again. >> xop unusual call buying. oil d gas. >> we talked about the beta names hitting. southwest airlines, this name will move to the upside. >> you love it fair to say? with that thanks a lot i appreciate it. that does it for the halftime. "the exchange" with kelly evans begins right now >> thank you, brian. hi, everybody. here's what's ahead. markets are up as china would reportedly agree to a partial trade deal in exchange for no more tariffs as both sides threaten move that would threaten apple and tick tok. what this is telling us about this week's outcome. headaches for the nba in china, more events canceled and partners cutting ties with the league as commissioner adam silver arrives ahead of tomorrow's game. can he repair the damage as criticism continues at home? he will debate >> despite high profile ipo flops money pours in to hot startu and ie scorching pace can continue.

we begin with today's markets and seema moody with the state of play. >> good afternoon. here is where markets stand at 1:00 p.m. eastern. really a confluence of headlines on the china trade front will they get a partial deal and will with it be enough for the markets toide do 237 point gain for the dow we're at session high, 1% gain the nasdaq up 1.2%, apple close it tos all-time high the two best performing sectors, technology and the energy sector within tech i want to highlight some of the big moves in the chip stock the chip makers that tend to move a lot in tandem with trade headlines are higher across the board. we have marvel, skyworks and nxp semi seeing gains of 2 to 3% that continues to be a strength of source for the broader markets. one outlier levi strauss earnings and revenue beat but the apparel maker did say a stronger dollar could impact full-year earnings

ub see the stock is down 7% or so but is down about 25% from its april high send it back to you. >> appreciate it very much welcome to "the exchange." i'm kelly evans. we begin with today's top story. china again with a number of major developments reports say the country is open to accepting a partial trade deal this week, willing to buy an extra $10 billion worth of u.s. goods in return for no more tariffs and hit back at the administration's decision to impose visa sanctions on some chinese individuals now. they're calling the move a mistake and saying it violates international relations. announcing they will consider implementing their own visa restrictions all of that and china criticizing apple for a featured app in its app store how does this play out as negotiators sit down in washington joining me is the vice president of global analysis at stratfor and james, managing director at capital alpha partners james, i'll begin with you

it looked for the last couple days as if the news flow was setting us up for a disappointment how much do you -- faith do you put ones the reports that china is still open to a partial deal? >> look. the trade talks are now about democracy, human rights, and free speech. the chinese won't change their system, they want us to change ours they've been pitching the idea that they're open to a deal for three years now and the last couple weeks, the state media has been saying there is a deal ready for the americans if they'll accept it. bit about liu he coming to washington with reduced expectations is that trying to lower the bar to make a mini deal soybeans for tariff relief seem acceptable m we'll buy $10 billion worth of soybeans and we'll pay you that and go away. >> $10 billion worth of soybeans is a pebble in terms of what we're talking about here should the u.s. accept that kind of olive branch? >> well, i think investors need

to understand there are deep structural problems here across the board. it's not simply the so-called seven deadly sins which ip theft figures it's competition across the board and about the compatibility of two systems if we cannot let nba employees make a tweet about hong kong, apple can't sell hong kong related apps, if any comment about china is taken adversely, and if they expect us to turn a blind eye at the way they're ropi roping weekers in concentration camps in china they don't understand our system. their message will change nothing but buy some soybeans. >> reba, we see the markets up about 200 points as they continue to look and react to every positive incremental trade headline as a sign of some major break through or maybe quelling fears as more tariffs are coming doesn't sound like much, if anything, is changing here is it just the relief there

might not be more tariffs which as we've seen in the past can be short lived. >> exactly it's a temporal situation and look at the concessions that china is offering here agricultural purchases, even if we get to energy purchases, these were things that china was doing even before this trade war started. these were always the easy, low hanging fruit in these trade talks. really, another cease fire we have been there, done that, and you see the white house in this kind of incessant search for additional leverage as it's trying to deliver on its promises to the american people, to show that this trade war has been worth it, that the economic damage has been worth it, and so that search for leverage is now going into more and more extreme territory. there can always be further tariff increases and additional tariffs but now we're talking more about that strategic decoupling argument, which has strong national security

undertones and much bigger market impact. i would say that there is little cause for market relief right now. this is the narrowest of a narrow deal. >> we're going to talk about this in a little later, but do you have a sense, if this is a strategic decoupling, hard to see how it's not, what market impact that should have? >> so obviously the performance of the u.s. economy is the chief issue for president trump going into the 2020 election season, so i think there will be restraint when it comes to major market disruptions caused for, for example, the delisting of chinese firms from u.s. exchanges. look at the first step, the idea of preventing or restricting american pension funds from investing in chinese firms that's politically bulletproof what u.s. congress member is going to argue with this idea of protecting government workers from firms that support the chinese communist party, right so what's notable here is that i think we're going to take the first step in terms of capital

controls and that should still be very unnerving for the markets and that's an issue that extends beyond trump in 2020. >> i said we'll talk more about this later but while i have you both here because you're experts on the issue, i want to ask about the frightening scenario playing out in syria as turkey launched an offensive there. james lucere, nobody thinks this is a good idea except the president, terrifying as we have to sit by and watch how this plays out. i understand the president doesn't want to lose lives overseas fighting battles, but what happens if we lose lives here because there's a resurgence of isis >> that's true i think there is a united bipartisan consensus against the president's position the u.s. is in a bad position here on the other hand, if you follow the jacksonen theme of american foreign policy as mentioned in a column in the wall street journal, the u.s. public does want to get out of these so-called endless wars i just wish that the president had found a different area to

make this statement. syria is a place where removing a small u.s. presence can lead to tremendous carnage and while the american public may want to get out of the middle east this is not the place to start. >> reva, a word on this. we watch the usual kind of market signs for geopolitical fallout. oil prices being up, maybe pricing in more of a risk premium, but there's probably not much of an impact. will this reverberate more politically or james right, this is what the public's appetite has become >> i would point to as the u.s. is trying to deal with great power competitors like china and russia, of course it has a strategic need to extricate itself from these middle eastern flibtss. apart from syria which has little economic impact by and large, look at the situation with iran. the u.s. still has a massive deterrence dilemma on its hands. iran has every interest in

escalating further at a point where saw ki di compare capacity and redone dancy has been reduced significantly. they have the capability to hold a global economy hostage and if it wants to break that sanctions stalemate it has to escalate to get to a negotiation to deescalate and that is still a big part of the iranian game i would not take your eyes off the persian gulf conflict in particular. >> thank you both. appreciate it. reva and james we have a news alert on 10-year notes up for auction moments ago. rick santelli has those results. rick >> yes kelly, everybody is, of course, a bit nervous about debt in general, whether it's short maturities, long maturity, $24 billion of 10-year notes cross the wires auctioned off of 1.59, priced about right all the metrics, whether bid to cover, indirects, directs, were close to 10 auction averages the only thing that was outstanding was that it priced quite right. that's where the one issue market was

so c-plus auction. tomorrow we'll have 30-year and the markets didn't seem to have made much difference in yields after the auction ended. back to you. >> rick, thank you very much rick santelli in the market, rallying today on word a partial china trade deal could still happen is this wishful thinking or do we need to price in a long-term standoff joining me are paul christopher, head of global market strategy at wells fargo and charlie, vice chairman of ariel investments. charlie, i'll begin with you it was suggested earlier in the week by dan clifton if we're in a longer term standoff with china, market multiples need to come down, that's what happened during the cold war with the soviets. what are the ways to think through the longer term implications of everything playing out here >> i think it's always important in one of these situations to figure out what the market is pricing in and then compare possible outcomes to that. i think right now, the

institutional investors, the commentators on your show, are pretty bearish and forecasting a recession, they're forecasting continued trade tensions, and i think that's factored in so when you get just a little bit of good news, like we got today, you get a couple hundred point rally in the market. if we get a substantive agreement, just better than where we were with some intellectual property protections, with some reductions on the need for partnerships with a little bit of extra agricultural purchases and don't poo-poo that, there are a lot of soybean growers in iowa and important states in the midwest -- >> but is $10 billion going to make a difference? our support for them was $16 billion, so i understand that's some chunk of it, but i also wonder if it's telling us the chinese need access to that product as opposed to really giving us something? >> i think that's a negotiating point. i think they know how important farmers are to trump and they

think they can quote/unquote buy a little bit of support and take some pressure off for that the point of all this, i think there's a lot of bad news baked into the market and if we get some kind of progress we could get massive move up in the market. >> paul, what about you? do you agree that seems to be the stance everybody is kind of braced for these bad outcomes here >> yeah. we agree there hasn't been really any optimism priced in for months on the u.s./china trade dispute. and if you do get some sort of deal, you are likely to see a positive market reaction, but we don't see how you can get anything but the skinniest of deals out of this. as you pointed out, $10 billion in soybeans is not much. they could still buy through the brazilians and frankly, if they just got the u.s. to withhold the october and december tariffs that's not that big of a deal. those could always come back on. the president has imposed all the tariffs that he's threatened so far we think there are much bigger rockses to break up here and

you're not going to get that deal on partnerships you're not going to get that deal on intellectual property. >> let's boil down quickly, paul, your top three places to be in this market? >> we like cyclicals, still have more growth, information technology, consumer discretionary and financials >> charlie >> small and mid cap value stocks our flagship traded less than 12 times forward earnings very good opportunities in small and mid sized. >> you are a brave man paul and christopher joining me today. here's what else is ahead on "the exchange. coming up, it's setting up to be another blowout year for venture capital investments. where the money is flowing and if it will continue into 2020. plus, the nba china drama continues to unfold. is the nba's position getting weaker or will they find way to keep the billions from china flowing.

and it's a new reality ahead for apple. n bc is "the exchange. ocn

welcome back here's a surprise, despite disappointing high ipos this

year, u.s. venture capitalists are on pace to pour $100 billion for the second year in a row who is getting that money? i'm joined by bobbie franklin, president and ceo of the national venture capital association and duncan davidson partner at bull pen capital. bobbies you have the numbers here do tell. what are the hot startups and where is the money coming from >> well, i wish i had all the lists of startups. you will have to ask duncan that question we look at it with our pitch book data to show what's happening in a different quarter and we released the venture monitor report today looking at third quarter and as you said we see we're on pace for over $100 billion to be invested in startups and that's good news for entrepreneurs in the u.s >> duncan, what is it telling us about the appetite for startups despite some high-profile stumbles this year and on the news by the way that posts this delay? >> i think it's impressive

number, but it's the wrong vanity metric. about half a hundred billion are late stage mega rounds we could coin a term and call some of them softbank rounds over inflated, too much money thrown in and look what happened to wework. i think paradoxically the wework debacle will make the ipo market healthier next year. >> sure. >> we need to avoid these crazy late stage rounds and get these companies public earlier >> and bobbie, one interesting point on that is in terms of where the money is coming from, there's a lot of corporate money here comcast, i think we have a venture capital arm, they do a lot of deals, how much of the money is coming from places like that how much is -- softbank obviously i take duncan's point but they're not the only game in town where else is this money coming from >> it's coming from all the usual places it's coming from pension funds and enbe do youments, sovereign wealth nations, family offices, corporates as you said, you do have a corporate venture arm as well as

a lot of other corporations. i think the way to look at it, i totally agree with duncan, that's the wrong metric to look at what's important, i look at it as a metric not really for the ipo market because you remember, you raise the fund, invest them, you're with companies more than seven years in most cases, and then finally they have some sort of event like an ipo which is just another financing round for them and the life cycle of an individual company you have to think about from the vc perspective, what was fundraising seven years ago or the money being raised now is going to get deployed over a long period of time. duncan is right, a lot of the numbers have been kind of inflated with others coming down and what some refer to as a private ipo with making the big investments, you know, late in the game i think what's important for the entrepreneurs in the ecosystem at large is we continue to have funds available for them we have seen a precipitous market share drop over the last

20 years and other countries now have capital available they -- many times have better policies in place like immigration and other issues >> so duncan, i'll ask you then where this is going. is it going to take us seven years for then -- in other words, if the money being put to work now has raised many years ago and has to get put to work somewhere, at what point do we see a slowdown hit if it's going to come, only just for the rationalization of the later rounds and people say i don't want to participate at these price points >> well, it acts like a train wreck in a way, a caboose is the early stage and the ipo is the engine when the ipos go off the rail about a quarter later the late stage begin to get nervous and ratchets down the venture funnel postmates being delayed is not a good sign, on the other hand peloton and wework was a poorly ipo candidate because of their business model i think we have to wait until the first quarter and see how

healthy it looks then and if the train rights itself, the rest of the vcs will be very solid and comfortable and this will be a good year next year. >> duncan, you promised you would give us a hot ipo name you didn't but i will ask you for one. >> i don't have one. last time i said data dog. at the moment i don't have one because the calendar seems to be pretty dry. >> exactly into next year we'll see what the first quarter brings then. thank you. appreciate it. duncan and bobby franklin. check out shares of roku up more than 6% today, on pace for their best day after an upgrade to outperform that predicts its users will trip until three years. that analyst will join us on "power lunch" about 2:15 p.m. eastern time coming up, some of china's most important unicorns are being black listed by the u.s. a look at which companies are being singled out and why. before we go, esg investing

growing in popularity with assets more than delivering this year at our delivering alpha conference the founder of rock creek group argued for a governance rating is a good indicator of long-term profitability. >> those rating agencies, the s&p and fitch, will have to integrate into there and you're starting to see that and i think the other thing is that so far it's been about quarterly earnings and if you move towards longer term sustainability for a company, not just quarterly earnings, i think obviously you have to be investing in long-term value and investing in your staff and team. otherwise you don't have a company. >> for more investment ideas from the biggest names in busissvit devengpha.com. ♪ you can get a satisfaction guarantee.

♪ you can also wonder why our competitors don't offer that. schwab, a modern approach to wealth management.

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. woman: they were able to restore my good name. vo: visit reputationdefender.com or call 1-877-866-8555. welcome back to "the exchange." markets hanging on to their gains this afternoon the dow up 177, two-thirds of a percent. best performer the nasdaq up 1% or 75 points right now a lot of this again on reports about a partial trade deal so what happens if that is the outcome this week, a partial deal, even a truce, with china for more let's check in with bob pisani at the new york stock exchange bob? >> and that's the problem. is it a truce or deal? what's the implications of that. we're up on more trade talk hopes, that's good news. china stocks, semiconductors, materials, industrials, all the stuff that moves on china news is up today.

the good news is the expectations for these talks have been pretty low the bad news is that there doesn't seem to be a lot of daylight to make any type of comprehensive deal reports that the chinese may be willing to buy agricultural products only if there are no more tariffs this has been floating around for a while as your guests made clear a few minutes ago. it's not clear this is a deal or a truce. this is a problem because if the market perceives this is just a truce that's a problem longer terms the next few months going into the close of the year a truce can be abandoned at any time that's not going to change the central market narrative that has been developing. find a way to reverse the narrative. the narrative growth in 2020 is going to be lower even if there is no recession, rates will be flat to low, the leadership will remain be in defensive sectors like consumer staple stocks and earnings guidance and particularly for the fourth quarter will be trending lower kelly, that's a big issue for the markets right now. back to you. >> all right bob, thanks very much.

bob pisani now to sue herera for a cnbc news update. >> hello, kelly, everyone. here's what's happening at this hour civilians are fleeing parts of syria as turkish troops gyp their aerial assault in kurdish held northern territories. the military operation comes just three days after president trump ordered u.s. troops to leave the area the president moments ago said he thinks the incursion into syria is a bad idea. the firm that reviewed designs for a florida university foot bridge which collapsed was not qualified to do so that's the finding of a new ntsb report the incident from march of 2018 killed six people. losing your job or taking a pay cut may be bad for your heart. a new study found workers who experienced a 50% drop in income were at a higher risk for heart disease. and goodyear and airbnb are teaming up to let a select few spend the night inside the famous blimp for $150 up to six

people can stay inside, but no flying it has to remain grounded. that's pretty cheap. >> that's the news update at this hour. back to you. >> that's how you would get me on it. >> right you're not going anywhere for a while. >> yeah. that's also true >> thank you very much here's what else is coming up on "the exchange. >> ahead, not opioids and not talc, another johnson & johnson lawsuit emerges. is an apple vr headset ahead the billionaire tax rate set a new record your work may be monitoring more than you think it's all coming up on the exchange

what do advisors look for in an etf? don't just track an index, help me meet a client's need. is the fund built to sell or built to last? etfs are only part of a portfolio. so make it easy to explain. give me a quality fund that helps me get clients closer to their goals. flexshares etfs are designed and managed around investor objectives.

so you can advise with confidence. before investing, consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus

welcome back let's catch you up on a couple stories on your radar today. time for rapid fire. here to break down the headlines, robert, meg, and bill first up, another blow to johnson & johnson. shares of j&j lower hit with an $8 billion verdict over marketing for res pir dal after they have been embroiled with opioid and talc lawsuits, shares flat since then.

how big a deal is this for new and kind of latest ruling? >> look at the stock, investors don't expect the $8 billion award to stand it did kind of come out of nowhere, though. people are used to thinking about j&j litigation in terms of opioids and talc this has to do with risperdal and more cases are potentially on the horizon for j&j the award was punitive damages guys in the case, the plaintiff, had been awarded about 680,000 in compensatory damages and the fact that punitive damages are that high, means they're going to be set aside by a judge, but also the way juries are thinking about pharmaceutical companies right now. >> i'm not trying to downplay this but the main issue the breast growth in boys. were there other health complications and problems i mean, lives lost >> that was the claim here for one plaintiff, that when he was taking this as a 9-year-old, that it caused breast growth and

that j&j allegedly downplayed the risk of that compare that to the talc cases, a big award last year, $4.7 billion to 22 women who claimed that j&j's talc powder products caused their ovarian cancer. a lot of people are saying this looks like a huge award for one person -- >> 10,000 potential people. >> you alluded to it, the risperdal, the tagging lawsuits and the opioid lawsuits. i mean we're talking tens of thousands of suits are facing this company and yet, when you look at the stock, go back ten years, this is about the time that they've been going through all this, the stock is not moving i don't understand. >> pretty soon you're talking real money. >> here's the thing -- >> how can this not have a material impact? st >> as meg said, the stock is not down much, it's down 2%, $6 million off their market cap $8 billion, not going to be $8 billion, but the investors are

just -- just took $6 billion off the stock today so maybe it's not out of the realm of possibility. >> over the past decade the s&p is up how much if you look at the opportunity costs, let's say, sure it's been steady, but it should have arguably been rallying during that time and it's not. >> we'll never know. >> we will never know. on this one, if they -- when will we know if they will reduce that amount or if that's going to just tell us these juries are not in the mood to be forgiving to pharmaceutical companies. >> the judge will decide whether to set aside this. most do say it looks like a violation of due process and likely to be reduced or set aside. if not j&j will appeal and that will take longer. >> many more years. >> indeed. next, a new note from a leading apple analyst in taiwan says apple is set to unveil a bunch of new hardware in the first half of next year. apple shares up 1%, but within

reach of their all-time highs of 2018. >> i did market research this morning and looked at all the ar glasses out there right now. the high end, 27, $2800 are these goggles used by technicians on assembly lines for high-tech assembly pretty cool stuff. low end, $450 for athletes who ride bicycles or run to help them keep track of their time and their disney and all that as they're going. that's pretty cool as well in the middle are these, for these people that want to do their iphone stuff the social media, read your e-mail, text and all that stuff without using your hand, who wants to do that? i mean -- >> they're talking about augmented reality. i have enough augmentation in my life already simplified reality where you get rid of the stuff you don't need rather than adding more data to what you're looking at. >> you the other day told us you might be interested in glasses, robert, that could do some of the functionality for the phone, right? >> if they could remind me of

someone's name when i see them, that would -- >> birthdays >> i will say, actually, as a mom holding a baby who often falls asleep on me i have dreamed of something, even my apple watch isn't enough, if only there was a chip in my brain i could summon a cup of coffee. >> amen. >> wait a minute, that's why god created husbands. >> i summon him to bring me -- >> now we know. >> is this too much of a reach for apple, if we assume this is coming, too gimmicky or possibly -- every time we've seen someone try this, every other product launch, whether the snap spectacle has been kind of a does. >> right. >> they have gone nowhere. remind me again, i thought apple wanted to be a service oriented company. now they're coming out with another piece of hardware that has questionable - >> but it summons your husband to get you a coffee. >> hard to question apple when it comes out with something. they're a fast follower they do

things better than everybody else. >> the bar will be high if they're going this route this new study shows in 2018, america's richest billionaires paid a lower effective tax rate than the working class. the study claims the tax rate for the 400 richest households in america 23% last year a percentage point lower than the rate for the bottom half of households and critics say the data used in the study is questionable. so we bring in robert. >> this is a study done by emanuel and gabriel, two economists at the university of berkeley, advising elizabeth warren and bernie sanders on their wealth tax plan so they have a political alignment here and the widespread data shows just the opposite. where these guys are saying the wealthy pay a lower rate than everyone else. what they're really looking at is if you add up all the taxes you pay, federal, state, local, driver's licenses, hunting licenses, payroll taxes. >> cost of living. >> everything you pay a tax for

if you compare that to your income, they're saying the wealthy have a lower share in total taxes than the bottom 50%. >> which by the way -- >> that's a strange comparison number number one. number two, they did a lot of strange things like took out the earned income tax credit, they estimate the 2018 taxes for the wealthy by looking at corporate profits and then somehow allocating that to the richest if you look at the established data and jason furman who used to advise obama put out a tweet where he showed a version of this that showed the wealthy pay 30% and the middle 20% it is less. >> that's the data i've seen too. 33%. like all in, federal, local, state, about 33% for the 1%. you know, 22%. again you could argue -- people that want to believe -- right now in this environment in this democratic environment people want to believe this, that the rich are getting off and paying a lower rate it's fine to argue the wealthy should pay more and we need more

money for social systems, but it's just the facts are the facts, the numbers are the numbers and these numbers are different from everyone else. >> it's meant to be a campaign trail talker, indictment of the 2018 tax jobs act. >> folks these days worrying about facebook and google spying, a new survey finds your boss is spying on you too. i'm seeing more stories about this, people this survey estimates by next year 80% of businesses will be tracking employees in some way including through your phone, your calendar meetings, even your facial expressions on your laptop. >> we could be watched right now. is that what you're saying >> welcome to our world. >> really interesting in this story, though, was that they were talking about employers doing this for their employees' benefits to assess whether they're happy at work, whether using their time in ways that are good for them. it seemed a little bit -- a lot big brother. >> we have a guest the other day

on whose company is meant to do this it's meant to help people at work be happy. whatever the motivation is. >> sure. that's why they're doing it. make sure we're happy. >> the irs says their job is to provide quality service for taxpayers. same thing no, it's not >> you'll know you're being spied on when the boss brings you a cup of coffee all of a sudden. >> bring me some coffee. >> look at my calendar. >> have at it. >> there was a big take out on this in the journal a couple months over the summer, i think people are realizing if i have just one device -- i have one device and i understand the contract. if i want to check my work elon musk on that phone they might be seeing what else i'm up to i don't know exactly what else but a little -- >> do the other stuff on your own phone. >> bill, howany hands do we have, meg? >> i have two phones >> i just feel sorry for whoever has to sit through all this boring data at the end of every day in the case of me. >> go ahead.

manage my calendar while you're at it. >> exact. >> thank you all robert frank, meg tirrell and bill griffeth. the battle of the black list with the u.s. adding some of china's unicorns which companies are being targeted and why they pose a threat shares of target hitting another all-time high, up 67% year to date the best annual performance since 1997 we're back in o.tw

. welcome back tech is becoming a bigger pawn in the u.s./china trade war as the u.s. moves to black list some of china's most important unicorns let's go to deirdre bosa in san francisco for a look at which companies have been singled out here. >> this time it is some of china's most promising up and coming tech startups like huawei before them they are critical to china's tech dominance and particularly it's artificial intelligence ambitions now they also have ties to major

u.s. institutions and investors that could now be threatened sensetime, backed by softbank, fidelity, qualcomm, partnered with mit on an a.i. program, now mit tells us they're reviewing the relationship and will modify any interactions as necessary. take megvi, it has filed for a $1 billion ipo in hong kong. its underwriters goldman sachs, jpmorgan, and citigroup. in light of the addition to the black list goldman is evaluating its involvement in the ipo jpmorgan and citi declined to comment. other companies in the list like hongjo hick vision critical for tech supremacy and china will not take this lying down. >> stay right there with us. bring in kate who is a technology reporter for cnbc t technology th they'renies --

using simply being niously used because it's the chinese using it or is the technology itself problematic >> i think we can back up a little bit and maybe if you look at this from the point of view of somebody in the intelligence community, these companies are certainly a security risk. they're a security risk because of the structure they provide in the sense that if we're not having the best relations with china, having a great deal of our infrastructure provided by the chinese with ties to their government is problematic. what's different about these companies when compared with huawei, which we've discussed this issue with many of these companies have stronger ties to some of them are partially owned by the government. >> so when they -- we have black listed these companies, it sounded like we were saying look, the reason is the way they're being used to oppress the uyghur population in china, but there's sort of two

motivations here, one is to maybe punish these entities for that behavior but the other is to make sure that they don't become more deeply engrained in the u.s. market is that >> i think that's exactly ght. the intelligence community has been saying many years more than a decade that these companies pose some sort of risk a couple years ago hike vision ended up in the news because so many of their cameras, their surveillance cameras, sophisticated cameras, were used at military bases and government agencies and other government institutions and it was a little bit of a controversy so it has been far fromlong before the uyghur muslim population faced the oppression they faced these companies have been under scrutiny by the u.s. intelligence community i'm sure they welcome this move by the trump administration. >> deirdre, any word as to whether this is a permanent move or is it a pawn in the trade talks and are there u.s. companies that can kind of step up into the void here if the void will exist?

>> that's a good question. i think they could potentially win exemptions as we've seen in the past certainly it looks like a pawn in the trade war, even though administration officials say that it's not. but a good question is, can u.s. companies step in. same kind of discussion around huawei and put simply, the u.s. hasn't embraced artificial intelligence, facial recognition in the same way that chinese companies and the chinese government have. it is a long way to get there but i also want to bring up that we're talking about the u.s. black listing chinese startups remember for years and years, some of the u.s. biggest tech companies, the giants, the googles, facebook, twitter, have not been able to operate in china. while we talk about them having trouble, sourcing supplies from the u.s., remember that this has been going on for a very long time involving the biggest u.s. companies. >> that's why i wonder is this now a permanent separation or not if there's the threat these could be used inappropriately by the chinese in the future.

>> what makes it more difficult with the chinese technology as well is that a lot of our allies in europe and across the world have embraced some of these technologies one of the forensics technologies that was black listed, they were recently held up by interpol as one of the great new technolo, the are big organizations. if they're using this technology an we are not, we might, you know, rub each other the wrong way at some point i think and it could cause some issues. >> thank you appreciate it. kate and deirdre with the latest on that news thank you so much today. coming up, it's a power shutdown of an unprecedented scale. nearly 800,000 california homes and businesses will be impacted as pg&e hopes to prevent a repeat of last year's deadly forest fires all the details on these drastic measures straight ahead.

welcome back to the exchange if you log in to the pg&e website right now. this is the first thing you'll see. the company calls it an event. it's not one you want to be part of they've begun shutting power off in parts of 34 north enand

central coastal county z this is expected to last several days the blackout is the largest power shutdown to date as utilities are trying to reduce wildfire risks in the face of unhealthy weather. this is its biggest game but to prevent that. why the woke culture seems to be fast asleep when it comes to the nba's/china situation the fed minutes due out at the top of the hour, stick around for that. markets hanging on to their gains. the dow is up more than 200 points ♪ ♪

♪ ♪ - when i see obstacles, i create opportunities. (soft music) - when i see adversity, i find a way. - when i hear never, i say now. - [announcer] southern new hampshire university is education made to fit your goals with over 200 degree programs, flexible class schedules, and some of the lowest online tuition rates in the nation. (cheering) - so when i face barriers, i can break through. - [announcer] breakthrough at snhu.edu.

so servicenow put your workflows imm-hm.cloud, huh? 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. a day before the scheduled tip-off between the brooklyn nets and the l.a. lakers in shanghai, the battle between the nba and china continues to heat up all the nba's official chinese partners have suspended ties an nba fan event was cancelled even exhibition games were cancelled. all of this as adam silver arrived in china today

can he contain the damage? he's a former vice president for the green bay packers. andrew, so this is a tough one for adam silver. what does he need to do, do you think. >> it's a tightrope between china and business interests he sees an incredible global expansion market and supporting social causes human rights, civil rights, which he's been so supportive of for nba players and coaches that have spoke out in the past he's trying to do a little damage control right now, because he is supportive late, albeit late of darryl mori, the general manager that supported hong kong in a tweet he's trying to do this damage control. he's running a little. it's a tightrope he's trying to

walk here. >> i think the chinese thing will work out. there's been some suspension, that's the key word, put of these partners have suspended based on what's going on now much i think as you said, what's going on here, we have seen the nba for lack of a better word, this woke league supports social causes that would never cen tour coaches like steve kerr and popovych and lebron against inequality and supporting human rights and civil rights adam silver has supported gay pride and withheld an all-star game from charlotte for the bathroom bill in north carolina. they've cen toured and taken a franchise away from donald sterling there's been crickets from

anyone trying to support darryl for this now, these coaches and players have supported human rights unequivocally. here there is nothing, there is silence. i think the backlash here is going to be, well, the nba is just like these others, they are conservative, they don't support, they're about the business it's all about the money. >> right, conservative in the small c sense. meaning, in the way that they do business, they're looking out for their own interests. you mention the players, which is super interesting here. unlike the nfl anthem protest, those were player driven this is not so much. the nba players themselves do a ton of good. especially the top players, the lebrons, the kevin durants they sell a ton of shoes in china. i don't think we're likely to see the players stick their necks out on this issue, are we? >> no, the star player for the rocket rockets in a sebs apologized for

darryl moore's comments. >> james harden. >> his star player went 234 there and apologized to the chinese people this is not something darryl moore is getting any support on. the nba has supported him. they're running a fine line. players realize there would be consequences to their brand, to their marketing and maybe to their employment they're being quiet right now. >> does it matter? i don't have time to ask you the question you know, andrew, but i just wonder if the backlash here at home is that -- it's not among the core fans, and the core fans are going to stay watching the product. on the issues they care about politically in the u.s., the nba and the players are still on the right side of this one i know we have to go, but thanks for joining me today >> the popularity is still there, it's not going to affect that >> appreciate your time, sir, thank you. >> thank you, kelly. that does it for the exchange today we have to go a bit early. the fed minutes are coming up at the top of the hour.

power lunch has them welcome to power lunch, let's gea check on the markets as we're just moments away from the minutes of the last federal reserve eeting this is just about four points off the session. we have the minutes breaking right now. >> melissa, the minutes show the fed is divided not just over the september rate cut, but how to talk about the path of policy going-forward. during the meeting, a few officials argued that the market appears to be factoring in more rate cuts than they believe appropriate. they said it could become necessary for the committee to seek a better alignment of market expectations and policy makers expectations. several participants urged jay powell to provide more clarity about when this period of weak calibration could likely come to an end now, in the press conference after the meeting and during a speech this week, powell has repeatedly pointed to the period during the late 1990