around john >> international paper, ip, i bought it during the show. >> pete? >> microsoft just up above, earnings are coming >> everybody, thank you. brenda, thank you. appreciate that. all right. that does it for the "halftime report." "the exchange" with becky quick begins now brian, thank you hello, everybody i'm bey quick. i'm in for kelly evans here's what's ahead. the focus turns to fang. netflix the first of the big tech names to report after the bell what to expect and why the results could hold the key for the direction of the markets 76 billion that is the eye-popping number of opioid pills that flooded the u.s. from 2006 to 2012 how it happened and where the pills ended up one of the writers of today's washington post investigation joins us and, plus, faceapp has a lot of us talking. but it may also have a lot of your data. why reading the fine print matters more than ever but we begin with today's

markets. dom chu back from the bathroom he has the numbers >> the markets are as red or as pinkish as that outfit you're wearing but it's not by much the dow industrial is only down by two-tenths of 1%. that's just about the worst levels of the session. the same percentage move for the s&p 500. the nasdaq composite also flat on the session as with eawait those big netflix earnings as we talk about other signs of where the market could be heading, yes, the fang stocks are important, but some other traders watching what's happening with the dow jones transportation index, that's what you're seeing down 3% today. it had rallied by about 11%. but a big rollover today csx the rail operator powering that move and almost every member of that index the dow jones transportation in the red with the exception of united airlines holding. and then if you're looking for a stock of the day, earnings from yesterday, the best performer in

the s&p 500 by a good amount, cintas, they provide workplace solutions. its earnings are better an expected what a huge move cintas the best-performing stock in the s&p and a very steady performer since the lows since christmas eve of last year >> the first of the fangs is set to report after the bell today with netflix hitting the tank. that stock has been on a tear this year. it's up 36%. but with company continuing to spend billions on content and news, the two of its most popular shows are going to be taken off the netflix platform should investors expect those gains to continue? joining us right now to break down what we're watching is sarah fisher she's media reporter at axios. so, of course, our very own julia boorstin and welcome to both of you julia, why don't we kick things off with you it's been a big year we have seen some huge numbers that have come up to this point. what's it going to take to impress the street this time

around >> reporter: i think the key thing that really moves netflix shares is the subscriber number. this quarter netflix is expected to add some 5 million subscribers. the vast majority of those are expected to come from overseas then the question is how many subscribers netflix will forecast it'll add in q3 the number analysts are looking for there is 6.3 million the reason that subscriber number is so important is it will really speak to how well netflix's investment in original content is paying off. and also whether or not their growth is really sustainable >> let's talk a little bit more about that, sarah. the numbers you're looking for really are growth numbers but especially abroad. that's a big deal and it's one that investors have been watching really closely. >> it's a huge deal because it's the only place they can grow so all growth opportunities are going to come from abroad. they're at about 150 million subscribers now. they think they can get to a point where they can cancel out that debt they need to get to

about 300 million. so they're about halfway there >> it's a pretty high bar to jump street's not too much ahead of where the company actually guided and told people to look what's going to make the difference in the metric >> i think the key thing, here, is, one, can you get to that metric where you're getting to 300 million if you're going to have to start getting a little bit more conservative on content spent. we know they're spending $15 billion a dollar but their coo says we might need to be a little bit more conservative now with how we are spending so let's take a look here at what those operating margins are, how much they're going to be able to profit. and then if they can get those numbers at a healthy place, i'd expect earnings with good subscriber growth to be positive today. >> if they're getting to a point where they need to be more conservative with their spending, at the same time you're also seeing big players, disney jumping into this there are going to be so many offerings a year from now. what's the landscape going to look like at that point? >> well, becky, i don't know if

they will be more conservative with their spending or if they feel like they can afford to because they are losing so much of this license content to the likes of disney, hbo max as well as nbc universal now all three of those companies are going to be launching their own services starting with disney in the fall so the issue is that they have to invest more in originals as they lose some of the license content. they're also going to be competing which means not just more exclusive original content to compete with these other players but also higher investment in marketing. so i think this landscape is incredibly crowded netflix has the advantage of already being in 150 million homes and already having that subscriber base. but people feel like what they could get elsewhere could be worth dropping netflix or whether they could just add perhaps one or two other services the so i think there will be a limit to how many services people subscribe to. netflix is going in with those people already locked in the question is how much that could really impact their growth going forward. >> last week i talked to a

content guy who had be looking to raise $25 million got into a bidding war with netflix and others where they were able to raise $50 million coming into one of these deals it's been great news for anybody who is a contentmaker. what's it mean for an investor if you are still seeing bidding wars taking place? >> i think we are going to continue to see bidding wars you are going to need to have original content because at the end of the day those catalogs are not going to stay in places like netflix the only way you're going to get people in the door is if you have things that are new i think if you're an investor, you take a look at what the bidding war looks like the debt is scary because if there's any way they're going to be able to sustain paying for this content, it's going to have to come somewhere. >> and what about apple? them getting into this whole game too they've got some pretty deep pockets hemz >> apple absolutely has deep pockets. they are going in a different direction. they are not interested in library content at all they are only going to have new

original exclusive shows they are set to launch this fall as well. i think apple is another player that is sending the cost of this content up higher than ever. i hear so many stories about films that were shopped around to different studios and then were ultimately sold to netflix with budgets that were so high that they may not have been accepted or sort of sustained by the traditional studios. so netflix so far has been willing to pay in some situations what others say are exorbitant amounts for films both for big stars, also to lock down exclusive contracts with some of these big showrunners. so netflix has deep pockets, but everyone else playing in this field as well is just raising everyone's costs >> content is king it's good to be in content thanks to both of you. good to see you. could the earnings and lower guidance from csx be the first bad news of what's to come

gentlemen, welcome to both of you. let me just start with you is this a big deal does it matter that we've seen csx because when you start looking at the transports concerns about what's happening in industrials and what's happening with intermodal shipping, that could be a warning sign of other things to come >> yeah. i think it is a sign that the economy may be slowing but on the other hand we saw some strong numbers from trucking companies so i'm not too concerned about, but i think it's very clear that economic growth is likely to slow if you look at the forecast coming up by economists right now, many of them are forecasting much slower growth than we saw in the first quarter. so, i think that's very likely, but i don't think we're at a point yet that we need to worry about the next recession >> sure. some of the earnings that we've gotten at this point, in fact, most of the earnings have been pretty decent numbers. you start adding it all up, but are the valuations at levels you would expect given the guidance

of the earnings we've been seeing >> good question, becky. what we would probably say is valuations at this point are probably fair. our year-end target for the s&p is a little below where we've been trading at currently. and whether there's credit spreads and volatility at this point investors would probably be well suited to maybe take some of those profits in the equity markets and we would probably raise just a little bit of cash because you are going to be a little bit more volatility in the second half >> do you agree with that, vahan? >> i do expect to see more volatility, and i do think that there is an opportunity right now to take some profits but on the other hand there are many sectors of the market that i think are very undervalued one of my favorites is energy. oil prices have rebounded to about the $60 level from their recent lows. yet, the energy stocks have not kept up. i think at these levels many of these energy companies can actually make very good profits.

so i think this is an opportunity to start accumulating in an area that hasn't participated in the market >> sameer, i know you like energy as well but you also like financials, tech, and industrials. which of those would you really be picking as one of your favorite one or two sectors? >> one from the growth side. so information technology. and then one from the value side we like industrial so some of the declines that dom mentioned in transports, we probably have buyers growth will maybe surprise a little bit to the upside in the second half. >> let's just talk really quickly, vahan, about ibm. it's going to be announcing at the bell today while a lot of people have maybe written that off because they don't like the growth prospects, you say you think the worst news is behind it >> i certainly hope so i do expect them to be on the earnings forecast tonight. the big question will be revenues they have a lot of trouble growing those revenues i'm also a little bit concerned

about this red hat acquisition, whether they pay too much for it or not we won't find out about that for a while. but i do hope that the worst is behind the company one thing that surprises me is that the same management is still in place the board of directors has exercised a tremendous amount of patience so if we don't see growth pretty soon, i think we can see some changes at the top >> can i just say you kind of slipped that in? you're surprised the management is still there, you're surprised ramedi is still running ibm? >> yeah. i'm not implying that she's done a bad job. i think a lot of the problems that she's been having have been more secular and not under her control. but, you know, i think the board of directors has exercised a tremendous amount of patience. ceo turnover is usually pretty high, and most boards would not have waited this long. >> as an investor, you'd like to see that >> well, as an investor, i'm also willing to exercise a little patience. it depends on what i hear

tonight. >> we'll be watching vahan, sameer, great to see you both >> thank you all right, folks, here's what else is ahead on "the exchange." >> coming up, unmasking the opioid epidemic in america a look at the staggering number of pills that flowed through the system and the path they took plus, when it comes to how americans prefer to invest long-term, one area stands out above the rest what it is and why it takes the crown. and one major transport company is sounding the alarm on the economy. this is "the exchange" on cnbc

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at the height of the opioid epidemic across america from 2006 to 2012, a staggering 76 billion pain pills flooded the market that amounts to about 252 pills for every man, woman, and child in the united states the dea tracked it all in a database that the pharmaceutical industry and the federal government fought to kept secret all of this coming to light tonight in "the washington post." one of the writers joins us. thank you for being here reading this and kind of going through all of it, it's kind of shocking it's impossible to imagine the

252 pills for every man, woman, and child in the united states and nobody put this together and thought this is too much >> right, exactly. thank you for having me. it's a staggering amount, 76 billion, communities saturated all over this country, although mostly rural areas of, you know, places like west virginia, kentucky, tennessee, south carolina and what we found is that's exactly right. there's this sort of secret database that was held by maintained by the dea. we were able to get this we fought in court to get it we've been trying to get it for three years first through a freedom of information act and finally through court for this big lawsuit that's going on in cleveland at this time what it reveals is, you know, we've all heard about purdue and oxycontin, but what you can see is that there are many other companies, cvs, walmart, wal greens and some we haven't even heard of that are all shipping,

you know, huge massive amounts of pills to these communities and not reporting orders that seem suspicious. >> sari, i think that one of the most shocking things i mean, i understand why the industry would fight this. why was the government fighting this information being released? >> well, that's obviously a very good question. what they say, what they said to us is that it could hurt possible criminal investigations that they were doing so what happened is the judge sort of lopped off several years of the data. so, we don't have the last five years of data, and then recently he took off two more years originally it was up to 2014, and we were going to hopefully fight for that and then two more years were taken off. so it's 2006 through 2012. so a seven-year period and like you said at the height of the epidemic. so it's not the whole story, but it's a snapshot where we can see all of these companies that of course made huge profits

shipping massive amounts of oxycodone and hydrocodone, which are two of the most addictive opioids. >> meg, sari alluded to some of the numbers and some of the companies. but at the very top of the list is a company called mckesson they shipped more than 14 billion pills over that time, 2006 to 2012 what does information like this mean eventually for the stocks of these companies >> reporter: well, so what everybody is looking for as to the stock impact here is an event that's coming up later this year, this multi-district litigation in cleveland that sari talked a lot about as well where these companies potentially are working on a settlement with 2,000 different entities who are trying to get them to pay for the cost of the opioid crisis in their cities, counties, et cetera. and so what people are trying to figure out is who's going to be accountable for what and we see these big numbers you do start to wonder can you start to attribute dollar amounts or percentage amounts to these companies. so that's what's going to matter

for the stock. we should point out the companies have responded both in this fantastic washington post" article and to us basically saying the same thing and across the board if they responded to us they pointed at the dea and said we were only doing what the dea allowed us to do in terms of supplying up to their quota. or why couldn't they be more proactive? >> well, that's dumb, why couldn't they be more proactive with their own information so we went all the way to the very extent of the line? sari, i think one of the things that shocked me, we've all been following oklahoma and watching the headlines that are coming out of what they're doing in terms of attacking this and going after it with lawsuits oklahoma's not even the top five states of where this played out. you've got places like west virginia, kentucky, and three other states that saw much more distributed in their own states. what is this going to -- >> tennessee >> right in. terms of the scope, what do you think it'll eventually look like something like the tobacco

legislation? >> people have compared it to the tobacco litigation this is much larger in scope 2,000 cities and towns and tribal communities devastated communities. and what the lawyers in these cases, this now consolidated case in cleveland, say is that the companies conspired, that this was a conspiracy to work together to all pour opioids into these communities and you know what we've seen from this, of course, the result is a lot of death. i mean, 100,000 deaths in that time period that we wrote about, that seven-year time period. but 200,000 opioid deaths all together and then, you know, then that's the first wave of what becomes a heroin addiction problem when the government starts cracking down on opioids and tremendous numbers of heroin deaths and then of course what we've written about the third wave which is fentanyl which has led to more than 67,000 deaths

between 2013 and 2017. >> meg, conspiracy to try and dump all these opioids into the communities? that's a pretty hefty charge what do the companies say about those? >> well, go ahead. i'm sure you have a better answer because i actually didn't ask them specifically about that, so you should go >> basically, the companies deny that they deny that's what they were doing. they deny having responsibility for the opioid epidemic and blame it on corrupt doctors and on pharmacies and on customers who they say were abusing these prescription pills >> probably a lot of blame to go around >> the issue is i'm talking with folks about how this liability is probably going to get spread out. from the stock perspective, that's what investors are trying to figure out. and while the drug companies point to the doctors and they point to everybody else, the drug companies and the distributors, they are the ones with the deep pockets here so they're the ones that are going to be gone after >> last word on this, sari >> i was just going to sfrachl

this database that is out, you can say that the companies knew where every pill was being shipped. every pharmacy, every town and city, they knew and they knew when >> right so follow the money, right sari, thank you very much. it's an excellent piece. we really appreciate your time today. >> thank you for having me still ahead, forget stocks and bonds. according to a new survey, americans are picking an alternative asset to park their money long-term. we'll tell you what it is when we come back who's dog is this?

it's my special friend, antonio. his luxurious fur calms my nerves when i'm worried about moving into our new apartment. why don't we just ask geico for help with renters insurance? i didn't know geico helps with renters insurance. yeah, and we could save a bunch too. antonio! fetch computer! antonio? i'll get it.

get to know geico and see how much you could save on renters insurance. welcome back to "the exchange." let's get to some of the movers this hour. bank of america, bank of my melon and pnc financial all reporting earnings earlier today and all three of those stocks climbing after the news. strong consumer banking in a healthy economy boosting bank of america. and ralph laueren on brand-specific challenges. both those stocks falling by more than 4% and then abbott labs jumping today after the company reported stronger earnings and higher sales led by-products for heart failure and diabetes the company also raising its full-year forecast and abbott labs up by 3.5% right now let's get over to contessa brewer. she's got an update on what's been happening in the news >> here's what's happening right

now. joe biden is going after his presidential democratic components on health care. he is defending obamacare and attacking those who support a single-payer medicare for all system >> the issue with regard to medicare for all and my plan is that if you go medicare for all, there is no private insurance, period no matter what system you're in, no matter who your doctors are or aren't, there is no private insurance. >> a royal caribbean cruise ship has stopped its tour because of protests the cruise line wrote a letter to its more than 1800 passengers explaining why the ship turned away from the island and other cruise ships now are monitoring the situation as well. german chancellor angela merkel celebrate her 65th birthday right before a regular cabinet meeting. she was presented with a large bouquet of flowers and a book as gifts.

she plans to step down before the next parliamentary federal elections in 2020. there's been some speculation in herself as she has been seen in public visibly trembling she says she's fine. >> contesta, i'm going to see you in just a few minutes. all right, folks, here's what's still to come today on "the exchange. >> coming up, prime day blows past everyone's expectations beyond meat lands another customer cruising past puerto rico. and they may be virtual products, but their cost is quite real it's all ahead in "rapid fire.

all right. welcome back, everybody. let's catch you up on a few stories that should be on your radar. right now it's time for "rapid fire." and joining us with their takes. >> what have you gotten yourself into >> we're already talking about word count and who the winners are. game on. >> he's already won. just throw some red meat out here, and we will compete for it >> first up, prime day is officially in the books and it was another record-setter for amazon, not just in terms of

what they brought in, but in terms of how many people they signed up for prime. go ahead who bought >> i did buy >> i bought. >> before prime day even started actually a third echo dot who needs another one? >> apparently you. >> have you received what you ordered already? >> yes, i did. you? >> it's been arriving while i've been sitting here. i'm getting emails because nothing says welcome to prime like, but you can't have your stuff in the promised one day or two-day deliver >> it's such a big chokehold, delivery's not showing up. >> i say everybody just settle down, first of all, right? >> i get apple stuff 33% off that never happens >> first world problems. >> however, that's amazon's response to. a spokesperson actually said we want to make everybody happy, but there's just such volume of orders that we don't have the capacity for delivery. so because everybody's so focused on getting the deal, they're not going to be that focused on the delivery.

>> you sure are quiet over there. >> i hate cyber monday i won't buy anything on cyber monday amazon prime day is the new cyber monday >> you don't have to look buy, i you look at the deals, you'd be surprised. >> but they put you in the market with the deal, would you buy? >> an ipad i don't even need one. we have five already at the house. >> see i refuse to be sucked into the vortex of prime day. >> holier than thou. tim hortons is expanding its menu to provide burgers for the first time ever. but there's a catch. these aren't real burgers. they're made from beyond meat. we need an expert to talk to us about that and we turn to our very own kate rogers >> now it's prime day. >> sully is going to be very angry. >> so tim hortons did announce this morning it's expanding its beyond meat partnership. they kicked this off with a breakfast patty option in canada this partnership in canada only.

now they've got the plant-based regular burger as well as a barbecue burger. it's important to note a lot of these coffee chains struggle with foot traffic in the afternoon, so obviously burgers are a way to add people hopefully to your customer base during the afternoons. and also restaurant brands international. the parent company is now in with two of these because they also have the impossible whopper partnership. >> how do the impossible sausages sell in the morning >> they said that they were selling well it's a breakfast patty sandwich and this went well that's why they decided to expand the partnership >> why is a coffee chain selling burgers? >> well, i just explained they are trying to get more people in to come eat in the afternoons. that's how you compete >> but is there a risk of diluting what people want? like, i'm not going to go to a dunkin' donuts or winchel's for a pizza. >> but it's this business model creep that goes on if you blow through the existing menu, you got to add to the menu

to get more people in the door but i think that -- i mean, a little off topic there, sully, on donuts. but as far as this fake meat, i think there is a growing market for it clearly >> it is seen as a magic wand. blue apron yesterday announced it's going to include it the stock shot up more than 40%. >> i just tried it last week >> and >> i guess if you putenough ketchup on it, it's okay [ laughter ] >> did you have it in like a real bun >> i just cut a piece of it off so that's not a fair >> but you had to cover it in some condiment >> no, i didn't but i wish i had. >> as our viewers know i made a bullionaise sauce. i think there is a growing market for this in when you see all these restaurants that are adding it, it just becomes another part of the menu >> i was just going to stay

mcdonald's still not in the game they are looking at it, they have to consider if the payoff will be there because it's not that it's disruptive to the supply chain, but you need to keep up with demand. these are prepared differently obviously you need to keep them away from the meat they are still not in the game. >> brian, you were just at your lake house in the northern middle of the country. >> the great north woods, you know did i see beyond meat in northern wisconsin listen, steak is breakfast there. >> you don't spill your beer and you don't fake the meat. [ laughter ] >> i like that >> so let me guess >> i may not win that was good. >> let me guess. you don't buy fake meat on prime day. is that how that works >> just prime cuts >> nice. >> he's a simple man no beyond meat >> thank you all right. then there's this. shares of royal caribbean following its decision to cancel a stop in puerto rico as more than 10,000 protesters gathered in san juan this afternoon to

protest celebrities like ricky martin >> we are watching puerto rico the situation is tense because the governor was caught in a text-messaging scandal on the heels of two of his top puerto rican government leaders being indicted on federal charges embezzling more than somewhere in the neighborhood of $15 million. the allegations are. and there is a widespread demand for him to resign. he says he won't do it so tonight at 5:00 a big protest is scheduled with ricky martin who was the subject of some of these texts with homophobic language associated with it. and lin manuel miranda is also going to show up at a protest today in new york city and we are expecting to see other puerto rican protests. on the tourism side, this is going to hurt because puerto rico is dependent upon those tourism dollars. now today a second cruise ship, the harmony of the seas is moving on to its next destination, and all the

excursions that people had booked for old san juan now have to be refunded and those are tour operators that are going to live out >> this is living la vida loco and the storms they are still not back to normal you've got people in the interior of the island still without power. their bond defaults. this is just another layer of stuff. that puerto rico does not need >> it's a self-inflicted wound this time. >> by that guy but not by the people >> but the people are furious and they want him gone >> i'm just saying it stinks because it's sort of kicking the people of puerto rico while they're already down >> this was a couple days ago where we saw the protest turn violent which is one reason though why at least royal caribbean is deciding not to go. we are going to have to watch the other cruise lines because now they're going to have to consider the same thing. let's talk about the last item on our agenda today these days kids are reportedly blowing their allowances on

virtual goods inside video games. they're called micro transactions that's where the virtual currency is used to purchase outfits for characters, maybe a special weapon the problem is a lot of kids don't even realize that these transactions are tied to actual money, and some are saying it's creating unhealthy financial habits in kids, not to mention some big bills for their parents who have their credit cards associated with this >> i blame the company first they are pulling a fast one. i then blame the parents for not paying attention i don't blame the kids as much because i agree that there are going to be times when they don't understand that this is real money that they're talking about. >> so the way they do it is they have apps that are free. and then you'll see a little thing. it's like in one-point fond that will say offers in-game purchases. when you see that, you will know that your child or maybe you will be prompted to purchase the skins, you think i'd know what i'm talking about, the weapons

or whatever to level up and be better >> do you allow that do you have your card connected to the app >> well, i'm the one that's playing the games so i allow it for myself >> are you serious [ laughter ] >> him i don't blame he knows going in what's going on but you put a pre-teen or somebody and they don't understand that. >> but sometimes it's an issue, and that's the situation with my 7-year-old he doesn't have a phone so he's borrowing our phones that our cards are already connected into >> i have a friend's son who spent $800 >> i'm in big trouble -- >> but they have another echo dot. >> you know what i am? i'm an enabler >> you are >> i think you're right, bill, in terms of who's to blame the companies are making it too easy, us for setting it up for the kids >> they've been wildly successful there's no doubt about that. but -- and getting people in the door by saying it's a free game. yes, the fine print makes it

clear that that's not the case totally. but it's an issue that needs to be addressed much like, let's face it, with the juul situation with kids vaping if you put it in front of them >> that is particularly the company marketing to kids. >> you've got fortnite doing the same thing and they are taking advantage of this relationship where parents are not paying attention and the kids are thinking that they're using fake money. >> you are going to lose long-term in a game like that. anyway, you guys, that was fun. that was my first time in "rapid fire." i love all my children equally [ laughter ] >> no one actually does. does anybody actually love all their kids the same? >> i do, yes [ laughter ] >> oh, brian >> i know one of them's watching right now. >> moms do >> so do dads. all right. weekly mortgage applications fell last week foreign purchases of homes

plunged 36% from the previous year all of these warning signs for the real estate market but americans are staying optimistic in the long-term and optimistic in the long-term and we will tell you why next.till u 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 answr 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. ♪

well, stocks may have just busted through the record for the longest bull market in modern history but according to a new surf yesterday by bank rate.com, americans have a new favorite place to put their money for long-term. 37% picked real estate greg mcbride is joining us and, greg, did this surprise you? >> no. i mean, this is the most unloved bull market ever, isn't it, becky? >> sure. >> stocks a very distant second in terms of what people's preferred investment for longer than ten years would be. real estate leading the way. and by the biggest margin that we've seen to date i think a lot of that deals with

the tangible nature of real estate and also let's not forget about the 20% drop we saw in the stock market last fall that rattled a lot of investors as well. >> what's been your experience with this kind of following everything since the financial crisis because it wasn't just stocks that plummeted that was kicked off because you actually saw real estate prices drop across the country for the first time ever or at least since the great depression >> and the preference for real estate bounced back just as home prices did but it didn't with stocks. it was one of those things where every year we would see the s&p was, you know, up versus the prior year but the percentage of people that were looking to stocks, unchanged. so very little movement of the needle one, you know, the preference for real estate has always been pretty solid but i think in recent years you've been it tracking home prices >> here's what shocked me. it's millennials that actually are the most attracted to real estate we talk all the time about how millennials don't want to buy a

home, they're different, they don't want to go into any of these situations but it was the millennials who really led the way in your surf yesterday. >> and that really throws on that notion that they don't want to buy homes a lot of the millennials that don't buy in their 20s i think buy in their 30s they had a higher preference for real estate than any other generation on the flip side, they had the lowest preference for the stock market of any generation that one's particularly troubling when we think in the context of retirement savings, accumulating that nest egg that you're going to need in the future millennials of course having the highest retirement savings burden that we've yet seen >> greg, is this a counterindicator i guess what i'm trying to figure out, is this based on what you've seen in the past from these results, does it tend to be a leading economic indicator or a lagging one >> this one in particular, not very indicative of, you know, market movements we have seen some other indicators a lot of the consumer

confidence, for example, a lot of that tied closely to headlines regarding the job market and the stock market. but in emergency room it's of preference and where people are putting their money, you know, we just really haven't seech much movement on the stock front. real estate has always been pretty solid >> one of the other interesting results you took away is that the higher respondents' earnings, the more likely they were to choose stocks as their top investment what do you think that tells you? >> the real break point here was $50,000 a year if you had income above that, you had a much higher preference, more than twice as likely as those with income below 50,000 to prefer the stock market those incomes below 50,000, those are households that had a much higher preference for cash and even precious metals i think a lot of that kind of deals with familiarity, lower income households that maybe don't have that familiarity of the stock market, you know, they're hunkering down in what they perceive to be safe-haven investments. >> maybe that's just reality, though if you're making less than

$50,000 a year, real estate may look like a bigger investment, because, guess what, you get to live in it >> yeah. then that was the thing. the preference was virtually the same across all income groups. it was the stock market and cash where you saw a real departure that had a break point at that $50,000 income mark. >> it makes me think the respondents are all smart. greg, thank you very much. it's good to see you >> thanks so much, becky i appreciate it. >> greg mcbride. getto editing app faceapp will swap your gender, age you, make you look younger, give you some face tats those are all the cool things. buitilt wl also raise concerns about your privacy we have those details still to we have those details still to comeas a mom and her kids. everything they had had been washed away. the only thing that brought any kind of solace was the ability to hand her a device

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♪ welcome back to "the exchange "we are keeping eyes on the shares of csx. missed on the bottom and top lines for the second quarter reel company lowering guidance in terms of revenue. right now expecting revenue to fall by 2 merz rather than increasing by 1 to 2%.

ceo james foote and csx on pace for its worst day since 2008, sending the transportation index lower than 2%, also having its worst day since may. transportation sector, however, had a nice run up this year, by 14%. ai photo editor face app back in the number one spot in the app store and while photos may be funny, the privacy policies are no laughing matter. we have details and whether or not it's worth the risk. that's right after this break.

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market flash for you we want to show you bitcoin, close to session highs, up 4% today, coming despite congress continuing its grilling over facebook because of libra. the asset has had a rough ride over the last week, down about 18 percent, but, of course, before that it was up significantly too. just the story with bitcoin, up and down and up and down and buckle your seat belts. faceapp, the ai photo editor, now the number one app in the itunes app store after going viral two years ago. now the faceapp frenzy is raising privacy concerns over user photos and data

for more, we're joined by editor-in-chief matthew pansorino and todd hazelton. >> todd, this looks like cool stuff. >> a lot of people are worried that -- people were saying your photos are being uploaded specifically to russia, although the company has denied that. it is a russian developer who made the app that allows you to do lots of fun things. you can make yourself look yourself, i don't know if we d have some of the pictures. but i was sending them around to friends yesterday and they actually thought i had grown a beard. and it looked really good. and i think it took off in popularity for a number of reasons. you had all-stars, really famous people posting pictures of themselves, right? and then you had people trying it themselves and noticing how realistic it looked. and i think that's one of the things, where it was kind of like -- >> ah! >> it wouldn't matter that much -- >> your grandfather over there check that out. >> there you go, that's me that's one of the things that

made it quickly popular, it's so good so a lot of people were sharing with friends we were talking about it here at work, everyone talking about it on twitter and boom. >> you jumped two generations with that. not one. >> and there i am with a beard which a lot of people said looks real. >> it does look real i'll give props for that. >> i can't grow a beard, though. >> matthew, is that a real beard, first of all? that you've got on right now >> this -- this one is real. not ai-based, yeah >> so what do you think? i mean, we're talking privacy on so many issues it's front and center. congress is talking about it, the media is bringing it up constantly is it an issue that consumers are now starting to get worried about too? >> yeah, you know, we've been writing about and talking about these issues as i'm sure todd has and other reporters for years. and it's just now in the forefront. people are starting to actually pay attention to sort of what compromises they're making for what may amount to something fun and genuinely cool but what tradeoffs are we making here, what's the privacy tradeoff for getting a real cool

aged photo, where does that photo go, what are the motives of the developers, that sort of thing? >> i guess in the end, todd, we should look at this and realize, there is no such thing as a free lunch, dummy if you're getting apps for free, what did you think there is nothing free. >> yeah, most of these apps, when you get something for free, you're more often than not trading privacy for it a lot of cases, you look at really popular apps, google maps google tracks you by default everywhere you go. you have to turn it off if you don't want that. it doesn't work very well -- doesn't know where work is any more so a lot of things, you're trading privacy, okay? and in this case, it's your photo, the picture you take, me right there with the beard, is going up to a developer. i don't know the developer we start to have some concern about that but if you look at well-established companies, say snapchat, for example, they also have the right to keep some of your photos that you publish that are public and use them as they want. which is the same kind of term language they have in the privacy policy for faceapp so it's really boiler plate

stuff. when you look through it and it's like we own it, maybe your face ends up on a billboard someday, other companies are doing the same thing. >> i will tell you, matthew, faceapp came out with this full statement. and one of things i was concerned about was that if you allowed them to take one photo, they could get all of your photos they say they don't do that. only upload the photo selected for editing and do point out the user data is not transferred to russia, even when you upload it into the cloud but let's talk more broadly. about a lot of the other things -- $10 off, if you let it track everywhere on the website. when do you start to get concerned and say, okay, this is too much and consumers should beware >> i think the solution to this really starts with transparency. so, for instance, a lot of the questions early on about faceapp were, hey, does it give access to all my photos at once, and because of the way apple set up the ios operating system on your iphone, no they don't they only get access to the one photo you choose, which is good. that's the right way to do it.

>> are you telling me that wasn't facebook -- it wasn't faceapp's choice on that that was apple who was saving me in that situation? >> yeah. >> that's right. correct. that's the way apple set up the operating system, yeah >> wow okay >> and i think there were a lot of reports today that we're using -- trying to blow up the headlines, make things scary, saying the camera is going to turn on and track you whenever it wants that's not true. and that's going back to the way apple controls apps, and whether or not they're even approved to the app store. so users are protected in a lot of ways, just a matter of what you decide to give up once you launch the app you agree to upload a photo, that's on you. >> i'm really grateful we played all of your embarrassing pictures, instead of mine, because they took some of me too. and i would rather it be you than me. thank you for throwing your body in front of the grenade for me today. >> thank you very much. >> gentlemen, i want to say thank you to both of you matthew, todd, great to see you. and, again -- >> thank you. >> i want to thank all of you for joining us today that does it for wee"the exchan.

"power lunch" with tyler matheson and melissa lee begins now. >> i'm melissa lee breaking news on the economy moments away in the meantime, where we stand right now. the s&p 500 down by a quarter of a percent, the biggest loser of the major three indices. to steve liesman for the beige book report. >> expanded at a modest pace some districts have seen healthy expansion. others said activity declined modestly or was flat overall, however, the outlook was positive for modest growth in the months ahead. two very big issues in the beige book here. tariffs and labor shortages. i'll go through each separately. on the tariff issue, widespread concerns about trade-related uncertainty. you heard the federal reserve chairman talk about that quite a bit. there were some increases in input costs from tariffs and rising labor costs, as well. but competition was set to