i think in the money center banks and we love the stock. >> farmer jim. >> boeing. >> verizon reports friday. it eventually takes out the 6230 high and verizon. we'll see what happens dow down right now 185 does it for us "the exchange" starts now. thank you, scott hi, everybody. we have the shocking new developments that are sinking boeing stock at this hour. the latest details, a look at what it could mean for management and more. there's also another trade fight that's front and center today. this one's with europe the u.s. moving forward with retaliatory tariffs. is it the wrong flight at the wrong time we'll explore that as well and no preset course here. that's what the feds vice chair said today we'll tell you what the last major remarks before the fed goes quiet mean for a rate cut later this monthbut we do begine markets. boeing pushing down

significantly. i should say seema mody. >> yeah, that's exactly right. boeing counting for about 40% of the losses on the dow. a slightly different tone from yesterday when we saw s&p 500 break boabove 3,000. weaker than expected gdp report out of china weakest pace of growth in nearly three decades and that's really resurrected this conversation on which stocks and sectors have most exposure to that global slowdown particularly, in china that we're seeing and topf mind really are the industrials keep in mind in recent quarters, profits earned by u.s. industrials in china have been softer than expected and next week we have reports from united tech, 3m, caterpillar, all said to pull reports. so that will give us a clear indication of how they are performing in the region earnings worth noting from honeywell, kansas city southern, have been relatively upbeat. but third quarter estimates for the broader sector have come

down since july, kelly, from 6% profit growth to just 0.9% but it's the trifecta of the stronger dollar. tariffs increasing manufacturering costs. that has really raised a question whether these estimates are too high going into these reports. the dow below 27,000 just off the lows of the session right now. kelly, back to you. >> seema, thanks very much and welcome everyone i'm kelly everyones. we begin with our top story today, which is boeing shares sinking on reports that the faa was misled about the safety of the 737 max. phil lebeau is live with the very latest. phil, it's the biggest move we've seen for some time in boeing. >> kelly, the concern of the faa is not just it potentially but was misled during the certification process for the 737 max. the other concern is documents that are just now being turned over from boeing to investigators on capitol hill, they've been known about for several months and they're just

now being turned in. that's according to the faa. boeing just issued a statement to us regarding this document dump and -- or being leaked -- from investigators on capitol hill let me run you through everything, kelly, in terms of what's going on with the discussion about boeing and these documents. yesterday, they turned over a document to the department of transportation in that document, allegedly, the documents show that there are instant messages between a boeing employee or a former boeing employee and another boeing employee about the 737 max certification process. we're still waiting to get those actual messages. that was just turned over. according to the head of the faa, they are concerned and he has sent a letter to boeing ceo dennis mullenberg about the fact that this was known about for several months and it's just now being turned over to

investigators. so as i mentioned, we are getting the statement from boeing in fact, i think we do have it now. i'm not sure if we have it to put up it says over the past several months, boeing has been voluntarily cooperating with the house transportation and infrastructure committees investigation into the 737 max as part of that cooperation, today we brought to the committee's attention a document containing statements by a former boeing emplwe wl cont to with the committee as it continues its investigation and we will continue to follow the direction of the faa and other global regulators as we work to safely return the 737 max to service. >> phil, stay right there. we want to bring in david gellis right now. he's a writer for the new york times who joins us on the newsline and david, your reporting is shocking here. just want to make sure everybody is say ware of what you have to say. you said it was a boeing pilot who lied to the faa about 737 problems i want to read a little bit from your piece so our viewers are

aware of what you're talking about. a new tesystem was forkner said making the plane difficult to control in flight lators in a message, he said to a colleague quote granted i suck at flying, but even this was egregious. what more can you tell us? what have you learned at this hour >> well, kelly, this is explosive. i mean, i've been covering this story for months now and this really feels like it is one of the pivotal developments and i think we shouldn't miss the forest for the trees here. yes, when the d.o.t. and faa and doj all learned about this is important. but what is essential is this was the chief technical pilot on the 737 max, who months after requesting that thfaa take mention of mcas out of the pilots manual is now acknowledging to a colleague in instant messages from a hotel room it seems late one night

that this very system was making the plane difficult to control and so the premise on which so many people have been operating, which is that boeing frankly had no knowledge that mcas could ever do anything likthat, it starts to show real cracks in its foundation when we see text ag le this. >> david, i also want people to be aware that one of the messages this chief technical pilot for the plane says quote i basically lied to the regulators and then in parentheses, he says unknowingly. what do you think he means by that >> listen. we're not inside his head yet and we haven't heard from him exactly what he means. so i think we need to be careful not to read too much into what he is trying to communicate with that unknowingly but like i just said, months before he sent these messages and months before it looks like he's experiencing these problems in the simulator, he had requested that the faa take mention of mcas out.

so we can, you know, again, i'm hesitant to infer too much but we know that he has made the case to the faa. that mcas was so benign that it didn't need to be included in the pilot's manual now, we have him months later recognizing this thing can actually move the plane in unexpected and potentially uncontrollable ways. >> so, phil, i want you to respond to this because this is extremely damaging it would seem to me. >> sure. >> coming from the chief technical pilot of the 737 max, is this plane ever getting back in the skies if it's found to have these fundamental flaws that were covered over at the >> completely separate question, kelly. and i say it's completely separate from this standpoint. they are in the process of redoing the software for mcas. theoretically, when this goes through certification, you know that the faa regulators are going to go through this certification far differently than they did back in 2016

so theoretically, they're going to make sure more than 100% if at all possible that this software in the mcas system in the 737 max functions as it is supposed to function and that pilots are prepared for it in flight that's different than what this document and what david was talking about, which gets right to the heart of, you know, what he was saying. that boeing for a long time said, look, this is going to be in the background. pilots won't even notice it. when you have the chief technical pilot saying, you know, basically i lied to regulators unknowingly in an instant message to another employee i mean, that gets to the heart of what people have said for some time, which is, look, you misled people about mcas when it comes to the 737 max. >> david, also we have to talk about the timeline here. these messages are from 2016 reuters i believe and the journal are -- they were disclos disclosed yesterday to lawmakers

on capitol hill. in advance of hearings, ironically, that the ceo will be testifying about these crashes for the first time so does this now contradict what we've previously been told by ceo dennis mullenberg? >> i think the -- the broader point is just what you say this could not really come at a worse time for the company boeing has been working feverishly to try to get these planes back up in the air. it's cost them $8 billion already. it's cost airlines hundreds of millions and countless thousands of cancelled flights we've seen the ramifications on companies including southwest and ryan air, which are having to scale back operations as this thing drags out. and just at the moment when it looks like boeing might be getting close to t finish line, you know, everything we're hearing is that maybe these things return to service at the end of this year or possibly the very beginning of next year. here we have these explosive text messages, again, coming just weeks before dennis for the first time is prepared to

confront lawmakers about this crisis which i have to say they have been asking him to come for months he has repeatedly postponed and declined and so the fact that these are coming out right before his testimony, i think, means that we're going to have a very interesting show down on the hill in a couple weeks from now. >> real quickly, david, can you confirm boeing did know about these messages several months ago? >> my understanding is, yes, boeing has been aware of these messages for several months. but that's correct only provided them to the d.o.t., the department of transportation, late last night is my understanding. and to lawmakers on the hill earlier this morning i need to add, though, that does not include when they may have provided them to the department of justice, which of course is conducting a criminal investigation. and some of my sources are telling me the doj had this

document well before this week. >> interesting david, thank you so much we appreciate it great reporting obviously. appreciate you joining us. david gellis of the new york times. phil, if you don't mind, stick around for a moment. we are going to speak to an analyst about this and about the share reaction this is the worst day since august 14th for boeing and the worst week for them since july jim corridor is on the phone he's an analyst at cfa jim, the analyst community has largely slugged this one off because frankly the shares are down but as the scope of this gets worse, the performance is held up relatively well why the drop that we're seeing today and should it be worse given what we've learned >> i mean, first of all, obviously these developments are still coming out we don't know exactly what the text messages said and it seems to be a conversation between the chief technical pilot and another pilot. if it is true that he felt that he was misleading the faa, why are there not messages between him and boeing, him and the ceo, him and the rest of boeing that show him saying, hey, this plane

is not safe? there doesn't seem to be any paper trail linking his misleading feelings with actual actions and playing this out to the rest of the boeing executive staff. so we don't have that, number one. and number two, as phil rightly pointed out, this is a -- the ongoing thesis on boeing is is the plane going to go back in service? we believe it will will it be safe when it does we believe it will because we believe it'll be the most scrutinized plane in history and will boeing be able to normalize operations sometime next year? start moving deliveries and start selling some planes again. we think they will. >> jim, the timeline has already slipped now to february according to southwest yesterday. if the timeline continues to slip, then this notion that the plane is coming back in service gets further and further away. not to mention, this again undermines its confidence with the flying public. i understand what you're saying. people are going to say it's been the most tested plane of

all time but what if this plane never gets back in the air >> if the plane doesn't come back into the air, then we're talking about boeing, its ongoing operations, they have billions of dollars tied up in development, in cost, in its back log all that would disappear there would be a -- if the plane never comes back to service. but reiterate that's not something we think is a possibility. >> phil, one thing jim mentioned, he said if this was true, why wasn't there a paper trail between this pilot and boeing executives? well, you know, the guy is exchanging clearly casual messages with the colleague. it's not clear he wanted or intended to alert people about what was going on here beyond just kind of half joking about it frighteningly, with a colleague. >> all great questions, kelly. which raises the bigger question when dennis mullenberg goes to capitol hill now for two days, october 29th and october 30th, will this chief technical pilot be subpoenaed by some of these committees hey, we want you to testify as well we want to know who you told and

why they didn't bring this further up the food chain in terms of alerting everybody that there is an issue with mcas? so i wouldn't be surprised if you find out at some point when they announce who is going to be appearing at this hearing that the chief technical pilot will be there or will there also be boeing board members? and the reason i bring this up, kelly, is because long ago, me and other reporters, we continually asked this question to boeing. why don't you bring in an outside investigator why don't you bring in somebody? and they can say we're going to do a full cleansing of what happened with the max. i say at least that sway, you cn say we have someone independent looking at this. time and time again, boeing said, nope we have the right people to look into this. well, if that's the case and if this document was known about months ago and it's just now being turned over to the d.o.t. and to the faa, i mean, that raises serious questions. >> and finally, jim, you maintaining your $406 price

target on boeing or does that have to come down? >> no. i think this will normalize over time obviously, this is a backward look we think the most likely circumstance that comes out of this is maybe an increase buy in for boeing as it has to acknowledge that mistakes were made in the max development. but in terms of the going forwn boeing, like i said before, this plane is going to come back into service. it's going to be safe when it flies. the flying public will eventually come to realize that and boeing will be able to normalize operations and the stock price will recover we think. >> thank you so much we really appreciate it. we'll see a lot more of you as you continue to follow these developments phil lebeau in chicago for us. boeing's around $355 a share right now. it's taking about 100 points a loan off the dow, which is down just under 200 points at this hour as i said, the more headlines we get on this, the more we will bring them to you. in the meantime, we'll talk about the earnings rally that really start to roll out next week i should say.

including one key sector that could have a make or break moment for this market plus, we also have a slew of downgrades in the retail sector today. but first, tariffs on 7 1/2 billion dollars worth of european goods kicking in today. ironically, because of our fight over air bus meantime, our trade dispute with china goes on. the chinese economy is taking a massive beating. we'll talk about all that next >> this is "the exchange" on cnbc

welcome back to "the exchange." tariffs on $7.5 billion worth of european goods because of a fight over air bus ironically are kicking in today china's third quarter gdp just came in at the lowest level in 30 years and that's based on what they're telling us it is. for more on the trade battles, fred kemp is here. cnbc contributor dan griswold also joins me he's director of trade and immigration. fred, listen, it is -- it is somehow emblematic that we're having this fight with the eu over its subsidies for air bus at the same time, we're learning about deeper problems with boeing so that might not be either here nor there. but what does the fact that we are moving forward with these retaliatory tariffs on the eu mean as far as you're concerned?

>> well, you know, first of all, this is absolutely the wrong war at the wrong time. and even trump administration insiders and loyalists, both past and present, are scratching their heads this week. both about these eu tariffs and the situation of abandoning our kurdish allies in the middle east in both cases, what you're doing is you're mistreating or disregarding or at the very worst betraying allies at a time when your own administration and its actual security strategy has said it's a new era of major power competition. so this should be a time where you are settling disputes privately and in negotiations with air bus and boeing. it would seem on the face of it through the eu decision, tariff decision this morning, that the boeing would be the winner but that's not going to be the case because several months down the line pretty soon, there's going to be retaliatory action from the eu against boeing. >> right. >> and so the winner is going to be china because these -- this duopoly, these two big plane

makers ultimately are going to be competing with chinese competitors. so they're kicking each other at a time when they really have to think about the rising competition with china. >> dan, do you agree with that is our skirmish with the eu in terms of this new kind of fight with them over trade going to ultimately benefit china >> yes hi i agree with all of that this is totally unnecessary. this is crying out for negotiations this case has been going on in the wto for 15 years it's very complicated. nobody's hands are clean we subsidize boeing and the eu's going to be retaliating next year with tariffs. these are just punitive tariffs. you know, it's ironic that we have higher tariffs on basic consumer goods from europe that are going to hit the american middle class on wine and distilled spirits and cheese and clothing we're hitting the scotch producers in the u.k. really

hard when we're going to be on the verge of trying to negotiate a trade agreement with them. so we're just alienating our friends. not moving any closer to settling the problem of subsidies for airliners and everybody does it, of course the chinese, the canadians, the brazilians, as well as the americans and europeans. and we have a large enough global aviation market that both boeing and air bus could prosper. boeing needs to fix its internal problems this is an unnecessary fight. >> yeah, and as you both mentioned, boeing could be hit with retaliation on that front next year, which would be another headache for them. fred, you mentioned syria. i just want to briefly mention what we heard fromturkish president erdogan this morning who said he was aufroffended by president's letter to him from earlier and will respond in due course now, there's been conflicting messaging on the turkish side and on the u.s. side as to what's really happening in terms of this ceasefire. boil it down for us from the market's point of view, fred, what is going on here? >> well, i mean, from the

market's point of view, there is a way that the u.s. could hurt the turkish economy worse but if you're going to do that, you don't project it quite in the way that president trump has done you can cost yourself all leverage and what we really have done is seated a lot of territory without gaining a lot. if u.s. troops pull out of their entirely, you really have lost your leverage on this. and the ceasefire agreement that was with turkey really gives turkey the 20-mile buffer that it wanted. i also just want to add one other thing to the trade question, if you don't mind. >> sure. >> and, that is, you know, it is still the most important trade relationship in the world. so as we go to a global slowdown, some of us still remember the negotiations over the trans-atlantic trade and investment partnership that could be revived. it is the kind of deal the trump administration is said to want, which is bilateral you negotiate bilaterally with the eu

it's worth 64% of all global outbound foreign direct investment it's worth 51% of all global consumption. and one-third of global gdp by purchasing power parity. so this is a huge win sitting right in front of you that would fit into your competition with china. >> okay. >> and i think people just don't understand why -- why the president wouldn't take this opportunity both for global growth and a big win going into an election. >> guys, sorry we don't have more time but great stuff from you both appreciate it. dan griswold, fred kemp this afternoon. coming up, we'll talk to the man who helped silicon valley get you addicted to technology and he says he's ready to give you the recipe to set you free and he'll explain why it's also your fault that you can't put your phone down that's ahead speaking of tech, take a look at shares of netflix, which are down nearly 6% now the company reported two days ago and missed its subscriber growth target for the second straight quarter again, the shares were up as much as 10% yesterday.

they gave up a lot of that today. they are giving up even more we're back in two. ♪ the amount of student loan debt i have i'm embarrassed to even say i felt like i was going to spend my whole adult life paying this off thanks to sofi, i can see the light at the end of the tunnel as of 12pm today, i am debt free ♪ we have no debt, we don't owe anybody anything, and it's fantastic

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hurd was a -- a hard charging salesman who valued numbers and efficiency over sentiment. and he got results he rose from relative obscurity first to stabilize hewlett packard. then he shrugged off personal controversy to make his mark at oracle rose through the ranks at ncr in the midwest. big data wasn't a buzz word yet and he used insights from data to turn ncr around and that got the attention of founder at hp he established himself as a data junkie quizzing executives on the numbers behind their business, slashing billions in cost he met wall street expectations every quarter except one in five and a half years the stock price doubled. he emerged unscathed from the scandal around misleading tactics the hp board used to investigate leaks. but he was ultimately forced to resign over inaccurate expense

reports. hurd rebounded quickly, though oracle's co-founder and then ceo hired hurd as president within weeks saying the board forcing him out was on par with the apple board firing steve jobs in the 1980s. became oracle's most visible leader after ellison promoted hurd to the shared title of ceo, hurd continued to be oracle's most frequent champion on wallstreet and at industry gatherings. >> john, is there anything more you can tell us about what happened in those final days with the health problems public only just learned about it a month or so ago. >> that's right, kelly and there's nothing more that i do now aboknow about that. but i will say i first met mark hurd while he was at hp. interviewed him several times in his office at hp here at the stock exchange, in silicon valley always a person of good humor, frequent to -- would -- would

always be quick to defend the company he was working for always selling and -- and just a great person to talk to and he will be missed. >> yep i met him briefly as well and i was struck by the exact same thing. he had tons of energy. more energy than i had and sold that room. they didn't even know they were being sold, john he was very, very good at it john, we really appreciate it. john ford. and we'll be right back. for farmers here, this is our life's work. but when a recall happens, perfectly good food goes to waste. now, we've got away around that. looks good. we're on target. blockchain on the ibm cloud helps pinpoint a problem anywhere from farm to shelf. it's used by some of the biggest retailers everywhere. a nice wedge. so more food ends up on your table, is that daddy's lettuce? yeah. and less food goes to waste. ♪ ♪

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welcome back to "the exchange." we are watching boeing shares closely this hour after reports that the faa is concerned it was misled about the safety of the 737 max. back in 2016, the chief technical pilot for that plane, mark forkner, told a colleague via text messages that a new automated system in the plane called mcas was taking it difficult to control in flight simulators this according to "the new york times" and we spoke to that reporter at the top of the hour. this same chief technical pilot had also previous to that asked the faa if mentions of the mcas could be removed from the pilot's manual altogether.

mr. forkner saying quote i basically lied to regulators in parentheses, he adds unknowingly. they are at session lows now down about 4 1/2% and that's why you see the dow down more than -- just under, i should say, 200 points this hour. let's catch you up on a few other stories that should be on your radar it is time for rapid fire and here with their takes are contessa brewer, bill griffeth, and courtney reagan. so much to discuss today how about apple ceo tim cook in china? the agency says they talked about apple protecting consumer rights, expanding investment in china, fulfilling social responsibility but this comes a week after apple chose to remove a crowd source map service that allowed hong kong protestors to track police activity. cook defended that decision saying it protected apple users. is he not the greatest diplomat this country has practically at this point here's somebody who can get along with trump and have the

president singing his praises. get along with the chinese and have them singing his praises. it's amazing. >> he needs to give adam silver a lesson. >> well, adam silver may or may not even need it at this point now, you've got people saying his response about not firing, this is a tough one. >> also, we won't really know how savvy a diplomat he is because what was released from that meeting was fairly limited saying we're going to talk about corporate responsibility well, of course the chinese want to talk about that what apple wants to do is do whatever's possible to increase their market share, which has been slipping. >> it's a fine line they have to walk if you want to be a global concern, global company, you have to play by the rules of the countries where you are doing business up to a point, though you cannot just completely abandon your values. now, the excuse used for taking that app out of hong kong was for user safety purposes that's great spin but it still

is questionable why they didn't get more blowback for doing that. >> i was just going to say that apple is probably the one company that got the least amount of blow back because they can pin it to safety whether that is true or not, that is what they said and at least makes logical sense. and so there was less of a pushback there. >> totally and like i said, the way they've threaded this needle when they have the most to use from this u.s./china thing going belly up. speaking of apple, their first movie is hitting theaters today. it's called "elephant queen. >> documentary. >> this is what they're choosing to put in theaters people going to show up and watch a nature documentary >> you know how big "march of the penguins"? you remember how big that was in movie theaters you take a narrative about parents' love, surviving hardship and then the animals are beautiful and endearing. what's not to love about this? i watched the trailer and, you know what? >> it is refreshing.

>> i watched the trailer, too. >> you taking the boys i'm thinking they're going after disney at this point. >> that's a good point it's a family kind of movie. but the slate they've got going is very eclectic they've got that they've got a movie called "the banker" with samuel l. jackson, which they're holding until oscar season so they want to play that game so that's all starting to become part of the process, as well. >> of course. >> i want to take i'm in a documentary club we typically watch a lot of crime documentaries. however, i went on a a farsafard i now love elephants we usually do it at somebody's house and we have to figure out how to get said documentary on what streaming service it's a whole situation so either we go to the theater or we ghot to figure out apple t plus. >> it is meant to push people to the new streaming service. so these will be in theaters for a couple months and then go

streaming. next up, credit swiss down grading macy's, gap, and l brands that itself is not remarkable. what's remarkable is the stock reaction today the firm there saying low valuation won't be enough to -- and look what happened l brand's down 8%. compare the market cap of these legacy retail brands that's all the way on the left there. those combined bars. you almost got to squint to see it it's just $16 billion cumulatively pails in comparison like uber or pinterest but combined, they are smaller than zoom and snap right now. >> i think the structural challenges ahead for a lot of these mall-based retailers and department stores are just getting in the way of anyone thinking there can be real growth here. i think even though many believe that there are smart executives running some of these retailers, if you talk to the analysts, no one says he's doing the wrong thing. i think they're just worried that the format is not something that can be fixed and it is not compelling to today's consumer.

>> i'm still thinking about this documentary club you're in. >> if they just showed at the local mall. >> yeah. >> they announced store closures the announced store closures so far this year are more than double what they were last year at this time and they're saying this research report that's out that if they don't have a decent christmas this year, watch out next year. >> will there be a christmas >> then you watch out for the mall operators and all the other companies that are so dependent on these retailers for their business this could -- it could be a tough year next year especially if you don't have a very good christmas this year. >> when is gap breaking itself up >> that's coming soon. it's still months out at this point. >> after the holiday. >> yeah. that's a great question, though, because they're spinning out old navy, which is the strongest business unit. and i think there are a lot of questions that remain for the other brands what does that look like and is it compelling enough on its own?

can that part be fixed frankly i think there are some broken brands there as well. >> a lot of the mall-based chains not doing well. next, if you want to buy half a share of apple, charles schwabb is now going to let you. telling the wall street journal it's part of an effort to attract younger clients to its platform because the thing is, charles is getting some headlines because they're the first of kind of the old-school platforms to do it. but all the new school guys have been doing this for years. >> if you ask them, they really set the trend here so far, he's probably the most popular one that has done this but something we know from the david from robin hood and from sofi is millennials and first time traders like to buy names they know. >> they just couldnan't afford >> it's 1500 a share. >> exactly netflix is even expensive. so they were sort of priced out there and sofi did this last summer they said since they launched that ability to trade a fraction

of a share, they've seen amazon shares 200 times the amount of people that were holding amazon now have it on sofi. >> i will repeat what i said yesterday in a different context. split your stock. >> yeah. >> i was thinking about you as this news came out i said bill was just talking about this. >> it's an emotional issue for a lot of investors but, you know, having -- not being able to buy shares of companies they like. but i thought the trend was more toward exchange traded funds anyway. >> and free etfs that's something sofi also offered that we saw j.p. morgan pretty soon after sofi announced that said we're going to do that too. >> the reason they're not splitting anymore is because people -- like the qqqs for example or some kind of etf with exposure to those names instead of buying the individual stock. >> but the reason i bring that up is i wonder how much business charles schwab is going to garner. >> that's true it's a little different. they're trying to get that high

net worth individual millennials, they kind of grew up with baby boomers and compared to robin hood, they have slightly more money. >> if you want to own amazon, it's not that you want to own the whole etf that amazon has been into because it's a lot harder to do your own research, to kind of track what it's doing. this is going to be your entry into owning equities, then it makes sense to own individual equities. >> but it doesn't make sense to hold half or a third or whatever the number may be. i do wonder about mechanics of this. >> is it hard to sell a fraction of a share >> it's interesting, too, something sofi brought up that when they first launched stock trading, people were buying shares of ge and ford and they were like why are mill wlen millennials interested in these? >> the same reason they buy two buck chuck. >> that actually tastes great. stay with us because this next one is up your alley too

there are millions of people breathing a sigh of relief after chime, which is now the biggest digital bank in the company. we've had them on this program they're recovering after the third outage since july. this blackout left their five million customers stranded and unable to use their debit cards or pay bills and this is a cohort like we had people tweeting about not being able to pay for gas at the gas station. >> we saw it on twitter. people were complaining that chime was out. there were a few different things so the debit card wasn't working. online banking direct deposit and that's really been their value add. they don't charge fees they don't charge overdraft fees so as a result of that, they've attracted sort of a lower income demographic. and those are the folks that can't necessarily afford to skip two days. >> you know, something just occurred to me amazon partnered with kohl's for returns and things they should partner with a brick and mortar bank, don't you think some. >> i think so. >> as a backup. >> oh, chime should. >> that is what i'm saying. >> i think this is word of warning because and i just want to chime in here

if you think about what the danger is, the only thing we know about not having access to our money in a bank is from movies like it's a wonderful life it's in black and white. or in "mary poppins. i think this is a warning sign to people who want to go and do something new that if it's not properly regulated, managed if you don't do your due diligence. >> even just battle tested it's an interesting point about had there not being a physical place or branch where you can go worst case and just say, okay, well, you know, i can show up and talk to the teller about it. >> right a lot of people are complaining that there's nobody to call and even that hotline, they say millennials and younger people don't want to go see somebody at a branch you really don't know if that's true until disaster happens. and on twitter, you had people and we spoke to a few people -- we spoke to people who were stuck at gas stations who don't have a backup bank account couldn't get to work

missed work for multiple days or were at a restaurant and couldn't pay the bill. >> free advice partner with a brick and mortar bank as a backup. >> here's one final tweet i wanted to show of someone saying i think everyone should be given $500 to compensate for this taking so long i'm late on my rent. >> $500 for you. $500 for you. >> there's a petition now that people have said we want some sort of compensation i missed multiple days of work here. >> that's crazy. >> don't blame 'em. >> guys, thank you appreciate it. kate rooney, contessa brewer, bill griffeth and courtney reagan he doesn't see that changing anytime soon we' we'll talk about what that means. and take a look at shares of slack, which is down nearly 10% today and it's had a rough week. it was down 4% wednesday 5% on monday a lot of these newer tech software names we've been watching closely have had a very rough go of it we're back in two. exciting plans available to anyone with

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exchange." fed vice chair richard claire speaking a short while ago saying central bank is not on a preset course. he also said a big part of the yield curve inversion was saying something about the global economy, not just the u.s. are investors in for a surprise with the potential of no cut in october? let's bring in jeff crumpleman and kenny polcari is senior market strategist. welcome, guys. kenny, first of all, october cut you think is priced in >> i think it's priced in. i don't think there's any way now that the fed is backing out. >> you don't >> i don't think so. they can talk about it all they want and i think maybe he's setting it up for the future because people are so intent on a december rate cut. but i think october's already -- >> so you think they're going to go in october but then maybe that's the end -- >> yeah, and i don't even think they should go in october but i think they have to yeah. i think they have to but, yes, he may be setting it

up for slow down everybody, not so quick in december. >> jeff, what do you mean by this being a wash, rinse, repeat cycle for the markets? >> well, we've seen this pattern where, you know, we have these freakouts and, you know, just panic scares on the items in the headlines that are announced and it creates negative psychology and the market sells off. and then when the data's released, it's been btf, better than feared, and folks realize that things are moderating, not collapsing you get these huge rallies and that just repeats over and over again. we've seen that going all the way back to the recovery but particularly beginning in december of 2018 when we had the 20% pull back and then it's continued through this year. so we think it creates great buying opportunities when the fundamentals are moderating, not collapsing, and valuation's attractive. >> okay. >> so we've seen it over and over again. >> kenny, one thing we have looming tomorrow actually is

this -- this vote on brexit. and i -- i bring it up just because we had the market starting to track it again this week and it looks like there might be a deal. we have now this additional complication of these tariffs that we're putting on the eu today. how important is tomorrow's vote going to be? >> i think it's important for europe i don't know think it will affect u.s. stocks or u.s. mind set in terms are investors going to continue to buy u.s. stocks i think it's important for the broader picture and every one will be watching it. >> it's been one of the items on the list of worry. if it comes off then i assume great but if it stays on >> there's some question about whether the parliament will be able to ratify he's going to get 21 people, those guys he kicked out a month ago to get on his side that might be a little bit of a problem for him. we'll see.

>> are you kouscautious >> i'm cautious. i expect the market will back off a bit. >> so far it's been pretty good. >> we still have two and a half more weeks of energy numbers and consumer names next week >> industrials >> i wouldn't be surprised and i think the market should back off to the lows. low like 28, 58 where it was and then we rally. >> how would you be positioned >> are you saying the market overall, people can be comfortable with exposure or would there be sectors or individual names you'd recommend? >> i think it's a great time to have some exposure to high conviction active managers wooe we'd have a blend of offense and

defense. as these policy issues have been sub born and lasted and taken longer we have seen the psychology is a little more fragile. we softened it a bit for example, selling morgan stanley and schwab that have some headline issues, they face challenge for lowering rates and shifted into intercontinental exchange also just enhance trading to rising volatility. we're repositioning bit. >> okay. there's ways to do that. i don't know you're hoping they go active. they don't just buy that atf with the passive trend

thank you, both. i really appreciate it today also, don't forget pinco, co-founder bill gross will be on power lunch today. that will be around 2:00 eastern time coming up, my next guest wrote the industry manual for tech companies on how to get you hooked on their products then he wrote a book on how to break the habit. this after the bombshell news the faa says boeing with held concerning messages from 2016 that were between employees and about the 737 max. a test pilot complained that the flight control system was difficult to control coming up, we'll explore whether is cldthou mean the road for the ceo. we'll be right back. servicenow put our workflows in the cloud.

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welcome back there's another dow component down big today and it's johnson and johnson. the company recalled a lot of baby powder because the fda found a trace of asbestos in a bottle a lot referring to that unit of measurement. shares are down 5.5% that's another big cap stock

weighing down. with big tech under intensive scrutiny, part of the backlash targets how the companies dominate our attention my next guest wrote the book on how to hook users with apps like facebook, instagram and youtube. now he has a way for people to unplug he's the author of hooked. welcome. >> thank you great to be here >> this is like the timeshare guy who says i am reformed and now i want to get you out of your timeshare >> my clients included the company like new york times that got people hooked to reading the news that get people hooked the exercise in the gym that gets kids hooked to education in the classroom. that's who i wrote hooked for. we can use these tactics across the broad range of industries. that's what happened since i

wrote hooked >> i love the candor what do the rest of us need to know and regulators are already kind of onto this. what are the real tactics being used here? >> i think a lot of this legislation is really missing the point. when it comes to note faificatn do we need one every 30 inutes i don't think that's helpful we need to focus on people being harmed by these technologies that falls into two groups children who are already a protected class. we have many laws that protect children and the other should be people who are pathologically addicted we see people saying that all of us are getting addicted. that's not true. all sorts of things are addictive to some people and not to others. many of us have a glass of wine with dinner.

we're not alcoholics not every one who plays poker is a problem gambler. >> someone like me, my screen time is two and a half hours a day or something me and my husband debate whether or not i'm addicted. what would you say -- we don't talk about this with folks where you loog around and say she's clearly a problem. what does real addiction look like and how can it be combatted th then >> real ae dictiddiction is 1 tf the population the vast majority are not addicted we are distracted. that terminology places responsibility away from addiction where you have a pusher, a dealer someoneho is doing it so you when you call it what it really is, a distraction. now the responsibility is on us. . >> you're trying to let facebook off the hook >> not exactly

i want them to adopt a use and abuse policy >> maybe the rest will feel better we're not addicts thanks very much appreciate it. that does it for the i'll join tyler for power lunch. thanks for that. here is what's new on a very busy power lunch friday afternoon. shares of boeing near the lows of the session as the company alerted the department of transportation that employees may have misled the faa. could this be the end for the em embaled ceo. the bond king bill gross returns after officially retiring from the business he'll be here for an interview and tell us why he think a global slowdown is the new reit