>> final trade time, joe >> jp morgan full force, icbc. >> steph >> l 3 harris. >> qsr, like the restaurant brand. >> our thanks again to jim cramer we'll see you tonight at 6:00 on "mad money." the exchange begins right now. welcome, everybody, here's what's ahead today the busiest week of earnings, the trade meeting in china, the jobs report and what that could mean, this could be the most market moving fed decision in years. all of that in the next five days, and we're going to get you ready for the market's big week in minutes from now. fortnite proving video games aren't just fun anymore. real competition for your battle in your eyeballs and yes, your money. i want my kids to start playing. the winners and losers and getting to the root of boeing's

prices did regulators relax oversight of the company too much? we're starting to ask that. we'll begin today's market and talk about that first with the one and only dom chu. >> eamon javers tweeted his kids are going for scholarships right now. the s&p 500 and nasdaq, after coming off record highs friday are pulling back just a bit. fractionally, the nasdaq is off by .5 of 1% as well. if you're looking for a clear standoff, year to date, it's technology stocks, the sector has peaked in the green territory. but we're hovering around record highs for this s&p 500 sector and it's up about 6%, mtd, and then up 33% year to date so again a massive move for

technology keep an eye on that sector. if you're looking for the stock of the day, the big report after the bell, not because of anything else but the sheer real, just inquisitiveness people have, beyond me, near session lows by 6% after a massive surge last week. right now the options markets are implying what could be a 15% move in this stock up or down on the heels of that report so beyond me certainly gotten a lot of eyeballs today we'll see how that stock trades as we approach the closing bell. >> dom, thank you. welcome to "the exchange." key elements may be missing interest this climb to all-time highs. get over to bob pasani at the new york stock exchange for more on that. nice to see you. >> good soto see you, andrew the big theme powering markets in july, haven't changed much.

the s&p is up a healthy 2.7%, fairly broad gains with technology, consumer stipples and banks. health care and energy are lagging a little bit market internals are still very strong and this is the key to the rally here we had new highs from the s&p on friday the breadth has been terrific. the advanced climb line is high as well. very little selling pressure in the market last several weeks. i'd like to see more new highs, one thing we're missing and an important element to keep the market going big movers are dovish central banks, second half earnings, collapsing, and no blowup on china trade talks. you notice how the sentiment has changed. you don't need an outright china deal to make people happy. the market seems happy as long as we have news the talks are continuing andrew, back to you. >> bob, thank you for that

with stocks at record highs the expansion faces a moment of truth. consequential of the summer, busiest week of earnings, feds making an interest rate decision, happening wednesday, jobs report friday, and mnuchin heading to china for more talks. janet yellen is advocating for a rate cut. >> also, the u.s. is doing well. i would be focused on wanting to keep it doing well to keep the expansion on track and i think in light of the risks, i would be inclined to cut a bit. i wouldn't see this as the beginning unless things change of a major easing cycle. >> and joining us right now is fred kemp, ceo of the atlantic council, jason brady, ceo of thorn burg investment management i'm going to you steve liesman, is she giving cover for powell

does she believe we need a rate cut? >> if you're arguing institutional allegiance in the words of the former fed chair, i would not disagree with you. >> what's happening? >> i think yellen in general probablyelves there is not a lot of downside to a rate cut. look, i'm starting to think a lot about the idea that maybe the federal reserve, and maybe the fed chairman believe there's institutional self-preservation in this rate cut and when i think about this, and i've been thinking a lot about this. >> when you say institution, explain what you mean. >> let me explain. i think that in the current political context with the current resident of the white house. >> yes. >> if the fed gets this wrong and it's too tight and they should have cut when they didn't cut i think they think that if they make a mistake here the fed can be gone. >> the fed can be gone or powell can be gone?

>> the fed can be gone and powell can be gone. >> what are we talking about, the man or the institution >> if you think about what happens when a person gets up at a rally and starts railing against the federal reserve and starts to create what could be potentially congressional pressure on the fed, then you could imagine that they might go to a -- there could be support for a different system. >> that's a bold call. >> i think they think that there's a lot of political downside risk to getting this wrong. >> i want to talk economics first and then get back to this idea. >> by the way, disclaimer, fred kemp hired me 25 years ago. >> you've got to be nice about steve here. >> i want to talk to you, fred, about china, and this meeting with mnuchin later this week, what's going to happen, what's not going to happen and specifically what you think is really on the table. i imagine before we even get to the real trade issues we'll have to get through huawei and we've been talking about that now for months. >> give me a few seconds to

answer, steve. i have a little bit more faith in the institutional structure of the fed i don't think it's going anywhere i think powell has seen four things, he's seeing new domestic risk in the economy, powell looks more at global risk, and there's been a global slowdown way ahead of where is u.s. is, u.s. has been looking good he sees trade tensions and that's getting to chain and the imf told us we could have a half percent off growth in 2020 if this trade stays here and then you're seeing wage growth should be greater than it is with job tightness. this is what powell is looking at now to the issue in china, i'v been arguing for a long time here on cnbc that the market's been looking at this in the wrong way and finally i think people are coming around to that we are in the first stages of the geopolitical, geoeconomic tests of our lifetimes and how the trade talks go i think you'll get some modest progress this week i don't think sweeping deals are in the cards right now

but what we're really watching is a realignment where it's a battle for the commanding heights of technology, the chinese want to win and it's a systemic battle between democratic capitalism and authoritarian capitalism that's going to go on for generations so tighten your belts. you're going to see supply chains change. you're going to see disinvestment of the chinese from the united states and we're just at the beginning of a new era. >> jason, if fred is right, these markets can't be where they're sitting right now because there's too much tumult, if you will, in between. >> what you're forecasting is more volatility. that's exactly right then the question is how do you position your portfolio in that context? the fed has taken the safe option away by talking down yields and globally what central bank has done is taken the safe option away. as we at thorn burg look into the future, it's trying to build

robust portfolios when traditional tools have gone by the wayside. >> fred, with due respect, you didn't disagree with me. >> that -- >> and your opinion and my opinion are not mutually exclusive. the fed can be cutting for all of those reasons trade and global slowdown. and it can be really worried about its self-preservation. >> but i think the issue i'm grappling with, with your assessment is do we really think that the u.s. -- that he should not, and this is powell, should not be cutting right now because somehow the economy is so strong or do you look at china and europe and look around and say it's ridiculous? >> yurm whdo you remember what like to climb the hill to 2.5? >> we've been climbing it for a decade. >> what it was to get back and claw back what we got in terms of normalization of policy over a ten-year period. there were stops and starts and lots of sweat and lots of blood.

and now we're going to give it up okay fine i'm just saying -- >> are we going to give it up though >> we're giving up a quarter here we're going to stop producing the balance sheet, okay. and we're going to do so in a way we're going to have real -- half a point. >> one and done? >> it may well be. it may well be in which case it's probably more defensible than that but my point is that if the politics play -- and fred, also, did not disagree with me that the president has almost no respect, as far as i can tell, for the institution of the federal reserve. >> so, andrew, let me step in on this first of all, yes, i've known steve a long time. he was in moscow, hired him in moscow, one of the best correspondents there that wall street journal's had. >> take credit for this view. >> but here -- he is right that we agree i don't think the institution is in trouble that's where we disagree. >> really? >> what i'd watch for this week is what is the message behind the cut?

so 80% chance of a quoted point cut, 20% people probably think it would be a half point cut the reason i don't think it's one and done is i think you've got dangers on the downside of global economy right now powell is looking at the global economy a lot. he's looking at the factors there a lot and they aren't positive factors at the moment but i actually think that after a decade of no cuts, he didn't want to cut the irony here is he's cutting despite the fact he didn't want to cut because of the trade tensions that the president has brought about himself. and so that's the irony of this cut. >> it's a longer conversation. i need to thank all of you, steve, let's continue it on "squawk box" tomorrow morning. fred kempe, jason brady, steve liesman, thank you all. what to expect ahead on the exchange coming up, it's not all fun and games anymore, video games are a billion dollar industry and becoming a real competitor

in the battle for eyeballs the winners and losers next. plus, a dive into the roots of boeing's 737 max crisis. and beyond meats, what investors are watching and why it may be a make or break day for short sellers. that's it, that's exactly why i hate working with you.

mr. arson here only knows how to blow sh... up. no offense, she hulk here only knows how to smash. [ screaming ] look at the two of you. the fate of the world is in your hands and you can't even get along. what do you think i'm stupid? of course i think you're stupid. woo! i got him. no i got him. no i got him.

exchange, the fortnite world cup is in the books and the tournament champion walked away with $3 million in prize money, thousands of fans packed into the part thur stadium and millions more watched around the world. i'm joined by michael olson, and russ frustick, you were in the stands over the weekend. >> i was, i was. it was unlike any other sporting event in the world i think it's more about spectacle. there's all sorts of events happening in between the matches. sitting in the stands it might not be non-stop action in terms of the game itself but they make it all day. >> is the business in the stands or online? >> definitely online. >> everywhere else. >> they've hit 2 million concurrent viewers online on

streaming platforms, youtube and twitch everybody's going to make their money there, find advertising and engage users you'll make money in the stands selling tickets but by and large it's a streaming platform. >> in terms of money, which companies do you like in this game >> between the three major publishers, activision is what we prefer the most not as much going on this year in 2019 specifically as you look out to 2020 they've got a new world of war craft expansion coming, and a new version of call of duty. 2020 looks good for vaactivision take two looks good, upsurge in grand theft auto, engaging that for take two ea is doing well with apex but in general we prefer the other two. >> come back to me on

activision they went big into e sports and e sport teams, this is a big push is that the rational for you >> we're more focused on the core business. you've got the core kind of console and pc side of the business great titles coming next year. it's more a function of next year activision is probably the name that grows the most in the group. >> if we talk about team sports. >> absolutely. >> team sports, versus ninja, versus a team, you saw what activision is trying to do which one works? >> if you're an all-star, like a ninja equivalent, like the michael jordan of streaming, he's doing well, not worried about it the teams, you know the orbs that are running the teams will make the money the actual individual players by and large that is a rough game for them to be playing they are kicking up a percentage, and trying to make that all work. and monetizing that whole thing

as a team is very, very difficult. so the problem is, there aren't that many michael jordans. >> michael outside of those three stocks we talked about is there another way to play the gaming world right now >> you know, not really. i think over time there's going to be multiple aggregators in streams of video games microsoft has talked about with google and we'll see amazon get into the space as well there's multiple different ways to play it as we move from physical to full game downloads, partway through as of now to eventually streaming. >> manufacturers adderall, people talk about drugs in sports, drugs in e sports, adderall is a big big deal right now. >> absolutely. and these are kids, little kids. so you want to make sure they're very careful, no one's getting any extra edge or advantage. it could get really bad. >> we want to thank you both of

you guys michael, russell, thank you. a lot more on the exchange, the faa didn't understand the automated system at the root of that 737 max crash and that's just one of the revelations in a new "new york times" article the author of that piece is going to join us live. taking a swing at boeing on its earnings call. and new presidential debates kicking off tomorrow with health care front and center. taking it on thehi cn. which candidate does big pharma actually want?

welcome back to the exchange, i'm dominic chu. lyft recession, on the heels of bloomberg headlines saying jon mcneill, the chief operating officer has departed the company. we have a call to see if they will respond that's the reason why the shares are lower. andrew, this is a pretty high profile departure because jon mcneill came to lyft back in march of 2018 to take over those operations on the operating side so we'll keep an eye on those shares that's the reason they're lower. >> dom, thank you for that as we try to read the tea leaves

there. and looking at shares at beyond meat lower right now. head to the company's earnings after the bell, the stock up 800% since the ipo what do investors need to hear today? aditi roy joins me live from san francisco with perhaps the answer. >> i hope so that stock, of course, up more than 30% last week alone leading up to earnings the street booking for revenues of just under $53 million, which would mean top line growth of more than 30% from last quarter. now, top line growth will no doubt be boosted by new partnerships during the quarter, like dell taco and tim hortons looking for a loss of 8 cents. investors are looking for big partners mcdonald's ceo told cnbc in may they're keeping a close eye on the space. one of the members is don thompson, ex-ceo of the food

giant. see how short interest will impact keep in mind the number could be inflated since the company is still in its lockup period. >> if there's one number you're looking at it's what >> i would say growth margins is what i've been hearing from investors. that will give us a real sense of how they're making all these new investments. >> aditi, thank you for that i agree on the margins, people care about margins but they've also got to grow. meanwhile, speaking of food, consumer staple is hitting all-time high today. hershey up 41% this year costco up 37%. and con agra up 34%. now we want to get over to sue herera for a news update. >> great to see you, andrew, thank you so much. here's what's happening at this hour everyone. before signing the 9/11 victims compensation funding bill at a rose garden ceremony president trump spoke about the deadly mass shooting at the garlic

festival in gilroy, california. >> we express our deepest sadness and sorrow for the families who lost a precious loved one in the horrific shooting last night in gilroy, california while families were spending time together at a local festival a wicked murderer opened fire and killed three innocent citizens, including a young child. >> more than a dozen workers were rescued this morning after a partial collapse of a building under construction in houston. it appears the top level of the structure, a hotel going up squljust north of the downtown area, collapsed. no word on what caused the collapse. and more cases of the measles have been reported the cdc says 1,164 have been confirmed in 30 states that's an increase of 16 cases from last week the majority of those cases from people who had not been vaccinated you are up to date that's the news update this hour andrew, back to you. >> it is a privilege to see you, sue.

>> i feel the same way about you. >> i just want to say that i don't get an opportunity to be here midday all the time i love seeing you. >> great to see you too. >> thank you. >> you have to come around more often. >> i do. meanwhile, a lot more coming up on "the exchange." show you what's coming up after this ahead, it's no youtube, but facebook watch is starting to attract ad dollars. as the popularity of the suv grows the mini van falls behind. millennials are asking for money. and i'll take burritos for a thousand it's all coming up in rapid fire $4.95. no matter what you trade, at fidelity it's just $4.95 per online u.s. equity trade.

welcome back to the exchange catch up on a few stories that should be on your radar. it's time for rapid fire here are their -- dom chu, robert frank, contessa brewer. first up, shares of chipotle are high today after i ate a lot of -- after goldman sachs issued a buy, 28%, goldman says any negative investor sentiment is shortsighted and predicts that digital sales will drive the

next leg of that rally stock already up more than 80% this year. >> we use group orders a bit around here. i'm not the biggest chipotle person, many viewers know i like taco bell. but i use the digital platform for the group orders we do around this office here. and it's probably -- >> doing delivery? >> i'm going pickup. >> online in a group, everybody gets their order, name is on it, pick it up from a dedicated rack and fly out the door, i'm done it really is an interesting platform to go with this and chipotle is capitalizing on all of this stuff here if they're getting that many more digital sales which is what the goldman analysts say are driving this, it's a record high. >> people want to know what dom chu does, he picks up lunch for everybody. >> stock to watch and lunch. >> looking at the digital sales, 99% growth in digital sales, made up 18% of overall sales,

they're aiming for more of that. goldman says not only them but starbucks and mcdonald's, also focusing on those digital ordering platforms and how do you go in and make it more efficient, and convenient for customers, and those are the retail restaurants that are winning. >> carne asada quesadilla. >> the most interesting was taco bell, mark king, who is the former head of adidas north america and the former chief executive at taylormade golf is the new ceo at ta dco bell. he's a big marketing guy there's a lot of dynamic in mexican fast food going on right now. >> golf and tacos. >> they go hand in hand. >> you understood the intersection there next, new piece in the wall street journal highlighting how facebook watch drawing more and more advertising dollars

thanks to more quality programming, a reboot of the real world, which i used to watch quite liberally. i was in college, but real world seattle was the best one. >> puck. >> puck. >> how do you know that? >> because i was in college at the same time andrew was in college. >> finish this out we should mention and here's the important part, it lags far behind youtube, viewership facebook watch reporting 720 million monthly users to youtube's 2 billion. there's a lot to go here. >> look, it's an advertising plan i don't think everyone's going to go to facebook watch to see world's best dog, one of their top hits, i guess. but if you can bundle an advertising package, give you facebook and watch and instagram. so i think as a packaged deal, even if you slice off a tiny sliver of the ad budget for overall facebook that becomes a

huge business. >> the next netflix or the next hulu >> it doesn't have to be it's going to generate money, throw this in too to give an extra million off your $100 million ad budget. it's making a lot of money. >> if you look at the -- >> starting dollars and content is second. >> if you look at the access facebook has, if you want hulu you have to subscribe. if you want netflix you have to subscribe. if you want to watch something on facebook, you're already there. >> and you get what you pay for. >> if you're a retail platform, it's the rolodex, the customer roll you have. facebook has the most robust list of clients out there embedded catch a little piece. >> if they rerun the real world seattle, i'll watch it. >> i want to know where puck is. meantime, talk airlines. it's not an airline segment we're about to talk about, it's even cooler. united airlines taking an equity

stake in clear, the company that uses fingerprints and eye scans to verify identity and move travelers through checkpoints more quickly moving it to newark, houston's george bush airport and chicago o'hare it doesn't replace tsa screenings but makes the process faster i'm tsa and i look enviously at these other folks. >> clear is now a function for the pleebians everywhere masses have rushed to this. >> another velvet rope it's too full now. >> what took united so long though they're catching the tail end of a trend when la guardia has had it for ages and las vegas. >> they're taking an equity stake. >> they waited. >> should have done it earlier i have a privacy question for everybody. where this is going is not just

airlines, it's now at msg. >> disney. >> yankee stadium. they want to do this with health care they want you to go in to cvs, those kind of stores, no money down, no nothing, get the drugs, you don't pay, it all just happens. >> log yourself in every time, give us your eye print, your fingerprint, your breath. >> you cool with that? >> unless somebody's going to take my finger, yeah. >> your children -- stealing your face to get into your phone. >> you can go online on the dark web and they sell fingerprints, for real. >> is that right >> now i'm worried i wasn't before, now i am. a couple more to talk about, suvs, this is your topic, suv sales continue to rise the mini van continuing to stall. i'm surprised by this. suburban living, sales fall 16% through june. >> am i being pigeon holed because i'm a mom?

>> no. suv sales jumped 20% five models of mini vans even available. >> grand caravan, the sienna at toyota when we were buying a car next, we had a child my wife refused to drive a mini van. she says she only wants an suv but didn't want to drive a suburban so we went to a smaller suv, we drive a toyota forerunner there's a stigma around driving mini vans. >> mini vans are cool. >> they're not cool. >> what about the movie with danny deveto driving the black mini van. >> "get shorty". >> it was cool. >> it was cool. >> here's theupside to a mini van, as a grown up you can get in the way back and buckle your children into the car seats so much easier than any suv what stinks, it's a mini van.

>> there's also no storage space. >> yes, in a mini van, tons of cargo. >> it's all seats. >> tons of cargo room. trust me, i've driven one. >> do you own one now? >> here's why. there's no four wheel drive. i need to get through snow. >> do we know who's manufacturing the most of these mini vans? >> chrysler. so does toyota. >> and honda. >> honda does for the past four -- i still think it's in play at this stage. >> seeing if they're out there. >> why can't suvs have sliding doors? >> or the tesla goal doors. >> or that. >> take a video of that and turn it into a -- finally, a new survey showing half of all millennials getting some sort of financial help from their parents every month. here's why the biggest area of need, mostly small ticket items, but the number one request, guys want to guest, help paying cell phone

bills, that's followed by groceries, rent, health insurance. i was thinking it was going to be the netflix account. >> we're paying for our parents' netflix accounts. >> giving the passwords away. >> same thing on the cell phone bill, five lines for $100 on sprint, t-mobile, whatever it is and all the sudden you're paying a bill that's subsidizing your kids anyway. >> that's true but there is this whole secret economy of parents supporting their kids there's a study last year that showed $500 billion going from baby boomer parents to their kids. >> baby boomer parents to their kids >> yeah, to their kids. >> wouldn't that be -- that's us. >> that's us in a way? it's millennials, the kids of baby boomers. >> i must have started early. >> the point is we talk about the struggling millennials in the job market they're getting this hidden support, whether it's cell phone bills or rent. >> gifting money.

>> lifetime exemption. >> lifetime or annual, what's the annual amount, 15 grand? >> yeah, about 15 grand. >> besides that you could be a millennial and out of college, if you're still on your parent's cell phone plan, big deal, if you're 37 and you're still on your parent's cell phone plan, get a life. >> and they're getting the mini van, inherited, first car. >> a huge thank you to the crew, dom chu, contessa brewer, nice to see you guys. more coming up new details on a broken regulatory system compromised the safety of the boeing max 737. the author behind it for your heart...

your joints... or your digestion... so why wouldn't you take something for the most important part of you... 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. welcome back the 737 max grounding drags on, airlines are letting their frustrations show.

micha michael oleary. >> expecting 50 aircraft, now 30 at best. it may well move to 20 it could move to ten, and it could well move to zero if boeing don't get their [ bleep ] together pretty quickly with the regulators. >> we're on a seven second delay here as boeing works frantically to get the 737 max back in the air, worth looking how the problems began. david gellis, a feature writer at the "new york times," phil lebeau is also here. david you shared a by line on this very big article, the roots of boeing 737 max crisis, a regulator relaxes its oversight. and i think what i want to understand from this is do we think, as of today, after this article, or perhaps even before the article, that the faa has changed anything about how it oversees boeing or anything else ha has to do with airlines right now? >> things take a long time to

change in washington, andrew, as you well know. there's no evidence that the fundamental regulatory process that allowed the faa to approve the max has or will change at all. there is, however, a congressional hearing on wednesday that i'm going to be paying close attention to. some of the people named in this article were already scheduled to testify and that's going to make for some interesting viewing. >> phil, you've been covering boeing for so very long. one of the things that david exposed, at least to me, for the first time was how much of the oversight, the regulatory oversight wasn't really managed by regulators at all but actually was managed by the aircraft manufacturer itself and so even if the faa doesn't do anything, and i imagine, or at least i hope that they will, has something happened inside boeing >> you mean in terms of how they do this in the future? >> yes will they voluntarily say, for example, we know we had lobbied, for example, to have our -- to oversee a lot of this ourselves but given what happened we don't

want to do that anymore. >> they won't change that part of the process. >> we're going to go to the government and say please do this for us? >> no. because it would be too -- well, first of all, if you're boeing you're not going to voluntarily come up and say, you know what, hire everybody to look at these planes in the future we think we should not be a part of this process which essentially comes down to them and the faa saying, okay, this individual has been designated to certify certain aspects of a particular airplane. boeing says, look, this process has worked for decades, and while it may not have worked with the 737 max in certain areas, they still believe that this is the proper process i think the only thing that changes, andrew, at least near term, and david can probably talk about this, everybody's going to watch their p's and q's a little closer for all of the -- not only for the max fix, but also the next couple of planes going through the process. >> david, the thing i'm concerned about, is it it looks like a lot of regulatory

oversight was pushed down to boeing as opposed to the regulators doing it. it sounds, maybe reading between the lines, the argument was the idea that somehow the regulators wouldn't understand it, complicated software they were saying look the experts are boeing, we're going to let boeing do it. >> they had relatively junior engineers responsible for overseeing the flight control software that went into the max. these guys had replaced two previously more senior engineers who had 50 years experience. why didn't they go and why didn't those guys stay because the regulatory process had changed such that they felt like they were doing mostly paperwork, that the real action was happening inside boeing and they didn't have good visibility into the company anymore and instead we see there is this pressure where many, most of the qualified flight controls engineers, if you want to get a great salary, do you think boeing or the faa is going to pay it

>> david, inside the story, you had to go deep but there was this fight you talked about, an anecdote about a fight between the faa and boeing, not over the software system, but actually over a cable and how close it was to an engine if the engine were to fail is there any chance that that gets revisited i talked to phil about this on "squawk box" earlier this morning. >> it's one of those troubling parts of this whole article to us it has nothing to do with m cas, the flight control system investigators initially believed played a role in both of the accidents. this has to do with the so-called rutter cables. and faa engineers, during the development process, believed that these new larger engines on the max, if they experienced is a shof called uncontained engine failure, if the engine came apart in an exproelosion, the shrapnel might enter the fuselage and clip one of the cables. >> any confidence i want to get

on one of these planes anytime soon. >> here's what happens the faa engineers raised the issue to their managers, the managers listened to boeing. boeing didn't want to make a change the faa managers sided with boeing and cables went in as initially designed. >> last to phil, hearings later this week, what are the chances the planes are in the air early 2020 at this point that seems to be the betting line. >> oh, boy, they would have to do a lot in a short period of time and that's why i think dennis muilenburg softened the market last week. saying if this is delayed much further and we can't get them in service we may have to halt production increasingly when you talk to people in the industry they're not expecting it before the end of the year. >> david gelles, fabulous article. for all the viewers out there, if you've had a chance or haven't had a chance, go do it phil lebeau, great to see you, my friend. a lot more coming up big pharma under fire.

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>> i spend too much time in the mornings here are some of the movers. shares of dominos pizza falling after a $208 price target. citing third party aggregators shares of paypal are down 3%, on a downgrade to sell from neutral. guggenheim pointed to headwinds from the ebay separation and brexit take a look at sonofi, the french drug maker with a strong growth at its vaccines and rare diseases products. the exchange is back in two minutes. carvana is six years old this year

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welcome back to the exchange as we get to the homestretch, the next democratic presidential debate kicking off tomorrow, and if the last one was any indication, big pharma could take the center stage once again. >> who is this economy really working for? it's doing great for thinner and thinner slice at the top it's doing great for giant drug companies. >> we see that because consumer prices are being raised by pharmaceutical companies that

often have monopolistic holds on drugs. >> my proposal is to do something about pharma, to take them on, to allow negotiation under medicare, to bring in less expensive drugs from other countries, and farmee thinks they own washington. they don't own me. >> it's the greed of the insurance companies and the drug companies. >> it's how the insurance companies and the drug companies that their day is gone we will substantially lower the cost of health care in this country because we'll stop the greed of the insurance companies. >> we stand in line and pay expensive prescription drugs >> the government should be able to negotiate the price for whatever the drug costs are. >> want to bring in meg tirrell. the question is should we expect the same later this week >> definitely. what's funny about those clips is a lot of those answers weren't even in response to questions about drug prices. it's just such a popular target for candidates kamala harris unveiled her medicare for all plan that puts her a little bit not to the left

of bernie sanders but to the left of biden. >> did she raise her hand? >> she the to clarify. she doesn't say she wants to abolish the private health care industry, but she's put that out. bernie sanders this week seeming to compare pharmaceutical executives to murderers in talking about drug price increases and specifically insulin. this could impact biotech stocks let's look at recent history if you go back to the 2016 election, remember the trump tape that came out in october. that may have an a direct impact on biotech stocks. this is october 2016, it was around the 7th or 8th that the report came out. biotech stocks declined because folks thought not just trump would be impacted but botengs althe senate and house as well these things can really impact what happens with biotech. >> we're going to continue this conversation and bring in david morris, a specialty and

pharmaceutical analyst at wells fargo. michael here is with us as well, manager director at jeffries who do you think as this election continues on, is there one or two candidates you say to yourself, if they get close to 1600 pennsylvania avenue, you have to run for the hills? >> actually, both candidates i think that - >> both candidates from both sides of the aisle >> both sides of the aisle because we're on this longer term arc toward price controls and people are trying to argue who can give away more, who can have direct negotiation, import from overseas, do away with patents, nih taxes there's all sorts of things being thrown out there, but both sides, both from the trump administration as well as from the candidates themselves, both are bad news for pharma. >> really? so that surprises me michael, you want to take that on >> hey, thanks i think that on the democrat side, there's definitely going to be a lot of fire and fireworks this week.

obviously, bernie sanders and to a lesser degree, kamala harris, are more of a problem for biotech investors. joe biden, i would note, obviously, a lot more moderate just wants to go back to obamacare. and then i think that we view at least in the biotech company, trump, a lot more rhetoric wants to go after the companies, but also a businessman and a deal maker, probably with a republican senate, not going to be as bad as we think. >> how do you feel about a biden or a harris? >> yeah, i think biden is more in the moderate side i think people are realizing that probably goes back to an obama type of administration and i would actually think stocks will rally on that. in fact, one of the arguments when the debate started, if biden heats up, that's good for biotech stocks >> look what biden did in the obama administration during obamacare, that whole thing was put 33, what happened to drug prices didn't go down i would say that industry like a trump or biden decision just

because they think that they're a little more malleable to the industry, but i would say that's a mistake. i think change is coming >> you think change is coming, for real this time >> yeah. >> it is >> as a reporter, i don't opine, but my experience covering this for ten years is change doesn't actually happen. so there's a lot of talk, and guys, i would be curious to know, this executive order that is rumored trump is going to put out on drug prices, do you think it's coming and how bad could it be >> yeah, so you know, everyone is walking on eggshells waiting for this trump executive order probably going to be a lot more bark than bite this is what we have seen, i think, constantly, meg we see a lot of different things, whether it was the drug blueprint, where it was ipi, the stocks go down, they bounce around, then we find out nothing really happens go away for recess, come back in sment, have a lot more talk about it and wonder if anything is going to get done >> michael, ten seconds. final word to you. >> look, we like gilead into the

print tomorrow we like vertax into the stock next week. both are good stocks to move higher in a tough environment. >> appreciate it both. thank you. meg, thank you that does it for the exchange "power lunch" begins right now >> andrew, great to see you in the afternoon. hope you saw your shadow that means six more weeks of summer i'm tyler mathisen here's what's new at 2:00 on "power lunch." a boeing beat down a top airline ceo with harsh words for the maker of the 737 max and why there could be more fallout ahead. >> plus, beyond meat on deck for earnings after the bell, but could the hot stock be about to cool off we'll find out and it is the rise of the robots on wall street morgan stanley says don't fight the machines we'll tell you how to meet the market "power lunch" starts right now >> and welcome to "power lunch." i'm melissa lee. here's where we stand with