changed and this company should do well. >> want to give shouout real quick. >> ennis hanging out in the control room thank you for all the great basketball nights we witnessed >> cvs >> dupont. >> good stuff. does it for the "halftime report." thanks for watching. "the exchange" begins right now. >> thank you, scott. here is what is ahead. new round of tariffs kicking in. trade worries continue and u.s. manufacturing constracts can the consumer continue to hold up this economy we'll ask. and there's trouble in the energy patch stocks are falling and the debt is growing we're going to look at who's most exposed in the oil space and what it means for the economy as these burdens pile up plus more delays could be coming that might keep the boeing 7 37 max grounded past the holidays and into the new year we'll have the latest for you. we begin with today's market

and dom chu with the losses. >> counting up t losses, but not as bad as they were earlier on kelly, at the lows of the session, the dow industrials you can see down 353 points and they were at one point down 425 th is the benchmark. low for the day in the dow jones industrial average right now the s&p 500 got below 2900 and bounced back a bit. 2902 the last trade there and the nasdaq composite down by 1%, as well. when it comes to the sector decliners, you know where they're at the more economically sensitive ones that are falling the most meanwhile, defensive, less economic sensitive sectors are doing the best let's accentuate the positive. half a percent for some of these and financials and industrials we'll continue to watch that tre trend and see if it continues to play out in afternoon trading. that pessimism has led to a safe

haven bid for things like treasury bonds the ten-year treasury note here 1.45% and one point it got below 4.3% meaning that this down trend that we've seen in place is still in tact and, by the way, kelly, that puts ten-year treasury note yields at the lowest levels we've seen at one point since july of 2016 some brisk selling i'll send things back over to you. >> we might retest those lows. welcome back to "the exchange. major moves in the currency moves and the euro touching a two-year low and the british pound hitting a three-year low against the u.s. dollar. this as we learned the u.s. manufacturing sector contracted in august hosting its first such decline in three years the fed fund futures see a 10% chance of a half point cut in september. a zero percent chance of that on fridays. trade and tariffs the biggest response and that's where we begin.

kayla is live in washington with the latest on the tariffs, the trade wars and their impact. >> the chilling global manufacturing is evident with new factory orders, employment in the u.s. all down in august as president trump ratcheted up the trade war with china and rolled out a schedule for new tariffs on all of china's goods. president trump today tweeting china shouldn't stall because the deal will only get much tougher if he is re-elected. tweeting china's supply chain and businesses, jobs and money will be gone china is pulling out tools from its policy tool kit to try to stem the fallout at present. filing a complaint with the world trade organization lowering the costs of domestic goods like appliances to disperse spending and easing certain traffic regulations so people buy more cars both washington and beijing hav committed to in-person talks but no date set according to aides

in question about what each side wants to achieve >> the metric that matters most to this president whether he thinks it is winning and the trade deficit for many other countries is up and by quite a lot. >> that is a trend that is ongoing for the last several years. reaching a ten-year high back in march and only marching higher from there one of the only trade deficits that has actually fallen is that with south korea, which is one of the bilateral deals that this administration has reached and it reached it last year. so, certainly a lot of progress on the bilateral trade front to make kelly, this is the key reason why president trump is taking direct aim at the federal reserve and about a strong dollar because he truly believes it is not his trade agenda creating that dynamic, but the strength of the dollar and the fact that exports are becoming much more expensive. >> we'll talk more about that, appreciate it. these markets are lower on a skiddish start to september.

check out the dow, s&p and nasdaq and all the major averages are lower the dow and nasdaq by more than 1% right now and the ten-year treasury note hitting its lowest level since july of 2016 joining me to talk more about this portfolio manager at aerial investments and michael schumacher from wells fargo. to pick up on kayla's point of currencies, what impact is the strong u.s. dollar having? >> well, this is the fly in the ointment this is, i agree, what is causing a lot of these problems. the dollar is a safety currency. it's the currency to which people leave when they're unhappy with their own currencies, with their own economies. so, despite the massive deficits the trillion dollar deficits, the very low interest rates and the prospect for more inflation, the dollars continues to be very strong that has all kind of implications and it is tough on

trade. so far it means that more money is coming into the u.s., which keeps interest rates low and it is a two-edge sword. >> so, in other words, from the president's point of view because he talked about this quite a lot. you would say to him, yes, look, the dollar is stng but the flip side, you're getting stronger interest rates than we would otherwise? >> absolutely. that's how we're able to fund this $22 trillion deficit that we have because interest rates are so low it is a vote of confidence from the rest of the world in the u.s. economy and in the u.s. government things could get ugly if people lost that confidence and interest rates started to go up. it would be tough to finance $22 trillion >> are u.s. interest rates artificially low or too high >> i wouldn't say artificially low. when you think of the u.s. being a safe haven, perhaps that makes sense. but people around the world look around and say, okay, you have german yields of 70 or 80 and yields in france are terrible and yields in the uk are bad and

the u.s. is the only place to go for yields not so sure it is a vote of confidence as far as where we put our money. >> a desperation shift it doesn't seem like a great sign, but people have been hounding the fed to cut interest rates. is that warranted in your view, especially now in light of the data this morning. survey dropping into contraction. >> big challenge for the fed is trying to bridge the gap between what the market expects which is another four cuts, really. and what the fed has been signaling which is one, maybe two. jackson hole powell did not bridge that gap but when the fed doesn't do what he wants, the president steps in the fed is in a tough spot the fed does not need to ease as much as the market expects >> the ten-year yield is going where, michael >> just about anywhere let's take a 12-month view perhaps higher think about the scenarios that

might unfold over the next few weeks. a trade battle the uk/brexit. hong kong situation, hurricane our advice is keep it safe over the next month or two. >> charlie, last word to you on this we're familiar with your stock picks, again our ways to stay out of this mess here, but where do you think interest rates are headed? >> i'm a value investor which means buying things for a cheaper price than they're worth. a ten-year bond is not worth par if it's paying 1.4%. 2% inflation in the future negative return. don't buy financial instruments because you think they might trade higher that is greater theory these interest rates have to go higher over time >> gentlemen, thank you, both. really appreciate it charlie and maichael. hurricane dorian continues to batter the bahamas as florida, georgia and carolinas brace for what is to come. a direct hit to the carolinas is

increasing let's get to contessa brewer with a look. from travel to insurance, it's starting to add up >> we're getting a glimpse at the damage predicting 50/50 landfall in the carolinas on thursday. category 2 moving sluggishly towards the florida coast. it will just not move away whole towns reported destroyed and infrastructure damage poses problem now for rescue and recovery with the death toll almost certain to rise from the five confirmed now the cargo in freeport is an important hub. the largest petroleum hub and laid directly in dorian's path shut to cargo and cruise traffic and, in fact, cruise cancellations cost those companies about 5 cents a share, according to

disney will begin shutting down its themrks in orlandos in 45 minutes kennedy space is closed. 1,400 flights canceled and we're watching for the impact here on agriculture especially tobacco, cotton and orange juicefutures now down about 2%. we saw that off their lows of the day. earlier down some 5%, kelly. >> we'll monitor it, contessa. thank you. we have some breaking news this hour on walmart and gun sales. let's get to sue herera with that news. >> walmart is changing parts of its gun sale policy. this comes in the wake of backlash that the company faced after a number of shootings, mass shootings over the summer, including one at the seelo vista mall that's where 22 people died. here's the latest on what walmart is going to change and what is going to stay the same they have updated their gun policy, they are discontinuing sales of the following items

short barrelled rifle ammunition, which could also be used in military-style weapons, handgun ammunition nationwide, handguns in alaska, which was the last state in which walmart sold them. what will be sold still long barrel deer rifles and shotguns along with the required ammunition for those firearms. hunting and sporting accessories and apparel. walmart's ceo telling cnbc.com, we believe these actions will reduce our market share of ammunition from about 20% to a range of approximately 6% to 9%. we believe it will likely drift towards lower end of that range over time. keep in mind, back in 2015, walmart eliminated the sale of assault rifles and they are also making some changes in open-carry states. they are asking customers in open-carry states not to bring the firearms in to the store

unless appropriate police are present. if you have a concealed weapon permit, you will still be able to carry those firearms in and they say that they are also the ceo telling cnbc.com that they're going to send a letter to the white house and to congress telling them that time for action on commonense measures are here. he is calling on the governor to strengthen background checks and remove weapons from those who have been determined to pose an imminent danger. big changes there at walmart, kelly, back to you >> hanging on to a small share in the session today here's what else is ahead on "the exchange. >> coming up, it's not just a china trade deal the new nafta has yet to be signed threatening new tariffs on europe and the president says we need to go at it alone. we'll look at what could be the next policy move

plus, oil and gas bankruptcies are growing as investors start to lose appetite for the sector and debt burdens get heavier. we'll take a look at who is getting hit the hardest. and why one analyst says amazon could rally more than 45% amazon could rally more than 45% in the next year lower calories. higher expectations. corona premier.

welcome back the impact of the trade war with china continues to grow.

the u.s. manufacturing sector contracted in august for the fist time in three years trade turbulence was cited as the biggest factor and you still have the new nafta deal that hasn't been signed and unfolding dispute with europe and a trade deal with japan that is in principle. let's bring in james who is an economic analyst and stephanie miller co-founder of sand hills strategy great to have you both here. jimmy, let me just begin with you. as the evidence piles up that the tariffs are having an impact certainly on the business sector, possibly on the consumer, what do you expect the president, if anything, to do? >> listen, i think we're at the state if you're driving through hell you just keep on going forward and i think that's what the president is going to do i don't think there is going to be a last minute i'm taking down all the tariffs and business confidence booms i think he's going to stick with these tariffs. listen, if i was an investor

what i would do is figure out, is this about a trade deal or a new cold war plenty people around the president think it is about a new cold war president still thinks it is a trade deal but he is going to keep going with that. i think he thinks ultimately a winner for him we'll see if the economy says the same thing >> stephanie, what do you think? as jimmy said, if this is an issue where the people rally behind the president and the consumer doesn't feel that much of an impact, maybe politically he could do fine, but the economy is in a more and more fragile place right now. >> it is interesting, i was watching cnbc about a week and a half ago and the president tweeted he orders companies to stop doing business with china and that was a light switch. i felt this program a lineup of people from the community saying you have to stop we could tolerate a lot of this but at this point, what are you doing? i think he does have a very long leash when it comes to his take

on china and what he could do, but at a certain point it is maybe he has gone too far. >> put out a statement today against the tariffs which and they say congress should pass, you know, this policy to take some control of the situation back your point, stephanie, they do have some control over trade right now. they still have to approve the mexico/canada agreement. is that more or less likely now given everything that has happened >> the way that the usmca approval, the new nafta is positioned to me nancy pelosi's decision at the end of the day i do think congress is going to have a lot of things to fight with the president about, but all these political arguments take place in a broader political context and with the 2020 elections looming, it's kind of what does the country need if there is a lot of economic pressure from china and this feels like a way to provide some relief or at least some good news, it could be helpful to get democrats to vote. >> jimmy, certainly be helpful for the economy and some businesses who want clarity on,

okay, if i relocate out of china, mexico is kind of a safe place to go. >> that's really a thing where is the safe place to go? when businesses are talking about going to vietnam, what did you see from the president he started tweeting about our trade deficit with vietnam maybe we needs to launch a trade war against them listen, the smartest thing someone told mat the start of the trade wars is, listen, very difficult for the president to make trade more open he has amazing tools at his disposal to shut it down only now fully realizing the extent to do that. >> to make your point clear to people who are following this, you do not think this is setting up for a trade deal that we're going to get a headline in two weeks time and suggesting a moratorium on tariffs could be a shot in the arm. you don't think anything like that >> i think that would be a shot in the arm for the economy, but i think that would look like a

humiliating defeat for a president who has made china and trade, not the tax cut, but trade the core of really his entire political agenda. to put a moratorium on it. i think the president likes to look strong, that would not look strong >> ironic, stephanie >> we've rarely been in a situation when something is seen as politically popular, even as it's damaging to people's pocketbooks. it will cost people $1,000 a year, that is real money >> it is short term paying for long-term gain, if you trust the president then you trust he is doing something. the first president to do something on china, that's very powerful maybe politically if people are not necessarily voting with their pocketbooks today, which is this rule that you seem to think is going to tell you what is going to happen >> but maybe they will next year or not >> exactly, which is why i think you have to end the trade war before it gets too far >> we will see thank you, guys.

stephanie, jimmy, appreciate it very much. still ahead here on "the exchange," we'll check in with one business owner who said the trade war is causing major supply chain problems and begging retailers to hike his prices he joins us live with a look at how he is trying to keep his business growing plus, trouble in the oil patch. oil is down 3% right now in the worst-performing sector last month. what is dragging it lower and how much pain for the economy? "the exchange" is back in two. - in the last year, there were three victims

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down 374 points right now. the bank citing competitive risk in the hard seltzer category shares down more than 6% casino operators are getting hit as gaming fell more than expected a sluggish and wynn is down 4% crude down nearly 3% on weak manufacturing numbers and raises concerns about the strength of the economy and energy is among the sectors all leading the declines today concho down 4% now to sue herera for an update. >> here's what's happening at this hour. iran will not enter talks with the u.s. unless washington lifts it sanctions against them first. he also said european nations are failing to implement their commitments following the u.s. pull out from the 2015 nuclear deal with tehran british prime minister boris

johnson urging mps to block a bill on october 21st without a legal. he labeled it a surrender bill and says if it passes he would be forced to go to brussels to beg for an extension >> there is a lot to do in the coming days, but things are moving and a major reason for that is that everyone can see that this government is utterly determined to leave the eu on october 31st. another health warning about soft drinks. a new european study found regular and diet soda are linked to an increased risk of early death. researchers followed nearly 452,000 people for 16 years. those who had at least two soft drinks per day were more likely to die than those who drank less than one per month something to think about that is the news update this hour, kelly, back to you

>> think about that while i take my sips next hour, sue. here is what is still ahead on "the exchange." coming up, as manufacturing shows signs of slowing down, can the consumer keep holding up the economy? amazon could rally more than 45%. smile, you're about to go public no love for the like button. and the surprising new nfl partner. that's all coming up on "the exchange."

welcome back let's catch you up on a couple stories that should be on your radar today. "rapid fire. bill griffeth and a special appearance by ron. we'll talk some manufacturing and some markets today the u.s. manufacturing sector contracting based on the latest ism survey any number below 50 signals a contraction and the index dropped to 49.1. ends a 35-month expansion

period not just the headline but the orders index dropped and the employment index and that's where we're looking for the contagion effect so to speak from the tariffs and the rest of the economy. >> not a good sign >> exactly >> no. i mean, we've been in this bifurcated economy for a while now where the consumer is doing fine, manufacturing has been reigning it in and now we're starting to see it pick up some pace here. >> not to say that, ron, it can't come out of this 2016 being an interesting example. a lot of analogies worried about global growth and china and then everything was off to the races and now it kind of depends on the president, once again. >> we don't have the same fuel that we had in 2016, 2017 to get us back to the races and we had this head wind and manufacturing around the world is contracting, germany is about to go into recession. china is decelerating more

rapidly than people realize. as we said before, nine different countries in or near recession and, look, the consumer is always the last to slow down. i was at the mall last night and it was jam packed. back to school stuff was going on apple stuff was busy >> we had these recession fears time and again in the first half of this year, consumer spending so strong. and we're talking about almost 5% growth and it was really, really good. not just is it going to slow a little bit it's kind of like that has ton very well. and if manufacturing is specifically hit by the tariffs is it as much about the business cycle or just really telling us about this targeted part of the economy? >> got rid of the trade war and manufacturing would bounce back. having said that, if you go back to the prior recession and december was very strong for the consumer and then by the time the stock market crashed in the middle of the year, everything went in a different direction. >> watch apple, for example, in particular the tariffs that hit today include a lot of popular products

the levees, the extent to which people see that and consumer sentiment did slip on friday not like this has gone totally unnoticed. anyhow, let's talk some amazon those shares in the middle of their 52-week range. they could rally 50% from here he raised price target to 2,600 from 2,250 because of the rollout of prime one-day shipping he thinks that will drive subscriptions and everything is fine one-day shipping to the rescue >> this is interesting the average prime household spends $1,800 annually on prime in general just ordering things for this quick shipping. i know, i certainly use it i can't even imagine how much i will order when it is one day. >> will it make a big difference to you >> big time. >> most of the stuff i get is one day or two hours later it's crazy how good it is. >> but from a value proposition, this will make their market cap

$1.2 trillion. jeff bezos go back up to $150 million. mackenzie gets over $50 billion. she will be worth more than the walmart heirs, so, there's a little bit of retail irony there. >> the market cap, walmart was the disrupter of its day they were putting out mom and pops >> let's not forget. let's face it, this is a pretty aggressive call to go 50% a year because of the prime thing what was the other thing i was going to say the macro. the macro environment is going to dictate this and the consumer is fine at the moment but i think we're heading into a period, especially as we head towards the holidays right now where if prices are going up because of the tariffs, it will slow things down no way we could have the kind of christmas we had last year >> also think about the criticisms about the platform now for amazon a lot of stuff from china that

is not being fully vetted and safety issues we talked about. it needs to move, yes, one-day as a consumer, it needs to keep growing share. >> how many nonprime members become prime because of this that aren't prime already? i think it's already well saturated group and people who are waiting to become a prime member until it is one day that is a small group. >> i'm fascinated by this delivery system because we had a milk man and a guy that delivered groceries and all this stuff went on in the 1960s >> what color was his horse? >> he had graduated from that but we had a, that was back far enough but little gray outfit and a cap and everything else. >> one area we have seen some progress is teeth straightening. smile direct is kicking off as the company reveals more about its plans to go public leslie knows this one inside and

out. this is disrupting the disrupter of the braces industry >> indeed, they are. they do this teledentistry process which is different than your regular orthodonia. they met with the sale force to kind of help explain to them how to market this to investors and went on to citi group and they are the two lead underwriters in this deal. they were seeking about $1.3 billion in this ipo at the high end of the range, which would actually make this deal the fifth largest u.s. listed ipo of the year and their valuation is a whopping $8 billion more than 2.5 times their latest private round valuation from just last october, kel now as you alluded to, the company makes teeth alignment at a fraction of the cost of even the traditional invisilign that

people are familiar with and braces the way they do that, they send you the molding for your teeth to your house or you can go to one of their smile shops or one of the drugstores they are affiliated with to take an impression of your teeth and it is sent to a licensed orthodontist and your straightening procedure at all just under $2,000. >> it is said to be about 60% less than traditional orthodontic braces and they will open up in cvs and walgreens smile direct club and there's an interesting kind of rivalry, frienemies >> i think this opens you up to older people who want to straighten their teeth and don't want the braces and the cost 60% less than traditional

braces very accessible. >> not making money yet. >> $50 million loss just for the first six months of this year and it is cheaper, but they're relying on this becoming a mass consumer brand if the economy turns a little bit south, $1,900 is a big check for the average american to write. this is a peak economy phenomena. >> $3,000 for braces >> it's less, but still $1,900 or $2,000 with all in is a lot for the mass market consumer brand to keep growing at 30%, 40% a year >> the problem here that you're being evaluated by your orthodoorth orthodontest remotely. what could possibly go wrong so, i understand that that is one way to keep the costs down, but at some point, you can take this too far and try to provide affordable health care you need the assistance of a

doctor right there >> leslie, what were you going to say last word. >> oh, i was just going to, i was just going to say to robert's point about the cost. they have a really interesting part of their business, which actually generates revenue which is their smile paid financing option they don't do credit checks. they allow people to put $250 down and it is also covered by some insurances. if you have a certain type of dental insurance >> no credit check >> makes money by giving money away basically >> the average is like 17% >> we'll let you get back to the road show. leslie will follow the ipo for us. facebook could follow in the steps of instagram

described their move of making a less pressured environment on the app. are these moves, guys, going to fundamentally change social media or is it just -- >> what is wrong with it what is wrong with the likes >> people -- >> it makes people feel bad. >> not as many people get as many likes as you. >> that makes me feel bad. my life is lame. >> any move a company makes has to have a financial motivation for it so, are they losing subscribers? >> it's discouraging for people that don't get much likes to post because they don't post as much because they know, that is not going to get many likes. >> the solution is nobody gets likes. so, then what happens? >> the influencers, that's how they make all of their money >> all the millennial who have to live off these likes. >> you're sitting among one right now.

>> but if you look at the pressure coming from washington. when you had josh holly present legislation that would literally limit the infinite scrolling and other things, they're probably saying if these little things are going to be targeted, better for us to get ahead of it before it deals a blow to our business. >> of all the things to target, it would seem the least objectable when it comes to facebook >> target infinite scrolling >> wonder if they target privacy and -- >> that's a good question. >> protect our accounts, okay. leave the likes alone. >>, t the nfl is teaming up wit tick talk. a huge hit with gen-x. the third most downloaded app and the partnership with the nfl inudesighlights and behind the scenes footage since i'm trying to figure out tiktok, it is, this is where the

energy is for the gen-z. >> what makes tiktok great is it is home produced and very amateur and very rough and kind of the knight watchmen doing a dance. >> can you do likes? >> probably. but the idea that you could have a corporate like the nfl sort of gather momentum on that, that is a big ask. i'm not sure it is going to work >> kids playing football, the participation rate is down participation rate in baseball is moving up i don't care how many videos the kids watch, it's still up to the parents to say, okay, you can go play now >> football has jumped, betting on games now football games where you're betting intra game and now they're going with the tiktok thing. they're trying to all kinds of

things the way movie industry tried to keep people away from television >> with social media, if you fix the core issue people have with it, in this case, the safety the season is about to kick off in a couple days time. how that goes will tell you much more about how people engage with football than whether they are on tiktok. >> from what i understand -- very loosely, i won't be watching football at all >> or anything >> no. we don't have enough time. but i don't really understand tiktok but call for action and challen challenges if that's a way to get the kids engaged. similar to make what is a youtube video. do i sound cool? i don't know >> the highlights of the beating new england is going to take at the hand of buffalo in mid-september. >> thank you, all. >> ron, thank you for joining us today. bill griffeth, robert, thank

you, as well. the first part of the latest china tariffs taking affect officially it's a war out there with the retailers. as we head to break, take a look at the italian etf, moving to session highs on far right and center left parties backed a coalition government that new government takecould office in the coming days and markets here at home are off the session lows the dow down 425 dow down 379 points and s&p wn 28 we're back in two.

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welcome back to "the exchange." 15% tariff on $112 billion wurlth of chinese goods went into effect over the long weekend. that hits many grocery items and household staples including products from my next guest. bruce is founder of housewares company casabella.

i'm familiar with your products, i assume many people are talk to me about what is happening on the ground here as a result of the latest round of tariffs. >> the tariffs created a tremendous amount of uncertainty and stress moving forward, also. this list four just came out it was announced in august, 10% in mid-august. another 5% tacking on 15%. we have goods on the water, so all of a sudden. >> in other words, you're ordering stuff how far in advance for your product line? >> for six months. >> so you find out two weeks in advance that the tariff is going up, nothing you can do about it. >> nothing we can do we have goods on the water and all of a sudden a huge tax coming on to our product puts us in a very stressful situation. >> what happens? your company has to pay these tariffs. whatever the price of your imports is, you add 15% on to that and then what happens you turn around and pass that on

to retailers >> that's what we're trying to do we are trying to get price increases. we cannot absorb a 15% tariff, it's impossible. we're trying to get concessions from china >> don't you just tell the retaile retailers? >> we tell the retailers, but it's not easy. their fear is that if we increase prices, you know, the sales will go down the volume will go down. so, it's a war it's difficult it's difficult conversations it's a giant squeeze play. a good example is that we're coming out with a new line and we established retails in june with a cool new line major retailer looking to put it in for april retailers, the retail is already set and we're ready to go and now we have a 15% price increase we either have to increase the cost of the goods, increase the retails or cut our marketing expense. >> do you have the option of making this stuff or importing

it from any other country than china? >> really difficult, very difficult. we have our supply chain in china and we deal with plastics and molds there. there has been a level of stability to make product there. we have our qc, we have everything there it is extremely difficult. we do make some product here in the united states when it doesn't have a lot of assembly but we can't find factories here >> do you support what the president is trying to do when it comes to, you know, the cracking down on ip theft with china and some of the other misbehaviors and saying, you know, look, over the years there has been theft out of this country of industries that need to be here are those goals that you think you are behind or not? >> i think there needs, this needs to be thought out. i think this is erratic decision of it is going hurt u.s. businesses i don't want to comment if the tariffs are right or wrong but doing it so quickly as of

august, goods in september gives us no time to react. that is just going to hurt american business. we innovate here and we globally source it's not, it's been a model that has worked for decades. >>s dox you have >> 500 >> are any of those jobs or wages at risk? >> ifok we can't get our price increases and get ae1 level of decreases from china, we're going to have to make some tough decisions, but we're hoping we're going to be able to deal with this. >> so the way this is right now, and i didn't realize this prior to this discussion, it comes done to what thee retaib%. whi putting your product on thee1 shelf does if they're pushing back and saying we're not taking your price, thate1 means your company has to eat it. or , ande1here's a decrease in the couple points. so there is definitely a e1cost. we can't absorbxd15%. there aree1 some items that are 30%, too there's no way of absorbing that

margins. >> all right bruce, appreciate you coming in and talking to us about it.l bruce kaminstein, he's the founder of casabella >> the boeing 737 max could be grounded for the holiday season, according to a new report. we'll have the details and what it mea fnsoroeing and for the airlines after this. that's why, your cash automatically goes into a money market fund when you open a new account. and fidelity's rate is higher than e-trade's, td ameritrade's, even 10 times more than schwab's. plus only fidelity has zero account fees and zero minimums for retail brokerage and retirement accounts. just another reminder of the value you'll only find at fidelity. open an account today. you- when i see obstacles,ty. i create opportunities. (soft music) - when i see adversity, i find a way. - when i hear never, i say now.

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welcome back boeing is the biggest drag on the dow today. it's down more than 3% right now, and it's following a new report that says the 737 max models may not be back in service for holiday travel this after united and american airlines have canceled flights until december phil, we have both this and of course the latest impact, the latest twists and turns in the china trade wars and global growth worries all hitting the stock today. >> right, and i think that we could expect this to happen probably from time to time over the next six weeks to eight weeks. as the faa and otherç regulato max, the report from the "wall street journal" indicates that there's tension betweençó regu]q,imeu$e faa and the

counterpartsi whether they're europe, china, canada, brazil. it's long been expected that we switch, the max is approved to fly again, by all regulators around the world.g2i that's what this report that's why we're seeing a little pressure on the stock, not añ huge amount of pressure, but a little bit of pressure in a day where the market is5a down.> there'se a good possibility. the rank and file are looking at how profitable the u.s.e1as bee for the big three. and they look at that and say

sure, we have profit sharing but we believe that we should get more whether it's through fewer temporarye1 workers being used, whether it's through a raise, a bigger raise than they received in the past. that's at the heart of this. remember, this contract expires on september 14th. this vote, kelly, r/csn't mean they're going to go onei strin the 14th it just gives thee1 leadership the uawqthe right to say,e1 you knowpwq1zs have broken down there's going to be a strike at this particular plant or wherever they decide to strike >> and over ironicallyx how we the autos have done. okay, phil, thanks.t we'll see how that goes int abt ten days' time phil lebeaui] joining me on tho stories. >> miereanwhile, there's troubl brewing in the oil patch they hit a w30-month low in profits. the permian basislp alonet(hast 59 rigs since the start of the year oil and gas bankruptcies are on the rise 26 filings thus year, 20 since

the beginning of may for more, let me bring in jordan blum we're just wondering if this is taking a toll on the economy down there yet >> oh, yeah, very much so. oil bust in the houston area has largely recovered frome that, t it hasn't added the jobs back. we have kind of this weird dichotomy now where u.s.t oil production is at a record high, 12.5 million barrels a day it's booming, but bankruptcies are on the rise. if you count oil field services companies,x bankruptcies are about at 40 for the year with an aggregate debt total of roughly $20 billion. and that's alreadyç e1surpasse7 billion a year ago >> and you mentioned -- jordan, let me home in on that a little bit because we all think about it as high oil prices, good for those companies. low oil prices, bad.

oil prices low, therefore this is happening you're saying it's more than that, the debt loads the retailer whose had the highest debt loads are the ones who have gone bankrupt qu e z prices now, and it just really hasn't paid off. and in the years ahead, you know, there's a ticking time bomb for a lot of companies. you know, where we stand right the mid-$50 range, it's basically a no man'sx land whe some companies can profit, some can't. so you're reallyproducing a lotñ of winners and losers. that's by company and by geographic region. youqmentioned the rig count.5 it's down roughly 15% in the last 12 months you have an area like new mexico on the edge of the permian basin. where the shale acreage isn't as

ñd last year. >> and there's company like sancheze1jf eenergy, epj ener missed an interest payment you have people at vanguard natural resources with debt concerns ulta mesa, the s.e.c. is looking into are we going to see larger and larger companies affected by smy indebted players >> the biggest one so far this year was the oil field services it used to be one of the so-called big four services companies look with baker hughes, schlumberger, halliburton, but most of the ones we're going to see are the mid-sized smallr" ones with the sanch sanchezes and ulta mesa hasn't filed, but they could be on the horizon in the next few weeks. they're a houston-based company, but again, they're actually focused on acreage in loklahom which has turned out to be a huge disappointment.

they were worth more than $3 billion. about $30 million and trading >> wow and that tellsx you -- that les it right there.e jordan, thank you for adjoining us lord brown will be on "power lunch" today inhlfact,cpower lunch begins right now. af#u)zmelissa óee a major selloff on the street. the dow falling 400-plus points at the lows of the session as trade tensions remain high are we in for a september swoon? >> energy stocks sinking deeper intox bear markete range lord john browne will be here to could get. gun salese1e1 following two deay shootings in stores over the summer we'll bring you the details on this lppotentially ground-breakg move