look up? by automating claims with machine learning and analytics, cognizant is helping insurance companies advance how they serve even hard to reach customers. cool ♪ hi, everybody, welcome back. here's what's ahead this hour. the fed under fire, president trump keeping up his anti-powell drumbeat, now getting high profile report, some fed watchers saying the fed is getting highly problematic plus raising confidence by raising billions in new debt does that actually hurt confidence more than it helps? we will ask. he ran major league baseball for 20 years bud selig will join me live tonight. what's his take on sports betting? and much more. we begin with today's declines dom chu is here with the

numbers. >> we're just about at session lows, kelly. the s&p 500 was down about 19 points you can see we're down about 17 or thereabouts right now still a half a percent decline, for the dow as well, and the nasdaq almost off a full percent. technology weakness is a big part of the story. remember, the best performer by a wide margin so far this year to date period, up about 28% meanwhile, the s&p is up about 18, 19% in that same year to date period. still a nice move higher here, just a slight move lower we'll see if that's a beginning of a bigger trend to the downside the bulls are still in charge. a couple of stocks in focus right now, coca-cola and pepsico. on a year to date basis pep ssio

is big right now, because, kelly, they report earnings before the opening bell tomorrow we'll see if that snack food and soda business is going well for pepsico. back over to you >> dom, thanks welcome to "the exchange," i'm kelly evans. investors have pulled more mone fr in the last few years. china fx reserves are higher on the topic of central banks, let's get down to bob pisani >> reporter: kelly, this is the second down day and there is weakness in technology sides apple is downgraded from rosenbla rosenblatt the key for the markets is jay powell's testimony this week there's a dilemma. the market wants rate cuts but it's not clear there's an urgent need for them. the labor market is strong, we saw that on friday inflation is low

and there's a record economic expansion. that is certainly a victory for the fed. other central banks are dovish also a victory for the fed and a recession still seems unlikely the big risks remain trade and europe and china's slower growth that's one reason morgan stanley downgraded global equities this morning, saying earnings estimates are just too high right now. it's true, earnings are expected to be flat-ish this year you see the four quarters for this year. morgan stanley expects more companies to warm for the second half of the year kelly, we'll see about that. earnings begin on tuesday with jpmorgan >> bob, we haven't focused on that as much the first quarter, we talked about how they looked negative now for the whole year, what's the trend shaping up >> reporter: it's basically going to be flat we're slightly down for the second quarter estimates, slightly up for the third quarter numbers. remember, they send to rise as we go through the quarters so i expect the numbers overall to come up because the guidance will be better i think morgan stanley may or

may not be right on this i'm betting on positive numbers. >> like you said, we've set the bar low in that case bob pisani, appreciate of this. so the president and the markets both want a rate cut plenty of skeptics are saying with stocks at record highs and unemployment at record lows, this is exactly when you shouldn't be cutting rates let's get to steve liesman with a closer look. >> despite the strong jobs report, kelly, the market continues to price in multiple rate cuts from the fed, which changes the debate about whether there are two or three cuts this year you can see where the 50% probability is, or higher, for the fed funds futures market the current at 240, one cut priced in still for july which changes in not pricing at 50 anymore, almost no bid on that right there. then a second cut somewhere in here september, october, december let's do a deeper dive into

december and take a look at the big debate does that third cut happen 51% say no, this should be higher i'm not quite sure why they made it this way. typically near record low unemployment, fed rate cuts wouldn't be priced in. why cut at all three reasons. trade still a negative despite the g20 meeting. inflation running below target global growth remains weak, a threat to this expansion and this is a really important week for figuring out what the fed will do at its meeting later this month jolt survey, we love using this more and more to take a look at how much slack is in the labor market, how many jobs are available. then you have the principals from the prior meeting that's going to give us the best look we have at the aggregate view of different clubs or factions or sets inside the federal reserve. that will superceded by the chairman's testimony again on thursday before the senate, with

the very important cpi number followed by the ppi on friday. so far, fed officials have either said they favor the cut or not pushed back against the market pricing that's why the testimony from powell is so important if you don't tell the market that it's wrong, it tells the market, kelly, that it's right >> exactly it's going to be a critical week steve liesman, thank you as the market is looking to that testimony, what should investors be watching for, for those clues to the fed's next move i'm joined by quincy crosby, chief market strategist at prudential quincy, what kind of signals and talk are you looking for >> i don't think he's going to come out and be very specific, because after all, the fed meeting is at the end of the month. the fact is his assessment of the economy, if it changes at all, any of the words that he just used at the previous press conference just a few weeks ago, if anything changes, the market

will be paying very close attention to whether it's an upgrade, a downgrade, or the same >> okay. so you're going to be watching for his language around the economy. we just had the jobs report on friday, which frankly is kind of a game changer it was much stronger than expected you're saying watch to see if he talks about the economy being stronger or not. >> or does he stress global concerns, the global slowdown. and if he does, that may be a reason, a rationale for wanting to cut rates >> sure. do you expect a rate cut right now, this month? >> i do, unless he moves it back you can't go into the meeting unless you move the market back, move your position back. it's 100% now for 25 beats >> wow sandy, are you also thinking rate cut unless you hear otherwise this week? >> yeah, but what makes me a little nervous is this is baked in, you're over 18 times earnings and you're coming into a spot where we better get that

25-basis-point rate cut at the end of this month and we better get a trade deal between president trump and xi these things are baked in. if not, i'm cautious with the market at all time highs here. >> any time you hear 100% of anything, you get a little nervous. although this is the game the fed plays, they like to telegraph their actions. when we look at the 2%, roughly, yield on the ten-year, sandy, where would that yield go if they say we're not going to cut later in the year as markets are also expecting >> yes, so i think there's a lot of support here at 2%. i think that's a good thing. and i'm glad that it's holding but the inverted yield curve is probably going to make the fed, you know, move and i think not only will you probably see a 25-basis-point rate cut, you could see another 25 in september, and maybe another 25 in december so we're going to be watching that 2% level on the ten-year really closely >> quincy, how can they justify

cutting interest rates right now when you have a stock market at all time highs, when you have an unemployment rate at all time lows >> it could very well be that the fed knows, obviously it does know because on january 4th it changed course completely, that it made a mistake with that last fed rate hike, coupled with the $50 billion a month of the unwinding. now it's $25 billion, supposed to end in september. they may want to walk that one back t it could also be that they don't see any improvement in the trade backdrop and therefore companies will probably still hold back their spending, perhaps to help the economy and spur some growth many people have talked about the low inflation. >> yes >> and unless there is a major material change in the numbers that come out this week, the inflation report is lower than what they want, at 2%. there are many fed members who looked at that and said, we can't allow this to as great into deflation, that would be

much more dangerous. >> sandy, final word to you, if you hear people criticizing the fed, saying they shouldn't be independent, there needs to be some way to hold it accountable, especially if the president is going to nominate people with low rate points of view, does that itself weaken the dollar, does that raise or lower interest rates what are the real world implications of that >> yeah, i think the f has got to be independent. and i think they are doing a good job they've got to look at the data and take it as it comes. that june, you know, employment number is a big one. and i think that, you know, makes them look to do something else so i think they have been to be independent and look at the data and make their decisions based on that. >> all right, that's the backdrop for hearing from jay powell thank you both, sandy, quincy, we appreciate it very much ahead on "the exchange" -- >> announcer: coming up, we work wants to raise $4 billion to

build investor confidence a4ehed of its ipo but is that strategy doing the opposite plus abercrombie and fitch wants you to buy now, pay later. is that a sign of the times or a sign of desperation? and bud selig joins us live on his book, player salaries, sports betting and more. this is "the exchange. on cnbc. the flexible class schedules allow me to go to work full-time, run my catering business and be a mom and parent. when i reached this accomplishment, it was like, it's here, it's happening, it's now. we, at southern new hampshire university, are the ones who succeed. we are the ones who break through.

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welcome back wework is looking to raise 3 to $4 billion worth of debt ahead of its ipo deirdre bosa has more. >> "the journal" reporting the news over the weekend. we have seen this year how unicorns with big losses are received by public market. there's uber and lyft still trading below their ipo price as investors look for that path to profit you hear it again and again. wework's net losses last year were even bigger than uber's at $1.9 billion and its business model, signing long term leases and subleasing them on a shorter term, is a lot

more capital-intensive and, you could argue, riskier in a recession. a source familiar with the deal tells me a debt offering could be seen as a so-called bridge to profitability. a way to take some of the pressure off an equity raise in an ipo and perhaps as a way to ease some of the pressure off the recent debate around wework's valuation. wework itself declined to comment, kelly >> deirdre, stay right there with more on what this means for the ipo, let me bring in the business editor at axios dan, wework is a subject of fascination out here is it any kind of bellwether or are people fascinated to see whether this company can come forth with a business model that will be justly rewarded on wall street >> it's not a bellwether because it's a standalone. you took unicorn ipos and unicorn tech companies wework is so much larger and in different markets. wework stands alone. people are fascinated in part because everybody knows somebody who works in a wework.

it's one of those few stormups that has become a verb, has become a stand-in, kind of like kleenex is for tissue paper. >> you're right. it reminds me in a sense of uber and lyft, dan, we all use them as descriptions too but that doesn't mean we invest in them >> by the way, it would buy back the bonds, they did a $7 billion bond offering last year which hasn't traded that great the idea of this is to say prospective investors, we plan to lose money for quite some time that phrase, "bridge to profitability," as opposed to "path," is important, to get investors over that river of debt >> deirdre, he makes a good point, it's a bridge, not a path, to profitability and

investors might wonder if it's a bridge to nowhere. >> that's a good question. the point is what happens in a recession. if the economy, if you see a downturn, wework is left holding all these long term leases and customers that could back out of them i think what wework would argue is a lot of their mature markets are already profitable, which is spl smart to what you hear from uber and lyft raising capital might allow that bridge to profitability. but they still have quite a long way to go. kelly, you asked if they would be seen as uber and lyft, certainly with those losses. but you have airbnb which has become this verb and that company, as we reported, is a lot closer and is profitable on an ebitda basis over the last two years. >> and they're talking about doing a direct listing dan, would wework be better off

staying private? >> just to something deirdre said, i'm not going to be wework's pr person, their argument might be they would get more companies that want to get out of their bigger leases and want to go short term. wework's ceo adam newman told me on the record a couple of months ago, i said when are you going public, why are you going public, he said we have plenty of access to the debt capital markets. there's a good argument for them staying private for a while. the problem is they have early investors and early employees who want to get some liquidity this is the problem for big startups of this age, these people have paper millions and big mortgages. they have to help them pay them off. >> paper millions and big mortgages. deirdre? >> just to that point as well, does wework need to do an ipo or raise money? i think so at the end of last year, beginning of this year, they were supposed to raise billions of dollars more from softbank.

there was reportedly pushback from some of those vision fund investors. so clearly, you know, wework is spending enormous amounts of money, they need more capital. perhaps a debt offering is, to their way of thinking, better than an ipo than all the hoopla we're seeing for uber and lyft >> for better or worse, sometimes. thank you, dan, deirdre, thank you very much. coming up, apple getting dinged today, a rare downgrade to sell on the tech giant. shares are off more than 2%. how much should investors start to worry former baseball league commissioner bud selig will join me on set. t home run derby of topics to hihim with "the exchange" will be right back ♪♪ ♪♪

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come on. this summer, add a new member to the family. hurry into the mercedes-benz summer event today for exceptional offers. lease the glc 300 suv for just $419 a month at the mercedes-benz summer event. going on now. welcome back to "the exchange." here are some of the movers this hour boeing is down more than a percent after saudi arabia and budget airline say they won't proceed with a $6 billion provisional deal for the 737 max aircraft you can see shares down 1.5% now, that and apple combining to contribute to the decline today. deutsche bank with a loss of more than 5% after the germany lender announced plans for a massive restructuring that will close the bank's equities and

trading business tech stocks are following apple lower after the iphone maker was downgraded to sell f5 down 4.5% we'll have more on the apple story ahead in rapid fire. first, to sue herera for a cnbc news update. hello, everybody vice president pence says the u.s. is prepared to protect u.s. personnel and citizens in the middle east. he spoke at an evangelical christian group in d.c >> let me be clear iran should not confuse american restraint with the lack of american resolve we hope for the best but the united states of america and our military are prepared to protect our interests. a flash flood emergency in the washington, d.c. metro area this morning

a lot of cars got stranded people had to be rescued even the white house basement was flooded. reagan national airport got three inches of rain in just one hour a flash flood warning is in effect until 1:45 p.m. eastern time starting today, kohl's is accepting amazon returns at more than 1,000 stores nationwide kohl's will pack your items and ship them back to amazon for free the company tested the program earlier this year in 100 stores. that's the news update kelly, back to you >> i plan to make use of it. >> excellent 30 minutes to go until "power lunch." i'm joined by melissa lee. >> you read about those earthquakes in california, 6.4, followed by an aftershock of 7.1. residents are saying, what's next, is there another one coming, and what do businesses do, how do they plan for this, what are their insurance costs, how do they deal with employees and store closures

we'll delve into all of that on "power lunch." >> they say it's unusual for the aftershocks to be stronger than the earthquake itself. >> it's very rare for the aftershock to be stronger than the earthquake and california is the fifth biggest economy in the world >> probably it's late for companies that don't have coverage to get it now >> probably. i don't think so >> melissa, see you then here's what's ahead on "the exchange." >> announcer: coming up, does apple face a fundamental deterioration? starbucks apologizes once again. and why sunday night is the new monday mniorng that's all ahead in rapid fire

>> announcer: will consumers deliver a pop to pepsico first word on the numbers, tomorrow on "squawk box," 6:00 p.m. eastern okay robert needs to wear his double breasted suit. and i apparently do not need to wear mom jeans let's catch you up on a couple of important stories it's time for rapid fire here are robert frank, contessa brewer, and dom chu. welcome, everybody let's talk about this apple story. the shares are sliding after a downgrade to sell at rows senblt

securities, the firm saying it sees, quote, fundamental deterioration over the next six to 12 months they say disappointing sales for iphones, slowing sales growth for ipad and other products, this is taking down, dom, frankly, a lot of markets. >> they take it down to below $150 per share the idea is not new, that there is a maturation of the product cycles they have we've talked about peak smartphone for what seems like a couple of years now at the very least. this idea that in the hardware side of the business, it's commoditized and everybody is entering the business. spreads are not there, the growth is going to slow. which is the reason why everybody talks about their services business so much more, including the analysts who cover them and of course apple themselves >> including all the rest. >> absolutely right. >> isn't rosenblatt kind of catching the tail end of a trend here by talking about -- i mean, the timing is weird. isn't this the time when investors are rushing toward

apple ahead of the product announcements? how that is the performance been to date? >> we've had a nice run in apple shares >> it's up and down. when steve jobs passed away, everybody said look, the maestro is gone, they'll never come up with a new product they kind of haven't, the last great product -- >> earbuds >> or the watch. >> the watch sold a quarter of what they expected the first year, which is interesting i think the power of that services, the power of the platform, i'm locked into apple, with so many products, i'm never getting off. i'm not upgrading that often but i'm also never getting off >> the amount of money that you're spending when you do upgrade has got to somehow justify that you're not upgrading at often >> right i think that the value of those services is the big question the margins on those, and how much they can make every year. will it replace the hardware, which was frankly -- >> if you want to speak about

what contessa keeps bringing up, the idea of the upgrade, the whole reason the sellrating is there is because of the hardware side of things on the same day, today, analysts just kicked off their own conviction buy list and what stock goes on that >> apple >> with a $225 price target? yeah, it's apple what they say is it's services that's going to drive everything, so who cares about upgrades, all we need is the upgrade for the os, the operating system dwlov we don't need to buy a new ipad every year another controversy brewing for starbucks, the company apologizing to police in tempe, arizona, after baristas asked six officers to leave the building because customers didn't feel safe in their presence starbucks visited the store to meet with the city's police chief. this was the tweet that came from the tempe officers

association. >> starbucks got into trouble last year for calling the police in and now they're in trouble in tempe for asking the police to leave. >> right >> and in all these cases, what's the common denominator? it's an employee with some questionable judgment-making skills do you really boycott a global company based on the decisionmaking of a person who is there on the ground >> the last time it happened was philadelphia, with that situation with the bathrooms and everything else. they took a whole day for an employee training session. they shut all the starbucks down for employee training. you wonder whether or not this is going to happen again i don't know if i would ever -- >> they got out much faster in front of this one. i think that by going forward and saying, hey, look, we actually offered these events called coffee with cops that we were trying to build these great community relationships, they sent executives there to do it, and now you have the tempe police saying, oh, no, we're not asking people to boycott it, we

just want to use it to start a conversation they're trying to turn this to their advantage to say how do we facilitate more understanding. >> it's a learning moment. >> i will say, i think the biggest learning moment was starbucks figuring out how to respond when something like this happens. >> it's not trending on american twitter. i mean, in some places it may be trending but i checked before i came down. starbucks boycott is nowhere trending on twitter. >> that will be a template for others if this happens again how about this, the federal appeals court dealing a blow to amazon and other online retailers, ruling that they -- and this fascinating -- can now be held liable for defective goods sold by third party vendors after a customer was left blind in one eye when a dog leash she bought on amazon snapped and hit her in the face. third party vendors are a huge part of amazon's business, they account for half of items sold guys, this has huge implications of course you have to watch the judicial process to see how it holds up for amazon itself to be held

responsible. >> it's $11 billion a year, a huge passrt of their platform, they sell you not just amazon products but other people's stuff. i don't know how you go as amazon and verify not just the sort of authenticity of everything you're selling but also the quality of it, and have guys inspecting dog laeshs leashes. >> ebay, craigslist. >> praeecisely. if you can be held responsible for things you sell on your platform >> there is a move to hold those responsible -- >> it seems like they could solve it with a little disclaimer saying we are not responsible for any of the quality or safety of any goods sold by third parties. it seems like if they just had that underneath it, it would solve it >> you're also dealing not with a federal guideline. you're talking about state and

local rules and regulations surrounding retailers, in pennsylvania and you wonder whether or not amazon, being at the mature online retailer stage that it is, is now going to be held to the same standards as a walmart or a target or anyone else who sells stuff, because they are in essence third party sellers. they source things and get them in there if it's on your shelves, you're kind of responsible for it but every local law is different. but this is, amazon is going to deal with some of the same problems that established hundred-year-old retailers will deal with. >> as people learn more about it, will they not do business in pennsylvania how could they ever be responsible for every third party product sold on their platform this is a story to follow. a major airline is making a strange request to passengers, to say don't fly check this out >> do you always have to meet face-to-face could you take the train instead? could you contribute by

compensating your co2 emissions or packing light >> i mean, this is part of klm royal dutch airlines' fly responsibly campaign they're trying to cut down on carbon emissions flights only account for 3% of global co2 emissions >> only? >> it's like liquor companies saying drink responsibly >> i thought they were going to say, use smaller shampoo bottles, lose weight >> eat less, stop breathing. >> it's so european, isn't it? >> this is all marketing >> it's green-washing. >> if they were being serious about it, they would make the carbon offsetting compulsory they would say, we're going to charge you $10 or whatever >> funny you say that, the airline in its statement says it's opposed to a national carbon tax in the netherlands. >> right >> because it says passengers would simply drive to germany or belgium and fly from there

instead. so it's a way to keep the carbon tax from going into effect >> that's exactly right. there are lawmakers in europe who have proposed not only the mandatory carbon offsetting but they've also said they want to ban these short haul flights that might be, time-wise, about the same as taking a high speed train. imagine tying an airline's hands. >> they're going to ban the option of you taking a short flight because of the emissions. >> but there's a way to arbitrage that, right? you mentioned the idea of moving people to take trains from germany instead or france or somewhere else eventually consumers gravitate towards where the lowest cost/best value option is and they will figure it out eventually all of a sudden you've created a whole other industry for people, maybe travel agents come back, because they're the ones who help you navigate all these things >> and this is progress? >> you need a logistics provider, which transportation will be best to go from munich

>> train to here, car to here, and you're all set >> unbelievable. studies show that sunday has become the new monday for workers because smartphones and other technologies led to more communicating outside the office and yes, on sunday nights. a study from microsoft even found that every hour spent online translated into 20 minutes of work from their employees. now "the journal" is saying sunday night anxiety is becoming more common. >> i mean, give me a break all you have to do is put your phone down it's not that hard i get the pressure of like being -- >> i wouldn't respond to an email sunday night i would bet contessa brewer responds to her emails on sunday night. >> i've told our bosses, i'm very good at checking out when i'm supposed to be away from work if you really need me, the best way to get me is a text. >> i love how we need an email program to not look at your email. structured disengagement >> when i first got out of college, my first job on wall

street was just when blackberry was coming on the scene, right, to check your emails remotely. i remember being a fairly productive employ fee for five, six, seven years on wall street without having to check my emails every single moment now my wife and i, between the two of us, at any given time, we're at dinner and checking our phones >> i think it sets a very bad example for your children about work and home. even if you don't have children, it sets a bad example for your spouse or whoever. i don't want somebody else with their face in the phone on sunday night when i'm trying to enjoy the last of -- i'm trying to finish "the americans," speaking of -- i mean, there's good quality television to watch. i can have the screen right here without this one right here. >> i was just thinking about the fact that, going back years now, what our former colleague kate kelly would say she often had the best source conversations on sunday evenings because at that time a lot of the people she was talking to were sick of handling

the kids and so forth. no comment on the alcohol intoxication guys, thank you all. robert frank, please wear the double breasted. coming up, former baseball commissioner bud selig there were a record number of home runs hit last month but not a record number of seats 'lta aut so much more when "the exchange" rolls on

welcome back it's all star week in major league baseball and tonight some of the top sluggers face off in the home run derby the winner takes home a million dollars, not too shabby. last month a record number of home runs were hit in the mlb. despite that, baseball attendance is down slightly compared to last year. my next guest was the commissioner of major league baseball for more than 20 years, i'm thrilled to welcome bud selig, currently commissioner

emeritus, author of the new book "for the good of the game. thank you for joining me >> a pleasure to be here >> it's all home runs and strikeouts is that alienating people? >> i don't think so. we go through trying to describe to people, in the '60s we had to tinker with the mound, bring in a designated hitter because we weren't scoring any runs and people were so nervous each degrcade seems to bring certain changes. but no, i don't think it -- i mean, we're looking at it, trying to figure out why i'm quite satisfied that the people are more concerned with how their team is doing today than how many home runs or strikes. >> one interesting issue with the teams and rome hundrehome r scott boris on recently, players are only getting maximum contracts from a couple of teams. you're the yankees, the red sox, of course you'll pay up for the big guys

but other teams say, we're trying to be competitive this year, why would we pay these big salaries >> this isn't the first issue that scott boris and i have disagreed on he's not correct on that if you look at major league salaries, the milwaukee brews have the high neest in their history by a good margin you can say the same for the cardinals and other teams. what's happened is a lot of clubs are spending their money differently. they're more attuned to bringing their young players along and they're more attuned not to be giving older people free agent contracts. >> but they can't even come up for those contracts until six years after they've already -- >> well, that's once they start. but the fact of the matter is, there are still a lot of free agents signing this year there will be a lot of free agents signed next year. scott boris is frankly like a lot of people who maybe told their clients that it was going to be a much better market and

it turned out not to be. but none of that has anything to do with a club's desire to win or ability to spend money. so i can take you to late small and medium market franchises who have record payrolls so no, i do disagree >>does the mlb need to shrink? look at the debate right now between tampa bay and montreal are there too many teams >> i don't think so. we settled on 30 they haven't expanded, although economi commissioner manfred is talking about expanding. for the most part you've got teams even in small markets doing extremely well does it need to shrink no >> you started out with the brewers, that you just mentioned a moment ago and you got there because of kind of happenstance, through your dad's car dealership that you were working at. this is cnbc, after all. there's a question i'm dying to

ask you, which is, why should the car dealership model still be with us today why can't tesla just sell cars directly on the internet why can't truecar, some of these other startups, do the same thing? >> it's a business i've been out of now for a long time so i'm not sure i can give you a rational answer. but i don't think the basic structure of that business will change >> why not what's the value in it for the buyer? >> well, the value for the buyer, i do think, is that if they have a dealership, a place they've done business with for a long time, that's good for them, for service and good for a lot of other reasons it's good for the manufacturer there may be less dealers now than there were. again, as i said in baseball, there may be adjustments that have to be made. >> let's get back to baseball in that case. with all that's happening this week, the all star week, the

home run derby, everybody is talking about the mba. these stories are thrilling, the way they're building teams, all the drama going on, what can major league baseball learn from -- >> it's interesting, they've had their free agent period. there were some big free agents moving this year but that's over now. look, we don't have that in the winter when we get into free agency, especially if they're ae big free agents moving i'm satisfied with where baseball is as a sport and as a business its revenues are at record level, the interest is at record levels are there adjustments that need to be made as you know, in every business there are adjustments made but i'm satisfied, and people should be, with where they are >> any adjustment come to mind these days >> yes, we're going to have some rule changes and people talk about shortening the game i understand all that.

we worked on that. i know commissioner manford is very sensitive about that. i've heard for 60 years that baseball was no longer -- 60 years later baseball is bigger and healthier than you ever could have dreamed >> will sports betting help that or hurt that as it becomes more legal? >> he's judgment cait's a judgml that only the future will determine. i'm old fashioned in that way. as long as they're careful never to let it affect the integrity of the sport >> that will be more important than ever. analytics, final question, do you think it's gone too far? >> i don't it's changed it's not like it used to be when i ran a club or when i was commissioner for the most part i think it's quite healthy. the sophistication to the sport is remarkable. you start looking at these

analytics reports every day and it's amazing no, i don't think it's affected the game >> even with the home runs and all that it seaems like it's affected the game but there might be in which to do about it >> i don't know if that's affected the game. there are a lot of factors that could be affecting it. the home runs themselves are not bad. i watch a lot of fans and a lot of fans at games and they don't seem to be discouraged by that but as i said before, we need to adjust, as every decade has, every period has, in every business, and that includes baseball >> and we'll see a lot more home runs tonight bud, appreciate it bud selig, commissioner emeritus of the mlb ab ercrombie and fitch shars have dropped but they have a plan to turn things around this one involves paying after you leave the store with your new clothes. we'll explain after the break. your brain is an amazing thing.

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welcome back abercrombie and fitch has a plan to lure cash strapped teens to

the store. buy now and pay later. what could go wrong with that? >> aber frercrombie is going to partner with a finn tech company, which allows you to make a purchase and buy it over several installments in europe, it's three installments in the u.s., it's four installments, and it's interest free it's a way to attract a millennial customer who isn't as comfortable buying on credit and getting them to make that purchase that's just one of the companies working with retailers the other is after pay they're working with urban outfitters, dsw, which is owned by designer brands and a number of other companies so far, many retailers are saying they're seeing the conversion increase. >> i don't know if affordability was the issue but it's going to be fascinating to see if this helps the results. >> a number of analysts say it also helps with data it helps the retailers grab information about the consumers, the demographics, if it helps them buy more, and some of the

companies that used after pay said more than a quarter of their shoppers are using it, and another company called morph said there's a 52% increase in average order value after adding after pay as an option >> thanks very much. courtney reagan. >> meantime, nearly 55% of all americans now live in suburbs, according to pew millennials are a driving force behind the numbers as they're priced out of the big cities, they're flocking to the suburbs, but cities and towns are struggling to keep up. joining me is valerie, a national reporter for the "wall street journal," and our own diana olick. valerie, welcome a lot of people take note at what it looks like this move from millennials into the burbs. >> after the great recession and the economic downturn, the cities were booming. the thought was people wanted to be able to walk to work and live closer to downtown life, but what we have seen in the last couple years is a flock to the

suburbs, especially by millennials. they're 23 to 38 years old now so they're somewhat belatedly, many of them, able to start a household, get married, start a family, and do what their parents and grandparents did, which is move to the suburbs >> diana, as you said, there might be a desire for home ownership that's driving some of this, but there's also a huge affordability issue that's still creating a lot of renters who wouldn't normally be renters here, right? i right, and they're still renting in apartments or looking to single family rentals i don't think it's a shift in the demographics millennials moving to the suburbs. it's the same percentage as were moving out or living there in 2000 i think what millennials want from the suburbs is different. they want close in, walkable, and around smaller cities. those smaller cities don't have the large suburbs. that's what her article is talking about, we need to build out the smaller city suburbs to accommodate millennials. >> where would be examples of

where we're seeing this play out? >> diana did research on this recently we're seeing a very selective move to the suburbs. there's two common denominators. warmth, good weather and good jobs. >> good jobs >> that's whatyou're seeing. phoenix, atlanta, tampa, raleigh, austin, places like that >> diana, where does it leave a place like denver, places that boomed early, but we talked a lot about how expensive housing has gotten in those places >> very expensive, but denver, the prices are now coming down because affordability hits a wall it's a question of how far can you build out. the builders could build further out, but while we're seeing millennials and downsizing baby boomers in the suburbs, they're not willing to take that hour-long drive outside, so you are going to see prices come back a bit in denver, but in places like pittsburgh, again, like she was saying, insmaller h is moving in, you're seeing

booming cities and booming suburbs. >> people will take the smaller city in a different place over the super wrong commute. i get that it makes a lot of sense. thank you both very much valer valerie, appreciate it diana, thank you very much thank you for joining me it's time to join tyler and melissa for "power lunch" on the other side of this break don't go anywhere. my experience with usaa 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 another insurance company, hey would say "oh we can't beat usaa" we're the webber family. we're the tenney's we're the hayles, and we're usaa members for life. ♪ get your usaa auto insurance quote today.

and welcome to "power lunch. i'm melissa lee along with tyler mathisen and kelly evan. a make or break move for the rally. fed chair powell getting ready to get grilled on capitol hill and the california earthquakes causing a lot of damage, disruption, and uncertainty. we could see more than 30,000 aftershocks in the months ahead. we have the potential impact and fixing america's savings crisis the father of the 401(k) lays out his new plan "power lunch" starts right now >> indeed, "power lunch" does begin right now. welcome, everybody, to the