partnership. no k-1s. it's an asset-like company meaning they buy mineral rights. looking for long-term investment >> i think if you had a good resolution this week, you're short the ten-year >> constellation >> uber, new all-time high >> monday on the halftime report, don't miss it, have a great weekend. hi, everybody. here's what's ahead of us this hour sign of a top veftdors are flooding the treasury market in the first half of the year way outpacing stocks is that a warning sign for bonds or are these low rates here to stay we'll discuss that and the clock is ticking the big meeting between president trump and china's xi jinping is just hours away will a handshake and a truce on future tariffs be enough for investors, and what about business leaders we'll find out hackers are attacking american cities small and large and forcing them to pay a rand some

is your town next? that's ahead today but we do begin with the markets. and seema modi is here >> the last day of the month, and here's where we stand at 1:00 p.m. eastern. we are near the highs of the day. the dow currently up 80 points but as we close out the first half of the year, take a look at the sectors, the three best performing sectors for 2019. what's interesting is that disbit the exposure that technology has to china, it's still the best performing sector up 26% followed by consumer discretionary and industrial's up about 20% so far this year. now it's leading us higher today are the banks. you have jp morgan, goldman sachs boosting their dividends and buy-backs after passing the fed stress test. you see all stocks up about 2 to 3% as a whole, the financial sector is up 16% year-to-date kelly, back to you >> all right, seema, thank you very much. welcome to "the exchange"

everyone i'm kelly evans. personal income and spending both rose in may as consumers boosted purchases of cars and spent more at restaurants ocht the flipside, chicago's manufacturing index fell below 50 for the first time since 2017 bob, as we mentioned, as we look to close out the first half of the year, there's been an interesting trend in etf flows everyone is flocking to the same place. >> yeah, it's bonds. and it's a little puzzling, kelly. investors seem very divided over the economy in the first half of the year, at least if you follow the fun flows. bond funds were the big winners in the first half of the year. taxable bonds, these are government and corporate bonds rose in the first half, particularly longer duration bonds. now we are talking about flows that are going in here, not the prices municipal bonds which are exempt from most federal and state local taxes also saw notable in

flows. but stock funds saw a measly 3%. those are defensive in nature. now that makes sense if investors were positioning for a global slowdown. however, many simply believe rates will be lower for longer without really signaling a global downturn. look at the high yield etfs like the hyg. right now investors don't seem worried that corporations with these jump bond ratings that they're not going to go on any time soon. otherwise these funds will be the first one to turn down >> bob, this is a great point. so just to be clear, we are seeing people flock into the safe haven treasuries and risk at the same time >> that's right. so what i watch personally after doing this for 20 years, i watch the high yield market, particularly the u.s. high yield market because if investors thought there was some kind of imminent downturn in the next few months, not only would the

prices go down in the high yield funds, but the outflows would increase dramatically. neither of that is happening, and that's telling me a lot of people are not, frankly, betting there's going to be a significant downturn in the second half of the year or even right now into 2020. that could change, but that's what i read right now. >> no, that's fascinating. bob pisani, thanks very much what does it mean that so many investors are piling into these bonds? for more i am joined by bill smead. bill, like bob said, if people are piling into high-yield bonds and stocks, that tells us the market, quo market,,quote/unquote, does not see a down turn coming >> i'd like to add an additional point to bob's piece when you break the stock market down between what people are doing, they're incredibly attracted to low volatility

trades so they've been chasing growth stocks that have just grinded their way higher consistently and the flows don't want anything to do with value stocks but many of those junk bond issuance and the issue errors are like ox dental petroleum buying anadarko. and the other ways that stocks are being retired. >> so, in other words. or they are saying we don't want to own these names in the stock market, but we are fine owning them in the jump bond mark the >> we are happy to loan money to these corporations the total number of value companies is going down. the supply is going down the banks are massive stock buy-backs. the junk-another value stock to disappear. on the other side of the coin, the low interest rates have

given people reason to chase the growth stocks. and every week bob is reporting on a massive amount of new stock issuance on the growth site. so if you believe in microeconomics and the law of supply and demand, you should be nervous about the growth stocks because we are flooding the supply with potential growth stocks and you should be much more interested in the value stocks because you're going to have, when they do get popular, there is a lot fewer shares available to chase >> john, let me just get you in, again with the same question which is we hear for example in politics a lot of people are saying, hey, look at the market, look at the data, everyone's talking about a slowdown coming. well, the message is kplooetically inconsistent >> well, we would say there is a barbell going on in both markets, both bobnds and stocks the high-yield bonds as well as treasuries are bringing money

in so there is a barbell going on in the bond market and then the stock market we see a lot of rotation among the sectors, even up to the current month between defensive and cyclical sectors the so we think it's a barbell in both markets. we actually think it's healthy that investors are rotating through diversifying we support that. >> john, do you think there is a bubble in the bond market? >> tough one so, what we would say is we are in the camp that the 10-year drifts higher second half of the year maybe it gets up towards 2.3, 2.4% we know a lot of sell sides on the other side of that so we're always very cognisant of higher rates in the bond world. we try to stick with individual bonds where we can we are going to find out a lot more this weekend, kelly, about where the risk is in stocks or bonds. >> bill, last word we've talked about the millennial trade before, why you like discovery, the home

builders you also said why you like some of the financials and amgen here >> well, no, let's just think of bank america remember, people are totally unafraid of inflation here, but we've got 89 million millennials coming in to borrow money for the first time in the next four or five years in size and to follow up on your other point, the price of money over the next ten years if we don't see it go up substantially, i will be completely shocked and that means a completely different set of dynamics on the equity side. that would be good for bank of america. >> no, i totally hear what you're saying. but five years ago, wouldn't you have said the same thing that this could only be headed one way? and the opposite has happened, and that's fascinating >> actually, kelly, let's just use bank america as an example bank of america was $8 back in 2012 it went up to 15 it languished there through the

election in 2016 then it made a big move to 30. >> true. >> it's a stepping stone thing >> okay. >> so a buyer bank of america 28 looks out five years and says if they do well and these millennials kick into gear, the stock might be 60. that's how you make money and create wealth is by staying put. but 8 to 60 in about 10 years plus dividends, we like our life if that happens. >> guys, thank you both. investors are largely shrugging off apple's announcement that johnny ive is leaving. josh lipton is out in san francisco. josh, why don't people expect a bigger fallout here? >> you know, kelly, because i don't think the news in and of itself was probably a huge shocker. i checked in with some smart long-time apple watchers this was pretty much a long time coming that their point being johnny passed at least the

day-to-day responsibility. ben of creative strategies has been watching apple for 20 years. as he noted in his opinion jony ive wasn't really driving the ambitions of apple having said that, it is big news jony ive had a tremendous profound impact on this company. he had a key role in designing a lot of the key devices that are in your living room. analysts say they have now sold more than 70 million watches it's a multibillion dollars business in its own right. i think one question for investors today is now that jony ive will no longer be an apple employee, who do you think can fill those shoes >> andrew asked him on "squawk box," he said when i was thinking about departure, what would happen if the ceo if tim cook all of a sudden -- we spent so much time talking about steve jobs but here's what jean muenster

said >> it was tim cook, the stock would be down 25%. this would be -- there really is nobody in to fill tim cook's shoes. >> down 25%, josh. that's coming from a buy who is very bullish on this company and says they don't have a plan for cook >> yeah. so cook took over in august 2011 obviously under his watch now there's been some pretty big changes. retail, legal operations, now jony ive it is, i think, important to remember that his team of lieutenants around cook, though, kelly, there are some guys who have been there a long time. i'm not just talking about phil schiller i think you could also talk about a guy like jeff williams now i'm not suggesting that jeff williams steps in here, but he's been there a long time like tim he's an operations guy. interestingly, too, remember what we heard here about jo jony ive they didn't say the new chief design officer

they did say we have two veteran design execs who are now actually going to be reporting to jeff williams, to theircoo. so interesting sort of leadership change there to keep in mind. >> josh lipton out west for us here's what else is ahead on "the exchange. >> coming up, just a few hours to go before the president meets with china's xi. new reports suggest it might not take much for trump to agree to a truce. we'll look at what that could mean for the markets not so healthy the health care sector closing out as the west-performing sector in the first half are the stocks bargains or will the weakness continue? plus, the mlb heads to london, and it has many fans and locals scratching their heads. this is "the exchange. on cnbc i can't believe it. that karl brought his karaoke machine?

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cnbc. welcome back to "the exchange." the countdown is on to president trump's meeting with chinese president xi at the g20 tomorrow kayla, with some new reporting on the potential outcome here? >> reporter: yeah, kelly the odds were always low for a deal at this meeting but a senior administration official tells me the working assumption is that the two leaders will reach a truce, similar to the one reached in argentina at the last g20 where they last met. now i'm told that this truce is

contingent by both leaders to entertain proposals of future negotiations even though i am told that robert lighthizer told his chinese counterpart earlier this week that no deal could be balanced going forward now president trump has a triple threat ahead to close out the g20. the meeting is sandwiched with a breakfast with the saudi crown prince and a bilateral with erdogan. and all of that followed, kelly, by what is sure to be a wide-ranging press conference. >> do you sleep during the day out there? but you can't. there's too much going on. >> reporter: well, you try to, and it makes it a little easier that your body e's already on u. time >> absolutely. and through the weekend, kayla, thank you very, very much. let's talk a little bit more

about this and kayla's reporting. what is realistically going to come out of the trump/xi meeting. also patrick is chief strategist at silvercrest asset management and a long-time china watcher. i will just start with you you know, i'm thinking not so much even just about the stock market but what do business leaders do? what are they supposed to think now even if there is some kind of truce with china? what the heck does that mean >> well, i think that it means we're now entering this negotiation in the context of a presidential campaign. i think the president in the past might've been much more willing to impose increased tariffs is going to kind of slow his role i think that you're going to see ongoing discussions. we are not going to get an agreement with china in the near term, but i don't think we are going to see increased tariffs either >> same question, patrick, for you. again, the market will discount

possible outcomes here and there, but we're talking about six or 12 months and so many different aspects of this. what about u.s. companies? are they supposed to do business with china or not? >> so both leaders have an incentive to kind of cool it a little bit and de-escalate because both economies are looking a little bit wobbly. and i, again, in going into an election here, i don't think that president trump wants to push the economy into any further, you know, down the road towards a recession. and i don't think xi wants to either so that's the reason why we are seeing both sides calm a little bit and buy some time. that side, i don't think that even an interim deal is going to take trade or china off the table. on trade i don't think that president trump is going to change his stripes the whole interlude with mexico i think convinced him that tariffs can be an effective tool against multiple partners.

he talked going to the g20, he talked about, he complained about vietnam, complained about india. he has potential tariffs lined up against the e.u. and japan. that doesn't necessarily mean that he's going to put those threats into action. but i think he's going to continue to stir the pot and that's going to continue to rile markets >> sure, so, senator as you said, if you don't really expect a major agreement here, then what has the u.s. gotten out of all of this? >> they've gotten attention to the fact that china cheats and china needs to be dealt with >> true. >> and so to the president's credit on the debate stage in the democratic party, people are talking about china. i don't know that that would have been true two years ago and so now we know we are further examining this problem and you know my position has been this go it alone strategy, unilateral strategy against china will never yield really good results and so i would rather hear reports that the president is bringing in our trade allies,

bringing in the liberal democracies. sitting down saying -- >> do we have any trade allies left at this point >> well, i don't know. you know, vietnam now is on the naughty list, and india, i credit the president india is a tariff-ridden place for agriculture. so i've always said look at india. india is almost worse than china for american agriculture but once again, we have this disruption with no resolution. and when you say what should businesses do? they should do what they always do at times of chaos, plan contingencies. >> senator's very important point about the shift taking place in d.c don't look just at trump's latest tweet, whether it's positive or negative towards china. look at the speech that vice president pence gave back in october in which he laid out a whole host of areas in which the united states now sees china not

as a partner, not even as a rival but as a foe and that's not just true of the trump administration, that's a shift that's taken place on a bipartisan basis in china -- in d.c. towards china and i think that it raises the issue with this huawei ban and everything else along with it, it really raises the issue if you're a company, are you going to have to choose in the future whether you do business with china or whether you do business with the united states >> exactly >> already in technology, that's becoming a real concern for companies. and i think it will bleed into other sectors as well. and for investors, you need to be aware that companies may face that kind of choice, which is difficult. >> and i want to add to that i think it's going to be getting a deal that much more difficult because before when you're just talking about it and people aren't paying attention. now that it's been elevated and all the list of horribles have been addressed kind of publicly,

then there's the scrutiny on any deal he does is going to be greatly heightened, which puts extra pressure >> i totally agree thank you both really appreciate it thanks for your time today and be sure to check out senator heitkamp's on this very issue. coming up, cities under cyber siege. hackers are shutting them down and demanding big money, sometimes bitcoin. we'll look at what if anything can be done to stop them plus, it's so nice they named it twice it's still up about 40% as you can see there. can it dominate an already crowded consignment space? "the exchange" is back in two.

welcome back to "the exchange." let's get straight over to contessa brewer for a cnbc news update >> kelly, here's what's happening right now. former president jimmy carter and his vice president walter month dale took part in a discussion on human rights hosted by the carter center. the former president tackled russian interference in the 2016 presidential election. >> there's no doubt that the russians did interfere in an election, and i think the interference, although not yet quantified, will show that trump then actual didn't win the election in 2016 he lost the election and he was put into office because the russians interfered. >> strong words there. a record-high temperature in france 113 degrees in what some

are calling an unprecedented heat wave. residents of paris tried to go about their business as the temperature rose to the upper 90s. authorities warn even healthy people here should take caution. i think they say atencion. a swimmer's close call off the california coast was caught on camera. it seemed that a great white shark was lurking below the surface. it doesn't matter if the shark was minding its own business i'm freaking out here. >> how far offshore were they? >> it looks like a long way. if there's nothing else around you, it's just the drone shot overhead in the middle of the pacific? i don't know >> contessa, thanks. contessa brewer, here's what's still coming up on "the exchange." ahead, the real deal hitting the market today is it the real deal or

overvalue? in with the beer, out with the wine google wants you to have a more comfortable commute. and the mlb heads to london, and the expectations are, well, low. it's all ahe i"ridiradn ap fe. r, 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. sounds perfect. see, your stress level was here and i got you down to here, i've done my job. call for a strategy gut check with td ameritrade. ♪ has been excellent. they really appreciate the military family and it really shows. with all that usaa offers why go with anybody else? we know their rates are good, we know that they're always going to take care of us. it was an instant savings and i should have changed a long time ago. it was funny because when we would call

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oh, my goodness. let's catch you up on all the drama today in "rapid fire." welcome. it is time for "rapid fire." that's what i just said. here is contessa brewer, kate rogers >> it is "rapid fire." >> yes, it is. >> the ipo parade rolls on today. the shares are up 39% right now, well above the pricing of 20 bucks a share. the company had about $200 million in revenue last year, and it takes a 35% commission from each sale. and again more evidence, this space is very strong right now >> very strong but very -- you're talking about the >> online consignment space. >> you know, it's too easy to say let's not forget that the ceo of the company that ceo of pets.com >> yes >> the world of the famed sock

puppet but this is an 8-year-old company, still not profitable, highly competitive business, very fragmented. i don't know they have high costs i think because what they do this again, according to leslie, they have horologists. >> they have what? >> i learned this yesterday. they have people who verify the authenticity of it a lot of the stuff you send in, that's a high-staff, high-cost model. but it's also why the ceo is saying she can charge higher prices because they can say it's authentic. >> and ebay doesn't have that same level of attention. that's not something that can easily outsourced or replaced by an algorithm or a robot. you have to have someone putting the item down and really analyzing it under different lights to see if there's chairs, rips, is it counterfeit? >> they have 100 right now, the new york times piece on them said today and also what's interesting some

pushback on the luxury retailers like chenel, they don't want you going second-hand because then they are not making money on the purchase so i think that's an interesting point of conflict that'll continue on come up. >> could you imagine if the art dealers were in on this position >> i can't imagine that would be something else shares of constellation brands causing a buzz today. and beer sales which was supposed to be a weaker category, the company does still expect its wine segment to drop as much as 25% this year, which is a shocking figure, but it's actually a little bit less than they previously thought. they unloaded the lower price portfolio as part of a deal announced earlier this year. >> i think it's interesting to see that they had strong beer sales around cinco de mayo there is something to that >> whoa, whoa. >> 75% is mexican imports.

>> modelo, corona, they rose 7.4% to $1.5 billion it's a big deal. i think that what you're going to see with these beveragemakers though is increasing attention paid to, what do you call them, spiked seltzer >> there's a new class of malt beverages that are coming in that get sold in the drug stores, and they are perceived to be more healthy they don't have all the sugar. >> or taste better >> but beer and craft beers and the mexican beers in particular are doing well with younger people because a year or so ago weren't we talking about people being really into wine and rosé for the summer i personally am still on the wine train >> it colors our lens. >> i have a very good friend, a former colleague here at cnbc, jim rogers, used to be a hedge fund manager he's traveled around the world a couple times on his motorcycle and in both of the books that he wrote about his trips, he said

when he goes to a country and he's there for the first time, if it's a solid economy, the first thing he will invest in are the beer brewers and the winemakers because he said that is probably going to be one of the most stable industries in a stable economy >> my advice is always invest in the brewers. [ laughter ] >> her people. we also are going to talk more about constellation has kind of hedged their bets on this with their cannabis exposure. we will have the ceo on at 2:30 p.m. then this calling all commuters, google, they are rolling out a new maps feature that predicts how crowded your bus or train might be they say it's the result of months of data collecting available starting today in more than 200 cities around the world. >> how useless is this >> no, i love it >> i love it too, contessa >> you have to take the train or the bus anyway, and you have to get to work by a certain time.

who cares whether you can sit down >> i'm taking the train home from the city when we are still in the "closing bell" days, very pregnant, it mattered to me a lot whether there was a seat on the 5:37 versus the 5 -- i'm just saying. >> you got to get aggressive with that. somebody should've gotten up for you. but i want to know how much i'm going to hate this trip on the train, and i think that's a great way to find that out >> you can be miserable the whole time, but at least you'll know it ahead of time. >> nearly 100 drivers in colorado took the same google detour the root took them down a dirt road that turned into a mud pit. i think that's what happened to morgan on her way over here today. morgan brennan [ laughter ] she was supposed on the on "rapid fire" today >> so the gps -- >> what happened >> well, so it was waze which is also owned by google but not part of the maps if we had this tool in the car

to get here, man, things probably would've gone very differently because it said we are supposed to get here at a certain time, and then we just kept sitting in traffic, and it turned out to be the wrong route. >> and "the office" predicted this a couple of years ago take a watch >> look, it means go up to the right, bare right, over the bridge to 307. >> it can't mean that. there's a lane there this is the lane >> the machine knows stop yelling at me >> no, here. [ laughter ] >> we have all been there, well, not in the lake, but we've been there. >> sunday afternoon i am going to the market, a simple trip ten minutes from my house. and before i'm on the main road that goes there, a tree, a huge tree fell into the road and blocked the road, and we couldn't get past. and the cop said you should just turn around and go the other direction. so i took an alternate route,

went to the market i get in the car, i am kidding you not, and i look on my iphone and the google map says take that road home it's a ten-minute ride because it's wide open today >> not with the tree but with the detour >> if you think the computer is smarter than you are >> i know it's not >> and the new saying for parents is not going to be well, if your friends jumped off the bridge you're going to say, look, if google says you are going to do it, are you really going to do it no you're not going to drive into a lake or a mud puddle >> but on waze, you are supposed to let your fellow commuters know about the tree in the road. it's your civic duty >> hello and good-bye. >> wasn't it worth the trip? >> i can't wait for all that predictive data. >> a.i. that is going to be in society. >> before we say good-bye,

america's favorite pasttime, is heading to great britain the yankees and red sox are set to play a two-game series in london this weekend. the first ever mlb games to be played in europe portable radios to help confuse spectators follow along, a mascot race between freddie mercury, winston churchill and others they are even importing dirt and clay from pennsylvania for more on why this is so bizarre to the brits, we brought in our favorite one. why are they so confused by baseball what's the deal? >> i like the way the mlb is doing its absolute best to try and make it successful the hopes, though, sadly, aren't quite as high if we compare it to how successful the nfl in london has been. >> i don't want to hear about the nfl. i want you to explain to me -- >> i was going to move on. >> why no one in the u.k. knows what baseball is >> no. they know what baseball is

i think there is two big issues though for when. it might not be a sellout this weekend. the first thing is that it's summertime when the nfl comes to london, it's wintertime, it's harder to fill the station whoever is in charge for scheduling for the mlb is they have put it during a weekend right in the middle of the cricket world cub. it's probably the cricket plans who will like baseball, so they have timed this oddly. >> what do you eat at a cricket match? i know they are importing or exporting i guess some of the food that they typically serve at a major league baseball like the hot dog. >> they are not, are they? >> yes >> oh, my. >> so what do you guys eat >> i went to an nfl game with mr. kramer and they imported the philly cheese steak and the hot dogs typically at a cricket game, although this is more of a cliche than a reality. but you can get anything and

everything from beers to burgers to sandwiches. >> is anyone you know going to the yankees/red sox game >> i'm afraid not. we are all focused on england versus india tomorrow. >> will, thank you, sir. our receiving cultural correspondent, we really appreciate it. [ laughter ] and we'll see you on "closing bell." thank you all today for our rowdy "rapid fire. contessa, bill, and kate, have a great weekend. we'll see yo back here on monday health care was second stage and it was medicare for all versus medicare for those who want it the key takeaways and what the durys xtorhen would mean f t inst ine

welcome back the first debate in the 2020 presidential race is in the books with health care taking center stage

elon moi is live in miami with a rind of nights one and two >> well, kelly, it was a contentious debates. and one of the biggest policy debates was over medicare for all. can bernie sanders plan for a government-run universal health care program actually work or do americans still want or need private health insurance? >> people who have health care under medicare for all will have no premiums, no deductibles, no co-payments, no out-of-pocket expenses yes, they will pay more in taxes but less in health care for what they get >> everybody who says medicare for all, every person in politics who allows that phrase to escape their lips has a responsibility to explain how you're actually supposed to get from here to there [ applause ] and here's how i would do it it's very similar. i would call it medicare for all who want it. >> the fact of the matter is that the quickest, fastest way to do it is build on obamacare,

to build on what we did. >> i believe we need to get to universal health care as a right not a privilege to single payer. the quickest way you get there is you create competition with the insurers god bless the insurers if they want to compete, they can try. but they have never put people over their profits and i doubt they ever will >> the moderator asked the candidates to raise their hands if they support getting rid of private health insurance kamala harris raised her hand alongside bernie sanders but today she is walking that back and saying she misunderstood the question and does support a role for private health insurance the bottom line is that democrats won the house during the midterms but now we are finding out that this is an issue that's dividing the party rather than. >> health care has not only dominated the political landscape, but is also the worst

performing landscape i mean, it was clear last night that the -- no one seemed to say, hey, we don't want to get to single payer at some point. it just seemed to be a difference of cadence and the path >> yeah. no, i agree with you, and i think you're seeing a whole scope and a whole range of different scenarios, but i think the common theme is that all of these democrats do want some sort of reform, some form of change and that's been weighing on my sector, no doubt about it. >> it's such a broad sector. we talked a little bit about this yesterday if you believe that there is the most riz for things like hospitals and the insurers, you could stay away from those and be in the medical devicemakers and drug pricing didn't come up that much. do you think people are throwing, you know, everything out at once? should they be more specific, i guess is what i'm saying are there places that can do well while all of this is going on >> yeah. i do think that, you know, while health care overall has lagged most of the market, i do think

it's a bit of a have and have-not you've got the med tech stocks like you mentioned which have been rip-roaring they are trading at ten-year multiple highs people are well positioned and have been positioned for that performance. whereas the drug stocks, particularly the big bioteches have been massive laggers for three or four years now trading at all-time lows it's been a huge have and have-notes those who have a longer term view, i think you want to play some of the contrarian positioning where people are not participating much in biotech. we think that will turn around over the next 12, 24 months. most people are positioned for momentum in the med tech group and they are going to continue to be good performers because they are not involved in the retd rick. >> so in the pharma group in terms of the drug names, you mentioned that there is a companies here that are at multi-year lows. how much of that is because of the political pressure that may

be coming from the trump administration or from the democrats, and are there other factors, and is that why we've now seen again another big deal in that space this week? >> that's right. i think it's half the drug pricing rhetoric and i think it's half the fact that fundamentals at most of these large bioteches have been, quite honestly, pretty bad and that is why what we're telling people is the best place to invest is in small and mid-cap biotech. you note that the xpi is up 20, 25% this year. obviously what you just mentioned, a couple deals obviously recently and those have been where the best performing is because of the big bioteches have to buy the big and the small. those are the ones where we're paying attention >> and how much change politically do you think is really coming and from where at this point >> well, we are confident and we are going to say it right here again. we don't believe that there will be massive reform that is going

to materially impact the big biotech names. most of the things out there with the exception of medicare for all, if you think that's really going to happen, might allow government to negotiate drug prices head-on. that could be tough. what's more likely to happen is some sort of reform around the fringes disclosing drug prices on television commercials. those things are not going to massively impact innovation. so i think what's really going to happen is some sort of compromise >> michael, thanks great to get your point of view on this today. appreciate it. michael yee of jeffries. and today marks the end of the first half of 2019 a look at which global markets are leading, which lagged and w e co hhothsendalf of the year is shaping up. that's next. as someone in witness protection,

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overseas, u about 17% here in 2019 europe has done well taking place is the central bank easing thee ining theme. it's not just the fed, but the people's bank of china they're playing a role in driving stocks higher overseas and it's really not a rally that's driven by earnings growth because the s&p 500 by the way, the second quarter earnings estimate is 0.3% it's not better in china or europe >> so it's fascinating that china's one of better performers emp sas the economy is weak, but the stock market is doing well how much is because we've talked a lot about their easing measures is it a sign of weakness rather than strength in a way >> i think it's a great poichblt why we have to see what happens in the second half of the year does china stick to their guns and unveil more stimulus options that can help the stock market continue to outperform on the trade front, we're still expegting more details if you pivot in other parts of

the world, see russia, one of the other outperformers, about 30% this year. interesting. that seems to be a story that's more based on politics while the u.s. russia relationship hasn't gotten better, you could argue that it b hasn't gotten worse. in january, the u.s. treasury department lifted sanctions on a number of russian companies and so the concern back in 2018 was that a challenged u.s. russia relationship would hurt russia's growth prospects going forward, but things haven't gotten worse. and oil is helping the story there, too >> that's a great point. the ruble u, has it been weaker? >> stronger. >> even more impressive. >> we'll have to see if that continues with the dollar in focus. >> thanks. coming uch, hap x hackers a focused on a wide range of targets. from small cities nth u.s. to insulin pumps. how cities and companies are handling the attacks right after this

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this week, lake city florida paid 460 million in bitcoin. another town in florida agreed d to pay $600,000 to end an attack holdi ining hostage. >> these are small towns a lot of people have heard about the bigger ins denlt dents and heard a those towns or big cities paid millions and millions of dollars to clean up the mess and it was because they opted not to pay the ransom. >> sothey did not pay the ransom they still had to pay for this long clean up. why do you think these small towns did pay it >> because i think that they now see how much it can cost they do a cost benefit analysis and i know for this race, they had insurance that would cover that ransom wear payment so i mean as far as taxpayers go, i think taxpayers might be angrier to know they paid millions and refused to pay, but it raises a lot of thorny e

questi questions. >> can't they call 911 if you're under a attack, you call 911 not saying you do it if you're under cyber attack, but shouldn't they be able to afeel authorities? >> it's very difficult there's not a real instruction infrastructure in place where we have a federal agency that can come in. obviously the fbi can come in and investigate buzz as far as getting your networks unfrozen and dealing with the clean up of the equipment afterwards, if you decide not to pay, you have to scrap a lot of the equipment >> do you expect all these other towns and cities, this is going to become a regular cost of doing business >> i think that's what's happening, actually. after they paid $600,000, we quickly asaw this other florida city have to pay i think the criminals behind this can quickly see that this is a really lucrative way to do things and towns are now willing to pay because they set a

precedent. >> such a bad sign also troubles is the news about the insulin pumps that may be hacked >> medtronic and the fda did a recall over a risk of a cyber attack that could if somebody didn't have access to your insulin pump, they could change the amount of medication being delivered to you it's fornt say that no actual attack against these pumps has been recorded. and sometimes you wonder if the news makeses people realize hey, i didn't know i could do that, but now i'll give it a try >> that's always a risk too. however, i don't think that in those cases, not a real financial gain of course there's a danger to people who already might be in danger from someone but as far as it being a widespread thing i think it's just good to upgrade >> why mess with sick individ l individuals when you can go to a town and get your half a million dollars. troubling stuff.

you can read more about the world of cyber crime in our her book which is out now. thanks for joining me. time to join tyler for "power lunch" which begins now. >> welcome, we'll see kelly in a minute trump -- what's next if we don't get a trade deal we've got three of the best banks for your buck and it's the era, the man behind some of apple's most important products. the designer johnny is leaving what it means for apple and the future of that company "power lunch" starts right now