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tv   The Exchange  CNBC  July 22, 2019 1:00pm-2:00pm EDT

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>> price targets jb. >> the price target is infinity. >> so there. >> that does it for us here on the halftime report, kelly evans is back for "the exchange. and that begins right now. melissa, thanks. hi, everybody, and here is what's ahead of us today a rate cut is pointless. that's the case one economist is making ahead of the fed's meeting next week. is she right we will debate that. and is a massive economic crash coming you heard this warning before, but who it's coming from may surprise you now it's coming from the campaign trail we will have the very latest. and the usda is trying to leave washington only to face a massive fight over taxpayer dollars, unions, and jobs. we will have a front row seat to this relocation drama. we do begin with today's markets. bob pisani is down at the nyc. >> narrow trade range for the dow and the s&p 500, the markets
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have been dominated by some disappointment the fed may be unlikely to cut 50 basis points at its meeting next week that was the hot topic over the weekend. opting for a more cautious base cut. providing some support for the markets, elsewhere a modest bid in oil on increased tepnsions tied to iran in the strait of hormuz key for stocks is earnings right now, and generally better than feared so far. so today halliburton reported a beat, though revenues were a bit light. that's helping some of the oil stocks up 7% there the key for earnings overall, no earnings recession in 2019 these are the numbers we're using from refintive, mild gains for the second quarter, earnings up 0.9%. and hopes for a global recovery in the fourth quarter are lifting estimates up 6%. that's the fourth quarter. overall, put this together, we're expecting ruoughly 1 to 2% gains in earnings this year,
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that could change when caterpillar and 3 m report later this week. >> thanks very much, bob pisani. welcome to the exchange. i'm kelly evans. as bob mentioned it is a big week for the earnings. the street keeping a close eye on corporate results, of course, but attention is turning to the debt ceiling lawmakers in d.c. are scrambling to strike a deal before leaving for their august recess. they have moving towards a deal. for more let's bring in dan clifton, head of policy research, art hogan is market strategist at national securities it's great to have you both here give us the state of play. what do you see shaping up at this hour? >> it's a little bit of something for everybody. you're going to end the sequester, the democrats are going to get their nondiscretionary defense spending the defense hawks are going to get their defense spending increase they're going to try to figure out how to get 218 votes
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that's why they're allocating a little bit of something for everybody. i think it's really important to get the debt ceiling out of the way. you have to remember we're going to come back in september, and then we're going to have to fill in the blanks of these top line numbers that are being agreed to if you don't come to an agreement then, then you have a government shutdown. it should pave the way for a larger deal. >> the subject of this whole conversation makes everybody groan. they go not the debt ceiling again, not the same kind of issues we've been dealing with you said this deal would make everybody happy. we would argue except for the budget hawks, right? for the debt and the deficit hawks who are still out there, including by the way, serving as president's chief of staff right now. is there any possibility that there's a last minute wrench thrown th thrown into these works by a president who says you know what, maybe i would like to see spending cuts. >> let me call this the field of dreams budget cut, build the field and they will come they're trying to slice those votes to get there, build it and
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they will come there's a real risk. what if aoc and 90 of her friends say hey, we don't think the defense spending budget should go up, and what about 90 conservative republicans saying they're upset about the deficit increase that will come. that's how tarp went down on the house floor in 2008, and that's what you've got to be mindful of doing a modest level of offsets probably is enough to get enough republicans to join with the democrats. pelosi's going to have to carry her weight on the vote here. we think they need about 150 democrats to be able to pass this bill. >> that's a sizable chunk. we mentioned that the markets have been watching this. listen, as the president said, you know, the debt ceiling he views as sacred and certainly investors are hoping that is the case it doesn't seem like it's going to burst to the fore unless this whole thing falls apart, and then we'll deal with that down the road what do you think is most important for markets this week? >> i think dan said it almost exactly correct. i think when you think about the endangered species that is that
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devastating hawk, they're too hard to find and neither side of the aisle is paying too much attention to that. >> do you consider yourself a deficit hawk >> at some juncture it makes sense. this is the only time we hold the government accountable every year it sneaks up on them again and here they are. you're right, you said the market's going to look at this and say not again. do we always have to go through this but i think the market is pang much less attention to that than they're paying to what the fed's going to do at the end of the month, how earnings are coming in, and they seem to be better than expected and where we stand on u.s. and china trade. >> one more thing on this, even though we all shake our heads, there's a fight for a reason if we didn't set up these barriers, there would be no barriers the debt level's growing, the deficit's growing and so forth, but would the market serve as that barrier when people say there's no deficit hawks, well, at some point if people say look, you know, you're not ever going to get less in terms of interest costs in termsf ate're
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servicing, won't the markets service the policemen or do we need the controls built in >> we need them built in, but typically or historically it's been the republican conservative deficit hawk that's kept things in check they're not in that place right now. when the market has to take over that's where you talk about bond vigilantes coming in and saying this is a bridge too far in terms of spending. >> the bond vigilantes, talk about an extinct species right now. oh, my gosh. dan, on this point about what the markets are looking at and focused on, before i let you go and we're going to talk more about this in a moment, you guys mentioned that your china trade basket is basically at all time highs right now. >> that's right. >> that's a big change from just a couple of weeks ago. how did sentiment turn so quickly? >> you know, kelly, this basket that we built is a leading indicator of china trade talks, and it outperformed the s&p 500 by 1.5% on thursday and friday.
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>> wow. >> somebody knew that these trade talks were starting to improve in the conversations on the phone between lighthizer and the chinese negotiating teams. people are talking today about china and the u.s. actually having a meeting in person next week, and it really comes down to meeting the commitments that the president's made at the g20, huawei relief for agriculture purchases, and i don't want to say a deal is imminent it's a far way away that's going to keep the fed in the game, but for the first time since g20 we are actually seeing some incremental positive news between the chinese and the u.s., and i don't think it's a coincidence with the chinese growth rate slowing to its slowest rate in 30 years and the u.s. starting to see some economic pressure that both sides are saying okay, let's see if we can find some sort of common ground maybe several months away. at least they're talking, and we'd rather have them talking than not talking. >> our final word before we go,
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you have a fed coming out of its last meeting saying there's signs the economy is slowing, and there's signs the trade talks are going nowhere. now you've had a g20 meeting that is produce, you know, enough momentum that these china trade stocks are at all time highs, the data everywhere but the manufacturing sector has been phenomenal but we're still talking about a 25 point rate cut. >> i think they were driven to this condition by an elongated u.s. china trade war >> i they know this information going into that meeting. >> absolutely. and all of the things, the better jobs number, the philly fed number, retail sales much better even the empire state manufacturing number better. we've got an economy that's buy fur kated where the consumer is doing better take that uncertainty away and the fed's lost all reasons for cutting rates right now. >> that's fascinating. we'll have more on this in the next block thank you both, appreciate it very much.
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art hogan, dan clifton. tech executives are coming to the white house hoping to convince the administration to relax restrictions along doing business with huawei ylan moi is in washington with the latest markets paying very close attention to. >> reporter: that's right. president trump made some comments about huawei during his meeting with the prime minister of pakistan. he said he wants the u.s. to remain the leader in 5g. he said silicon valley can't be competed with, but also said that the administration will have to find out about reports that huawei worked with north korea to help set up its telecommunications infrastructure, so kelly, this really underscores the balancing act that the administration is facing here. on the one hand they don't want to be seen as backing away from their hard line on huawei. there appears to be a growing acknowledgment that this is having an impact on businesses companies say they are not just concerned about direct sales to huawei, but that the white house's executive order could be
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interpreted so broadly it could keep companies from even writing the global rules of the road for 5g if huawei is participating. kelly, i expect these questions to be at the top of the agenda when the companies meet at the white house later on this afternoon. >> this is narrowly about huawei, but more broadly has there been a change in atmosphere between the u.s. and china just over the last couple of days? we heard the president's exasperation that those agricultural purchases hadn't started. that was a week or so ago. now it looks like we're getting a little bit more traction back? >> reporter: the president did say that phone calls between the u.s. and china were going well, that they had even happened perhaps a little earlier, and yoal heard secretary wilbur ross say that the administration would be considering exemptions for products that did not have national security concerns those might be allowed to be part of the supply chain to huawei, so, again, there is this idea that perhaps the administration's executive order
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might have been written too broadly and so companies want to ensure that they aren't prevented from doing what they see as legitimate business. >> thank you so much rkts ylan mui at the white house. >> here's what's else is coming up on "the exchange. here's what's ahead, a fed rate cut is pointless, that's what one economist and professor says why? she'll make her case. a shiny apple, as investors get ready for apple earnings next week, morgan stanley says it's time to buy and disney's domination. this is "the exchange" on cnbc
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welcome back to "the exchange." next week the fed faces a major dilemma to cut or not cut interest rates with the president, wall street, and many fed officials calling for a cut, the outcome seems pretty clear an op-ed in the financial times asks whether a rate cut will be pointless. joining me now is megan green an author of this piece and our steve liesman to talk about the setup of this meeting. when you say pointless is that because you think it wouldn't accomplish anything? >> yes
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>> in a nutshell. >> i don't think the cost of borrowing is really a constraint on activity these days that's particularly if you're looking at the economy, the real weakness is for businesses and so if you look at businesses, the nfib survey even shows that the little guys are hardly having any problems getting access to credit it's not the cost of borrowing that's an issue. if you cut rates further, it's hardly going to really boost growth in that sense. >> it's interesting, we talk about if you go back to the fall when stocks were last at all time highs, the ten-year was based on 3 1/4 we've come all the way down to 2%, okay, and doesn't that -- in part because the fed has reacted to it, take the rate hikes off the table this year et cetera, do they need to deliver a rate cut now when that repricing has already worked its way through >> yeah, i mean, i guess it was evans or i can't remember who. there's been so much talk last week when said you have to deliver at some point because the market demands it, and
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actually, the why that megan seeks may just be because the market expects it. >> this is so ridiculous. >> it would be too tumultuous or otherwise catastrophic for the fed not to deliver. >> so is that what you think if they don't cut next week it could be catastrophic? >> it's probably too strong a word, but it would be something the market would have to figure out, and it's -- megan asked some very good questions i didn't realize she was a senior fellow, and i've been paying a lot of attention to her until then, but now that she's a senior fellow. >> i should have mentioned our senior economics reporter. >> at that level now, we have to pay good attention to megan. but i was just going to say that what you cannot find justification for with this rate cut is in the data. >> megan, that's the most important point. this is a fed that's been arguing its data dependent if they talk about the manufacturing data that's one thing, but it's a part of the economy that's been rammed by trade and tariff issues.
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it's not necessarily a bellwether in and of itself when something that unique is happening. the rest of the data, retail sales, the jobs report, even the inflation numbers have been strong even the inflation sentiment readings they're obsessed with has been a little stronger. >> trade isn't in the fed's lien, that's not up to them to deal with. if they wanted to address it, they couldn't. they shouldn't be trying to. i think steve's right, if the fed doesn't go ahead and cut now, then financial conditions would tighten so much it would necessitate a fed cut. their communication's streeng has been spotty i would say and they've kind of painted themselves into this corner. the big risk i think is that they go ahead and cut and actually it doesn't help that much, and we know that a recession is coming. we don't know when but it's probably coming in the next couple of years. >> wait, but they can't cut for something that's probably going to happen in a couple of years. >> no, of course not, but if they cut and doesn't do anything, then when we're facing into the next recession, we won't have as many tools and no one will believe in them anyhow. >> that's important. >> eric rosen grin was
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fascinating on friday. he came out and said like the last opportunity before the blackout period, he leaned against everything that we have heard from the rest of the fed and said an insurance rate cut has a cost, and that cost is financial stability. you can't look at the bond markets and not think they've gotten completely out of whack, maybe they do need a wake-up call. >> if nothing else, eric may be known as the most sober of fed officials. he made a big and important pivot from being on the hawkish side to going to neutral the idea of cutting rates and a little too far i would like to understand more that the fed understands why inflation is undershooting and how cutting interest rates will cause that process to reverse itself. >> but even -- that's not even the case they're making. they're basically making a slowdown argument. they're basically saying we will provide this as needed to support the economy. >> inflation expectations have fallen pretty significantly. >> it doesn't seem like the main catalyst right now. >> it's the most cogent
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argument, it may not be the main one. if you had one where you were going to say why should they cut rates? i would say well, this inflation reason is a reason you might want to adjust interest rates. if you could tell me a couple of things, why have negative rates and zero rates in japan and europe not -- the intended inflations one of thesources of the disinflation, why aren't wages pushing up inflation if the fed explained that and then said, okay, now we're going to do x to address that. >> right. >> the thing that megan's talking about really important if the fed loses the credibility of the market through this cut, it's a big problem for them. >> how much credibility do they ultimately have if people just kind of know they're cutting because they told us they would, that's the worst reason of all time. >> if it actually did something, if it were to generate some inflation or we were to see growth improve off the back of it, i think people would feel like there's a point to that if it doesn't happen, and i don't think it probably will,
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people will say what's the fed going to do in the next downturn they can cut rates but that obviously doesn't work. >> there is a way for them to create inflation. >> last word. >> i don't know what you think about this, but the fed should be seen as reckless. megan is listening to me there is actual research on this idea. >> no, gosh. >> the fed needs to alter inflation expectations in a way that makes people think they're really serious about letting it run. >> they need to exit stage left. there's other ways to support and boost the economy. there's tax imulus there's incentives for businesses to actually do stuff. why are we talking about the fed intentionally losing its -- why does it have to be in its lane at all. >> you're the one who brings up fiscal policy. the fed would certainly take fiscal policy. >> they're getting it. this is a much longer debate we will be having -- >> reckless fed, remember who said that. that's how you create inflation. >> steve, thank you, megan
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really appreciate it you can check out our pieces we mentioned at the ft. coming up, does government need to be in washington, d.c. the usda doesn't think so. it's creating a whole lot of drama, we'll have those details ahead. is wall street warming up to elizabeth warren we'll lack at athewh t presidential candidate is proposing now and why wall street isn't panicking we're back in two. - stand up if you are first generation college student.
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welcome back to "the exchange." micron is up more than 3% on an upgrade to buy from neutral at goldman sachs. gold man's expecting memory chip pricing to increase in the third quarter. it's actually giving much of the sector a boost. there may have been a heat wave across the east coast this weekend. it was a rough one, but air conditioner maker lennox cutting its full-year guidance partially due to cooler temperatures overall. its shares are down over 3%. lucken coffee is up 4% the stock is up about 23% since its ipo in may and now to sue herera for a cnbc news update. >> hello everyone. here's what's happening at this hour white house counselor kellyanne conway reacting to president trump's tweet this morning in which he called the four progressive democratic congresswomen a racist group of troublemakers who are young, inexperienced and not very smart. >> they certainly are young and
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inexperienced. that doesn't stop all of you from elevating them into the stratosphere and super stardom, but okay because i read this weekend that the president somehow wants the squad to be the face of the democratic party. you know who wants the squad to be the face of the democratic e squad. hong kong lawmakers are condemning the violence that broke out during protests last night. inside a subway station a man was seen hitting people with a stick. he was one of several who opposition politicians suspect were gang members who attacked pro-democracy protesters at the station. and volvo is recalling more than half a million vehicles worldwide from the model years 2014 to 2019 at issue a faulty engine component that could potentially result in engine fires. you're up to date, that's the news update at this hour. >> sue, thank you. about 30 minutes to go until "power lunch" today and i'm joined by tyler mathisen. >> we're going to spend a lot of time talking about the markets, obviously to cut or not to cut
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one of the stocks we're going to look in on a little more deeply is johnson & johnson probably the biggest multiline health care company in the world facing right now legal challenges on two fronts, one, how they marketed opioids, and two, the talcum powder concerns that there was asbestos in the product that caused cancer to occur. there are a lot of people who think that the bad news is already priced into the stock. we'll talk to one of them. we'll take a look as the hearings begin today as to whether those talcum cases are going to go to trial already a year ago, a $4.7 billion jury verdict against johnson & johnson in a st. louis case, and we'll see as those appeals move forward what happens. >> they've been in the headlines for all the wrong reasons. >> they certainly have. here's what's still ahead on "the exchange. >> announcer: coming up, china launches its star exchange, and
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things went interesting. it's pipes versus content. morgan stanley gets even more bullish on apple. and there's a new apple in town th'sat all ahead in "rapid fire." we put our latest technoly and unrivaled network to work. the united states postal service makes more e-commerce deliveries to homes than anyone else in the country.
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welcome back, let's catch you up on a couple stories that should be on your radar today. in "rapid fire" here to break down the hdlines are deirdre bosa, contessa brewer. >> how much longer do we get you? >> another week. >> squeeze it all in first topic is china opening a new stock exchange called star market it went totally gang busters the 25 stocks listed gained 140 % on average by the end of the first day. it has lighter listing requirements it's likened to our nasdaq i mean, this also by the way i should mention a new report shows that china now has the most listed companies on the fortune global 500, 129 if you include ten from taiwan. that surpasses the u.s. for the first time since the last began almost 30 years ago. >> this is fascinating one company is a chip maker angi up 520%.
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>> on the star market. >> crazy. >> this is obviously i think an exchange we need to watch and learn a little bit if i were an investor i'd be very cautious about getting in i want to understand what's going on there >> you're not investing in these markets then. >> you can't >> no. >> and that's the whole point of it you can't, and the chinese stock markets work a lot differently the big knock against them is they operate like casinos. they have done this before, it wasn't that long ago, i remember, i was in china covering the chinex which was their nasdaq style exchange. guess what happened? stocks went gang busters total speculation, operated like a casino, and it never went anywhere what's different about this time >> why are they doing it again they just went through this thing about settling people down about it, and now it's like we're going to go through and try to re-create this nasdaq type thing you don't have to go through the typical registration process, you can apply a little more quickly. for the first five days they said trading could be unfettered then a 20% cap goes in on
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volatility in order to access the market you have to be a chinese trader with two years of experience and $133,000 of your trading account. >> so not cautious apparently. >> deirdre is this to make sure they don't lose chinese ipos to the united states? >> that's the idea you've seen alibaba and some of the big chinese names list in the u.s., jd.com, buy due, so they're trying to attract those listings i think the key which could make a difference than their previous attempt, i think they're still a long way off that. alibaba is looking at hong kong, not mainland china. >> that was a way for western investors to get in on those companies. as i understand it, it's not like american investors are going to be blocking because they can't yet to this exchange, is that correct? >> thatexactly right. >> the chinese investors, they don't have access to the same financial instruments as we do in the u.s., so the financial systems are still being
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developed and evolving that's why you see so much speculation in what they can do. >> we'll see if this thing sticks around or if it ends up being another failed experiment. >> we'll move on to stitch fix, keep rates in the men's business have improved every quarter since the category was launched. this comes on the heels of lululemon signing a deal with former eagles qb, nick foles, and sacks 5th avenue splaplans o open -- saying that market has been neglected. >> women have long been the target of fashion, retails, all verticals so you get really big numbers there, and it's hard to grow more. and then you look at the men, and ever since the rise of the idea of the metrosexual, i think men have been a little more interested in being more fashionable. i mean, you've got skin care is up like 7% for men.
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>> yes >> over the last year. >> they're going to lululemon to buy pants. >> is that what pioneered it courtney >> it is, the abc lululemon pant, the antiball crushing pant is what that stands for, have been a real hit. i think there were some men reluctant to lululemon, but once they try some of those items, you can't turn back. >> i predict there's more divorces we're already fighting in my house over closet space, and as men become bigger consumers of more shoes and how many dress shirts does one man need is my question. >> i was watching a lot of hgtv last week while we were home, and i can't tell you how many times it would be the woman uses the closet in the bedroom and the men's stuff is relegated to the guest room, to the downstairs, to the wherever. you're right, this is going toeb a to be a major problem. >> they predicted between the year 2017 and 2022 so we're already part of this, that basically men's retail lines will out grow and outpace that
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of women a lot of these companies look at this as an opportunity you've got coach, which says look we're on a path for a billion dollars for our men's business apartipare apparel, footwear. sacks, they say the men's shoes are a gateway drug for men's luxury they're opening up the idea. >> no designer t-shirts. >> just say forget it. all right, meantime, cbs has gone dark for roughly 6.5 million at&t customers since early saturday morning the blackout covers directv, streaming service directv now and at&t's u-verse cbs and at&t had been negotiating for several weeks but couldn't agree on a new contract this is fascinate as a test of who's got more bargaining power. >> i think what you're going to find is we're in for more of this as the networks try to make up for lost fees from these cable subscribers. the cable subscribers are trying
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to lower what they pay because they have fewer subscribers. everybody is trying to adapt to a new reality where people can get exactly what they want by paying for a stand alone service. here's the fallout you know brandy glanville, the real housewife of beverly hills? she's got 802,000 twitter followers. she's an influencer, and what was she tweeting about last night, not girl fights or lux brands, she was tweeting about not getting cbs on directv and threatening them if you don't work it out, i'm going to quit my directv they're going to encounter that. >> she's taking it out on her provider which is interesting. >> that's right. and then her followers were bringing up -- in fact, one of them said cbs is gluttonous, they're just looking for more and more money, when what do they offer us. or you can pay for their stand alone service, who needs it, take it out on cbs than directv. >> create an opening for netflix
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which licenses a lot of the shows, its biggest moneymakers from the networks and it all comes full circle and you can see the landscape changing so much where does it end up >> i agree also because they have options available on streaming, is that a blessing and a curse for the content companies, because if there are other ways to access this em, you know, does it feel as urgent that they get back on. >> cbs was late to the party in terms of having a cable channel the way nbc and abc did, and so they're trying to make up for it by being an early adopter of the streaming services and things like that. will it pay off? >> we'll see what blake said, that will tell us most about this one. morgan stanley's katie huberty, kept her overweight on the stock raising her price target to $247 the stock's at 206 right now on the other side you've got bernstein remaining more pessimistic than the rest of the street he's got a market perform rating
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price target of $190, guys, and that's a pretty big swing going into this report he says services is decelerating, she says it's picking up >> and he also notes, tony notes that q3 is typically a quarter that is neither here nor there people are looking to the next cycle. this one's going to matter because apple has been so central in the trade war what is happening to their china business what's happening to iphones and how much are they selling it are they creating an opening for other smartphone providers i think that will be really interesting, and as much as we talk about services now all the time is it enough to make up for a declining iphone sales these are existential questions. >> i look at it from the app store angle primarily as well. if they are found to be anti-competitive in those app store 30% fees, that, i mean for their services revenue, that's going to be a big headwind we'll see, no one's ruled it that way i don't think yet, but it does look like that's where e courts may come down. >> it will be fascinating to see how the big tech companies
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either address or don't address all the anti-trust concerns and the set of earnings. >> they don't want to do too good. >> speaking of apple, really my favorite story today is there's a brand new product about to hit stores, and it's the cosmic crisp apple in your produce aisle after this fall's harvest. no joke, this has been called the largest launch of a single produce item in american history. >> it is a patent protected apple. and guess bho who owns the patent, washington state university, and they have agreed to only make this available to washington state apple growers the cosmic crisp in order to do this, they were planning on handing out 300,000 samplings, the growers demanded 4 million. it's coming to market this fall, and because we're talking about the apples, this is not the cosmic -- >> i was going to say, you don't have one. >> i thought in talking about it
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it might make you hungry for it. i'm like the evil stepmother >> i'm not taking a bite of that >> i've seen this movie before >> contessa, what does it taste like is it a honey crisp but better >> it's a cross between a honey crisp but enterprise honey crisp came on with a bang. >> i love honey crisp. >> how is it not the number one apple in america i'm not touching your apples i learned -- >> that's going to be a meme >> i learned that red delicious was the number one apple for a decade >> totally mealy to be surpassed by gala, was it? >> and enthis ti got you fuji'sn my favorite granny smith. >> the sour granny smith it matches me. >> for cooking >> as an eating apple and baking apple? red delicious fell off the popularity charts because everybody was looking for what was the best looking what happened was what they traded off in a beautiful skin
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meant they were getting a mealy, mushy apple with not a lot of flavor everybody wants the crisp crunch honey crisp delivers that but apparently about 25% of the apples get left on the orchard floor, ground, whatever, they rot, and so they cross it with an enterprise which kbigives yo longer lasting apple. >> i could keep going with this segment. i love this. i find this totally fascinating. >> my favorite apple which is no one else's favorite apple the is the macintosh. >> it's got a tag to it. >> thanks, i might actually take one of those deirdre bosa, contessa brewer, courtney reagan. elizabeth warren says e odc asa coming economicrh. thgo news she says she knows how to stop it we'll look at her call and her plan stick around
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welcome back, senator elizabeth warren is out with a
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provocative piece today. she says the coming economic crash and how to stop it she says the country's growing household debt, corporate debt and a manufacturing recession are three warning signs of a e precarious economy "politico" says wall street isn't panicking. here with me to break it all down, is ben white, the chief economic correspondent at "politico" and a cnbc contributor. there's two things going on here, the first is kind of a director onslaught of the private equity onslaught of last week the more recent one is the piece she warnings of this economic crash using it to say here's how i'm going to come in and save it what are her plans >> this surprised me in that she's calling for an economic crash. it could look silly if it doesn't happen over the next couple of years. >> that's such a loose time frame. >> she also i think misrepresented some of the numbers, she's talking about household debt being at unprecedented levels she didn't sort of qualify anything for inflation if you look at debt to income
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right now, it's actually much lower than it was before the crisis and doesn't look that bad. i think there's some exaggeration it's a pretty good thing to call the crash coming get rid of a lot of student loan debt, crack down on wall street. manufacturing, a lot of stuff she's called for before is what her prescription is for fixing the crisis. >> it's interesting to me, and we see this happen a lot of times with prognosticators it's in their own interests to say something dramatic because their career is to get attention. if you're a politician who has solutions but no one else sees the urgency in implementing them or necessarily thinks they're appropriate, nothing like saying hey, this is all going to crash down unless i come and i -- it gives an urgency to the need to do these dramatic things to the economy that otherwise a lot of people might not see the need. >> that's true it feels a little trumpian in the sense that i alone can come and fix it, this crisis that is about to happen. there is overlap in the populous appeal they are appealing to people who think the system is rigged and
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fixed against them, but i think the headline is really where it seems a little odd, you know, here's the coming economic crisis i kind of expected to read like the case for buying gold right now, you know, that we should all panic and buy gold, but you know, she is saying there's some fundamental problems with the economy, and here's what i would do to fix it. >> and there's plenty of people who would agree with that. again, this would add urgency to the discussion no matter what. let me ask you as well, what i thought was fascinating is you're talking about how wall street is not necessarily quote, unquote afraid of elizabeth warren i think this is something that's misrepresented a lot there are a lot of people very successful up and down wall street who support a lot of these democratic and progressive candidates whose policies would hurt them but in this case, in elizabeth warren's case, has not really hurt her standing with these kind of fundraisers, has it >> well, there's two things going on here. one is that she's not bernie sanders, and so there are a lot of o'people on wall street who don't necessarily want a super progressive candidate to get the nomination they'd be happier with joe biden
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or pete buttigieg or kamala harris bernie sanders is someone who says i'm a socialist, i want to tear down the system, warren says i'm a capitalist. i believe in free markets but putting cops on the street they don't love some of her wall street proposals but they would definitely take her someone they understand and can deal with over someone who wants to tear everything down. >> she would end the private equity -- >> i think they probably think there's not a lot of constituency to do some of the things she's talked about in private equity they think they could probably manage that in washington. they'd probably have to pay slightly higher tax rates. maybe they can deal with that. wall street now is not what it was a few years ago. there's more progressives, more women, more diversity. it's more than it was and a lot of folks who believe warren is right on a lot of her issues and would be willing to pay a higher tax rate. >> fascinating, it's good to see you, ben white from "politico." >> coming up, outrage, resignations, and growing tensions between two estates, a
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look at the fallout as the ua sd plans to relocate is next.
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welcome back to the exchange the usda has announced plans to move more than 500 jobs from
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d.c. to the kansas city region the problem is the agency hasn't specified which side of kansas city those jobs will land on, and that's pitting two states against each other kate rogers is live in kansas city, missouri, with the latest. kate >> that's right. the search is under way here in the kansas city region for that new home for the usda. this is move the agency says will save it some $300 million over the course of 15 years and remove its researchers closer to stakeholders within the agricultural community of course, it comes at an interesting time in the region the governor of missouri has recently signed a bill calling an end to the border war, which has cost both states some $335 million over the past decade, luring companies back and forth. both states say they want the jobs while also calling it a regional win >> kansas would be delighted to
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get the offices on our side of the line if you have ever been there, the line not visible there is no wall you know, people just live across the street from one another, so regardless of which side it goes on, it will have a positive impact on both sides of the border >> moving the agencies out of the d.c. area has also been controversial, more than half of the 400 workers who had received those relocation reassignment letters either declined to move or they didn't answer the agency some of the members of both of those agencies also turned their back on the agriculture secretary sunny purdue when it was announced earlier in june. many layers, multifaceted story with a lot of drama. >> i love it not to root for the conflict, but it is kind of fascinating. we'll veer if they get out of washington that's the main point. >> coming up, a double record for disney the details and whether disney's dominae tncathe box office can continue, right after this
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disney continues to dominate the box office this year with another record breaking remake in the lion king the company now holds the record for the highest grossing movie
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of all time, now that avengers has surpassed avatar, and they're no stranger to this kind of success disney has had the top grossing movie every year since 2012 and has been the top grossing studio since 2016 i'm joined by daniel loria, and julia boorstin is here as well julia, they're so dominant i start to wonder, i mean, do we ask about antitrust, or is that a weird place to take this >> well, i think it's really not an issue of antitrust because if you look at disney's box office dominan dominance, it's 35% of domestic box office market share. if you add fox, maybe it gets them above 40%, but the thing about the box office is it's competing with everything else, with video games, with streaming, with netflix, so there's so much competition in the entertainment landscape right now that i think it's unlikely to raise antitrust
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issues, but at the same time, it's interesting to look at how disney is going to use its success in the theatrical space to try to drive subscribers to its new streaming service. >> for sure. this is obviously just playing right into their hands, dan. so my question, if we were to just look at the theaters, which are the other side of this then, you're telling me you're dealing with somebody who has over 40% market share, can basically dictate terms to you, right? are the theaters in any position to say, no, we don't want to do that or we don't want to give you that cut of revenue or show this movie this time and this many times >> those are tricky negotiations there's already been a little friction in foreign markets, in germany around the release of avengers for two years some movie theaters have clearly said this isn't for us, but domestically in the u.s., the top three movie theaters are all multinationals the consolidation isn't just happening on the stud yeside, but also on the theater side
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>> i'm sure you'll mention amc and some of the others, but their share performance hasn't been great you may think these are hals ya halcyon days for the box office. >> i think there's questions as to what the market is responding to or waiting on a big part is the market trying to figure out what the streaming strategy is going to be for a lot of major studios right? two, three years ago, the big conversation was pvod, premium video on demand, charging $15 for a movie to watch it at home the weekend after it comes out now it looks like the evolution is subscription video on demand, where all of these studios are scrambling to launch their own streaming platforms. >> we should add, this was such a hot weekend on the east coast, i wonder if it helped drive people into the theaters who were like, i just need to get out of the heat, but regardless "the lion king" was a hit.
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>> the air conditioning is a key. but the end game appears to be streaming. >> i think it's a little bit of both, though we have to remember here that disney is one of the few studios that does not want to close the window between when films come out in theaters and when they're available on demand for streaming. there are other studios that would like to be able to maximize their marketing spend by offering a movie by streaming, either through one of their own services or vod, where you pay to download it much sooner after a movie hits theaters i think that disney wants to maintain the status quo because they're doing so well in the current market and with the current rules. as long as disney is the biggest player, they're going to want to make sure that there is a reasonable window between when avengers comes out in theaters and when they get people excited to watch it again on their streaming service. at the same time, you have something like the disney plus launch, and you have to look at the fact that they're basically taking theatrical movies and
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films that cost as much and putting them out in streaming. they want to maintain the theatrical window but they're kind of erasing it by bringing their films straight to filming. >> at least in the theaters, it's like, at least it's not netflix. thank you. that does it for the exchange thanks for joining me. i'll join tyler and melissa for "power lunch." >> we will see you in just a moment i'm tyler mathisen, and here's what's new at 2:00 on "power lunch. a monster week for earnings. as 133 stocks on the s&p 500 will report this week. they include the tech behemoths, facebook, alphabet, and amazon we'll tell you what's at stake >> plus, in less than an hour, some of the biggest tech executives head to the white house to talk about how to take on huawei as the u.s. ban of that chinese tech giant remains in place >> and disney, as they were just talking, the king of the box office the lion king of the box office. live action lion king movie dominating the weekend and it

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