those, too >> by the way, i do like union pacific and they took their second price increase today in california vf corp. it's a recovery on 35 years to date, strong brands, good controls of inventory. they have 2.8 billion in cash so that dividend is safe. i like this for a comeback >> good stuff. thanks, everybody. see you on the other side. "the exchange" starts right now. thanks very much, scott wapner i'm dom chu in for kelly evans today. stocks struggling a little bit today. stimulus talks on hold until after labor day. china trade talks in limbo and just 80 days until the election. we look at five stocks that could be good trades heading into that november 3rd date. plus the tech lash over the app store continues. we look at the growing list of companies who say apple's policies need to change. and payment stock power. a legal setback from amazon and why getting a mortgage just got

a lot harder a lot is coming up on deck "the exchange" starts right now. we begin as always with the markets right now, and as you can see, we're holding steady on this friday. the dow industrials were down about 137 points at the lows today but they're up just fractionally, marginally now the s&p 500, 3,374 on the last trade. 3386 on a closing basis and 3393 on an intraday basis the nasdaq down right now. tracking a lot of these stocks on an equal basis is up.

some gains in the retail sector after it came in a little low but retail still growing in some areas. baidu and iqiyi, the firy both reported numbers, but baidu owns a big stake in iqiyi iqiyi got some alleged misreporting practices the china internet is down 2.5%, so watch these chinese internet names. a lot of stuff going on there. a big week for treasuries. 10-year benchmark yields just a hair below 70 basis points the 30-year t-bond, trades there

as well. this comes on the overall fixed market let's get to rick santelli to wrap it up for the week, and rick, i remember you telling us a record-breaking option at least in size for the 30-year long bond. what's been the takeaway this week >> that really kind of rough auction, i gave it a d minus that auction set the stage, in my opinion, for potentially wave 2 of higher yields if we get equities to cooperate and the data to cooperate. the first wave rates going up is when they really started going into hardened negative territory. we saw much selling. look at a two-day of 10s it's interesting we didn't take out yesterday's high yield that is holding us back. look for it to pop especially on a friday look for a chart that starts mid-month. we're on the best levels on a closing basis since mid-june right now we are down 3 on 10s but we're up 13 on the week.

pretty much all of them show up as 10s minus 2 on the spread it's bumping along at the basic low end of its range, and even though it's holding, many say there still may be another leg down dom! back to you. >> rick santelli, thank you, sir. have a nice weekend. the s&p 500 turning positive in the trading day the market brushed aside weaker than expected sales data and the stimulus talks out of washington, d.c., the s&p 500 just points away from a record high is this rally in stocks unstoppable. joining me now are james mcdonald, the investor at hercules ininvestments and brian weinstein. brian weinstein, let's talk about whether the massive bull run in bonds is over

>> well, for a little while. i think we tested how far we could go in treasury yields down in those 50 basis points for a 10-year note and there's a lot of supply coming it's gotten quiet, people have gotten long. i think on the other side the fed is still out there i think the idea the 10-year notes are going to go wildly above 1% is hard to believe. so, yeah, we've probably done most of the work for now as far as low yields. we'll come back to it in a bit but there's room for yields to go a bit higher. >> james mcdonald, let's talk about what it looks like from a person who has to look at the overall market is your view somewhat changed given what you saw out of the fixed income complex over the course of this last week does it mean we're due for more volatility across asset classes going into the november elections? >> volatility is imminent. it's unavoidable if we study markets on a weekly basis, monthly basis, decade basis. whatever time period you look

at, volatility is real in this particular environment, we have factors that we never experienced before with the pandemic we have to closely watch data. we have to listen to our government officials tell us what's going to happen with treating this thing and preventing schools are closing. maybe no college football. it's a very, very different environment than other situations where we had volatility we got new data today. we got retail sales. we're back above pre-pandemic levels july purchases were up 2.7% year over year. so we are able to get clues as to where things are going, but we're prepared for volatility, it will happen we expect a profit from it or protect the -- >> we're going to work on some of the technical difficulties there with james' feed brian, i'll turn to you there. james mentioned clues, things he's looking for are there things in particular right now you are looking for or looking at with regard to whether or not we see markets able to sustain their current

rally and whether or not we do see volatility heading into what could be a very volatile election season? >> yes, for sure i mean, what's interesting is i think the first couple are not subtle clues, right? we need to know the outcome of stimulus, which is binary, and we need to know the outcome of vaccine, which is also binary. those are a little hard because you have to decide which way the right way to lean is our argument is you will get stimulus and you will get more good news on medical treatment that means keep your risk, keep your income, because yields are a little hard to come by for a good outcome, it's not clear there isn't more long-term damage so we can't expect to take profits in low-income virmts which things get a little too optimistic >> it's fair to say things are fairly optimistic right now. we have markets at record highs. yields are at historic lows at this point right now is there still some kind of relative value you look at the entire fixed income spectrum, where should

investors and traders be putting money right now relative to the credit or government or recovery space? >> i think a five-year spectrum is still a better outcome than most in the world, and those companies are in good shape. i think we like things where a dollar weakness helps. there hasn't been as much money into emerging markets. they're still trying to catch up there is a yield on credit space and some more local markets. and listen, high yield markets are harder you have to be active. that's where i think they could be steamed out and you get too much optimism. >> are there high yields specifically that are more attractive than others >> there are definitely some high yield markets that have lagged a lot of this momentum has been for things big and tradeable in an etf world i think when we're active, we can find smaller issuers, places

like gaming and things that have been really beat up. i think, yeah, away from the big names in etfs, i think higher management has lagged. >> james mcdonald and brian weinstein, thank you for your thoughts we appreciate it coming up in the show, a closer look at the increasingly complicated relationship between china and the u.s. with reports that tomorrow's trade talks could actually be postponed. plus, everything about getting a mortgage just got a lot harder we'll tell you why and what you need to know "the exchange" is back in two minutes. >> announcer: but wait, there's more "the exchange" is also a podcast. listen to your favorite parts of the show you might have missed sign up now on apple podcasts, spotify, stitcher and google podcast. look here, it's your very own all-in-one

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welcome back to "the exchange." the u.s. and china trade talks have been on the agenda for this weekend, but we're now getting some reports that those talks may be in limbo. eunice joins me live from beijing. eunice, what can you tell us about these investments? >> reporter: it looks as though the trade talks as you suggested are going to be delayed. a source is telling reuters that the two sides are having scheduling issues and no new date has been set. the trade chiefs of the two countries that had negotiated the deal back in january were

expected to reconvene over vi o videoconference on saturday for a semiannual review of the trade deal that would be robert lighthizer, secretary mnuchin as well as the vice premiere lou ha they were expected to finalize the deal and this represents the two countries on so many fronts, chinese technology, for instance, and the pandemic the pandemic has made it easier for china to reach its pledge of u.s. goods as part of this deal. the shortfall was expected to be on the agenda. morgan stanley estimates that china only bought at best a third of the annual target for this year with soybeans and energy lagging now, the investment bank believes that china is going to ramp up its purchases, especially of soybeans part of that is seasonal

it's also because farmers are expected to continue to restock the pig population beijing has also made good on other parts of the deal, which was pointed out by the central bank here just this week, such as the financial opening now, there is a big question as to whether or not that is going to be enough for the trump administration, but something else that the trump administration will hear from china and will have to think about, dom, is that china has this week been pushing for the u.s. to create what they describe as more favorable conditions as part of these discussions. >> eunice, while we have you, really quickly, there haven't been a lot of formal statements from the government per se about what the character of these talks is looking like right now. has there been anything in the, quote, unquote, state-owned media suggesting what the stance is from the chinese communist party right now? >> reporter: well, the chinese

communist party, actually, in official statements as well as in the state media has been trying to reiterate that they have been committed to carrying out the pledges in this trade deal at the same time, what i thought was interesting is the other point that i had mentioned, which is that they keep saying that the u.s. should create these favorable conditions for the trade talks, which people here believe really means that they want to make sure that the u.s. doesn't discriminate against chinese companies, which is one of the issues that the two sides are facing right new u >> eunice yoon live in beijing, we appreciate it we have the heritage foundation and also fred kemp of

the atlantic council. let's start with you, fred, if you don't mind you heard eunice's characterization of these talks. we heard reports they are stalled out. can there even be trade negotiations between the u.s. and china at this point? president trump himself said it's very different now than it was eight months ago >> yes, dom. i think the situation is the following. you have larry kudlow coming out yesterday talking about progress toward the phase 1 deal, and that progress was an increase of soybean sales in june and july but still far below what was sought in the deal i call -- when you call that progress, that's like saying that paint is peeling more slowly on the front door of a collapsing house, and so that's progress but we have problems in the technology field you had more than a dozen ceos coming in to see president trump

this week really worried about how that could hurt their business in china. you have problems in the security field you have china ramping up their activities around taiwan after the visit of the secretary of health and human services, alex azar, to taiwan this week, the most important visit of a u.s. official since 1979 to taiwan, and you had new sanctions on 11 americans, you had the arrest i hong kong of a leading media tycoon jimmy lie, so this is really the front door of a collapsing house so one really has to take on the whole of the relationship, and i think as trump said himself, the phase 1 trade deal, which he once said was going to be one of the greatest deals ever, is now not so important >> tori, it doesn't sound very promising, i got to say. between the news reports and what fred just said, it doesn't

sound like we'll make any head way, really, on this i remember a time pre-covid when we talked about the economic impact and how important it was for both sides to come to terms. where is this deal now and will it have a really big economic impact, not just on us but on china as well if a trade deal cannot be moved on >> well, i think the first thing to point out here is that these talks this weekend were supposed to be a sort of routine act of the phase 1 deal it requires a meeting of the trade sort of group every six months so that is more routine. but what struck me the most in this situation is what are these favorable conditions china is talking about? obviously both sides have an interest in having this deal be successful we don't want to see more tariffs which is just taxes on americans, taxes on the chinese people, and that's not good for anyone during covid. but if china's idea of favorable

conditions is reducing some of the u.s. pressure on china as a result of china's actions regarding hong kong, their actions in xin jiang, that is an action of the u.s. government and the president should remain steadfast on those issues. >> do we have the upper hand here is this something we can go into a trade negotiation, if it were to happen, in a position of strength versus one where we don't know how the eventual outcome will shape up for americans? >> it's hard to know who has the upper hand, and that's a relative idea, but what we do know is the united states has many tools they have been using to address specific concerns about chinese practices. whether it be trade practices or other issues, like i mentioned,

human rights abuses, intervention in hong kong. specifically on the trade side, i think that there is not really a lot of effort or oomph to get more out of the deal or to get a phase 2. i mean, the trump administration has made it very clear that phase 2 is really a post-election goal, and like i said, i think that this meeting was more supposed to be, you know, just to follow what they agreed to in the phase 1 deal. >> fred, we're going to give you the last word here what exactly, then, would be the strategy for the administration in the coming weeks? what exactly is the playbook if you were advising president trump right now, how exactly do we tackle this particular issue of moving these things forward >> i think the chinese, and also to an extent, the u.s. have an interest in the bottom not falling out of the relationship. this is a really dangerous moment in the relationship heading up to the election president xi himself is going

through a very difficult economic year, so you're keeping the bottom from falling out. i'm really watching the wechat issue. the wechat executive order that trump is pronouncing for four or five weeks from now could hurt american companies enormously. it could be devastating for apple. some say it could take 25% off their iphone sales if it's imposed in china and not just imposed in the united states wechat might not mean a lot to a lot of your listeners, but in china, if you show up at a cash register with a credit card, people look at you askance because everyone in china does that with wechat you have disney, you have procter & gamble, they don't want to lose access to the second biggest market in the world. when you said who has leverage, i think both sides will lose

enormously if we don't put a bottom on the decline of the relationship and find out how we can compete with each other very strongly but at the same time figure out a way to collaborate as two of the biggest economies in the world >> tori smith, fred kempe, thank you very much for your thoughts. we appreciate it >> thank you coming up on the show, the app makers are revolting, and apple -- apple -- is their target a look at who joined epic games against the tech giant plus, square, paypal two of the stocks soaring this year we'll take a look at some of the real winners in this shift to digital and who is in the best position keeping those games inrward. "the exchange" is back after this constructing funds that don't simply follow an index. but explore new terrain. helping you fill portfolio gaps. connect to client goals. and strengthen confidence in you.

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we have frank holland for a cnbc update. >> here's your update for this hour reuters is reporting the

payments to trump vaccine makers are conditional and they are reaching timing targets to launch clinical trials, gaining public approval and launching doses. former president obama and nancy pelosi are urging voters to mail ballots early to avoid usps delays. the democrats are getting worried that the president is undermining mail-in ballots as voters want to vote by mail to avoid the risk of covid-19 peter madoff is released from federal custody he was sentenced to 20 years in prison in 2012 frank holland, thank you very much for that we'll see you again in "rapid fire" later on this hour meanwhile, july retail sales

are going through a slowdown due to the automaker brands like j. crew, brooks brothers, many more, have all filed for bankruptcy since the pandemic started meanwhile, others are trying to avoid that fate. earlier today the runway indicated they were permanently closing their brick and mortar locations. lauren is here with us lauren, it doesn't sound like it's easy for companies to adapt, but why is this important? >> surement thanks for having me, dom. we did report that the runway is permanently closing all of its locations. they just had five stores in cities, including new york and washington, d.c. and l.a it is going to turn its new york store into a permanent dropoff location, so if you're familiar with the rent the runway business model, essentially women use it to rent out accessories or clothes on a monthly, weekly basis, turning

those, swapping those in and out. many women would use this service or have used this service to go to a wedding or a formal event or to wear outfits to work every day, and certainly the pandemic in many ways has kind of upended these things that used to be part of our normal lives i think we've seen rent the runway's business model struggle because of that. when i spoke to the ce oh o of the runway earlier this week about the decision to close the stores, she said the company is trying to cut costs, manage costs during the pandemic and it's going to focus on its digital operations and add more of these dropoff locations, not necessarily stores where you can find merchandise we've already seen 6,000 stores announced by retailers this year alone, so this just adds to the ongoing turmoil, as you said >> the whole business is getting upended for sure it's not just retail, it's

everybody in the business with covid-19 lauren thomas, thank you for that update. we appreciate it apple's "fortnight" and amc is about to open its theaters to party like it's 1929 stay tuned for "rapid fire." "the exchange" will return right after this it's easy to get lost in the economic uncertainty. the volatility. the ambiguity. this moment calls for more. and northern trust delivers more. with specialized expertise. proven strategies rooted in data and analytics... and insights borne from over 130 years of successfully navigating economic turbulence. giving you new clarity. inspiring confidence. and helping you uncover new paths forward.

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welcome back let's catch you up on a few stories that should be on your radar. it is time for "rapid fire" and here with their takes, frank holland, seema mody and rick santoli.

that hit game "fortnight" are claiming unfair policies around their app stores, but epic is just the latest in a long line of companies calling out apple for questionable business practices recently cnbc.com editor steven kovak joins us with the latest details. steve, this is like david and goliath, but they're both kind of like goliath, correct >> epic is not a private company. they're valued around $17 million. they make a ton of money not on apple's app store but on nintendo switch and basically anything with a screen that can run this fortnight game. apple is the dominant platform if you want to make money on mobile, and they theoretically want to be there but they're sick of paying this 30% cut to apple for every transaction. >> so this is interesting here and perhaps we'll turn to you, mike this notion that apple has been

the market darling for such a long time. we talk about this $2 trillion mark it may be coming up onto pretty soon. how important or how unimportant is an epic games lawsuit against their app store to their overall business prospects down the line >> in isolation, it doesn't have that much of an impact, but to the extent that it calls into question the margins of its services business, it invented the app store, it has this kind of consistent policy with the exceptions of taking a 30% cut of these app developers. i think as a general principle, it causes people to say, one, wow, apple really is dominant and has these lush margins based on charging other developers for this stuff on the other hand, fls any compromise for that, if it does buckle a little bit, i think it's interesting i think the market is taking a wait and see on cash flow capital. it makes people say, hey, why

are we paying 30 times earnings for this company on the services side if, in fact, it's not bulletproof. >> frank, this is an interesting story, because apple and google do have a cut they take of all of these transactions and epic is trying to circumvent that you maybe can't blame either side for being a little mad about this why exactly is this important for epic >> i'm a big gamer myself, so if epic's complaint might make things cheaper for gamers, sure, i'm on their side. they made $43 million from the apple app store, only 30 million from the google app store even though it's a bigger platform. sometimes you have to pay to play these are basically sales leads. so epic, if you want to be on that apple app store, you have to pay for it. >> seema, are you a gamer? >> i am ant a gamer. my fiance is, so i'm definitely around someone who likes to play these games. we'll have to see if epic is willing to play this fight with

apple and how far it will take this conversation around the app store and whether apple is in fact monopolizing the app store and will change its practices. we know ceo tim cook cares a lot about brand and perception, so given the unique position that epic is in, in fact, that it has all these users who are so young, will that perhaps push tim cook to change apple's ways and that 30% revenue it takes from apple developers? we'll see? >> and how scared should apple and epic be because of this kind of lawsuit >> there are massive user bases that are really the key here with 350 million people playing for billions of hours every month, and you have spotify, you have pile, you have sonos. these people will be upset if their favorite apps are pulled from their favorite devices, and that is something apple has to listen to. if the customer starts complaining, they might have to tweak the rules a little bit to

make this happen and even looking forward to the future of gaming for some services coming down the line from microsoft and google, those aren't allowed on the app store, either, and those potentially compete with apple's own gaming product, so people are going to want to have more choice in the ability to play these and apple might have to start listening not just to the developers but what their own customers want. >> all right big deal for sure. thanks very much, steve kovak. for more on epic's app store battle, be sure to go to cnbc.com that story is up right now shares of coach and kate spade tapestry, the firm saying bold changes for tapestry is helpful in weathering the pandemic and there is more risk reward for tapestry in the long term the ceo resigned last month over

allegations. seema, i remember when it used to be just coach this is a big deal because it says maybe the consumer is still spending even if it's not here in the u.s. as it is other parts of the world, right? >> to your point, dom, i wonder if the current economic backdrop actually creates a new opportunity for affordable luxury, which is the segment that tapestry, coach, indicakate spade, they operate in does it give them a win over chanel, those types of products, that perhaps you want to have the in-store experience before you buy one of their products. where kate spade and tapestry, theirs are priced at a discount compared to those big brands >> i think of lvh and carrying brands, christian dior, anything like that, those are premium price points compared to a kate spade or a coach what does that tell us about

where the real demand is is it just a hair below that luxury side of things? >> dom, i have no idea i'm not a customer i've never bought anything from tapestry in my life. until now i didn't know what it was. i have stepsisters, my mom, my aunts, they buy kate spade it's a cover-up to buy things. do you think the holiday season is somewhat normal or where it is now i know people who want to go out and shop and buy presents for people and things like that. also people added 100 customers to their digital channels, but their existing customers are people who have money in many cases. just so much of an upside for recovery if you think there is any chance we'll get back to anything close to normal by the holiday season >> mike, i'm not sure about your household. do you have a lot of coach or kate spade floating around yours? i know my wife is a kate spade person >> it is kicking around for sure what i know, dom, when it was coach, just that brand, the ceo

at the time used to say that only apple stores were more coveted by mall landlords in terms of the traffic they generated versus coach they were second to apple at the time, so he claimed. clearly this was built upon brand affinity, and i think there is a case to be made that the brands that do have that kind of stickiness with customers that are recognizable, they have an advantage here as opposed to the distributors or just kind of basics, for lack of a better term. it's a pretty decent contrarian stock haul to say, it looks okay, they can probably weather this period. and in theory, people are going to want a new bhag when they go out of their homes >> seema, where do you spend your money is it kate spade, coach or elsewhere? >> i'm just saving my money. i'm not part of this trend of people putting their money to work in retail

we're not going out as much, we're not going out to broadway musicals and events, so there is not a need to spend money on purses i'm not spending much am retail. >> next up here, we got payment stocks surging as more people use digital and contactless payments during the pandemic they may not be going to a store, but they're using some kind of a payment transaction. some of the names cashing in this year, paypuyallal up 77%. square up a whopping 125%. is it time for investors to cash out of these big names or should they charge into these payment names? see what i did there, guys seema, we'll start with you. >> i think the outpayment of these stocks are even more pronounced when you take a look at the performance in comparison to the traditional credit card companies that have severely underperformed the market so far this year. these companies have clearly found a unique selling point, and it's worked especially for

small businesses >> all right mike so, as we talk about payments companies, it's been red hot there is an instinct that you want to take some profits here is the trend your friend >> longer term, i think the underlying term is absolutely friendly for investors here. the big question is, is there room for all of them, if you totaled up all the market caps for the paypals and the squares and these other players, is there enough when you also have visa and mastercard out there, which are, on some layer of this whole process. paypal looks like that stock broke stride a little bit after an amazing run the bet here if you buy them at these levels, it's not just the customers who are introduced to more electronic payments during this shutdown period stay with it, but it almost accelerates from here. they like to say that their main competitor is cash which, in theory, is in perpetual decline. it's unclear if the market maybe got ahead of it a little bit in the last few months.

>> it's so funny to hear paypal referred to as a mega cap stock these days a major setback for a mega cap. we're talking amazon.com they can be held liable for damaged goods sold on their marketplace. the lawsuit starts from a woman who bought a laptop battery that she bought from a third fire seller on amazon caught fire, gave her third degree burns third party sellers count for about 66% of their sales this is a big deal >> it's made clear it's more than a marketplace it's guaranteed shipment from third-party sellers. it's taken things down that were fraudulent during the pandemic or price gouging during the pandemic it does more than just a marketplace.

it's not just a place to sell things amazon is sort of a digital utility. it does need to have some level of responsibility. i don't know if being able to sue them is allowed. certainly amazon is more than a marketplace. >> mike, how much is amazon or how much should they be responsible for the overall supply chain that they have? again, they're not making the stuff andselling it, they're just allowing people to use their bazaar, if you will. >> it's certainly debatable. if you want to make the analogy of a walmart, a physical store, you would be suing the product maker most likely if there was something defective. but it probably raises the similar question of amazon does a certain amount of vetting of these vendors. it accepts payments for them and it almost reminds me a little bit of the task that something like facebook has, which is we know there are a lot of users creating content that's harmfulal some level, and it's

amazing to keep on top of it it seems like it could be a major expense. not big in terms of amazon's overall scale, but a major new expense to try and make sure you're managing that liability end of things, too >> you know there will be folks saying amazon is worth $1.2 trillion and should be able to shell out some money to these things amc cinema opening big they said they will offer customers 15-cent movie tickets -- you heard that right -- when it opens more than 100 locations later this month they said it's an honor of their 100th anniversary and honors ticket prices that go back to the 1920s. the 15-cent offer is good for one day only while they show features like "back to the future," ghostbusters" and

"grease. seema, would a 15-cent movie ticket get you to go into a public theater >> for myself, no, i'm just not ready to be in a closed environment as of yet, but i think that lower price, 15 cents, that's certainly one way to entice customers to get them in the door, especially as so many people through this pandemic have found the convenience of renting their movies or watching them on netflix in their home. >> frank holland, have you changed your media consumption habits given the pandemic? >> like seema, i'm not going to go into a movie theater for quite some time, but this is getting people to come back to life and do normal things. a 15-cent ticket takes away all the risk and the movies are movies we already know and like. really, what you're buying with this ticket is an experience you're going if you think it's safe if you don't think it's safe,

you've lost 15 cents and you leave. >> mike santoli, a date you would go back to a movie theater. >> i would say late this year. it seems with social distancing and masks and all that, it might be okay. this is the theater saying we're trying to get you in the door to buy a $6 tub of popcorn, which is where the money is, anyway. thank you all for today's "rapid fire" edition is there a head on new mortgage rates those details and what it means for the red hot housing market that's coming up next. as a reminder, you can always watch us or listen to us live on thgoe on the cnbc app "the exchange" is back in two minutes. ♪

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let's move to the housing market where a perfect storm is making it suddenly harder to refinance your mortgage. diana, this is crazy i'm trying to go through this process right now and it's not easy >> it's not easy you're okay because you're already in the process a number of changes are making it not only harder but more expensive to refinance your home loan first is rising mortgage rates it's been at record low after record low, and rates are still lower than a year ago, but in the last week we've gone solidly from under 3% to solidly over it part of it is rising treasury yields but then rates moved even higher yesterday when fannie mae and freddie mac hiked fees up 50 basis points for refinancers that amounts to $55,000 for a $300,000 mortgage.

the market reacted quickly with rates even higher. the median fica credit scores jumped to 784. that's the highest since the none york fed began tracking in back in 1989. the number of 660 dropped to a level seen lower than before the financial crisis that had been a real bright spot in a tough economy, is just saving a little on that monthly payment or possibly taking some cash out >> this is interesting, too, because i've been kind of moving around and checking out all these interest rate sites and whatnot. one of the things i've noticed is there is a huge discrepancy in terms of rates you can get based upon geography and then whether or not it's a conforming loan or a jumbo mortgage for a lot of folks out there, it seems like banks almost don't want to lend on the jumbo side of things. what is that dynamic like and how is that playing out? >> well, it's a lot harder at the jumbo side because they're

either trying to package or sell them off or they have to hold them on their balance sheets fit if it's a nonconforming loan, fannie mae and freddie mac don't back jumbo loans so no, they're not particularly thrilled lending in fact, a lot of people are moving to 15-year fixed and even ten year arms that are fixed for ten years but have lower rates those are a bit easier few people will take the chance and start a new business. one couple did just that we'll talk to the owners of the new york moonlight cinema that opened on july 24th. that's come up next. we'll be right back. you say the customers make their own rules.

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welcome back to the exchange throughout the covid-19 lockdowns, movie theaters are among the hardest hit businesses with many of the more than 40,000 indoor screens in the country shutdown drive in movies have seen a resurgence as socially distanced forms of entertainment one new jersey family opened newark's first drive in theater since the 1980s screening classics to full houses, so to speak. joining us are the co-founders thank you very much both for being here first of all, i love the fact that you started the business

during the peak of the covid pandemic what was the impetus behind it what inspired you to do it >> i'm a film maker. i completed a documentary called wise the american. that premiered -- it prescreened at a festival in new jersey. they adapted the pop up drive in theater. i thought it was a good idea i said, i wanted to do a pop up drive in movie theater he said the stadium will be great sight. the rest has been history. >> i'm trying to figure out, what exactly the economics look like when you had your business plan together, were there are certain things during the pandemic that were a tail wind for you was it real estate values. was it obtaining certain pieces of hardware, movie rights. anything like that what exactly was so attractive about doing this at this time? >> just from a business standpoint, when things are low

and at their worst that's the time when you invest based off that premise, we thought this idea would be great. only thing -- everything else from a financial standpoint was okay the only thing we had an issue with was making sure we follow the covid-19 guidelines and making sure that we were lock and step with whatever the governor said so we made sure we abide by everything. in terms of the finances and financials for everything, it was something that within our financial wherewithal so we took care of it >> as you look at the future of this business, it's about a month old. you had to look maybe a year out, three years, five years, maybe even beyond. what exactly do you think the long term trajectory for your business is? are you forecasting that the covid threat goes away at some point? >> we are forecasting that the covid threat goes away i think because of the pandemic, it allowed this old time classic to kind of get new life and

breathe new life into it we're seeing we're getting tremendous feedback. people are asking us as possible >> let's talk about how much will it cost me, my wife and my two kids to drive our vehicle into your theater and have a movie night for four of us with all popcorn, soda, that sort of stuff? >> perfect we made the prices affordable because we want people to come we wanted it to be an experience for anybody ages 13 and over, it's $12 any kids 4 through 13, it's $8 anybody kids four and under is free our sodas cost about $4. burgers around $6. >> we have full concession on site >> for family of four, probably

come to maybe about $60. $65. that's four tickets and four meals. >> all right that's not too bad there before we let you go, this is -- you're only one of handful of black owned business with regard to theaters. how exactly do you take that is there a responsibility that you have do you feel like you need to set an example and maybe help others get into this business >> i'll start and let my wife finish i don't think we have to set an example. i think we have to do what we normally do in our businesses and that's provide great customer service and provide something that our consumers need >> i think that, for us, we thought it was a good idea we know it was going to get this amount of feedback and this much positive stories and people sharing it we're very excited about that. we do think that it's important for african-americans to be able to have ownership, to be able to

get create -- it's a great opportunity for us we hope that ke set an example for others sg fantastic thank you very much. good luck with your business keep it right here "power lunch" comes up after this plap ♪ ♪ ♪ ♪

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. good afternoon, everybody. welcome to "power lunch. glad you could join us on a summer friday. mixed day for the market this day. all three major averages are set to end the week in the green despite stimulus talks coming to a stand still. ai