made its announcement. >>r. j >> camco uranium play ccj ithe symbolt l calls earnings the first of november >> good stuff. thank you all. thanks as well for watching. that does it for us. the exchange begins now. >> thank you, scott. hi, everybody. it is make or break for the china u.s. trade talks as high level meetings kick off. both sides sounding optimistic and that's boosting the market but if the u.s. ak cemts a deal from past, is that a win? we'll debate and apple may have the most to lose a look at how they got in the cross hairs and how they can get themselves out of it and americans apparently need to brush up on their digital knowledges colleges are testing the need for standardized tests that's ahead in rapid fire, but we begin with the rally. seema? >> three hours left in the trading day and we are

decisively higher with a major averages up about a half a per cent the dow was up 257 points at the high, so we're off the highs up 150, but again, a move to the upside none the less the three best per foeforming sectors include industrial, financials and technology. within industrials, we should look at the big movers there this is a sector that tends to move with those trade headlines. names like caterpillar and fastnal all seeing gains caterpill pill trading at 121 ae it hit low of 114 in august. it hit back in that month. let's move on to one of the big movers in the s&p 500. the worst performing stock, delta airlines the stock falling about 2.6% as highest costs overshadowed better than expected earnings. higher costs due in part to its plan to hire at least 12,000 employees through the end of

next year. the stock down today but you can see still up about 5%. on the year. back to you. >> thanks very much. and welcome to the exchange, everyone i'm kelly evans. let's get straight to today's top story. china. the high level talks kicked off this morning and after a lot of drama, today, the tone has been more positive. the white house is reportedly working up a partial deal that would suspend next week. the u.s. has signed a you have on esh special licenses for some companies here to do business with huawei and the president tweeting he'll be meeting with china's vice premier tomorrow. so much for the delegation going home early and now for a potential deal derek joins me asia economist at the american enterprise institute and michelle caruso-cabrera is in the house as well. welcome. derek, i'll start with you is this all about avoiding this tariff hike next week that may be coming? because it doesn't sound like the u.s. is getting a lot out of this here. >> yeah if it's just for the

october 15th bump, it's going to be very little the currency test is meaningless. so that would be a deal to say hey, we're not fighting. wouldn't really accomplish anything also on the table though is is the december 15th inclusion of more chinese goods under tariff, which is a much bigger deal and if that were to be postponed you would expect to hear from the chy needs side so you think it's meaningless, this sort of currency agreement that they might come to. >> yeah. we saw u the text when secretary mnuchin was first talking about it and he said it was the strongest ever it doesn't do anything it's a monitoring deal that allows the u.s. to act in a certain conditions when we can already act ourselves under any condition we like. so it's basically the chinese saying we'll pretend that we'll allow you to retaliate against our currency policy when if we did retaliate, they wouldn't put up with it >> okay, michelle, meanwhile, you have to think markets are saying we don't really care if the it's meaningless we want this issue to be kicked

down the road as long as into the future as possible >> clear to me that market participants are desperate for a deal they want to see this kind of all go away. even p if it's just a taunt or truce. what i think however even if there is some kind of truce, ooem even if they come to deal, the relationship with china is permanently changed. never going back to what it was and by the way, their economy is is slowing because of their self-inflicted wounds and all the presunlmptions we had for years about the chinese economy. those are gone everything is different now. >> you know, that makes me wonder, which side of the bet would you take neil ferguson's, the china's gdp will never catch up with the u.s. or would you be on the other side of that >> well, what gdp are we talking about? the ones the chinese announce or the actual they're the ones they announced will probably catch up of course their population is four times ours.

will china ever get close to the u.s. in prosperity, not under this leadership. >> so if that's the case, markets are saying okay, you know what, so maybe this is a permanent change in a relationship we don't necessarily, we don't necessarily care, right? they're more concerned about near term cyclical worries tariffs that could slow down the u.s. and chinese economy if we're talking about a permanent change in a way, that's easier for them to deal with because they go, okay, what does that look like in ten or 15 years? it takes way i the growth worry. go ahead >> i agree with michelle that there's opinion a permanent change i don't think that it's the case that it's ten, 15 years down the road that we face that change i think facing the election in six months so i think it's likely we'll get a truce, they're working on it, but i don't think the truce will hold long because say elizabeth warren is the democratic nominee. she's going to come at the

president for being soft on china and that his instinct is to outflank everyone so markets may be hoping for a truce. they're going to get a several month truce, not a several year truce! what do you think, michelle, the practical implications will be? >> i think we're there already the obsession about trying to deal with their intellectual property theft that's asking the chinese to be different than what they are and then even if there was an agreement, it's individual companies that make the decision about whether or not they're going back into that country or willing to sacrifice what they've built here or elsewhere in the world and in putting it at risk in china just because the president says okay, we have a deal on intellectual property, doesn't mean private sector individuals and companies believe it's going to be the case and believe it is going to be acted on by the chinese >> and people are left trying to decide on a case by case basis that's always going b to be the case >> there's companies who went into china with a very different i guess hope you would say for

the outcome here and what you're basically saying is that as it stands today, this idea of liberalization is not necessarily happening, but the idea that they're going to reach the world's biggest market still is, right? >> so i'm not convinced. i'm a firm believer in markets and you know that. the free movement of labor, capital and goods and what i see under xi is going backwards on those issues they never got to the free movement of labor. people are still forced to live in certain part of the country the free movement of capital has never happened there as well i just don't think, and now, they're going back to massive state intervention they had started to undo that for 30 years starting back in 9 1979 now it's all about supporting state owned enterprises which are inefficient, waste people's money and will hold back the chinese economy. >> sounds like you'd be on fooel ferguson's side. maybe that means for u.s. companies they shouldn't take for granlted they're going to reach an expanding market. >> when we're all stressed about

what should the nb ara do, all f these companies made this you know promise to go into china because it was going to grow so much what if that's wrong >> that's the question we're going to leave it on >> guys thank you both really appreciate it today just how sensitive are the markets to these trade talks and issues we're discussing? we'll take a look at this chart. yesterday as soon as the market closed, conflicts headlines on the trade deal sent s&p futures on a wild ride triggered four 1% or more swings in three hours today, the the s&p was essentially treading water before jumping on the positive trade tweet from the president which references his meeting tomorrow so should investors just move to the sidelines while this plays out? joining me now are nancy tang lehr and wayne rise ner is president of correa asset management today, cnbc unveil ed the uninauguralal financial 100 list and correa's firm coming in at number 14 so congratulations on

that and welcome >> thank you very much >> it's great to have you here nancy, fascinating discussion with derek and michelle there. tell me as an investor what you're going to do about this. >> yeah, i mean you're going to rethink the model i think from here but i also, we're not investing short-term on china tweets or trade innuendo >> but is it harder if you're invest ng the long-term because what are you trying to factor in for those china numbers? >> i think we're going to see supply chains move slowly. i think there's going to be change at a glabl speed, but i think it changes the framework i agree with michelle. i think she's been right on this issue all the way through. our relationship is changed with china and i think that's a good thing. >> in terms of the u.s. interest, but so many different megacompanies like anybody you look at and have to figure out what's their exposure going to be in china, how big a presence are they going to have there how do you make that tacalculation? >> we're setting parameters lower on earnings. we still like the company baseded on cash flow and those

earnings, we're comfortable going for the long-term, but the way earnings are going to come in right now down this quarter and i'm concerned a couple of companies that reported today, phillips electronics guided lower and so we're going to set our sights a little bit lower on earn, but we can still like companies >> sure and do you use those opportunities and say okay, well this is going to be a near term pullback how bearish are you about the u.s. economy >> we don't expect recession or bear market, but we're definitely cautious because we have valuations that are high because of low interest rates and we have slowing economy and we have corporate earnings, which i'm very concern ed about as i said based on the reports i'm getting from companies what's the main that i think you're hearing from clients. are they nervous about being in the stocks about being in bonds just fine. >> i have a lot of high net worth worth clients and they're

circumspect. this cycle for the market to be where it isment normally, they're getting more speculative juices going at this stage and looking at ipos and what do you think of this and that we're not seeing that. they're very comfortable having cash reserves, so i'd say our short-term investments are pretty high. >> that again i wonder feeds into this idea that this whole cycle can be lower than previous ones an the ipo point is interesting. we've seen a lot of heat come out of there, but not to say it's over. next year could bring air bnb and host of other companies. how do you position? >> we buy companies on a relative valuation bases and we're looking at the dividend because management of these companies set the dividend based on free cash flow or normal sustainable earnings power as a portion of so i'm less concerned about earnings we're watching the top line and we are find iing attractive valuations in cyclicals and so when i was here last, i was talking about software before

that, it was consumer discretionary. we've been trimming back the consumer discretionary and moving more into tech and more cyclical names it's a bit contrarian. >> absolutely. you're comfortable with the fundamentals >> we are. a lot of it is priced in you've got 3m up today been a long time >> that's a good point guys, thank you. was phil your dad by the way >> no. he was the founder of the firm >> oh, you're not a correa you're just a wise ner looks like he had quite the career one of the first mutual fund guys >> maybe i should have been. >> like a son i'm sure guys, thank you both thanks for joining me. and you can see the whole cnbc list at cnbc.com/fa-100. and here's what else is still ahead today on the exchange. >> coming up, apple gets caught up in the corporate battle between china and american

companies. how far are they willing to go to appease the country and will it come back to hurt them? plus, digital media consolidation is picking up massive valuations we'll tell you who the big winner is from this m and a bonanza and how you can profit and a look at the ceo that investors think is wor thithy oa 20% rally. this is the exchge cc.an man: can i find an investment firm that has a truly long-term view? it begins by being privately owned. with more than 85 years of experience over multiple market cycles. with portfolio managers who are encouraged to do what's right over what's popular. focused on helping me achieve my investors' unique goals.

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welcome back to the change apple's business in china raising some eyebrows after the company complied with a number of of the government's requests. they removed a map service it also dropped the courts news app from its store after authorities said it violated local law. its newest iphone software from its list of emojis now is apple going to be the next target? i'm joined by trip and ed lee. you know, ed, it does strike me if i have to ask the question, maybe they're not going to be argument theeded do we love our iphones too much to really get too um bridged at apple and their behavior in

china? >> anything apple does, even th smallest or biggest things i think the context here though is that apple for pretty much ever has always complied with beijing's requests or demands, which ever way you want to put it we talked about what's been happening now, but a few years ago, apple took down skype app for chinese users. there was an issue with the apple watch where they had to suspend sales in china because beijing couldn't quite track the users using whatever kind of cell service that was embedded into the system. of course they fixed it later. the point is that this is in that context is consistent with that they've done in the past. of course the protests in hong kong, that sort of put a different lens on everything where you're sort of pitting one consumer group versus another. that's what we saw with the nba and here >> and that's why we're asking

the question with everything that the nba is dealing with, is that turning point for the public to look at the turning of corporate america and say we tony want you to sort of keep cow iing to these demands or is that not going to extend to apple? because as gold man pointed out, if china, if apple got banned in china, they would expect a 30% hit to earnings. obvious from a business point of view, they're going to do everything they can to keep people pleased there >> it's a huge market for them no doubt certainly the second most important market behind the u.s. and that's why over over the year, they have gone out of their way to accommodate and abide by the laws in beijing the difference here really is that this is happening both with the trade issue and the background and with the nba issue as well and i think the one thing that the nba issue has highlighted and that apple is subject, too, is that domestically, the nba was progressive, very supportive of free speech and that's what's

caused such a challenge for them a balance between u.s. and chinese viewpoints and apple is similar in that regard we've seen them be outspoken on issues in the u.s. and human rights issues have been a real pushing point of tim cook. so that's certainly one of the issues that's going to come into play here as well. >> and ed, which group does apple most have to be afraid of running afoul with i'm really paying attention to what's going on here with the act vision blizzard story where the gamers are really kind of the group at the front of pushing for these, in favor of these hong kong protestors and really trying to make that a center of activity in this country try to like push and influence companies from behaving a certain way. is there a group like that that apple has to worry about get tig on the wrong side of what some of these moves here or do you think the public is largely going ignore it? >> i think that's the right question

i think with what's happen wg the nba and activision with the e sports thing, the thing different here is that the sphere of influence that china is expanding into is that these are actions taken outside of chinese borders. when they're talk iing about supporting democracy in hong kong, you know it was also a tweet. twitter's not even available in china so the fact that china was able to sort of kind of muscle in on actions outside of his own borders is what's interesting and different here i think to your question about what apple has to be concerned about, it's going to be more if you see tim cook, but maybe an apple employee says something on twitter and that becomes an issue for beijing and now you can't buy iphones in china that's an extremely hypothetical, wu that's the difference between apple complying with beijing's demands within where its laws reside versus things that happen outside of china i think that's the big kind of question mark as to how things

might be changing going forward. >> got to leave it there >> apologies such a complicated issue i know we could spend more time on it. i'm sure we will thank you both for joining me today. tripp mikel and ed lee from the times. coming up, shares of this retailer soaring today we'll tell you why investors are so excited plus, pg&e's unprecedented and deliberate power outage leaving hundreds of thousands of sterin tcuoms he dark. we have a report from the ground ahead. the exchange is back in two. ♪ keeping the night interesting, is all about setting the right tone. ♪ lower carbs. lower calories. higher expectaons. ♪ the light beer you've been waiting for has arrived. corona premier.

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welcome back stocks are still rallying this afternoon, but we've come a bit off the highs. dow's up 150 points as trade talks continue in walk let's check in with bob pisani who has more at the new york stock exchange bob. >> and kelly, today's rally really happened right after the open here when the president tweeted he would be meeting with the head of the chinese delegation tomorrow at the white house. which contradicted earlier report that is the chinese officials may leave a day earlier. we're still trying to figure that out regardless here, i think the bar is very low right now. that's the important thing the market seems content with a mini deal of sort or r a truce for the moment that might involve buying agricultural products. that would be seen i think as a win here would it get us through christmas? that's the question i asked art cashin and he said he didn't

know, but it might be enough to keep us in the roughly 200 point trading range we have been in for most of the year you see that to 200 point range. the problem is b everybody knows, truces can be easily broken that's what makes these rallies tentative. it doesn't change the fundamental narrative that's been developing for 2020 that is generally lower growth even without a recession. perhaps rates flat to lower. defensive stocks staples and earnings guidance flat the lower. tyler, back to you >> thanks very much. bob at new york stock exchange now to sue for a cnbc news update sue. >> hello, kelly hello, everyone. in liverpool, the prime minister says his meeting with the brish prime minister was very positive and promising. >> i am now convinced both in britain want there b to be an

agreement. that's in the interest of ireland and the united koing dom and european union as a whole and i do see a pathway towards an agreement in the coming weeks. >> the alleged gunman in the synagogue shooting attack in germany appearing in court he was arrested after he allegedly tried to storm the n synagog synagogue. he is alleged to have shot two people outside of the building he is accused of two counts of murder and nine counts of attempted murder and first lady melania trump sitting down with students to discuss the dangers of vaping on wednesday and the impact it is causing. she was joined by health and human services secretary and white house senior counselor, kellyanne conway you are up to date that's the news update this hour back the you >> thank you very much here's what else is coming up on the exchange >> ahead bed bath and booming problems are stopping wework from expanding overseas. guess what facebook owns instagram and believe it or not, most

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welcome back let's catch you up on a couple of stories for rapid fire and here to break down the headlines -- welcome, everybody. first one you know where we're going with this. it is bed bath and beyond. the shares have soared today from about 20% now all after tapping a new president and ceo. bringing in the big guns courtney reagan from the new york stock exchange because yes, there's a huge short interest in this company, but you have to feel good if you're the new hire, right? >> yeah i think huge is an understam. 53% of these shares are held short so we have a pop it was kind of expected because of that, but you're right. mark tritton is someone that investors should be and are happy about. of course we know there's a trio of activists that are involved in bed bath and beyond that are pushing for change they're all really excited about

this announcement. one source told me it's not just a name they like they love having this man for the job. he came from target. the chief merchant at target and if you think about it, over the haas three years since he's been there, merchandise has been reinvigorated for target that's been a key part of what the company has done really well under him. a lot of them sort of in the home sector and i was able to get in touch with one of the analysts, excuse me, activists directly chris kuiper and he says look, mark tritton is a superstar. we are so excited he's joining bed bath and beyond. we believe mark has the skills to return bed bath and beyond to greatness. >> even the most skilled person on the planet faces a challenge with bed bath, guys, but look, it also targets performances here it's up 67%. >> he's got his work cut out for him. clearly, this was an $80 stock a few years now, now a 10, $12

stock, but they have still even despite problems, a clear brand. and a following there. it just got tired. they need a reset. both brick and mortar and online and reading what he's done in the past, not just at target, but bf before that at some other companies, he sounds like a right guy. >> i wonder what we might expect that in practice fresh merchandising. >> a lot of analysts were saying that, that they can improve the in store experience. >> the maze. >> you go there, it's like a big stress factor for me so if a way they can make it more efficient and user friendly, i think there could be something there. but what does this mean for target they just lost a star player >> good point. he really was a star and obviously like we just talked about has sort of brought in all of these new private labels building them from the ground up so target has basically put two

other individuals that were currently on their team sort of to fill these shoes, the good news is of course we know they set holiday way in advance so while it seems like a really crummy time to lose your chief merchant, luckily a lot is locked and loaded. it's a loss for target and gain for bed bath and beyond but a job is a big one it's a lot cut out for him he has a lot of experience, but has never been a ceo when he started at target, he was tired. you may remember three years ago, a lot of people thaukt target was on the downward slide. he's made a turn around, not quite as a dire situation as what he might be walking into with bed bath and beyond a lot of activists say there's a lot of low hanging fruit and a lot of things that could be fixed easily >> this one has a possibility. certainly better than if you tried to turn toys or us around. that's not their problem >> absolutely. >> merchandising >> and refresh thanks

appreciate it. next we go to wework whose push to go public may be dead now, but the we company is full speed ahead with plans to build out in southeast asia even as they're slowing plans in china they're opening new offices in singapore and manila and they're seeking up to a billion dollar lifeline from soft bank. >> the problem is the cash burn they're facing which is where soft bank comes in to try and plug the hole. what's interest tog me about this is the fact that they're pulling back on their expansion plans in china so they must see less of an opportunity in china and more of an opportunity in singapore and manila i don't know if that's a factor of cost. if that's a a factor of potential revenue, but it's interesting to see especially now that they have to be a lot pickier about where they expand, where they choose to expand and what that says for

other companies r that are looking to kind of expand in this region. >> why were they losing much money? they weren't charging enough membership fees? how many profit margins relative to what they were paying $45 a month. you know, you could charge more than that i would think. >> it's more -- >> these small business people could afford more than that. >> the expense was largely related to their expansion plan and people i spoke sw closer to the company said they could ratchet that back in order to save money in the long-term now the trouble is you just never know exact hi when to ratchet that back. it could be too late these things take b you know, months and months to come together so the biggest issue for them was largely related to expansion, but it was also the biggest opportunity for them which is why they kept doing it and why their backers allowed them to keep doing it then there's the you know, the mismatch in terms of f the longer leases haves short-term

wre rentals. >> if they need the billion dollar, presumably, soft bank's got to give it to them what choice do they have >> they're in for $10 billion. >> it's a hazard situation, right? if you're soft bank, you're in this thing to the tune of $11 billion. so if it takes a billion dollars to keep it afloat and preserve your $11 billion of capital, you know, here's the, here are the moneybags. >> and whatever else, too, may be coming there. let's talk about something else. a new survey out shows american's digital knowledge leaves a lot to be b desired only 29% of survey takers knew that instagram and what's app are owns by facebook and when shown a picture of jack dorsey, only 15% of respondents knew who he was more salient is the facebook piece of this. >> let's think about this. we all know how to drive a car do we all know how it works?

could we name all the parts? do we know who the ceo of fiat chrysler is? >> it's different. it's type of information your phone now has about you, especially with facebook, what's app, banking account ss much different than what your car is has. >> why should i care whether facebook owns what's app or instagram or what he looks like. you should know about the security issues, but some of these questions were -- >> and this was ten questions from the pugh center they put to everybody. only 20% of adults answered seven or more correctly. just 2% got all ten questions correct. i think there's a big regulatory issue here so if people don't know they're owned by facebook, could see some interesting d.c. pushback to that. where they're going to want to say wait a minute, you need to know the real corporate

overload to your point, bill, 59% of people knew that advertising wa the largest source of revenue for most social media sites, dhs which is encouraging now do they know the exact nature okay, it comes from digital micro targeting, but at least there's a sense of we understand the fundamental contract they're advertising and making money off of us. >> and to your point on the regulatory side, we're looking at a situation in the next couple of years where big tech is supposed to be regulated. if their constituents don't know or may not even care what happens to their data and what happens to their footprint online, then how are we supposed to expect the regulator to take action in response to that? i think that's a key take away from this study. the fact that the constituency -- >> divest. instagram from facebook. >> when politicses go home to their towns, are they hearing, you've got to break up facebook?

i don't think so >> this presents a big opportunity for the u.s. education system, for universities, just implement a digital literacy class there needs to be more knowledge on how to use your devices and where the information goes ask me what cookies are, there's an opportunity >> people did well on that question surprisingly. before we go, speaking of college, one of the most dreaded part of applying getting a lot less popular, nojust with high school test takers over the past year, a record 41 clemgs and universities have gotten rid of requirement that people take act or sat people say they favor higher income students whose parents can afford tutoring and are more likely to apply for extra time to take the test everyone seems to be doing that these days i think there's a fallout here from the college candidate that kind of has taken the authority out of the, when these tests are so easily manipulated by people spending the money to fake the proctors, they're not

standardized >> if you can cheat the system, it's not actually a standardized test at the end of the day >> i'm just not sure if it's going the change the status quo. what do you guys think if there's other ways for people to signal you know hey, can you afford a bunch of extra circulars? there's always going to be built in inequality. >> the testing system has always been flawed any way. everybody's high school edge skags not equal. but yet the test is standardized and you got to know a certain amount but some are going to know more because what they were taught i've long had a problem that a lot of kids these days aren't getting ucation, just test prep >> that's how i feel personally. >> i find it somewhat interesting and a bit encouraging that schools are not emphasizing the tests as much. they're making it test optional. >> they're considering it as one of many factors they'll use to determine whether they'll let you into their university.

>> that personalizes that vetting process for the yufrl university they're just pushing buttons when looking to see what the number was on the sat score and do we want that or not you have certain parameters and if you meet it, you're in, if not, you're out. but they don't take into consideration who that is. >> i think those changes have been years in the making >> absolutely. but it's encouraging and a good step >> thank you, guys we're living a digital age which shares of companies like "the neyo tesarsuinanw rkim" e rgg d it's thanks to google and facebook we have those details right after this well have you tried thinkorswim? this is totally customizable, so you focus only on what you want. okay, it's got screeners and watchlists. and you can even see how your predictions might affect the value of the stocks you're interested in. now this is what i'm talking about. yeah, it'll free up more time for your... uh, true crime shows? british baking competitions. hm. didn't peg you for a crumpet guy. focus on what matters to you with thinkorswim.

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man: can i find an investment firm that has a truly long-term view? it begins by being privately owned. with more than 85 years of experience over multiple market cycles. with portfolio managers who are encouraged to do what's right over what's popular. focused on helping me achieve my investors' unique goals. can i find an investment firm that gets long term the way i do? with capital group, i can. talk to your advisor or consultant for investment risks and information. welcome back tlsk three digital media deals in the past three weeks as outlets work to take on b facebook and google. julia has more with how the space is changing. >> these three companies are consolidating on a greater scale

to better compete with b facebook and google. now all three are all stock deals. discovery back group nine bought pop sugar and vox bought refinery 29 and new york magazine these digital media companies are going up against b facebook and google which together dominate 60% of all digital advertising revenue in the u.s. according to e marketer. while those digitals have hurt traditional publishers over the past several deck katds, after years of declining ads and subscriptions, now "the new york times" and news corp. stocks are turning around all three are up by double digit percentages this year as their digital businesses start to kick in and now, facebook and gook l are taking steps to help them. facebook is negotiating to pay publishers to license their contact and it's coming news tab b while google's algorithm hi highlights original reporting! what would have thought they might be doing help. >> we're also joined by alex

sherman. these deals gained a lot of buzz should i say because of the valuations and whether they're realistic and what it says about how the digital media world has really, is it collapsed? just consolidating this is not the landscape from ten years ago when everyone was pouring money into these websites >> maybe a broader realization that the exit may not be there for these firms. even the leading firms, vice and buzz feed that have toyed with going public have reach ed the conclusion now there's no appetite for them to go public they're not in a financial position where investors believe in the long-term growth of these companies. >> we know they were extremely successful then a couple of years, you started hearing about the need to pivot to video so there must have been a recognition on the inside that traffic channel rs changing, what's the difference?ing.

>> that facebook made a change to its alleggorithm that lowered sites. in addition to that, people realized that simply advertising alone wasn't going to get them there. so what we've seen is many of these sites have transitioned to a pay wall or they're getting subscription revenue in addition to the advertising revenue so the whole model is now different and the value proposition along with that business model has changed. >> so julia, you have these sites that came on in a big way and now are kind of floundering. well the traditional old school, "wall street journal"s of the world are doing much better and have that papal and the help of facebook and google. but why are facebook and google benefitting the other digital media players more >> i think the key thing here is that facebook and google are

under all this regulatory scrutiny and one thing they've been criticized for is really stealing advertising dollars from the "new york times" and woss of the world there are so many news sites out there that just aggregate whole headlines that copy what those original sort of journalistic outlets are doing that there's been this push now for the facebooks and googles of the world to take a step back and make sure they're not going to get criticized and really more regulatory scrutiny about this from capitol hill sochlt facebook is in the process of putting together a news tab they want a license content. they want to make sure they drive people back to the news outlet to subscribe there. haven't seen what that will look like, but google has been doing this thing to try to feature original reporting because i think they know this is something they're going to be criticized for more and we need some journalists out there to keep doing the original reporting. >> we got to go. quick last word. >> i think one other to point out what's dimpblt, donald trump

was lektded and that helped some traditional news organizations >> gave them their mojo back >> we'll have to see if trump is not re-elected, if these companies have a post trump strategy >> when trump takes up all the action, when not, we can take quizzes about what job we'll have in 20 years thank you guys appreciate it. a news alert meg has some news from the cdc >> the cdc is updating the numbers of the lung illnesses associated with vaping they're up to 1299 and 2 dea6 deaths that's up from 1,080 last week so this continues to grow. they're saying that essentially, the same breakdown of what people used, most used thc vaping product though some did exclusively report use iing nicotine contain products still no information about the exact thing that is cause iing

these lung injuries, but the in your opinions continue to grow back to you. >> 1300 affected 26 deaths. wow. appreciate you joining us with that meantime, power company pg&e creating mandatory blackouts for millions in california and in an attempt to avoid another round of devastating wildfis. 'lgeyou e latest op the ground and fallout from this move next. 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.

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. millions of people in california are experiencing a blackout as pg&e shuts down power to temper wildfire risks josh lipton is live in berkeley with the latest for us josh >> reporter: so kelly, we're here in berkeley, california, berkeley hills specifically, where residents don't have power. i caught up with a long time resident of this neighborhood who said that he was ready he had stocked up on provisions with his wife and he interestingly wasn't angry at pg&e, he said in his opinion, utility was doing what it had to to keep people safe. but there are plenty of californians are upset with the utility as it takes this decision to shut down power to hundreds of thousands of customers. 34 of 58 counties across the

state are expected to be impacted the worry is that the high winds and dry weather, that could damage infrastructure and lead to wildfires the outages resulted on runs of supplies like batteries, flashlights. it could take five days or longer to completely restore power. and the potential economic cost, $2.5 billion and all of this at a tough time for pg and g, a judge opening the door to a rival bankruptcy plan and the stock crate erg in today's trade on that headline >> they have a lot of work to do obviously. they can only hope today helps a bit. josh, thanks watch out silicon valley, the midwest is coming for your venture capital. we'll talk to a capitalist that says companies that provide economic value but when a recall happens,

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welcome back silicon valley is the seat of venture capital, but in the wake of several ipo flops, the startup culture is earning plenty of critics.

should investors look elsewhere? my next guest thinks so. with me now is scott shane from comeback capital good to see you, welcome >> thanks for having me. >> i like how you say you are investing in real companies so to speak we're talking about machinery, robotics tell us what kinds of companies you are seeing >> so a good anecdote, in san francisco probably people who weld would only beiartists but e have companies that use to weld in the midwest >> when we talk about how facebook and going willing can have billion of users, who do the economics look like for some of these companies >> if you are serving customers and making robotics for -- or software for robotics for welding, you can get to scale because you can go after all those companies all over the country that are using your product. >> is there a lack of funding for these companies or no?

>> the hard part for the companies is there is not a problem getting money in the beginning in the early stage but later when they need larger amounts, they have to be connected to new york or san francisco where the money is >> so are you trying to change that piece of it >> that is the heart of what we're really trying to do this is to build a fund that gets that capital involved in the early stages in the midwest, us serving as scouts. and then later the biggest fund s taking over. >> what is the biggest home run you've had >> we're only a year into this, but we've had several companies with big paper markups already as investors see that there is really opportunities in the midwest. >> does the fact that the ipo market has turned more discriminating, discerning let's say, does that worry you at all? what happens as that window maybe starts to close? we are pretty late obviously in this which panks >> right although it is taking about 10 to 11 years for companies to go from early stage to exit so we are invest in the beginning, what i'm worried years.the ipo market in ten

if you can tell me that and it will be bad, then i'll worry >> and like you're saying, you also have to jump in when there is a good opportunity and not try to second guess where the economy is going to be >> one attractive thing that i hear is people wanting a lower cost of living do could you attract more human capital to the midwest along with the venture capital >> one thing that we've noticed is you have a lot of people trained technically in these top universities all throughout the midwest and then they go and get jobs in california and they discover that that is not such a great opportunity because the cost of living is so high and if they had the opportunities to move back to companies in the midwest where they went to school, they would jump at that >> so as it stands now, you guys have, what, a couple dozen investments? >> yeah, we're at about 14 right now in a year. >> wow and counting i can imagine scott, it is interesting stuff thank you so much for joining me >> thanks for having me.

>> scott shane with comeback capital. and that does it for about "the exchange. i'll go engijoin tyler and melia for "power lunch." >> come on over. welcome, everybody and here is what is new on "power lunch." this is a thursday trade talks, they are under way and stocks are soaring up 168 points on the dow as the president teases a big meeting to come at the white house tomorrow details are straight ahead deal, no deal, we'll see we'll bring in howie handel. here comes the iphone bump another analyst pounding the table on apple following stronger demand for its new slate of smartphones and earnings kicking into high gear next week as expectations keep falling. are we in for a season of pain "power lunch" starts right now