they're going to benefit from them i think it's a good solid company, and i think it's going to do well. >> kkr. >> >> sjm. >> good stuff. thanks for watching. dow right now up 407 points. "the exchange" begins right now. thank you, scott hi, everybody. here is what's ahead a tariff bomb shell, the u.s. delaying some china tariffs until effectively after christmas. that, plus word of a phone call between our two trade reps has that market soaring today. is the worst over, and what does it mean for the fed now? we will ask. plus, worsening protests in hong kong. the local leader warning protesters they've gone down, quote a path of no return as skirmishing break out in the airport. we'll have the latest, and talk about how this factors into the china trade talks. and bringing skilled workers back to america's heartland. a look at how so-called heartland sri srinivasvisas coue

answer to that. >> kelly, so much green on the board, every member of the dow jones industrial average is right now in positive territory. that's the reason why you're seeing, we're up 390 points, up 1.5%, but at the highs, the dow is up 529 points we'll keep an eye -- if we can push higher to that level, the s&p 500 up 1.5points as well we were up about 60 handles or so we'll watch that still below that 3,000 mark. the nasdaq pacing the advancers here if you take a look at the macro picture, as economic uncertainty starts to unwind a little bit and there's more optimism about the global economy crude oil rises, 4.5% now, just off those highs for wti crude $57.20 what traders are watching is whether that near term down trend in prices stays intact crude oil a key focus. when it comes to stocks of the day, those ones who have outsized exposure to a benefit for reduced tariffs or no tariffs until december, take a

look at these names. smartphones, laptops, exempt from some of those until december 15th, apple shares up 4% best buy, the best performing stock in the s&p up 6% that china trade delay, tariff delay affecting these stocks in a huge way, kelly. back over to you. >> apple helping the dow quite a lot: welcome to "the exchange," everyone i'm kelly evans. the difference between -- showed firmer than expected inflation last month core prices up 2.2% on the year now and the president just last hour saying he delayed the latest rounds of tariffs on china quote, for the christmas season to help u.s. shoppers avoid a hit. for more on this breaking story, let's get to kayla tausche who have the details. >> after days of no news and increasing investor worry on the trade front, tensions thawed with a call between the u.s. and chinese negotiating principals which china state tv said came

at washington's invitation treasury and ustr declined to comment on that and whether in-person negotiations for washington in september were confirmed, but the two sides are expected to speak by phone in two weeks, just before a september 1st tariff deadline. in the meantime, u.s. trade representative robert lighthizer has shelved tariffs on a wide swath of consumer goods, including smartphones, and some apparel until december 15th, a few days after the fed's last meeting of the year. and president trump says as you mentioned, it's to keep that holiday spending intact. >> just the christmas season, just in case some of the tariffs would have an impact on u.s. customs, but so far they've had virtually none the only impact we've collected almost $60 billion from china. just in case they might have an impact on people, what we've done is we've delayed it so that they won't be for the christmas

shopping >> many of the president's advisers previously said the economic impact of the tariffs would be negligible but clearly there's been some hand wringing about the economic impact. >> the list we got from the u.s. trade office did not have a lot of detail. should we expect that to be fleshed out from here? >> they're still in the process of figuring out what would get permanently excluded from each of those lists for each of these four tranches there has been a series of legal processes. there was a series of hearings that took place in june, ceos saying the tariffs would be a bad thing. we're still figuring out which of those companies will be approved for exemptions. it's expected that there could be some tweaks here and there going forward. >> kayla, appreciate it. this tariff truce sending market higher. if you feel some whiplash these

days, no surprise. the dow's daily average range this month has been 473 points let's check in with bob pa sea kn -- pisani. >> stocks are very beholden to central banks and trade talks, both of which have been in the news in the month of august. what's another trade truce worth to the market? about 400 points on the dow. that's how much the dow moved in just about 15 minutes right after the open i was on the air when it happened in the few minutes i was on the air, that's almost how much it moved. the usual trade related sectors all up 2 to 3%, semiconductors, retail industrials, and you see gold dropped that's predictable stocks again moved in lock step with bond yields this has been happening regularly. yields hit the highs for the day about 10:30 eastern time that was the high for stocks as well, at least so far. the issue, of course, is that a truce is not an agreement as everyone keeps pointing out. wall street is well aware that we are one tweet from going backwards. many believe a deal will not emerge prior to the 2020 elections. with all the turmoil in the

world, not just hong kong but italy, brexit, argentina as well as the potential damage to the consumer into christmas when the president acknowledged, a second truce on trade, which is exactly what this is, was not a difficult call to make and kelly, there's a lot of cynics saying there's not a lot of real progress being made and it's not clear what, if anything the chinese agreed to in resip roe occasio -- resip roe occasion the market is loving this delay in tariffs on some chinese goods. what is this plus the phone call between our two trade reps tell us about what's really going on between the u.s. and china let's many bring in the senior fellow with the peterson institute for international economics. derrick scissors is asia economist at the enterprise institute, and senior global market strategist at wells fargo investment institute derrick, i'll just begin with you. you know, half of the people out there are saying, of course the president did something about this

he knows it's bad for the economy, and you know, this was never really going to happen, and the other half are saying this just delays the inevitable. what do you say about the news today? >> i think i'm siding with the people who think this is never going to happen. this is absolutely a domestic political move december 15th is well after the shipping season for christmas is over that was a signal to say, look, the month of december is labeled in this delay, so no one can get upset about christmas. 10% tariffs weren't going to matter very much anyway. but, i think the longer term implication is if the president is hesitating on a 10% tariff and trying to protect christmas to the extent of a symbolic move, where is the upside for him to go to 25% of course if there's a serious chinese provocation he will, but other than that if you're hesitating at 10% this much, you don't have the 25% thread in your bag anymore. >> nicholas, i wonder what the u.s. got in return for this, if anything i mean, it reads like, hey, we realize the impact of this

we've decided, you know, that we weren't going to move forward with it. we are the ones who initiated the call with the chinese and so forth. does it appear to you that the u.s. has the upper hand here or no >> it'd be very hard to make the case our trade deficit with china is up, manufacturing employment is down those were all things that trump said he was going to change and that the trade war would be beautiful, and i agree with d derek. the 25% he made first last may then he took it off the table. then he put it back on for september 1st, now he's taken most of it away. he realizes if he goes ahead with this last 300 billion of mostly consumer goods and price sensitive products he's going to lose politically domestically. it's not going to help him get reelected. this is a domestic political move. >> hearing all of this, was the

market wrong to sell off as much as it did on the announcement of these new tariffs and on their imminent, you know, imposition and on the economic fallout from all of that, or did we have to wait and see what the president was going to do? is it now that they're realizing it's not going to be that bad, and if so, frankly, is 400 points all that we're going it get out of that, or does that suggest there should be a much larger relief rally? >> yeah, so kelly, we would say, you know, probably the initial decline was probably an overreaction, but this, you know, rally today is probably no reaction as well december 15th, you know, not to read too much into the date, but especially now in the world we live in, you know, you can order something probably the day before christmas and a lot of people are last minute shoppers. i'm not sure it lessens the pain for christmas shoppers given how much shopping takes place in those two weeks. the u.s. probably is realizing the limits of what it can do without bringing pain onto consumers on the u.s. side, and that's probably a good sign.

again, it probably means we're closer to a resolution we don't see one in 2019, but it does mean that we're probably starting to see the limits of the -- call it theramp-up if you will. >> just to circle back on that, we're up 1.6% on the major averages today, but i could see that being worth 10% upside if that coast really is clear and if they might turn to other tools. i don't know if huawei is one area that might be looked at if we're trying to get tough on china, are there other methods everybody keeps saying this president loves tariffs. that's the tool he's going to use. >> right, i mean, this is a battle between the president's insti instincts which is tariffs for everything, tariffs on european cars, tariffs on mexico and running up these limits of you've applied a lot of tariffs and now it's going to get harder we do have other tools to use against china that's my preference, invento fact, and t one reason you don't see a huge rally on the market. we're getting past the shock of tariffs in september and october, and people are

digesting we haven't gotten anywhere on ip and there are other american tools that can provoke the chinese and have them retaliate against firms listed on the nasdaq for example. >> do you think it'd be likely we'd go that route >> well, i don't think it's likely we go that route for the rest of this year. i think the president is going to want to clarity on who his democratic opponent is i don't want to turn this into too much domestic politics, even though i think that's what's driving the change today, but vice president biden and senator warren are very different on china, and that's a very different strategy for the president in 2020. >> can you elaborate on that for one more moment? you think that it is responding to the democratic primary, his about face today why so >> well, i think today is just general reassuring consumers everything's going to be fine. my tariff war with china isn't going to hurt you, which, you know, i tend to agree with if the tariff is 10% with exclusions but is not if you were to go to 25%. it's reassurance when we get into 2020, senator warren is much more hawkish on china economically than vice

president biden is, and that means president trump is going to maneuver himself to say look, i'm tougher than warren or i'm tougher than biden, but tougher than biden is a lot easier than tougher than warren. >> interesting, a lot to digest. nick lardy, derrick scissors and sameer samana. don't miss wilbur ross tomorrow on "squawk box." violence erupting at the hong kong international airport as protesters clash with police. >> reporter: things have calmed now, but the scene was certainly more chaotic over the past few hours after occupying the airport for two days now, the mood shifted here in the evening. protesters turned on at least three individuals they believe to be spies within the group,

and then in order to try to get these individuals out of the airport, to get medical care, hong kong police moved in. there were very intense clashes. at one point there was one officer who went down and lost his baton and went to grab his baton and pulled his gun and was pointing his gun at the protesters it was extremely tense, very vivid and rushed in trying to get these people out, and then it calmed down again protesters still are not going anywhere they say they are going to push through on their demands some of them are gathered behind many laying out what they say is the evidence that they took from these individuals saying that they are chinese spies it lends to the shift and the mood of these protests over the past ten weeks they have become more violent. the protesters wanting also to add to their demands that there

be an independent inquiry into what they say is police brutality. of course the big question is what beijing will do next as they certainly will not let this linger. >> thank you very much appreciate it today, and we're watching very, very closely. here's whaels t else is coming n the "the exchange," could u.s. banks be facing a lost generation like their european counter parts? we'll ask whether investors should steer clear. plus, is it time to go back to the future to tackle china's dominance? and a special visa that would bring skilled workers back to america's heartland iss "the exchange" on cnbc - at southern new hampshire university,

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welcome back investors are gripped by the possibility that the yield curve will invert for the first time since 2007 we're talking on the screen there about the gap between the ten-year and two-year yields, and it came within a hair of doing that this morning. it remains only about 3 basis points wide right now. financials have been especially hard hit as it threatens profitable i'm joined by peter bookw var. you've warned that we've seen

this play out to some extent in europe already what's the bigger threat to u.s. banks? is it the narrowing of that gap? is it the absolute level of yields falling and the extreme policy measures discussed by the central bank >> the direct is the squeeze on interest margins and the message it sends we are headed for a global economic slowdown that then affects bank loan books. it slows down the demand for commercial industrial loans. credit quality, which has been so pristine, does that now start to reverse, which is a huge drag on corporate earnings, bank earnings i think it's a combination of those things. >> yeah, and even the fed's household survey this morning suggested that credit quality is continuing to fray a little bit. jeff, you cover these things on such a granular level. what evidence are you seeing already of low rates taking a bite >> well, i mean, we're definitely seeing it not only hit net interest income now but kind of the outlook. it seems that every quarter we kind of downgrade or take down our interest income expectations going forward. i mean, the way the markets

behaved, especially financials in august, has the feel of a panic to me. i mean, you look at how quickly the ten-year went down i'd like to sit here and say you've got to buy banks today, everything's going to be fine, but it's a tough environment for banks, and it may stay that way for a while. a sub 10%, two-year, and a flat inverted yield curve makes it tough. i'm pushing clients to look at banks, but look specifically at really steep valuation discounts, buy the banks that are on sale. look at a citigroup where you can buy it at a discount to tangible book value, three multiple discount or look at banks in that big dividend and kind of buyback expectations or capabilities or capacity you know, if you can get a 3% plus dividend yield given where the ten-year is trading or bring up citigroup again, but companies buying back 15% of their shares that's, i think, a meaningful place to be looking. >> so you'd be a stock picker instead of buying an etf here,

jeff, does it alarm you when you see stories about denmark offering negative mortgages, for example, and make you wonder if it's going to happen here? i mean, if we're talking about going that route, the financials could be facing a lost decade, right? >> it would certainly be tough if we got to that position one ocf the things i like about some of the bigger banks is if you still have economic growth and low interest rates, that really can be tough for the spread business. it's not so bad for some of the feed businesses like investment banking. i think with some of these bigger banks you get a little bit of an advantage there as well. >> true, and peter it's not to say that we are definitely going that route the great thing about the u.s. is we've actually tried pro growth fiscal policies this snamacks a little bit of panic this month if we start to see this unwind a little bit, get back to normal so to speak, in the fall, then would you feel like at these deep discounts the financials could be investable? >> hopefully, we'll see if the

fed responds by lowering short-term interest rates. they'll try to at least move the curve. i think the concern when you look at what's going on with european banks and how the ecb has just destroyed their yield curve, you worry if the fed goes down the path of cutting interest rates too sharply and you don't get that steepening and you get a collapse in the long end and you kill our curve just as the boj and ecb did, what does that mean for u.s. bank profitprofitability >> don't those templates suggest it won't work going that route >> i hope they're paying attention. i hope they're looking at the evidence of what extreme monetary policy is where it went negative, and we won't repeat those mistakes, but that will remain to be seen. powell's already said that we may go back to zero. actually, he said not if but when we go back to zero. if he really was learning the lesson of the boj and the ecb and what happened to their banks he would stop at 1% in the fed funds rate. >> even risking what that does to the economy it's a great point, thank you

both appreciate it. we have some breaking news on hong kong, let's get right over to eamon javers. >> we've got new information from the president here putting this out in a tweet a few seconds ago. the president saying our intelligence has informed us that the chinese government is moving troops to the border with hong kong. everyone should be calm and safe, so no additional context yet from the white house on this one, but the president saying that the chinese government is moving troops to the border with hong kong. as we watch those pictures over the past 12 hours or so of police officers inside the hong kong airport having confrontations with the protesters who have occupied that airport now for two days. as you see, some of the scuffs there erupting into something that looks a little bit more like outright violence today the president now saying that the u.s. intelligence is suggesting that the chinese are moving troops to the border. we'll wait and see what additional information the white house can provide on this one for us back over to you. >> does this seem to be new information that's he's sharing from the intelligence community, or is he referring to some of

the movements that we've already seen >> reporter: well, the president in the tweet -- and that's all we have to go on right now, is saying that our intelligence is informing us, so presumably he's getting a realtime intelligence update on what's going on in the situation in hong kong now, the president also put out an additional tweet a few seconds before this one in which he suggested that people were blaming him or the united states for the situation in hong kong, and he says he's not sure why that is. not clear, again, what the president's thinking is on that one, but he does appear to be on its face citing u.s. intelligence report here >> and they seem to be eager to appease the chinese right now with all of the news flow today. eamon javers is in washington. still ahead, uber is lower again today after closing at an all-time low yesterday this as we work, another company that fails to turn a profit is getting ready to go public we'll have a look at its numbers coming up. apple is having the most positive point impact on the dow today as it rallies 4% following

the tariff chus witruce with cha can it last? that's coming up in "rapid fire." woman: my reputation was trashed online.

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welcome back to "the exchange." let's get a check on these markets. the dow is up 529 points at the session highs today. we've come off that, especially in the last few moments here we're still hanging on to about a 380 point gain, this after the president tweeted that intelligence officials have informed him china is moving troops to the hong kong border about a 1.5% gain still on the

earlier news the president is delaying some china tariffs that were set to go into effect september 1st. the nasdaq the best performer, apple giving a big boost to the averages here are some of the biggest movers, jd.com the biggest gainer on the nasdaq up 12% of better than expected second-quarter revenue boosted by strong sales. shares of best buy climbing more than 5% after the u.s. delayed china tariffs on items including cell phones, computers, and gaming consols and dr horton, kb home are rallying after suntrust initiated with a buy rating saying as rates go lower it's time to buy these housing names. now to sue herera for a cnbc news update. >> here's what's happening at this hour, everyone. as you've been seeing, hong kong protesters clashing with police at the city's international airport. riot police moved in and used pepper spray against the demonstrators, but the chinese government says that it firmly supports hong kong chief executive carrie lam and her government in dealing with that

situation. the world health organization confirming that ebola patients will be receiving treatment from two new drugs after research suggested that they've been saving lives. >> let's not forget we now have a vaccine which is highly efficacious. we have treatment, which really shows good data. so overall, this is positive news, and these are great new tools or great tools for our toolbox. and stargazers in bosnia watching the perseid meteor shower they gathered across the country to enjoy the spectacle, which occurs every august when the earth passes through the debris of comet 109 p swift tuttle which was discovered in 1862 that would be a great jeopardy question >> just think it looks cool. >> that's the news update, back to you. >> thank you very much, sue herera. here's what's still ahead on

"the exchange. coming up, third point betting big on netflix vanguard's ethical etf error, and should trending be ending on twitter? that's ahead in "rapid fire. more plans to mix and matchnos so everyone gets what they need without paying for things they don't. new plans start at just $35. the network more people rely on gives you more.

welcome back let's catch you up on a couple of stories that should be on your radar it's time for "rapid fire. welcome, everybody >> are we tasting any foods? >> no tasting. >> no taste test. >> i'm out. >> no byob's we're keeping it real. apple is surging on news that the white house is delaying the 10% china tariffs until december apple today on pace for its best day since may, wedbush saying it removes a dark cloud hanging over the tech giant. apple had previously warned the next round of tariffs would directly impact all of its major products produced in china. >> i would invite everybody go to ustr.gov, they have both lists, those being delayed, that's 21 pages. those still to be imposed on september 1st, that's 122 pages.

to my untrained eye some of these things look the same in terms of clothing items, technology items my favorite one that's being delayed until september 15th, magic tricks and practical joke items, which i'm relieved to see. >> the top level list that the trade rep group put out was that it includes cell phones, video game consols, clothing, and shoes, and certain toys. it leads like your christmas shopping list. >> there are still plenty of those kind of items on the september 1st list as well apple is definitely going to benefit. >> lots of apparel is still on the list by the way. >> for september 1st. >> exactly a lot of that -- a lot of food items, which i don't think we import that much of from china, but you never really know. i mean, there's things like livestock on there it really does read like a laundry list. >> it says, okay, so apple's knee jerk reaction was a 5% gain on the news, even there we're not sure if all of their products would be excluded or if

it's just the iphone i mean, there are other products like the air pods and different things they make there's still question marks about which applies to the rest of this lists. >> analysts saying it removes the cloud. i think it's a one day umbrella or a 20-day umbrella we just see from today how fast changing and capricious the whole lists are and the dates. this could change again next week. >> what i thought was an interesting acknowledgment today, though, was president trump standing before reporters saying the reason he did this was to help protect the american consumer around tholiday season >> we don't pay the tariffs. >> the point is we apparently didn't pay the tariffs before but now it's an acknowledgment from the administration that consumers do bear some of the brunt of that particular move. >> and i think part of the magnitude of the rally we're seeing in the stock market today is also an acknowledgment that this is something of softening of the stance. >> oh, sure. >> it's not just the list per se it's what the list symbolizes right now. >> especially by the u.s

i mean, i'm not sure what we got in return for this, other than acknowledgment that it was going to be some harm. all right, meantime, hedge fund third point is disclosing it raised its stake in netflix by 25% in the second quarter. that's ending june they hold about half a million shares in the streaming giant. we're still waiting meanwhile on the expected cbs viacom merger news the big question for netflix is how itls with all of this consolidation. and everyone got more excited about disney plus, the shares have been a little more rocky lately. >> netflix as a stock overall has nobeen participating nearly as much as the market at large, especially with regard to mega cap or large cap media and technology names out there it's curious that third point would up its stake it does represent a little more of a bet than other more conventional trades with regard to mega cap technology it's been beaten up pretty baz because it is in an increasingly

hyper competitive space for streaming media. they also bumped up their stake in mike soccrosofmicrosoft. the netflix thing is very curious, but it is competitive, and it will be a bet on whether they can survive this. >> i just wonder if at some point we drop netflix out of faang or bring in microsoft or have to adjust somewhat, but i think now with disney plus coming there's more questions than ever about whether they're going to remain the only game in town. >> many other pluses coming as well. >> then there's this, a new column for an end to trending topic on twitter, which is one of the most important things the platform does. it would deny bad actors, but it does raise the question would it come at the expense of editorial neutrality, same issue facebook and every other gate keeper is now grappling with. >> there is nothing wrong with trending per se. it's the monitoring of trending that is woefully needed by

twitter. this is another example of a company that's losing control of its product. we've talked about this with facebook as well, you know, with some of the posts that have been put there. it's like getting rid of the front page of a newspaper, you know, what's the top news. what's going on? you want to be able to see on your dashboard what's happening, what's everybody talking about right now, and then be able to move in that direction it's not the problem with the trending it's how twitter monitors the trending. >> one of the unique innovations of social media was this ability to say hey, you guys can all see what everybody else is talking about. it's not some boring wall street journal editor picked this for you, it was hey, this is the water cooler conversation and you can see, and now if they're acknowledging that that's broken, i wonder what that means in terms of what we go to them for. >> well, to bill's point i think the answer is pretty sifrp m we all benefit from what's tr trending on twitter.

i didn't know this singer just had a divorce, whatever, but i do think it is easy -- >> need to know. >> there are times when there's somebody trending or a topic or a conspiracy theory that's blatantly false that's being promoted by someone's algorithm that some editor could just say this is false, just take it down i don't see why that's -- it does require some additional staff. apolitical ability to do that. >> i think it's tough because not all of the topics, conspiracy theory are that cut and dry. >> they're not, and you're still asking for an arbiter of what's right and what's wrong, what's trending and what's not trending the numbers should speak for themselves, but just the idea that you could have -- >> the anti-vaccine folks, the al lebs jon alex jones folks, those things everyone agrees could have been taken down. >> there's still a lot of gray space. >> the media companies, "the wall street journal," they all deal with gray spaces every day, that's what they're paid for. >> very, very well >> finally, vanguard says it's

removing 29 stocks that were erroneously added to its etf, among these names are ruger, glaxo, and geo group the firm apologized for the error and cited an issue used by its benchmark provider what do you guys make of this one? >> go back and see what we said about trending on twitter. >> algorithms. >> monitoring it properly and setting up those algorithms. this is a big oops come on. they made a mistake. >> i think there's a lot of questions people should be asking all of these ethical etfs. >> exactly we've talked about this ad nauseam. it's a very subjective thing when you're talking about ethically imposed mutual funds out there. whose ethics, according to what. >> exactly. >> but the error itself shows you that it's not just subjective, right? they put a rules based effort in place to look at certain -- screening is by definition subjective.

>> subjectively developed rules. >> but there are still rules by which things have to funnel through and pass these screens they acknowledged the error, but this is the idea of quantitative investing means you have to identify key words or phrases or ideas or certain like terms and phrases that actually get you to invest thin these things. >> it won't be long before we have red etfs and blue etfs. >> politically >> yes when we look at our surveys, and steve liesman found this too, people's attitude toward their investments is shaped almost entirely now on their political affiliation. i think the point of this mourdock papers being taken out of this, i think their investors would say i want that in, and i don't want some other broadcaster in my esg, so i think red and blue could be developed, if they're not already. >> i think they already are. >> those tickers aren't taken, someone grab them now. >> that is a lovely green tie. >> apolitical today. >> thank you, dom chu, bill griffeth and robert frank. china sending shock waves across global markets last week

when it devalued its currency. has it become so dominant it is finally time for the trump administration to team up with allies and take it on? that's next when "the exchange" comes right back or even trouble with recall. thankfully, the breakthrough in prevagen helps your brain and actually improves memory. the secret is an ingredient originally discovered... in jellyfish. in clinical trials, prevagen has been shown to improve short-term memory. prevagen. healthier brain. better life.

welcome back in 1984, the u.s. dollar surged to an all-time high, american businesses and agriculture, manufacturing and tech lobbied the government to ask for protection fweagainst cheaper foreign imports. that led to a joint agreement signed at the plaza hotel in new york city in september of 18985 between the u.s., the u.k., france, west germany and japan they jointly deappreciated the doll -- depreciated the dollar, and it plummeted as president trump rails against a strong dollar today, could something like that happen again or are we stuck with the dollar's strength this time around joining me, director of strategy at bank of america merrill lynch.

it took that type of coordinated intervention to get the dollar down last time would we ever see something like that happen again? >> i doubt it. the world economy is much more complex than it was back in 1985, and of course china was not an important player at that time we were devaluing the dollar against the yen and the deutsch mark that agreement really didn't last very long because japan did not want to allow the yen to appreciate that much, so they ended up sterilizing and eventually two years later the louvre agreement came around where they wanted to strengthen the dollar a little bit, and they just ran into one problem after another. what we need is we need more flexible exchange rates, not more pegged exchange rates, and we need to get china to -- >> more flexible exchange rates? so how would that solve the -- if you think -- do you agree with the president that the u.s. dollar strength is even a problem right now? when you look at that chart back to 1980, it looks like we're in

a sideways range, not in some big breakout. >> yeah, well, i think the chinese devaluation was a slight devaluation a couple of days ago. it upset the markets initially, but they came back and it would not be in china's interests to allow the u.n. to depreciate to any large extent because that means the dollar would be appreciating, and they have a lot of dollar denominated debt. >> absolutely. >> also, if you get into a situation where you're trying to get top down coordination with respect to exchange rates among the major players, you're probably going to end up backing into capital controls which would be very disastrous for the global economy. >> so kamal, let me bring you in on that. first of all, how strong is the u.s. dollar? is its strength a quote, unquote problem as you can see it?

>> it is a problem in that it has crossed the radar screen of the president, and this, i would say is an unprecedented move by any u.s. president to talk about the dollar in such explicit terms. in terms of what can be done about it, as you've said by the plaza accord, what was very interesting there is both germany and italy and france were all willing participants in the move to weaken the dollar. they were concerned about their currencies being weak. if you turn around to the ecb or the bng ank of japan, they willl tell you that currency weakness is an essential component of their monetary policy toolbox at the moment it's going to be very difficult for trump to engage with the g7 counter parts to willingly coordinate and weaken the dollar is it strong yes, what is our metric for it being strong it's overvalued according to a range of our metrics if you look at the current account deficit, plus the public

sector deficit, we are seeing a glaring as much in the same way as we saw during the plaza accord. >> you said that for those other countries like europe and japan right now, currency weakness is an essential tool. is that fair >> well, in the absence of any significant fiscal stimulus pushing, we've heard today from chancellor merkel that there isn't going to be a significant fiscal stimulus push, all the emphasis is on monetary policy we are going in evdecreasing circles here it seems like we're in the beginning of 2014 again with the ecb about to cut rates potentially and embark on a further qe cycle, and the only way that is generating inflation is by keeping the currency weak and hoping that oil prices will rise as well so in a way, this is the only option that they've got left, and if you listen to president draghi, their emphasis has always been on structural measures by governments, plus

coordinated fiscal stimulus to alleviate the pressure that monetary policy is indeed feeling at the moment. >> right now it seems like we're just getting the la ttter, but o can understand the frustration over the dollar strength gichk a given all that thank you both. wework is set to take steps to go public any day, but given yet it is urn to ta profit, should investors be aware of the red flags? we will drill down on those numbers next

welcome back let's get a quick check on the markets. dow, moving a little higher since the last time we checked about 1.5% gains for dow and s&p. nasdaq up 383 for the blue chips. here's a look at the most searched tickers the ten-year still in the lead apple, the dow, grk e, and the s&p 500. that inversion we're watching closely. uber closing at an all-time low yesterday. it's lower again today as we await wework's filing, should uber be a cautionary tale for another company that failed to turn

deirdre. >> start off with massive losses and uncertain profitability. they have not been compelling bets for the vestors this year wework is another one of those with 1.9 billion in losses last year but it will try to buck the trend. it will argue that it is the biggest office tenant in new york and london, and it's doubling revenue year over year. it will try to prove that it is a safer bet than the ride sharing companies because it is upping its enterprise memberships from the likes of big names like amazon, microsoft, ubs, and sprint wework says they typically sign longer leases with these enterprises, leading to a larger committed backlog of revenue convincing investors, though, could be tough in a recession, office rents tend to fall wework's core business model is signing those long-term leases and subleasing them on a shorter term it's unclear if enterprise members, kelly, would be willing to stay at the levelthat they signed in on if rents were falling. >> deirdre, when should we

expect their official filing >> well, we're hearing it could come any day now so we're certainly on watch. september ipo is what we have heard as well, which actually would be sooner than we originally expected. >> wow, so they're moving it up despite all of this. thanks so much deirdre bosa following wework for us >> a new report shows middle america is dealing with a major working age population decline, as younger workers head to the ulach. cod a new immigration policy stop the demographic drain that's next.

welcome back 80% of counties in america saw working age adults disappear in the last decade. as population growth slows, the american work force is shrinking and this reality is hitting the middle of the country particularly hard. my next guest says a heartland visa for skilled immigrants can change that. jen is the ceo and president of the economic innovation group. jo john, what is a skilled immigrant, exactly >> a skilled immigrant is really anybody with a college degree or some equivalent skill or above so it's pretty broad-based

>> you're talking about immigrants to this country who are probably thwarted by the current immigration policy this would be a fast track to get them here, but to get them to places like uute taw, new york, or south bend, indiana >> it would be a bathway for skilled immigrants to connect with welcoming communities throughout the country we currently let in few skilled immigrants every year. we know there's a demand for immigrants who want to come here, and we haven't been doing enough to open those doors to communities that have struggled. >> would the openness in the communities, you think, be sustained for a program like this how big could the numbers be >> well, when you look at the h-1b program, which is the current skilled visa program we use, that lets in about 65,000 visa holders every year. we think something equivalent to that is certainly possible and would be hugely beneficial we know that communities around

the country are already trying to recruit immigrants, in particular skilled immigrants, they're just trying to do it without much help from washington this is an area where the disconnect between federal policy and local needs is particularly vast. >> would they get anything in response for this, thee communities? would it be up to employers to start the process? how would something like this work >> well, they would start with the communities that are eligible based on their demographic stagnation or decline, opting in its important the framework be a dual opt-in. it signals by applying for eligibility and committing to certain steps and the immigrant would signal its preference for the communities that it would like to settle in. it would give a lot of choice on both ends and a lot of flexibility on both ends to find the right kind of match between the visa holder and the community itself the visa holder would be tied to the place rather toon a specific employer that flexibility is really important. so they would be able to work and live within that local labor market for a period of time.

this becomes a pathway to permanent status, to a green card it's a strong incentive to maintain eligibility and be a part of the program. for the communities it's a huge incentive because it's tapping into one of their greatest challenges the governor of utah said the worker challenge is the existential threat you have states like michigan that have lost over 10% of its prime age workforce in the last decade these are staggering numbers and also the places that are going to decide the 2020 election. michigan, pennsylvania, ohio, you have new hampshire, another state that's really struggled with its workforce shrinkage in the last ten years one of the important early primary states this is a front and center issue in terms of policy and in terms of politics. >> you're right. i wonder over time as millennials age and maybe move back to the suburbs if that helps ameliorate some of this, but this would obviously being a much bigger step in that direction. it's a really interesting idea thanks for joining us. >> thanks. >> john is with the economic

innovation group >> and that does it for the exchange today thank you for joining me i'll go join tyler and melissa for "power lunch." >> thank you very much indeed, we will see you in a moment welcome, everybody i'm tyler mathisen here's what's new at 2:00 on "power lunch" for a tuesday. remarkable rally stocks moving decidedly higher as the white house takes a bit of a breather, cooling it a little bit in the trade war with china. and all it took, apparently, was a phone call we have the details. plus, despite the market euphoria, tensions in hong kong erupting as police and protesters face off at the airport and president trump tweets that the chinese government is moving troops to the border we will follow the situation throughout the hour, as it unfolds on a tense night over in hong kong. >> later, retail stocks moving higher after a delay on tariffs, but as the brick and mortar apocalypse continues, the relief may be short-lived we'll talk