maybe 10, 15% growth because companies have to invest there >> and joseph. >> mks instruments, nksi, is rallying along with lam. it's got further to move >> thanks for being here and thanks for watching the exchange with kelly begins right now. >> thank you scott here's what's ahead. vice president pence wrapping up his china speech and while his tone towards china was a bit softer than last year, he was pretty tough on corporate america. plus the busiest day of earnings bringing surprises, disappointments. bold ceo statements and warning signs today. we'll dig into that and why elizabeth warren's private equity reform push may not stop the corporate looting she's worried b about. but first, we begin with today's markets and dom chu has the state of play. >> slowing momentum, but not terrible the dow is down by about 56 points and a big reason why.

we'll get to that in a second. but the s&p 500 just cannot seem to get above or beyond that far away from 3,000. and we still hover there right now. just about up 11 at the highs of the day we were down four point in the s&p at the low. just hovering near the lows now. nasdaq outperforming if you're looking for one of the industry groups that continues to show solid momentum, all year long, check out what's happening with home builders and home construction stocks. this etf track, it's up three quarters of 1% nothing crazy, but look at this. since the lows in december, this particular etf is up 60% during that time span a huge move higher and buy the way, noby the way, none has bee higher than 5 to 7% and the reason the dow is lagging so much today, check out what's happening with shares of 3m. the biggest drag in the dow today after they miss earnings, missales estimates and cut their full year forecast

sale slowdowns in china. but 3m shares, certainly a big thing to watch today >> thank you welcome to the exchange, everyone i'm kelly evans. our lead story today is a reversal of fortune for two battleground stocks. twitter was having a strong year, up 35%, until today. the stock is sinking nearly 20% now after disappointing earnings then there's tesla investors hit the brakes this year sending shares down 23% again until today. now the stock is up 15%. 16% in change now. after a very surprising profit let's delve into both now. julia and phil join me let's talk about twitter first and the advertising issues >> what i think is really interesting here is this is a company that grew its daily active use rer base faster than expected added twice as many daily active users. 6 million in the quarter while they were doing that,

their revenue came in less than expected as did guidance for the fourth quarter. this was due to two issues one, they had advertising glitches technical glitches around products they weren't able to target ads as well as they anticipated then give that valuable measurement back to advertisers. second, they attribute it to seasonality. there tends to be slower advertising in the summer. they said it was slower in july and august and picked up again in september, but they say these issues could continue to impact the fourth quarter so the good news is that it was a glitch that had a huge part of this impact. the bad news is if you have glitch or two, this much of an impact, it raises real questions. >> that's behind the this goldman downgrade a taking it from a $52 down to 34 and it's around 31 right now. then they're saying it's on these advertising issues one question that's come up, understanding what twitter says

is the problem in terms of their concept relative to the more trolling commentary >> jack dorsey tried to address these issues today he said they're getting better at pulling down abusive content. half of what they do they do before anyone r reports it i think when you look at the advertising product as a whole, this is a company that's made so much progress in figuring out its business model they're going to tell you just how many people are engaged on this product and why they're focused on these users they've shown they can generate revenue from them. one reason the stock has sold off dramatically today is because it looked like they were on a path to make more money from their slowly growing user base and now their question, maybe their system isn't as robust as it seems >> thanks. we'll see you in a few for rapid

fire >> that's julia boorstin now to tesla swinging to a surprise profit in the last quarter. phil, man, this is is a really, really interesting profitability turn how did analysts not see it coming >> when the number came out yesterday, more than once i heard people say can we really trust this is this accurate yes, they kid swing to a surprise profit. the expectation was for a loss of 42 cents a share. tesla reported a profit of $1.86 a share. they did it by having much lower operation alal expenses. so tesla reaffirms its 2019 delivery guidance. yes, they do plan to hit that target of delivering at least 360,000 vehicles this year as for the model why 's next vehicle, here's what elon musk had to say last night. >> we can't think about summer

of 2020. it's going to be an amazing product and be well received i think it's quite likely to, just my opinion, but i think it will outsell xs and three combined >> he said they plan on having it by the middle of next year. that's a move up in terms of when it's expected compared to the end of next year, also the china plant, it's ahead of schedule production expected to begin and deliveries begin before the end of the year. they have some test production going on over there. robin denholt who is the chairman of tesla, she was brought in when it was clear musk would not be able to keep it, she will be talk iing with tomorrow morning on sidewalk box. you don't want to miss this interview. 7:45 you can bet they'll be asking

her about life with elon musk and how it's going >> i will definitely be catching that one because i love this story. while you're here, i want to ask you about airlines on earnings both southwest and american are up and both ceos threw some punches at boeing. doug parker said quote, we're working to ensure boeing shareholders bear the cost of boeing's failures and not american airline share tholders. he was followed by care garry kelly saying this, diversifying away from boeing take a listen. >> not saying we're going to change i'm simply acknowledging that that's something that will need to be review eed and next year will be the time to review that. >> he's not saying they're going change, but phil that would be a huge blow reputationly if the biggest customer at least most reliant customer on boeing goes the airbus way >> oh, yeah, these guys have been two peas in a pod since 1967 when southwest began fly ing the 37737 as the airline was

launched in down in texas. these guys both beat the streets today, but it's the comments getting the most attention they've been without the max since the middle of march and they have moved back their schedules. now they've had to cut capacity and for southwesaiines, which has more 737 maxes than any other airline, they're not only dealing with 34 that were grounded, there are a whole bunch that were supposed to be delivered this year that they're not taking delivery of and that's why you heard this from ceo gary kelly earlier today on "squawk on the street." >> i've been very clear. we're not happy about our situation. you know, we put, we put our future in the hands of boeing and the max and we're grounded >> and one other airline to keep your eye on. alaska airlines. it will report its q3 earnings after the bell and guess what, kelly, this is another airline that has an order for 737 maxes. i'm sure when brad joins us on

the closing bell, there may be a question or two about how they're dealing with this. now they weren't flying any when the grounding happened, but like everybody else, they had a schedule they have now had to adjust >> yep and we spoke with an analyst earlier this week who thought southwest might be forced to buy the likes of jet blue or alaska to deal with the loss of these aircraft phil, thank for now. appreciate it very much. phil lebeau wrapping those headlines up since yesterday's close, 130 companies have reported earnings of those that updated their guidance 11 raised, while 25 lowered it some companies face issues specific to their industry while others are bracing for negative trends with me now, bryce doaty and art hogan. so, art, we started off earnings season with the banks. a lot of beats and some outperformance the industrials have been a mixed picture. 3m on china, does that worry you? >> no, because we should expect that coming into earnings sean, we

have pmis, so we know what was working on global economy and what wasn't. caterpillar and other names. typically sore for u.s. china trade. we understand for the magnitude for how much of that is priced in we knew that 3m, there was a larger surprise. you have to check those boxes. >> what about texas instruments, which is a big bellwether semiconductor chip maker they come out, may miss. the shares are down big and everyone's wondering is that some kind of sign or industry specific >> then you hao step back and say are they overindexing hand sets? the sales are slowing because we're waiting for 5g the entirety is doing poorly because they're not. >> look at lam >> exact ly u o step back and say isto b this company specific and expectation wrong there, of course they were

should we have done that we know global hand set sales are down for a lot of reasons, not the least of which people are putting off that decision until 5g >> it's interesting because 3m talked about the vul nernerabli points being china, autos. so there are places where that are doing very poorly right now and others that are holding up okay so where as we move to this earnings season into the retail portion as well, look at how well the home builders are doing, where would you be? is. >> well you know it's really tricky to figure out where the pockets of weakness are in the manufacturing sector because there aren't really good, broad measures that differentiate between domestic manufacturing activity versus the ones with international market manufacturing activity it's all kind of lumped together so when we see these earnings come out, it helps you can say okay, this company has a problem, this this one doesn't. with as a bond investor, none of the earnings or announcements

one way or the other, positive or negative, are really affecting spreads significantly. in october, it's always a little dicesy for the stock market because everyone lowers their expectations for the year. probably a little too optimistic at the beginning of the year, but nothing is really blowing anything up. so we're okay with some risk there. >> we don't have a lot of time so i want to get right to the point. next week, the fed meet, you think they're going to cut again. the president tweeted he thinks they should lower rates. what impact will that have i assume you would think that would be the more important force for fixed income >> definitely. 2019 would be the year of the inversion and it's going to be gone you won't see an inverted curve next year. the fed will cut it for sure next wednesday and maybe even again. they need to in order to continue to inject liquidity into the repo markets. they need to make the rate that banks earn at the fed less

attractive they need to push that cash back out into the repo market so they're going to keep doing that and that's going to prop stocks up so i think you're going to see a steeper yield curve and strong stock market at least for now >> that trumps all gentlemen, thanks. appreciate it. talking through these market moves today. here's what else is coming up on the exchange >> coming up, in ordnordstrom t big gamble with the stock down big this year, will this strategy pay off? plus, elizabeth warren is taking aim at private equity, but could her proposals do more harm than good and paypay stock moving higher despite lowering guidance. we'll tell you why uber plays a role this is e thchange on cnbc

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welcome back p. vice president pence delivering a highly anticipated china policy speech a short time ago. the speech coming at a pivotal time in the trade talks and a year after he criticized beijing in a speech ha got many talking about a new cold war kayla? >> he invoked that speech a year ago. it was a withering critique from a the president as a strategic and economic rival intent onning

civil lib erties and intervening in democracies like hong kong. pence says the u.s. stands with demonstrators in hong kong that's the firmest language the administration has used thus far and condemned recent actions from nike and the nba. >> in siding with the kcommunis, the nba is acting like a wholly owned subsidiary of that authoritarian reveem >> he said the u.s. is ready to reset the relationship if china ends its abuses trade practices and on whether the white house wants economic decoupling, pence said a resounding no, kelly. he said it is his hope this phase one deal gets signed, but that the hard work will start after that >> stay right there. etlet's dive deeper into today's comments for that, we bring in michelle caruso-cabrera michelle, this is an interesting one because on the one hand, he could have been tougher on china.

remember this was f a speech he was originally going give on the anniversary of tiananmen square then didn't. but at the same time, he's very tough on corporate america, especially nike and the nba, with regard to their posture towards china. >> if you look at the speech in ice laigs, i think you'd see it and say this is a very hawkish speech then you compare it to one year ago and it sounds more dovish. if you google that speech, back then, every headline was about china's malign activities. that's how he described them he's clearly pulled back fromsoa whole litany of issues the stuff about nike, i see that as dmes pick con sumgts. if you're going to harshly criticize this president, remember we're going to be watching for you how react to china. and when it comes to china >> so kayla when we look at this as signal in the trade talk, what does it tell us

is there he could have not given the speech all together. he talks about back in hong kong although there's way to be more explicit maybe in that backing, what does it tell us about the progression of these talks >> there's two there's a development in trade talks around the corner and the expected signing of the phase one deal but the vice president here wants to deflect the criticism that president trump is now backing off of its hard line on china and he's going easier on china despi creating a situatio where he's had unprecedent ee ed leverage from chinese negotiators. no, we are still keeping this hard line. i am the bad cop if president trump is the good cop in trying to move forward with the phase one deal, but saying they are still going to be opening those phase two negotiation, that they see china as a rival, they are

not forgiving the debt diplomacy, the state of china, using a lot of these incredibly withering descriptions of chinese operations and sort of signal iling that this is not t end of the hawkishness >> michelle, he says people sometimes ask whether the trump administration seeks to decouple from china we talk about that on the show all the time he says the answer is a resounding no, so what is corporate america supposed to do >> i think actually he was pretty clear on that point, which is he says the u.s. doesn't want to decouple with china as long as they start to act in a way that a modern economic nation should act when it comes to prreciprocity, fair trade and free trade the message has always been we are harsh on china because harsh on us. we are doing things to them they have long done on us trying to limit the amount they invest in us when it comes to tariffs >> it feels like it's more

hawkish. >> but it sounds like trying to thread a needle here by explaining how has the policy shifted and how are we still trying to achieve and the administration trying to achieve its goals with china >> diminishes cold war talk? >> compare d to the speech a yer ago? absolutely it was add the hudson institute. you would not call the wood row wills institute the same thing that's a signalling mechanism on the part of this administration. >> great stuff, guys thank you. really appreciate. coming up, elizabeth warren has some harsh r words for the private equity business and plans to shake it up, but could those plans backfire plus, it's taken nordstrom seven years to open its flag ship new york city store. a lot has changed in retail at istconstruction began wh'sn ore for the store as the stock continues to drop? the exchange is back in two. ♪

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but there's a common theme amont them she was mentioning 3m. slower demand in china tariff issues. stanley black and decker lower on tariff issues industrials. lower in emerging markets as well then we had ford reducing its full year profit forecast lower than expected china sales. what's this have in common well, the common theme is exposure to several industries autos, industrials and then china. if you have exposure to one or a particular all of them, you've got a problem and we've seen examples of this 3m, black and decker, ford b, caterpillar and texas instruments. that's the trend watch out for those particular exposures. still 2019 earnings still in the flattish area. what's flattish look like? third quarter number, down 2.3%. that was about 3% a week ago, but that's what i mean fourth quarter was 4% a month ago now it's 2%.

this is what flattish looks like and we'll see what goes on in 2020 want to make out, make sure you understand, kelly, that only 14% of companies are missing estimates. that's about average right now 83% are beating so we're getting a normal amount of them, but these high profile companies are the ones that have big global exposure in the industrial and autos and in china >> thank you very much, sir, appreciate it. over to sue now for our cnbc news update. >> thaupg. here's what's happening at this hour, everyone representative elijah cummings lying in state at the u.s. capitol where he served for 23 years. family, friends and members of congress were on hand to pay their respects house speaker nancy pelosi says he help ed shape america's future >> elijah was truly a master of the house. he respected its history and in it, he helped shape america's future i have call ed him our north star our guide to a better future for

our children >> the remains of spain's late dictator arriving by helicopter to el pardo after his body was exhumed. the remains will be reburied in a smaller family crypt where his late wife rests north of madrid. here at home, subaru is recalling nearly half a million vehicles from the year 2017 and '18 as well as the 2018 and '19 cross trek models. they say the engine computer can keep powering the ignition coil even after the motor is turned off and that could cause a short circuit and a blown fuse you are up to date back to you. >> i've got the outback so i guess i'm safe for now thanks very much here's what else is coming up today on the exchange >> ahead why uber is forcing paypal to lower guidance washington ramps up pressure on

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welcome back let's catch you up on a couple of stories that should be on your radar today time for rapid fire. here are robert frank, julia boorstin and dom chu m first up, the impact of uber's disappointing ipo is popping up in unlikely places paypal slashing due in part to paper losses on its stake. doesn't seem to be hur hurting investor appetite. the stock is surging and a 64% jump in volume for venmo >> venmo seems so promising then if you look at payment volume, which is the metric that really matters. are people using paypal and also venmo and do they treat this as a utility and the answer seeps to be yes. i think it's what's drive thg. >> up 64% at venmo that's crazy, but how is it still not profitable with 64, i mean how is is that an expensive

platform what are the capital costs for venmo once you have the platform how is it not making money >> it's so important to have tight security and they don't, they want to get you in the door by not charging if you're linking toyolink ing it to a bank account >> what i think is easy, you look at the other side of the equation and ebay shares have like tanked. i remember the days when ebay and paypal were the same thing and paypal was a utility so people could pay for their goods on ebay. and paypal story is bigger than ebay now which is crazy i would say this i thought it was just for the youngsters out there but more and more -- >> you are a youngster >> i'm in my 40s, so i'm gen x, but the 13 to 25-year-olds use it, but now folks in their 50s and 60s are like just venmo me

>> as people become more familiar with them, things like quick pay. i use a lot of f quick pay all banks have their own versions of this >> what made venmo superior in terms of utility was it came in the age of mobile devices. papal didn't have that >> this is what libra is tackling >> we are not going down that. we don't have time but let's talk tik tok the number of new users on that app just fell for the first time ever last quarter. dropped around 4%. this comes as two senior members of congress are calling for a federal review as to whether this chy company because it's chinese owneds a national security risk. >> it dropped, but there were still 177 million users across apple an android so the growth is slowing, but

this is still a very fast growing app and the first one we've seen in years that has any shot of really becoming a rival to snap or facebook or instagram. >> was it the journal the other day who had a story about the afterschool drama club type things where they work on making tiktok videos? it's a social phenomenon, but should parents be saying don't get involved with this or should the u.s. be worry ied this is a chinese trojan horse >> i think it's interesting the bite dance, $75 billion private chinese owned company owns it, but we've reached out to tiktok in the past and asked b about sensorship they say the chinese don't tell us what to do, we are run out of the u.s. the bigger it gets, the more questions to be asked. >> the one cautionary tale is that they are spending a lot of money on facebook and other mpl to buy those eyeballs. that spending declined in the quarter. once it's off on its own and they have to generate organic growth, can they do it without buying those eyeballs.

>> i'm more curious about whether or not the showdown, how much of that can you attribute to the idea that it is china or that it is a chinese owned company or that awe tense bly, there might be -- >> competitors already this vsco -- >> my daughters go through apps like that. it's super cool one month then two months later, oh, that's so last year. >> the demographic is so young, it is his daughters, so i don't know if they care about the china ownership or if it's tir parents and at what point the parents -- >> things like the nfl have launched tiktok channels the nba was called out by mike pence. "the wall street journal" has a new investigation on amazon. ti turns out some apparel on the site is made from foreign factories including places like bangladesh who had the horrible fire a few years back. while some items were produced for amazon directly, no surprise

more than two-thirds were from third party sellers. facebook right now on capitol hill this week over how it polices content on its site. does amazon now need the same scrutiny if it's just saying we're just a platform for commerce that happens. >> it seems inevident bable that it will will held accountable. it says a marketplace, but amazon is taking all these steps more environmental responsible and at the same time, if it's selling products and taking a margin, taking a cut from products that are both potentially terrible for the people working the factories and for the environment, i mean i think this is sure to become an issue r for them fashion is increasingly facting scrutiny >> it's not just that. we talked about expired -- >> it's deja vu all over again kudo to the journalists at the "wall street journal." this investigation where they used shipping records and labeling, just incredible piece of investigative journal

islamabisrael m. they say we require third party sellers to tell us therd party, it was clear they didn't in fact ask anything of the third party sellers whether are you come plying with these rules or not so it was clear that's what was missing from this whole equation and it's not our fault third party sellers, they never asked. >> and pertinent to the stock especially is so the consumer chief jeff wilkey was at the tech live conference on tuesday, he said amazon might need to spend billions to police products on its site now that get to the heart of its business model and its ability to generate profit going forward. >> the thing i think of when you say billion to police is margins. >> to do this, as a result, amazon which has spent a lot of f time trying to get back to level profitability is now going to be faced with more regulatory come plai complian compliance is it enough if r tor?

>> not a good look for the richest man in the world to be tied to these factories! they report after the bell and will likely face questions speaking of spending money, how about what's happening in tv land the launch of these streaming services, an, dppapple, disney,s highlighting the booming cost. new programs like the morning show on apple tv plus and star wars spin off series are expected to cost at least $15 million per episode to produce they're saying the expectations from viewers, they want a hollywood like product >> they do the eququality these new servics are making, it really looks like movies and i have to say, i just went premier of an apple tv show called for all mankind and it's about astronauts in the space race apple did this hollywood style premier with the red carpet and everything it looked like a movie high quality enough to show on a

big screen in front of a huge theatre full of critics. i think apple is trying to show we are making such high quality content it's worth subscribing even if we only have a dozen shows that launch. maybe they're bundling it in with something else. maybe you'll get it for free if you buy it with an apple device, but they want to show it's worth paying for >> how many red carpet openings can you attend must be one every night. a new show every night >> the very first one that apple had done i was so curious what it was going to be like they wanted to tell hollywood they had arrived and were willing to pay >> what about for actors >> got to be great >> always a sense actors are always out of work is it booming for them as well >> they're competing for top talent these apple tv shows are starring movie stars people who have never done a tv show before so their salaries are going up but they really need those big names

>> jennifer aniston was at $1.5 million. >> it was a big deal when they were making flends and they were going to make $1 million an episode. >> that was for the whole cast >> okay, never mind, we are way now above those levels before we go, a public service announcement stay home from work if you're sick please because if you think your coworkers, tom's hanging his head in shame. yes, 90% of people in a new survey from account temperature, global staffing firm, say they have come to work while having or flu symptoms. more than half say it's because they have too much work today and 40% say they don't want to use sick time. which was it for you >> all thof those things directors going, you better show up to work all kidding aside, i do show up to work because i was part of a generation as my parents were where you said suck it up. if you're feeling ill, just play through the pain get through it go home. sleep it off, whatever these days, it's become iing les

>> now you're a pariah >> we did this story early this morning on worldwide exchange and immediately, one of the producers ran downstairs and says don't ever come near me i guess i'm just going stay home >> it seems like a generational change i don't know if it, i mean clearly people went to work sick in the past and i, did everybody just deal with it? now it's like no longer okay >> i have a whole pharmacy in a drawer at my desk so i prepare for any situation, but it's hard to stay home when you know you have something to do and it's hard figuring out that balance >> with e-mail and everything, it should be easier than ever. >> i think the 40%, i think it's more like 60% don't want to use a sick day they'd rather use it to do something fun and just go to work and not do much >> charlotte and miami had the most cities of employees to show up while feeling ill we're watching you austin, chicago. they don't want to use the sick

days ever. thanks coming up, pensions will need a bailout within the next decade according to one wall street strategist the fakctors that get us there and fallout. we'll explore that but plus in order storms new store is opening its doors today and a retail environment that's been turned on its side since that store's conception seven years ago. with department stores sink iin this year, is this the right time is exchange will be right back . (impact, click) who is with me for the long-term. who understands i'm dealing with lives, not only livelihoods. that in order to help people, i need more than products, i need quality support and insights. can i find someone who partners with me to achieve people's long-term success? with capital group, i can. talk to your advisor or consultant for investment risks and information.

talk to your advisor or consultant servicenow put our this changes everything.

you're right sir... everything. no not everything, i mean you're still blatantly sucking up to me gary. brilliantly observed, sir. always three steps ahead. six steps ahead. sixteen. so many steps. you done? a million steps ahead. servicenow. works for you. elizabeth warren proposing the top wall street looting act taking direct aim at private equity and introducing a slew of new regulations. investors are asking what the market could look like under a warren administrationing, but could a crack down on private equity backfire let's bring in

brian reynolds what do you think would be the real world impact? if a ban like that happened? >> i think it would backfire i think we would see more shadow banking, not less. bbacks wereanned, we'll see company do more lb oros and it was a crackdown on private eck wii, we'd see our pensions do the lbos directly and they're free of federal regulation >> so you're saying warren trie to put private equity off business cal pers is going to get into the business itself. >> it's already sending that way. c calpers and another county pension in california are already looking at plans to make direct private equity investments and hire the firms merely as managers >> but is there a way that she should get rid of that kind of activity all together? loading up companies with debt and flipping them so to speak? >> it would be hard to stop the pensions because they view themselves as sovereign entities this is a states right thing this is why we had the

revolutionary war and if they tried to regulate the public pensions, that battle would go all the way to the supreme court and probably last two or three presidential cycles before it was decided. >> you bring up the battle over public pensions and there's probably going to be a very different one taking shape if they can't make their returns. warren presidency, the stock market would drop such and such. pension fund would underperform. if they were told not invest in private equity, that would hurt their returns. is there a reckoning coming for these major public pension funds who have everybody's retirement dollars in them and can't deliver on those promises? if the market returns aren't there. >> there will be a day of reckoning, but it won't be because of because of regulations. they would use it as a buying opportunity and the ensuing lbos would probably get prices right back up, artificially through shadow banking they would have a day of

reckoninging when there's a kris and there will be at some point, but that starts with a run on the shadow banking system. when people want the take money out of these entities and put them back into cash. that's when it starts. that probably doesn't happen for three to five years. >> you've been more bullish on the length of this cycle than most so is there anything that can be done now to prevent that crisis from happening >> nothing b probably because again, the driver of this is our public pensions. th they're the ones who put this to work they need to make 7.5% that's how much they've underfunded by. so they have to take every new tax dollar that comes in and init as a aggressively as ever and again, they feel they're free from federal regulation because they are state entities and so they're virtually unregulated in terms of what they can do and how aggressively they can invest and that's why we have these boom and bust cycles that have been on going

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welcome back opinion the stocks are at $19 an share any options after that date woubt have any value if they were exercised now former ceo is getting the pay out up to $1.7 billion including $185 million consulting deal the new executive chairman defended that decision and had a warning for silicon valley saying the world has changed growth stories don't tell anymore. if you wanted to get botox and get that stroller cleaned while you shop, now is the chance on power lunch, a group one

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planning, nordstrom opened a new flagship store >> reporter: this store was the $500 million worth of investment biggest investment they've ever made it is expected to add about 100 basis points to top line growth. the company could use it they set out for a total goal of $18 billion in revenue by 2020 last year they were sitting at 15.5 sales were down about 6% in their full line department store business for first half of the year we know that new york is already nordstrom's biggest online market and they didn't have store here we also know that things have changed a lot here neiman marcus opened its first

store. lord and taylor closed its flagship operation as well analysts have been impressed here bow tt botox, hair blow outs and tanning. there's pop up areas where you can display your merchandise there's broader concern about what's going on in the department store sector as some analysts report some sluggish trends in the third quarter. >> looks pretty busy >> i will say i think that store

will do well it will improve their online business it will do lots of business that is ideally located near columbus circle it's better than 34th street it's better than where we were, lord and taylor. >> you had lord and taylor close in manhattan that has become tied into wework >> sole it for $850 million. >> shot -- not too shabby. they opened in the area. >> every time i was in there it was empty. >> they had to make a big investment why is this one going to be different? >> this will be fine do we need more department stores in america, absolutely not. do we need more malls? absolutely not will this store in han mat tan do fine, yes there's the place for the right store at the right time with the right environment around it.

this has been planned for 25 years. >> that's the problem. >> they have been trying to get into that location lit do well. >> that's literally the case with newest. is it going to be the biggest mall in country. both of these things are about to open at the same time can that project work? a huge mall that was dreamt of 25 years ago, more experience and restaurant oriented. >> it will be about a four million square foot project. >> it will be the biggest in country. it's only 45% retail do i think it will be successful i think lit be successful amusement park i don't think lit be successful retail space they required them to do some special things like the foot locker got a basketball court

inside of it you've got to sell a lot around the outside to make it work. i'm not thrilled with it in that respect. disney world works i don't think it's great retail environment. >> how important is this store for nordstrom's now? >> that's a really important point. it's more than a store that's how they are looking at it it's part of a network they opened up the two local service centers in manhattan they have two rack locations the men's flagship across the street that opened 18 months ago. the goal is to use them all together to better fulfill inventory faster, services fast and returns faster the local stores in l.a. that shoppers that use those spend two and a half times more. i think it's important to look at there as more than just one store. it's the final note in this big network. that's the goal that nordstrom is going for if that works, i think the investment will pay off. the biggest investment nordstrom

ever made in the store >> yeah. they've got a lot of climbing back to do thanks appreciate it. that does it for the exchange today. i'll join tyler and melissa for "power lunch." now i can talk they gave me the signal. welcome, everybody kelly, we'll see you in a minute welcome to "power lunch. i wonder what this is that's -- i thought it was the grill of an automobile maybe a lincoln. earnings buffet, ladies and gentlemen, on the busiest day of earnings season. sinking twitter is tanking and tesla is surging we are gearing up for amazon after the bell tesla is