staying with j.p. morgan versus other banks that may have more upside i'm looking for more defense >> the dow is down 150 keep your eye on tech for certain given where the nasdaq has been and those huge earnings reports that lie ahead next week thank you for watching have a great weekend "the exchange" with kelly starts right now. thank you, scott hi, everybody. here's what's ahead. stocks are ending the week in a foul mood and escalating wars in china and a constellation with beiji beijing. the treasurey yield intel is feasting on the chip fumble, so what's next?

shopping maybe down thanks to covid something huge is on the way let's begin with today's moves in the bond market the 10 level hitting since early march. mike san ttelli with more on th. mike >> the reason i'm alluding to 54 is because today was the lowest intraday trade since the 9th of march which was the day we made the all-time neo close at 54 base points. tens minus twos are going to have the smallest weekly close if it stays here at 43 basis points since the first friday of may. so going way back, and that, of course, if you look at what's going on overseas, same thing. they were trading at a whisper of 96 basis points.

they haven't closed at that since mid-march. the dollar, best level for nearly two years dollar index at the worst level in nearly two years, and maybe this chart should really have some impact. the euro is now at a six-year high against the chinese offshore chinese yuan, which is all very good progress if we consider that, three years, five years, seven years, should they close right where they're at would be yield all-time closes. back to you. >> rick, my big question is, why now? >> part of this is what's going on overseas in the kind of catch-up trade is the eurozone in particular is trying to wrap their arms around the coronavirus in a stimulative way that is putting even more pressure on purchases of sovereign debt like treasuries but i also think there is a

natural buying propensity. stocks are closing down for the week in all three indid id he n index indexes. secretary of state mike pompeo continues to throw verbal haymakers. kayla tausche is here with the latest >> reporter: a tit for tat with china announcing it will close a consulate in guangzdhou. it is a critical city because it is the westernmost outpost that the u.s. has and it serves as a hub to central asia. but they called the u.s.'s decision to close its consulate in houston unilateral provocation and said this was a legitimate and necessary retaliation in response.

this comes after last night the secretary of state mike pompeo delivered a speech at the nixon library, a symbolic backdrop because it was under nixon that china and the u.s. ushered in this era they said no words accusing china of tyranny and said they are asserting themselves on a global stage outside of china. >> the truth is that our policies and those of other free nations resurrected china's failing economy only to see beijing bite the international hands that were feeding it >> china responded by a foreign ministry spokesperson saying that pompeo is likened to an ant trying to shake a tree and urging the u.s. to shake what it calls a cold war mentality kelly? >> they always have the most colorful nalanalogies, an ant trying to shake a tree kayla, thank you let's move on to markets where for the first time in a

month the dow and s&p are down for the first time in a week a big earnings week for tech as the market's recovery rally about to be tested big time. joining me is barry joins and troy chiesky of skybridge. it's good to have you both here. barry, i'll start with you you told us for weeks now that you favor a cautious position on the market what is your latest thinking >> well, it's no different, kelly. i'm looking at this as kind of the yellow brick road, if ul there is a wizard behind the curtain and that's jerome powell pumping out money, and everything else is almost irrelevant with that amount of money coming in. so the market doesn't have a brain, it's just going, it doesn't care if there are big losses it doesn't have a heart but it does have courage to keep plugging ahead earnings are coming in better than expected, and that's good, but they're still terrible right

now. you have a possibly trade flare-up with china, and as we look at the market, it's come so far so fast that it is due for a bit of a pause here. but i would say stay with th yellow brick road, don't get too far off of it because that's probably what's going to work well for folks >> you're still favoring names like helen of troy, microsoft and google we can circle back to that, but troy, i want to bring you in after we got the latest numbers yesterday that was a disappointment, the chase data today shows a five-week low, so some of the high frequency data is stalling out here is that changing your investment process? >> we agree with that in that, look, a lot of this reality is driven by fed policy, and clearly the fed balance sheet stopped expanding in the past five weeks in turn, money growth stopped expanding as well, and you're in for seven-times earnings in 2020 and possibly 2021.

as we get to flare-ups across the country and there is angst about what the next stimulus package will look like, you start to see the realtime data deteriorate. the good news is, though, the economy has not deteriorated as much as people feared and it's snapped back, but it's not going to be a straight trade from mid-march to the middle of june. >> why do you favor credit as opposed to equities here >> if you look at where equities here, s&p is up on the year, so they've traded more than the loss we had or where they were starting the year. sorry, not quite the loss from the peak but pretty darn close if you look at credit strategies right now, particularly credit strategies tied to the economy, like housing, which is on fire it's bounced back more than we thought in the economy and spreads are still extremely wide compared to where they were in early march if you look at distress corporate credit, another area

of our focus, even though the market didn't deteriorate as much as people thought and it's come back faster, expectations are still $200 million corporate falls. it's not just energy, but leisure, retail, even health care so when we think of risk reward, if you're trying to get a high-digit return, the math is there. we have an 8% yield in our portfolio. so we think on a risk reward basis, particularly versus bonds and high yield, it's a great place to be. >> barry, we have this stat here that we heard a lot about lately the market caps of facebook, amazon, netflix, google and microsoft are 20% of the s&p 500, so i'm pleased to see that microsoft and google are the names you favor here >> kelly, the yellow brick road, stay on the yellow brick road. what's been working is likely to keep working

every time i've thought of getting off that yellow brick road to something smaller of value, snap, snap, snap. it's coming after me and it isn't pretty the six months ending in june, the best value stocks are down over 20% the worst value stocks are actually up with the average stock down around 12%. so you've got this unusual period of time they have good earnings. you know, microsoft just came out with earnings, they're solid. it's got the azure and the teams and the halo holding in there, and of course the search market is not locked down by google and youtube. and helen of troy i really like. it's the company you own their products but you don't know its name braun, revlon, infusium, you've got their stuff in your house and their earnings came up 22% even in this time of covid some pretty good names and

they've been doing well, we think they'll continue to do well >> sticking to the yellow brick road thank you both we appreciate it today got news on mcdonald's kate rogers is joining us. kate, what's happening >> kelly, well, mcdonald's joining other big retailers and restaurants including starbuck's and walmart warning their customers to come in with face coverings. they say they're adding protective panels to front and back and it's opening its dining room services for an additional 30 days. in the beginning of july, they said they would take a three-week beat. it's now extending that pause for another 30 days. some 2200 of its locations in terms of in-store dining were open at the beginning of the month for people to come in and eat but now they're taking a pause on approving any additional reopenings, kelly back over to you >> speaking of this stall we're seeing of late, kate thank you. let's get to shares of moderna which is sliding after the company lost a patent on

epidemiology meg tirrell is here with the latest meg? >> this is a pretty big development with moderna developin developing so what happened was a patent court decided, or the patent office decided that this patent that moderna was challenging over delivery technology for mrna medicines was, in fact, valid. so moderna lost that challenge to a small company called arbutis which holds the patent and that sent shares of that company doubling this week moderna's stock down 23% this week on this news. le leerink says this decision opens the door to a fascinating and

likely protracted period of investor controversy and debate around the implications of any potential infringement much claims so the question is can they challenge a patent to get royalties? moderna says it's not aware of any impedimentmes for products kelly, i've reached out to genavan which would make the decision on this they're a private company. i literally heard back from them right before i came on air with you. they said it's not company policy to comment on an ongoing dispute. they said they look forward to a safe and effective vaccine for patients i hope i didn't make that too complex, but what it means is there could be a royalty dispute over this vaccine which some speculate it could potentially hold up its development, but moderna says they don't believe that's going to happen >> that's probably the only way the public is going to snap to attention is if it would

potentially hold up that development. it sounds like we can't totally rule that out. >> it sounds like we can't rule it out based on the way analysts are looking at this, but moderna says it doesn't think it has any impediments, and as far as they believe this patent issue was an error, they will pursue it legally. this will be something to continue to watch. >> thank you, meg tirrell, bringing us the update on this latest it's another big day and headline for big tech. amazon reportedly met with companies and stole their pitches. more fodder for those who want to break up the tech giants? the low interest rate sounds great if you want to buy a home, but at what point does it make a profit point for banks we hit session lows on the market every sector, all 11 of them, are in the red technology and health care the biggest laggers.

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5g is now included with all new data options. switch and save hundreds. xfinity mobile. . welcome back to "the exchange." the congressional hearings slated for monday with the ceos of amazon, apple, facebook and google will likely be postponed a couple weeks as the antitrust momentum continues to build.

yesterday we learned that apple is the target of a multi-state consumer protection probe. today the "wall street journal" is out with a sweeping report that amazon attempted to use its deal-making process just to launch products that would in some cases destroy competitors a law professor at george washington university, it's great to have you here what kind of case do you see coming together against the big tech giants, if any, here? >> i think there is a strong chance that by the end of the calendar year and maybe as soon as september, we're going to see two or three major cases being run collectively by the department of justice, the federal trade commission or the state governments. one type of case will probably focus on how platforms are using their position as gatekeepers to determine how third parties compete against them another type of case will look to the extent of which, when

presenting information, they present information in a way that favors their own products another part of the case will look at how they use acquisitions as a technique to stall the emergence of independent competitors, so there is a very good chance that by the end of this calendar year, or sooner, we'll see several big cases running against these companies. >> and some said there is no consumer harm you can demonstrate, while others said the fact that it's anti-competitive should mean there is some basis for either fines or penalties or other kinds of effects i mean, what would it take under law to literally break up these big tech giants if the government wanted to do so >> there is a lot of antitrust technology that's been developed over the decades to make it possible to do it. our courts have been very skeptical of the application of these remedies, and their fear has been if you intervene in a way that's not really careful and expert that you'll perform

surgery that kills the economy so the effort to obtain a breakup remedy will face a fairly difficult, demanding legal standard the purpose of it, i think, basically will not so much be prices but will be innovation and quality. the core argument that the government prosecutors will make is that we're not so much worried about price effects, we are worried about how this part of the economy develops over time are there opportunities for new products and services? i think one assumption in bringing the case is that the simple fact that the policeman is observing and intervening to control bad behavior by itself willhave a positive effect and open up some breathing room for other firms to compete effectively. >> what would you point to as to how this will play out are we talking about at&t? are we talking about microsoft are none of those good

analogies? >> they're both good cases to study. amazon did not suffer a breakup, even though the department asked for it the fact they intervened, brought a case and made restrictions on conduct, and these were subpoena le me understand -- supplemented by restrictions on conduct that allowed others to emerge it's hard to follow this process without having access to internal company records, but one possibility is a company like google emerged the way it did because microsoft did not use its platform to try to exclude them microsoft is a useful example to see how the very prosecution of the case, even with conduct remedies, can change the way in which the industry unfolds at&t is another good example that shows you that breakups can take place without the destruction of the sector. so if a federal judge asks me in

a case involving the tech giants today, give me an example that a major breakup dealing with a crucial part of the economy can be carried out in a successful way that arguably makes things better, if i'm a government prosecutor, i say, let me tell you about at&t >> that's fascinating. for all the sand in the gears we're looking to throw into these big tech giants, it's amazing the stocks are performing as well as they are william kovaceci, thank you for your input today coming up, a closer look at the future of cities the desire to live in one may be down right now, but my expert says don't count them out just yet. he'll tell us why. chipmakers stock sent sharply down today was apple right to ditch the chipmakers in favor of its own chip "the exchange" is back in a

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welcome back to "the exchange." markets are near session lows right now, the dow selling off nearly 10 points or 1% the dow is actually the outperformer the s&p is down 1% right now and the nasdaq is down 1.5% azt as technology appears to be one of the worst performing sectors. sue herera has updates sue? >> the toronto blue jjays will play their home games in buffalo, in a stadium usually used by the home team. they would not let them play in their home stadium due to the pandemic governor greg abbott in texas insists the state can continue its reopening >> 85% of texans agree that a

face mask is a way we can go about keeping businesses open without having to shut down. i made very clear we do not want to shut down again the only way we can go about the process of not shutting down is for people to embrace this process of wearing a face mask >> along those lines, dr. anthony fauci telling the "washington post" that states with rising cases don't need to go all the way back to a complete shutdown but should pause reopening or even consider, quote, backing up a bi bit. you are up to date that's the news update kelly, back to you >> that's sue herera as the amount of covid cases continues to rise in america, people are wondering what that means for big cities for now more on how the pandemic is shaping urban communities, we have the head of rothman

development. you've been such a thought leader in this space of a few decades, and i know you're not as downbeat on big cities as many of the rest of us are, frankly. tell me why you don't see this as pointing towards a major headwind for big cities for the next generation or so? >> well, big cities, suburbs, rural areas in the countries are all going to face major headwind for a while. i spent a time in lockdown reading the history of infectious disease and pandemics. before there were antiviral therapies or antibiotics or modern public health, cities have survived far, far, far worse pandemics. so the force of urbanization which causes people to get together in cities, to build communities that increases productivity and drives innovation is a far greater force than this infectious disease. people are not going to camp and fracture everywhere. cities will survive. >> i take your point about the

pandemic, but i'm thinking more about the analogy to the '70s and '80s when you had more of a similar political regime that was bent on making sure the police didn't have too much power, on different cultural movements -- i'm thinking of images in portland and other big cities right now where it's not just the pandemic. there are things happening culturally that make me wonder if people will leave the cities for the better environment that the suburbs offer. >> one thing is for sure, the united states is getting wracked by this. i'm talking to you from toronto, and toronto is just a nice place to live. the united states has had sectored areas since i was a little kid schools that were a problem, violence in areas that were a problem, too many guns that were a problem that we've got to deal with that said, this is a really different time than the '60s i was a kid in the '60s.

i lived in new york during the riots. cities were on the downswing industries and business were moving to the suburbs. affluent people were moving to the suburbs. companies have been moving to the cities, corporate has been moov moving to the cities, and my hunch is when things settle down, our cities will be just fine if our cities fall apart, if new york, san francisco and los angeles fall apart, good luck putting america back together. >> true, but we have lived through a period like this, in the '60s, and '70s and '8 #0s, o it's in our recent history where we've lived tlhrough it and coul experience it again. companies are finding what might be temporary now but could be a permanent arrangement, they are

actually following their companies out of the big cities, and i just think that could have some legs to it. >> here's what's happening we see families moving to the suburbs, which they've been doing since the 1970s. when you have a kid or two and you look at the expense of living in the city and the difficulty of setting up schooling, in the united states -- differently in canada -- you move to the 'burbs so what they've done is take this, and if you're a kid, you're not going to live in the suburbs. you're heading for new york, san francisco or atlanta, wherever the opportunity is, because you have to build a personal network, you want to find a mate those people are in cities so i think our cities are going to get younger, more families are going to go to the suburbs, and i think our opportunity is to build our suburbs better.

one of the things that really galls is this ridiculous long commute -- one thing people absolutely hate the most is a long commute and half an hour or 45 minutes on a train, bus or car, we can create offices in the 'burbs, we can create offices in the cities they call it a 15-minute neighborhood where you live, work and play, and i think we can build our suburbs and cities better >> we'll leave it on that hopeful note thank you, richard florida >> thanks. we're in for a long haul, but we'll make it. meanwhile, we have some pains and gains in the chip sector today, defaults plaguing ann annex. that's all right after this.

welcome back let's catch you up on a few stories that should be on the radar to close out this week here they are to break them down for us we have to start with intel. a decline the company has had in two decades. they gave weaker than expected guidance, a warning on the year. advanced micro and tie one you can see is surging it's a strategic perception that they are less of a player. this is one of the biggest earnings news i can remember in recent history >> yeah, and it is just an

enormous drop now. i might argue it's not really about this quarter, it's not even about guidance or the nanometer chip already it had been falling behind amd, you see those shares going in dramatically different directions this year, but the ability to get that 7-nanometer out is critical. it's not just this chip, but they have struggled with previous generations intel, its strength has really been in designing and manufacturing its own chips, but those manufacturing processes are coming under question now. analysts and investors are saying should it be doing both, and we spoke to bob swann this morning on "squawk alley" and he says he takes responsibility for what's been going on, even though he hasn't been ceo over many generations of different chips. i think there is really some critical questions that the market is asking right now, and that's why you see the stock

down more than 15% today >> mike, how much pressure do you think is on management right now from the market, from investors? >> there is a lot. the street was very vociferous in saying this was a major stock proficiently it hasn't always paid to buy the value play in big tech sectors and that's been played out by intel and places like nvidia i think right now just placing it on the valuation right now, it shows nobody is really on board for the longer term process. maybe that's the opportunity for the regular ceo. >> you get a report like this one and it changes the world it changes everything you think you know about it. >> that's right, especially for a company where -- i think people thought they had effects on what they might hear, but a six-month delay in a fast-moving competitive market share game

like this is something that really did come as and of a shock, and that's why you see this sort of give-up trade >> quick response, deidre? >> that's going to be the delay for chips, but perhaps intel doesn't tell us about future earnings because this is a very intel-specific problem some of the bright spots actually reflected quite well on the tech landscape as a whole, so i wouldn't read too much into this as far as the big earnings we have on deck in the weeks ahead. >> maybe uit's a reminder we shouldn't do way with quarterly reports. this one was a game changer. how about shares of american express? they're also lower on their earnings but not as much they reported an 80% drop in quarterly profit its core business consumers simply aren't traveling and they're spending less amid virus

lockdowns. didn't we notice spending was down rather than on the rise for spending in april? >> i'm not surprised to hear that because if you think about small businesses in this landscape, a lot of them were getting creative we're going to talk next hour about businesses that already burned through some of that money, so i think they need to rely on lines of credit they have i wasn't surprised to hear that but it was a potential bright spot in an otherwise slower quarter. >> you have to wonder what that means for amex going forward a lot of banks have talked about the potential losses they might face if companies can't make good on that >> that's right, and if nobody is actually going out and traveling and spending -- >> exactly what were you going to say, mike >> the credit was bad, but not

as bad as they were expecting, so i think that's usual relative to other consumer finance plays. it's really about the big spending in the big companies. inside amex its payment network looks very much like the visas and amex and paypals some people have made the case amex should get some credit for that, but they're saying, no, i'm scared by all these other issues let's talk about the retail. the big headline is neiman marcus is leaving hudson yards after just a year there. right now mall owners are trying to save the struggling brooks brothers from a similar fate lauren thomas, how much of a blow is this for hudson yards? >> it is kind of shocking when you consider the size of this space and neiman marcus spans multiple levels at the top of this mall, and it's hardly been open a year and it's the sole

anchor in this property now. a source familiar with its plans moving forward has told me they are looking to bring in office space to replace this department store, but again, consider this new environment that we're in with the pandemic and not sure exactly what the need might be for that much office space moving forward, but certainly neiman did take up a sizeable portion of this promplt. >> and deidre, i think facebook and others have a sizeable presence there i would think they would offer some pretty generous terms to get people into that office space if they're looking for that as a replacement to neiman. >> precisely, kelly, companies like facebook who have said they will let a portion of their work force work remotely and indefinitely, so that's interesting. i can't help but draw the comparison, of course, to amazon which we often do against the retailers. just firing on all cylinders reporting next week, i'm interested because their physical sales stores, even

though that's mostly groceries, that's whole foods, actually saw an uptick significantly last quarter, up about 8% do they continue to build their physical presence as traditional retailers, mall owners continue to struggle. >> lauren, back to the brooks brothers stories as well that we mentioned, and we talked about this last week, but a mall owner potentially coming to the rescue here how likely is it, do you think >> exactly they have been naming simon property group, this duo offered to keep more than 25 locations open for business. it's not a done deal i actually spoke to another licensing firm, whp global, that they said they're looking to make a bid as well, and there is a court date set later in august to see if this goes through. but certainly, i mean, i think simon is a serious player in this space and is increasing, like we discussed earlier,

increasingly looking to do more deals to rescue some of these brands >> yeah. we talked to nate forbes about it, he's another mall owner, and he loved it. he thought it was a brilliant concept. mike, do you think i'm too bearish on the future of cities? >> i think long term it's very difficult to project out whether in fact there will be an enduring abandonment of cities in the near return, hudson yards was years in the making. it was already pushing kind of the fringe, adding capacity in office and retail in a part of manhattan that was not as well trafficked so now you're going to have a greater vacancy situation, so it's obviously become tougher for them to make the numbers work i think in terms of living in cities, tell me the price. if, in fact, it gets cheaper, then there will be a demand response as things more normalize. >> i see everybody nodding in agreement there. lauren, thank you, we appreciate it you can read more on cnbc.com on the red ahead for retail

foster beer company, they're sharply higher the maker of sam adams and twisted tea is up 20% after a surprise earnings beat a 42% spike in revenue they also report a huge jump in sales to retailers that are up 46% in part thanks pto demand fo its truly hard seltzer they said the growth for truly and truly lemonade grows beyond our expectations someone pulled out this twisted tea. these are the new growth categories good for them for figuring this out. >> i mean, they really are no analysts have kind of compared the switch to these hard seltzers and spiked lemonades and iced teas to the switch to light beer generations ago, right it's something a younger consumer is really looking toward, particularly in the summer that's something i know a lot of people younger than me but within my family group like to tend to gravitate toward these

spiked seltzers. and they gave guidance, and better than expected guidance. who is giving guidance right now? they're really, really optimistic about the future of what this means for the brand, and it's a trend that seems to be here to stay. we've been talking about it for a while now. >> mike, what do you think about the stock price? >> we can all agree they're actually performing very well, they're winning market share clearly this is a buzzy category, so to speak. look at that angle, what's happened in the last month or so i think folks have flopped to i as a newfound younger consumer play i obligatory robin hood sear stock is for this right now. you can still think the stock is overshot >> by the way, the stock is over 21 it is as popular out west as it is out here? >> you know, i couldn't say because i have not been out in

so long, and i don't drink hard seltzer. but i'm assuming it is i think what's interesting, though, some hard seltzer is better than others you look at the stock price of anheuser busch and some other drink makers and it is a drastically different picture, so we can't put it all on hard seltzer, but perhaps boston beer's distribution model as well, it really has taken off and it's quite amazing to see the difference between molson, coors or anheuser busch here >> deirdre, we'll try to get you out in the next couple weeks maybe come back with some reporting. >> i'm not drinking hard seltzer. >> what is the animosity against hard seltzer, deirdre? i don't think it tastes good, but i haven't tried a lot. >> i see it as a fad i haven't bought into it yet i shouldn't judge until i try it

>> absolutely. deirdre, mike and kate, thank you so much today. people investing in day trading apps business in finance is booming we just told you about robin hood we'll talk about them next nasdaq biotech is set to break a 3-week streak. "the exchange" is back in two. ♪ come on in, we're open. ♪ all we do is hand you the bag. simple. done. we adapt and we change. you know, you just figure it out. we've just been finding a way to keep on pushing. ♪

welcome back consumer adoption of digital finances surged during the pandemic as more people forgo cash and get into day trading with apps like robin hood. kate rooney has some new numbers. kate >> some people predicting this app adopting happening over years. it only happened in months due

to covid they shared some new numbers from around their customer base. take a look. this year investing apps have seen a 300% surge in new users acrosss plaid's top customers they saw a 42% increase in users. that was from march to april of this year compared to the prior year from january of last year to may 2020, the number of active users across plaid's fintech customers at 70% a lot of people were due to covid. we talked to zach perret this morning on "squawk alley." he says he expects this behavior to persist even after the pandemic, doubling year after year after 2020. kelly? >> we saw in some cases

distributing ppp funds >> that's right, cabbage is a partner of plaid, and they say those loans tend to be smaller they tend to serve a different customer than wall street banks, take wells fargo, for example. so they said it is putting pressure on some of the bigger players that may not have a digital offering right now >> right, and it's a good foothold for them as well to grow kate, thank you so much, we appreciate it. kate rooney with new numbers there. still ahead, mortgage rates at a record low, and while mo y homebuyers may cheer at that, there is a catch for the major banks. next

welcome back housing continues its hot

streak, mortgage rates hit a record low overnight investors are taking notice. the home builder etf is up almost 50% in the last three months returns are similar for the itb. it's also having some monster gains. let's drill down on what this means for housing and the banks. we talk about why it could put pressure on banks profitability. diana, let's start with you. >> just when you think we can't go any lower, 2.87% on the 30-year if i cfixed. that's a full percentage point lower than a year ago. that's an average. you might be able to get lower if you can shave 75 basis points off your current rate, refinance more than 15 million borrowers can and save close to $300 a month on their payments.

the supply fell to the lowest in seven years. even the number of new homes sold but not started jumped dramatically meaning builders will really need to ramp up the pace of production if they want to keep selling with those numbers. >> 2.87% i want to make sure i heard you right. 2.87%. >> mortgage news daily it's an average which means some people will get over and some will get under you do have to get 20% down. that's good borrowers with good credit >> that raises the important issue which is what does that mean in terms of profitability in terms of the banks. >> some people thinking will it mean they will lose money. banks borrow short and lend

long even lower than that 2.87% banks prefer a higher interest rate curve and a steeper interest rate curve which produces a bigger margin opportunity for them but today even if mortgage rates feel like incredibly low, 2.87%, they are still above the fed fund rate. they might do that sort of thing in other areas like on the deposit side moving your checking account to

us with a deposited $5,000 and we'll give you $500 cash back. there too much other risks involved with it >> it does raise this question of whether they want to be in the mortgage lending business now. remember when wells suspended jumbo mortgages and you get this feeling they are reluctant to really make these loans. >> well s a special case because they have this fed asset cap imposed on them. there's a limit to what they can do at the moment it's fair to say the business drop but two, in any business, if the price of your product drops, you can offset that by doing higher volumes a that's happening at the moment in the mortgage space not so much in corporate lending. the other point a lot of people have floating rate mortgages

if they issue it now at a low rate and someone got a floating rate mortgage then clearly as rates go back up they will start to get a better price on their product. >> sure, if that ever happens. we're at another near low. my final question is do you think we'll find a floor on mortgage rates and people who say wait a minute, should i wait until it goes 2.5% or lower, do we start to hit natural resistance at these levels >> 2.5% would the base that's something we wrote about on cnbc.com. it could hit with the bonds out there. we say that mortgage rates loosely follow the yield but they follow mortgage backed bonds. investors need to get some kind of return and the current bonds suggest we could only get for the borrower as low as 2.5%. there's still room to run if we're at 2.87. you can save up to $200 a month on average if you have more than

a percentage point higher than the current rate now it's pain toot a refi. more of it is going online you can do it in your backyard i closed that way a couple of weeks ago online >> a real quick last word. >> the other point is the top in terms of whether it's worth refinancing or not, it adviser to neat to see the interest rate fall by 0.75%. the fact that's a factor highlights that there are other fees involved when you do refinance, up front, one off costs the bank will extract from you. it's another way that shows this isn't loss making for the banks even if it's not as profitable as they would like toyota be >> can't believe we're talking about a 2.5% mortgage. that does it for the exchange today. next hour, the president of george mason university tells us how robots will play a key role in getting students back on campus this fall

welcome everybody. glad you could join us on this friday afternoon stocks are under pressure again today as u.s. tensions with china rise and tech stocks lead the way lower. the nasdaq down about 1% it was down more earlier intel, as you probably know, the worst performer on the dow this day. down about 16% one of its worst losses in years after guiding lower and delaying its next generation of chips by six months we'll have more on intel this hour as colleges gear up to