>> copart. >> jpmorgan, refuse to sell. >> and, steve weiss? >> adobe i hope it's bottomed >> do you think it has >> i think that whole group has today. >> it's been so good having you. >> advanced micro. >> "the exchange" begins right now. thank you, scott hi, everybody. here's what's ahead, fed up, a double downgrade for boeing as analysts warn it could be a while before it's back in the skies days ahead of earnings and the ceo's appearance on capitol hill the latest plubold prediction for how southwest may be forced to keep with these delays plus, slacking off, why that supposed email killer slack has been slipping, and it's not the only one we'll dig into the cloud crash ahead. and wall street's love of peloton. zuckerberg wants to be understood, and amazon may be shipping expired food all ahead in rapid fire today.

but we begin with the markets. dom chu with the state of play it's green across the screen and has been the entire day so far as we go into midday trading. we have seen some negative territory. of course holding right above the 3,000 mark, the nasdaq, up almost a full percent. generally speaking a pretty good day to start the week for the bulls. one place we are keeping close attention is a nice, big move higher in oil services stocks. they're up 4% today on the heels of halliburton earnings that's helping the sector over the course of the last five years this particular etf that tracks oil services has lost three-quarters of its value so a very tough road ahead for some of the oil bulls especially when it comes to services and you mentioned peloton, a slew of analysts covered starting today, generally speaking, it's all

overweight, buy, you name it that stock went from being up almost 4% today to now down 4%, a big swing. this stock went public at $29 per share, open below $28 and it's been a down trend since then so a lot of the analyst commentary, kelly, about the total addressable market and the growth we'll see if that sticks for peloton. back to you. >> we'll talk more about that, dom, thanks. i'm kelly evans and we begin with the corporate story dominating headlines catching wall street's attention now in a way it hasn't before is the drama at boeing. the stock hitting a two-month low and is on pace for its worst month, down about 13% this month. this after the reveal of explosive messages last week showing pilot concern about the 737 max. cnbc has also learned an internal survey showed boeing employees felt pressure from managers for safety approvals at the company. all of this as the board meets today and earnings are scheduled for wednesday. joining me now, a write wer the

nosew york times, phil lebeau it's great to see you both phil, let me begin with the share price action today is another big move lower for boeing is it because of these downgrades what do you think is the catalyst of today's action >> partially, kelly. you have three analyst who is downgraded the stock today, brought down price targets one firm brought it down more than $100. we should point out there is a wire report that within the last few minutes boeing ceo mullenberg has sent out an internal email, within the company, saying they are making steady progress on returninghe 737 max to service am we should point out, however, the steady progress line has been almost standard from dennis muilenburg. that's what they would deem as return to service.

>> natalie, you have been doing a lot to report and uncover the messages from the pilots from 2016 what more have we learned over the weekend? in particular how he was jedi mind tricking regulators into accepting minimal new training for pilots what do you think the significance of these disclosures is going to be in terms of what boeing is now required to do to get this plane back in the sky? >> the company has said that these messages were not,n fact, anything about mcas. he was talking about problems in the simulator. there was a story that forkner had jedi mind tricked into accepting minimal training on the max. you're seeing a daily drumbeat

of negative news headlines for the company, again, as itseo is facing congressional hearings in the coming weeks and seeing this pressure mount. the meeting should last until the afternoon. we'll see what happens it's going to be very difficult to maintain the steady hand they have >> the time with regard to boeing's criminal probe that led to the disclosure of this inrmation to the regulator and now to congress. why weren't these internal messages made public or at least to their regulator sooner? does this order of events make sense to you or raise any

concern about boeing sitting on these messages >> boeing has said that it is complying with the criminal information and did not provide to the regulator because of the criminal investigation but lawmakers have not been satisfied with that response, and they were livid on friday when this news came out. and the regulator itself, steven dixon, you saw him sending a message to muilenburg expressing his displeasure with the news. while the company has said it is complying with the investigation, you have outsiders, again, important outsiders here on the hill and at the regulator becoming concerned with the disclosures >> and, phil, the ceo, as you just said, has reportedly put out this internal email trying to reassure employees that the 737 max is still on target, but that's the main concern by the analyst community, and in his own position is going to be one of increasing uncertainty, i mean, it's unlikely they're going to do anything before he's

about to appear on capitol hill, right? that's in about ten minutes' time >> do you mean in terms of letting him go >> yes >> the feeling among a number of analysts -- and, look, nobody is inside the boardroom, so nobody knows for sure, but the feeling among a number of analysts if they're going to make a switch and say, you know what, dennis muilenburg is not the right guy to lead this company, would you do it right before you do earnings or right before he's being called to testify on capitol hill theoretically if you did that, you would bring in a new ceo who maybe is also testifying with dennis muilenburg at the hearing and get a lot of, well, we're going to get to the bottom of this, make sure everything is fine the dynamics do not appear to match up with what people are saying should happen in terms of potentially removing dennis muilenburg i should also point out, kelly, i do not get a sense -- while i do get a sense there is a demand for accountability within the company, i do not get a sense that there is a drumbeat of,

hey, dennis muilenburg is responsible for all of this, and he's got to go that doesn't mean it couldn't happen, but i just don't get that sense that it's imminent. >> thank you both very much. natalie kitroeff and our own phil lebeau. those boeing shares down big, and that is weighing on the dow although it is up 32 points. and the fallout from the 737 max is spreading to airlines southwest downgraded from a buy to a hold saying they may have to buy rival jetblue to cope with the loss of its main aircraft i'm joined by the analyst behind this call today. joseph, welcome. it's good to see you. regul regulartorily speaking, could this happen? >> that could be one of the biggest challenges southwest would face the degree of overlap between southwest and overblue is relatively modest. beyond that there's a political

component to the m&a process and southwest has a fair amount of political capital it could use it has a reputation within the industry and within government, more importantly, of being a low fare, disruptive provider of air travel and i think it could use that if it felt the need like it needed to go forward with the jetblue acquisition. >> and you say buying alaska could be another option here why do you now think an acquisition could be necessary for southwest? what's changed >> yeah, i think if you just look at some of the data points recently related to boeing and the max and what seemed to be kind of a deteriorating relationship between them and the government, we just think there's more risk that the grounding extends for a longer period of time and it just takes them longer to get back to the rate they thought they would be at and if southwest looks at that and sees a multiyear period

where their growth is constrained, there aren't too many alternatives other than trying to buy growth i think jetblue is probably, you know, the opportunity that addresses that most cleanly for them >> that is, again, absolutely fascinating. you upgraded jetblue for that same reason, moving their price target to 24 you mentthey could be constrained for a multiyear period, southwest. what do you mean by that >> well, i think there are some reports over the weekend that boeing is considering lowering production again on the max. if that were to materialize, that means that for a period of time they're going to be delivering fewer maxs than they would have expected. if southwest has a plan assuming 40 to 45 per year get delivered over the next couple of years and that becomes 20 to 25 because boeing isn't delivering as many airplanes as they

thought, then that means southwest isn't going to be able to execute on their growth strategy if you listen to southwest's management last earnings call, that was clearly what they were most frustrated about. they recognize they're handing share to their competitors and delta talked on their call they recognize they've gained share and they plan on keeping that share. there's a point at which southwest views this as unacceptable and significant enough to push them to do something transformational like look at jetblue. they're not really at that tipping point, but, again, if you have a period where they lose confidence in their ability to get the airplanes, that could push them to that tipping point. >> it is a fascinating call. joseph, thanks very much, moving your price target from $75 to $60 as part of this today. appreciate your time >> yes, thank you. >> joseph denardi. now president trump was

holding a cabinet meeting moments ago. eamon javers >> reporter: a lengthy cabinet meeting. a couple of items on the u.s. mca trade agreement. the president pushing democrats on capitol hill to pass that saying he would be willing to give them all the political credit if they would do it, calling them do nothing democrats, but would give them credit if they do move forward to that. no indication that will happen anytime soon and on china the president saying the chinese economy is going down the tubes their supply chains are. they're having a very tough year, he says. and then robert lighthizer speaking up in this cabinet meeting as well making a couple of points, one, the u.s. target is down to the phase one of that china trade deal completed by the time of the chile summit but there are issues to resolve. the president saying the chinese are purchasing u.s. agricultural

products and saying that all of the issues will need to be dealt with in phase two, the president says, are in some ways easier than the issues in phase one so the president here trying to put a good face on exactly where this is going once they get that phase one negotiation wrapped up by the time the president goes to chile, kelly. >> the markets are shaking thi off. we'll talk about that next eamon javers with those headlines out of washington. here is what else is coming up on "the exchange. coming up -- resilient or sputtering a look at why the markets can't break out to record highs despite coming within 1% nearly every day. plus, it was supposed to be the email killer but so far the only one it's hurt is investors. a look at the recent downfall of slack. and, wall street loves peloton. really loves it. but investors still aren't buying it.

welcome back to "the exchange." today four companies implicated in the opioid epidemic reached a last-minute settlement for nearly $260 million. some say the trial could be a

benchmark how the broader trials could be resolved. virtually every state along with thousands of local governments have sued this industry. let's bring in "washington post" reporter lenny bernstein who has been following the ongoing litigation and the general counsel. it's great to have you both here is today's settlement more, less, or about on par with the expectation for how much dealing with opioids is going to cost these companies? >> i think that the expectations were really unknown. the counties were asking for more than $8 billion obviously the settlement doesn't come close to that however, if you try to extrapolate this out over an entire country, it appears to be much more than these companies would be capable of paying every county in america. >> it might be more than they're capable of paying but it's also 1/32 of what the counties wanted now explain where either of

these figures have grounding is. $8 billion appropriate given the damage this has done or is it a quarter billion? >> certainly the plaintiffs presented evidence during the runup to the trial that to abate this crisis going forward for a number of years would cost them in that range. $7 billion and another $1 billion in damages he avoid the risk involved of getting nothing on either side you avoid the cost of litigation you avoid information that might come out during the trial, and so you're going to settle for a much lower number. the damages overall probably were in that neighborhood for the plaintiffs >> what does this settlement price say to you and suggest about the exposure to companies like teva will have to the opioid epidemic?

>> so i think at this point ebbs tr extrapolation is difficult it's the first case and there are risks to both sides of going to trial but the likelihood of scheduling 2,300 cases for trial would take hundreds of years. and so the value of the later cases, the case that is are further down the pike, if you will, that haven't even begun to be scheduled, is necessarily going to be lower. the extrapolation is sort of less obvious than we think it is you can't just sort of multiply these numbers, you know, by 2,300 cases or whatever. i think there's a real legitimate value for these cases and this settlement today provides another data point in trying to figure out what that exposure is going to look like. >> what you're basically saying

is the companies could kind of say, look, we could drag this out -- we could or it could be dragged out for years, and that might give them some leverage to settle for a much lower number than the counties would like what does teva think it should be paying here for its role in the epidemic >> i think all of the drug manufacturers are in a position where they sold a variety of different, both brand and generic, opioids over a relevant period of time but they're different. they're not a monolith teva will be differently situated from j&j who is different from allergen. we have to be careful in terms of trying to put them all under one umbr, if you will, particularly when you try to compare them to like a purdue pharmaceutical, for example. i think the facts are really important and we really have yet

to see the facts in these cases because other than j&j in oklahoma we haven't had a case go to trial yet. >> right >> so i think that caps like teva and allergen and others if they go to trial before a settlement are going to have a story to tell. i think at the end of the day these companies want to now be part of the solution i don't think any of them anticipated the opioid epidemic becoming what it, unfortunately, became -- a national tragedy i think there's a lot of blame to go around i think these companies are willing to pay to make right some of those issues >> we have to go but do you think these numbers will satisfy the public in terms of holding someone accountable and these companies accountable, if that's the right place to go to, for what's happened here >> if these numbers lead to a global settlement, to a much larger settlement that wraps up

all the litigation, you might see some satisfaction on the part of some people. on the other hand, there are people who really want the companies to admit wrongdoing, say they're sorry for what happened, and so far, at least in today's settlement, that didn't occur >> okay. thank you both lenny bernstein and ildiko mehes, thank you very much the trend that's picking up in the housing market, we'll tell you about it. but first, small caps underperforming over the past year is it time to buy some of these names at a discount? we'll talk about that next if you're on medicare, remember, the annual enrollment period is here. the time to choose your medicare coverage... begins october 15th and ends december 7th. so call unitedhealthcare and take advantage of a wide range of plans with a variety of benefits... including an aarp medicare advantage plan from unitedhealthcare. it can combine medicare parts a and b,

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feels like a broken record, stocks are once again inching closer to record highs but unable quite to get there today, and now it seems like positive news on the trade front can't even give things a jolt. the president saying the trade deal is coming along great and lighthizer saying the goal is to have the phase one deal completed by the summit. joining me now is the strategist at proshares advisers. the dow is up 25 points. granted boeing is weighing on things a little bit today, but why not more optimism or how much does progress in the u.s./china tradealks matter? >> your point is well taken. the s&p and the nasdaq is up more than the dow. there is positive movement happening. we are in an environment where first you can't really say that

stocks are maybe more than 10% off value even given low interest rates and earnings season, look, it was almost a sigh of relief last week that the banks had some decent numbers but we're still bouncing around zero earnings growth. there are not places other than the resolution on china or brexit would be great. >> what's your best recommendation in terms of positioning whether it's in the u.s. or internationally? >> i think it makes sense to look domestically. the hair on europe, even if all the stuff is solved, germany is in recession in emerging markets you have hong kong blowing up, chile blowing up there are a couple opportunities to go risk on. it's on the value side they've woken up we think that makes sense.

small cap stocks have consistently grown >> anything else you mentioned in there as well >> the other thing is we note the technology has started to turn around and that's, a lot that have has to do with the potential of the china trade deal here you can look at some of the old school tech. think about the consistent dividend in tech and in addition to the potential upside from the benevolent resolution of the china trade deal, there's another piece people have forgotten about. we had this big corporate tax reduction, and it's already almost in the rear-view mirror the first principles of economics ultimately gets passed through in terms of price when you're in a competitive industry you need a moat. you need differentiated product to be able to hold on to the tax break. that's a pretty good description of some of the old school tech companies. >> stick with the ones that have the moat, that pay the dividends that grow. people can hunt around with that

information. simeon, thank you very much. simeon hyman of proshares. here is what's happening this hour. the speaker of britain's house of commons turning down the government's bid for a new vote on its brexit divorce deal it is a blow to prime minister boris johnson's plan to take the country out of the european union at the end of the month. >> today's circumstances are in substance the same as saturday's circumstances. my ruling is, therefore, the motion will not be debated today as it would be repetitive and disorderly to do so. >> a small plane went down and is missing en route to raleigh, north carolina, has been found debris from the plane was discovered in a tree at a nearby heavily wooded state park. two people are confirmed dead. the search began sunday evening when the plane disappeared from radar on approach to the airport. and consuming darreny

products may increase the risk of prostate cancer researchers from the mayo clinic reviewed 47 studies involving more than a million people those who consume dairy products the most had a higher risk of developing prostate cancer you are up to date that's the news update, kelly. back to you. >> sue, thank you very much. here is what's still ahead on "the exchange." ahead, wall street's love for peloton is overwhelming. zuckerberg's wise words. the next time you get something fr from amazon, check the expiration date. and companies are starting to question whether influencers really pay off

welcome back let's catch you up on a few stories that should be on your radar today. it is time for "rapid fire first up and dom tipped us off, the street is extremely bullish on peloton, the digital fitness company, despite shares down 25% since the ipo, more than a dozen firms initiated coverage with

the buy or equivalent rating average price target is around $30, which is a 30% rally. now, dom, it would be one thing if they said we're bullish because it's done so poorly since the ipo, but most calls reiterate why the ipo should have been more successful. >> sure. they talk about the idea there's a big runway available for companies like this. one mentioned the idea they're vertically integrated well they own the hardware, the bikes themselves they own all the content the stars have signed away their likeness and their ability to broadcast these online classes so all it have belongs to peloton. but a $29 ipo price makes it seem like it was very aggressively priced if the target price they are putting out on average is $30 and change this is not a call on whether or not peloton can grow they obviously can the issue is whether or not there's a valuation that actually kind of fairly puts given --a level in the market

>> this is reminding me of go pro where you start out with a successful hardware company that said it could transition into a media software content company and it didn't. peloton might because it is stickier and one of the analysts said they would go from half a million subscribers to 3.5 million which is a huge liam and that implies a lot of bikes. >> they also don't have a ton of competition. they could do it i would like to have a peloton if i had the room for it in my apartment. i don't. >> so we do -- jim cramer -- they use his at his house for drying clothes my house, we don't even do that. it's so heavy -- the great thing about peloton, it's so heavy you can't move it. you can't move it out of your house. it's 150 pounds! >> you know what i would say about it, again, this is not a hit job on peloton with whatever it is, what they do have going for them they are trying to diversify behind just the bikes. you have the treadmills now with those things, you have the wall

mirrors and everything else. what they're trying to dis innova tt way. i don't know how much invasinaos it takes >> are you saying underwriters -- >> am i suggesting -- i would never do that. moving right along it is a big week for mark zuckerberg, the ceo of facebook, has been on a media offensive amid complaints about policies and influence on elections in an exclusive interview with lester holt he explained it's not about making friends right now. >> i get that a lot of people are angry at us. part of growing up for me has been realizing that it is more important to be understood than it is to be liked. >> i mean, props, props to him for that kind of statement what i think he's really getting at there has been a lot of backlash about his free speech principles people want to see facebook be more proactive when it comes to

policing especially political content and this is mark zuckerberg basically saying no >> comparing and likening facebook to the fifth state which is okay, but then to say they don't have any responsible policing their content is like, with much power comes great responsibility so you can't have it both ways >> it's going to be up to the regulators this may be out of their hands if zuckerberg's position is i want to do it x way, that's fine regulators might say we think you're like cable tv instead of broadcast, or whatever the right analogy is, and make the question for them. it's an open question. >> you have that great interview which hit on a lot of things facing mark zuckerberg as a founr and ceo in silicon valley and at the same time these reports about whether or not it was appropriate for mark zuckerberg as ceo and facebook to be sitting down with conservative pundits and whether or not he is softly advising some democratic potential candidates for president about

what they should be doing with their hiring so all of this has put him squarely in the political cross hairs and that's something where you cannot be liked because eventually half the people at least are not going to like you. >> is he understood at least >> fine, you're not going to be liked. we knew that to be understood, i don't know what there is to understand about facebook we don't already know convince the rest of the country you can police yourself and do the things you say you do which they've proven over and over again, they say they would do this and didn't. >> he's trying to say we're going to follow the principles of free speech as they are enforced on the government, in other words the stuff that incites violence is that enough, though, or do people want more of him than he's willing to offer? >> the power of facebook in the coming election will only make this much more a focus let's talk amazon. the new cnbc investigation has found that third party sellers on amazon's marketplace are frequently shipping customer

expired food okay, the details might make your stomach turn. there's been curdled coffee creamer, year old brownies and products discontinued. 40% of sellers in one case tested had five or more complaints from users about expired food apparently what's going on since amazon opened its platform to third party sellers, you can buy expired food at the grocery store and turn around and sell it on the platform >> so when i heard the story i thought, well, when you buy something from amazon, isn't it always buyer beware? and then i realized i buy my protein pouder from amazon and robert was the one who told me about the protein powder >> does protein powder, like twingies, never expires. with beef jerky, hot sauce, sugar, that doesn't really expire they talk about all the ai technology amazon has to detect these things all you have to do is get a

reader to read the expiration date >> how hard could that be? >> there are third-party sellers. >> amazon could have a reader. >> it tells you the shortfalls or what could happen for not controlling your entire supply chain. >> absolutely. >> i would say this, i have a growing peeve, not massive, about food waste so i'm not as conscientious -- i'm one of those people who believes expiration dates -- >> you love it >> it's fine just don't throw it away >> on a slightly more serious note, for companies like abbott, the companies themselves are concerned because now you have people selling their products that may be expired and could be on the hook maybe for some issue. now they, themselves, are trying to police the site >> i believe people call it the gray market. isn't that what it is for the third party sellers? >> or if it's cheese it's blue -- >> sometimes green >> we may need to check our protein powder >> it's fine >> never take shopping advice

from robert. >> noted >> and finally a new report from "the wall street journal" highlits hdvertisers becoming more and more skeptical of online influencers because a lot of them apparently have inflated follower accounts who knew and this, in many cases, can be actual fraud influence or deception will cost advertisers $1.3 billion this year according to industry estimates to which i would say my guess is most people are still getting more value out of using influencers than they are worried about losing that cumulative billion dollars. >> that's a fair point >> i would say this, i don't ascribe to the influencer side of things but ads have been a huge idea generator for holiday gifts. >> i'm a nano which means i have less than 5,000 -- >> i'm a nano, too >> for $100 i could become like her and she's a micro. she has 10,000 >> she bought all her followers.

>> i told that you in confidence okay, so here is my growing peeve. influencers who constantly bombard yowith ads i think, for me, and im a little susceptible to influencers online, i think it's quality over quantity. for companies watching, if i believe that the influencer actually uses that product, i might buy it >> protein powder -- >> it's just off the table now so that's the thing, though. if i'm constantly being bombarded with sponsored ads, i'm out. i'm completely out >> the influencer ecosystem has become the most important channel through which to launch products and sell things would anybody argue with that? even though i realize not the whole population is on sociameds comes up with things blow up, too. look at vaping they went and realized, oh, gee, we paid these influencers l this money and it was ccessful and now maybe we wish it hadn't been so. >> they're expected to spend almost $10 billion over the next year on influencer marketing

yes, i think people are wising up to it but there's still a lot of big spend going to that. >> it's like the third-party thing with amazon. you know there's problems but the core thing to me still seems like it's working. are you not an influencer? >> she is. >> actually companies have reached out to me. >> she's on her way to becoming mid-tier help her get to be mid tier. >> no additional streams of income from me learned a lot. >> thank you all for "rapid fire" today. it's been a wild two weeks for slack, down about 10%. we'll talk about what happened to the hot ipo of a company proclaiming it would change the way people work forever and whether this is a warning sign for what's going on with this segment of the ipo market next 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.

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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. pacifica: ted! goin' oneighbor: yes. takin' it off road station wagon? you know it's an suv! i know for fact your suv does not suck. why is that? it ain't got that vacuum in the back! we got to go. ♪ vacuum in the back, hallelujah! ♪ welcome back even some high-profile ipos have flopped like uber and lyft, the tech software names doing just fine at least until lately

slack is down 27%. zoom is down 29% the tech software category just had its worst week since late august is that because oftry specific problems or is the air coming out of the whole ipo balloon? dan gallagher is a tech reporter for "the wall street journal." dan, it's great to see you how would you tie this all together for us? what's really going on here? >> well, kelly, i would say it's all of the above really. i think especially like zoom and slack win out in the market with pretty high valuations even though they weren't in this kind of huge unicorn status that uber and lyft had but the stocks went out, they were priced really well and zoom went high up for quite a while i think we have a combination of just -- there's rrieabout what growth is going to look like in enterprise software later this year, early next year, plus the valuations were really high. >> a lot of people, dan, said while we're all focusing on some

of the consumer oriented ipos that aren't doing well, the enterprise stuff in the background was is that story over now or are these still considered a success? >> well, i think it depends on what you're going to look at i think the businesses will still show some pretty strong growth especially in the small cloud companies. they're not taking up a huge chunk of the i.t. budget so still a lot of room they can grow even if the overall i.t. spending environment will be slowing. there's no reason they can't have good, strong growth rates next year. when you combine some signs of deceleration plus the fact a lot of the stocks were at 20, 30 -- zoom was above 40 times forward sales. >> wow. >> you just can't sustain that even with really good growth numbers. >> and you put your finger on it in your piece where you said, look, this goes back to the work day. this was last tuesday afternoon. the ceo said we're seeing some delays, when he was asked about the state of the market.

what should the rest of us extrapolate if that's true for this high-flying piece of the market here? >> yeah, well, if work day is going to say that they're always very careful and conservative with any of their forecasts, so i think when they made that comment that's what kind of triggered a lot of selling activity in the sector and had been going on but that was a particularly bad day because work day is usually not a company that makes careless comments we still don't know if they specifically are going to miss their targets. when they put out a cautious comment like that it made people worry and they're among the largest ad companies, their sales usually run really well. i think if they were seeing that pressure, investors were thinking what are all the other companies going to see as well >> they're not that recent of an ipo but what does it say about the ones who are dan, i have to leave it there. there's so much more to discuss including the direct listing model which in slack and

spotify's cases looks different from the ipo priced action we'll bring you back we appreciate your time, sir >> good to be here >> a columnist for heard on the street at the "wall street journal. move over, tiny homes, there's another big trend in little housing that's on the at n th'sext when "the exchange" comes right back

we're seeing a big boom in a little type of housing and wae'e not talking about tiny homes we're talking about extra homes on your property >> reporter: take a look it's not a she shed, not a super tiny house it's a backyard bungalow and fast becoming big business for homeowners and builders alike as states as cities relax zoning laws these units are cropping up used for family members or income properties. that's meant huge growth for prefab adu, which is a bay area builder. they could expand to 1500 next year and they say possibly 3,000. >> over 80% of our business still remains people who are looking to address housing for

family and 20% is the people looking to address options for income >> reporter: rental income was the goal for lisa and chris who rent this adu out on a monthly basis. >> we lived in it for ten months while we renovated our main house and we loved it. i was kind of sad to move back in our main house. that's how much we loved it. >> you feel like you could retire >> definitely. >> reporter: recent changes in zoning laws have really made for huge growth in this area in the last few years the hope is it will help alleviate the housing shortage and the lack of affordable housing in big areas like d.c. >> they can just retire to the backyard. >> reporter: why not it's easy. >> even when we were renovated the garage, we were worried would this look too much like a

dwelling unit. how many timowns allow you to build another property your existing one >> reporter: a lot especially out in california and in the bay area. here in d.c. it was a recent change to zoning laws. merchandise maryland is voting on it they talked to their neighbors around here before they did this they did not see a lot of opposition to it at all. their neighbors came afterwards to look at the house and said maybe i could do this in my backyard too >> i bet they did. thank you so much. while adus may be the next hot housing trend, new data out of harvard suggest the remodelling market will stall next year. we'll speak to the authors behind this study. that's coming up the u.s. economy has been chugging along relatively nicely for the past ten years why are tens of thousands of workers across the country now going on strike. we'll look at the disconnect, next be sure to tune in for the

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welcome back to "the exchange." mack truck workers are the latest in the string of workers we have seen on strike including gm and chicago teachers. a million took to the picket line last year that's the highest since 1986. why are so many workers walking off the job? for more i'm joined by a reporter from the new york times. you answered the question just as i was asking it it's great to you on what did you discover about why we're seeing this trend lately >> thanks for having me. good to be here. historically we have seen a lot manufacture strike activity in periods where unemployment is really low that was immediately after world war ii from the 60s into the 70s. there were several decades in which workers went on strike a lot less now we're seeing some reversion to the historical pattern. unemployment is low.

workers feel like they have some leverage and are using that to negotiate a better deal. one wrinkle is versus the decades after world war ii is i think now workers feel like unemployment is low. they have some leverage. the economy hasn't benefitted them as much as their employee they wanted to share you talked about non-competes, for example. it's changed to make it more likely that workers are pushing back >> exactly in the last few decades what we have seen is the share of income that companies and employers generate that goes to workers have been gradually declining. there's some variation from year to year. the long term trend has been to decline. employers have been able to hold down wages through the mechanisms you discuss non-compete, no poach agreements i think there's a sense of frustration that as the economy has rebounded over the past decade from the great recession,

workers haven't gotten their share and upset about it >> are these strikes successful. how closely do you think people are watching the outcome of the mack struck to see what they might do >> i think the big thresholds moment was last year when tens of thousands of teachers in a bunch of red states walked out many of them did get better deals n deals. that was a real thresholds that we crossed the deal that gm put on the table does make a lot of concessions. the company has said they will shorten the kind of progression time it takes new workers to get to the veteran pay from eight years to four years and phase it out altogether the workers have upset that three of the four plants that gm ieds led earlier this year it doesn't look like the company

will bring them back online. that's a real sticking point that may be the toughest part of the uaw having to sell this deal toyotas members at this point. >> it's great information. thank you for joining me >> thanks for having me. that does it for the exchange. "power lunch" starts now thank you very much. we'le er here in a moment welcome every one. here is kwhast new at 2:00 on power lunch for a monday we are heading into the heart of earning season but so far so good we'll tell you which names could take the markets to new highs. boeing is turmoil. new fall out over the safety of its 737. wall street split on what will happen next. the nba getting ready for tip off this week under a cloud of controversy in china insider will be here later this hour to explain it all as "power lunch" begin