countries in latin america and mexico you certainly see americans, and travelers in general pull back whensecurity and safety concerns rise. >> what about also incidents of violence, it is not just sickness that's more frightening to me, some folks around the resort, even what happened with big papi this is scary stuff. >> they're seeing data that highlights concerns that americans are pulling back a survey showed 60% of travel advisers cancelled flights and trips to the dominican republic just in the last week. we also have data that shows substantial rise in flight cancellations in the month of

june there are implications for the industry that's been investing in the island. >> who benefits, i don't know the caribbean. people are saying there's no way i'm going -- >> i will go to aruba or turks and caicos >> it is a great point when you spoke to travel agents, they said some americans are just cancelling trips completely, saying we'll wait it out, go somewhere else others are rebooking to other islands in the caribbean, mexico, and puerto rico top of the list >> any other, you mentioned downgrade this morning who has the exposure >> every major u.s. hotel operator has exposure to dominican republic, but the main name is playa resorts. they have five or six properties across the dominican republic. sun trust analysts today cut the price target and earnings estimates on the stock on concern with visitation on the decline, that's going to be bad news for the company. >> also a growing golf destination, with those resorts. >> you going down golfing?

>> maybe not >> if they try to send you to cover this, you should be like thanks but no thanks. >> i want the full story, as a reporter i'd go >> just don't drink the beer >> no drinks >> bring snacks and a bodyguard, you'll be good let's talk monopoly. this is a warning to monopoly cheaters hasbro is releasing a new version of the board game, always releasing a new version this is cashless, uses an ai device shaped like a top hat to keep track of transactions the catch financial experts, it could deprive children, here we go. >> education lessons. >> learn to count money. >> if we were learning financial literacy from monopoly, we wouldn't have this problem in the first place. >> learn to count the money, somebody has to be the banker. >> collect the rent. build hotels. >> might sneak a bill or two from a brother or sister

that's the way you play. >> the image of what the game looks like monopoly voice banking with a giant talking top hat, and no actual money. >> you might as well play it as a videogame. >> first thing i thought of, you can hack that thing. you can totally hack that. passing go, getting $500 payment. >> they know how to code, don't know how to count money. >> doesn't it seem odd >> "star wars" monopoly. pokemon. >> what's next >> bitcoin >> crypto, libra. >> i won't be a buyer of this. thanks appreciate it. billions of investment dollars from china were promised to pour into west virginia as part of the biggest deal made in

the trump presidency, but nothing materialized so far. cnbc investigates what happened there next. and take a look at the most searched tickers ten year note leading the way, slack is right behind it back in two. ss to research. yep, td ameritrade's got that. free access to every platform. yeah, that too. i don't want any trade minimums. yeah, i totally agree, they don't have any of those. i want to know what i'm paying upfront. yes, absolutely. do you just say yes to everything? hm. well i say no to kale. mm. yeah, they say if you blanch it it's better, but that seems like a lot of work. no hidden fees. no platform fees. no trade minimums. and yes, it's all at one low price. td ameritrade. ♪

welcome back as president trump tries to negotiate a trade deal with china that's enforceable at the national level, here at home the biggest deal the administration has done with china is a cautionary chal. west virginia was to get $84 million, a boone for the manufacturing and engineering workers to give president trump the widest margin of victory in 2016 cnbc kayla tausche found that promise two years later is a pipe dream >> under the foothills of appalachia is a gold mine of

natural gas. vast reserves of underground energy that's what china wanted when it reached a deal in 2017 with west virginia, more valuable than everything the state produces in a given year an $84 billion promise, endorsed by president trump and president xi jinping >> imagine the magnitude of what we're talking about here. >> this is the best thing that could possibly happen. >> really and truly. >> 18 months later, the governor acknowledges the reality is much different. >> has there been any money that china energy has directly invested in west virginia? >> no, i don't think so. >> china state owned energy giant was expected to fund three initiatives, the new gas burning power plants, a so-called steam cracker that turns gas into a by-product for plastics and fibers, and an underground reservoir, called appalachia storage hub, to hold the excess

energy until it is processed the goal according to those involved, invest in the state's infrastructure, send natural resources back to china. but china is nowhere to be found. >> the stumbling block is our country is in the trade issue that we have after we get through that, i think there could be a green light to it. >> production of the cracker stalled. department of energy says it won't be operational for at least three more years, at its proposed location, an asphalt lot, fenced in by barbed wire. power plants are under way but lawmakers say beijing is no longer investing after the u.s. flagged national security risks with china involvement then there's a storage hub. >> flexible storage. >> steve runs the firm planning it when you went to china, learned it would be an $84 billion pledge, what went through your mind

>> that's a lot of cash is exactly what i thought >> he said he would welcome chinese investment, now expects the 3.3 billion he needs to come from elsewhere. >> as far as you know, is china participating in this? >> what we have seen thus far is investment out of the continental united states. the investor slate is proprietary at this point, we have only been invested in out of the continental u.s. >> dennis has been drilling in west virginia the past 45 years, he doubts china could even come close to the mark. >> are there $84 billion of shovel ready projects? >> no. >> would there be in ten years >> not that i'm aware of. >> in 20 years >> i doubt it. >> in a statement provided to cnbc, china energy says the project in west virginia is progressing as planned >> it is unclear how many stages it entails the document is a memorandum of

understanding between the two parties, never made available to the public, and it is not legally binding. woody thrasher signed off when he was the state's commerce secretary, now running for governor. >> why get the state excited about something that could be years off or could not happen at all? >> i don't think there's any question there was a lot of significance took place with president trump visiting with president xi, there was great desire to show we're going to work together, work on trade imbalance, and i think temptation was too great not to sort of announce that deal. >> why not announce this deal when there was a document or agreement that would require china to make good on its investment. >> that's at a level that's at a national level in terms of sort of enforcement >> it is a state deal. >> well, it is actually a private company that's going to invest in the state of west virginia, and it is their money. any company in the world can invest in the state of west virginia. >> you signed this deal. >> correct, in support of that investment, it is not enforceable document where we

can make them spend their money. >> kayla tausche joins me. will we ever see this deal >> kelly, there's a legal battle to make the deal public so the people of west virginia can see exactly what china planned and when a state judge ruled against that, the decision is being appealed we reached out to the white house, they declined to comment. department of commerce that arranged these deals for the president to announce when he was in beijing in 2017, they said work on the specific deal continues but cannot guarantee it will be successful >> what does it mean for trade talks? >> i think the question is can the u.s. actually enforce a deal i think this makes it very clear that china is willing to make a lot of promises, but it is hard to get them to deliver on that >> and what do the lawmakers say? >> depends who you ask, what side of the aisle lawmakers stand on categorically, everyone said there are major issues with the deal republicans more optimistic.

a senator told me she thinks it is in a holding pattern, when broader trade issues resolve it would go forward democrats like joe manchin say they never believe china intended to spend this money >> appreciate it very much shares of canopy growth falling after fourth quarter growth we'rtang aeer vente ki dpedi io the numbers next xfinity mobile is a wireless network

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best devices. best value. simple. easy. awesome. click, call or visit a store today. welcome back and check out shares of can pi growth today. they are down big after their earnings showed a decline in recreational pot sales in canada from the previous quarter. hey. >> the company had a big bottom line miss which also drove down shares cano canopy's been pouring money into meeting demand in canada marking its territory in the u.s. cbd space here's what they're spending on. the company's investing on capacity in canada also marketing and developing of new products since cannabis will expand to vaping products by the end of the year. then there's the push into the

u.s. hemp industry with operations in several states planned. the company's ramping up medical cannabis in countries abroad and investing in rnd in clinical trials causing expenses to shoot up, revenues while their up u, aren't providing as much relief with canadian medical revenues down that's really their core business >> what's going on >>. >> because dan ramping up and not as many retail stores for them to sail through they say they have plans to increase production capacity and also increase the retail space there. they had a top line beat and that was driven by other revenues being up which was caused by an acquisition they made into a medical device company. >> and constellation heard on this, too. thanks now from walking to skydiving,

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welcome back this from 2015 ceo elon musk walking on the wing of a plane in midair. he's far from being the only daredevil executive out there. here's greg penner at the top of mt. everest. 12 days hater at the annual moting, he told the company succeeding is what walmart is all about. my next guest ks why they aren't doing more from risk their health here's john staal and john, the deaths op mt. everest got you thinking about this? >> a year ago, i talked to the chairman of walmart. he told me the story i'm all about it i would love to climb everest, too. my family might have an issue with it. then a year later, i started thinking b about it, b wait a minute, did what how did the board of directors take this. greg is not the ceo. to be fair he's the chairman.

and he even said to me on the phone, listen, had it been the ceo of the company, it might have been a different story. fifrt first of all, takes a lot of time. but just the risk. the risk bs we all take. the professional sports teams don't let their ath loletes do certain things >> you want board to coddle their ceos to be nanny, make sure their seat belts are buckled and no resc risky ventures for you >> number one, you've got the risk i think a lot of boards need to think about this the ceo oftentimes is a risk taker. they are an adrenaline junkie. you don't want to take the poernlty w t penalty away i would fwif give you u the example of elon musk, sheryl sandberg they're mentioned in the 10k as risk fakctors, if they are,

investors have to have a bit of insight into what they're doing. searrgio, we talked about them last week. until a year before he died, he smoked a lot of cigarettes that's a risk. to somebody's health not only ceos operate that >> what do you think should be required sm is. >> i think investors should be think i thinking about this. i talk to a lot of venture companies where a situation where the founder or leader is more of an important intersection in the life blood of the company their existence is very important in those early years and maybe if you're on a third, fourth, fifth, sixth generation ceo, i'm not saying their life isn't as important, but what they're contribution of the company may be disproportionately lower

in particular if you're inves g t ing in a start up to think about we don't want our ceo living unhealthy loifs a lives and we be thinking twice about the risks. if this person jumps out of planes in their free time or drive boats at 90 miles an hour or motorcycles >> tesla's ceo might argue his risk taking helps the performance of the company that it's part of the image. part of why people are signed up and they want to go along for the ride >> rig i think you know that. if you're following rich regard branson or elon musk, you know they take risk, but it brings another question, how much of the company's value is walking around in that one person. and there should be disclosure around that. getting back to the greg penner example. this is a discussion the board houb having long in advance even in the hiring or in succession

plans? >> i would love to be b a fly on the wall if these discussions start happening. >> me, too >> john, thanks very much. from "the wall street journal. thanks for joining me. that does it for the change today and we'll join melissa for "power lunch" which begins now >> see you in a moment, kelly. new at 2:00, president trump calling off a strike on iran just minutes before it was scheduled to happen. the next move for both sides s&p 500 hitting new record highs. should you keep ride iing this n and vice president pence making positive comments about china trade talks and a number of big companies urging them to drop tariff plans "power lunch" starting right now. stocks are in the green, but off the session highs. s&p 500 hitting record