>> just bought cisco you just bought it >> we did. >> the yummy cisco right now, take a look at the markets. dow is up 256. that does it for us "the exchange" begins right now >> thank you, scott. hi, everybody. here is what is ahead from a day of escalation to a day of calm president trump says china wants to make a deal and the two countries are having conversations and phone calls. wh does that make fed rate cuts less likely now? >> the $17 million verdict the looming decision in the opiod case could mean for the company and the large number of cases now waiting in the wings hong kong protests are beginning to take their toll on the financial status that's all ahead in "rapid fire." and we begin with these markets and dom chu has that

>> generally green and positive all day long if you look at the dow industris up 266 points right now at the highs of the session, we were up just about 312 points at the lows of the session, only up 87. so, again, green all day long. the s&p 500 just up by a percent or so right now. nasdaq up a little over percent after we see a bounce back from friday's big selloff one place to keep an eye on. the idea of lower volatility stocks the ones that don't move around quite as much. they have been marketedly outperforming the broader s&p 500 over the course of the past year the gap has gotten wider so, the etf up 12% over the last 12 months and the s&p 500 is flat if you're looking for some of the stock winners today, check out the ones that are a bit more leverage to trade. these four stocks are dow components and they sold off

between 3% and 5% on friday. intel up 1.3% and nike up 2% and caterpillar up 2%. some of the biggest bounce back. >> dom, thank you. welcome to "the exchange." i'm kelly evans. durable goods jumped 2.1% in july business investment rose for the third month in a row gold prices are moving higher again today and hitting the highest level in six years and big swings in the treasury market the ten-year yield hitting the lowest level since 2016 before swinging all it way back up to around 1.53% right now let's drill down on these market swings with bob pisani at the new york stock exchange. what a difference a day makes. >> modest and very tentative rally after a wild 700-point swing in the dow overnight the markets are stuck in a range as traders try to figure out if the timing is right for a trade deal or not. it's difficult because it's not

clear if anybody knows the answer to that we saw very angry president trump on friday implying china was an enemy and more reasonable president trump today praising the chinese president as a great leader none of this answers the critical question. is this the right moment for a trade deal demand for stocks have been weaker on the inability to answer that simple question. tough rotating into the defensive sectors because that so-called safety trade and consumer staples and reits exteneded. near historic highs and trading at historically high multiples the only thing normal, august continues to live up to its reputation as a crummy month so far august is down nearly 4%. but the s&p 500 still up 14% for the year kelly, back to you >> bob, thank you. let's turn to the latest in the u.s./china trade war eamon javers is there.

what have we learned >> yeah, kelly, that's right what we learned is that this president is unapologetic about his negotiating style. he was asked if the volatility that we've seen in the markets is a response to his own uncertain negotiating style. his comments, for example, on friday that xi was an enemy that you just heard bob pisani referencing and that ping is a great leader what are markets supposed to make of that the president said essentially this is who i am, this is who i have always been and this is my negotiating style and it worked for me in my career and this is a president who believes this negotiating style as much of a roller coaster as it can be for those of us following it, he believes it works for him. the president also asked about these phone calls that you're talking about. he suggested there were two phone calls between the chinese and the u.s. side overnight last night. throughout the day today, we've been trying to get more detail or information from the white house about what was in those phone calls. who called who what was committed to, if

anything the white house unable to provide any context or additional information the president was asked about that again today here's what he said. >> the vice chairman made the statement that he wants to make a deal that he wants it all to happen that says it there i don't have to talk you folks reporting before, we can't find any phone call. he released the statement. i didn't release it. he released the statement. >> but there were phone calls, sir? mr. president. >> numerous calls. >> so, there the president at the same time referring to the statement by leo hood the vice premier of china made on a phone call that he wanted calm negotiations between the u.s. and chinese side the president citing that as his evidence that they wanted to come back to the table which was different than what he said earlier in the day pressed on it, whether there were calls, in fact. numerous calls they do seem to be referencing

some lower level calls between the u.s. and china and, also, this statement from leo. nonetheless, ultina nonetheless, ultimately, what we're getting in france is a positive and upbeat take on the trade war from the president of the united states and that has seem to be enough for markets of the united states today. >> thank you so much eamon javers. we learned the president might be more tolerant of market selloffs than we thought joining me now it's great to have you both here >> great to be here. >> michelle, this is kind of interesting, both eamon mentioned this and you flagged this, as well. the president's selloffs might be higher than we thought because he invoked the dow as a metric has something changed? >> in the sound bite that eamon was referencing he asked a

reporter about him going back and forth and causing market volatility, et cetera. the president came back and said that is my negotiating style but also within the president's response was there was almost this whiff or hint that he was just more tolerant of the volatility that ensued on friday i don't think he liked it. it's probably why he softened. and yet at the same time, it suggested that he fought back against the reporters. global instability, i would call it something else. so, for the markets purposes, if he's willing to live with more volatility, yeah, exactly. >> so you think that that volatility means he could be tougher. meaning more tear rfariftariffs prospect of a deal >> and raising the level even higher >> of tariffs. >> yeah. >> jim, what kind of scenarios do you have in a base case now >> i think we have to go from the top down because these are very interesting times when we think about global

economy, we think of it as bent, not broken key thresholds where we can see maybe where the breaking points might be the first one we have to start with is world growth world growth we expect to be at 2.7% that is danger close to the recession threshold, which is about 2.5% next we've got to go to europe germany, if we had another quarter of negative growth, we'll be in a technical recession. then we have to move over towards china. china is growing at 6 to 6.2%. >> if you believe the numbers. if they start to fall below 5.8% growth, that to me tells me it is harder for them to have net contributions to jobs and net subtractions >> meaning what exactly? >> which means conditions start to get worse a lot faster in china which means global growth. >> you're watching for all of these to break to the down side. >> that is the direction of travel and nextset t is the u.s. and ts where we start to ink the about the fed.

right now second half growth for the u.s. probably between 1% and 2% growth. now, that would put 2019 growth somewhere probably around 2% just under 2% growth now, that's not terrible however, when we start to think about the fed, the fed probably starts to need to get ahead of this >> that'sreally interesting. i want to read something tom said at jeffries the fed is falling behind the curve. he said the fed waited to see the after effects of lehman go under before they decided to step in and we know how that turned out greenspan cut and hiked again. if they cut now, they can hike, again, once trump ends the trade war. the only holding back the fed from cutting is pride. i raise that because you also think they should be more aggressive in a world where we talk about u.s. looking okay >> think about all the things i just listed in terms of thresholds the fed needs to get ahead of

this they need to be more proactive and they need to lead, not follow >> the only thing, michelle, that we might have learned today. because in all those scenarios they could work out to the upside, as well. the main things seems for everybody to come down to what could happen with the u.s. and china and you're suggesting maybe the new information there is negative. >> so, i find this obsession with the trade deal by the markets interesting. i think the far more consequential question in the world is, why are yields going so low as he points out i mean, there's something going on here. is it solely because of the trade war? i don't believe it the trade war likely exacerbates. for sure but something much bigger at play what is it >> happened so quickly over the last six to 12 months. treasury was at 3.25 and now at 1.44%. >> a breathtaking move. >> why is that happening >> you have plenty of people and

you have to be a fixed income portfolio, jim people sitting on huge capital gains and bonds and looking at yields only makes sense if prices keep going up can that keep hapening >> that is exactly right you're getting price performance and not as much income people will continue to buy, except we are starting to get to levels, again, i talk about these thresholds and being bent and not broken how much lower can that yield go i think that's going to start to slow down and that's when you can start to really have bigger issues going forward >> sure. michelle, last word on this what do we watch now in terms of next steps and where the trade talks are now going? >> i would wait to see what happens in hong kong to see how that settles out and how the chinese decide that situation. it's up to them to decide what they're going to do and that could lay a wrench in any hope for a trade deal at all. >> we're going to have more on that, stick around thank you, michelle. we'll see you for rapid fire

michelle, jim, appreciate it don't go anywhere. still a whole lot more coming up on "the exchange." coming up, a landmark opioid decision what today's verdict in the oklahoma versus johnson & johnson trial today could mean for the company and the rest of the health care industry plus, bank of america says china may be getting ready to target and boycott u.s. brands and why one market strategist says aggressive central bank activism is under way. and how you could play it. this is "the exchange" on cnbc

welcome back to "the exchange." a judge in oklahoma is about to make a landmark ruling on whether johnson & johnson will be held for the epidemic we will learn his ict. what is at stake here for j & j. >> what is at stake is whether it becomes a new corporate face of the opioid epidemic they sell band aids and baby shampoo and left as the sole defendant in this case the first to go to trial of thousands that are still pending across the country that's after purdue both settled here now the state of oklahoma is saying that j&j is creating what

it calls a public nuisance and marketing its opioids to doctors. a king pin because of their business of cultivating poppies and selling raw ingredients that went into these drugs to other companies. now their defense is that its drugs were fda approved and marketed responsibly in terms of that raw ingredient business, that was highly regulated and their sales were responsible. now, wall street is really trying what the outcome could be the state is seeking $17 billion and if the judge decides in favor of johnson & johnson, they would be ordered to pay nothing. in the middle, we see those settlements from teva and purdue and we're hearing from evercore that wall street may look at $1 billion what they're guessing j&j may have to pay. the only company affected by this outcome dozen of companies named in lawsuits and their stocks could be affected, as well

his decision will come around 4:00 and we'll bring it all to you. >> matter of fact, stay with us to talk about more of the potential domino effect of this ruling great to have you here so, you think no matter what this amount shakes out to, if any amount, the industry will remain under pressure. >> for a year. everybody will take what is decided in oklahoma and multiply it by 50, which is probably the wrong way to do it and then come up with some sort of settlement. but we've got numerous other cases working their way through the courts in different states >> we also heard numbers that say look at what happened with the landmark tobacco rulings in the '90s and to the effect of multibillion dollars how do we know which path or if all those paths we're heading down >> i think it will be time we need to see a bunch of cases settled first and then i'd also add merck's one decade ago, too, another precedent here

somewhere between vioxx and tobacco is where it shakes out >> do you think it's smart for j&j to fight this one in oklahoma instead of settling like the other companies did >> its are e's a tough call bec don't have all the data they have i don't think they like being called the drug king pin perhaps they would rather stem it here. of course, if they lose, that's a black mark for them. and they're already taking a lot of punishment in terms of the court of public opinion. >> what would you do with the stocks >> we don't own any of them, including the distributors for both opioid reasons and, quite frankly, health care in general is going to be under pressure until we have a democratic nominee in a couple months so, no reason to rush in here and be a hero. there may be a relief rally in j j&j. but, you know, for the next six months, i think, at least health care in general will be in a

holding pattern and anything associated with opioids is still tarred >> do you think he is right that this case will serve as a template for what we would see in the rest of the states? >> well, certainly, that's what wall street thinks, kelly. j&j wouldn't like wall trestreet think that public nuisance laws and different from other states. so, you can't translate it into other cases and we're going to see a massive federal case consolidating more than 2,000 lawsuits from states and cities that has been consolidated in federal court in ohio. that first trial will start in october. the judge there is really pushing hard towards a master settlement whether all the companies can come together and reach one is an open question >> thanks, meg, at the courthouse by the way, what would you invest in if you would stay away from this whole segment? >> we're focused on medical

devices, in particular they are no where near any of the overhang >> and china tariffs >> not a problem >> thank you, les. coming up, one shoe company is taking a big step despite bad uncertainty. a look at why now and how the retailer plans to protect itself from the trade turmoil. another industry getting riueezed by the latest round of taffs is auto suppliers. we'll look at who will be hardest hit ahead.

welcome back to "the exchange." cell gene has decided to sell its right to amgenfor $13.5 million in cash. in order to win approval for its pending merger with celgene. shares up 2.5% dish upgraded to a strong buy at raymond james. involving both its pay tv and wireless operations. dish shares are up just under 4% semi conductors are on pace for their best pace in a week. the sector has had a rough august, though still down more than 5%, even with this 1% to 2% move upwards. let's get to sue herera for a cnbc news update >> hi, kelly thanks so much here is what is happening at this hour. as the g7 wraps up in france

emmanuel macron and angela merkel plans to organize next month. russian and ukrainian leaders would also attend that meeting. here in the u.s., republican congressman duffy of wisconsin is announcing he is resigning on september 23rd to spend more time with his family duffy says he and his wife have learned that their ninth child, which is due in late october, has a heart condition. new england patriots safety patrick chung pleading not guilty to a felony cocaine possession in new hampshire where he has a residence state court said he waived his arraignment which was scheduled for wednesday. his next court appearance will be in november meantime, the drug enforcement administration announcing steps to expand the number of marijuana growers for federally authorized scientific and medical research the agency says the number of individuals registered to conduct such research with marijuana and its extracts has jumped by 40% in just the past two years.

you're up to date. that is the news update, kelly back to you. >> thank you very much. here is still what is ahead on "the exchange." ahead, why one ceo says china is more concerned than we think. one shoemaker says it's not afraid of tariffs and is ready to ipo googen him thinks lyft shares are getting ready for a ft. > and the logo free ad that is ahead in "rapid fire." what about him? let's do it. ♪ come on. this summer, add a new member to the family. hurry in and lease the glc 300 suv for just $419 a month with credit toward your first month's payment at the mercedes-benz summer event. going on now.

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let's catch you up on a few stories that should be on your radar here today here to break down the headlines, dom, michelle just a couple more days. first, snap on chairman and ceo was on "squawk box" this morning with this to say about the effect of the trade war on china. >> i think the local market is pretty shocked, you know china has been like this but, what, two years ago they did 27 million vehicles. this year it's going to be down. you talk to car dealers, they've never seen a down market in general, when you talk to people in china, they are more

concerned than i've heard them in a long time >> his comments echoing president trump's remark that china wants to make a deal because they have no choice. interesting insight, michelle, into how they might be struggling >> well, i hope the chinese realize that trade isn't their biggest problem. i hope the chinese realize the biggest problem is themselves. they intervene too much in the economy and they do all these things that deny credit to the parts parts. would the trade war ending help them yes. but they are shopping in the cemetery of dead ideas for their economic policies recently and they need to end that. >> somehow i don't think the communist party is going to decide, we're the problem and we're going to get out of the way. >> something in the name >> what about their response to the slow down? they've done a lot of credit easing measures and those kind of things. >> yes, yes, i always hear the chinese are very long term they think very long term and their life ceo managing to the border every single quarter.

they're going to tinker here and remove fear. they have been protectionists and communist and reformists and now revisionists and that is only in the last 100 years >> here is what i would say, to all of michelle's points, what they also do is they're also part of a government that manages and they throw money at things because they have a problem with keeping people employed there the most populous country in the world and people need to work in a communist society. if they don't, remember all the stories about them building cities. >> the ghost cities. >> the ghost cities. this is a country that needs to keep its population somewhat in check by getting them all jobs and making sure they all have something. >> american growth and american companies. this goes baic ck to the big question who is going to blink first? they claim china has the longerterm view but we know they are afraid of any social unrest

that comes from joblessness. >> they are. they can't acknowledge for some reason the way you keep all the people employed is through a market economy much more efficient than blowing taxpayer dollar. >> that is the hope of what the u.s. is pushing for. ip protections and open up your economy a little bit even if china realized in the long run its own best interest to do that doesn't feel like anywhere close to making those concessions. >> hence why i don't believe there will be a deal any time soon snp. >> so addicted to the idea that intellectual property and they've grown so rapidly in the last 30, 40 eryoyears, they're afraid to give that up >> they did market reforms remember, they're going backwards. 30 years of market reforms and they stopped and undoing it. >> and let's talk about hong kong, which you said earlier is the place to watch in terms of where these trade talks are going. 12 weekends of protests now. the city is at risk of losing

its crown as the top market for ipos the new york stock exchange have raised 30 billion and the index is now down 9% in the past month. >> it's slowing dramatically over the summer, as well one listing there in the entirety of august which is traditionally a slow month but not to discount what is going on with the protests there. this is also worth noting. you mentioned ali baba a result of some of the easing that the hong kong exchange has done in regard to their restrictions which have historically been much stricter than they are here and stricter than other parts of the world. including those who have weighted control structures. >> one vote. >> exactly >> so, those measures were taken in order to attract more capital to that region now, you're seeing a lot of companies considering singapore

as a potential option and considering the u.s. as an option and london as an option as all this uncertainty surrounding hong kong has led to lesser volumes and less attractive investor pool there and people are looking for other opportunities. >> worse than it was in '07/'08. you have the fact that protesters still continuing and turn more violent over the weekend and facing the deadline of kids going back to school that was seen to quell things and maybe the october, is it october 1? >> yeah, so those are two calendar moments to watch. which will really be catalysts kind of push a decision there. a lot of the uncertainty in hong kong may have started with the extradition law that they try to put in place hong kong going forward, it used to be so rock solid. >> right. >> and we are starting to see encroachme encroachment >> look at this cafe pacific

ceo. tell us of who of your employees are participatinparticipating. a piece of paper with one name and that is his. >> seeking an identity little weird given the relationship with taiwan and all the other areas. >> a lot at stake. let's keep with ipos but lighten things up a tag. shoe retailer hahn only the 13th foot wear company since 1980 when nike went public first question everybody asked we hear foot wear is exposed to tariffs. cole haan 70% of shoes come from china, it primarily sources from vietnam and india. >> that is the key differentiating. i didn't even think you knew about it you said you want to lightening things up that is a key to their strategy they are embarking on this athleisure no, physically light

their shoes are very light and very comfortable they have seen slowing growth before because people were moving away from this kind of shoe trend to the office people are wearing their, you know, their vests and they're wearing their sneakers to the office and that suddenly has become okay. cole haan has embraced this trend. they have their zero grand brand which is that sneaker that looks a little bit dressier. like a real shoe >> again, that was a big thing -- >> yes, a lot of that formed by thnike side of things. you remember with the nike air the air max soles you had in there. you could almost see, they put them in there. but cole haan still has some of that nike dna in it and that's the reason why maybe it's intriguing but such a cumodatized product. they just get bought up and sold off. nine west is another one of those stories. >> ipos, but it's hard to be good over a long period.

>> you have to look at the department store exposure, as well th're sold in the big department stores that have been struggling like macy's and so forth that are seeing less foot traffic. >> but, you know, that is something that i think investors will also have to consider, especially if they're looking at a private equity owned asset that isn't too frequent in the ipo landscape and not that many pure play sneaker shoe companies that they can relate to. >> whether it was intentional or by accident, the fact that they're not in china is a huge right now. >> guggenheim upgrading the stock and setting a price target of 60 bucks. $10 higher than where it is right now. lyft trading today the company will turn a praucht by 2021. interesting timing today because check out uber on the other hand little bit lower "new york times" published an excerpt over the weekend looking at how uber got lost and some of the challenges facing its

leadership one excerpt reads, dara replaced mr. kalanick as chief executive two years ago this week and even replacing the helium filled balloons that workers traditi traditionally get on their hiring anniversary with stickers deflation is in the air. uber responded by saying we can't wait to prove you wrong, basically. >> wish we did that. the question is, what exactly is he proving wrong obviously, those cost cuts are happening. we've been seeing the headlines come out what is interesting the cost-cutting measures that he has been imposing with the guggenheim note about the price increases and the price flexibility that the ride hailing companies have is this big overarching issue that everyone is looking at with regard to autonomous vehicles. that being kind of the silver bullet that will help these two companies reach profitability. i don't know if that is necessarily the case that has been the discussion among the investor community

>> the hard to invest in today the hope that this new technology which requires billions of dollars of investment and not ready for primetime feels a little -- >> it's very risky if you're going to say that the entirety of their ability to get to profitability rests on these price increases that they haven't really been able to enact successfully on a major scale since they have been bounded as companies as an industry and, so, to say that they will be able to do that because, you know, they're competitors and all the other businesses where they're losing money i don't know it's possible. >> and that's why you've seen the share's language the worst part of the ipo market is the most anticipated part of the ipo market this year before we go, i want to mention doritos getting hopes brand recognition in a new tv ad airing tonight that is a little different. watch. >> the following is a paid message for chips so iconic we don't need to name it.

because this is an ad with no logos. no jingles, no gimmicks. >> okay, so, here's the only thing i can say about this is you just have to keep coming up with new kind of viralish kind of content in this environment >> absolutely. >> right, dom. the same old ad all the time, that's not getting it done >> almost as if you have to make a super bowl ad for a regular ad to get it to resonate with people because these ads have become so innovative and so unique over time >> it has to be buzz worthy. >> but only a handful of brands that can accomplish what doritos is trying to accomplish. mastercard tried to do it with that logo, right >> i would say, you kind of can see it >> you can totally see it. >> so ubiquitous everybody knows, that's doriteoes. >> cool ranch or nacho of. >> or the fingertips

>> don't wear white and eat a bag of orange doritos. >> it could be pizza hut when i look at it i really like your point, dom. here's my question for companies. if it's now that every ad you put out there basically has to be buzz worthy and super bowl ready and all of that, that is a high bar >> it's a high bar, but one you can get people to creatively address because there are so many minds out there who i creating for multiplatforms whether they are online, instagramable or tweetable or super bowl worthy that you need to come up with these ideas and you have a feeling like the younger generation of ad folks out there are custom tailoring a lot of this content. >> that's not cheap. super bowl ads are expensive >> yeah. okay all the 23 year olds churning out the dorito ads what is this on the mtv vmas speaking of staying relevant >> i haven't watched the vmas in

a while. >> i haven't either. we'll leave it at that thank you, guys. colts quarterback andrew luck retiring from the nfl at 29 citing injury concerns whether more young plars wyeill follow in his footsteps and what it all means to the nfl, next.

welcome back president trump threatening the auto industry, again, with the latest round of china tariffs. his first round paused back in april. phil lebeau joins me now with what this means for companies already dealing with pressure profit margins phil >> remember, china is the world's largest auto market and it will have an impact on automakers most likely here in the united states, general motors we're showing you the four largest talking about toyota, honda and volkswagen

when you look at other shares, you have to talk about tesla the impact could be significant. report on china that the company may raise prices on some of the vehicles that are built in california and then shipped over to china because of an increase in tariffs that could happen as soon as the end of this week remember, tesla is building a plant in china the expectation is that it will be open by the end of this year. elon musk goes over there earlier this year when they symbolically broke ground on what they're calling a giga factory number three or the giga factory in china also, when you take a look at stocks that are impacted by what is going on in china you have to look at some of the parts supplies we're talking about superior industries and the auto part suppliers are impacted because these tariffs on china hurt the second tier, third tier suppliers who provide components that go into a lot of the parts that these suppliers are building finally, when you take a look at china and the auto sales, remember, this is a market that

has had amazing growth over the last 20 years. but we've had down sales that little tick down there before the red line, that's because we had 13 straight months of negative sales, but that forecast we put in there because the expectations is, if the market doesn't continue to slow down, kelly, it should continue on that trajectory over the next five to six years. >> that is dealing with the china front, phil. we also had japan and europe where there has been some news for autos. the president this morning, it was interesting. they were asking about the potential for european auto tariffs and he seemed to disz misit. >> he seemed to dismiss japan, too. i kept his tweets over the last year and everything is fine and then a couple months later he will say, well, you know what, they're making a lot of money off of us and the tariffs arant fa they have any basis of y, you know, these are solid comments

could change in a week, could change in a month. >> the biggest exposure, still, mexico, in terms of the way we make and cell cars in that country and we're still waiting to see if the usmca is ratified? >> the automakers aren't waiting. they are continuing to build and increase the number of vehicles exported from plants in mexico to the united states their expectation is that the new trade agreement will go through. remember, china is, or mexico is the number two manufacturer in terms of vehicles sold in the united states after those that are built in this country. >> i know that is the biggy, even with everything else going on phil, thanks very much >> you bet. colts quarterback andrew luck retiring from the nfl at age 29 citing injury concerns. 'lta authaiteawel lkbo wt mns for the future of football, next epharmacist-recommended memory support brand. you can find it in the vitamin aisle in stores everywhere.

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welcome back here's a quick check on the markets for you. the dow is up more than 300 points at the highs today. hanging on to a gain of 216 right now. o.8% for the blue chips and s&p up 24. the nasdaq outperformer with a 1% gain today. take a look at the yield curve, too. that curve we have been watching

and talking so much about in the last couple weeks. it is staying that way this afternoon. it was a retirement that rocked the nfl this afternoon indianapolis colts quarterback andrew luck game in his prime at year after being named comeback player of the year the former number ondraft pick calling it quits because he's tired of what has become a vicious cycle of injury, rehab, recovery, and injury all over again. the question is, is luck an isolated case of football fatigue or the beginning of a bigger trend the nfl needs to start worrying about let me bring in eric chemi to talk about whether luck is a unique situation or as people become more injury sensitive, it makes sore mense to walk away. >> his is a uneck situation because of his stature, his ability to play when he was healthy, and the options he has outside of football. john herschel left the nfl to get a ph.d

he had another option. andrew luck, though, he missed all of two seasons ago, all of half a season two years before that but this guy was a valedictorian of his high school class got an engineering degree from stanford was an academic all american he is a very smart individual. and his father is a commissioner of the xfl, has been a football executive for many years he saw his dad have an nfl career and a post football career in administration probably thought, i had shoulders on both of mize shoulders, a lacerated kidney, a kevin durant situation on my feet i have been in pain for four years. >> what was the most recent catalyst >> the ankle and feet were what was happening the last few weeks. that was after a couple years ago, stories were oh, he's finally getting on the field he was throwing a nerf football. that's a tough uphill battle to face when you're opportunity have a kid and think about the future of your life.

>> sure. the nfl season starts for real next thursday,ane couple days. i don't know that much about the colts and their draft strategy, but now they're going to have the backup quarterback >> they were a contender a lot of people thought they could win the conference with a healthy andrew luck, they're one of the best teams in the league he's one of the five best players in the league when healthy. >> if he walked away before the draft, the colts would have maybe taking a quarterback i was reading criticism. this guy steve said i can't justify this >> for an nfl quarterback. >> no scenario where retirement is defensible, to do this to the organization, fans, the nfl two weeks before the season is just not right. you mentioned earlier that this might not be the end of andrew luck's career for sure like, he could still maybe have the option of coming back and playing. >> the colts basically said, look, we could recoup $25 million from you in bonuses you

didn't actually perform. we're going to let you keep it the owner said this is a unique situation. maybe he'll feel healthy and want to come back. i think they're playing the long game we'll let you keep the money that you technically owe us. get better maybe in a year you'll feel 100% you have rehab without the pressure of week by week people forcing you to get back. >> he has the ability to be a trail blazer the biggest question is whether others will now follow maybe they were more desperate or hungry to start with, but after five years, i want out >> i don't want to do this that's why a lot of teams and owners don't like players with options. if you have options and something happens, maybe you dent want to take the pounding anymore. >> it is a pounding. eric, thanks very much >> china trade headlines are whipsawing markets again today a top strategist tells us how to invest in a world of plunging and negative interest rates, next

welcome back global bond yields keep sliding lower as central banks

arepulling out all the stops to prevent a global slowdown. my next guest says low rates are here to stay for the long haul joining me is keith learner. keith. how do you tell somebody with prices this high they can keep going higher >> it's really incredible as to how far these yields have gotten even today, we came close to testing the 2016 low for the u.s. treasury market as i talked for some time this year, we keep having these ongoing carousel of concerns and you have seen this bid, this huge bid for fixed income across the world. >> right, but that bid scares me at some point, it looks like the dotcom mania of the late' 90s or something. some of these numbers are astounding if the swiss/german debt went up by 2 percentage points, people would lose 50% if the german 30-year went up to a 1% yield, people would lose 30%. at some point, the risks are so one-sided, why don't you see it that way >> listen, i do think there is

some there's risk in all asset classes. that's why you basically have diversification. even in the u.s. market, which is being dragged down by the global negative rates, 15, 20-basis move up in the ten year wipes out your coupon. you have central banks buying across the globe, the deflationary trends, poor demographics, but on a relative basis, we see more value in equities one thing we have been talking about, a lot of near term uncertainty, but if you have a longer timeframe and think about the s&p 500, as of today's, we have about 63% of stocks in the s&p 500 with dividend yields above that of a ten-year treasury yield and what that means is over the next ten years, stocks could do nothing, trade sideways for ten years and just pay that dividend, and they would o outperform fixed income. >> absolutely, but as you well know, people say if stocks are unchanged, i'll get that performance, but what happens if it's '08-'09 all over again.

>> really, i think that's a recency bias every downturn doesn't have to be 2008, 2009. if you think about this bull market, this is the 19th pullback we have seen of at least 5%, but during that time, the market is up over 400% every year, we have two or three things that get the market nervous, and the reason why we call our theme this year investing amid a carousel of concerns is as one concern recedes, another one comes to the forefront. it's that kind of thirst for markets to be worried because we have that recency bias of 2008, and in our view, the bull market still deserves the benefit of the doubt. i think this corrective period is normal, but it likely has further to go. but we still think that this bull market deserves, as i mentioned, the benefit of the doubt. >> i have five seconds left. i have to ask, what's a noncorrelated strategy you would recommend to people? gold in a word. >> sometimes hedge front strategies that aren't related

on the directional movement of the market, so it could be trend following systems. and we're using that along with some fixed income to help balance portfolios during the bouts of volatility. >> carousel of concerns. thanks for joining me. keith learner from sun trust i'll go join bill griffith for "power lunch" which begins right now. >> we'll see you in a moment here's what's new at 2:00. stocks snapping backic as you know, as president trump says the talks with china are back on we'll tell you how wall street is navigating this trade triggered market move today. >> plus, growth stocks have been under pressure this month as invesers run for cover amid the volatility is the safety trade becoming a safety trap? we'll look at that >> a little later, disney plus could be a game changer for the streaming wars one top media analyst explains what's behind the platform's magic. "power lunch" s