>> i bought mastercard. >> jd john. >> pete? >> ready to break out. >> going after the jci i'll be back with you tomorrow and friday as well that does it for us. "the exchange" with kelly evans begins right now thank you, brian hi, everybody. here's what's ahead. the rush to market peloton, smile direct club and cloudfair all on deck ipo even as investors have been rotating out of growth and into value names this week. will that hurt demand for the next crop of offerings we'll ask. plus, what lies beneath? walmart is on the surface lately there are major shifts under way. we'll talk about what they are and what they mean for your money. and falling interest rates are now costing people their jobs another beat and raise by one surprisingly strong retailer, and the major name in washington calling for a recall of e-cigarettes that's all ahead in "rapid fire." we begin with today's markets and dom chu has the numbers. >> generally green across the board, kelly they weren't that way the entire session, but for most of it,

right now we currently sit right near session highs the dow industrials up about 111 points we're still watching the 3,000 level. we got within striking distance of their earlier intraday in the session. we were up 16 points in the s&p at the highs, right around there now, down four points at the lows the nasdaq composite almost up a full percent today as well crude oil a big focus, this on the heels of a "bloomberg report" saying that possibly president trump had looked into easing some sanctions against iran that sent crude prices, you can see here, falling intraday we are now just around the lows of the session for crude, off about 2.75%. that crude trade dragging down what was the out paewling energy sector so far today. energy also the best-performing sector this month. and we'll end on apple, because after yesterday's event, we're up nearly 3% today you can see over the course of the past year, up, down, up, down, and right now getting back to these levels is important because, kelly, that means that apple is now worth $1 trillion in terms of valuation. again, $221.28 is the price we

need to keep to stay at that valuatio valuation. >> about a buck above it right now. dom, thank you very much dom chu. welcome to "the exchange." i'm kelly evans. breaking right now, the president holding a meeting in the white house on e-cigarettes, president trump saying the administration is studying vaping carefully and they must act. the health secretary saying the u.s. will start nforcing fda guidance on vaping products once it's finalized, determining whether to ban all of the products from the market we'll get more as we get information in bob pisani is at the new york stock exchange robert >> hello, kelly. value has been the big outperformer bevens talking about it all week, but exactly what is value? well, in this market, it tends to be retailers, it tends to be banks, tends to be energy stocks, and some industrials and you can see here all of these sectors have been outperforming. this is the last five trading sessions retail up over 10% in the last five trading sessions.

banks, energy, industrials also strong beaten up economically sensitive sectors. again, generally outperforming today. look at some of the energy stocks they were up more. they're off a little bit from their highs as oil has come down they're holding on today industrials like caterpillar and boeing also up caterpillar's up about 10% in the last week. it's been a crummy performer all year boeing strong also banks had been doing well recently, particularly regional banks like comerica and zions. also, technology stocks doing well, apple up again what's the common thread here? these all tend to be economically sensitive sectors, and kelly, that's the story. hope that the global economy is going to be better if a trade deal happens and no recession in 2020 that's obviously a given back to you. >> that would be a great sign, bob, if that continues thank you, sir bob pisani. the year has also seen a number of high-profile companies go public with peloton, smile direct club and wework next in

line total proceeds raised topped $42 billion, a 20% increase nearly from last year but with some high-profile problems at uber, lyft, and wework, is the tide about to turn against the rest of these offerings. dan primack is business editor at axios and leslie picker great to see you both. dan, what's at stake here for the next crop of offerings is the going degetting tougher? >> i don't think it necessarily is when i think of wework, for example, that's probably a lot like uber and lyft, worth $40 billion in the private market, but whou think back to uber and lyft, for all the press about them and all we focused on them, remember things like zoom and beyond meat, which went public around the same time and have done really well. this time there's wework, but also data dog and smile direct club, which might do very, very well. >> and leslie, it almost seems like the rule is to kind of fade the headlines, right you want to go with the companies you've never heard of and not the ones you have. >> reporter: a big rule of thumb for investors in these ipos has

not only been that, some of the under-the-radar stocks, but also these with recurring revenue models, the big saas companies with predictable revenue streams, plus growth investors like to see both of those. not necessarily profitability right now, although it's one of those nice-to-have things, but it is kind of the saas model as dan was mentioning, the data dogs of the world. zoom, we saw what happened to them in the first half of the year those are the types of companies that investors are favoring right now. >> it's ironic, dan, because the banner names uber and lyft in particular have not done that well, but the ipo basket in general is up like 30% this year so do you think we're seeing more companies coming to market because it has been pretty lucrative, or is there a sense that they have to get out now? >> i think it's -- i don't think it's a sense they have to get out now. i wrote yesterday that this whole idea, that it used to be you didn't want to price in a presidential election year, right? too much uncertainty who's going to win but given how much uncertainty we have from the current white house -- you know, we didn't know there was going to be a vaping announcement today until a few minutes ago.

>> right. >> given that uncertainty, i don't think going out now or next year so much matters. i think it's more that just you have this big basket of companies that have raised a large amount of money in the private markets and they simply feel they're ready to go and they're kind of 5, 6 years old they have employees who would like to get paid. >> so they don't have to worry -- so, in other words, there's no rush to get out ahead of the election year, so then why not wait it out? i mean, airbnb seems to be taking that approach, right? >> i mean, you can, and some are. airbnb is taking that approach didi on the ride hail haven't gone out but if you feel your numbers are ready to go, as you say, the basket of ipos has done well this year, why not take it out in august? people aren't so much concerned about the presidential election, but there is a concern for recession and what that would do to markets. >> doug dav-- duncan davidson i joining us now with bullpen capital. you had a clever way of summarizing what we've seen in the ipo market this year you kind of break it down between the softbank stocks and

everything else. at is that telling you about this market? >> well, let's define softbank stocks -- uber, wework, maybe slack -- they drove these things up to really high private values for their own purposes and so, they've traded down, or weworks, a terrible situation right now. i was afraid for a bit that wework along, if it went out with crazy value, it might collapse the ipo window, but it's not going to happen they're managing it so well in the background, it will come out -- if it comes out okay. it won't hurt the rest of us is what i'm saying. >> so, what do you make of the arguments, or not the arguments, but analysis that private market valuations, duncan, are so much higher than what public markets are assigning? does that tell you that silicon valley is out of whack, or does it tell you that the general public is, you know, rating stocks as way too cheap right now, which would make sense in this kind of macro environment >> let's compare uber and lyft lyft goes out public at a higher value than the last private round. uber goes out public at a lower

value in the last private round. it's not all stocks have high private value. i'm just defining softbank stocks maybe i'm unfairly picking on softbanks. >> right. >> but a small handful of these companies were driven up to high valuations usually with what i'll call structure in the private round, preferences and other things that artificially inflated the price way above what it should be in a public offering. >> so -- >> but in general, not very many of the stocks did that. >> last quick question -- >> this is a small group of stocks, not a whole thing. >> which of the crop that's now coming would you be a buyer of, duncan >> well, there's a couple coming data dog i mean, there's some coming out that look stunning, absolutely stunning i love zoom. there's some zoom-like ipos coming out, more in the b 2b side peloton, not so much. >> even though they have the right target market, the people handling the ipo are kind of their core audience. leslie, finally to you, what are

you hear on peloton as that ipo comes closer >> reporter: yeah, so, that -- we saw those executives leave jpmorgan just a little bit ago we have some fresh video of the executives walking out of jpmorgan they were there for the teach-ins with the sales team and also at goldman sachs, which is where i'm at right now. the valuation wasn't too surprising i think it was what a lot of people were expecting. it's about double their latest private valuation. people liked what they're seeing with regard to growth. they like the product, as duncan mentioned. a lot of the people who would be prospective buyers actually own the bikes or treadmills or are familiar with it in some way but again, there are losses. their subscriber numbers i think are lighter than people were expecting. but overall, i think people are definitely going to at least show up to hear management speak. >> all right, we've got to go. dan, last, finally is wework happening? are you taking the over or under on that? >> i'm taking the over that they're going to try, right? the whole softbank's going to

make a pull. they'll give it their best shot. whether they can -- remember, they need to raise at least $3 billion. that's their number to get that big credit facility. >> all right thank you. dan primack, duncan davidson and leslie picker. now, eamon javers is at the white house with more. >> reporter: we'll see this tape of the president moment yarm, but a senior official tells me that what the administration is contemplating is removing an fda waiver that this official says was initially granted under the obama administration, then extended under the trump administration and now will be removed. that waiver allowed the sale of some of these nontobacco flavors for vaping and e-cigarette products so, the idea here, the official says, iso go after anything that could be seen as marketing toward children -- sweet flavors, bubble gum and the like of these vaping products and the official telling me that a lot of the initiative is coming from melania trump, the first lady, who is very concerned about the idea of companies targeting children for

these vaping products. so we'll see those comments here from the president in just a couple of minutes. >> eamon, thank you. eamon javers bringing us the latest and again, we'll get more from the president shortly. meantime, here's what else is coming up on "the exchange. >> announcer: coming up, the markets may look calm, but there's two major shifts happening under the surface. we'll tell you what they are and what they could mean plus, from argentina to hong kong to china and the uk, it appears the whole world is a hotspot right now. are investors ignoring some big ones that could impact their money? and uber and lyft may get a lifeline when it comes to california's new gig workers law. we have the latest >> announcer: this is "the exchange" on cnbc. hmm. exactly.

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welcome back happening right now, health and human services secretary alex azar and the fda's acting commissioner, normal sharpless, are speaking right now outside of the white house, having met with the president let's listen in. >> -- using e-cigarettes, increasing frequency of their use, and children being drawn in by flavored e-cigarette products, including mint, menthol, bubble gum, mango, alcohol flavored, et cetera.

just to be clear, youth utilization of e-cigarettes -- these are nicotine delivery devices. there's one product on the market, for instance, where one of their pods can deliver in the course of its life, which can be used in a day, the nicotine equivalent of an entire pack of cigarettes so, quite dangerous, quite addictive, and especially for young children becoming addicted to nicotine can become a gateway to use of combustible tobacco. so, after briefing the president, with the president's support, the acting commissioner and i have announced that the food and drug administration intends to finalize enforcement guidance which will require that any flavored e-cigarette products, not including tobacco flavor, be removed from the market until they apply for and secure approval under the

premarketing tobacco authorities at the fiood and drug administration under the tobacco control act. for the time being, we will allow tobacco-flavored e-cigarettes to remain on the market their manufacturers do under court order have to file an application with the fda by may of 2020, so next may, but we're also being clear we want the tobacco-flavored e-cigarettes to remain available for adults who may be using e-cigarettes to be off of combustible tobacco, but if we find that children start surging into tobacco-flavored cigarettes, or if we find marketing practices that target children and try to drive the market share into tobacco-flavored products, we will engage in a course of actions there also so, i just want to thank the commissioner for his leadership here, strong support, and of

course, the president for his unqualified support of this critical public health initiative with that, dr. sharpless, do you have anything you'd like to add? >> sure. i would just say, we had the opportunity today, as the secretary alluded, to brief the president and first lady on the data from the 2019 national youth tobacco survey data. this is data collected every year by the fda and cdc to study the patterns of youth use of tobacco, and they show this alarming and concerning increase in the use of e-cigarettes by children and the president has directed the fda to take decisive action to stem the tide of youth use of e-cigarettes >> mr. secretary azar, many companies, like juul, for example, have already pulled or said they're pulling those flavored e-cigarettes out of the market already what significant real-world impact do you think this move that you're announcing is actually going to have >> well, they weren't pulled from the market. they were actually removed -- one manufacturer removed some of the flavorings, not including mint and menthol, however, from

retail establishments into vaping shops that would have i.d. check on entrance as well as online with online verification what we have seen in the data from the national youth tobacco survey has been -- and it may be connected -- a huge spiking of children utilization of mint and menthol e-cigarettes, which, of course, remain -- >> the ones that are still -- >> -- to all manufacturers available in retail. what we have decided is that we simply can't have those products in the marketplace, because even with 8,000 enforcement actions that the fda has conducted, even with warning letters, these products are still getting to kids, and we cannot let a whole generation get addicted to the mint menthol and other flavors >> -- why not remove tobacco-flavored products in this action given the vaping concerns >> so what we're seeing in the data is that tobacco-flavored

e-cigarettes are not a major source of youth utilization at this point we do have 8 million adults who are using e-cigarettes, so there is actually some public health need for nicotine -- alternative nicotine delivery devices to be available for adults to get off of combustible tobacco, but with now 5 million children regularly using e-cigarettes, we can't allow the benefit to adults from that to come at the expense of our children yes -- >> mr. secretary -- >> isn't that just -- >> all right, that's the current hhs secretary and acting fda commissioner speaking about their moves on e-cigarettes today, which they say will include banning nontobacco-flavored e-cigarettes from the market, as long as they can work that out with the fda right now. scott gottlieb is on the news line he's the former fda commissioner and cnbc contributor, exactly the person we want to hear from on this announcement are they going about this in the correct way, doctor? >> well, i believe so.

that's a startling rise in the use of the products on top of the startling rise we saw in the 2018 national tobacco survey we long said that if youth use continues to spike in the survey, which it appears to have done, that we would need to consider banning entire categories of products, either take the flavored products off the market entirely, which is what they're proposing to do, or ban by type of product, considering taking the base of e-cigarettes off the market. and that's something i talked about because it seems kids are more to use the cartridge-based than the vaping, which is more at vaping stores i think the more legally defensible policy would be to ban flavored products, which is what they're doing, but ultimately, you need to reduce the access and appeal these products have to kids. and by taking the flavored products off the market, pending success faful application, you' going to accomplish that. >> what explanation do you have

for the six deaths and multiple comas and sicknesses we've seen from people using these products what do we know about those products or what does it tell us about the danger here? >> well, look, based on the public reporting we have so far, and we have do epidemiology done by the states -- it appears that most of the acute lung injuries are related to probably illegal products and probably products that contain thc or cdb, the active ingredients in cannabis they're unlikely to be related to the legal e-cigarette products like juul they might be. we don't have enough information, but they appear to be related more to illegal products i believe the action that they're announcing today isn't necessarily related to those acute lung injuries, but it's related to what they saw in the 2019 national youth tobacco survey that was always going to be the decision point for the fda on whether or not they needed to take more drastic action remember in march this year, shortly before i left the agency, we announced that we were going to put in place effectively a ban on the sale of flavored products in convenience stores that was a way to try to reduce

the access and appeal of the product to kids. but at the very time we announced that -- and i said it on cnbc as well -- we said that if the 2019 national youth tobacco survey shows another increase in use and not a decrease, we'd have to consider either removing all of the flavored products in the market or removing the cartridge-based products in the market they've chosen to remove the flavored products from the market by ending -- session. that appears to be what they're doing. in closing, remember, all of these products are on the market by the discretion of the fda we made a judgment that by making these products available, we would help more currently addicted smokers transition off of combustible tobacco and hopefully not allow kids to get onto these products, but clearly, kids are still getting onto these products. >> right, so i can imagine you must be frustrated as it's now kind of blowing up, people asking why they were ever allowed to market in the first place. the fda also warned juul about their advertising earlier this week there could be fines there could be further action coming down that pike.

now, obviously, we're following this from the angle of, you know, 40% of that company's now owned by the araltria, in a potl merger with philip morris international, that piper jaffray earlier this week said they're less confident is going to happen because of regulatory risks. what's the worst-case scenario now for people involved in this market >> remember, i also announced that we were intending to ban menthol and combustible tobacco, and that's also a product that's widely used by -- widely used in the marketplace called the combustible/noncombustible products what i heard from the secretary now is that they're affirming in this action that they also believe that mint and menthol contribute to this for kids. that's a question of whether or not they are going to extend the menthol band to the combustible products as we were seeking to do when i was at the agency. that's another wrinkle in this that's why you might be seeing the market react the way it is. >> dr. scott gottlieb, thank you for your time. appreciate it very much. >> thanks a lot. >> and we'll be hearing from the

president shortly with more on this, continue to follow this developing story all hour. also coming up, we have some interesting trends happening in llg arkets right now that are teinus lot about sentiment. we'll have that and more after this was losing my independence. mmm... good. so i've spent my life developing technology to help the visually impaired. we are so good. we built a guide that uses ibm watson... to help the blind. it is already working in cities like tokyo. my dream is to help millions more people like me.

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and earlier today the ten-year was over 1.79%, up from 1.45% just last week while markets have been quietly humming along in recent days, there are some major cross currents developing. one is this rotation away from momentum stocks and into value names. in the past week, the ishares value etf is up nearly 6% while the momentum etf is down about 2% meantime, corporate demand, like demand for treasurys, is soaring. companies have issued $150 billion worth of corporate bonds just last week that's the highest weekly volume on record. here to discuss whether these are threats or positive developments, chris zaccarelli, chief investment officer, and art hogan. it's great to have you both here art, these are major moves in the bond markets what does it tell you about the market overall >> it was interesting. i think they're related. so first, the momentum meltdown is something we've seen about five times in the last four years, so it's not something we think is unusual in that it's a trend that by the time you and i

start talking about it it's probably at the end, not the beginning. >> so it's a correction. >> it is and there's a reason for it. i think the real reason, tied to interest rates, was in august, we overshot on the u.s. ten-year at the 1.47% level and that's bounced some 25 or 30 basis points so, is that sending a signal that the economy has gotten that much better and we should exit these trades that we felt safe in, in a slowing economy, or is it just technical? i think it's very much technical. >> so, you're in the just technical camp chris, bob pisani did highlight these moves at the top of the hour where he said a lot of the economically sensitive names are doing better we'd love for that to be a sign that, hey, maybe the recession odds are dropping. where do you see things shaking out? because it has implications for the fed as well. >> yeah, i'm largely in agreement. i think we had a bond rally, prices higher, yields lower, that went too far, too fast. we had a little retracement of that over the last five days yields have gone up quite a bit and i think that's what

triggered that big rotation from momentum and growth to value i agree, i don't think that's going to last. i think we're going to have that rotation start to subside and we'll see it actually pull back as people acknowledge that the economy continues to slow, and in a slowing economy, i don't believe that value will be as good a place to be during that situation. >> so, what would be some specific recommendations, chris, then, where you think people should be? does that mean you buy literally the momentum etf does it mean that you buy, you know, the tech reit plays, for example? >> so, for us, we're really watching three themes. we're looking the at the u.s. economy that's slowing but is actually stronger than mos the rest of the world, we're looking at the fed, which is easing and loosening financial conditions, but it's the third factor, which is the trade war, the wild card. if the trade war is in more of a pause and reignites, which is what we expect, that's going to be really bad for momentum in high-pe stocks but on the other hand, if the economy continues to chug along at a slower pace, that's not necessarily so good for value.

so actually, we like quality stocks. >> okay. >> we're looking at stocks that have stronger balance sheets and a more profitability so for example, one area that we've been looking in is within health care. so if you look within health care and look for those with better brand names, those kind of consumer staple, like health care stocks, that have not had -- that have sat out the rally in staples, we think you can find good value there. >> give me one example or you can't? >> i can't name specific names. >> okay, all right. >> but like i said, in that sector, that's where we're looking. >> understood. and art, last word again to you. specifically, where should investors sit? you also like quality or how should they play that? >> hopefully, i always like quality. i think what we really think is be careful of the defenses even though they sold off, i think staples and utilities are still expensive. if you want to be defensive, i agree on health care we love technology here, but stay away from social media and the data collectors that are going to be under the gun for a while. >> all right thank you both appreciate it, guys. art hogan and chris zaccarelli and one of the most widely followed strategists on wall street will join the "fast money" crew talking about these themes tonight at 5:00 p.m

he's also going to product what will cause the next crisis marko kolanovic. don't miss it. here's what's ahead here on "the exchange." >> announcer: ahead, the phone, the streaming, and the watch what stood out from apple's event and what will move the needle a potential saving grace for people with peanut allergies the race to zero on wall street is costing jobs. and the retailer that's raised and beat estimates three methtis is year. it's all ahead on "the exchange." flows in the cloud, h? mm-hm. your employees must love you. thank you. ah, you could say that. so how are things with you guys? great. thank you. thank you, sir. lunch next week? terrific. say hi to the team. will do. call my office, i will. -sounds good. alrighty. servicenow. works for you.

welcome back it's been a busy hour. let's catch you up on a few stories that should be on your radar today. it's time for "rapid fire. here are dom chu, meg tirrell and bill griffeth to break down the headlines for us welcome. let's talk about the wall street reaction to the apple product launches yesterday, mostly muted. needham raised its price target on the stock to $2.50 from $225. they say the transition they're making should drive the multiple higher morgan stanley's katie huberty also expects them to expand into the 5g in the next year. atlantic equities just has $120

price target on the stock, and thinks the differences between the pro and standard models continue to shrink and that could negatively impact profit margins. >> i think the apple swagger is missing for the moment, at least. they have eased into this service-oriented portion of their business, and i think they have the riskiest streaming play at this point. >> even though it's cheap. >> they don't have the library well, they'd better go cheap because they don't have the library. disney and netflix have the library. they can charge. apple cannot so, and the pricing on the new iphones i think is very interesting as well. so, i think they are coming in with some humility this time around, which is unusual >> well, of course. >> right >> well, i would say this, one of the notes i read this morning, among the 20 of them that all came out because of last night, was bank of america, who talked about the attractive price point for even the arcade service. and the point being, as you talk about the narrative that's developing and not just around services, there's going to be a point at which we sign over "x"

dollars a month, not just for video streaming, but for all different kinds of services, just to apple. so it doesn't become like they're dependent on the hardware anywhere. there's a recurring charge that comes up on my credit card -- >> there's music, there's theming. do you pay the 99 cents every month for the cloud? >> right, they rake it from me every month and that's the business model there is probably a premium you'll pay for that subscript n subscription-based model. >> and we should mention that the watch got a lot of positive reviews and it always flies under the radar. i get it's not a big mover for the stock, but what they're doing, what is this, sleep, targeting? >> heart. >> heart. >> absolutely. >> and the lower price of previous generations has caught some attention. >> yeah, feels like we're at early days in a lot of this stuff. and going back to the tv idea, they might not have a lot of content now, but the billions of dollars they're pouring into content creation could lead to something very interesting and we might just be in the early stages of that so we'll have to see how good the content ends up being. i think a lot of us in tv might be interesting in that, the show

about tv people -- >> what do they call it, good morning -- >> "the morning show" -- >> the jennifer aniston vehicle i like to call it. >> the morning show. >> the morning show. >> just as a last out here, this is the first time after seeing that presentation yesterday i've thought about buying an apple watch. >> interesting. >> because -- >> it would be good if you could actually see it -- >> i've been wearing an analog watch for 20 years i'm just a creature of habit. moving on, we are getting some new headlines from the white house at this hour the fda is saying it's going to develop e-cigarette guidelines in the next few weeks. the hhs secretary says the administration is readying a ban on flavored e-cigarettes and meg, this came out, i don't want to say came out of nowhere, because we've seen measure from mitt romney about this, who tweeted these things should be -- i mean, we've seen the pressure in the headlines coming, but to move this quickly, all of a sudden this morning out of the blue is a big deal. >> right. >> the question i have for you is, how did these things ever get on store shelves to begin with, without fda approval that is negligence right there, right? >> it's interesting. they're kind of working backwards on that. >> now they're saying this needs

fda approval, these need to comply with rules. they should have done it to begin with. >> yeah, it's something we talked with dr. scott gottlieb about, and i know he just called in at our conference, he said what they were trying to do with e-cigarettes is enable them to be used for a tool for those who already smoke, make them stop smoking. and they didn't want to take that away as a tool, but the youth cigarette use caught them by surprise and the numbers skketed d sounds like we'll see the numbers skyrocketed again with the new report so while it seems like this is kind of coming out of nowhere, it really speaks to the fear that's going on around these illnesses that we're seeing. >> and now six deaths. i guess what i mean is, in a way i've sort of applauded them. they've worked very quickly -- >> swiftly. >> as soon as this has gotten really bad but to bill's point, should there -- and that's what we talked to dr. gottlieb about a moment ago as well, but should there have been more recognition about the hazards associated with vaping that unfortunately we're still learning about, so it's hard to even identify the causes -- >> the public has become the guinea pigs.

>> yes. >> they have become the test animals on this one. >> the product outran regulation in other parts of the tobacco field, you have cigarettes or cigars, and you have smokeless tobacco. they have been around in some use form for hundreds of years. >> right. >> and so, there was a construct by which to evaluate new products like peach-flavored smokeless tobacco, apple-flavored smokeless tobacco, all of those things which are already flavored and on the market as tobacco products this was a situation where they didn't have a precedent to go into that. >> i feel like a lot of what's happening with the cbd products and cannabis now, too, it's now out for consumption. the rules are so even, they practically don't exist. >> we'll set rules later. >> and as the public impact widens, it does make you a little unsettled, i think, about everything and we'll have more, obviously, as we get it out of the white house this afternoon, but let's talk some rh formerly restoration hardware, higher today on a big earnings beat for the second quarter. this is becoming a theme they've raised their fiscal 2019

guidance for the third time this year, seeing positive momentum, saying that rh beachhouse, the new galleries opening this fall and the rh ski house are all tailwinds. >> i have nothing to say about this >> yeah. >> private joke. >> we know you -- >> you should have been here. >> we know you both have -- we don't have time to get into it but let me just put it this way -- this is a company that was supposed to suffer from its exposure to china. >> yeah. i think they're a special situation, don't you the furniture makers were the ones we thought were the most -- one of the most vulnerable to the chinese manufacturing tariffs -- >> i think if you're willing to spend that much on furniture already, the impact of the tariffs, which they say in some cases they're passing through, aren't going to adhere to your willingness to spend that -- >> i totally agree. >> the consumer hasn't noticed. >> this stuff in rh is expensive. it's not cheap -- >> premium outlets -- >> only if you're part of a class-action lawsuit you apparently -- >> i have purchased stuff from rh because of a legal settlement >> anyway. >> but it is surprising. again, less so because they

should be able to pass this along, but because they were supposed to suffer more than they have -- >> so you know what the theory is here. the theory is, at that level -- or at that price point or quality point, the low interest rate environment helps, because what you have right now are people who can take out home equity loans or use some kind of home equity product at very low interest rates to buy this type of product and have very little interest exposure down the line. >> good point. >> so it doesn't affect say the rent-a-center or la-z-boy part, but you can see the luxury end being those places where if you do have a good amount of home equity -- this is diana olick's room -- buy against it at cheap rates, buy that $2,000 couch -- >> rates aren't that good, people, come on. finally, shares of immune therapeutics are surging on news that the fda is considering approval for its peanut allergy therapy. and we're calling it a therapy, meg, opposed to a drug. >> it's going through the drug approval pathway but is actually just peanut powder this is administered in a very controlled dose through the fda

rigor way, and it's basically building up immunity, tolerance to peanuts over time and it's shown in clinical trials to work very well, but there are side effects, and that's the, sort of the bear-case thesis -- >> what are the side effects >> well, since it's peanut protein and people are allergic, it's basically reaction -- >> so this is just peanut powder why do we need a therapy for this >> it's a great question it's already being done in some doctors' offices, but people who believe in the therapy say this is much more regulated, the dose is extremely controlled, you know exactly where it's coming from, versus taking, you know, say a peanut every night you don't know how big that peanut is, so it could be scary. >> has anybody figured out why we are seeing more peanut allergies today than ever? >> that's a big question. >> there are a lot of theories, but no exact ideas but guidelines are changing really fast for folks with young children they said before don't give your kid peanuts when they're little, but now they're saying give them early, 7 months. >> we did that with our daughter every nut you could possibly imagine.

but we also do it because our daughter's in a daycare facility or a pre-k, whatever you want to call them -- >> where she's exposed to a lot -- >> no, because there are enough allergies in the school where all of those things are prohibited so you cannot have -- >> oh, really? >> yeah, they'll have signs on the doors that says we have a child in here allergic to eggs or milk or peanuts or something like that, so you don't see any of those types of foods at the school. >> last question, and i don't mean to belittle it, but if it's just peanut powder, can't a billion other players rush into the space? what makes immune so special >> you would think so. they're the furthest along, obviously. there are other companies trying to work in this space, but they're at the finish line, really and the fda's t to decide by january. but there is a question, you know, this could cost maybe $10,000 a year -- >> wow >> for peanut powder >> it already costs a few thousand dollars to do it in your doctor's office, so it's actually not that much more, but it will be interesting to see. >> if it cures one of the major problems out there right now, that would be, maybe worth it.

thank you all very much. bill griffeth, meg tirrell and dom chu today. now, from brexit to mexico, tensions between india and pakistan, the whole world feels like a hotspot now why this could be the beginning of a second cold war, next look at art patterns. i've even built my own historic trading model. and you're still not sure if you want to make the trade? exactly. sounds like a case of analysis paralysis. is there a cure? td ameritrade's trade desk. they can help gut check your strategies and answer all your toughest questions. sounds perfect. see, your stress level was here and i got you down to here, i've done my job. call for a strategy gut check with td ameritrade. ♪ woi felt completely helpless.hed online. my entire career and business were in jeopardy. i called reputation defender. vo: take control of your online reputation. get your free reputation report card at reputationdefender.com. find out your online reputation today and let the experts help you repair it.

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tariffs on some u.s. goods is seen as a sign of goodwill between the trade talks next month. at the barclays financial services conference in new york yesterday, jamie dimon talked about the trade situation and the many other areas he's worried about right now. >> the u.s. consumer is chugging along. the u.s. consumer's 70% of the market they don't necessarily react very much to geopolitics at all. but you do have this mounting stuff of what i call a complex geopolitics, but you do have argentina, mexico, brexit, china trade we'll go back to in a second, hong kong, india, pakistan >> it's a long list. joining me with more on those

global risks is neil ferguson, senior fellow at the hoover institution. and neil, it's great to have you. i'm going to ask sort of the cynical question, which is, you know, the world's always a mess. there's always a bunch of problems out there what makes now different, if you agree that it is >> well, some of what jamie dimon's talking about is essentially business as usual. argentina financial prices come on, that's pretty much once-a-decade affair, and a bunch of other things, too i think it's not worth getting too excited about, populist governments and that in america and mexico, changing government in italy it's all business as usual but the big story is u.s./china. and i think although every now and again, wall street gets excited about signs of progress on the trade war, i'm pretty skeptical that there's going to be a trade deal any time soon, and what i've been saying for some time is the trade war some time ago became a tech war, and that tech war also has escalated

in many ways into a cold war i mean, think about some of the things we've seen recently protesters in hong kong in the streets clashing with police, waving the stars and stripes that is a pretty inflammatory thing to have happen under xi jinping's nose so, i think that's the crisis that's worth watching. >> but nial, in the cold war, the u.s. was fighting. we were an active participant. we were working for the spread of democracy and to contain communism. are we fighting this cold war now? of course we're going after china's behavior, but we're not doing much to respond directly to what the protesters in hong kong are asking for. >> right we didn't do terribly much about people in budapest in '56 or prague in '68. remember, the thing about the cold war is that there wasn't that much fighting, except in proxy wars you know, the united states and soviet union did not directly fight. there were a great many proxy wars from korea to vietnam and many others, also in southern africa and indeed in central america. i don't think this cold war is

going to be like that, and i also don't think this cold war between the u.s. and china is going to involve nuclear brinkmanship it is much more a kind of space race, cyberspace race war in which technology and the competition over artificial intelligence or quantum computing is really where the action is, and i think that kind of a cold war in some ways makes sense for the united states because the alternative was to let china win economically and tech lodge kelly in a sense, i'm saying cold war ii is here and it's probably not a bad thing. >> what do you make of john bolton's departure from the white house and the implications there? when you have rand paul, an isolationist, who is sharing his departure saying it is better for america, it makes the world a safer place, is he right or not about that >> well, i'm an admirer of john bolton, but i'm also not surprised at his departure because there always seemed to me to be a fundamental incompatibility between john bolton and president trump one of the things that doesn't get said nearly often enough is

that president trump is the most dovish president in living memory he has backed down on so many issues, it's hard at the moment, the regime is nearly toppling. right now, the president has just failed to have a peace meeting in camp david with the taliban, right around the time of the anniversary of the 9/11 kind of amazing to do. the president wants to have talks with the iranian regime. this must be the principle reason one aren't geo political situation isn't so panic endeucing is a friend of the united states is really very reluctant to get bolton into the complex.

he likes the trade war, he likes economics, and he's very focused on china there are a bunch of other trouble spots where president trump is looking to make peace and his critics are numerous you don't hear that a lot. >> it is amazing that for all the criticism for the obama administration foreign policy, it's this president that's actually turning out to be quite dubbish. neil, thank you so much, appreciate it. neil ferlg ussen from stanford joining us today apple announced yesterday their streaming service will cost just $4.99 a month. we decided to conduct a poll to see which streaming service comes out on top of this crowded field. we took to twitter to ask for your top picks, this is what we got. netflix still rules the roost.

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california's gig economy is in jeopardy after state lawmakers passed a bill that could change the way uber and lyft do business they could be subject to minimum wage, to benefits, to sick days and more for more on this i'm joined by an analyst who covers these companies. what's the latest on this space of this bill it sounds like the companies may get an extension from the stock rallies today in. >> uber and lyft in particular p.m. a lot of the other big economies have been working to carve out exemptions the bill has been winding its way through the california legislature for some time. it just passed the last step

now it goes to governor gavin newsom's desk. these could have multimillion dollar implications for the business there are still some questions over the implementation of it, and whether governor newsom will carve out exemptions for uber and lyft >> if they're not cracking down on uber and lyft, then what is the point of this law. >> the point of this law is to initiate the gig economy should these drivers are doctor be communities there are some that are considering other endeavors, careers. they may not want to be classified as employees. there are other drivers who say they want all the benefits of a full time worker, what uber and lyft are doing is trying to

carve out some of these benefits, minimum wage on their own. so they're not part of the sweeping bell. >> what would be the biggest win. i'm told that all told it would raise their costs by 35% what numbers are you putting around that? >> that's generally in the ballpark look, i think the market largely anticipated the bill was going to pass, and we expect the use -- are they going to sign it, what the market is trying to handicap is whether the two sides are able to hash out some sort of middle ground. >> what would the middle ground look like. >> it will be a watered down version of the level of benefits that 85 suggests, it will include a minimum hourly wage

that the parties have thrown out at $21 per hour. it will also include -- at least the gig economy companies are trying to put forth this idea of portable benefits. if you're a driver and drive multiple platforms, but you drive collectively over 24 hours a week, you'll get a certain amount of disability insurance. >> they kind of worked together? >> they pulled the costs a little bit >> what does it mean for the prices of uber and the share prices, and is it contingent on whether this spreads beyond california >> i think that's a major question and it's still sort of an unknown. i've had people try to argue that there are particulars in the california constitution, that kind of created a loophole in which the gig economies could be targeted that might be harder to replicate in other states that said, i think broadly a lot of states are going to look to california as sort of a thought leader and as the model to deal with this new gig economy model.

>> listed at 47, uber's at 34 right now, what are there price targets. what should those targets look like >> we still don't really know enough about exactly how this is going to get implemented i think if they manage to hash out a middle ground and it looks like we think it's going to look, i don't think that there will be massive impacts, there will be moving pieces, costs will increase. i think they will need to get away with the prices more. at certain times of day, certain markets, certain usage so midtown manhattan trip to the airpor airport. >> will get more expensive >> it will get more expensive. >> thank you, guys we'll continue to watch how it

develops thank you. that does it for the exchange today also join tyler and melissa for power lunch which begins now president trump targeting vapping. we'll bring you the latest details, it's been a massive year for ideas as we face scrutiny just how healthy is the ipo market amazon, the latest tech target we will tell you what that could mean for the stocks. >> good after noon, everybody, and welcome to power lunch here, the highs of the recession, you see what's there. the dow industrials about a half