buying yesterday and today >> scott >> tjx is there, master card and paypal growth is coming back >> jim >> cvv contins continues to do l despite political pressures. >> that does it for us here in naples, florida. "the exchange" begins right now. >> thanks, scott welcome to "the exchange." i'm andrew sorkin in for kelly evans. technicals say we are way overbought is a bubble forming? the consumer may be strong but that doesn't mean everyone benefits a look at the haves and have t nots but we begin today with markets.

>> andrew ross sorkin, good afternoon. great to see you in house. >> can i walk over and say hi to you? >> you can do whatever you want. you're anchoring the show. >> i'm going to keep out of the camera zone, though. >> stocks are uling back from record highs right now with the exception of the nasdaq. a lot of that having to do with this rebound that we've been seeing in a number of chip makers as andrew was alluding to, a lot of weakness in the retail sector this is the week where we hear from a number of retail companies, both home depot and kohl's, down now nearly 19%, home depot lower by 5% now we await results from nordstrom after the bell another theme we've been watching, just taking a step back is the outperformance in global stocks so far this quarter. germany, you'll see russia and even the banks in europe

responding nicely to a weaker dollar as well as better-than-expected earnings from some of the major banks in europe plus trade optimism and those concerns of brexit germany up 18%, vastly outperforming stocks here in the u.s. andrew, sending it back to you >> thank you for that. as the markets continue to hit new highs, tech has been a big standout questions are arising as to whether it's getting a bit frothy tech stocks are on pace for their best year since 2009, up 41%, that gain coming despite the sector posting a steep declean in td decline in the third quarter fund managers say it's the most crowded trade out there. joining us to discuss, paul meacham is here, portfolio manager of the wireless fund and

chief investment officer of hennessey funds. good morning -- i'm a squawk guy. it's midday now. you're with us here. you think we're a little long in the tooth. >> i don't think the market's long in the tooth. i think when you look at technology that it could be long in the tooth but there's still a lot of tech companies out there that are overlooked. i'll give you a classic example. you can look at microsoft and buy that at a price-to-sales ratio of 9-1 so you're paying $9 for a dollar in revenue or buy ncr, the old national cash register company and buy that for 60 cents on the dollar there's a lot of companies outside of what people focus on in technology. >> you're thinking much more in the sort of older, classicent prize world it looks like. >> value there's still a value in tech but you get those five companies

and they run everything but once somebody decide to exit the door, they're all going the same way, especially with the index funds. there's nothing they can do but sell at the market >> paul, what do you think here? there is a sense this has been going on for quite some time the multiples have gotten rich is there an argument to take some of the profits and go to dinner? >> i actual think think there's a pretty good argument for that. i don't know if i would shift into the 80s and 90s style oriented companies but you said in the intro e41% year to date, which outrageously good, how, i would tell you something that whenever the tech stock performance is quoted, they're typically using the performance for the xlk, which is the best known etf, the

technictech stocks wp the s&p 500. only microsoftand apple make u the weight it essentially the microsoft and apple fund you have to be laser beam focused that those stocks are what you want and they're going to continue to have 2020, just like they had 2019 ds. >> a -- 2019s >> you're saying they aren't >> apple might be the stock where there might be hell to pay. the way i look at apple is their hardware business is slowing and they're getting to eps growth only through huge stock buybacks, which can't continue indefinitely >> i give you a hundred grand, you can only buy one stock in this space what are you doing >> just one stock? >> it would be exxon i've always said exxon because they're going to be here forever. >> there's not in the technology

space. >> in this lane i'd say ncr. i think it's just cash flowing out, it doesn't pay a dividend, it earns 220 i know it's old and stodgy, andrew, but that's where you really make money long term. >> paul, i give you a hundred grand. i know you'd need a million or probably ten to manage my money but if you could only buy one stock you'd by one >> i'd be the wireless fund or 50 in applied material and 50 in energy >> many will say that more than any other factor consumer spending whats behas been the df growth in retail people are picky about where they shop. macy's has plummeted more than 50% at this point. some retailers are still rocking it, best buy and dollar general

have jumped over 40% while target shares are up 67% already. here is michael lassiter good to see you. >> good to see you >> we're going to be talking about target we'll talk to their ceo tomorrow and i want to get into what happened with home depot today >> target tomorrow will do better than a 4 come, a the least 40 to 50 basis points of gross margin expansion and earnings are going to beat the question is -- >> is that built into the stock, though >> it's a great question it really about expectations a the this point that's what's anticipated. so for the stock to move higher, it got to do something better than that and show it's got momentum into the holidays, which the most likely case is that it will >> now tell me about home depot. those numbers crossed this morning. the market did not like it they were unhappy. the question of course is we

also got lowe's coming as well was the h.d. situation, a home depot-specific situation or is there something else going on here with the consumer, with housing? >> this is a home depot-state police situati-- this is a home expectations issues. they got ahead of themselves, a lot of this was built into their stocks and as a result the stock is pulling back nothing fundamentally has changed about the story. this still is one of the best run retailers on the planet and that's going to over the long run produce a return for shareholde

shareholders >> the shock is down 12% today you buy it in. >> i think it's down in mid single digit range, i would buy it i would buy lowe's into the print tomorrow what we heard from home depot is the that the home improvement market is stage, seasonal, which lowe's overindexes to did particularly well and lowe's trades a the a meaningful discount to home depot here estimates are mork likely to rise than fall and that will drive the stock price higher so we would be buyers of lowe's at this level. >> what do you have make of the fact that some of the other retailers got killed today on this news? i think there's a widening gap between those well positioned retailers and all of the rest. the good retailers are making it easier for us as consumers to do business with them, taking friction out of the process. as an example, you can go to the home depot app and they'll tell

you exactly where within a store a product is located two, they have the products that we want at the price points that are compelling and, three, they're gobbling up market share from the likes of those retailers that are going away those three conditions are not going to change any time soon. >> thank you good to see you. we will see what those prints look like tomorrow meantime, we have a news alert on boeing. phil lebeau has the story. what's going on? restraining orders following the ntsb recommendations regarding an incident on a sotomayor west airlines plane in april of last year a lot of people will remember this was the incident where there was an uncontained engine failure and as a result one of the fan blades then went into the fuselage, blew out a window, a passenger was partially sucked out of that window, that passenger later passed away. what the ntsb is saying, there have to be changes made to the

engines in the 737 ng model, the variation of the 737 before the max. after these released from the ntsb, boeing saying it is committed to working closely with the faa, engine manufacturers and industry stake holder to implement enhancements that address the ntsb's safety recommendations. those engines, by the way, manufactured by a joint venture between ge aviation and saffron. they inspected a lot of engine blades and the ntsb is saying you have to do a better job, everybody involved, specifically working on the inlet and fan problems so this are no uncontainedin gin failures in the future >> another day, another boeing headline, phil thank you for that >> here's what's ahead on "the exchange." coming up, forward looking

that's one of the cftc's new models as it looks to the future of trading we'll talk to the chairman about his plans to make america the leader when it comes to crypto plus, why elizabeth warren's weather tax cou-- wealth tax ma have some public companies considering going private. and two private companies, tour company and we work are in hot water with the law did have thi it ws isophie's big day. on cnbc. behind schedule. but sophie's enthusiasm cannot be dampened. not even by a run-away donut. we powered through it in our toyota prius. because a star's got to shine, no matter what.

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well commonwealcome back to exchange." elizabeth warren went after ceo lloyd blankfein for the weather tax. scott wapner got a chance to sit down with mr. blankfein just a couple of moments ago and got his tang on that wealth tax. >> i can understand where the wealth tax is coming from. that's a very good way to, again, share the rewards, share the fruits, which you can also achieve through a progressive tax system if you don't realize i concome, you're not touched by it i understand where it's coming from and i understand the goals.

the problem with it is it's completely unworkable. it's hard to settle an estate, often can take many years to settle an estate how do you mark to market your entire wealth every year, farmers who own farms, people who own homes. it n it's not just fancy people with tens of millions in art collections. anybody with a farm or a home would have to establish what that home is worth every year and you'd spend years fighting about it and next year you'd have to do it again. >> i want to bring in the economic adviser to the past five democratic nominees for president and cnbc wealth editor, i'm camming -- calling you roberto, frank

is it a good idea even if it doesn't work >> it's not feasible in the taerms that warren has presented. and blankfiend ein is right thao have a fair tax you have to accurately know the value of the asset and the only assets that are marked to market are shares in publicly traded companies however, he's wrong about the issues of homes and farms. the fact is that the warren tax exempts the first $50 million in assets so that's not really an issue. the real issue is that half the economy, half of employment, and more than half of all businesses are privately held i mean, you know, we're talking

bechtel and ernst & young. how do you value them? you can have a value -- >> i have to go to the other roberto now, robert. you've spent a lot of time looking at wealth taxes implemented in other countries you have argued, at least as have i seen, they don't work why? >> there used to be 12 countries in europe that had them and now it's only three and it will probably be less than that in a couple of years. the issue isn't so much valuation. the reason why it didn't work in europe, they started at a very throw threshold, $1 h $100,000, $200,000 i think what lloyd was making the point, which i think was really interesting, yes, we have a problem with the allocation of wealth but the very production

of wealth we shouldn't see successful billionaires and successful ceos as policy mess takes, which is what the warren campaign is saying. >> that's the question i would ask robert, given you have historically advised other democrats, "the new york times," neal irwin had a piece where he described the significant tax as a wealth tax this is not only there to raise revenue but over time is supposed to do something very different, which is to disincentivize and reduce the amount of money that people have in the same way the cigarette tax reduces the amount of people that use cigarettes. >> thii think that's probably correct for a 6% wealth tax but we also have tax preferences for i come which is highly concentrated among wealthy people, which is all the

preferences for capital income that would be subject to the same criticism >> but why aren't wetalking about those things why are we not talking about capital gains, i can talk to you about carried interest and 1031 exchanges. if we solid those things, the low hanging truth, plus if you spent some money on the receivables issues, if the irs is actually collecting money they're supposed to receive, i think we would have a very different discussion in this country. >> the word step up basis doesn't become a campaign slogan in when you have a campaign situation, whereas 2 cents, shouldn't the billionaires pay 2 cents? that's that gets people, doing alls they things that you and i talk about every morning that

could raid more revenue. >> why do the -- i. >> think those who say -- we could get a pretty good semblance of a wealth tax if we did that and taxed the gangs on an annual basis, whether realized or not, which would be to treat capital gains the same way we treat mutual funds today and you would raise a lot of money and it would be an in effect wealth tax. >> robert shapiro and roberto frank, thank you very much for this conferring. -- conversation. >> coming up, he's taking the lead on crypto currencies and revising what he calls the most

poorly designed regulation in the history of finance plus what american express is offering businesses to take its card as it hopes to catch up to the competition. "the exchange" is back in two minutes. deeper data on cnbc. shipping containers fell 7.2% from a year ago. the trade war with china is blamed for the drop. woman: my reputation was trashed online.

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>> both of them found is unusual and vindman said he thought it was improper, inappropriate and could undermine policy in ukraine. >> thank you for that. now for a cnbc news update >> hi, everyone. here's what's happening at this hour the taliban releasing an american and australian hostage they held for oaf three yeaver . they were kidnapped in august 2016 from outside the american university of afghanistan and kabul. >> a gas explosion inside a coal mine in china killed nine and injured more >> more than 140 schools are closed across indiana as thousands travel to end indianapolis to protest low

teacher pay. indiana ranks 50 out of the 50 states in teacher pay increases since 2002 and you can expect to pay a little more this year for your christmas tree climate conditions have hampered tree growth with many trees being much smaller than in years past that's the cnbc news update at this hour. i'll send it back to you >> thank you for that. here's what's coming up on "the exchange." ahead, american express is paying you big time to make sure every retailer is on board wework may be facing a new lawsuit. a serial entrepreneur tells us the secret to building a successful company and is door dash pocketing tips? a coming up on "the exchange." related to aging? prevagen is the number one pharmacist-recommended memory support brand. you can find it in the vitamin aisle in stores everywhere.

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welcome back to "the exchange." >> we're having a much more interesting conversation, weren't we >> we was going to talk about the navage >> it's like a netty pot

>> we can make do a demo om squawk tomorrow. we have a handful of big story to talk about. american express has catching up to do. in 2018, millions took mastercard but not amex. is this a good idea or not >> they still haven't gotten over the loss of the costco contract, have they? >> that's a separate issue >> but that was a big loss. >> in some cases, it will take them six, seven cases to get the payback. >> it all comes down to swipe

fe fees you may say i'm a small business, i'm not getting the benefit from your amex customers. >> have you had any experience with this? he asked knowing the answer already? >> i'm not an amex holder but i certainly have a couple of those friends who take them to a cool hipster spot in the lower east side, it time to split the ball and t -- bill and the owner says we don't take amex. >> how much of this is a function of the fact that visa and mastercard now actually offer real benefits that they never did before >> right that was the value add for amex historically they'd be willing to pay $400 a year for a card -- >> the best feature on a platinum amex card, if you have

a problem in another country, they will literally med vak you out. >> every year at the u.s. tennis open, we get free headphones with our amex cards. >> if you travel, that insurance thing is worth every penny >> topic two on our list there has been an inquiry from the new york state attorney general's office the new york afrmg.g. would not confirm or deny there was an actual investigation taking place. is this to be expected >> i think it's to be expected no charges have been filed yet we don't know exactly what they're investigating per se, but any time you see a situation like this where there's been this tremendous loss of value, you expect the regulators to say we're awake and paying

attention. >> this is out of newman's piggy bank he was taking advantage of the company even before the ipo was coming along we know the stories about buying buildings, renting it back to the company, charging $6 million for his patented "we." >> some people think it's self -- >> when you're a publicly traded company, all that is a no-no >> you got to wonder what type of incentives he has to provide whoever this new ceo is going to be of we work. it's going to be tough to navigate >> masa now has something like $15 billion in company what's the chances he'll get it back >> i'm not raising my hand >> amex will catch visa and master card before he gets his

money back >> save the tape >> stock falling after microsoft's team product, a direct competitor to slack, has 20 million daily active users, slack reporting 12 million daily active users in july the slack stock down over 9% and down about 50% from its all-time high of $42. >> we use slack here >> i think we always knew microsoft wassing if to going e competitive -- slack was really their case study, their poster child of direct listing model the story hadn't really worked out. the stock hit an all-time high when it first went public at $42 and now is trayiding about 50% below that level >> this feels like a bragging match in the short term. in the aggregate, what's is

going to make? they both are going to grow -- >> are they, though? >> put on your deal maker eye shades i have a question for you, m & a reporter you, do you think as the stock falls that somebody is going to come out of the woodwork and say this thing is half of what it was worth before, i'm going to buy it, integrate it into my enterprise and that's the end of -- >> maybe somebody that already has a messaging service like that >> from a regulatory perspective can they >> with microsoft, big benefit here and the reason they've been able to surpass slack so quickly is they have this bundle idea. the reason i say it could be more of a zero sum game, if you can get the product for free on microsoft through this microsoft bundle, and a free customer on slack that ultimately becomes a paying customer, if there he's

recession, you're probably going to opt for the three option through this bundle so maybe if you are slack or you are -- >> if you're google and g-chats no longer working the way it used to, if you're apple and you want to do more on the enterprise, i could see a lot of things going on. >> slack could benefit from that because they'd be part of a bundle of a bigger company >> dual class shares, right? >> i believe so. >> we'll know it's over for slack when we convert to teams >> washington d.c.'s attorney general suing door dash, accusing the company of keeping tips that were meant for customers. they guaranteed delivery workers a certain amount and door dash pocketed the tips to offset base pay. >> is that illegal it turns out there as a law on

thebooks in d.c. that makes it illegal. but it's only in d.c. as far as i can tell it's not a federal statute look at restaurants. it varies from restaurant to restaurant door dash is not taking money from the delivery guys, they're just not giving them all of the money that's out there so they're not loses out necessarily. >> for those of us who order in on a regular basis, it's unfortunate to know. when you read a story like this, it doesn't incentivize me to add a bigger tip because now knowing that it door -- is just pro vie cash >> i was going to say give them cash >> but now we live in a cashless society. >> a lot of these companies say you are adding a tip -- >> it's now on uber, lyft. sometimes they've bumped it up

20, 25%. kris jenner, matriarch of the kardashian clan talking to us. her daughter kiley just sold her company for $600 million i asked her if she considered sale of any of her other daughter's businesses and here what's she had to say. >> i think that if they do grow the business and they're able to sell something and keep, you know, having a hand in it, that that's kind of the ideal situation. >> kim hasn't had that opportunity? >> she's getting calls right, left and center. >> it's not just a brand issue but it's also an infrastructure issue. >> right >> i think the deal is about that. >> she's able to grow the company now. >> she opens half it have so

she's going to benefit on the way up, too. >> say what you want about the kardashians but -- >> you don't need to look at me. i spent some time with them two weeks ago. the most disciplined entrepreneurs i've seen in a very long time, the hardest working. i watch "keeping up with the kardashians. spending time with they will changed my whole perception about how this whole business operates it's a real umpire of. >> that reality show would have sputtered years ago if this didn't have that work they were really savvy early on with that. >> i think if. >> what they've really done, which so interesting, is each of the daughters has almost segmented a certain deme ordemdo

>> because kim k. has her own line but -- >> i was thinking what would robert kardashian think about this >> i remember robert kardashian. he would be very proud >> i'm sure. >> leslie, bill, thank you guys. what a fun conversation. coming up when we return, a lot more on "the exchange. making crypt yo currencies one the top priorities "the exchange" is back in two minutes. . medicare is great, but it doesn't cover everything - only about 80% of your part b medicare costs, which means you may have to pay for the rest. that's where medicare supplement insurance comes in: to help pay for some of what medicare doesn't. learn how an aarp medicare supplement insurance plan, insured by united healthcare insurance company

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there are 3 key things you should keep in mind. one: if you're turning 65, you may be eligible for medicare - but it only covers about 80% of your medicare part b costs. a medicare supplement plan may help pay for some of the rest. two: this type of plan allows you to keep your doctor - as long as he or she accepts medicare patients. and three: these are the only medicare supplement plans endorsed by aarp. learn more about why you should choose an aarp medicare supplement plan. call today for a free guide. welcome back to "the exchange." the crypto assets gain traction in the marketplace joining us exclusively from the global leadership conference is

cfdc chairman keith talbot good morning -- i should say good afternoon to you. in this larger conversation about where the u.s. stands in digital crypt yof curreo current feels there are different forces fighting each other you want the company to be at the top of the game yet i tell you some of the other folks in government right now and i'm thinking even of secretary steven mnuchin and others and even the president have some real reservations about crypto skircurrencies >> many of the concerns that secretary mnuchin has and i have as well in terms of anti-money laundering, making sure that these markets continue to have integrity. so i don't think there's actually any space between us. it's just that for those that

are commodities regulated by us, we want to make sure we create an environment where these markets have integrity and we're able to regulate them and they're able to innovate >> explain this one to me because i have yet to understand it facebook nouannounces libra and washington goes out of its minds they can't even fathom this is happening, yet bit coin, which has been around for over a decade and has nobody that you can call, there's nobody you can pick up the phone and say, excuse me, i have a problem here, i need your help, i want to regulate you, nobody seems to be having at least meaningful problems that they have wi why is that? >>s they're fundamentally different products bit coin has been around for ten years and we have a good idea of how it works we're able to classify that not as a security but a commodity.

whereas libra is lienked to a se of national currencies >> if any of these were to reach escape velocity, and i don't know what that means, but if bit coin was used in a meaningful way, it would up end the monopo monopoly and if libra were to take off, you'd have billions operating with it overnight. how much does that weigh on regulators >> i think that's something that people are thinking about. i never use the term crypto currency i've always used the term digital assets these are not yet legal tender they're not money. they're not currency like traditional currency so something like bitcoin is very important but it has the volatility of a commodity and

market trading it alongside other commoditiesfrom a regular trif perspective, you think the things that are going to happen to get there, if you think that we do get there? >> well, i think it's entire live possible that i get there my emphasis has not been on any single digital asset thing but the block chain technology underlying it and it being used first and foremost for these digital assets but i could see it overtaking the internet or being effectively parallel to the internet in using a variety of different transactions, not just the financial system but in other types of transactions as well in terms of the velocity and getting it to the point, i think really a key development, which we haven't seen yet but we're starting to see in other countries i is if s if for example, they say you can use them to pay your taxes

i think we're far from in a at this stage at this point we're trying to get our arms around it, trying to understand the technology, we're trying to understand the and we're trying to understand how they can address anti-money laundering >> if you were to rank order where the united states plays or ranks in this game to the expent tent it a game, where the united states right now relative to china, south korea you name the other countries involved in this >> well, i can tell you this, i don't think we're at the top of the list we may not be at the bottom. i think the libre association is a good example of this they could have chosen anyplace in the world to set up they chose switzerland my understanding is a second choice was singapore i think and my emphasis is on

making sure the united states is a leader >> chairman, we have to run. the reason why facebook wanted to do it originally trying in the first place. >> thank you very much still ahead, a lot more on the exchange self-care now a popping business we're going to talk to the founder of some big na bndmeras in the space about the future of that trend "the exchange" is right back after this we powered through it in our toyota prius. because a star's got to shine, no matter what.

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my squawk box partner sitting down for an exclusive interview with walmart ceo he weighed in on the store's stance on guns in wake of a shooting at a walmart in oklahoma yesterday >> it's a very divisive issue, obviously. what we tried to do is come forward with some common sense steps and we would love the see government do the same thing just some practical common sense steps to help make the country safer.

as we have said to every one, we don't think the status quo is acceptable we think there needs to be change >> have you gotten blow back from your customer base? >> a little bit but not much i think most people understand we're not trying to make a political statement here we're just trying to help create safer environment. >> you can catch the full interview tomorrow at 7:30 a.m. eastern time do it yourself health care using vitamins to soothes what ails you. w we'll talk to the founder about his keys to his success in that market, next

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welcome back to the exchange procter & gamble looking to boost its health care business my next guest has built a career on disrupting through three ventures that value at more than $1 billion for more we're going to go out to cnbc evolve conference.

eric, i'm so interested in your success because most people have one good idea and you now have three. you seem to look at industries that i wouldn't consider trying to up end because who would have thought band aids could be up ended. how do you do it and how do you think about it and how do you decide which category you're going into because we have seen you do it three separate times >> thanks, andrew. mymotto is different than othe entrepreneu entrepreneurs. i don't start with ideas i start a category that i think is big and right for disruption. i try to figure out what is the cultural shift meaning what is the big macro trend. >> you're sitting around, i don't know where you're sitting and you're saying band aids. band aids needs to be disrupted. why?

how does that happen >> i'm a fur of three kids two who like to get hurt and bleeds a lot i found when ever a kid was hurt it's always a sense of urgency and it's the hardest thing with band ag bandages was trying to find them in the house and not use them. >> it's about finding it but part of it was making the experience look cool and better and different, right >> absolutely. we figured it's probe not a great way to differentiate the products you'll see a big common threads of all our brands is how we leverage creativity and design turn something that you need into something you want. >> you do a lot of think through target

why target >> target is a great partner they are one of the few retailers that are very design led. you have creative directors like todd waterbury they really give us the space to bring to them these newly imagined brands and get behind it >> i think about stocks. i was thinking what industry do i think need to be up ended. it seems ridiculous. how do you think about which is the next one >> for me, i look for a place that's a really big category that has a predictable business model. i like profitable businesses like for spaces where there's an economic opportunity as well as where we can really apply design and creativity taking something that feels very

intangible for people and leveraging design no a way to make it more tangible and change the experience it's probably very, very right >> i'll get you my number. we'll talk socks and find an opportunity and at minimum just a little stake thank you. that does it for us on the exchange power lunch starts right now thank you, andrew. here is what we are working on at 2:00 on power lunch retail gets wrecked. two earnings disasters, home depot and kohl's under pressure after big misses both retailers say there could be more pain ahead tech on track for its best year in a decade if you missed the rally, don't worry, we'll tell you how you can still get in on that party lar later, chipotle, one of the best