josh brown. >> store capital. >> megan. >> industrials. >> john. >> kkr. >> okay. and joey. >> domino's pizza. >> good weekend, everybody all of you as well stocks off their lows right now. "the exchange" begins now. thanks very much, scott. welcome to "the exchange." i'm dom chu. a developing story as the united states kills a top iranian general in an air strike what happens next? and what could the retaliation be markets rattled by the news overseas but should you be making moves in your portfolio or just stay the course? >> and an exclusive interview, dallas fed president on the fed's next moves he is a big one there. he's a voting member on the fed this year. but let's get right to our top story. all right. the u.s. killing iran's top commander. general qasem soleimani in an air strike in baghdad.

soleimani has been a key figure in middle east politics and iranian politics for some time and some have considered him the country's most powerful military commander. his death exacerbating what's already been high tensions between the iran and the united states here. the department of defense saying the general soleimani was actively developing plans to attack american service members and diplomats throughout the region in response, the iranian foreign minister called the strike an act of terrorism and, quote, an extremely dangerous and foolish escalation stocks and the oil markets reacting to the news with oil shooting higher and stocks moving to the downside but again, off their lows of the day. for more on those moves today, let's bring in bob pisani at the new york stock exchange. bob, we'll start with you. >> and the low print was right at the open. and i mean right at 9:30 let's just take a look at the major indexes. we went down as much as 368 points on the dow industrials.

if you notice, we have cut that more than in half. same with the s&p 500. also, with the nasdaq. yes, we saw the big cyclical names, big 3m, caterpillar for example, weak at the open. and what happened to that oil rally? some of the big global oil names are now negative on the day like exxon mobil. defense stocks have held up throughout the day near the highs. lockheed martin, historic highs. airlines are down but not as much as you might think. they, too, are off of their lows that's something i point out all the time cost for oil and for these airlines is much, much lower than it used to be used to be 20, 25% fuel cost now, maybe 10 or 15% labor is the most expensive part of running an airline along with a number of other expenses like parts, labor, airport fees, et cetera. >> bob, thank you very much. oil jumping sharply following news of that u.s. air strike ha killed iran's top military commander in baghdad, iraq

you can see the spike right there in the 8:00 p.m. hour last night when that news broke right now, oil is up more than 2% it's off the highs of the session. seema mody joins me now with more on the repercussions in the energy sector and seema, it's been interesting because these moves have now tempered a bit as the hours have carried on. >> exactly right oil prices are up over 4%, which would have been the highest level since september when that saudiattack took place but now the world awaits iran's next move as you were pointing out, qasem soleimani, a key architect in military operations in the country. widely seen as one of the most powerful military leaders. and foreign policy analysts say it's this type of context that is important to understand when trying to gage or measure the type of response we could see from iran. now, the energy market is most concerned about the strait of hormuz iran possibly taking aim at this critical passageway. average 21 million barrels of oil flows through this channel every day. and iran, in the past, has taken

aim at this channel. so that, of course, is something that the energy market is watching very closely. another possible plan, lot of foreign policy analysts are saying this morning, is iran's role in iraq worth noting iraq is the fifth largest producer of oil already. and it has a couple of key bases, specifically in the south. analysts saying this morning that if the iranians attack iraq's production of oil in the southern tip, that could result in oil prices shooting up to $80 a barrel dom. >> all right so just to kind of follow up on this we talk about the possible retaliation points here. is it that the markets right now seem to be waiting for what that next step could be and that's why the moves are so tempered the way they are right now? >> absolutely. this is one of the most consequential assassinations in middle east history in recent years at least so now, the question is how does iran respond and retaliate either look to the strait of hormuz or iraq's oil production. but others saying there are certainly other ways that they can retaliate.

whether it's the hezbollah in israel, syria, tensions in afghanistan. so a lot is on the plate here. >> we're going to be diving into much more throughout the course of this hour with a lot of experts. seema mody, thank you very much for that well, the president responding to the killing of general soleimani on twitter, eamon javers is live. >> eamon. >> that's right. couple developments here in washington to bring you up to speed on the pentagon now saying elements of the 82nd airborne are going to the region. about 3,500 more troops sent into the middle east also, here in washington, in the senate, mitch mcconnell taking to the senate floor to support the president's actions against this iranian general in baghdad. and also, saying that the administration is arranging a classified briefing for all senators early next week not today, necessarily, but early next week. and all senators will have access to that information at that point meanwhile, the president, as you

point out, taking to twitter today with pair of arguments a couple of pair of tweets first one directed at the people of iraq. the president making the case really in the first set of tweets that the people of iraq don't want to be dominated by iran and, therefore, they should support the action that he's taken of taking out a key iranian general who was in baghdad. clearly, operating in baghdad. although, we don't know exactly what he was working on at the time of the strike last night. and also, in another pair of tweets, the president making the case that the iranian people themselves don't love qasem soleimani as much as their leadership might like people to believe. today, the president suggesting on twitter that he believes, anyway, that the iranian people themselves might be a little bit more relieved about this attack than the leadership of iran is letting on so the president sort of giving a sense of how he wants people in the region to perceive what happened last night. and we'll see whether we get any

response from the iranian side today or any additional statements from the president. we will see him later on this afternoon in florida at a pre-scheduled event. dom. >> thanks to eamon javers. so how will developments impact u.s. relations in the middle east joining us now on the phone, retired army colonel jack jacobs and joining us from washington, d.c., charles, senior fellow at the counsel on foreign relations. colonel, we will start with you first as we talk about this situation developing how critical is it and how important is it for the u.s. to get the situation resolved is iran that big of a threat >> well, iran's always been a big threat not just to us but to everybody else in the middle east. soleimani's been operating more or less with impunity for decades. and the countries in the middle east are not particularly sbr enthralled with the idea of iran

projecting its influence as it has been since the united states has decided to leave the area. they're not happy with that. having said that, what everybody in the region is most concerned about is a lack of stability stability's not something that one finds in the middle east very often and now, it's even more unstable the -- the situation, if it does escalate, is not going to escalate any place except in the middle east and this concerns everybody there. so when you use the military instrument of power, as we have, even in one incident like this, it's very important to coordinate it with the other instruments of power we don't do that very well we've used economic instruments. they haven't worked very well. we don't have very much patience as it turns out. but they haven't worked very well we've used diplomatic instruments. they haven't worked very well. what we haven't done is to coordinate all of that and to do

that, we need a strategy i don't think anybody is convinced that the administration actually has a mid to long-term strategy for how things are supposed to go in the middle east. and how we're supposed to operate in it. >> so, colonel, that brings up an excellent point i want to turn now to charles because i want to talk about the strategy the colonel seems to think there may not be one in place. but what should, charles, the strategy be given what we've already seen given that the strike has already happened, what are the next steps and how can we find of put that decision tree in play and in process? what are the next steps here >> well, the colonel's right it doesn't look like the trump administration had a clear strategy i think the best sign of that is that the escalation went from zero to 60 overnight right? what we probably would have preferred to see is a graduated escalation not going for someone with the notoriety, with the power of

soleimani. and now, in some ways, the iranians are going to be forced to retaliate i'm less concerned about war between iran and the united states because i don't think that either the trump administration or the iranian regime wants that. but i do think that in iraq, where we have thousands of troops, in other countries in the region, the iranians can do us a lot of harm the iranians have a lot of influence in iraq. so i think the next step is to try to open a corridor of communication to the iranians. and to prevent this from a tit for tat escalation in which we were hurdling forward and get a war that at this point i don't think either side wants. and the colonel's right. we need to marry our diplomatic engagement with iran with our economic sanctions with our military pressure. right now, those three prongs of strategy are not integrated. >> so -- so -- so an interesting

point being brought up here. you have to figure the state department is looking to try to deescalate things. colonel, i'll turn back to you we know there are a number of u.s. assets in the gulf region just as charles has pointed out. in the hypothetical scenario where we do have some kind of planned retaliation from iran, what exactly could we expect to see in terms of targets, possible targets, that iran would look to go after as a proportional response to what happened with soleimani? >> well, one has to start with the assumption that charles brought up and that nobody actually wants a war in the middle east between the united states and -- and iran not the least of whom is iran because they would -- things would turn out very badly for them so if you start with that assumption, you can expect to see small attacks, relatively small attacks, the type we've already seen and not directly by iran but instead by iran's proxies.

attacks on shipping, perhaps hezbollah attacking areas. we see rockets go into forward operating bases. american allied forward operating bases. probably going to see more of that what you're probably not going to see are -- is a large-scale attack of some kind on an american installation. that's unlikely to happen. precisely because they don't -- i think iran does not necessarily want to be associated directly with the kind of -- the kind of response that would engender a massive american -- >> sure. >> i don't think they want it. >> all right charles, just a few moments left here the last word to you what is the likelihood the u.s. gets drawn into a full-scale assault and war, conventionally, with iran? >> i think it's pretty low likelihood i don't think the president wants that he promised his base that we're going to be pulling out of the middle east, not getting in deeper

and so i think he's going to instruct the people around him to try to turn down the heat, not turn up the heat but this was a move that has a certain reckless quality to it things can unfold in ways that the president doesn't want so i do think these next few days are critical. i agree with the colonel the iranians are likely to continue to go after relatively low-level assets the united states should try to keep the lid on this because, as i said, things could rapidly spin out of control if the u.s. and iran start turning up the heat in a it for tat way. >> all right ternl ja colonel jack jacobs. thank you for those thoughts meanwhile, the middle east turmoil is dragging down the markets but not as much as you would think. we started the day down nearly 400 points in the dow. but now, we're down just half a percent. if anesq escalation like this c' shake the markets, can anything shake the markets at this point? for more, let's bring in craig,

ceo of columbus macro. also, chris, chief investment officer for the independent advisor alliance and perhaps we'll say, craig, and start with you this was so interesting to me because even when i saw the headlines and i saw the market reaction, i thought to myself initially, why isn't the market down more? why isn't the market down more >> something i think people expected a more volatile geopolitical year because of the sanctions in iran are really starting to take a bite on the regime and they are sort of acting out. this was a preemptive move but i think the conditions are still in place, right? we don't have the same like we had last year in the sense first half of election years tend to be volatile. and we're not going to have the fed switching on a dime. but still slow and steady economy. fed is buying short-dated treasuries wages are growing faster than inflation. and you still have the china trade deal by doing it in phases, you have a phase one deal, which was pretty modest. but the fact that nobody could get too bearish because by doing it in phases, you can still roll

out good news in the future. so the conditions have pushed us higher last year are still in place today. >> all right chris, does this kind of given you some comfort then? this idea now that markets and investors and traders aren't reacting, you know, violently one way or the other given this news and is this, in your mind, a change in market regime? or just more noise that investors should kind of gloss over because the fundamentals in the u.s. and globally are still somewhat intact. >> well, i would say it's probably the latter. if you really look at the regime change, that change happened last year when the fed went from tightening to easing and so we're still in easy money regime the economy is still doing well. we are seeing it move along at a pretty good pace you are seeing consumer confidence is high and spending has followed that so really, everything's in place for the market to keep moving higher however, you do have those geopolitical risks and what happened last night is just one example of that so whether it's iran, whether it's north korea, there is always going to be risks to the market and if things were to spiral out of control and really ratchet up higher as the former guests were

saying, then you may want to reassess but in light of everything we've seen so far, based on this action and some possible iran counterreactions, for the most part, really the underpinnings are still positive i think that's why the market is being pretty resilient to what would otherwise be a somewhat upsetting and surprising move in other market regimes. >> chris, just to follow up on that then where would you be looking to invest? is the energy complex still attractive is it technology that's been a leadership group for a while now? where do you go? and where do you stay away from? >> i think if you look at what just happened recently, the knee jerk reaction is to move into energy i would actually caution the opposite and i would really say you want to look at what's been working and what's likely to continue working throughout the year in the absence of some really big change so i do believe if you look at technology where you've got semiconductors that have been doing well up until recently but have a lot of legs behind them you look at within industrials, there is the industrial conglomerates, as well as looking within financials. i think those larger banks, those larger investment banks

should be resilient. today's a day where all those sectors have been down and it could be an opportunity to really position yourself for the rest of the year i wouldn't let last night's events dictate what you do for all of 2020. i think for now this is a short-term story. >> craig, quick last word to you. is this a situation where the u.s. is still the most attractive market in the world >> well, i actually think the greater opportunity lies outside the u.s. look at china where the regime is going to be celebrating 2021 it's going to be celebrating the 100th anniversary of the party you saw the triple r cut outside the u.s. in the emerging world, central banks have been more aggressive. and i think actually see a catch-up trade in emerging or even in europe relative to the u.s. >> all right craig columbus, chris, thank you very much for those thoughts on the market given this situation. appreciate it. well, the next fed meeting is scheduled for the end of this month and the question is whether or not rising geopolitical tensions could become a factor in the fed's decision-making process on interest rates

for that, let's go live to san diego, california, where steve leesenm le liesman is standing by with dallas fed president robert caplin steve, over to you. >> thanks very much. thanks very much for joining us today. interesting day for you to be here one of your specialties, one of the areas of expertise at the dallas fed is our oil prices what do you make of the muted reaction or the reaction to the oil market to what's happened with iran and in iraq? >> i mean, it's -- it's notable. i think you would have gotten a different reaction ten years ago. certainly, 20 years ago and i think it's indicative of united states now producing 12 million barrels a day. where we rival russia and saudi arabia in terms of energy production we're much more energy self-sufficient. so because of that, you'll see these events in middle east, they'll have an effect but it's going to be more muted than we might have seen historically. >> what kind of reaction do you see in the oil market to get some kind of reaction overall

economic growth in the united states >> how would -- how will it -- >> how big a reaction? in other words, a couple bucks isn't going to move. >> and it's interesting, again, this is different than 10 or 20 years ago. we have done a lot of work on this 10 or 20 years ago, if oil prices went up, it hurt the consumer we were a net importer so it was net negative for gdp now, because we produce so much of our own oil, it helps producers. it still hurts consumers we're also a more energy-efficient economy we're less energy sensitive. and so we think the effect, even if you had a five or ten dollars up, is going to be more balanced it's not going to be material in the way it might've been historically and it's a little bit more uncertain whether it's actually positive or negative it's more balanced. >> beyond the impact on oil, there's just an uncertainty factor that comes along with what's going on in the middle east right now how does that fold into your economic outlook along with the

other uncertainties that are out there? >> so we know global growth going into this year has been weak we know manufacturing's been week and trade uncertainty's been an issue. business fixed investment mainly due to uncertainty has been sluggish so to the extent you've got global uncertainty, we still think it weighs somewhat on business fixed investment and manufacturing. but still, because the consumer's strong and we still expect some stabilization, we still think we can grow 2, 2 and a quarter percent in 2020. >> is it your expectation the consumer rye mains strong through 2020 >> yeah, it is still i think you'd have to see more severe weakness in global growth, manufacturing, business fixed investment weaker than what we've seen and what we expect to spread to other parts of the economy i don't see that i think we'll have a year of solid growth. >> let's leap from that to your views on the overall outlook for 2020 along with what you think policy ought to do. >> well, on the fed funds rate, as you and i have discussed, i don't think we should be making any moves at this point on the

fed funds rate obviously, keep revisiting that as the year goes on. for me, the issue will be now that we've gotten through yearend in terms of the repo market, i'm sure we'll have some significant debates in the early part of this year about the size and trajectory of the fed balance sheet. >> let me follow up on that. september, you began to reverse course you had been cutting -- reducing the size of the balance sheet. then you started growing it. should you continue to grow it the way it's been growing along with the economy or is it time to reduce? >> there have been two parts to the growth one is buying 60 billion of treasury bills a month and we've said we'll do that until the spring the second part of the balance sheet growth has been these daily and term repo operations those will, hopefully, run off and the debate i'm suggesting we need to have is as we wind up these planned 60 billion a month

of treasury purchases, what do we do next and what do i mean by that should we have a standing repo facility which might, in fact, let us slow down or curtail the treasury bill purchases. >> what's your take on that some. >> i think we need to debate it. i haven't come to a conclusion but i -- i want to -- my objective for policy should be that we -- we have the smallest possible balance sheet in an ample reserves regime. which means i'm sensitive to growth in the balance sheet. i think we needed to do this in light of the repo volatility and we've done the right thing heading through yearend. but now that we've gotten past yearend, i want to find ways to grow the balance sheet more slowly that would be my objective i'm sure there will be disagreement about that. but that's what i'd be advocating. >> i just want to do one more question here. you're going to be a voter this year you can't stay on hold forever you're going to go one way or the other. if you had to guess now, which direction would be the next move >> too early to guess. on the one hand, i told you, i

expect solid growth this year. 2, 2 and a quarter percent on the other hand, we've got still trade uncertainty. we've got weak manufacturing, as we saw today and so i think it's just too soon for me to say and i'll have a more refined answer to that question maybe as we get two or three months into the year but at the moment, i'd stay agnostic. >> what about inflation? some of your colleagues are more worked up about the issue of not hitting your inflation target. do you think it's something that ought to prompt the fed to act if you continue this year to not make your 2% target? >> i am also, as you say, worked up about not hitting our inflation target but there are other factors that i also want to consider. and so i'd be -- i'd be supportive of maybe a longer averaging period or other things we can do to make it more humph to meeting our target. having said that, i'm also worried about excesses in balances building into the

economy. and i also think it's critical that fed policy is forward looking, not backward looking. so even if we extend the averaging period, which i'm supportive of, that's an analytic it doesn't mean when we get to making decisions, that i won't want to take into account other factors that are forward looking. but i would be willing to let inflation run for a time above our 2% target. i'd be supportive of that. but it's subject to what's going on with other factors, including financial stability and excesses in balances. >> thanks for joining us. >> back to you guys. >> our own steve liesman we appreciate it coming up on the show, l brands getting a lot of love from wall street today what's changed for that battered retailer that's coming up ahead plus, as the u.s. braces for retaliation from iran, a look at how real a cyberthreat is and what institutions and infrastructu infrastructure could become primary targets. do don't go anywhere "the exchange" is back in just

two minutes. >> deeper data at cnbc the restaurant performance index rose to an eight-month high in november the rise was driven by higher same-story same-store sales and growing customer traffic levels.

welcome back to "the exchange." markets right now as you can see there, the dow off by just about 162 points the s&p off by about 13. and the nasdaq down by about 38

points by the way, right near session highs for the day so far so a far cry from where we were just after opening bell. let's check out movers this hour shares of general motors down 2% following disappointing sales in the fourth quarter with trucks and suvs seeing biggest declines but a different story for tesla with deliveries coming in ahead of consensus at a record 112,000 in the first quarter that brings the total to 367,000 and change for all of 2019 which is in line with guidance from the company that stock is up more than 3% as a result now, let's send it over to sue herera who's got a cnbc news update. >> indeed i do, thanks very much here's what's happening at this hour, everyone china's ambassador to the united nations says his country is opposed to the use of force in international relations he made the comments at the united nations after a reporter asked if the u.s. strike, which killed iran's top general, was a violation of the u.n. charter.

>> we are paying close attention to the situation and americans' use of force in international relations and the sovereignty and territorial -- of iraq should be fully respected. a man armed with a knife rampaged through a paris park attacking passersby seemingly at random he killed one person and injured two others before police shot him dead the man's motives were not immediately clear. and here at home, according to the latest data from the cdc, 37 states are now reporting high flu activity that's an increase from 28 states the week before over 6 million people have come down with the flu so far this season and 55,000 had to be hospitalized nearly 3,000 people have died. you are up to date that's the news update at this hour dom, back to you. >> all right

sue herera, thank you very much for that here is what else is coming up on "the exchange." >> ahead, the love for apple continues and continues. an unloved retailer gets a big confidence boost from wall street and falling prices, rising inventory, and big discounts not the words you want to hear about your city's real estate. it's all coming up on "the exchange." find the best instructors in the world, and tie it all together with a world-class software experience. we ended up creating, as you all know, so much more. peloton is truly a category of one and we're just getting started. now, let's do this. together, we are going further than we ever thought possible. ...it's almost like a mywchallenge everyday to seeey. how well i can eat and still enjoy myself all day long.

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all right. folks. let's catch you up on a few stories. here with their takes, kate rogersment also, robert frank and courtney reagan as well. this all-star line up is going to be weighing in first on apple. kicking off 2020 with two big price target hikes but let's look at where the stock was just one year ago because it was this day, this day one year ago, january 3rd, 2019, the stock fell to 142 bucks a share. having its worst day in six years. fast forward to yesterday when shares closed above $300 a piece for a total return of 112% over that one-year span now, bank of america and rbc capital boosting their targets

to 330 bucks a share a piece apple, the juggernaut. it was given up for maybe dead not really but, courtney, this is a big deal in a time when the american consumer continues to not just buy iphones but just about everything else apple has to sell. >> and remember when we were so scared apple was really going to get caught in the cross hairs of this trade war and they have managed it well. whether it's tim cook's management with the white house. the supply chain a combination of the two things. the stock run is pretty unbelievable and it feels like you can't have a rally unless apple participates in that the stock chart is really impressive particularly, at the end of the year and so i think these price target heights are probably just some of more to come in the airpods. one of the most popular items. exactly. multiple months backlog i think of that new one now. one of the highest items this christmas. so really reigniting the wearables category. >> i remember. robert, when that revenue forecast downgrade happened last year with apple. i kept thinking to myself, oh my

god. this is the beginning. it's nokia and ericsson all over again. and it couldn't be anything further from the truth right? >> yeah. no i mean, just in the past month, they've gained $180 billion in market cap and what have they announced nothing. nothing. and even these analyst reports, you look at them today and i was trying to find something that was new. and there -- you know, we did some scraping of twitter and found that mentions of the apple iphone, of the iphone 11 were pretty good. okay but -- but -- so there's really nothing levitating this stock except for apple is still apple. people love their stuff. >> i got a question for you. a pointed question for you are you going to buy an apple? a new iphone this year because of the rollout of 5g wireless? because that's what everyone is waiting for, right >> no, i don't think i will. my phones just shut off and i need one for a long time now i keep telling myself i'll wait because i'm always waiting for a better camera. i'm not as concerned with 5g but the camera is supposed to be amazing on this. what i was thinking about the

social media mentions is that i think that camera matters so much more now than it ever has before because of social media and how much emphasis people put on amazing photos for online profiles while it may seem silly, i do think it -- >> mine just got paid off on the installments. >> the only reason why i bought -- >> wow. >> you guys all know that i had a 6 for the longest time i didn't want to upgrade but finally, was convinced by one of our assistant managing editors that i'm doing my child a disservice by not taking good photos. >> you can't take a bad photo of her. she's too cute. >> and the battery probably didn't work, right >> yeah. mine keeps dying. >> moving on from apple here next, we got the battle over l brands first up, bank of america upgrading stock from a buy to a neutral saying the company has multiple options to create value. boosting the stock more than 8% as you can see there in the chart. in just the last hour, this is pretty funny

jeffrey's analyst out with a note telling their clients shares are out on a competitor's upgrade and to now use today's rally to exit those l brands positions. >> come back and say it's even more attractive. >> exactly. >> it is pretty rare to see that back and forth but when you look at the l brands business, they've got victoria's secret and bath and body works we don't really need to belabor the point that victoria's secret has been through its share of struggles. they exited the swim business, which in behihindsight looks lii was a mistake. bath and body works on the other hand is still very popular anecdotally, i saw more bath and body works bags on black friday than anyone else had a very busy store. people are still really into bath and body works. and l brands has a very good history of spinning out companies at the right points. even when it doesn't feel like it for the market, when you look back i don't know what that means here but i think there is some interesting analyst diverging views at a point when the stock -- >> kate, are you a shopper

would you shop there >> so i was -- i was shocked about bath and body works still being so popular i had absolutely no idea but i'm so curious, court, just about the turnaround i know one of the things they've struggled with is this inclusivity thing they've cancelled the fashion show is that a brand you can rehab? what happens next? >> i have an interesting way of thinking about this. i think you could rehab the brand. but i actually think that a brand is allowed to be what a brand wants to be. and i actually don't think that it is necessarily wrong if they decide they want to be sexy. i know that may not be popular. >> unless it's just not profitable anymore. >> absolutely. >> look at the aerie business. like, they have done amazing because they did the exact opposite so i'm just curious. >> i guess my point is i think you can find success in one or the other and i think they need to figure out which way they're going to go because right now, it seems like they might be trying to straddle both and i don't think that works. >> so speaking of trying to figure out where they are going

to go, let's talk about topic three because it's new york. making a new name for itself as the city that never sells. believe it or not. the average sale price in the fourth quarter for real estate in new york fell 8% to $1.8 million that marks new york city's eighth straight quarter of declines robert, could this year be any different? >> no. >> or is this just a stalling out of manhattan values in general? >> it's one of the great paradoxes of our time where we have a record-high stock market except for today is a little softer but we have incredible economy we have all these tech companies moving to new york city. everyone's working all these tech companies are hiring people, adding space. this should be boom time for real estate and it's now two years straight if you look at the supply of new development, there is a six-year supply of new condos in new york city now so you look at that supply and 2,000 more condos coming on the market this year prices going down 8 prsz ju% juh quarter. maybe it will turn around or stabilize at some point. but the numbers suggest it's not

going to be in 2020. >> what is the biggest driver of that weakness, robt rt >> it's really two things. it's the tax issue the mansion tax they just added in new york city and it's the fact that you don't have foreign buyers and there was so much supply at the top. giant, new luxury condos priced at 8, $10,000 a square foot. so it's oversupply and taxes. >> but the high end is still selling, right >> no. i see a penthouse going for like $100 million or something like that. >> so we had a spade of deals that were at the very high end because those went into contract four years ago now, the buildings are done so those are actually deals that are sort of tracers from the past but if you look at what's on the market now, the top sales above $5 million were down 40%. >> wow. >> in the quarter. so the top is hurting. >> all right big deal for new york real estate now, finally, this is an interesting one. only because it's the new year brewers, alcoholic brewers, are starting to embrace dry january

as a concept looking to cash in on the growing sober-curious movement i know this is something. apparently, this is something. look at that graphic volumes in the u.s. for beer are falling 1.6% in 2018 the fifth fastest-growing type of beer is no and low-alcohol beer discuss. >> can i -- i have thoughts. >> okay. >> so i did a whole 30 last january and i'm going to do it again this january. >> explain what that is. >> you basically deprive yourself of everything but you sleep really well. your energy's great. you have no sugar. no dairy no alcohol. >> you're starving. >> so i did a dry january. no, you can eat a lot. you can eat a lot but it's all whole, nutritious foods. kind of like a reset detox thing. you can't drink on it. i would never think to buy a non-alcoholic beer because what's the point no i don't enjoy the taste that much to be honest. >> it's like acoustic metallica.

you just don't want it and, you know, beer just doesn't taste great. that's why we've seen so many people go to the spiked seltzers and all the things that actually taste okay this is the worst of both worlds you get the taste of beer without a buzz. >> yeah. >> i mean, courtney, you're -- you're a good, wholesome, midwestern girl. >> beer drinker. >> just say it. >> you're a beer drinker i mean, does it resonate with you at all this idea that you want all of the benefit of taste but none of the buzz or the calories? >> i'm sorry i don't get it to each his own. but like, i want a full, real beer none of this dry-ish january i understand there's some marketing campaigns by some of these beer makers to try to go dry-ish because it's low calorie. all right. fine low calorie, fine. but alcohol's got to be there. it's kind of part of the reason. >> let's end this here your drink of choice alcoholic. >> corona. >> scotch. >> your drink of choice. >> rose. >> all right wine, beer, and liquor all

together at once kate rogers. robert frank courtney reagan. happy friday. >> happy friday. >> thanks, guys. >> stocks falling after the u.s. air strike in iraq but one asset is climbing on the news and it's not gold we'll tell you what it is. that's coming up next. ♪ limu emu & doug

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so you only pay for what you need. and now we need to get back to work. [ applause and band playing ] only pay for what you need. ♪ liberty. liberty. liberty. liberty. ♪ exchange." there is gold as a safe haven and then there's bit coin. the cryptocurrency jumping 4% in the wake of that u.s. air strike that killed iran's top military commander. now trading up more than 6% there for bit coin prices. that marks a sharp turnaround following a tumultuous six months where bit coin had dropped below the 7,000 mark it does again. continue to just hover around 7352 right now coming up, secretary of state mike pompeo telling his foreign relations counterparts the u.s. is committed to deescalation in the middle east. what both the u.s. allies and adversaries have to say about last night's air strike. that's coming up next.

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well, president trump defending the air strike in baghdad which killed iranian general qasem soleimani. the president said soleimani was responsible for the deaths of millions of people and should have been taken out many years ago. how will allies and enemies of the u.s. respond to the military action joining us now is michael, senior fellow and director of research in foreign policy at the brookings institution. michael, thank you very much for being here today how important is soleimani's killing? and will it reshape policy in the middle east? >> good afternoon. well, it's certainly going to have a lot of impact on the u.s. relationship with iran and also with iraq. let me start with iraq, if i could, because that's the one that i am most worried about obviously, we're headed for some difficult times with iran. we've already had them and they will continue. but with iraq, of course, we've got 5,000 u.s. troops in that country. that's sort of how this whole thing began in some sense. when the -- when the iranian-sponsored militia

started attacking our military facilities, we retaliated. then the soleimani episode occurred and now the iraqis are thinking seriously of booting us out. and that would be a reflection of their passions, their you got to watch that. that's the biggest thing that's going to happen next, in my opinion. even bigger than the likely respochr response of iran by using violence i think iran will have to do something but it's always doing something. this may be more burr i'm most concerned about whether we can prever preserve this u.s.-iraq security partnership without which i think iraq will not be able to withstand another attempt by isis to establish some caliphate territory in parts of the country.

>> let's talk about the idea it's been a proxy war so far how much does this escalate from a proxy war? >> the latter is not super likely because iran knows it doesn't do well. the cases that you mention and you could also add yemen to the list and maybe one or two other, iraq is different in the sense it has a functioning government. it's not stable country. we know that well. it's been through a lot. it has a government. the government wants to work with the united states as well as with iran we've been trying to create this balancing act. make sure iraq is not purely in the iranian camp i think we have been partly

successful now that is in jeopardy. if we're booted out then i thin the government has a harder time >> let's talk about the balancing act that the u.s. has right now because the u.s. still does have a significant amount of military mite and forces in the region i think the fifth fleet is based out of bahrain you have the fifth fleet there you have troops on the ground in places like iraq, still in afghanistan. how does u.s. military policy evolve given the fact this has happened with soleimani? >> you're right on all of that i would add important airfield if qatar which is one of the biggest air bases we have in the entire world

our regional footprint does not go away. i'm not overly concerned about that the syria presence would be jeopardized because it does depend on logistical support from u.s. forces in either iraq or turkey. then iran just begins to consolidate and bridge all the way from its own territory to the mediterranean. those are the big downsides. >> thank you very much still ahead, a look at ir iran's cyber attack strategy that ces uomp next the company's most at risk we'll talk about those

if you're looking for a bright spot, check out sicyber security stocks. one of the major generals, will they retaliate in that way

we have the details of that story. there's ran why all the stocks are in the green why is the cyber a huge focus? >> i've been on the phone with the representatives for these companies and one of the major things they heard starting a few minutes after the news broke of this killing were calls from their financial services clients, particularly saying what does this mean for us why is that because in the past iran has shown they will retaliate against things like sanctions by attacking large financial institutions in the united states. sometimes taking their websites offline. >> the banking infrastructure will be front and center as a risk for this. we heard people saying the electrical grip or our company's infrastructure from a power standpoint are at risk are owl all of those at play in. >> i don't think so. it's tough on infrastructure like that.

we know iran has had some positions on u.s. dams we know that from some intelligence reports that have come out over the last several years. that's a bit too risky for them. what is less risky is hiding behind some of the collectives they have hid behind in the past when you have a group of people who are attacking the u.s. bank and say they are doing it for ideological reasons. they are hacked to this, as they call themselves. it gives iran a little plausible de deny blt that's what many experts would expect to see. >> i know the revolutionary guard there has its own little cyber division you mentioned the proxies. i'm wonder how much this em

boldens hackers. is that going to be a threat as well because of a ripple effect. >> that's a really interesting question you're right a ripple effect maybe isn't the right term but a smoke screen. when there's a lot of cyber activity happening from one country against another, it gives third countries or other nations to ability to say they're not going to be paying attention to me now. i can slip in and get the stuff i'vewanting to get for a long time. >> the companies you've spoken to, how concerned are they >> they are very concerned they are less concerned about a serious attack they think it will be probably something proxy related. >> all right thank you very much for that >> thank you >> it's a huge story given everything hast happenthat's han iran power lunch begins right now. >> thank you very much welcome, everybody to a special

edition of "power lunch. the markets are down more than 200 points as the u.s. takes out major general in an overnight air strike we are just getting the minutes from the last federal reserve meeting. they come out right now. >> there was considerable agreement in the december minutes about the reasons behind calling the federal funds rate currently appropriate. the vote was unanimous to keep rates unchanged. participants agreed the labor market was strong and economic activity had risen at a moderate rate some noticed the rate could rise further while some indicating payroll would show less momentum they expect to sustained expansion and inflation near the 2% objective they agree spending had increased at a strong pace and many noted they were reporting strong demand for the holiday