>> and steve weiss >> skyworks. i like it. >> big earnings next week as we said right now the dow jones industrial average is down more than 200 points. hope everybody has a great weekend. thanks for watching. "the excnge" begins right now. thank you, scott hi, everybody. here's what's ahead. trade warriors are slamming stocks for the second straight day now. china says it's ready to fight back against trump's new tariffs. what could they do and what would it mean for the markets? we'll explore that plus, hitting rewind on the recovery one analyst says the new tariffs could completely offset the fiscal policy boost this year. he'll join us to discuss what that means for the economy and how low will they go as treasury yields plunge, will mortgage rates follow? we'll look at who might benefit from that. but we begin with today's markets and courtney reagan down at the nysc. >>hi, kelly. happy friday well, markets seem a little inclined to hang in there.

we are even seeing some resiliency today stocks well off session lows at one point the dow was down 334 points, now down about 255 the latest round of tariffs of course does have traders asking though if that rally that we've seen is over the bulls though, they've got a lot of things to say why it's not. the u.s. economy still holding up there's still plenty of cash on the sidelines. global central banks are inclined to keep the stimulus coming any way they can. there wasn't an earnings recession. but the bears are honing in on the fact that the trade truths look to be a little broken stocks are looking pretty expensive, and there's a chance that the fed can only do so much to help cushion the blow from the global economy weakening still, industrials like caterpillar, deere, united rentals are still under pressures. and transports falling back into correction territory now, retail really slammed yesterday on this new round of tariffs. the sell-off though isn't so severe today, not at least

across the board you've even got names like aber crom bee&fitch kelly, back over to you. >> that's a rebound. we'll have more on that in a bit. and welcome, everybody i'm kelly evans. let's kick off with the latest on trade speaking of china responding overnight to the president's new round of tariffs. kayla tausche is live at the white house with the very latest at this hour >> reporter: china says it would have to retaliate if these tariffs went into effect we're still awaiting details from the u.s. trade representative on exactly how this would work if it were put into place but among trade watchers, it spurred a lit of déjà vu from the last time a chinese delegation came to washington. on may 5th, president trump tweeted that he was going to increase tariffs later that week that coincided with the chinese officials being in town. he hoped that they would deliver a breakthrough it didn't come the tariffs went into effect just a few weeks later a senior administration official tells me that this time around, the president could reconsider

if china delivers on positive action, but that he's also willing to put these tariffs in place. now, larry kudlow, the nec director, spoke to reporters earlier today. and he was asked about the impact on the economy. he said it's miniscule and when asked whether the president would in fact go forward with these tariffs he said let's see what happens. i spoke to two executives who wanted to remain anonymous for fear of further retaliation. they said they could have their licenses revoked there could be surprise audits or even, kelly, a cyber attack >> wow okay those are not rare earth metals that we're talking about kayla, on a different front with the e.u., we were worried yesterday that maybe that november deadline for imposing auto tariffs on the e.u. could now be in play if this was the move that the president -- but then today it looks like there may be some softening in terms of trade relations with the e.u.

>> kelly, any time you see a trade event on the president's calendar, i think the business community shakes in its boots. remember, the white house has been negotiating with europe for well over a year now they haven't been able to make progress on some of the bigger issues, but this is a small win. the u.s. is going to announce that it's reached a deal with the eu to buy more u.s. beef from u.s. producers. remember, the white house has been trying to make up some of the lost purchases that china would've otherwise been bying. they've been looking to do that with europe. but there are at least three instances this fall where the president could still move forward with tariffs on europe >> all right, kayla, stay with us let's talk a little bit about this more with derek scissors. derek, it's great to have you here you've been hawkish on this all along, and just as everybody thought, we had reached this truce, now a whole new front has been opened in the china trade war. is that how you would describe it how serious are these new actions? >> uh, i don't tend to think

they're that serious simply because a month ago the president would very pro-chi and basically what happened is he understood and a lot of people on the u.s. side understood the chinese would be making some agricultural rchases. and he's reminding them if you're not even going to do even the small things i ask, i have more tariffs to put in play. but i don't think the tariffs are that important by themselves i agree with mr. custokudlow thh economic impact is slow. it's interesting we looked at some of the stocks in particular that would be hit by this. best buy and steve madden was hit hard i was surprised that investors took this much more severely than what you're describing, which would suggest what exactly. i mean, what does that tell you? is it just this mindset of caution? is it a sense that there might be worse yet to come, or are we all not understanding why this could be a bigger problem? >> well, i do think there could be worse yet to come i think there's a dividing line

in chinese retaliation that we might be getting close to. the chinese have largely left u.s. firms who operate in china alone. of course they try to steal their intellectual property. but there hasn't been explicit retaliation against those firms. if we were to go at some point to 25% on all chinese goods, the chinese have nothing material to do on u.s. trading because it's so small they have to act against u.s. firms. that creates a lot of uncertainty for some big-hitters in the nasdaq. i think that risk is what's weighing the market down >> and i'm sure you heard what kayla just said. but the executive she spoke with, we are starting to speculate what those look like what do you think we should be considering? >> yeah. i think the chinese will probably -- you know we've had no solid remarks from the chinese about what they're going to do if these tariffs go into effect because they don't have a good low-level response their exports to the u.s. are small. then the chinese will target

american if i remembers in china in some way. that uncertainty if i were an executive would be very scary. some of them won't be targeted but some will it's not really clear who they could do anything from a consumer boycott to under the radar cyber work >> and kayla then you start to understand some of the wall street reaction especially for the names that would be most exposed. so how likely is it, when people say, okay, the big move would be from 10% to 25%, what should we be looking for to see if an event like that would play out >> reporter: well, i think time is really what people are looking at, kelly. the folks that i've had conversations with today are really looking at the next six months as a make or break moment for these talks. there's an expectation that the president is more inclined toward a deal than against a deal but he sees the next few months as really the last chance for him to really ramp up this leverage before going into the heavy, heavy campaign season in 2020 where he doesn't want to risk hurting the economy, he doesn't want to risk giving his rivals a leg up.

and so if there is in fact a window of opportunity that the president has over the next few months to really hold china's feet to the fire, then people say worst-case scenario you could see this ramp up in relatively short term. >> derek, i still don't understand why they would, the chinese, i guess, would give in here i'm curious what you think their interest might be in doing so. and also for those who say in this is going to be politically unpopular because it hits consumer brands in the u.s., you point out the president is say, look, they're also still sending fentanyl into this country they're bad actors >> yeah. i think the fentanyl issue is important both for china's credibility and u.s. politics. the chinese originally promised to do something last year. they didn't. they promised again in april and they didn't. and they're basically conveying the message that unless we can come to an agreement on everything, we're going to still allow these deadly drugs to leave china and enter the united states that could be held over us at any point. and politically it's a big problem for anyone arguing for a deal with china because if an

industry says, oh, i don't want 10% tariffs, that's not nearly as politically powerful as somebody reporting that a family member died on a fentanyl overdose that they bought from china off the dark web this is an issue, fentanyl i think looms over this politically as kayla was saying when you're thinking about next year, you've either got to wrap up the fentanyl issue or you have to be seen as being very tough on china >> derek scissors, kayla tausche as markets are down still more than 250 points on all of this news we are continuing the major sell-off should we expect this sell-off to last for some time? i'm joined by paul christopher he is head of global market strategy at wells fargo investment institute welcome to you both. stephen, i know you've been more sanguine about the u.s. economy. can we absorb this 10% tariff hit? can we absorb 25%? >> yeah. i think it remains to be seen.

the consumers should probably be okay i think the real question as it has been all year is business confidence in a particular, how does that translate into investment spending. investment spending's been slower, and i expect this is only going to make this slower yet. so can the consumer continue to hold up the economy as we go through this negotiation process? >> right paul, what i think that means for investing? should people stick with specific industries in parts they think the economy is going to be fine or what's your advice here >> still, the labor market is a good reminder this morning that that's still pretty solid and wages are growing faster than inflation. that should help consumers continue to hold the water, carry the water i should say for this economy but, yeah, we are concerned that investment spending is slow, it could get slower from here and if we did see 25% tariffs, we do think those will be material, especially on consumer goods. that could start to dent some of that consumer confidence so, it's still a solid case for the u.s. economy, and positive

earnings but there are risks out there. >> paul, when you're off and when you're choosing these investments, it's not in a vacuum when you're looking at what's happening in fixed income right now, it looks crazy. the german 30-year bund yield went negative overnight. the 10-year was at minus half a percent. the u.s. is down 1.85% what would you be saying to clients who look at this and think i am not comfortable with that exposure at these levels? >> it's a really tough call. it's difficult to keep buying bonds when they're that expensive here at home and of course you're saying to buy fixed income overseas. we don't want to do that either. we got out of that asset class some time ago. but you have to believe that the fed is still concerned about inflation. if inflation can stabilize, maybe the bond market will start to back up in yields a little bit, there could be a buying opportunity there. but for right now we are telling our clients stay neutral on duration in other words, stay close to your long-term target

allocations. >> all right so don't do anything crazy, i guess. but, stephen, to me it does look a little crazy out there should the fed have leaned more against this we're now ending the -- shrinking in other words they might be buying more bonds over the next couple of months. that would seem to exacerbate -- i understand they're worried about supporting the economy, but which concern should dominant >> well, it definitely was a contentious decision i think we got that not only in the formal consents but some of the comments leading up to the meeting. i think there's more than just two people that weren't really all in on this move. so, we'll see going forward. i mean, obviously if we go another step on the tariff process, then i think, you know, the leadership of the fed is probably going to push for another move but, you know, the economy to me still looks like it's in pretty good shape so if i'm president trump, i guess i'm using that as leverage to try to get a deal, which will help me in the long run. >> right >> and i'm giving up a little short-term pain in the meantime. >> right

and hoping for that longer term gain paul, i noticed here you're saying there are some areas to maybe watch out for in particular like small cap equities why so >> well, small cap equities, they just don't have the ability to go for that extra financing or for the buy-backs that the larger companies do. and if the economy does slow, let's suppose we do have some spillover from the rest of the world into this country or suppose we do get those 25% tariffs, it's going to be a lot stiffer headwind for small caps than large caps at this time we're neutral. we want to stay close to long-term target allocations on large and mid-s and be underweight small. it's just a way to manage risk in this environment. >> guys thanks, enjoy your weekend. coming up on "the exchange," those falling yields could be great news for the housing market but only if mortgage rates drop too plus, looking for a financial planner? it turns out that the go-to website emits major red flags. and oil finding some steady

ground today after posting its worst drop in years after the announcement of new tariffs yesterday. we'll look at how much lower crude could go stay with us >> this is "the exchange" on cnbc going to go down.

you're my sidekick. ain't nobody's sidekick. hey boys. the fate of the world is in your hands and you can't even get along. pretty disappointed right now. you want a sidekick? i'm gonna find you one. see that guy over there? he's too big. look at you two. bickering like a couple of old ladies. woo! welcome back and, boy, does the yield on the 10-year treasury continue to slide. it's at its lowest level since

2016 we're just around 1.86%. lower rates aren't boosting mortgage applications. demand actually has dropped. for more i'm joined by skylar-olson whylar, why isn't this doing more to get buyers excited >> well, i think it's doing a bit. one of the ways that we can think about that or see this is over the past six months nationally has really pulled back, and the heat has drawn back um, but, and we even, like, last time i think we talked, we talked about how home values fell for even one month. home valuation is now back to positive at the very least, and that could be due in part because of low mortgage rates keeping it attractive for buyers the rub is, though that, low mortgage rates mean that the monthly payment is much more affordable it. >> does nothing to that downpayment affordability. >> so, in other words, instead of the pricing correcting to a

level at which more people could afford it, the low rates are keeping that pricing high and maybe keeping people locked out. it's fascinating because there's a structural impediment to more people buying homes. >> yeah. there is some research that kind of shows that it's the drop in the rate that really matters that gets people reinterested in the market this most recent drop i would expect to start actually doing that the slowdown i think will start moderating because we will see buyers returning and considering it but that, again, i think you're a little bit right there's a balancing act here where monthly affordability is dm something i have my eyes on, but buyers really to be doing this right in a market where things are really slowing down, you got to be paying attention, too, to the overall price level and that downpayment you got to make sure that you'll be in there for a long period of time to make it worth it for you if home values continue to be much, much, much more modest going forward. >> and you can't just come up

with the dough for a 20% downpayment overnight. so the average 30-year mortgage rate has fallen to 3.75% from 4.5% last year that is a huge move, even in relative terms you know, do people just shrug off these rates because they just go, eh, it's low enough, i don't really care if it goes down another half a percentage point. >> no. i think it matters a great deal. it just depends on who you are and what you're looking at here. when you think about anyone who's interested in refis, that was the opportunity where you said to yourself, well, that's pretty inexpensive debt. and so if you had any other, you know, expenses or projects you wanted to tackle or any other kind of loan that you wanted to pay off, that could actually be a good strategy. pay off high-interest college loans, say, if you went to grad school and convert that over to a much lower interest cashout refi that's a very appealing, you know, strategy or process forward that low rates get you

the rub, again, if we're talking about the typical home buyer is that downpayment as well so that's where we haven't seen quite the return but i think we are and we will, and that will be a part of the story and the picture is that home buying at low interest rates, you lock in that 30 rate still attractive, it's just a matter of finding that right match between you and already having been the kind of buyer who saved up for the down payment over the past few years. >> it will be great if people do convert this, pay down those high-interest student loans. finally, we have seen a drop in the percentage of people who are buying homes in cash i don't know if that's just run its course post financial crisis or if the share of borrowers are up because rates are so attractive >> let's break apart the people who buy in cash. you have kind of your typical investor this is someone who is really

looking for home value pree apreeshation when housing markets are slowing down in the same way the other cash purchase buyer is someone who's more typical, i'm buying the home in order to live in it, it's going to be my primary residence. but i went towards cash because of the competitive market. that was your story of 2016, 17, and 18 a cash offer would make me more competitive to the other people that are also offering bids. and it's appealing to a seller because you can close faster and you don't have to wait on the contingency of maybe this person actually won't get financing so than sentive is also pulling back because if markets are less -- there's less heat, it's less competitive i don't really have to really go and attack this towards the all-full cash offer. some of that cash will go towards the down payment and the rest of that cash might go towards another investment because right now, again, that

low interest rate kind of creates that opportunity to do that >> oh, sure. it's fascinating like i said, skylar, thanks for joining us. i appreciate it very much. >> thank you >> skylar olsen with zillow. certified financial planners are expected to be skilled, screened and trustworthy but the board that oversees this process may have been dropping the ball plus, vermont getting a credit downgrade due to its aging population what the state is doing now to reoung people to move there. we're back in two.

welcome back we've got our first reading on third quarter gdp from steve liesman. >> that's because we got our first piece of data for the third quarter. that was vehicle sales we are tracking at 1.9%. third quarter tracking, that's the median estimate created by cnbc along with moody's tracking forecast on the street that's down a tenth from where they estimated it to be. a lot of data yet to come, only the first month of the quarter complete action at 2.3. amherst, 1.9 on the low side we have oxford and rsm at 1.7 the second quarter, as you know, came in right around the same place. so maybe get used to this, kelly. this is back down to trend, and this is where we are >> i don't like this trend,

steve. we want a new trend. we want a better trend >> we would love a better trend. but if this is the trend we should be thankful we're at the trend. it could be worse. let's get over to susan herera now for a cnbc news update >> hello, kelly. hello, everyone. here's what's happening at this hour the u.s. envoy for north korea's stephen biegun began meeting this a day after north korea launched two more short-range ballistic missiles indonesian authorities issued a tsunami alert after a strong earthquake hit off the coast of java. buildings as far away as the capital was seen swaying it was a 6.9 a judge has recommended firing the new york city police officer accused of using a chokehold in the 2014 death of eric gardner daniel pantaleo's lawyers will have about two weeks to submit a

response the nypd says that he has been suspended until then and the u.s. postal service is honoring the contributions of military dogs with its new stamp collection each forever stamp features a different breed typically selected for that kind of duty they are proudly standing next to a white star. >> oh, my goodness >> got to have them. >> sue, you don't understand my dad is going to want this stamp on every letter that is ever sent his way now. >> that is fantastic >> i'm going to give him a sheet or two for christmas easy gift. sue, thanks very much. if you're thinking about getting a financial planner to look at your portfolio after that interest cut rate this week, be careful an investigative piece by the wall stre"wall street journal" flags. here to explain this is jason. he writes the intelligence investor column every saturday for the journal. jason, it's great to see you

>> hi, kelly >> your fundamental industry that the cfp website pushes its own industry for people to come and find that planner and get information. and the problem is they're not giving you the full story on some of these guys, are they >> well, with my colleague andrea fuller, what we found is that at least until our article was about to come out, the cfp board was not doing quite as thorough a job of vetting these people as it was indicating it was to the public. >> right and this is a big number of people so, you guys looked at about 72,000 profiles on this site more than 6300 of them did not have problems that were disclosed to finra so we ares talking about almost 10%. >> were you to go to finra's broke questioner check website >> we use it here at cnbc. >> although it has some completion problems of its own but it's a step up, certainly.

if you went there, you would find oceans of information about all of these people not available at let'smakeplan.org >> the finra site shows complaints that have been filed, things that may not have been proven against people. is the finra overly broad or i should say in terms of the allegations that it includes and cfp just goes the other way? >> well, i think we have to trust consumers to make sensible decisions. i mean, you might go to the finra website, you might see a bunch of disclosures, and i think most people are intelligent enough to say this one doesn't sound like a problem, but maybe that one does and take that as an indication they might need to do more homework or embrace the person as trustworthy >> there's a deeper story here because the cfp has become kind of the gold standard for financial planning at a time

when there's been a lot of upheaval about regulation and who's holding whom to a fiduciary standard but your article suggests that the cfp isn't necessarily holding their members to a high enough standard. so in one case which unfortunately involves finding child pornography on a planner's computer, his certification was only suspended, an investigation only started after you guys really looked into this. does cfp need to be vetting its members much more carefully in general? >> yeah. and to be fair after our article came out, they said that's exactly what they're going to do now instead of taking self-reporti from its members' cfps, what they will be doing is they will be using finra broker check and the sec website to verify whether the person has had more recent complaints, criminal situations. >> which will be costly. a lot of their budget now does go to marketing. they call it about a third, let's say. 12 of the $36 million budget

and fundamentally, they want this designation in this industry to grow is there just a natural tension there between policing your industry and wanting to promote it it's different than what we see for the cfa or the cpa, isn't it >> it's very different chartered financial analysts, certified public accountants, don't have a central mechanism run by their certifying body that purports to endorse them to the public and cfps do. and to the extent that the public believes the that a website like let'smakeaplan.org is a vetting mechanism that has screened these people, that needs to be valid. and the board has said it will step up its disclosure and enforcement procedures, but that's going to be a big step for them >> yeah. we'll see if it goes far enough. jason, thanks very much. again, people looking for more information can find it in the wall street journal.

coming up, still on "the exchange," footwear fumbles. why the shoe industry could get fumbled by the we'll bring it to you when it happens. we're back in two.

welcome back let's get a check on the markets today. we are in the red. we're off the lows when the dow is down 334 points at the worst levels of the session today. still the dow off right now by about 2706789 that's a 1% drop, and it's the outperformer. the s&p down 1.2%. and the nasdaq down 1.8% today it's back below 8,000. here are some of the individual movers shares of square are sinking the company beat earnings, but its total payments volume came in light, also gave weaker than expected guidance. etsy also coming in lower than expected its shares down nearly 11% but newell soaring that company reporting better than expected earnings raising its sales guidance and the shares are up 16%. now let's catch you up on a few

other stories that should be on your radar today it's "rapid fire." and here to break down the% headlines are bill griffeth. we're talking a lot of tariffs today. first up, shares of apple are lower today. here is wedbush's dan ives he says consumers could pay an extra $100 for the latest iphones once the tariffs kick in could drop by up to 8 million units in the u.s. as a result. tim cook had just praised the quote market improvement during q3 but the tariffs in china could hurt the u.s. consumers. >> imagine if tim cook didn't have a direct pipeline to the white house. he has said that he can pick up the phone and get the president on the phone whenever he needs to but imagine if he couldn't get that kind of access. >> and the president appears unphased by that it's pretty clear what this would mean in practice, and, yet, here we are, 10% and now

everyone's speculating about when they might be going to 25 >> and, look, i think the apple customer's probably one of the least sensitive customer segments out there so they can probably eat a little bit of it and pass some of it on the bigger risk though i think is if china decides to do something retaliatory against apple in china, and that i think is the sort of second shoe to drop that hasn't and may not, but i think that's a bigger risk >> if apple sort of avoids that, it would only be because they're also such a big employer in china. to some extent they are protected by foxconn and by the supply chain there it might be bad for them in the long run >> i don't know if you saw, but just maybe 15 minutes ago, the new chinese ambassador to the united nations responded and said if the united states wants to talk trade, we'll talk trade. if they want to fight trade, we're prepared to fight trade. >> and during their latest earnings call, tim cook did -- i was about to say tim apple tim cook did say in their growth

in china was strong. the question is as this trade war does become prolonged as it appears to be, you know, will the chinese consumers start to turn off from apple in the way that they have for other products? >> huawei's picked up a lot of markets here >> that could put a big dent in demand as well >> and by the way, it's not just apple in terms of the retailers that could be hit hard by these tariffs. here is the ceo of columbia sportswear calling these tariffs a disaster for our economy saying they will force retailers to raise prices on products. then the footwear industry, lauren thomas, come on down because there are some amazing little nuggets in your story why is footwear in particular so hard hit >> and i hate to be the barrier of bad news. >> were those shoes made in china by the way [ laughter ] >> i know, i should've changed but, yes, no, footwear and even more than apparel. you said about 70% of footwear

in the u.s. comes from china a lot of these companies, nike, adidas, underarmour, still rely on china increasingly they've shifted production into places like vietnam and indonesia. but china is still -- i mean, it plays a huge role. last year more than $11 billion of footwear was imported into the u.s. >> this comes from one of the trade groups a popular type of canvas skate sneaker, let's just call it a vans sneaker could increase in price to nearly $59 from under $50. the price of a typical hunting boot could go from $250 to 2990. now is this just the trade group scaring us all with what could happen >> i think this is reality setting in and i think when you talk to a lot of these companies sh they

would say, okay, we get it the trump administration wants us out of china. they want us to ship production. you can't do that overnight, though i mean, like i said, these companies like nike, they've been working at it for years now. so you've seen that shrink but it doesn't happen overnight. i really think that, you know, when this goes into effect come september, i think that sticker shock will be a reality. >> steve madden was big down today. >> and piper jeffrey has estimated more than 90% of their production is in china but i just wonder, you mentioned some of those increases. so a running shoe. if it's, you know, $38 more now, do you think that's really going to impact? like, you as a consumer, would you change your mind and say i don't know if i'm going to buy that >> it depends on how much it gets diluted if it ends up only going up in price by 10 or $15 >> it also depends on who the consumer is too. those who are shopping at walmart and some of the discounters, they're more price-sensitive as we all know

than it would be if you're walking into one of the high-end stores that sell those things. >> and that's why as you mentioned in your article, so many of these shoe retailers have gone bankrupt, like the paylesses of the world >> and it'll be interesting to see will this cause even more shake-out in the industry because there are still some brands i think arguably that are teetering on the edge. >> lauren, thanks. i appreciate it. >> thanks for having me. >> she's going to walk on out of here [ laughter ] >> shares of pinterest soaring more than 20% today on a big revenue beat from q2 pinterest saw a huge jump in global active users hitting 300 million. and it says it's rolling out more tools for business advertising. but this is a great day since its ipo. >> oh, yeah. i think this is the second time they've reported since their ipo. and this company is all about setting low expectations and surpassing them if you recall from their ipo, they priced their range, you know, when they were marketing their deal to

investors well below their latest private round only to kind of increase it over time and price above the range when they ultimately wound up going public and then that stock soared on the first day of trading we can see kind of evidence with this with regard to their earnings that they are just, you know, of the mindset that if they set the expectations low, later seems to pay off >> under the big guys that are all under fire from regulators, somebody is going to be underneath then catching the bucket of money that's not going in there so you look at twitter, snap, pinterest, this sort of second tier stands to benefit >> if i were facebook and google right now, i would be putting this on my home page see, pinterest, they are doing great. they've got online advertising. we're not the only game in town. >> they pouint out that 70% of their monthly active users are outside the united states. but yet most of their revenue comes from inside the united states so it's this high concentration

of users where their money comes from they've got a few eggs in one basket that they're really relying on >> no, that's right. we'll see if they can diversify. finally, today one less food adversary because doordash is buying from caviar caviar launched in 2013. it does a lot of more upscale restaurants in urban areas square says the move lets it focus more on its core payments business which mentions square getti getting whacked today. >> this is about - >> a short conversation between the ceos >> although apparently they round a process. post mates also looked at the deal in the past because the price was too high but for square in and of itself, looking at a ten times return from what they purchased the company for five years ago at $44 million. so -- >> still can't get any love from the market today >> i know. >> because of its earnings and

some other issues. >> should i get daniel belou delivered to my house? >> i use it a lot. it's great it tells you your food's being cooked you can track it it's a really good product >> they say they are going to keep the app separate for now, because apparently - >> there's no overlap. doordash is all about the suburbs and the pizza, and caviar is the upscale urban. >> but how much are people saying, oh, i don't want pizza from this app, i would rather have pizza from this app >> in the long run when there's only doordash and uber eats to pick from, it reminds me a little bit of the roll-ups now that the ftc is all upset about the tech giants. yeah, no one's paying that much attention today, but they will in a few years there's just too many of them. >> guys, thank you all appreciate it. >> robert frank, leslie picker, and bill griffeth. coming up, could the new

tariffs on china wipe out this year's fiscal policy he says china will likely retaliate. plus, president trump expected to make an announcement on a trade deal with the eu any moment now we will bring that to you when it happens it happens stay with us you can find it in the vitamin aisle in stores everywhere. prevagen. healthier brain. better life.

welcome back to "the exchange." stocks are still reeling from president trump's latest shot fired in the trade war with china. my next guest says this reaches a crucial tipping point. daniel clifton is head of policy research this is important because you're saying if these tariffs go into effect, nearly all of the fiscal policy boost we're supposed to get this year will be erased >> i would argue that trump's economic policy was to do shock and awe fiscal policeony deregulation coming in 2018 was an exceptional year

$200 billion of fiscal policy tax cuts now you're in a place where the amount of tax cuts if these new ones go into effect are roughly equal to the amount of fiscal policy so you've offset it completely that's why you see a lot of the weakening of the economic darkts even job growth has slowed somewhat now i do want to be clear here, that's not to say, hey, you shouldn't take on china. clearly china is trying to wait out president trump. but there is an economic cost to these tariffs. each one of them in isolation have not been that big, meaning the tariffs. but on a cumulative effect of those tariffs, it's starting to get a bit costly >> dan, what are the other ways that the u.s. -- we've talked in the past with derek scissors about how sanctions could be an effective tool i mean, what are the other options -- it doesn't even sound like it's worth asking because we know this is the president's tool of choice so the market is now already speculating about these tariffs

going from 10 to 25% are you guys worried about the same thing >> well, first, all the tariffs that have gone into effect have not going to way yet we've been getting more tariffs, not less tariffs i would argue that the average tear is about 10%. the average tariff into the u.s. is 3%. trump told them at the beginning, if you don't come down, then we're going to 10 but at some point you start getting into these nontariff by delaying any type of foreign investment that come in. so there are definitely tools on both sides to prevent that and the question is whether this latest round of tariffs is enough to get china to start saying, okay, maybe we went too far, maybe we should cut a deal. and if they're not going to do fentanyl, those are minor. how are they going to do structural reforms so the president said let's see if we can change that negotiating strategy by putting tariffs on all of these goods.

i don't think china thought trump would do it because they are goods. so we've kind of crossed over that line. we'll see how china plays it >> and you guys also mention someday other retaliatory measures that china could take here including currency into europe, now one of the other ris b ks to the u.s. economy is if trump slamps 25% tariffs on autos, what do you think is the likelihood of that happening? what's the status quo in terms o a positive relationship or a contentious one on trade >> so this is an important question every time we escalate with china and there have been multiple times, the president then reaches to his alleys in europe and nafta and teens down those trade issues with them

in fact, delayed those auto tear i haves two different types because the china issue started to escalate again. so if we're still in a protracted fight with china, i think it becomes unlikely you'll see auto tariffs what we're seeing today is classic trump. we're going to fight with china. hey, we're making progress on europe when the president was talking about these tariffs yesterday, he talked specifically about how we are getting progress at the mexico border because of the threat of terrorists and that's working and that was a message to china you play with us, things can get better i think that's what's guiding the president's policy here and so with where i'm leading is that you're going to see a renewed effort to get nafta passed when congress comes back in september and from my understanding, the democrats are going to put forward their first proposal of the items they would like to see to move that process forward today! wow. >> shoring up your allies is one way b to be able to kind of then be able to escalate with china and i think that's what today

represents >> that's a great way to tie it together dan, really appreciate it. thanks for your time we're standing by for president trump's announcement on a trade deal with the eu will he say anything more on incha and markets? we'll carry it for you here on cnbc stay right there

welcome back to the change one of the most beautiful states in the nation desperately needs workers. vermont had its credit rating downgraded in part because of its small and ageing population. kate rogers is in vermont. >> that's right. look around. vermont is absolutely gorgeous, but it's got a few challenges. an older population that's growing slowly so the thinking is outside of the box with this new remote worker program it will offer you up to $10 thourk if you're a remote worker who wants to relocate here to vermont and do your job. one of the people who did that is named collin. he now lives on 64 acres in paul let got reimbursed about $4500 for make iing the move

>> one of the thing i love about remote work is that it allows the worker to choose whatever environment is going to be most conducive for their work >> this state is expanding this program come january to new workers who come to vermont and work for companies based here like daan tough. the software manufacture is eeg eer for talent in this market. >> we're going to be double our workforce in a matter of years and we need to work and partner with the state to get those workers here >> now of course they want younger workers to come, but there's fo age limit for either program. so far, the average age of the worker is about 38 and average payout has been about $3800. back to you. >> you think more people might take them up on it now >> i mean potentially, it's absolutely beautiful here. did you see collin's property? 64 acres useded to be a medicine documentation retreat. i'm like are we doing the this right? >> i only ask because it would be hard to go there as a single

guy, right >> he's married. got two kids they packed the kids and dog up swoo an rv drove 25,000 miles across north america looking for a place to live a friend sent him a link to this remote worker grant program. he made the move and said it was the perfect choice for his family >> i applaud him thanks very much we are standing by for president trump who is expected to make comments on eu trade markets right now are still plunging dow's down 240 points. that goes back to yesterday's tariff announcement. oil having its worst day yesterday since february of 2015 let's dig into this a little bit. jim is a cnbc contributor at the cme where as we just show ed, we wish you were in lovely vermont. any case, oil is bouncing back a little bit today, jim, but man, there were some severe damage

done yesterday wasn't there? >> holy cow, but i don't think it's totally the tariff announcement if you look since july 18th, crude had rallied almost %, 6% when you see move that's that outsized, you have to think market position plays a part in ilt. they have to price in what the worst possible snacenario is i heard some analysts say 250 to 500,000 barrels per day could be coming off the market if these tariffs go into effect, but then today, cooler heads prevail and you say everything is just a big if even larry kudlow said if they start buying our agriculture, there's room to negotiate and everybody now today rerealizes be a point >> but today the stock market seems unhappy by this. tech is throwing a fit >> to me, that means the stock market break is you know, obviously a little more convicted. the oil break was just a washout of the positions and that's why

they're bouncing back today and i still think ultimately, it's a demand, it's a demand story more than anything and the demand here is fine global demand has been slowing down and that's worrisome, but like i said, i think it was more market position. had a bunch of weak longs. >> when you were talking about oil yesterday, does it set us up for going lower from here in terms of the tratding levels >> i think medium and longer term, i think we're heading lore if you look at the long-term chart, crude has been well behaved. i think now we can recoop on the short-term back up to 58, but i think ultimately, we're going back down to 50 in the medium term, which is an area of a lot of significance going back several years. >> jim, thanks very much appreciate it today. that does it for us on the exchange i'll go join tyler on "power lunch" to cover the president's announcement that begins right now. >> thank you very much

and we will see you over here in just a few seconds welcome, everybody i'm tyler mathisen and here's what's new at 2:00 on "power lunch. for a lovely summer friday retail at risk more tariffs coming down the pike it appears and we'll tell you which stocks could get slammed the hardest.plus, energ flames it's the worst performing sector in the past month. but a top analyst will tell us which names can be saved from the inferno and later, pinterest its best day ever. 300 million users now. early pinterest investor will be b alistening as "power lunch" begins right now it is been a rough week for the markets. all three of the major indexes on track for their worst week of 2019 the dow down about