we only got 15 seconds >> facebook. >> lesley? >> nxpi. >> ihi, medical devices. >> a busy hour following boeing. "the exchange" with kelly starts now. >> thank you, scott. here is what's ahead boeing ceo is facing a lashing on capitol hill and it will continue into tomorrow we'll talk about why investors are not careful of the consequences here. we'll discuss that >> california is the most popular state in the nation. it is facing potential blackouts that's affecting millions of homes and still battling the kwie wildfires. we'll look at the missteps could a hawkish statement put a hole on this rally >> we begin with dom chu

>> we did hit as record intraday high in the s&p 500. s&p 500 is well above that 3,000 level and did hit a record of one point today. taking a bigger hit today of the nasdaq composite one of the stand out sectors of today's trade is healthcare. i mention it because healthcare on a year to date and one year bases is still the second worse performing sector in the s&p 500. 1.5% today driven by mega cap earning results. if you are looking for stock of the day, check out what's happening with general motors. better expected earnings and revenues it could provide some clarity for stuff going forward for next year watch those gm shares up 5%.

remember, kelly, from the peak that we saw earlier this year, those shares fell by 19%, if not rallied to current levels by 14%. we see that positivity stays >> i am kelly evans, welcome to "the exchange. boeing's ceo grilled on capitol hill today phil lebeau had a front row seat on all of that it kind of sold off as the sessions continue. >> this was a bruising couple of hours for dennis muilenburg. they questioned him today and blasted him for the development of 737 max no sena take a listen from ted cruz. >> you are the ceo, the bucks start with you did you read this document and how did your team not put it in

front of you, run in with their hair on fire saying we got a real problem here. how did that not happen and what does that say about the culture of boeing? >> time and again, dennis muilenburg continues to say there were mistakes that were made and boeing will learn from them a number of senators have said we heard that and we see you pivoting away from the questions that we are asking here. boeing shares as you mentioned kelly, they were up early in the day, pulled back just a little bit. the reason they're not selling off, kelly, with all of these questions about the 737 max certifications, look at that backlog. it has not changed you have not seen airlines cancelling orders. the believes is they'll get these planes built and delivered. >> phil lebeau, thank you very much he testifies tomorrow for transportation and infrastructure committee

joining me now from capitol hill, our representative in california, one of the members that'll be questioning mullenburg tomorrow. >> what would you like to ask h him tomorrow, represent garamendi? >> what is the actual value of boeing not the monetary values, what are his values safety of the aircraft or increase profits >> i think ceos that have done the kind of things that we have seen major companies go through, they ought to be fired and ought to not to walk away with all the bank accounts in their pockets we see too much of that.

we can give examples after examples where bad behaviors and outcomes, deaths is rewarded with a big fat paycheck out the door >> a lot of time when there is an incident like this, we see a massive loss of share values we have not seen that this time around should there be more of a penalty? >> the penalty ought to go to those who are responsible. >> not to shareholders who had nothing to do. perhaps voting occasionally and their processes. going forward, this was not the only issue, 800 max is not their only issue with boeing we have a serious problem with boeing in the military side of it the kc 46, the new areal refuelling tanker does not yet work there are ongoing problems at least four years or a few more before it actually gets out to

the u.s. air force so we got a lot of problems with boeing certainly the deaths occurring with the max 8 as well as the kc 46 and now they want to bid on other bigger contracts. you guys have to prove yourself, that means a bunch of executives take a big dive and leave without a fat going away present. >> congressman, since we have you here, i want to ask, you were not lieutenant governor of california with arnold schwarzenegger, what do you make with the wildfires this is a massive blow to california there is no clear answers as to how this gets fixed. tell us what possible solutions there are to this incredible problem? >> let's put the insurance piece aside for a few moment

>> the other part really goes to pg&e and the utility companies in california. they simply have been miss managed over the last 20 years as energy production havs have changed. pg&e in southern california, they simply have not been able to respond and mismanagement issue. we know pg&e they specifically have not invested in modern distribution technologies. their power lines are ancient and many cases are falling down. we are talking about an enormous investment that has to be made in california to secure its electrical energy system pg&e and bankruptcy is not able to do that

i know you got a lot of hedge funds sitting around and watching this and i am saying don't you dare come to california and rip off what remains of pg&e. we need serious investors that are willing to take the old ancient way of return on investment and consistent with the bond and not with the heavy stock market >> congressman, with that said, we heard from the governor who said he would like to see hathaway coming in buying pg&e and everyone saying they think this utility should be taken over by the state. which of those two options you prefer >> probably something in between. >> clearly and enormous amount of money that's going to be invested in the energy delivery system that goes all the way from rooftop solars to the main distribution lines coming in from morgan and colorado river

all of those things need to be upgraded whatever comes out of this bankruptcy, that plan has to be one and which the owner, the current owner or future owners have to be willing to put in billions and billions of dollars to upgrade the system. the state as parecalifornia, ca function on shut downs every other day. >> congressman thank you so much for your time today. >> thank you >> congressman garamendi of california beyond meat, the stock is down nearly 20%. analysts are pointing to increasing pressure if the competition which is something ethan brown addressed on "squawk box" this morning. >> if you look at our velocity, we are up 144%

we have been competing for a long time and we feel comfortable where we are we don't look at the 6 to 12 months period. >> lesley pickers is joining me now. you are right, kelly a company raises full year guidance and reporting of first quarter of net income and you see the stock declines over 19%. there are technical issues at play here. i think a lot of investors are looking at this lock up expiration today and saying what is going to be a good time to get into this stock? there has been some valuation concerns since ipo top performance ipo of the year, still up triple what it was when it went public it is definitely an interesting dynamic for this one >> yes, we talked about whether the selling pressure was enough

with all of these. this stock is falling another 20%. the answer is clearly no the selling pressure is still so intense. the selling pressure is incredibly intense often times when you see a lock up expiration, it will be interesting to see in the next couple of hours exactly how the beyond meat stock price recovers if it does at all and also studies have shown subsequent to a lock up expiration date. you see that stock price tick up higher just as people are seeing it as a good entry, maybe you get into the stock head winds from the expiration behind them. this stock is still very expensive by many, many metrics. and so i think there are still a lot of investors who are waiting to see more of a fundamental basis, what things look like from a competitive standpoint.

>> for sure. appreciate it leslie picker. >> here is what's ahead on "the exchange." >> coming up, just 24 hours left into the fed's decision on interest rates will they give the street what they want? will we see a big hedge when it comes to december outlook? promiscuous diners >> a look at our crisis in california and the huge blackouts. this is "the exchange. on cnbc

welcome back to "the exchange." the fed is expected to cut rates tomorrow what happens beyond that is more of a question mark steve liesman is here with some insights >> a lot of clarity on what happens tomorrow a rate cut by 25 based points. things get cloudy. take a look at our survey, fed-expectations 25 bases points cut in october says 79% next week cut in february 2020

i think the fed is going to pause after this rate cut tomorrow the 2020 meeting of 1.4% of median fed funds it is really dividing. even though there is that division, there is a lot of concerns about the economy it stems from the trade concerns and stems from global economic we are a 34% probability in the next year. if you go back here along with the whole of the highest we had since 2011 a 34% and up and up. pretty much mirroring as the trade war and global economic of both intensifies take a look here at the forecast take a look here coming down 2% and down a little bit more 60% of our respondents locked up

growth because of the tariff effect this 2% number is seen as a trend. inside of this forecast is about 34% chance that it did not happen >> all right, steve, thank you very much. >> what happens if we get a hawkish cut tomorrow and the fed is done after that joining me now is andrea garcia, welcome to you both. dean, people have said look, powell is a lawyer, he likes precedents and he cited the late '90s rate cuts which we had three totals and if fed was done if this is the third one and we don't get anymore after this what does it mean for the markets? >> i think chair powell does seem to latch on on the '90s example. i think what this means is the markets are not going to be supported if the fed does not continue to cut every meeting as

they have. and you know how that works out depends on how the economy proceeds at that point you think the economy will hold in on solid growth the market should be okay in that senator ocenario. >> what's your forecast right now in. >> we think they are done in this it is hard to have strong conviction with this fed they may well slip into another cut at this point. >> andre, the first one especially having this hawkish tilt to it where powell in the press conference says this is a cycle of adjustment and more, even though it turns out exactly right. what are the odds that he says something that is just not d dubbish for the market expectations >> the landscape has changed a big difference now is how many other central banks are cutting.

china is cutting and europe is cutting, all major energy marketing countries are also cutting and at much higher levels the landscape has changed where the market is looking at next year as a potential bounce back of global growth as a result of this monetary policies >> that's also the reason why the white house and the president have said, our fed needs to do more they're killing us and everybody else is way ahead of us. is that the way these cuts play out? is that the right dynamic? >> i would say it is not directly the reason they would do it. but, if this spread continues where interest rates were for the u.s., is it going to spread out more it is going to force the fed to cut further. more dollar strengths would be negative for the u.s. economy. >> the two fundamental reasons why we see these rate cut this is year, the main one is manufacturing. that's the one place where the

survey data and some of the hard data and the numbers are really kind of turned over. the rest of the economy is holding up relatively well the second big warning sign is what's happening with the yield curve. do you think the fed needs to continue to cut rates or are they okay leaving with the status quo here. >> in most case the fed would not be cutting at all at this point. we have 2% growth. unemployment rate of 3.5% falling. so really the feds have been cutting risks of the outcome the fed does not have to keep going. >> it is going to take a while to fiend out, right? we are only a few months into this now recession headlines into december and late last year, none of it has pan out yet >> that's right.

the fed is doing a preemptive easing >> andre, a final word of what you think? >> i would say look, you got to look not only of the equity market but at yields if long-term yields start to peak higher as a result of the bottom of the pmi, the feds may not have to do anything to improve it >> can they delay the meeting in a few weeks? >> i don't think that's on tap per se guy, thank you very much andre garcia and dean mack >> coming up supply shortages are putting pressure on the house market we have those details ahead. plus, it is the morning after its apple's morning shows, cricare not being too kind reasons for it that's ahead so servicenow put your workflows in the cloud, huh?

service now works for you. mploy thank you. ah, you could say that. so how are things with you guys? great. thank you. thank you, sir. lunch next week? terrific. say hi to the team. will do. call my office, i will. -sounds good. alrighty. servicenow. works for you.

welcome back shares of alphabet are down 2% c the company records low expenses the risk reward is turning favorable after its recent

sell-off take a look at shares of apple after hitting an all time highs everyday including today, it is now down 2%. new with sue herrera with our update >> hello everyone. we begin with the army officer testifying in the impeachment inquiry. lieutenant vindman is preparing to testify masked gunman opened fire in the city of iraq it was one of the deadliest single attack on protesters since antigovernment demonstration erupted this month.

he bowed to one of the simple demands of antigovernment demonstrators. take a look at this, one of nasa's satellite capturing the kincade fire from space. it had scorched more than 75,000 acres in sonoma county and it is just 15% contained you are up to date, that's the news update. i will send it back to you >> sue, thank you very much. sue herrera. here is what's ahead on "the exchange." >> from $149 to $33. stocks fall from grace why they are blaming ping promiu diners e teiaors are up in arm about thpontl new netflix features that's all ahead on "the exchange." but when a recall happens, perfectly good food goes to waste.

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here is our contessa brewer. we have a nice theme going on here grub hub share is potassilummet. the stock is down nearly $150 last year. the ceo pointed the fingers of users flooded to shareholders and this was the court of the day saying "online diners are becoming more promiscuous. our newer diners are increasingly coming to us already ordering on competing oen line platform and our existing diners. >> what happened to monogamy and dining if you are being rewarded by getting your first meal on us, why would you not be promiscuous. it sounds like they don't have a great plan to turn around when they say we are going to go around and try multiple strategies hello, throw spaghetti on the

wall and let's see >> does the customer loyalty lies with the restaurants or delivery service they're going to change to uber eats i am going to figure it out. i am not going to find a new way to get my chicken wings. >> everyone is talking about it and frank. >> you are hitting on it >> it is not object promiscuity. >> those diners are not so promiscuous. it gained more market shares >> door dash reporting valuation s right now of $12 billion market cap is around $4 billion. >> wow >> that shows you it is huge >> grub had the first move of advantage. there is also a little bit of

urb urb urb urban suburbans. there is little signs of door dash and we switched over. it is not promiscuitpromiscuity. they say that's where they are winning. >> they bought kcaveats. >> and grub hub says they're going to try again they're going to go back and look to partner with more restaurants but can they do it if you are a restaurant operating on the margins, you really have time to go through and partner with multiple companies. >> is grub going to win by giv r more discounts we'll catch an interview with jason helfstein. we'll speak with him on power lunch in the next hour >> next up, speaking of delivery, amazon is going to make a two-hour grocery free for

prime members. this is a $15 a month service that they just made free now they'll have access to tens of thousands of products the grocery has been one of its fastest segments and a game changer. >> this is a big gain point for a lot of prime members great to be able to order groceries online the minute you check out and see that $14.99 added to your total, and you are thinking maybe i will go to whole foods and buy it >> amazon is saying either way we in. it is a lot. obviously we can't look at the publicly traded direct counter parts. what does it mean for the rest of the grocery chains? do they get under cut by this? >> whether it is kroger or others, you have other grocery chains that's trying to compete with amazon grocery. we'll do the shopping for you but we'll charge you a fee of $5

for us to go through and pick your groceries and have it to be delivered at your car. what's future caascinating abous in places where there is not a lot of competitions, amazon is going to be the competition. will this end up driving your local neighborhood grocery stores in the midwest out of business >> does it make them at the margins profitable >> that's not the question will the price of your groceries go up? how does amazon make your money back amazon got chase out of the food business how did they make money doing this >> it works for them for now they're building shares time and time again totally changing gears let's talk about juul today. more jobs are in jeopardy there. sources telling cnbc, the company is planning to cut 500 jobs by the end of the year. juul says they are under going a quote, "necessary reset.

get this, chief marketing officer is leading the company they no longer have a cmo. i guess if you have no marketing why do you need a chief marketing officer? >> right apparently you do. everybody coming after them. you are causing all these deaths or the whole thing that's being worked out. i read an interesting thing over the weekend making the point that in the u.k., there is a ton of vaping and they have not had the same problem as the u.s. have obviously a lot of the problems here associated with thc as well >> they uses nicotine salt and it has more nicotine in your average vaping product what we need to look at as juul is trying to compete, they're

pointing earnings on wednesday since the cdc started studying illnesses related to vaping. a lot of change, they placed a former altria executive as the ceo and cleaning house is part of the entire process. valuation haves bes have been l. >> cutting work force does make sense at a time. on average it was employing 300 new people every month over the past year. so the work force is a little at a time and refocusing on these multiple inquiries of the rising teens of vaping. the investigation is going into the company. we got to imagine the type of legal expenses this company is dealing with, taking care of marketing really makes that. >> 80% of their sales were on flavored products.

putting a ban on those products really put a pinch in their bottom line and how they go about combatting that. i don't know how you do that without a series of marketing strategies this is what they chosen to do now until the fda comes down one wa way or another >> netflix is testing a future that would allow users to watch conten contents in higher speed judd apatow tweeted, "don't make me have to call every director and show creator on earth to fight you on this. save me the time i will win but it will take on." >> netflix is changing the quality of the content which hollywood think is really is >> i am shocked as many people

speeding up the podcast as they do is there going to beuser demands to speed up shows. >> what does it say about it >> we are so time crunched that we need to hurry through our binge watching >> remember how they speed up reruns on "seinfield" so they can jam into more commercials. it is hard to watch because you got to talk a little bit quickly. well, what would it be like if you sped up judge apatow's show. here is what he sounds like now. >> this is my level of fame. if i am walking down the street and somebody says are you judge apatow --

>> you can't take away of everything they're coming. eddie murphy came back to more raunci comedies. would he do the same thing >> do users want it? >> if netflix mentioned this and does not do it we'll be happy to take you we'll do it. >> comcast needs or spectrum needs to add some volume to the speed bump on your dvr and you can do it yourself i speed through commercials anyway this is a way to watch shows much faster. >> i can get a lot of shows under my belt. >> who wins this fight is it netflix in apple's product is coming out on friday.n netflix has to be competitive here

>> thank you all, contessa brewer and frank and seema modi. >> coming up, people are saying hseto my backyard when it comes toou development a closer look on how it can impact your neighborhood up next. - [woman] snhu was the best experience of my life. - [man] without snhu, i wouldn't be the leader i am today. - [woman] i graduated high school 19 years ago. i still finished. - [man] in the military, you feel that sense of accomplishment. that's what snhu is. - you will march from this arena and say to the world.. i did it. - [woman] you did it. i love you. - [graduate] i love you too.

welcome back california's utilities hope to prevent fires. their mandatory black out did not work out how do you prevent this from happening over and over again. >> reporter: it is only 5% contained and they're trying to get their hands. this is one of the eighth houses destroyed and completely gone. i have to tell you next door is a brand new just completed all concrete compound, untouched on the market for $36 million

which gives you an idea of what this neighborhood is like. this particular area is covered by los angeles' department of water fire it is also saying they have to do more power outages prevent e preventive preventively the governor is insisting on an investigation on whether these outages are being successfully on whether customers are charged for power they are not getting >> pg&e has not been in this position before. we would like them to consider reimbursements and we are going to be force full in advance ing that >> pg&e is in bankruptcy evercore has suspended ratings and on the target price. trading below and ever poor warning of the value of the

company can go to zero >> kelly >> jane wells out in california for us >> thit could shut off power agi this time affecting millions of people again let's bring in john myers. we are looking for some answers. how did we get here? >> all californians are asking the same question. the problem is so complex. in some ways it is simple. turning off the power presenting wildfires. the strong winds and fires have knocked out power lines and spark this dry brush it is always dry in california this time of the year and dryer these days in the climate change universe the complexity of what pg&e is up against is financial pressure that you mentioned a moment ago and technological issues of where they turn off the power of some of what's been going on the last few days whether they are

turning off to powers of individual houses where they are turning off big transmission parts. the governor wants them to be more targeted about it that's hard with the technology of the company the company does not seem to have the finance >> in terms of what's changed. like you said the winds, the situation here, this is not new to california. is it because of the drought is it because of the weather has there under investment by pg&e for decades why last year and this year? has this problem become so bad that's lead to potential blackouts to stop the problem and it is not clear it is stopping >> a couple of things are being played here. we had a couple of dry seasons and windy and gusty seasons. that's not historically unusual in california. it is getting dryer and the season is lasting longer you got a lot of people who are living in these areas between

rural areas and i would say areas outside of california cities and wild land interphase area they are in harm's way when this thing happens. there has been a lack of investment they have been asked of questions of why did you spend this money on underground lines years ago. governor newsam and state legislatures are going to get on this utility companies are pulling on the shots. they control when to turn the power on and off >> the governor begged hathaway to come in and bernie sanders says it should be taken over by

taxpayers. we are talking about billions of grand larce dollars for investments need to happen if not, in order to pay for the upgrades, does that mean power bills for californians which already have housing adjusted of the highest poverty rates in the nation, those bills are going to be going up. >> their ideas to floating statewide bonds, would help pay for part of it it is complicated and as you know, it is obviously a huge level here newsom realizes what he got in front of him and it is not going to be easy and end any time soon >> john myers, appreciate your perspective on this. we'll check back in with you as it plays out >> john myers with the los angeles times. >> apple's morning shows are falling flat with critics.

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rank this opportunity. he's not getting paid from the college directly

external sources say it's the first step in what would take ma months it's the first step. remember ncaa was saying they didn't want college players getting paid they understand the rules have changed. congressmen are trying to put together new bills we will go ahead and let this happen and watch for specific rules that come in next few months back to you. >> this is a huge u turn i can't imagine the ramifications. i don't know where to begin. >> we could have gotten paid when you were paying lacrosse. >> i don't think i would have collected much for that. it's true, every one from division three, it will happen in about 18 months time. >> they say they want to get clearance immediately but nothing in january 2021. they will still have the working

group. that's still six more mons the go it's if first step mp tin the process. the fact they are allowing this to happen is a big deal. >> a clear response to what was happening in california. coming up, from not in my backyard to go right ahead the housing affordability crisis is having people change their tune in certain parts of the country. we'll explain, next. if you're on medicare, remember, the annual enrollment period is here. the time to choose your medicare coverage... begins october 15th and ends december 7th. so call unitedhealthcare and take advantage of a wide range of plans with a variety of benefits...

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welcome back america's housing shortage seems to be getting worse. realtors say that's what's holding back home sales. they are saying yes in my backyard to multi family lots. with me to take a look at this movement is kim. she's a managing editor over at axios. is this just a san francisco phenomenon or is this something that is happening nation wide? >> it's great question this really started in san francisco. that was where really ground zero for skyrocketing whole prices and that's where the buy a home in san francisco, the median price is about $1.7 million. people who are making even six

figure salaries at major tech companies and doing quite well by most standards across the country are having a really hard time affording a basic one bed room, two bedroom house. as you see the supply and demand just completely out of whack you are starting to see more and more people say, you know what, the answer to this is to increase the supply to help meet the demand we have to build more houses and units beyond single family houses >> that's the area is unique because physically land and there's a host of other reasons for this as well traditionally people have moved to second tier cities that are more affordable. we saw minneapolis saying it's going the way of pushing multifamily housing over single family housing what is driving this in other parts of the country is it coming to most single family neighborhoods >> the pressure on housing is

not just limited to to casoastal cities as people mover out of those coastal cities and looking for more affordable place, those places that were affordable are becoming less affordable you're seeing places like minneapolis to do away with single family building and really make way for not the 20 unit, 30 unit kind of housing but the duplexes, the triplexes. a way to make it more affordable for normal families of people just starting out. starter homes are becoming much more out of reach. >> the attitude is shifting toward a more prodevelopment but what about the older generation who are afraid their views will get blocked. >> you are seeing this conflict

and clash between no not in my backyard when it comes to more housing development and those on the younger said saying i can't afford to live anywhere. we have to change this or every one will be spries priced out that's a big problem for city leaders as well. >> sorry to cut you off but we have to leave it there that does it for the exchange. power lunch starts now we'll see you in a moment. we are just 24 hours away from the fed decision tomorrow with stocks at record highs jerome powell doomed to disappoint the market. mullenburg, the boeing ceo