to answer her questions. i don't think a lot of these people want to live that life. >> and you are having dinner tonight with jack dorsey >> well, i was, but after i said that he is probably having a conversation with the board, we might just be going out to the taco truck. >> guys, it's been fun thanks so much "the exchange" begins now. welcome, everybody i'm tyler mathison here is what is ahead. a fed meeting, a trade deal, impeachment articles, a tariff deadline, a lot of headlines out of washington this hour. it has the market searching for direction. we'll tell how to play the volatility and there is something out there that may actually save the malls. we'll look at what it is or are maybe who it is and the names that could benefit plus an exclusive and rare look at you how the s.e.c. monitors

insider trader from their enforcement and forensics labs but we begin with today's markets and democrom chu >> it has been a whole lot of nothing in terms of what is happening right now, but there has been volatility intra day. you see here just about flat for the dow and the s&p and the nasdnaz up nasdaq up. but at one point, dow industrials down as much as 135. so not a lot, but trade headlines are moving the markets along. we're watching the financial secretarier to check out this particular etf that tracks financials again, flat for the day, but we are right now hovering at a level that is right near a 352 e high so decent move there and picking up steam and we'll end here on the stock of the day, autozone in the zone right now, you can see shares up 7%, one of the best performers in the s&p 500

the auto parts retailer coming out better than expected profits, sales and sales growth. so those shares have been on a steady climb throughout the year a lot of folks do it yourself when it comes to maintaining your cars. and we begin today with the latest on the trade and traf front. a lot to tell you about. kayla tausche is live following all the twists and turns >> after a suspenseful 24 hour, democrats in the white house reached a revised deal on usmca that will see the three countries assigned and the full house vote next week on the ground inspectors will report back. and the deal remove as 10 year period of exclusivity announcing generic competition sooner this is less than an hour after nancy pelosi announced two articles of impeachment against the president.

pelosi asked why support his deal >> i would say that we came a long way we fr what he originally proposed, what he originally proposed. tland are some people who said why make it looks like he has a victory. well, we are declaring victory for the american worker and what is in this agreement but he would never not any one of us is important enough is for us to hold up a phratrade agree that is important for american workers because of any of collateral benefit that might accrue to any one of us. >> the international trade commitment estimated a deal would ahead a third of a percent to gdp >> and what can you tell us on the tariffs that are supposed to go into effect on december 15? any smoke signals here at all? >> well, certainly the administration's official line has been that the tariffs where on until they aren't but there have been increasingly

bullish signals from administration officials just yesterday, secretary sonny perdue says it was his belief that they would not be impt p implementing the tariffs and larry kudlow said he could not confirm that they would be delayed as the "wall street journal" was reporting but that if there was enough progress, potentially a delay could happen >> all right, kayla, thank you very much. let's dive deeper into the possible tariffs delay agreement on the usmca and the market, joining us are chief investment officer from i said adviser ally arngts a, and co-hm wells fargo institute. and the managing director at capital alpha partners james, your thoughts on the possibility that the tariffs may be postponed december 15th

the possibility that there may be some kind of skinny deal or not. how are you handicapping it? >> well, i'm giving it about 50% odds that the tariffs are postponed, that we don't see a deal i think that the signals from the administration are pretty clear, also we're getting signals from the chinese side that they do not expect tariffs to take place. but there is also a lot of sign that the negotiations are slowing down so i think the most likely scenario is no tariff for the time being but also no trade deal they will probably postpone it untimg tl the beginning of next year and so no trade deal, but perhaps it is not such a big deal if we usmcadone and we also see u.s. and china trade stabilizes >> so no trade deal, no new tariffs, what do you think that will mean for the markets? >> i think really what matters is if we get those tariffs implemented or not, if the tariffs are implemented, i think

that you could see a big pull back in the market if not implemented, i think that is pretty good for the markets, probably they will drift higher. so a negative if they were implemented this weekend >> so james, obvious lid tly the december 15th tariffs would apply for a lot of goods but there were predecessor tariffs on a whole host of imports as well. do you expect that those tariffs will stay in place for the foreseeable future and is that the kind of new reset that you were describing in your first answer >> we actually have four lists of tariffs all the way up through list 4 a and xwchb. and i think december 15th is

likely to be suspended and i think it is whether or not the administration is willing to release the 4-a tariffs that took effect in september so it is that last round of tariffs that we're talking about possibly holding off on the december tariffs, possibly trading the september tariffs for some kind of ag focused trade deal but the others do stay in place. that is the new normal and they will stay in place until we get a more comprehensive trade deal >> and as our fixed income designate, put a big red ribbon on all of what you have heard and specifically my question is, if what james talks about does come to pass, and will some tariffs stay in place, what is the economic impact, does it slow the american economy such that the federal reserve might be more inclined to lower sbr

rates as we turn into twochb but may 2020 but maybe not tomorrow is this. >> i think status quo is just fine for the markets they can grind higher. only way the fed comes into play is if there is a meaningful increase in tariffs and that clearly i think would have the potential to slow the economy next year. >> so what is your forecast then for good ratinterest rate, basiy where they are now what are you saying? >> we look for a pause here. potential for the fed to come in next year and maybe fine tune a little bit, but we think lower not higher >> and chaert markets in to 20 uncertainty, but every year is uncertain uncertainty. there is brexit, 2r5i trade, int

rate, a possible impeachment would should i believe investors do >> you really want to see what will happen this weekend i think you have to look at all the good economic news the jobs nunl wmber was fantastc and all things being equal, economy is doing well, you want to stay in the market and not make any rash moves. but if things fall apart on trade, that would be a big risk. so continue do what you are doing and look for the opportunities. if there are pull backs, just stay the course and not make any rash moves based on what is happening in the near future >> all right thank you all very much. and a news alert in the bond mark market rick santelli is tracking the action >> and straight up 1:00 eastern, i give it a c-plus

this is at second time this these ten year notes have been up for auction first free opening yield, 1.842 right in the middle of the one issue market so a price tight 2.43 bid to cover, basically that is the ten auction average, 56.1, tyler on in-directs is just a smidge light. wae weakest since august but 19.4% on direct, so all the big institutions, pension funds, they lined up. the best since may of 2015 so we end up walking away with a c-plus tomorrow's 30 year bonds bonded a remember the 78 billion in supply settles on monday the 16th tax day as well. remember, tax day in september that caused the beginning of all the liquidity issues so we want to make sure your eyes on the scene when the

auction settles. >> all right, thank you very much and here is what else is ahead on "the exchange." coming up, an unlikely are warrior in the battle to save the dying malls. plus, a widely followed analyst cuts netflix to underperform and predicts big subscriber losses and old navy has a new partner when it comes to delivering your last minute holiday purchases. through the at&t network, edge-to-edge intelligence gives you the power to see every corner of your growing business. from managing inventory... to detecting and preventing threats... to scaling up your production. giving you a nice big edge over your competition.

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welcome back a new report out suggests that teens could be trading in time on their phones for time at the -- i don't believe this -- the mall next year diana olick is -- i don't know where she is it is an unusual place a mall in philadelphia where are you standing >> reporter: where else would i be i'm in a marshmallow pit with a quarter million fake marshmallows because where else would i go so apparently teens are coming back to the mall and developers are enticing them with this, but with more than just marshmallows this is candy topia, a sugar fun

house. and they sunk $400 million into redeveloping this downtown mall which has several instagramable art installations and a bowling theater. and teens say that they prefer shopping in actual stofs g gen z spending power increased and $460 billion in spending >> well, that is an amazing fact how are you read yourg noing yo is that on a blackberry? >> we were supposed to go to a sound bite, but that is -- >> that's what i thought >> but tell me about the awkward position you are how comfortable with those marshmallows >> they are putting in all this entertainment stuff to try to get kids to come into the mauld.

so you have this and they have candy art work and literally have seen 100 kids come through here in two month, 2 million potential shoppers here. the ceo says you have to reimagine what it is that you see as the retail mall and people will come >> and there is a place call american dream not far from where we are at headquarters here that is maybe the largest mall in the united states. but it is all about the experience >> but they don't have marsh mem mellows. >> no, but roller coasters and it is all about the experience diana, thank you very much streets not just reits looking to cash in on teen spending retailers also stand to gain from the mall renaissance if we can call it that with us now, susan anderson with b. riley fbr are malls making a comeback?

>> well, i think that it is still going to take a while. we still have to see a lot of rationalizati rationalization. but you look at the a mall, maybe the b mall, they are figuring out ways to get consumers back in the door and with the teen cohort thousand wanting to go to the stores, it could make it easier. >> and teens want experiences. and they like the social aspect of going out with their fellow teens. maybe bumping into others and hanging out, right because these places are not just shopping places they are dining places, they are places that you just go and have a few laughs >> yeah, correct and this is nothing new. we saw the rise of the mall back in the '80s and it was centered around the teen where it became a hangout for them and i think that that is coming back with the gen z generation

>> and what stores or brands are best positioned in this kind of environment to take advantage of the traffic that we're describing here? >> so we've actually seen some pretty decent performance out of the traditional teen brick and mortar retailers such as american eagle we see them as the best in class teen retailer and they have been comping positive they have the growth format area which is grows and they have been ahead of game in online penetration. so we think that they are best positioned to take advantage of the new ten consumen countrier >> does is it mean that the gen z folk won't be online shoppers or it is j a phaust a phase? >> i think both. they are the less likely to shop online, but in the stores they

utilize their phone a lot to check prices, to check trends, to text their friends a picture of what they want to buy so they are blentding t y are bo together >> all right thanks very much thank you do your time and this stock is crushing it, up 8% today and up nearly 60% so far this year despite a competitive market the name and what makes it stand out, ahead plus nike striking out with major league baseball fans after unveiling next year's uniforms they have the contract to make them and why the new design is causing such controversy when one student gets left behind, we all get left behind. this is a problem that affects each and every one of us. together with ibm, we created a whole new kind of school called p-tech. within six years, students can graduate with a high school diploma, a college degree, and a pathway to a competitive job. you know what's going up today? my poster. today, there are more than a hundred thousand

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designer brands is down. and they blame higher promotion and ships costs as well as tariffs for the shortfall there. shares of sanofi up more than 6% on news that the french drug maker plans to stop its research to prioritize treatments for cancer and other segments where it is performing well. shares of toll brothers down 3% despite a beat on the top and about the line and current order outlook that is above analysts they are caucus on margins including a sustained drag in high margin markets like

california.erera has an update and here is what is happening. house republicans reacting to democrats introducing two articles of impeachment against president trump. mccarthy continues to support the president. >> no, it is not difficult to defend this president. because this president did nothing that is impeachable. it is hard to defend democrats on how they are running this house and what they are doing inside their majority. that is the difficulty that i have sththousands of un r union activists marching for upcoming changes to the national retirement system. paris deploying thousand of police and ordering shops and restaurants closed along the march route. and there is a new e. coli outbreak linked to fresh express salad kits the outbreak has sick onlied eight people in minnesota, north

dakota and wisconsin, three have been hospitalized including one who developed a type of kidney failure. so check your refrigerator that is the news update. back to you. and here is what else is coming up. >> ahead, how stitch fix managed to stitch together big gains is netflix in for big subscriber losses in and a look inside the s.e.c. enforcement room and why the economist is calling 2020 judgment time. it is all coming up on "the exchange."

let's catch you up time for rapid fire. bill griffeth, rahel solomon and robert frank are here. shares of stitch fix jumping after beats estimates. the online personal styling service saw active clients saw 17% year over year revenue spiked 10% and the ceo talked about how it meets the needs of today's retail consumer >> i think the world wants a more personalize the offering.

the days of retail saying this is the it thing and everybody should giant it, those things are gone people backth want wa people want to be unique >> and the stock up nearly 60% >> however, i would take the other side of that trade because if you look deeper into the earnings report, cash flow has been cut in half operating income, did you see that number? down 99% >> cash flow down 46%. >> meaning that their expenses are going up, meaning the cost of acquisition of these customers is still going up and that can't last forever. >> they have also made a lot of investments this last year, they have expanded into their uk, expanding their kids and men's business but their direct to boouy offerings have worked. you pick five items and you can

decide if you wanted to buy something. based on the data, they are giving you 30 to 40 more options and they are seeing that it is really successful owe owes f-opl navy or something --e to you >> and they made no money. they expected a loss of six cents and they hit zero. >> and a lot of that is investment the abull case is they have what foubnd the promise way of retailing. the number of questions that they ask of their customers is data that most retailers would kill for and so the question is, can you scale that rapidly enough to start making money they are in the investment

phase, but if they are start scaling, they can start selling things that they are recommending and could be a great business >> still feel he s gimmicky to e you are applying science to an art. dressing yourself is an art, not a science. give me a reak >> and yet as a woman as millennial, the shopping experience is daunting i'll not a stitch fix consumer, but i can certainly understand the appeal of this, not having to shop but based on what i have shopped for in the past and based on my answers to certain questions ying me what i would probably like -- >> i bet the returns are high. >> don't you want to touch it, feel it, see what it looks like on you >> to be honest, no. >> really? >> let's move on to netflix. lowered after being downgraded

to underperformed. projects that they could lose up to 4 million sub skriscribers at faces competition. they recommend a lower option and also use ads basically making a case that they are getting undercut on price. >> please netflix did not do advertising. i mean, that is the number one, two and three reason that i subscribe to networks because we don't have to watch the ads. she is ask have a point about price, but i don't know that you would either not lose so many sub skri sub skriscribers or you would gn that much. i think the key is better kent >> and they are getting better content. they have golden globe nominations.

so i think it is interesting to hear the indicate that they should be cutting their prices as they are starting to gain in a credibility. >> if i were an investor, but i'm not, i would bet the jkky in this case. reed hastings is one smart dude and he has brought it back from the brink again and again and again. i'm not too worried about netflix. >> they weren't the red box, but you used to get -- >> started out like that >> and they were com complepetih blockbuster. remember them? don't miss the analyst yind tbed that bold call and then old navy teaming up with postmates they announced that it will offer free same day deliveries through postmates to online customers across 4,000 cities. it has been a rough year for old navy's parent company gap. the shares there down more than

30%. that in part is why they are making a move to separate -- >> after the stitch fix commentary, it this has your name written all over it you need yoga pants. >> they are just now announcing this deal? shouldn't we have known about this before black friday deals like a last minute that -- >> good idea >> maybe we can get it delivered on the same day. well, welcome to the 21st century. >> they need help and whether it is a solution or just a temporary band-aid every other day, it is $8.99 and will they pay that much for delivery same day? >> i think most of the things like flip-flop -- >> yeah, that is a t shirts.

>> too much choice for you >> i'm out >> let's go next up, shares you have -- -- oh, the pet supply chewy. they reported adjusted loss of 20 cents this will feel like the loved ones episode of survivor the pet care market booming. spen spending expected to hit a record this year and that would break the previo previous record. what do wethink here >> let's look at our children. >> whose picture is first? >> those are my knuckleheads that would be nick on the left and nora on the right. and, yes, for you old movie fan, nick and nora, the tin man

series >> and that is your, right >> that is my teddy bear sullivan he can see his the toy beside him which is from much everywhere >> did you get it from chewy >> no. >> we get his pet food from chewy but not his toyotas. >> and robert. >> wow, never enough. he is my only -- he is a bushy cat. he is the fabio of cats. great looking but not a lot stairs >> love that >> and here come our two cats. movie illusion here. my son was going through his spider man phase when we got these cats and the cat on the right at male peter parker and

the cat on the left is mj. >> allow do you tell them apart? >> you know, it is a long story. but you the one on the left once spent eight hours tucked under the hood of my car here. drove 18 miles and i'm hearing meowing. >> no wonder he is named after a super hero >> i pull over and i'm tearing it all apart and there is the cat's head and it is peeking out and a woman comes over to help me, i'm pulling and pulling and she is like a midwife and i'm giving birth to this cat. only thing that happened was she got a little burn on the top of her head so she has a white streak on the

top of her head. >> a tough cat >> any way, chewi didn't ischew is a nice company. and many baseball fans are outraged about the company's new designed jerseys for the m lclbt the new design will feature the nike swoosh on the right front shoulder some are accusing mlb of severaling out >> probably true >> nike is ruining baseball. >> the most arrest accident baseball fan that i know is mike santoli. i asked what do you think of this and he said he'd rather not this happen, especially on yankees jerseys which has been clean automatll these years but a good time to quote jerry seinfeld who says with plarts moving so often, you find

yourself rooting foot ye ining y so we're screaming about the laundry. >> it should be on the sleeve. >> i agree >> and the card ininal looks wed because it looks like a stick. >> even if they put it on the sleeve, twitter would still be -- >> they hate everything. >> i just fear that they are opening the do aor to something more so uniforms don't look like nascar drivers >> and this is what is -- obviously go to european soccer, it is all about whoever the sponsor is in the nba now, most teams have some sort of blaze on their journals >> and business news anchor, that is when >> yeah, sponsored by stitch fix. >> chewy >> folks thank, very much. that was all too much fun. >> glad your cat made it the s.e.c. recently announced it assessed more than

$4 billion in fines in 2019 and we'll get an inside look at where the action happens in the s.e.c.'s market can crap enforcement room tr - [spokesman] if you've tried college but never finished,

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. bob pisani is joining us with a look behind the curtains. >> and we look at the exchanges and suspicion activity is referred here. and so detenlgting i witextin dg is done here

and over two dozen chinese were sued for manipulating the stocks and it is not jufraud. there are sdechare dozens of act are reporting false or inaccurate financial information. if you look at the last fiscal year, for example facebook in which they paid $100 million penalty against nissan, an action against chrysler and also volkswagen >> and there were cases on fraud and digital assets and unlawful icos 95 investment 23irfirms were fo to pay to murnl fumutual fund is and they get involved in cybersecurity issues and they forced them to pay a

$15 million fine because they weren't doing adequate financial risk management and systems security so there is a lot plate. and they got judgments and orders totaling more than 4.3 in penalties. and coming up, in the next hour, s.e.c. chair jay clayton will speak with us on his efforts to protect retail investors, and we'll go inside the forensics lab, the most highly secure room where they take apart the cellphones abtsd computers that they have seized from people and they basically try to reconstruct exactly what they have been doing. fascinating look and they have given us access to it today. we'll show some of you to you later on >> what are the for hlks behindu looking at

>> what is happening is the actual -- again, the daily monitoring of the trading activity takes place generally at the exchanges and finra and that is where the actual investigations occur here people come in and actually do basic research and monitor g stock trading. and not necessarily anything secure, they just come in here and have conference rooms, meetings around things that they are investigating. so, yes, they are not actually accessing direct trading from us right here, this is more investigating around us in the immediate area >> and i'm interested to here what commissioner clayton thinking of the race to the bottom in trading costs and fees both in the mutual fund world where expense ratios are coming

down to xi he rzero and some ara r. and where more and more are going to online trading and what the fuultimate effect is >> and it is not an enforcement issue, but they have been very involved in telling individuals that are out there about their responses in terms of disclosure of information for example so there have been enforcement actions against mutual funds for charging excessive fees for example, enforcement actions against registered investment advisers for not disclosing the fact that they are taking fees from clients or other businesses that they are not disclosing to their clients. so you charge a client for having a portfolio of mutual funds or etfs, but you don't disclose, you are getting money back from the mutual funds that could offset your costs overall.

there are a lot of things they are involved in every day about protecting investors that you don't normally see and i know people complain all the time about being charged excessive fees by mutual funds for example or their financial adviser churning their account around where they charge commissions for trading that isn't really necessary this is something clayton is really big on and reducing the incidents of that kind of abuse of retail investors. >> and we look forward to hearing more from him and you next hour. thanks, bob. and millennials may soon be in sticker shock. we'll explain why next when it comes to your customers' expectations, there's one thing you can be sure of. they're changing by the nanosecond.

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coupler te econsumer tech h operates at a distouiscount butt may be a soon of the past and why millennials may have to pay more kate >> and good to see you so investors now have a new vie on what it means to being ipo ready. and we heard there is a renewed

focus on profit ability and unit economics, not just user growth. analysts say some of the discounts for things like food delivery will go away and companies will have to raise prices to get better margins and consumers really you can't sustain a business model that isn't profitable you can spend to get customers but at some point you've got to turn those customers into profitable customers >> absolutely. we saw this with netflix it was an example thattagists kept coming back to.

they have been able to raise prices and it helped their stock. people said that's an example of a winner there's also going to be some losers here. maybe on the consolidation side we saw with jordach. those are the two trends >> we got a news alert for you on netflix julia has it if irishmen has been watched by 26.4 million accounts since the film started streaming two weeks ago. he projected the film will be watched by 40 million accounts in its first four weeks on the service. it counts as completing 70% of a film and an account could include more than one person likely includes a whole family

pretty dramatic there. we previously reported the nielsen numbers. this season an official number from netflix they will be giving more transparency about viewers going forward. >> if my son who was just watching the irishmen yesterday on his computer watches it, that's one view. if i go on and watch it with my wife, joe, is that a separate second view? >> no. that is per account. as long as someone in your household has viewed 70% of the movie then netflix is counting that as a view it's possible that many, many more people in the 26.4 million people have watched it they really care about those accounts because that will indicate whether or not a subscriber like yourself

considers this a valuable piece of con tent tent on the platform these movies like the irishmen that cost about 200 million dollar to make are about getting subscribers. from the rise of the young 'lgegearorpos. f srt wel t a look at the economist view of the world, next yeah, and he wanted someone to help out with chores. so, we got jean-pierre. but one thing we could both agree on was getting geico to help with renters insurance. ♪ yeah, geico did make it easy to switch and save. ♪ oh no. there's a wall there now. that's too bad. visit geico.com and see how easy saving on renters insurance can be. "um houston, we've had a problem" it's human nature to hate problems. but why is that? problems inspire us to re-write the rule books.

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the economists is out with its world view ahead the latest edition identifies 12 key themes for 2020, touching on u.s. election, the unstoppable baby boomers and more. here is daniel franklin. good to see you. great to see you >> good to be with you >> let's go flu a couple of your items. refer the magazine for more. economies globally will wrestle with negativity. >> one is the general slowing down it's a very difficult picture

around the world india, kmie that and emerchina g markets. my own country is having slow growth you can take out a loan and pay back less a t tend t the end ofn the beginning. that's hard for banks. europe will be finding it hard to keep profitability in the financial sector >> sustain blability will be al the rage i assume you're referring to the growing push among investors and corporate constituencies to behave for reasonably. >> i think that pressure is very

palpab palpable you feel it saying it's no longer just about share holder value. it's about responsible husbandry. it's one thing to make these statements about being, doing good and having targets to sustainability it's another to have results and especially when period of times start to get squeezed but the shareholders get fussy in the long term risk management takes it into account. >> maybe half a cheer for skepticism in your answer there. people turning 65 next year

really the heart of the baby boom the people between 65 and 75, that demographic block will determine a lot of what happened >> i think it's a useful reminder people talk about millennials or generation x or z or other generations don't forget the boomers this is the age they would be retired. they want to be active they are big consumers of air travel and other tourism there they are very fussy about all sorts of eras. they will be disrupting markets. >> judgment time the economists figures through a.i. work that trump will use in

2020 >> i don't think it's the economists that reckon that but that's what the a.i. said. >> brexit will leave great britain divided and under disunity that would be fairly simple to think through. thanks so much we appreciate it >> thank you that does it for the exchange power lunch begins instantly >> here is what's at 2:00 on power lunch today. the usmca deal ready to be signed on the dotted line. the next round of tariffs will be delayed we'll tell you what that means for market it's going from bad to worse for boeing later, an exclus ifr interviinte -- exclusive interview with