>> good stuff. thank you, josh brown. >> dunkin brands, i'm an investor and client. >> i knew he was going to say that. >> such a lay up. >> that was very vivian. >> pete, what do you got for me. >> vm ware, buying out in april, not looking for a big move >> "the exchange" begins now. scott, ladies and gentlemen, thank you very much. welcome to the exchange, i'm tyler mathisen on a tuesday. a selloff on wall street, the first big one in a long time the dow having its biggest fall in two months, this after president trump suggested he may want to delay a trade deal with china until after the election the president referencing the market's drop today calling it peanuts and saying it won't force him into making a bad deal let's get more on the selloff with dom chew. >> -- dom chu, at our lowest

point, down 457 points for the dow, at the highest, down 272. it's been a red day since the beginning but the s&p 500 down about 30 points right now, off of its worst levels today, the nasdaq off about 1% as well. one place we're keeping a close eye on is the elevation and stock market volatility. it's not often we will show the cbo volatility index for vix for short. but we are siegel evacuat-- seeing elevated levels we are pretty depressed, but the long-term average for the volatility index is 15 above that right now and chips under fire micron, intel, applied materials and nvidia, off 2 to 3% at this stage. one of the big battlegrounds when it comes to u.s. china trade talks. keep an eye on the semiconductor s, and temperatusemi etf back to you.

>> thank you very much and we begin with the latest on trade and tariffs, and kayla is live in washington kayla, lots of moving parts today. tariffs everywhere. >> as there are always moving parts, tyler, the multi-front trade war is heating up again with the trump administration now proposing tariffs up to 100% on $2.4 billion in french luxury goods. it's a counter punch to france's attacks on revenue which the president says he should be collecting. >> i think we'll be able to work something out, i hope, and maybe not. maybe we'll do it through taxing, working easily through taxing, but they're american companies, the tech companies you're talking about they're not my favorite people because they're not sal for me i don't care, they're american companies and we want to tax american companies >> president leaving his options open for negotiation there, but if those tariffs hit in mid january, that would be a month after a deadline for new tariffs on china

the truce with beijing has lasted 53 days this time at least and a delay by trump without a deal would be the fourth such move this year alone. the state of play is unclear as of now with trump saying a deal may be nearly a year away. tyler. >> kayla, thank you very much. let's take a closer look at how this trade turmoil is hitting the markets. the broader economy, and geopolitical tensions. joining us now, steven whiting, economist of city private bank tory smith, and peter book barr, a chief investment at bleakley advisory group and a cnbc contributor. why don't we talk about the latest tariff and that's the one the president says he may put on french luxury goods in retaliation for a french tax on american technology products and internet related products. unpack this one for me

>> yeah, so what we're looking at here is a french digital tax that was imposed several months ago, and really the united states has been investigating this tax to see if it's affecting the united states but the problem is that it's not actually affecting americans it's affecting american businesses in france of course but that's more negative impact on french citizens that are using products and services like amazon, facebook, google, et cetera and even amazon has come out and said several months ago, you know, we're actually just going to pass this tax right on to the consumers. we're not going to be absorbing these costs at all. >> these things ultimately come back and are paid in the form of higher prices usually, aren't they >> tariffs in the united states are paid on chinese merchandise are paid by american importers if we go ahead with this, this is $100 billion of taxes that would be collected roughly speaking, analyzed rate from

americans paying for those products it causes some displacement, if we weren't collecting that money at you will, there would be no impact, but we are >> but we are. what is your sense of whether the tariffs that are scheduled to go in on december 15th on a host of goods including now things that really hit home, like my ear buds, ear pods and so forth, that they will go into effect. >> look, i think there's a great deal of suspense about this. we have had delays before. i want to be clear here that with all the news we can follow, all the experts that we can talk to we can't know for sure what both sides will do. it will not mean the end for an otherwise underlying healthy u.s. economy and global economy. this has been a weight that has been taken on and off over the course of the last two years if we want to put it back on again, then we'll have to struggle a little bit. but the underlying story is a good one, with low inflation,

solid consumers, and a business sector that recoiled, that cut production on the anticipation of an economic downturn here and across the world i don't think putting these things on again will be decisive in stopping a recovery in the coming year. >> let's talk about that peter, as you look at the possibility of higher tariffs on chinese imports, the possibility or really the reality of tariffs on argentinian, and brazilian steel products, possibly on french cheese and wine. what's the economic impact if any? have we felt it yet? are we likely to feel it in 2020 what does it translate to. >> i refer to the tariffs as mud into the spokes of business. it doesn't stop the wheel from spinning but sort of clogs it up we're seeing in the u.s., contraction and manufacturing, four months in a row as measured by the ism we're seeing global trade that is not growing at all, and a sharp reduction in capital

spending yes, the consumer is keeping us alive, and we keep saying the consumer is strong well, the consumer is spending at a decent rate and that's why we're growing at 1 1/2 to 2% instead of something faster but we're threatening the possibility of that consumer no longer being so strong, particularly if those december 15th tariffs go into play. >> it hit consumer goods. >> exactly and that's why i'm convinced whether we have a deal or no deal, those december 15th tariffs will get kicked into 2020. >> let me put this out here for the table, and tori, i'll let you go first on this it seemed to me that yesterday, i married a metaphor that we were inches away from a phase one deal with china. today we sound like we are a year away from a phase one deal with china is this just negotiating tactics, what are the odds that what the president said today is the master deal maker playing

the last innings of this deal? >> well, there's really no telling when an end will come to the u.s. china con flibflict, ad even this next potential deal is only a phase one, right, and the administration hasn't yet admitted to a tariff roll back, included in this phase one deal. from the american consumer perspective, we're not looking at much relief anytime in the near future, whether there's a phase one deal or not. really, what they says to me is that the administration's not necessarily prioritizing an elimination of barriers on ne s americans and we might end up with a watered down deal which is more things around fringe and not the core issues. >> tactics or real snag. >> you heard the commerce secretary early on saying that you would cede your ability to negotiate if you thought you were paralyzed by an election. it makes a little bit of

suspense the bottom line is you have to think about where markets have been cyclicals have had a very nice complete full circle rebound on the assumption of the things that i said that the industrial sectors across the world that the trade sectors across the world have contracted much more than these tariffs would imply, right, so we all rebound, we get very very confident, suddenly the news headline hit us the reality is i think we can still actually grow through these tariffs. >> what occurs to me ladies and gentlemen, is this, on any given day, the market is hyper sensitive to a headline on trade. good headline, market goes up. >> especially when we have rallied. >> and bad headline or questions about it market goes down. but if you look at the year as a whole or the last 18 months as a hole, all of this trade turmoil has meant very very little the market's up 25% this year, peter. >> right but underneath the hood, earnings are possibly flat to down this year

so it's had a fundamental impact. >> that's exactly correct. >> classic margins are now receding we have revenue growth the profit margin has completely changed. >> if i have a market that's up 25% this year, and earnings are roughly flat and profit margins are going down, is that a vulnerable narcotic. >> the market is not going to be able to repeat the large gain that it had in 2019. we're expecting single digit returns. we want again to focus on a little bit of the sure part of returns, dividend income, for example, is a lot more sure. you have to put this in the context of two years 2018, we had a severe valuation contracture, one of the most severe in 50 years earnings up double digits, share prices down. so this year, flat on earnings, share prices up, you know, there's a middle ground here that i think we're likely to hit and it's going to depend in fact if we swerve away from any massive trade cliff or make

mistakes in monetary policy. i'm unsure on the latter part. in the end, i think we can in fact have gain in earnings and shareprices will basically follow through. >> we've got some breaking news. i'm going to cut off the conversation there, gentleman, thank you very much. tori thank you as well we have breaking news on democratic candidate kamala harris and kayla has the details. >> senator kamala harris is ending her presidential campaign, this is confirmed by brian schwartz of cnbc.com, confirmed by the atlantic and politico this is the first of the candidates in the democratic field that had been polling at one point in the top tier of these candidates but there had been some disarray, and some disorganization amid the campaign she had closed operations in some of the early voting states and pretty much focused all of her efforts on iowa, but that strategy did not bear out. some of the reporting is that senator harris is traveling to tell her staff in baltimore, and new york about her decision to end her presidential campaign.

when we get more about exactly why she made this decision at this stage in the race, we will share it with you. brian schwartz from cnbc.com reported that there had been a fundraiser scheduled for today hosted by some heavy hitters on wall street, hosted at the paul white law firm that had been abruptly called off with sources telling schwartz that that had been for personal matters but clearly the end of the road at this point for senator harris, although a very large democratic field still remains. >> wow, kayla, this one is abrupt, as far as i can tell i mean, she was, as you pointed out, a front runner four months ago, based on her performance in i believe it was the first of the debates where she assailed very personally joe biden. >> she did that was back in june, though, tyler, and the spike that she saw in her poll numbers was short lived. she was unable to regain that momentum which in the intervening months has been picked up by pete buttigieg who has tried to own the moderate

lane certainly she felt like she could not regain that momentum, and did not have the resources at this stage to continue. >> kayla, thanks very much once again, kamala harris ending her campaign for the presidency. shares of apple among the worst performers in the dow as trade worries ramp up. the company caught squarely in the middle of the tariff debate given its large iphone manufacturing footprint in china, so what could be the financial impact on apple's bottom line if a new round of tariffs kick in. dan ives is managing director at equity research at web bush. good to see you. what's at sake here for apple? >> there's a lot at stake, it really comes down, they're the poster child for the u.s. china trade wars do they absorb or pass that tariff along if they're not exempt in my opinion, this could be a 4% reduction to eps or reduction demand if they pass forward.

there's a game of high stakes poker, especially for app and will cook as they go into december 15th. >> koch has played this game skillfully, seemingly good relationships with the white house, the president the president was with him a week ago at a factory down in i believe it was texas what can apple do here is a waiver a possibility or some sort of exclusion of their products and if they get an exclusion, you can well imagine dozens of other companies are saying why not us too? >> it's a great point and cook has been a master tactician in terms of how he sort of played this i continue to think that exemption is a very likely possibility if the december 15th tariff comes in. you saw that in the austin, in some of the back and forth with cook and trump and cook continuing to be a pseudo ambassador between the u.s. and china on this you take a step back you're talking about a third of the install base is going to be

an upgrade cycle between 11 as well as the 5g this is a pivotal time for apple. you have seen it obviously in the stock. i believe it's a $20 overhang on the stock in terms of the black clouds from the u.s. china tariff issues. >> very interesting. dan ives, thank you very much. apple up 25% over the past three months one of the best performing stocks among the dow in that time dan ives thanks. here's what else is ahead on "the exchange. coming up, numb to the news, one analyst says there are two stocks to buy right now because the negative headlines that follow them just don't matter. he'll join us. plus, there were some very surprising win when it came to foot traffic this weekend. we'll tell you who and a look at the growing college debt crisis. this is "the exchange" on cnbc when it comes to your customers' expectations,

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and welcome back to "the exchange" retailers are falling along with the broader markets today as the risk of tariffs threatened to hijack the holiday shopping season. so what's in store for these stocks, coming off a record breaking cyber monday, for more, let's welcome kimberly greenberger, managing director in retail research at morgan stanley, and courtney reagan,

welcome back from bethlehem, pennsylvania, good to have you here kimberly, let me start with you. i guess the market is reacting to the possibility of tariffs, higher tariffs starting december 15th in the companies that you follow, the retailers that you follow, if new tariffs come in, it's not going to affect them looking backwards. it's only in 2020, right, because they've got all their merchandise already. >> that's right, tyler most u.s. retailers land their holiday goods in the august, september and at the latest october time frame so really the tariff news coming out today is certainly an incremental head wind for profit margins in 2020 but not a material head wind at the holiday season. >> which of the retailers you follow do you think would be most adversely affected by heightened tariffs >> well, the retailers who sell more commodity type apparel, where they would not have much pricing power, on the other end of the spectrum, we think

companies like nike, who have very covetable products, nike has pricing power and nike has the ability to pass on that increme incremental cost head wind that it would be experiencing they could pass that on to consumers. if you think about some of the more generic or basic kind of apparel, you would think of gap or old navy. it's very difficult in commodity t-shirts or commodity jeans to have any pricing power and so it's those kinds of retailers that would actually see their profit margins. >> that's an interesting way to think about it, courtney. >> that's why if you think about some of the staple names like some of these dollar stores, they have fixed pricing, so that's part of the stitch, you want something for $3, how are you going to raise that price. you can't really >> that's your game. that's your zone. >> your business model on this exactly. that gets tricky, especially more for a dollar tree than dollar general because dollar

tree has slightly nor discretionary products at a fixed price. if you have a product that is really desirable, you're able to fa nag that pricing you need to think about retailers that are sort of the second party in line we talk about a company like best buy 60% of best buy's costs of goods sold are made in china however, a lot of those are made by samsung or apple, somebody that's going to get the tariff first. watch, you know, the vendors, we have to watch them sort of first to see how much they can absorb before they say that's all we can do now it's up to you retailers. >> kimberly as you look at the universe of stocks you follow or sector you follow, are there standouts in your view >> we do think there are several standouts, first of all, the off

price retailers, tjx, ross stores, burlington, they represent value, and they will follow on price, but they will always maintain their price discount relative to the full price channel. if we do have tariffs come in, the off price retailers would be positioned at an even greater value proposition. because they're buying goods already here in the united states in large measure they would not be the ones paying for the tariffs. we think they're certainly in better position. you also have companies with actual pricing power, and i would call out lieu liulu lemon, yedi, these are brands that have performance technology or some sort of quality point of difference that gives them some degree of pricing power, and we think they are absolutely better positioned heading into this environment. >> they are inoculated because of the quality of their products

and the brand they have been able to establish. kimberly, thank you very much, great to see you >> court, bethlehem yesterday, canada tomorrow, safe travels as you interview the owner of travel goose. investors advertisers and users don't care about negative headline on facebook and google. at least that's what one analyst says, why he says it's time to buy them right now. plus, boston beer getting an upgrade but not for what it's best known for the details and what it says about the industry, take a look at the dow transports, their worst day since early october. woman: my reputation was trashed online.

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exchange," let's take a look at the markets right now. we are down but off our session lows as you see right there, the dow off about 348. it was down at 1.457 points, so that's a hundred point return from there but a point and a quarter off. a 1% decline in the s&p 500 and ditto for the nasdaq let's check in with bob pisani for a look. >> threats on two fronts, french imports and potentially no deal on china, maybe more tariffs coming here. take a look, industrials predictably down, fedex dips on

this news, caterpillar also weak, big move down in bond yields, generally not good for bank stocks, including the regional banks but the super banks, also weak we saw predictable semiconductors all week. big movers on trade. nothing unusual going on there french luxury goods, biggest champagne producer in the world. they have gucci and eve st. lorent what would happen, december 15 no new tariffs but keep the old tariffs, his response, no big swings the market is already trying to adjust to that what happens if there is additional tariffs on december 15th depends what they are, if we get 10 to 15 tariffs, a moderate selloff, if it's more severe, keep your hat on, your hard hat on, that means big drops

we're trying to parse exactly what the probabilities are of things happening that's why we're seeing such confusion in the markets back to you. >> to sue herera for a cnbc news update hi, sue. >> hello, everyone, here's what's happening at this hour. 23 people have been killed and more than 130 injured in a ceramics factory fire in sudan the government officials there say a huge explosion tore through the factory after a gas tanker had abruptly caught fire. california congressman duncan hunter pleaded guilty to misusing campaign. he changed his not guilty plea in federal court after denying wrong doing for more than a year prosecutors say hunter and his wife spent more than a quarter million dollars in campaign funds. volkswagen says its u.s. car sales rose 9.1% in november. that jump was driven by a 30% surge in suv sales which accounted for 55% of total vehicles sales which is a new record we end with a different kind of

holiday green in a town outside of estonia's capital instead of a traditional pine tree, an installation of more than a thousand plastic containers is taking center stage in the town's christmas celebrations the artist's behind the environmentally friendly project said the inspiration came from the local gas station whose containers of window washing ended up in landfills. putting it to better use that is the news update. back to you. here's what else is ahead on "the exchange. >> coming up, one stock is up 48% in three months, but one analyst says there's still time to buy in fact, it's a must own stock corporate jet use is back, and adding millions to corporate tax bills. tictoc is sued, and are investors finally numb to the negative news flow on google and facebook that's all ahead on "the that's all ahead on "the exchange."

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as you just saw there, the dow rallying back just a bit, down 325 points, a far cry from 457. let's catch you up on a few stories that should be on your radar, it's time for rapid fire and here with their take, robert, don chu, welcome all three. piper jaffray raising its price target by more than 50 bucks, calling it quote a must own stock in the auto sector the firm says investors would have a hard time finding a more disruptive company in any industry citing high manufacturing volume, bold designs. you can say that about the truck, if it was a truck and its new cyber truck as reasons to be bullish. the shares up nearly 50% in just the past three months. what do we think of this is tesla one of the most disruptive companies in the world? >> it is, and whether or not it's valued correctly is a complete other question. it is certainly one of the most disruptive companies out there,

and the reason i know this, if i didn't know it already, is my mechanic of all people told me, what do you think your next car is going to be my car is 15 years old he goes you're a prime candidate for a tesla. you have a predictable commute, you know exactly when you have to charge. if i were one, i would get a tesla. that tells me there's more to this. >> they included not only the high volume manufacturing, which as we know elon musk took the rein out and said we have to whip this into shape, and frugal capital spending, these are signs of a leader who had tight reins on his organization, and it's not something that you would normally think about with elon musk. >> no. >> talk about visionary. >> tight reins and visionary is not what comes to mind. >> or math >> here's the thing about the truck, one of the things, they could get to 200,000 trucks a

year by 2023, something like that ford sells a million pickup trucks a year. that's a fifth of what ford already does even if they hit that wild target of 200,000, and by the way, tesla's market cap is like twice as much as ford's. so there's a discrepancy in terms of tom to your point, the valuation, that just doesn't make sense. >> let's move on to corporate jets, from teslas to corporate jets use by american companies is on the rise and nearing prefinancial crisis levels, kau causing a bit of unwanted turbulence what do you know about this one? >> if you take a private jet, you have to pay the company back there's this weird accounting thing where the company loses tax deductions because you have used it for personal use pilots, maintenance, depreciation, all of that would normally be written off the taxes as a company. >> as a business expense.

>> in this case, they found that visa, for instance, racked up loss of deductions of $4.8 million a year because of the personal use of the jet by the ceo. and this is one of those sort of strange hidden costs of private jet use that doesn't show up on any s.e.c. form but reuters was able to dig the numbers out. >> why doesn't the ceo have to gross up the loss of deductions. in other words, that's a cost, right. >> well, it does count as compensation on his w 2 if he takes it for personal use. what they're saying is there's a hidden loss of deductions that isn't accounted for anywhere, that really is the loss of the company. >> if it's considered compensation, at some point they're getting the cost. >> the ceo is not paying those lost deductions, which again, can be far more than the actual cost so it's one of those hidden perks and there was a company flagged aros, an insurance

company, amsterdam, india, around the world, the loss and deductions was so significant that a hedge fund said we think you're a badly run company >> and that's when you're comparing the flights for a first class ticket. >> it doesn't really equate. >> this isn't my world but my guess is a business executive can find a pretty good rational for calling a business trip. if it is just you and your family, that's another thing. >> me and my family are going to the beach house but i took corporate papers that i didn't want anyone on a corporate flight to see. if you want to just avoid. >> you're right, it's not your world. if you wanted to just avoid all of these things, get a net jets account, or get one of those fractional shares. get rid of all of that stuff, to your own personal stuff and then you don't have to deal with

taxes. a college student in california suing tictoc alleging the video sharing app transferred her private data to china. the student claims she downloaded the app but never created an account the lawsuit alleges that tictoc then ended up creating an account for her, gathered up her personal data, including web sites she visited and transferred that information to servers in china tictoc maintains it stores all u.s. user data within the u.s. tictoc is not one i know much about. >> tictoc is this app where people can go on and create videos of themselves lip syncing to pretty well known music and usually there's choreographed dancing. it's very popular with the teenage set. it's also very concerning for one reason because she said she never actually created the account, that tictoc did it for her. she never uploaded videos but found her personal biometric information had been downloaded to servers in china and according to the lawsuit, source code from bydou and chinese

advertising service was in the code it didn't have evidence of but it raises questions of national security purposes and how much oversight do we really know about these apps that our kids are downloading. >> tictoc is a chinese company. >> right and they maintain that all the u.s. data stays in the u.s. doesn't make its way to china. that's why this lawsuit, which perplexing to me is how did she know that they scooped up this data and moved it to china they don't say, and they don't say they have proof of that. >> one of our tech reporters pointed out that there are pl plaintiffs attorneys who are chomping at the bit to take this on they are looking for one personal story that they can sort of tag this on. >> i don't know how you would know that data moved to china. >> you remember there was a phen phenomenon where an app would

take your face and change it into something else. >> the ageing app. >> remember, everything on your iphone is face id. any kind of face id can unlock stuff on your iphone if you're uploading personal images, biometric video, there's somebody, any company has access to what your eyes look like, nose, face, all of this is going to be bad at this point. i would be careful about uploading any kind of image of data wise to any server. >> my goodness, i'm in trouble >> including on instagram. >> let's move on to shares of boston beer. moving higher after the company was upgrading buy. citing potential earnings growth next year, and 75% sales growth for its truly hard cider expecting the hard seltzer market to hit $5 billion in

three years. these hard seltzers and hard si sigh d ciders are popular. >> i'm into pabst blue ribbon. >> and anheuser-busch, they're all getting into this game this is really white claw's game truly is making a run for it they have about 35% of the hard seltzer market but white claw is the one to beat, having about half of the market. >> these are click low cal. >> it's malt liquor in a can, but in a nice can that you can go into a fancy party and say i didn't bring you wine, i brought you malt liquor in a tan. >> it's this generation's zima or barts and james >> wine coolers. >> in part, millennials are

making this popular because they're testing, they call themselves sober curious so if you're on your way to -- >> these are alcoholic drinks, right? >> they are but they're low alcohol. >> it would seem to me that these kinds of products would, like the ciders would be leaving themselves open to criticism that they appeal mostly to underaged drinkers. >> exactly and that's what i'm surprised has not happen all the flavors, black cherry, strawberry lemonade. >> you know who's drinking it, health conscious middle agers. >> that is what're told, i'm waiting for the second shoe to drop somebody is going to come out and saying, look how many underage drinkers. >> it's a juul. >> it doesn't taste that good. >> foelks, thank you very much. treasury, ten-year yield

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guide. licensed humana sales agents are standing by, so call now. welcome back to the exchange, everybody, some big moves in the treasury market today. in fact, the ten-year yield on track for its biggest daily drop since 2018 let's check in with rick santelli at the cme. hi, rick. >> hi, tyler, yes, a big day in treasuries and of course this follows what was a big day up in yields in treasuries yesterday let's look at the short end. let's look at two-year, there's an october 1st start, i want you to pay attention to the one spike low, 2/3 of the way to the right side of the chart. that was halloween below that day on a closing basis was 153. today, the low is 151. for a while, we were below that point we're now hovering at 153. look at a two day of ten's

at 171, we're down eleven. 169 was the low of the day we're down 13, a bakers dozen. open the chart up to 10-1. their halloween low, right where the market stopped today if you look at how the curve flattened it's the same scenario curve was steepening, boom, took it all away as the long end dropped in this bull-type flattening is just huge and finally, the dollar index at a one-month allow, you see that start, risk off, you can see how much easier it is to push rates lower. tyler, back to you. >> rick santelli, thank you very much. and coming up, there's another college debt crisis happening in this country, but we're not talking about student loans this tim wl inyou that story next - stand up if you are first generation college student.

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big laggers. we talk a lot about student loans, there's another debt crisis, the colleges themselves. moody's estimates one in five colleges are under financial stress and when all is said and done this year, many as 15 schos could close down altogether. scott cohen is at one school in ohio that's trying to buck the trend. hi, scott. >> reporter: hi. we're about 40 miles outside of cleveland. about 1,000 or so students they say they are in okay shape. they know about the challenges which involves demographics. there's fewer students graduating high school that puts pressure on tuition and liberal arts education not exactly in vogue these days. their answer here, try to change the very definition of liberal arts >> how's it look >> reporter: when laura took over as president of the college five years ago, she knew the

school founded in 1850 needed some updating. >> i knew that small colleges need to be thinking about change >> reporter: tlp was something even more pressing the college had $25 million in debt up for refinancing. lenders with the not enthused about small liberal arts colleges the solution, a top to bottom makeover >> we looked at the curriculum, the graduation requirements, we looked at technology we looked at the 21st century skill set and mind set that students need to demonstrate to employers. >> reporter: they call it the new liberal arts more technology, new majors like criminal law and sports management gone are old majors like religious studies. also gone, about 20% of the faculty. lenders were satisfied and so were students.

she sees a chance to turn her creative writing major into media. >> i can't imagine a public school. >> reporter: if the model works, it may be the exception in a deeply troubled industry >> it's here to stay i think we have seen the higher education sector is a period of real transformation in terms of how students learn, where they learn. >> reporter: the trend is most severe here in the midwest and in the northeast where the demographics really come to bear a will the of higher education now is keeping an yieye on what they do here thinking it could be a model for this industry before it's too late >> scott, thank you very much. i think i'm seeing you tomorrow in washington, aren't i? >> reporter: yes, you are. looking forward to that. >> you'll be interviewing a college president there of purdue. >> reporter: i will.

mitch daniel, also the former governor of indiana. >> cmdc for capital exchange look forward to it my next guest says when it comes to google or facebook, negative headlines don't matter. he just initiated coverage on both stocks and tells us what makes them so teflon to investors. that's next. about medicare and 65, ysupplemental insurance. medicare is great, but it doesn't cover everything - only about 80% of your part b medicare costs,

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the house intelligence committee has just leased the final report in the investigation of president trump. the report states that it has found an unprecedented campaign of obstruction and impeachment inquiry and the report uncovered significant misconduct on the part of the president of the united states. members of the house intelligence committee are scheduled to vote on this report at 6:00 p.m. and send it over to the house judiciary committee which will be responsible for

drafting the formal article of impe impeachment. the house has released the final report it's over 200 pages long we'll bring you anymore information we find. back over to you >> thank you very much both facebook and google have been on the severing end of several congressional hearings over the past year on privacy, anti-trust, sensorship and more. investors may be willing to look past all that. joining us is mike olsen he just initiated coverage of facebook and google and sees substantial upsides for both mike, let's take them one at a time make your case for facebook and specifically address the regulatory issues that the company faces and may indeed face in the future >> actually i'm going to violate your rules a bit and talk a bit about how the key take aways for each of them that are similar. first and most important both companies are benefitting from

underlining secular tail end of ad shifting from offline to online both are in a position where recent spending is easing to some degree. then third, as you i lewded to having endured regulatory hurdles and headlines that are still ongoing to some degree but this is a situation where we think investors are more toll rant and a potential risk that go along with it the point is costs are coming down for both but strong line growth has remained and that is driving overall growth and both companies are seeing investors being around the regulatory headline >> can you quantify what the regulatory risk is what do you model? >> it's really hard to quantify it i would say the regulatory environment is certainly an ongoing risk for both facebook and alphabet but we believe investors have now become

somewhat numb to these headlines. the risk of the company being broken up or any sort of major additional signs still exist i think the widely held belief among investors is there's not much that can be done beyond what's already rumored out there and to some extent is factored in the stock >> we got about 45 seconds advertisers are spending likely in 2020 between the olympics and politics we'll spend more what have the companies been spending on because you say that spending will taper off or has >> facebook and google have been spending quite a bit on really capex to drive security growth and in general traffic acquisitions we have seen google have significant increase in their costs and 2018 declining a bit driving better cash flow growth

and for facebook we're seeing what was 50% capex growth last year looking more like it will be only around 10% this year that comes down significantly as well >> thanks very much. that does it for the exchange. i'll join melissa right now. welcome to power lunch stocks selling off president trump brushed off today's drop calling it peanuts. with the deadline now back in play, the semis are getting hit hard a top analyst joins us to discuss this later apple is the biggest drag on the dow falling more than 2% as investors question whether it will be exempt yet again from the tariffs. let's dig in to trade and the markets. we have thte