live pictures there. thing as peer to be a bit more calm but an hour ago you saw riot police clashing with protesters there. things seem -- the violence seems to pick up a little bit. we will continue the follow the story. i know "the exchange" and kelly will and that show begins right now. thank you, scott hi, everybody, and yes, here's what's ahead we're closely following the breaking events in hong kong police clashing with protesters. how much does this complicate china's deal making with the u.s. and do stocks get too excited about the trade truce at the g20? we'll ask. and new reports suggesting the doj is seeking documents on other boeing production issues, this time involving the 787 dreamliner we'll have those details plus out of tune a shake-up in the music business has a major star crying foul wait until you hear the details on this story and big money involved but we begin with this

market new records here to kick things off for july. >> although we're off the highs for the day, kelly, we drifted to session lows so stocks in the green. traders calling it a classic trade-induced relief rally between u.s. and chinese official talks no surprise the global industrial names with exposure to china that are leading the dow higher, 3m, southern, norfolk southern, honeywell all higher by nearly 1%. president trump also surprising the market with awayway concession and that's lifting shares of chipmakers that have ties with the chinese company and looking for companies like alibaba moving to the upside but it's worth noting we have certainly seen this story before in december 2018 when the s&p 500 rallied on top of a truce but quickly reversed course due to a lack of real progress dow currently up 77. kelly, back to you. >> seema, thanks

let's get more on the stocks surging on the trade truce, but there's still plenty left to work out before there might be a deal we were there for the g20 and back in washington kayla, how much progress is there? >> the open-ended nature of the road ahead is something to be considered the white house has some big hurdles to clear first it needs to sell official washington on what was brokered in osaka, particularly democrats have criticized the president's relaxing scrutiny on huawei but republicans too have said we don't need more business with huawei, we need less and you're looking at just a few of those critics who have spoken out. and perhaps more difficult is to get beijing to meet the u.s.goal president trump said the u.s. would immediately send a list of goods for china to buy but wouldn't say how much exactly. and negotiators will have to get president xi to agree to an

enforcement mechanism that killed talks just six weeks ago. it's unclear whether those positions changed. >> the last s10% is the hardest part how striking was the moment when the president stepped on north korean soil. first u.s. president to do so. what now what comes with this by the way, what was the reaction in that part of the world? >> spending a full 27 seconds in north korea, historic moment but similarly double-edged sword to the china situation, kelly on the one hand you have a thawing of relations because of this in-person meeting, about an hour those two leaders spent together but there's little to signal any positions of pyongyang have changed. there's always been disagreement over how and when north korea would give up its nuclear weapons. and it's unclear there was any change in that meaning, but the hard work, again, begins now. >> oh, yeah, it will be very, very interesting to see what comes out of this, if anything kayla, thank you very much

appreciate it. we'rekeeping a close eye this hour on the developing situation in hong kong protesters clashing with police. this because it's july 1, the annual mark which marks the handover of the city to china from britain this protest that started in june over 2 million people have taken to the streets lately. for more, let me bring in rutledge's chief financial officer and cnbc contributor and how this may complicate the relations between the u.s. and china, the head of equities against mariner wealth advisers. john, first to you the interesting thing about the situation in hong kong, if there's further escalation, it's extremely difficult to know how the chinese and international community may respond to that. how significant is the escalation we're seeing tonight? >> i think this is a very

frightening situation. kudos to the young people in hong kong for having the courage to stand up and push back. it strikes me they have more courage and we have more tweeters here in the u.s but make no mistake, china is intent on getting hong kong back in the fold and i just hope this doesn't end up as another tiananmen square with chinese troops coming across the bridge. >> of course. >> they're very patient. they have a long view but they're not going to let hong kong go. >> you're exactly right. if we go back to that agreement between britain and china, more than 20 years ago, could britain ever say to china, you violated the terms of this. you agreed to respect the nature of hong kong during this 50-year transition and that's not taking place? >> i think there's zero probability of that. the uk just doesn't have the power to deliver that. the u.s. does but the u.s. isn't going to do it

i think what we're going to see probably is china try to internally inside hong kong calm this down and keep their troops out of there but it's a very dangerous situation. >> why isn't the u.s. going to do anything about this i have been thinking a lot about this, if you're president trump, and your goal is simply to get a deal with china, then i understand everything that has happened or what hasn't been said, but if you're looking to have the maximum number of negotiating chips at the table, isn't this a major one all the u.s. has to do is revoke the special status of hong kong and you can see their global financial market leap overnight. >> absolutely. and the truth is if i were in the white house, i would be having a quiet talk with xi that we want them to stay out of hong kong and that it will be worth something to them to do it so i think the u.s. has a role to play here i don't know whether we'll do that though. >> right, right. jeff, that's what makes it

interesting as we continue to understand or analyze the trade truce between the u.s. and china. from where you sit, is this something that looks like a done deal,it will be in the rearvie mirror it's kind of a clearer investing path ahead or not? >> i would never say that it's a done deal. it's not a done deal until they ink a deal they made progress i think we avoided the worst-case outcome, which is what the market when it gets crabby, back in december and may, where the market tends to go to. we'll get worst-case outcome on policy and oh, this will push us into a recession, and we don't see signals of recession and we don't expect worst-case outcomes weigh voided the disaster scenario and this was a net positive for the market. and i think we saw that going into the weekend no, this is a good result. >> interestingly enough, jeff, this is as we mark what is officially the longest expansion in history, at least going back

to the 1850s when we started measuring business cycles. this, interestingly enough, truce with china puts pressure on the fed, doesn't it that's how we have to think this through. if the downside is gone on that front, does that mean the fed is a little less likely to have to cut rates? >> yeah, i mean, it's one of those things be careful what you wish for there is a fed put that is out there. and so there are offsets to all kinds of events that can happen and the offset here, this is almost a goldilocks scenario if you will and what happened this weekend on the fed front it wasn't such good news that people will start fearing now the fed can hike. >> right. >> but it was enough that will keep them from doing that and also keep an eye on the accelerator if they need to, if things do extend longer than expected or break down more. >> jeff, one more, can you explain to me why the german

ten-year boon is yielding negative .35% today? >> well, the only thing i can tell you is the economic data in the u.s., and that's why we boon tilted towards the u.s. as folks are prone to say, international, international, international we look at three things, we look at fundamentals, we look at valuation levels and we look at technical price trends the fundamentals in the u.s. are far stronger, they're moderating but far stronger than they are in germany or other parts in the world. look at gmi, pdps, whatever you want to look at. >> what should investors look to next as we both continue to monitor what's happening in hong kong and also with regard to where the trade talks go from here >> the trade talks pulled half the rabbit out of the half they gave us a little relief on huawei and no new tariffs for now. i think that's what we live with for the next year because hating

china is such a great political topic that both republicans and democrats are not going to let go of it i don't think we will see a final agreement for some time but that's actually good for the economy, a little bit of stability for a while. >> the stability of uncertainty or half a rabbit guys, thanks, appreciate it today. meantime oil's been giving up its gains this afternoon after it briefly topped $60 a barrel following an opec agreement to extend supply cuts. let's get out to brian sullivan at the meeting and intrigue on the role russia's played here as well, brian. >> yes, certainly, we are waiting on that decision this is a perfect example of how the rumor mill and conventional wisdom and twitter and everything else may not be accurate i mean everybody going to this meeting is like oh, you don't need to go it will be a short meeting the decision is already done it's 7:10 here in vienna. there's no one left. some accounts even getting

testy. we're waiting for the ministers. no deal, i want to be clear, has been made and russia looming large. once it was not even the rush oil minister, vladimir putin himself at g20 alongside mbs, mohammad bin salman of saudi arabia coming out saying we will extend the deal six to nine months everybody said okay, that's a done deal. by the way, there's 13 other members here besides saudi arabia that have something to say. opec is an equal charter and the saudi minister addressed the conflict or topic if you will during the press scrum earlier today. >> we are very respectful of every member country the fact of the matter is saudi arabia and russia are the largest producers and we are delivering the largest cuts. for us to agree and discuss our agreement with colleagues from other countries i think only

helps reach the unanimous consensus that we're seeking. >> remember, kelly, all decisions here have to be unanimous. yeah, you can be saudi arabia, iran or iraq, they're the big ones iran obviously has sort of raised its flag a lot over the last week or so to be recognized but it doesn't matter if you're com bill or equatorial new guinea or venezuela. they want to be part of this decision as well as of 7:10 vienna time, no decision haseen made t it is expected but as of now nothing. >> is that the shrug of the afternoon, we went above 60 but we're off that now is that the shrug that opec ain't what it used to be >> no, the russians will be here tomorrow, they're not a member of opec but it's opec plus they're frustrated the u.s. at 12 1/2, probably going to 13 million barrels a

day. opec wants to keep a price level which means they have to cut and they also want to keep market shares u.s. shale boom has just thrown a wrench into it all, hasn't it? >> kaboom. thank you very much for covering that for us. here's what's ahead on "the exchange" -- coming up, the problems for boeing continue. new reports suggest the doj is probing the company beyond its 737 max issues the details of the impact ahead. the johy ive intrigue, the inside story of why one of the most influential employees at the world's biggest company is saying good-bye. and e-cigarette buyers are in for a rude awakening in what state today as the tax rate goes to 92% with all that usaa offers

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but we all know we're paying too much for it. enter xfinity mobile. america's best lte with the most wifi hotspots, combined for the first time. when you're near an xfinity hotspot, you're connected to wifi, saving on data. when you're not, you pay for data by the gig. use a little, pay a little. use a lot, just switch to unlimited. get $400 back when you buy the new lg g8. call, visit or click today. welcome back more bad news for boeing out over the weekend "the seattle times" reporting federal prosecutors have subpoenaed documents related to the production of the 787 dreamliner this as the doj continues its criminal investigation into the grounding of the 737 max phil lebeau has all of the die tails for us phil >> kelly, over the last couple of months there have been a number of reports suggesting

there is shoddy workmanship or practices that are not living up to the level of standards people would expect for a commercial airplane in terms of parts being left inside 787 dream liners in charleston, south carolina now "the seattle times" is reporting the doj is subpoenaing or has subpoenaed documents from boeing regarding 787 production down in charleston, south carolina boeing for its part is not commenting on these reports. it says, look, we don't comment on whether or not there is a federal investigation. when you take a look at boeing, it's not just the 787 reports that came out this weekend that's getting a lot of attention, it's also what's been happening with the 737 max while we talked at length about the fact it may not be until september, october that they are finished with the 737 max, they continue building these at 42 per month, which raises the question, where are they parking these maxes after they're built? well, in a number of locations

in the pacific northwest this picture from last week got a lot of attention yes, that was a max in the employee parking lot there in renton, washington they have at least 150 by the count that we've been able to do maxes that are built waiting for delivery once these planes are no longer grounded, whether that's later this year some are even suggesting it may not even happen until the end of the year look at the shares of boeing it reports june -- that is a picture. that is a picture. >> i can't get over it. >> june deliveries and orders that come out next week. >> so this is a bizarre situation. they're still producing 45 a month of a plane that's grounded -- >> 42. >> 42 a month of a plane that's grounded for safety reasons. i mean how >> you can't shut it down. you can't shut down the production line. >> did they oversell it? >> remember, they did not take -- they take the bulk of their revenue for a plane once

it is delivered when the delivery takes place not all of it but the bulk of it so they've got customers who are waiting on these planes with the expectation that there will be ultimately a solution agreed to with the faa and other regulators around the world. once that happens they have to make the fix on those planes and deliver them as soon as possible you can't stop production. there are people why even run the production line? you can't stop it all together so the question now becomes, though, you're building 42 a month. where do you put these planes? >> absolutely. phil, stay right there jim corridor is also with us he's got a $400 target price on the stock. as you hear all of this from the analyst point of view, i guess that's a good thing. you go okay, production's still on track but for what ultimate purpose? it was going to be july, august and then october when are these planes going back into the sky and when are the deliveries going to customers? >> kelly, the ultimate purpose is obviously ship those planes

out to customers as soon as the plane is put back into service obviously boeing has a huge order book of thousands of orders that are in place these planes already all have homes. so once the plane is revert fayed, obviously phil laid out the story it's getting pushed out even further, october, maybe november not great news there but these planes all do have homes and they will be starting to move once the plane is revert fayed. >> is this like a tesla, there's a swoft wear fix a software fix and you beam it to the car and everything's fine? or we identified and fixed the problem and every new plane that comes off the lot is ready to go >> i'm not certain if there's going to be actual hands-on modifications to the software. either way those planes are on site at boeing facilities. they will be ready to go shortly after the plane has a software fix that is certified. >> kelly, real quick, let me add

to that, boeing has teams that will be ready to go to those planes to make sure -- it's not like they're going to say we sent it out to the plane, it should be fine let it take off. they will be double checking each of these planes they will have a game plan in place to make sure the software is fully operational and where it needs to be for those planes. >> whenever that day may come. thank you, both. appreciate it. phil lebeau, jim corridor talking boeing today coming up, reports that jony ive's been unhappy at apple for years. the writer behind the story will join us live and grubhub using predatory practice to boost its lionne traffic? we will look at what the online service is being accused of. key portfolio events. all in one place. because when it's decision time... you need decision tech. only from fidelity.

welcome back to "the exchange." let's get you caught up on the markets right now, with stocks losing steam into afternoon trading and dow up just 45 points after we were up 290 earlier today on the optimism over the trade truce with china. there you can see the best gains are in the nasdaq today, up 64 points here are some of the individual movers, shares of casinos are jumping left by shares of wynn, coming in well above expectations better than 7% expectation shares of coty on pace for their worst day since november, they're down about 15% the company releasing details of its turnaround plan to improve its beauty business.

but wells fargo saying this remains a long-term story. and shares of crocs up 3% after the company said it partnered with vera bradley to create an exclusive footwear collection. crocs had a rough year up nearly 3% on that news today. i might have to buy some -- of the shoes that is, vera bradley ones let's get to sue herera for an update. >> hello, everyone here's what's happening this hour german chancellor angela merkel said it's worth a little more time to achieving the broadest consensus as possible on eu leadership she put off filling the bloc's top job until tomorrow democratic presidential candidate pete buttigieg said he took in nearly $25 million in the second fund-raising quarter, more than triple he raised in the first three months of the year the $25 million mark tops the $18 million raised last quarter by bernie sanders. a one-time aide to former

new jersey governor chris christie asked the federal court to be released from prison this following the supreme court's decision to review the george washington bridge gate lane closings this fall. bill baroni's lawyer filing a brief that the government does not oppose his relief on bail pending the supreme court review and the transportation security administration sets a record number of passengers will be flying this week. 12 million people are expected to travel between july 3rd and july 7th, with the peak travel sunday bring your patience as well as your tickets that's the news update this hour kelly, back to you. >> tickets are easier to get, frankly. >> exactly 30 minutes to go until "power lunch" and i'm joined by tyl tyl tyler mathisen. >> guess how long it takes for a person earning the median income to raise the 20% down payment needed for a median home >> how many years? five to eight.

>> 43 years it would take the average median income earner in l.a. to come up with 20% to put down for the median house in l.a. 40 years in new york and miami a company called unison thinks it's come up with a way to ameliorate this situation where they will front you a portion of the down payment and in return they will take a portion of the profits when you sell. and if you don't make a profit when you sell, all you do is you pay them back the down payment we'll talk to the ceo of this company unison and explore this way to beat the affordability crisis. >> oh, yeah, i got a lot of questions now. >> chris, can you turn and look at my friend carl's shirt here brooklyn nets, we are all in, brooklyn k.d., deandre jordan and kyrie going -- >> our executive person is very unhappy. they get deandre jordan, create

the cap space and screw it all up. >> he's had a lot of pain. carl knows pain. >> this is his moment. >> all right. >> see you at the top of the hour here's what's coming up on "the exchange" -- >> ahead, out of tune. ♪ now we got bad blood >> a look at the $300 million music showdown sticker shot for e-cig smokers in one state a scandal for grubhub. microsoft e-books, you heard right, are disappearing. >>anis t hwedr> d heuai ama really over?

demand and delivery pressures, do the electric car giants meet expectations welcome back basketball aside, let's catch you up on a few stories that should be on your radar today. it is time for "rapid fire." here with our takes are bill griffeth, leslie picker and william frank. welcome one and all. stocks are rallying big-time with the president saying he will allow american companies to sell products to huawei where there's not a national security problem. some of movers, these are big, and they have come down today. corporate was up about 8% earlier, skyworks, micron

hanging on to gains, 3%, 5%. but if you're these companies, the close is clear for now. >> yes and no. huawei really epitomizes our relationship with china. economically, we need them they're good business for a lot of these semi conductors companies. politically, we can't trust them and we have to find -- how are you going to determine on each component if it brings national security issues? how is that enforceable? >> i think that's the key here, the whole idea of national security this has come up time and time again with regard to cfius and they reviewed different deals going through, what constitutes a national security threat the fact we're seeing flip-flopping, may not be behind the scenes but at least to the market and average person watching this, it appears to be one day there's a national security threat and the next may not be much of a national security threat. >> the other way to put it is it's inconsistent. it depends, right, robert?

we're talking about a relationship with china that has been dramatically different 15 years ago than it is under different leadership today not to mention all of the back and forth with these two, president trump and xi. >> not only epitomizes our relationship with china but the direction of the trade war as fought by donald trump depending on the day, depending on his mood, depending on the meeting so you have this whole structured policy in government saying huawei is a national security threat from mike pompeo, everyone in the administration telling us all for months how this was a dirty bomb in the democratic system. and then for trump to say, you know what, it's okay for companies to sell to them, it just shows you can have a consistent policy when it's all based on one man's decision at a given moment and that's the problem for these firms, ceos. obviously they have to sell as much as they can to whoever they can, that's their fiduciary duty but it may not be repeated in

the next quarter. >> why did the president change his tune he admitted he heard from a lot of technology companies this will hurt their business. >> and carriers saying it could increase the cost of millions of dollars and dozens of layoffs. >> exactly the argument being made why this is a national security issue, that very equipment could be used for spying. >> but it's just like saudi arabia and the defense firms, i'm sure all of the defense firms are telling the president and white house and congress we need them as good customers. that doesn't mean congress can't say the saudi regime is not a regime we want to back at this point. so there has to be a policy independent of the mercenary interest of the firms. and i think there was until saturday. >> and the one thing that was interesting pointed out let huawei become entrenched in our economy because then they're going to be the ones with a lot to lose. if you block them off, they don't have anything to lose. they already lost it you let them become intertwined, you have a lot of leverage when

you come to the table. next up, there's serious bad blood between taylor swift and scooter braun over his $300 million deal to buy big machine records and acquire taylor's first six albums she was the first artist big machine signed in 2005 when she was 15 years owed. she left last year for universal music group. her new deal there ensures any proceeds the company in spotify, by the way, would be distributed to other artists behind the label and she maintains ownership of her music now the back and forth is so fascinating, it puts swift and her father at odds because he had an investment stake at this company that had just been purchased, that is bringing this guy into her life again, scooter braun, who she's not a big fan of. >> so many interesting cross-currents here. the first thing interesting to me universal was the distributor of big machine, the label. everyone thought they would purchase this label and all would be good. she signed with them, and their deal with big machine is up in

18 months. so this was basically universal saying, you know what, we're not going to take that cattle. we're not taking your back records. we're just going to take taylor swift, which is an even better deal for them. >> for universal. >> and taylor swift, her net worth is estimated around $300 million. this deal, it's hard to imagine anything else in big machine is worth the $300 that they paid. rascal flats is not worth $300 million. >> hey, sure they are! what a beautiful mess. >> sing it ♪ what a beautiful mess >> we're not allowed to. >> so what's interesting is they got a huge amount of money for the six previous records it's only mass recordings, it's not the ricghts but she's angry in part because they got a lot of money for their back records he net worth is $300 million. >> is she worried he will try to suppress sales

i don't think so you're buying the taylor swift catalog. >> i think it's an ownership issue. i think it's just personal. >> but she will still make money off of this, right >> yes. >> as long as the check clears and she endorses it, i don't know what the issue is but i understand the personality clash. although i don't know how you dislike somebody named scooter i get how she's upset it went to them and not somebody -- >> she wants control from the outset, it wasn't about how much money she made in this deal, which is ee norm use, i'm sure, she controlled the narrative from the beginning that's what she's good at. >> she's very influential in social media as we know. it will be very interesting to see how this proceeds going forward. >> just a reminder of the way these music rights are sold back and forth, obviously the michael jackson, beatles as well they're up for grabs i can see why artists feel a little uncomfortable about that sometimes. shall we talk some vaping?

vaping in vermont got a little more extensive starting today they're imposing a 92% tax on e-cigarettes, doubling the cost. as a way of curbing teen use teens are sensitive to price, as we know. they been subject until then a state tax of 6%. in vermont it's $8 and $3 is taxes. >> so basically the whole purpose of this because cigarettes and roll your own tobacco had previously been subject to the state's standard tax rate as well as other taxes, this was an effort to essentially move e-cigs up to the same level that traditional tobacco and traditional cigarettes have been taxed at. what's interesting vermont is at the forefront of this. they've been raising the age to purchase tobacco from 21 to 18 however, i have to look at this and say vermont is a pretty maul stat small state. i grew up near a state line that's it's easy to cross over

to the next state and purchase thing. >> but you never did that. >> cheaper gas -- >> you didn't do that. >> i didn't purchase cheaper gas. missouri always had cheaper gas than kansas so we always crossed the line to do that. >> i can see you breaking the rule, to save 50 cents on a full tank, that was rebellious. >> at 16. >> vermont's strategy though is a better one than san francisco's, an outright ban how do you enforce that? >> right. >> and doubling the price using an economic tool of some kind, that makes much more sense. >> studies show time and time again taxing tobacco works to limit -- to decrease the demand for the product. >> and it's more politically palatable anyway. >> by the way, they get the dough. let's talk grubhub coming under fire for creating more than 30,000 websites disguised as restaurant home pages. those sites sometimes had higher prices than what the customer would have even paid by ordering from the restaurant directly

grubhub says it create the these sites as a service it no longer provides the company says it's always been its practice to transfer the domain name to the restaurant as soon as they request it but big blow in terms of at least the perception of them being up to no good. >> down a dollar though. although it's been down a lot. i'll give you that. >> this was outrageous. >> it is outrageous. >> over 30,000 websites. when you look at what they did, they would take pictures from caviar or another site, use the pictures, stole the menu from the site and when asked about it grubhub said these are micro sites designed to provide an additional source of orders and revenues forget about the fact it's an additional 20% commission to them every time people ordered through this rather than directly through the restaurant. can you imagine how many dollars the restaurants were losing to grubhub on this? unbelievable. >> oh, i was going to say, there's a term for this called cyber squatting. i learned something today,

google. >> did you google that >> i may or may not have googled that but basically that means you are in bad faith registering a domain name that is essentially trademarked to someone else. and it's a huge, huge issue. but if you're a huge company like grubhub, that has to be a certain trust factor when i, the consumer, go on to your site and look to order something, i just assume i'm getting the best prices. >> i know you want to move on, but my question though is how do you regulate it and who should i looked it up i googled this, there's no regulator for the food industry online but let's not forget grubhub is a publicly traded company. hello sec, if they're engaging in unethical behavior as a publicly traded company, someone needs to look into it. >> this one i suspect we will hear more about. the shares have taken quite a beating, even not today. and if you bought an e-book from microsoft and we know very

few of you d. it's going to disappear. the book you rented or bought will no longer be available to you because the company is closing the category it said it will happen some time this month it's offering full refunds for all back purchases if they still have your credit card on file. let's remember any time you buy an e-book or something like that -- >> or any technology. >> it can go away. >> i worried about that buying stuff on itunes. and then i went back to buying cds because nobody can take those away from me. >> you did not go back. >> for about a year. >> what are you going to play them on? how many dvds do we have in the cabinet? >> i didn't rip the cds, i didn't buy the songs from itunes anymore. >> and you buried them in the basement and stash for 25 years. >> i totally agree cds, dvds -- >> cassette tapes. >> even if you want to read the book, i like this book, i don't want to spend money, read the e-book but if you want to keep a bock

because it means something to you, you have to get the physical copy. >> people annotate books and some people, the people that would go across state lines to get cheaper gas, would write in the books. >> no, didn't dothat. >> apparently they will pay you $25 if you annotated your books to say you're sorry, you're losing those annotations. >> you mean if you did it digitally? >> yes. >> there's great stuff about digital options and bad stuff too. guys, thanks. >> i learned so many things about leslie today and google. >> leslie picker and robert franks stocks surging on hope the u.s. and china reach a trade deal as trump and xi agree to hold off on further tariffs.

welcome back there may be a truce in the trade war with china as talk continue but there's a lot of

uncertainty about the actual deal joining me now with key takeaways from the g20 summit is didn't clifton, ahead of policy research dan, it's great to have you here especially because people are looking for any kind of clarity or certainty what do you think is first and foremost >> kelly, i would start off by saying that the dark period of drafd negotiatio trade negotiations that started may 4th, that period is over this is when both sides went back to the corner and tried to escalate as much damage as possible on the other side we don't have to worry about a future escalation at least in the short run. but by no means does that make anything that came out of this weekend better it just means that we're pausing to see if negotiations can come back together. and the goal would be to see if they can come up with something by november 16th that's when the apec summit will be and probably the next time donald trump and xi will be in the same room. but it did not solve the tariffs

in place as a mechanism versus china trying to say no passing of laws on some of the deals they agreed to we still do have to resolve that i have to be honest with you, if you look at the second big takeaway, you have now taken huawei off the table that was a really big moment putting those sanctions on huawei that takes some of the pressure off the chinese. there's no deadline there. so there's a lot of skepticism about whether a deal can actually be reached. but i would argue the tariff increase that went into effect in may that increased tariffs from 10% to 25%, those are the tariff that's really hurt china and they will continue to suffer from those supply chains moving out of china and into vietnam and into mexico. that should eventually lead to another pressure to bring both sides to a deal late they are year. >> "the new york times" had a big write-up on that over the weekend. >> great article. >> just before you move on from this point with you, you said your china trade basket was

picking up positive changes in huawei we saw the chip suppliers today but they're losing some of the their gains. should investors then say, as you said, huawei is off the table so we can buy, we can own these companies with exposure there and feel comfortable about that for the time being? >> yeah, i would caution though that the devil will be in the details. the president announced almost as if he was taking off the black list and policymakers have been talking down what could actually be sold we will see what those details are. clearly this is one risk that's now out of the way but i would argue, kelly, a lot had been priced in a week before this agreement and we continue to be struck by both how are china trade baskets have been placing progress on the trade front even when there were no active negotiations. the best indicators have not been the pundits on tv but ut market has been very smart how these trade negotiations are going and that's not just chip conductors that's industrial stocks, that's on payment processors.

it's been across the board cross sectors and the market knows something that i think the consensus has been catching up to. >> absolutely. we're out of time. retail companies you say will catch a break, cyclical stocks should benefit, why for currency by the president until a deal is reached and, again, we will see if the new nafta can be passed at this point. dan, we will bring you back for more on all of that. good to talk to you today. dan clifton from is that teaguia. americans are cutting spending by 33%. we'll have the reasons why and what that means for the economy next g for your brain. with an ingredient originally discovered in jellyfish, prevagen has been shown in clinical trials to improve short-term memory. prevagen. healthier brain. better life.

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so you save hundreds of dollars a year on your wireless bill. xfinity mobile has the best network. best devices. best value. simple. easy. awesome. click, call or visit a store today. welcome back the larger amount of americans are curbing their spending according to the new invest in you spending survey. kate rogers joins me with the reasons behind these productions. >> that's right. our invest in you survey finds one third of americans say they have cut their monthly spending in the past year, while 45% say they have kept spending about the same, and one fifth say they have increased their monthly spend. why are some americans cutting back of the third who are spending less, 23% say they have lost some alternative form of household income

17% told us it's because they have taken on new debt, and 16% say they did so because they fear a recession 15% say it's because they lost their job. there's also a split between political parties when it comes to cutting back on spending. just over 20% of democrats cutting, say they're doing so because they, too, fear an economic slowdown compared to 10% of republicans and 13% of independents we're also going to have much more on this on "power lunch" and talk about if that college degree is actually worth it. the answers we got from people, very interesting >> it is fascinating to see how people's political views translate into their money decisions in a big way >> thanks. i'll see you soon. >> johnnyives stepping down as apple's design chief, but his departure was a long time coming, according to a new report we'll have whathe t split means for apple's future, next inventory - ♪ ♪ it needs to track it all, from cincinnati to singapore. ooo! ♪ ♪ and protect it all.

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just days after apple announced the departure of its longtime design chief, jony ive, "wall street journal" said he's been disappointed there for years let me bring in tripp who wrote about this in the "wall street

journal. welcome. >> thanks for having me. >> so you know, we have this sense that jony ive was not directly involved with apple day to day in a long time. but does the split with cook mean that apple itself is a different kind of company now than we had understood it to be? >> certainly in conversations with a lot of the people we talked to, over more than a year, that is what people were indicating, is that this really cements the shift at apple from being a kind of design driven company into more of an operations driven company. that had been coming for a long time and that had been taking place for a long time. but this is kind of the ultimate example of that. >> who is doing the designing now? is it because there's no new products even the wearables thing was interesting because it's been a relative success, but inside the company, they think they haven't had a hit since the ipad >> look, they have a huge cross to bear. the iphone is an enormous product. they still sell a tremendous

amount of them, and they still rake in a ton of profits they made $30 billion in the first half of their fiscal year. but by the same token, it's hard to replace that iphone revenue as it begins to slow down. that's really what they're wrestling with the one big product they had is the watch, and it's just not priced at the same level as an iphone for each iphone sale that maybe takes a couple years longer to sell, a watch isn't going to replace that revenue that's really the challenge there inside the company right now. >> sure, and i was personally disappointed it never came out with a charging pad, the wireless charging pad. i was really looking forward to that you said it's kind of emblematic of the challenges. is that anything that has to do with jony ive being at fault that it didn't work or more of an engineering issue >> more of an engineering issue. it's a balance of both, really it's both a design issue and an engineering issue. they ran into challenges meeting

the design specs and delivering on the engineering needs of that particular product in talking with some people, they compared it to a dorm room hot plate. if you drop change on it, it would heat up the change and wouldn't evenly charge the devices it was supposed to >> where does apple go from here do they need new design energy or should they double down on this more operational focus? >> it looks like, and at first blush, based on the announcement last week, what they plan to do is double down on the operations focus. they put jeff williams in charge of the design team they put a product designer in charge of the industrial design team that jony long oversaw and worked closely it was like a family and will continue to be a family. that product designer has been part of that family for long time and then allen dye will be working on human interface but all of tat is a change jony has been in that role since

1996, and he's reeled off a tremendous amount of products, and a lot of those were, you know, the consequence or the output of an outgrowth of his collaboration with steve jobs. they almost had like a lenin/mccartney type relationship, and when you lose that, you still get hits, but you don't reel off 20 number ones like the beatles did. >> we'll leave it there. thank you so much for joining us tripp mickle from the "wall street journal." that does it for us. "power lunch" starts right now >> see you in a minute i'm melissa lee along with tyler mathisen the s&p 500 hitting a new record high, but a big pullback will the bulls keep charging the u.s. and china declare a trade truce, but the hard work begins now we'll tell you what's next >> and mortgage rates getting back to record lows, but the affordable crisis still shutting out homebuyers what they're doing to get around that, and it might surprise you. "power lunch" starts right now