>> baba, they fixed the price or will fix pricing. >> staying with alphabet. >> farmer jim? >> intel wants to break out to a new high. >> sold my boeing stock. >> good stuff. thanks for watching. "the exchange" begins right now. it does, scott, and thank you very much. welcome, everybody here's what is coming up oh, to be a fly on this wall jerome powell meeting with the president at the white house today after months of hammering the fed chair. the president said the meeting was cordial. how long will the good vibes last, and should the market get ready for more fireworks plus macy's trading at the lowest level since the financial crisis it is the worst stock in the s&p 500 this year. it is struggling from e-commerce, heavy discounting and sales expected to fall again. what happened to this iconic brand, and has it finally gotten too cheap to ignore. and apple strikes the right note with the government tic-toc's u.s. infiltration

continues, and an electric mustang suv. you heard that right, a mustang suv. really that's coming up in rapid fire first, let's begin with today's markets. dominic chu is here with the numbers. >> i have those for you, brian, because as you can see it's largely unchanged and it's been a fairly tight trading range overall. dow industrial flat, same for the s&p 50 and the nasdaq. we're near the highs of the dodd in the s&p, up just one point. that's the highs of the day so far. we were down as many as 8. however, take a look at these stocks they have one thing in common. apple, microsoft, alphabet, they are the three biggest publicly traded companies in america and as you can see here, they're all relatively unchanged alphabet is down about a percent right now but they did at one point make record highs in trading today. the stock of the day so far, at

least it's come up high but at one point one of the best performers and that's cosmetics giant coty at one point it was up about 5%, this after the company, brian, pays $600 million to take a 51% stake in kylie cosmetics yes, that kylie cosmetics, the one started and still run by kylie jenner, and the reason why people had optimism, you know how many instagram followers kylie jenner has >> 16 more than you. >> yes 151 million more than me back over to you. >> if you remember back on january 31 bill miller said he was buying coty. the stock is up something like 75% since then great job by bill miller see you in a bit thank you very much. hi, everybody. and welcome to "the exchange." i'm bryan sullivan in for kelly today. as dom showed you stocks climbed up they were down earlier mostly on reports that chinese officials are pessimistic about a

u.s.-china trade deal. the dow setting another all-time high every time it goes up, it's going to be a new high if you look at what is driving those record highs, it's what they call the cyclicals, companies and stocks that are a little more sensitive to the economy. financials, they're up 3% since november began oil rising a bit and industrials led by boeing up 4% as a group that's all since november started. well, as more bears surrender and turn bullish on the markets, what's next? greg craig, what exactly has changed since august when of course the yield curve was inverted and everybody was crying imminent recession. suddenly it's let the good times roll. >> i think two big things have changed. one, global data has stabilized. it got less bad. two, financial conditions became very favorable

by that if you think about in two months of asset purchases, the fed has reversed 40% of 21 months of quantitative tightening the fed cut interest rates at three consecutive meetings and any broad measure of money supply, m 2 is growing at 7% versus 3.5% last year. that's a good backdrop for lending, risk and housing and i think that's what's changed. >> michael, do you think this rally has gotten ahead of itself >> i think it's a little ahead of itself. the market is obviously rally, in my view, based on low interest rates and more particularly trade talks, but if you see some of the softness and it's a very slight softness based on eunice's report out of beijing, i think the market is susceptible to pullbacks if you don't have perfect news and i think the market is pricing in perfect news from china as well as interest rates. i'm still cautiously optimistic but i'm not as euphoric as some are. >> what are you most cautiously optimistic on? what parts of the market

where can we still make money? >> i think you can make money in stables. i know there's been a significant rotation stable assets but if you look at what's happening with interest rates, i think the new normal is going to be long-term low interest rates there's no real inflation pressure out there globalization is going to keep wage rates down and i think dividend stocks are going to continue to make a comeback. i don't see any reason why one would consider investing in a ten-year treasury at 1.5 when maybe you can buy another asset at 2.5 and 3% that has an opportunity for upside i think that's where there's going to continue to be strength in the market. >> ultimately, craig, stocks go up because more people want to own than want to sell. they drive prices up what are your clients doing? is anybody out there getting nervous, or are they saying maybe i've missed the rally, i'm not going to miss it anymore and they're putting new money to work at dow 28,000 >> i think one of the places to put new money to work would be outside the united states but the data is getting less bad in

europe and in particular you have some easy economic comps in europe the fourth quarter was really bad last year and sentiment has changed. look, 70% of the countries that make up the all country world index have a rising 200-day moving average that's not catching a falling knife versus last year when 60% had a falling 200-day moving average and on top of that if you look outside the u.s., europe in particular, last year when we had the selloff in december and the selloff in may of '19, both of those went down less it's a part that's beaten down, trading at a discount to the developed market and you get some protection on the down side that's a good place, i think, to put new money to work. >> craig and michael, a good conversation on another record high day for the dow despite the fact we're up a couple of points have a great day. >> thank you. it's been a great year for many stocks, most in fact, but not for one. that is macy's macy's the worst performer in the s&p 500 this year, down 44%

and down 75% from its all-time high four years ago. lots of retailers posted big gains this year, walmart, target, you name it. no doubt macy's hoping for a holiday miracle because their sales have come down, especially with a 9% dividend, the highest in the retail etf, the xrt and the second highest in the s&p 500, nobody seems interested in macy's what happened and can the company turn it around joining us, liz dunn, founder and ceo. liz, there's a lot of things that are happening in retail it's not just macy's but if you had to put your finger on one or two big mistakes they have made in the last five or ten years -- because they're not suffering now just from now, they're suffering from decisions made years ago. what did they do wrong >> i think it was a number of things they were adversarial to their vendor partners so i think that's a big, big thing. they did not focus enough on product and they didn't focus

enough on being a supportive environment for their vendor partners to thrive so when that relationship got strained, many of the vendors said, hey, i'll open up my own stores and focus on my own dtc once they lost the vendors, macy's became not a place that people go to discover fashion or products >> michael, you look at their eb, let's just look at the numbers. $3.9 billion in eb, real earnings ten years ago that number today, 1.9 do you believe that this is in some ways the bottom for macy's? >> well, we are worried. we're worried about women's apparel. also macy's faces really stiff competition from off pricers such as tj maxx, ross and amazon macy's was a little late to the game in terms of more speed in execution of brands and trends we're in a new instagramable nation with the transformation

of the ways people shop and you really need special product. in addition you need a special store experience, and the mall has been a horribly tough place with negative mall traffic our preference this week is for customers to own target. we think target comes at a nice pe relative to walmart it's well positioned there's private label there and curb side pick-up. we're cautious on the department store sector and macy's has some unique challenges. they are working hard across different themes but it's still very small as a percentage of total in terms of commerce, what they're doing with growth 150 and their loyalty program. >> but is there any unique opportunity? what i mean is let's talk about the real estate. a couple years ago starboard value came out and said they believe the real estate is worth about $20 billion, far more than the market cap of macy's today they're developing the air space over herald square, their massive and iconic home location is the market overly discounted

in any way the value of all that real estate, or is the real estate itself losing value because the business is losing value? >> the real estate is valuable, no doubt they have a lot of marquee locations in cities and they own these properties macy's is working hard and quickly to try to monetize this. that being said, the core retail business is flatish comps and also there are some underproductive stores for example, with growth 150 which is about 25% of the store base, 50% of revenues, the problem is in b and c malls and lower productivity stores. macy's is having trouble generating positive comps and profitability. we're in a great consumer environment so for macy's to have trouble executing in a very good consumer environment, that's a tough factor as well. >> liz, is there anybody out there that you could see based on what we just talked about with oliver that might want to commit and make a bid for macy's do they have valuable to another

potential buyer? you're shaking your head. >> i don't think so. i think that the consolidation of the department store sector is kind of how we got here with federated and may company. i think we have seen some instances of department stores that are making some positive changes, nordstrom, kohl's doing a lot of innovative things to transform their fleet but it's the worst neighborhood to be in and i would say second to like a jp pennies or sears type situation, macy's has become one of the worst houses in a bad neighborhood so i think maybe there's value through financial engineering bullet but as a going concern to try to turn 5r7around the business, th' a tough turn unless they do something dramatic. >> you're right about the fundamentals it's almost a billion of free cash flow, pretty good debt position, 1.6 times, and the pe is very low, at 6 times, 20% cash flow yield, 9% dividend

yield. but this isa battleground and liz and i pointed out some real structural problems with what's happening in apparel and you can get everything every place so how do you compete in this new world of retail and engage younger shoppers those are majors questions and this week will be a lot of information. >> they lost $3 billion in revenue and 2 build in eb. great discussion thank you. you don't want to miss this interview. former macy's ceo terry lundgren, we'll get his take on everything we talked about he will join power lunch at the top of the 20:00 p.m. eastern time hour. we are just getting going on a very busy monday here's what else is ahead on "the exchange. coming up, snap's stealth comeback, better earnings, a soaring stock and no pressure from regulators. we'll hear from the ceo and look at whether its run with

continue. plus, apple hitting all the right notes. the stock at all-time highs, reports of strong china sales, and a seat at the president's table. and a new investigation shows google's search results may have more influence from humans than they say this is "the exchange" on cnbc - when i see adversity, i find a way. - when i hear never, i say now. - [announcer] southern new hampshire university is education made to fit your goals with over 200 degree programs, flexible class schedules, and some of the lowest online tuition rates in the nation. (cheering) - so when i face barriers, i can break through. - [announcer] breakthrough at snhu.edu.

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welcome back to "the exchange." we have got a news alert on juul >> the state of california is now the latest party to sue e-cigarette maker juul the suit that was filed by the attorney general claims that juul allegedly marketed its products to minors the attorney general holding a press conference right now and also claiming that after teens went onto the juul website, gave their email and failed an age verification process, the company continued to market to them the nation's largest e-cigarette maker is facing several federal and state lawsuits already related to its marketing in response to criticism, the company has stopped u.s. marketing and stopped sales of flavors here in the u.s. again, the state of california suing juul over marketing practices towards minors. >> ail tria, not impacted, up 1% but that news just developing. we'll see what happens. meantime, shares of snap are up 3.5% today, adding to its very impressive gain of more

than 155% return this year ceo evan spiegel spoke with julia boorstin julia, great interview you covered a lot of ground including the hot and controversial topic of how snap will handle political ads. >> reporter: that's right, and thank you, brian i asked evan spiegel how he's tackling political ads he explained why they're taking a different approach than twitter which is banning political ads and facebook which is allowing political ads but not fact checking them take a listen. >> we've tried to strike the right balance so we subject all advertising on our platform to review including political advertising and i think what we've tried to do is create a place for political ads on our platform especially because we reach so many young people and first-time voters. we want them to engage in a political conversation but we don't allow things like misinformation to appear in that advertising. >> so you fact check the political ads? >> that's correct.

>> reporter: as for all the talk about regulating big tech from capitol hill, spiegel says he thinks it's important that regulation protect consumers without hindering the growth of startups and favoring the big companies that can manage the costs of regulation. he said that european privacy regulation is a good model and they think that's working. he said because snap is about communication between friends rather than broadcasting on social media, he said it's not as suppoexposed to privacy regulation when i asked him if he thought facebook should be broken up, he said he didn't know but the real question is whether facebook should be allowed to integrate the back end of its different apps you can find the rest on cnbc.com. >> check that out. julia, don't go anywhere we want to bring in rich greenfield, partner and analyst with light shed partners rich, obviously a great interview by julia the stock is moving ostensibly on that interview. what is it that snap has done? is it what julia hit at the end

where you're not going to like this, is it kind of like aol to facebook's net escapscape? what i mean, snapchat kind of a walled guard it? >> what snapchat is doing a great job of is opening up and allowing others to innovate on their platform now tic-toc is a partner i had asked evan on the last conference call was tic-toc friend or foe and he said absolutely they're a friend. i think a lot of invest eors. reddit recently enabled the functionality to pour content into snapchat. you're seeing snapchat becoming a platform for this youth generation. >> what i meant was -- and i don't think you would disagree

with this and i don't know, tell me if you do in facebook and twitter you go outside and yell, right? you sort of scream to the public or whoever is on your feed or it could be anybody snapchat you're passing notes in class to your friends. you're not going to be out there in the public eye which in some ways i feel like gives them a layer of protection from a broadcasting perspective. >> from a consumer standpoint, there are influencers who certainly can broadcast. there are certainly people like kim kardashian and you could look at online influencers that have large public presences on snapchat but certainly from a consumer standpoint i think is what you're hitting at, it's hard to get that mass audience on snapchat because it's not designed to be that same type of broadcast platform but i would say the content piece is not well understood by investors and how successful snapchat's been in content partners not just here but all over the world you're seeing a building array of content you walk off a plane in india

and you're going to see a localized content in india for that audience that didn't exist a year ago and the same thing with advertising you're seeing companies like spotify advertise locally on snapchat in india. there's been a change in terms of the globalization of the product, not just making the service easier to use outside of the u.s. but bringing in content and advertisers. that's why we think the stock is so compelling at this level and you're getting an opportunity with the recent pullback to buy this thing again. >> the key thing here is when it comes to content snap does take a different approach than facebook, youtube or twitter those platforms are all about allowing people to share their own content, produce their own videos and share them. what's interest background snap is that their discover section is professionally produced content. they're partnering with media companies here in hollywood and they're leveraging that professional content and putting ads next to it which makes them much less risky than the platforms that are relying on user generated content and trying to find ads and also having to police that content to

make sure there's nothing inappropriate or potentially violent in there. >> why are they losing nearly a billion i year, rich >> this is still an early stage company. while snapchat isn't brand new, this is still building and you're seeing them move to break even they should get to that during this calendar quarter. you're going to see them get to free cash flow profitability next year. you look at the team evan put in place and that's one of the things he should get more credit for. if you look at the transformation of the management team, it's dramatic. jeremy gorman running the whole business side including ad sales. they have brought in a new cfo there's been big, fundamental changes in snapchat and again, this is a stock we had to sell on a year ago. this was not a company we liked. this has been a dramatic change and when you look at where it's going and the momentum that we see, as you look on the service, pull up the discover section that julia just talked about and you're seeing real name brand advertisers that weren't there a

year ago you're seeing apple, you're seeing bud light, miamick alobe, usaa. >> amazing, two companies designed to trade pictures of undergraduate that their respective college is now billion dollar organizations thank you very much. coming up, a new and explosive piece by "the wall street journal," claims that google not only uses blacklists but also tweaks its algorithm to alter what you see despite saying they don't. one of the reporters who broke that story will join us. plus, warren buffett is betting that this retailer's turnaround is going to pay off what is that chart it's up 58% this year. it's a retailer. here's a hint, rlleay big catalogs we're back right after this. ♪

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thank you, sir. lunch next week? terrific. say hi to the team. will do. call my office, i will. -sounds good. alrighty. servicenow. works for you. welcome back to "the exchange." a nearly two-year wait is finally coming to a close. the world's biggest company is selling shares to the public with a caveat. it's going public but only to its local saudi market despite coming in a little lower than expected, the company will still have a record-shattering valuation of about 1.6 to $1.7 trillion let's put that into perspective, shall we at $1.6 trillion, saudi aramco

would still be about $500 billion larger than the biggest company on the planet, apple think about that now, they're looking to sell only about 1.5% of its company that's about 3 billion shares, each roughly worth $8.30 a share. now, according to reports, the company has cancelled the london leg of its planned ipo road show with many suspecting lackluster demand from international money managers still, when all is said and done, the aramco ipo is finally under way and we could get a 1.5 to close to $2 trillion valuation. remarkable let's get a cnbc news update here's what's happening right now. two men and a woman were fatally shot outside a walmart in duncan, oklahoma two victims were shot inside a car and the third in a parking lot outside the store. police are looking for witnesses now. duncan is about 80 miles south of oklahoma city.

defense secretary mark esper meeting with his counterparts from ten asian countries in ban dock esper announced the postponement of military exercises with south korea. more than 800 rear seat passengers who weren't wearing seatbelts were killed last year. th the governor's highway safety association says more than 400 people would have survived if they had been belted of course with ride sharing this is a big deal, riding in the back seat. two pound bags of quest beef cat food are being recalled after samples tested positive for salmonella there's also risk to owners if they're handling the products, especially if they don't wash their hands thoroughly afterwards that's the cnbc news update at this hour. brian. >> got to be careful with that and don't drag the cat food out

with your hand i guess that's the attention there. thank you very much. we also want to draw your attention to this. this is the nasdaq, hitting yet a new record high. turned positive in the last couple of minutes. the nasdaq is now up 28% higher this year. it's only up a couple of points but as we noted, every point matters. here's what else is ahead on "the exchange. coming up, the retailer who's turnaround plan is actually working the president may be backtracking on his ban on flavored e-cigs. tic-toc comes under more pressure, but users don't seem to care. and, does the mustang brand still have the horsepower to get consumers in the door? 'sllhe o"the exchange." my biggest fear was losing my independence. mmm... good. so i've spent my life developing technology to help the visually impaired. we are so good. we built a guide that uses ibm watson...

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welcome back 1:32 eastern time. let's catch you up on a few stores th stories. rapid fire entering the chamber you were on worldwide exchange this morning >> i was where were you >> sleeping. are you feeling okay this is going to go fast. >> we'll see.

>> the white house confirming president trump will visit apple manufacturing plant in austin, texas on wednesday apple shifted its mac pro assembly to texas after winning tariff exemptions for computer parts for the white house in september. tim cook has gained praise for his relationship with president trump all amid the trade war with china oh, by the way, in case you missed it, apple stock continues to hit all-time highs. sem sema, itim cook has navigated this beautifully. >> you have to give it to him for maintaining a strong relationship with beijing and at the same time trying to please president trump. back in august this year president trump via twitter basically demanded that all u.s. companies find an alternative production site out of china and apple is responding. this looks really good for the company opening up a big manufacturing facility in the u.s. >> this is a pretty small production item.

>> $4,000. this is a mac pro that graphic designers and film editors use they don't sell many. >> and it doesn't take many people to make them. for him to go to president trump saying, see, we're making them here -- by the way, they used to make them there so it's not like they suddenly decided. they shifted to china briefly and they're bringing it back. >> apple is not losing any points on the other side with china. i just covered alibaba last week, iphone 11 was one of their top selling products it's clearly bwinning points ove here. >> you look at the back, it says designed in california now the mac pro for all six people can say that. >> who can afford it >> it starts at $4,000 next up, talk about a rally. we showed you -- this was our mystery chart. you know who it is it is formally known as restoration hardware now known just as rh that stock has been on an

absolute tear lately look at that chart it's more than doubled in the past six months. the retailer in the midst of a big brand transformation that appears to be working for many investors including a young upstart named warren buffett roo you've been following the story. what are they doing right? >> it's a fascinating story. the stock has been on a tear since may. last week we learned that berkshire hathaway -- it's a transformation a few years in the making they actually raised their prices. >> yes >> they cut back on discounting. they moved more toward a subscription model where you have to pay $100 a year to opt in and it seems to be working. they've also moved their brand away from being a furniture retailer and more of a luxury brand. when you go into their galleries -- they don't call them stores. when you go into their galleries you can see it. >> i feel like this is more of a

robert frank story because this is secret lives of the super rich and comfortable they have $10,000 couches. i laid down on one in the store. security had to remove me because i couldn't get up or i didn't want to get up. they're raising prices. >> it's like two mac pros just for an rh couch. here's the question i have whether you're talking about the wealthy or not, is this the time to be building 17 to 30,000 square foot brick and mortar stores and to be betting your future on giant boxes rather than moving online >> the ceo takes the position that they're taking the road less traveled so where we're seeing stores downsize, they're betting on a larger shopping experience we're seeing arrest fraunts resn their stores and we're seeing that also with lululemon >> buying a couch is not like buying a t-shirt you want to see it, experience it, how does it look in my

house. >> that's why they're calling them galleries it's an interactive experience where you not only get to use the product but enjoy a drink, meet new people. they have a lot of social events that take place at these galleries across the nation. in terms of tariffs, this is one of the few companies that took a proactive approach when tariffs were announced in early 2018 by trying to diversify the supply chain and at the same time raising prices and investors are rewarding the company for taking that approach versus other retailers saying we're going to stick it out and hope for the best. >> by the way, i've learned just now that the ceo is on cnbc tomorrow. >> excellent >> have you seen their catalogs by the way >> they've also expanded their catalogs. >> the mailman is like, here's your catalog, boom. >> does that mean you're shopping at rh if you're getting the catalog? >> true story. momentum for tic tok

continues to throw it's a chinese phenomenon. it's hit 1.5 billion downloads meantime, "the wall street journal" is reporting that they're exploring ways to distance its brand from its chinese roots as national security concerns continue to grow as lawmakers are looking into tiktok i told my teenager you know this is a live mic and video into your life from the chinese government and she said, eh no one cares. >> by the way, they were on it was it was music before it became tiktok i gree, there should be concerns on the other hand, it's basically four-second videos of people dancing so i don't know what the chinese government is going to get from that they say all the data for u.s. users is housed in the u.s you and i both know that that's probably not the case. >> every company in china is part of the chinese communist party. >> it's a legitimate concern.

>> you have investors that will say that tic they'll maintain a bigger customer base specifically in the u.s. so trying to downplay concerns -- >> look at hong kong, that's why everybody's wearing masks, not for the tear gas next up, "the new york times" reporting that president trump may be reconsidering plans to ban flavored e-cigarettes after advisers warned him that it could hurt his re-election campaign advisers apparently told trump that a ban could alienate voters who helped him get elected back in 2016. a lung illness linked to vaping has left thousands sick. juul pulled most of its flavors

after the market and the government of california is suing juul over this is this a flip-flop on the vaping story >> no. this is a politically charged move of course president trump is going to take this stance. i'm sure there are a lot of concerned parents about the rise of juul and the rise it's taking in teen vaping. >> do you really think that his voters are not going to vote for him because he went back -- >> yeah. >> look at the farmers they've left habeen slaughteredr trump and they still support him. this poll, i don't know where it came from. >> it's kind of weird. it's like a 20-year-old in wisconsin who's the only one vaping with a flavored cigarette. it's ridiculous and borderline offensive. >> it's sad but not surprising that we would make health policy based on one guy's re-election campaign. >> this doesn't seem like an issue that would be divided across party lines parents, whatever side you're on, would seem to be concerned

about young people. >> between vaping and tic tok, rapid fire has all the teens covered. >> finally, ford unveiling something very uke unique, the mustang mach e the company is transforming its iconic car into an suv in a bid to redefine its vehicle lineup and expand the brand to a new generation the top model will go from zero to 60 in three seconds the base model will cost about $44,000. ford says it's part of an $11 billion effort to develop electric and hybrid models by 2022 i tweeted out i thought it looked like if a bmw x 6 and a nissan miles an hour rano had a. >> it's a beautiful baby though. >> you think so? >> i think it's a nice car hat tip to mr. john fort who

earlier quit mustang sally, now pta mom. that is so clever. >> aren't they late to the game here you have tesla with electric vehicles why now for ford >> you got to push the thing i wonder, is the car good looking enough >> i certainly think so. >> i think it's not. >> i remember when porsche came out with an suv and everyone said you should not use those labels on an suv t and look, those cars turned out to be hugely successful. >> suv is widely overused. it's supposed to be for guys like -- by the way, bob lutz called the tesla model x an inflatable bug >> do you like the mach e? >> i do not. but don't call it the mustang. it's like chevy with the blazer. anybody out there who works for chevy, turn your tv off. chevy came out with a blazer it looks like a lexus.

it's not a blazer. all right, good stuff. thank you all very much. coming up, opportunity zones we're supposed to bring capital to low income neighborhoods. a concept enjoyed by partisan support but l at h balthaseen changing we'll look at the benefits and the breakdown and the missed opportunity coming up. it's about quality. no trendy stuff. i want etfs backed by research. is it built for the long-term? my reputation depends on it. flexshares etfs are designed and managed around investor objectives. so you can advise with confidence. before investing, consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully.

. welcome back to "the exchange." investors have been pouring billions of dollars into a federal program that promises big tax breaks for putting money into lower income communities. but the program is now facing congressional scrutiny and even some of its original backers are raising red flags. >> reporter: opportunity zones were billed as a bipartisan way to help poor neighborhoods attract billions of dollars into investments, and senator cory booker told cnbc this summer

that he was on board. >> we have got to make sure that this economy is working for the ideals that we've taught that's why i passed a piece of legislation with tim scott across the aisle for opportunity zones. >> reporter: so were several of his fellow presidential candidates mayor pete buttigieg championed the program as a way to drive growth in south bend, indiana. andrew yang was part of the think tank that came up with the idea now what was once one of the only bipartisan provisions of the new tax law has come under attack as a handout for the wealthy. take this opportunity zone investment fund founded by anthony scaramucci the first prom is in a trendy neighborhood in new orleans, the new virgin hotel is an experiential life-style property with a premium room product. the minimum investment, $100,000 >> we've got to have some limits on the type of investments.

>> reporter: investors get to defer taxes on any capital gains they put into an opportunity zone they also become eligible to discount those gains by up to 15%, and any money they make on their opportunity zone investments is tax-free. >> the pool of unrealized capital gains which is the source of capital for investment opportunity zones is about $6 trillion you really only need 1% or less of that capital to have a program that creates a major new marketplace. >> reporter: but that's a major new problem for another presidential candidate, bernie sanders. he tweeted, we're going to end this tax scam and invest in working class communities that have been fleeced. as for booker, he's now sounding the alarm as well, writing a letter to the treasury department warning that reports of abuse would be a perverse violation of public trust. >> what is the response to this from either cory booker or anthony scaramucci

>> i reached out to both of them and have not heard back, but more broadly, backers of this program say the fact that so many rich people want to invest in it is a feature, not a bug. there's something like 8700 opportunity zones across the country. the program is still in its infancy and they say of course it makes sense that the money, at least initially, is going to flow to projects that are low risk, potentially have high returns, and that may be already under way. >> an opportunity story there. thank you very much. meantime, the latest read on housing shows solid demand and continued positive conditions for the real estate market nationally we'll dig into the data next on "the exchange. what are you doing back there, junior?

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welcome back confidence has slipped a bit in november but builders remain positive on the housing market we have more on these numbers and some people building a home behind you. >> reporter: why wouldn't they be it was an unexpected drop for the builders in november the national association of builders home index dropped one point. the first fall since last june

but well above a year ago. anything above 50 is positive. lower mortgage rates the average on the 30-year fixed was around 5% last november. now it's just below four current sales conditions develop two points to 76 buyer traffic dropped to 53 and sales expectations over the next six months rose one point to 77. builders stocks still up and way up about 50% year to date thanks to lower mortgage rates and strong earnings from the big builders builders are trying to pivot to more affordable homes but still face high cost for land, labor andregulatory compliance >> all right thank you. here is a stat for you it's been a blow out here for nearly every home builder. it's soared nearly 110%.

they are based in columbus, ohio we have the buck eeyes near the top and the best performing home builderstock everything is comie ining up google claims it does not interfere with search results but an investigation found otherwise. one of the reporters behind that piece will join us next. we started a non-profit community bank with a simple theory - give people a fair deal and real economic power. invest in the community, in businesses owned by women and people of color, in affordable housing. the difference between words and actions matters. that's a lesson politicians in washington could use right now. i'm tom steyer, and i approve this message.

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just google it staggering 93% of all queries worldwide go through google. turns out that google search algorithms aren't as objective as they might suggest. joining us now with the findings, one of the wall street journals behiensnd this investigation. there were four of you involved, great piece. what stuck out the most to you was it the contractors, was it the blacklist or was it that google or its parent company

alphabet aren't honest here. >> thanks so much for having me. it took us many, many, many months to publish this investigation. what stuck out for me was just that google really wants every one to believe that when you type in a query the answer is coming from computer code but there are so many hard decisions going on every day behind the scenes that we're not seeing about all the results. >> if you're a restaurant, you might tweak a recipe because you find the customers want the salad dressing like this or like that companies are always messing with everything because that's how you evolve did your investigation highlight they weren't just tweaking things but at the behest of others like an ebay? sgl

>> that's a really good analogy. what was the most startling to see how much pressure google is under to sort of tweak that recipe from governments around the world from its biggest advertisers like ebay, from interest groups especially since the election and so they are trying to battle how do we make these decisions on what to show and that is really what was rev revalatory for us. >> what was google's response n >> they did not agree with our conclusions. they believe their algorithms are unbias and objective i think we are showing in this report they really are not >> they have people of lower paid contractors this is not like four guys in a room with giant super computers. there are human beings involved in the process >> that's right. the problem that google has is

that if it was just more transparent about how it's making some of these decisions and why, it would really not be as controversial as it seems no one is going to object to them say putting the suicide hot li hotline higher when you're googling how to kill myself. they're not explaining how these things work nor do they have outside parties and looking at what's going on. >> you talk about knowledge panels and featured snippets is there any indication that google might fix these things that you brought up or is it just we didn't do anything wrong. >> that's another interesting part the face of google search has really changed they are kind of using that to their advantage because in their own minds they are sort of saying we don't touch those blue links which is what delivers organic search results but that's small part of a users experience now that they are

basically saying we could just touch this other part over here and that's okay. >> that's a big piece. i know you and your colleagues worked for a while on this check it out over the weekend. thank you very much. >> thanks so much. >> that does it for the exchange i'm going to join melissa for power lunch. we'll see you in a moment. here is what's new at 2:00 on power lunch. stocks hitting fresh record highs again today. forget about recession fears everybody was worried about a month ago. this market is being driven by fomo, the fear of missing out. former macy's ceo is here. what would he do to fix the struggling department store. he will tell us the two retail stocks that are a screaming buy. >>