Skip to main content

tv   Closing Bell  CNBC  February 4, 2015 3:00pm-5:01pm EST

3:00 pm
well cider master. thank you very much for joining us today. >> thank you mandy. >> thank you so much for watching "street signs." >> "the closing bell" is coming up next and i'm going to now enjoy a sip of the anvil. you have the pitchfork and the hatchet. >> sounds ominous. >> going to bury the hatchet. i enjoyed a lot of cider in london actually. fast growing. u.s. worldwide. >> and half of it consumed by men. >> there you go. welcome to "the closing bell." i'm kelly evans. we're talking about a lot more than cider at the new york stock exchange. >> i'm bill griffeth. the dow is outperforming the nasdaq and the s&p and you can credit one stock in particular. disney just blowout earnings. you guys reported it last night on the show. it's been up about 8% a little less than that right now. when you think about, this is a
3:01 pm
170-plus billion dollar company. that's a huge move. >> it is and it's incredible those earnings still could blow it out. a lot to do with "frozen." we talked about it yesterday but the reaction initially was not as strong as what we've seen throughout the session. it's held up well throughout a volatile session. >> speaking of volatility, look no further than oil. remember the big rally we've been talking about and the price of oil, it has reversed itself. it's now given back all of the gains that we saw the last two days. the price of oil settling down more than 8% today. for a period of time it was down 10% just off the lows. we'll talk more about that coming up. >> more market moving earnings also due out in an hour. we have 21st century fox today, keurig green mountain under armour yum brands. don't miss a moment of it. >> we're waiting for the big unemployment number on friday. right now it stands at 5.6% and the unemployment rate is a big
3:02 pm
lie. that's not me saying that. that would be the ceo of gallup of all people and he will be here to back that controversial claim up a little later on the show. >> here is where we stand in markets. it's not really about the dow today. it's about the s&p. that index actually negative as you can see there by about a quarter of 1%. a lot has to do with the really shocking move in oil just as everyone was talking about the 10% bounce over the last couple sessions. today we are giving that back and a lot of questions for investors here as to what to do next. >> let's talk about it. a lot to get to in our "closing bell" exchange. we have tom essay from sevens report, jack bouroudjian, a cnbc contributor, kimberly foss is back from imperian wealth management management. tom, are we putting in a bout tom at this point in the price of oil? >> no i don't think so. i think what we're seeing is your prototypical short covering
3:03 pm
rally. what got us to turn around was a big drop in the rig count and that carried over monday when we got some earnings that said there were all these slashing of cap ex budgets. neither one of those things are going to materially reduce production in the u.s. in shale in the near term. until that happens, i don't think we're at a bottom in oil. i still think we'll see it trade with a three handle in the $30 range. >> what does that mean for the market, jack? >> you know i think whenever you're talking about lower oil prices lower energy prices, you've got to be a bull. the bottom line is that whenever you see that happen the market reacts favorably. don't take my word for it. look at history, and history has taught us that. if that is the right analysis and i do think that at least at the very minimum we'll test the bottoms one more time. if that is the case chances are we'll be there for quite a while. even if we see 5% and 10% snapbacks, this era of low energy will be so beneficial for
3:04 pm
stocks for the next six to eight months, i think we are going to be surprised. >> kim, we've got the volatility we have to deal with. if oil is going to keep doing this, the stock market is going to keep showing this kind of volatility, what are you to do then for your clients as you invest their money? >> you know i think volatility is here to stay. with the geopolitical uncertainties, oil issues volatility is here. so what i'm covinge coaching my clients to do is control things we can control which is really the allocation of your portfolio. how much do you have to stocks how much to bonds. diversification obviously. globally diversified portfolios and microrebalance your portfolios back to ips levels. you need to rebalance back to that allocation. you need to be in these markets in the long term and that volatility pretty much is going to say here probably for the short term and probably for the long term but that's where the 1
3:05 pm
percenters make the money in the market. they stay in through the peaks and valleys. >> against this backdrop do you see interest rates starting -- speaking of bottoms, to form one and maybe the next move is higher or what? >> well i think the last six trading days are going to answer that question. today we moved right up to that 1.85% level in 10s, 1.86% is hugely significant. it was the intraday low from that crazy october 15th where we settled 28 basis points higher. at this point it looks like we're snubbing up against yield resistance but all bets are off should we settle above 1.86%. it looks to me as though we're going through a digestive process whether it's in the foreign exchange market think the euro. digestion in the yen pretty much all year after its crazy weakness in 2014 and i think when it comes to oil, yesterday i talked about $51.27. you need to pick something to gps. that would have been a momentum play if it closed above it.
3:06 pm
of course, it didn't. that's why we pick out areas to put your sell stop losses in. i agree with pretty much every guest, we are definitely bottoming in crude. it is just going to be a rounding process that takes time. >> rick, if we get a strong jobs report on friday could that be an impetus to see those yields rise back above those october lows do you think? >> oh absolutely. while the market is in this process, anything that pushes yields up, even if it's some kind of shock like a strong number just like oil, it becomes a logistics game not necessarily fundamentals, but who needs to get in who needs to get out, and how big is the port hole for everybody to fit through. >> jack the other thing happening today are some headlines going back and forth about about germany and greece and can you tell us how that might move the market for the next month or so? >> i think the geopolitical issues are affecting the market. you see them every day but the reality is that europe is not as big a factor as people really think it is. you know unless it free falls
3:07 pm
or we see a complete breakup of the eurozone. what we find here is that the u.s. economy is the engine that is leading the way. the rest of the world seems to be following that path. and -- >> would you rule that out, jack, a breakup of the eurozone? >> you know what? i would, and you just mentioned germany. germany knows that failure is not an option. that they are stronger much stronger, with a unionfied europe. if greece were to leave, i don't think it's the end of the euro zone. if germany starts to talk about leaving, then we have some serious issues. >> rick is assuming we're putting in a bottom here a rounding bottom in the price of oil. i want to come back to you again on this. plenty of guys are coming through saying maybe they're going to start nibbling on some of the oil stocks. maybe it's time to start thinking about these guys. are you at this point even though you still could see us go down another $10 on oil? >> see, i think that's a smart
3:08 pm
play. >> tom? >> this is for tom essaye. i'm sorry, rick. >> no, i'm not. i'm being cautious. i think that the xle, which is the broad based energy etf, is trading better but until i think we have a bottom in crude, and, again, i think we could trade in that $30 range before this is all said and done, i'm staying away. again, i'll have people refer back to natural gas, what's happened over the past several years in natural gas. rig count declined 60%, production went up 20% over the same period. i don't think the bottom is in. >> kimberly are you guys buying in the energy space? >> that's in our large value portfolio. energy sector we're buying in that as well as the financial sector as well. but here is the point, with respect to jack's comment, you know the economy of the united states, we are the engine of the world, and here is the thing. we're "c" plus in the world economy but everybody else is a "d" and an "f" and guess what's
3:09 pm
happening? all that geopolitical issue, all that oil is all coming to the united states. it's going to push our markets higher whether we like it or not. i think this market is going to go higher and investors need to be prepared so that they can be in that market take profits, and then also make sure that when interest rates do rise they are prepared for that in their portfolios and stay in the markets in the long term. >> rick what were you going to say on oil? >> i disagree with one aspect. i think a lot of what's going on with oil the last 10 or $15 below $55 was logistics. how the trade pans out with respect to margin and leverage. i think that process is left to be worked out. i would go with the true side of the business as being a buy and look for the commodities to play catch-up. >> could you discount the idea that we could go into the $30 area? >> i personally would, yes. >> what about tom's point as well, rick that it's more likely we still see production continuing to increase here
3:10 pm
keeping downward pressure on prices? >> i do think we have a supply/demand mismatch no doubt about it but i think that was many dollars above us. i really think what's going on here is after trading commodities for a good chunk of my life they get beyond fum fundamental rationality, somewhat like stocks have the last couple years. >> i wonder if there's an oil vix. that sounds like something to buy as we've seen things move around. >> something to ask jackie a little later. >> yes. thanks, everybody. good to see you this hour. we have 50 minutes to go into the close and the dow is up 60 but as mentioned, a couple big names contributing to that. disney visa, the s&p two points lower, the nasdaq trying to stay positive. >> coming up make or break time for 21st century fox, yum brands keurig green mountain under armour they are all posting earnings. i don't know how you're going to get to all of those guys all tame. >> with i aa lot of help. >> the market responds the
3:11 pm
analysis, it's all coming from our team of pros. >> also jeremy siegel speaking with us exclusively. he accurately called dow 18,000. >> and airlines have been surging again today, no surprise to our next guest. she just upgraded delta and united continental and she'll tell us why coming up after this break. stay tuned.
3:12 pm
analysis, it's all coming from break.
3:13 pm
3:14 pm
modest gain for the dow today with a gain of 52 points and much of that as we pointed out, is disney because of the blowout earns last night. that stock has been up about 7% or 8%. s&p lower today. if we look at the ten sectors that make up the s&p 500 index, you see discretionary -- consumer discretionary is the leader followed by technology. the laggard, one day they love energy and the next day they hate it. the price of oil fell by more than 8% in today's trade. >> that sector off 1.6%. there's an oil vix. it's ovx. dominic chu is keeping an eye on all of today's movers for us. >> let's start off here with what's happening with apple shares which did hit an all-time
3:15 pm
high in trading today. the stock is up about 65% over the course of the past 12 months. you can see up by 1.25% today. so a nice green day for them. a tough day for ralph lauren. they reported weaker than expected third quarter results and trimmed its full year 2015 revenue forecast but it did raise quarterly dividend. on balance shares are down by 18%. bad day there. cable stocks moved higher after fcc commissioner tom wheeler detailed his net neutrality plans that will not include rate regulations, any of that type of stuff. those cable stocks comcast is the parent company of cnbc. energy stocks falling as oil prices plummeted during the price of the day. what's bad for one industry could be good for another. airlines, of course, that inverse relationship holding true. they're soaring on falling crude prices. united delta, southwest very
3:16 pm
much in the green. back over to you guys. >> dom, thanks very much. by the way, speaking of that oil vix, the volatility index for crude oil, you know the cboe index, when it gets to about 20 that gets our attention. it's yellow flag territory. look at the oil vix right now. it's in the 60 range. we got a one-year chart. it's up 5% today at 62.5. >> everyone talking about buying volatility last year. buying oil volatility would have worked even better. >> speaking of which, united and delta have been upgraded to strong buys this week by our next guest. she says the u.s. airline sector is well positioned to show strong earnings and cash flow even if fuel prices do not stay this low. >> savvy joins us from raymond james. she's behind that call and also with us is jack moore from the street.com who is less optimistic about the airlines. welcome to you both. do you feel any differently now that oil has behaved today the
3:17 pm
way it has. >> no and that was really our call. we saw oil moving back up and we expect it to move back up. our estimates for 2015 preflekt a reflect a $70 brand price. this is a group that's profitable at $100, $110 brent. even if brent is at $70 or $80, it will be a group that's profitable. >> the fact we're down 8% in crude, now that we're back below $50, does that change your call at all? >> it just makes it stronger. you know what you're going to probably have into 2015 is possibly a one-time cash windfall for the group. as long as the economy stays strong, we expect fares to hold steady and a lot of cash to be generated and that cash is powerful because it can improve balance sheets and as well as create a lot of cash to be returned to shareholders. a great example is in 2008 when delta in the recession lost $1
3:18 pm
billion. most of all of that was related to interest expense. by doing nothing they have just halved the loss. >> maybe we can get free peanuts at some point. why aren't you as optimistic about airlines? >> the one thing they said that's true is these stocks work if the economy is working. one thing for united and for delta, 45% of their business is tied to the international markets, and, you know, the u.s. is doing well. i'd love to own southwest, 99% of their business in the u.s. there's concern once you go abroad and both of those companies spoke yesterday about the weak yen and weak euro and how that was impacting their business and that's just the fx side. there's also just economically visa was saying how spending was coming down on the travel side in international markets. i think that opens up a big risk. >> but you have to admit, jack these guys have pricing power right now. as the price of oil was coming down, people were saying why
3:19 pm
don't they bring the price of the tickets down because they're making so much money and at least one airline executive told us here that pricing is based on demand for those seats, not on the price of oil right now. not on expenses. >> right, and i think that the pricing -- the pricing is relatively strong, but that doesn't necessarily mean that it's going to continue that way, and i completely disagree that a higher oil price certainly in material level up to $100 is good for these companies. you see oil coming down today and these stocks going up but when oil was going up three days before that these stocks were down 10% to 15%. you talked about the oil volatility index being at $60. these stocks are essentially oil derivatives. it's very risky to own these unless you're going to try to make a fundamental call which i don't think has much strength. >> savi, is part of your point it's less of a call on oil than some of the unhedged ones like
3:20 pm
american or alee gent. >> investors will probably sell these stocks in a gut reaction but oil cannot go back to $80 or $100 without the global economy improving is our conjecture. in that sense it oil moves higher demand is probably improving as well. so i think what you will see as they report quarters is that earnings holds up even if oil prices move up. >> i didn't see savi do you have price targets on these guys that you put the strong buys on? what are you waiting to happen? >> we do. we have 30% upside from current levels on these stocks and, again, it's really that as fuel prices move up some of their losses on the hedges you're right, will be less but their earnings are still going to be very strong and if you look at our 2016 earnings they're based on $80 brent and middling global economic growth and we still have some very attractive valuations. >> so she sees 30% upside.
3:21 pm
jack what about you? >> i don't see the same. i think you have a lot of risk. when stock was working when analysts didn't believe in it but one by one thief been converted and now you have 16 buys and no sells. that's a precarious position to be in. you know current events you can't extrapolate that into perpetuity and i don't believe they have many levers to pull. i think they've done an incredible job of restructuring, but i think that any kind of spike in oil and any kind of weakening in the global economy which we're already seeing you could see 10% to 20% lower from here. >> two smart people two different points of view. i love that. savi, jack thanks for joining us today. >> thank you. >> heading to the close. the dow is up 70 points but that's not really telling the whole story. we should probably just put up a chart of disney to tell that story. nasdaq is a little higher and the s&p a little lower. >> and jeremy siegel coming up.
3:22 pm
also up next our weekly "beat the street" segment. we'll find out how one fund manager is crushing his benchmark in the real estate investment trust area without owning any physical real estate. that's coming up.
3:23 pm
there's nothing more romantic than a spontaneous moment. so why pause to take a pill? and why stop what you're doing to find a bathroom? with cialis for daily use, you don't have to plan around either. it's the only daily tablet approved to treat erectile dysfunction so you can be ready anytime the moment is right. plus cialis treats the frustrating urinary symptoms of bph, like needing to go frequently, day or night. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain as it may cause an unsafe drop in blood pressure. do not drink alcohol in excess. side effects may include headache, upset stomach,
3:24 pm
delayed backache or muscle ache. to avoid long-term injury, get medical help right away for an erection lasting more than four hours. if you have any sudden decrease or loss in hearing or vision or any symptoms of an allergic reaction stop taking cialis and get medical help right away. why pause the moment? ask your doctor about cialis for daily use. for a free 30-tablet trial go to cialis.com welcome back.
3:25 pm
take a look at markets here. the dow helped by disney as we mentioned, but not helped by oil, and that impact playing out across the s&p today, but clearly the laggard, energy is the weakest space. the index has turned positive. it's holding at 2050. the nasdaq putting in a decent performance. there is disney there's the story of the day if you're wondering why the dow is up 80 points. it has a lot to do with this name. strong earnings. frozen not just describing the weather but certainly a lot of the merchandise. >> the "frozen" juggernaut is still strong and they still have "star wars" to come down the road. >> in december. that's right. >> that series of movies that you would think would do very well. >> we're back with our weekly "beat the street" segment. today real estate is the focus. >> pimco's real return real return strategy fund is. joining us is chief investment officer scott mathers. good to see you. thank you for joining us today.
3:26 pm
>> good afternoon, bill and kelly. >> is the reit market right now something you could just throw darts at or do you have to be selective? where is it that you're finding the best return for your money right now? >> well i should mention this particular fund the pimco real estate real return fund shares some features in common with a broad suite of products we have targeting different sectors of the equity market. and what's unique about it is that we're using different return drivers, so yes, our specialist expertise in the equity market in different sectors, but also the expertise we have in corporate bonds, in this case inflation linked bonds and other sectors, mortgages, securitized universe, et cetera and what we're doing is using all of those specialists' expertise areas we've doved over eddeveloped over the years to build portfolio with better return characteristics
3:27 pm
characteristics. >> i have no idea what you just said. >> yeah. >> i know you're getting there somewhere. >> what i do think i'm hear something a lot of the performance of this index will depend on inflation expectations which our viewers should know have continued to drop precipitously. >> why are you so confident they will turn around? >> this particular strategy it's using reits, and so it's using an index tied to the reit universe, and what we're doing there is mainly focused on that but also using real return or inflation index bonds in the portfolio as well. so it's a strategy that typically does well when inflation is rising. both those sectors do well when inflation is rising but in this case both those sectors have done very well because of our call for low real rates. and so i should make a notation that the day-to-day managers of those funds have done an excellent job. earlier in the year she spotted this misvaluation of reits and our forecast for low real rates, which would continue to hold
3:28 pm
throughout a long period of time, so-called new neutral we've been talking about, meant that that asset class would be rerated. so that's why the fund has something like a 45% return over the last year. >> we would be remiss in not asking the chief investment officer at pimco about the total return fund. the outflows continue. it continued again last month. how frustrated are you to see that happen even as your new team beginning in october when you were managing this fund you're outperforming 83% of your competitors and yet the outflows continue. is that a distraction for you or what are you doing? >> no, it's not a distraction. we're 100% focused on returns and performance. we found that by doing that not only can we continue to deliver the excellent performance that by the way, we've had in the total return fund and across our other offerings, but ultima thely if you focus on returns, that's what investors care about. >> i want to ask broadly about rates here as well and the
3:29 pm
manufacture emphasis you place on real rates staying low. there are other people saying with the number of bonds around the world with negative yields how much lower really can we go here and what happens if the fed does start to move? i mean just give us a sense. are you guys basically betting that the kind of interest rate environment we're looking at is here to stay for a period of several years? >> well we think we're in a low rate environment for the period of several years for sure. we think it's pretty unlikely that real rates can fall much further, and we do expect that the federal reserve will begin inching those real rates up to what we call our new neutral destination but it's going to take years. we're in for a low rate environment for a good period of time. >> part of the reason i ask, too, is that real estate has done so well lately here as people have desperately looked for yields. if rates do move higher at all, and i understand that's not your view, but would that be what snuffs out the real rally we've seen in some of the real estate and related funds lately? >> well it could be if it wasn't matched with superior economic performance. you would think the two would go
3:30 pm
hand in hand. it's our forecast it will continue to have a pretty healthy growth rebound in the u.s. that should deliver some ability to raise rents across the real estate sector. largely because there's been an episode of underbuilding. it's going to take many years for that to catch up. even while real rates can gently rise you can still do pretty good by investing in an income producing asset class like the real estate real return fund. >> all right. scott, good to see you. thanks for joining us. appreciate it. >> you're welcome. thank you. >> scott mather the chief investment officer at pimco out in california. >> and prrsx is the ticker for that name as well. our thanks to scott. we've got 30 minutes to go into the bell. the dow is up almost 100 appointments. don't look now. >> we've been stuck between 17,000 and 18,000 since early december. our bob pisani will take a closer look at why that's been happening. plus wharton's jeremy siegel is back with us to tell us when he thinks it will break out of that range and which way it goes when it does. >> we'll talk fed policy the
3:31 pm
affect of global central fed easing on wall street and a whole lot more. we're back in two. ♪ there's confidence. then there's trusting your vehicle maintenance to ford service confidence. our expertise, technology, and high quality parts mean your peace of mind. now you can get the works, a multi-point inspection with a synthetic blend oil change tire rotation, brake inspection and more. $29.95 or less.
3:32 pm
3:33 pm
3:34 pm
welcome back. the volatility continues. that is for sure. oil is trading in the electronic session and it's coming off its lows and now suddenly we've had a pop in the industrial average. the dow is up more than 100 points. now to 17,773. the nasdaq is up 15 and that's put the s&p back in positive territory. we're showing the dow heat map. all 30 components a little more than half are positive and, of course disney is pinned at the top of the category right now. >> a lot of interest in visa today, too. the dow has been making huge moves for the last two months but it hasn't really gone anywhere. bob pisani you get the lucky job of explaining it to us. >> i want to show you how wild the ride has been because it's
3:35 pm
been a thousand-point churn and it began in the beginning of december. we hit historic highs just shy of 18,000 in the beginning of december, then we plunged 1,000 points in a little over a week here to about 17,000. the third week of december. the dow rallied another 1,000 points. then we're back to over 18,000 a little over that. we move sideways for a week, closed around 18,000 december 31st and it started all over again. the dow swung in a 200-point range daily in january and then february 2nd we were down essentially at 17,000. and now look i want to show you the chart. we're moving back towards 18,000 again. the dow has rallied more than 700 points in just three days. now, you know what's the motivation here. it's oil and it's europe. take a look at the chart of oil. oil is dropping already going into december but it took a big leg down that first week and then kept dropping like a rock. went from $60 to $55 and then it stabilized and the market
3:36 pm
stabilized a little and it's been up and down since then and even today that's the story. same with europe. here is the vgx, the european stock market. fell out of bed in early disease. fears greece might exit the euro. every turn of the greek saga europe has been moving up and down and that's moving our markets as well. if you would have stayed in the lower band bought on the close -- bought close to the 17,000 level, you'd be doing already right now, but it's a tough call because it's happening again today. we're moving in exact line with the oil markets. down and then up again. guys, back to you. >> bob thank you. you know this rally now reminds me of late yesterday when we learned then that there was a huge imbalance to the buy side. we don't know the numbers yet at this point. art cashin just came by and said he didn't have anything yet for us, but this pop we're see something very reminiscent of what we saw late yesterday. >> given the absence of headline that is would otherwise perhaps be moving it. our thanks to bob.
3:37 pm
what is the catalyst that will break stocks out of this range here? well, with us now exclusively is wharton school professor of finance jeremy siegel. welcome back professor. >> happy to be here. >> i just want to begin by asking is your dow 20k call still on for this year? >> i think it's very very possible. you know we know that lower oil prices is good for the united states. a stronger dollar is actually also good but there can be too much too fast and i think the plummeting oil the soaring dollar caused so much chaos in earnings projections -- i mean the real source of the decline in earnings estimates are those two factors, oil going down and the dollar going up. and i think what the market is seeing, maybe there is a little stability here. we've seen oil rally, we've seen the euro come back a little bit, and i think those two factors are able to anchor the market and if we can get some stability in those factors, i think the market can move ahead from this
3:38 pm
position. >> jeremy, as you well know the last, what four or five years a lot of people have said where else are you going to put your money but the u.s. equity market? you know you have difficulties in europe and china is slowing down and our interest rates are bad. so put your money in u.s. equities but now we're starting to hear from people who are looking to europe as sort of a value play and i wonder if that takes some of the momentum away from the u.s. equity market. what do you think? >> well european stocks are selling a lit cheaper, maybe 10%, 15% on a price earnings basis from the united states. i think a big question is do you have some more risk of euro depreciation? actually i think there is some more risk there. i think a lot of risk has been taken out. certainly from 135 down to 115, but, you know, draghi hasn't even begun the qe. i think a lot of people are looking for a dollar there. so you got to be careful. if you could hedge obviously the
3:39 pm
euro decline, i think there are some attractive stocks there, and certainly among the exporteders. they export out of the eurozone. they could be looking at pretty good demands in earnings increases. there are opportunities there but take a look. the interest rates there are even lower than here and they're basically zero everywhere. so stocks are still i think really the dominant game for anyone who either wants yield or protection or return. >> professor, would you distinguish between good and bad stock rallies? we've heard a lot of guests say as everybody looks to the u.s. as being the most attractive place in the world, do those inflows start to push us for example, to a higher valuation, one that isn't justified. does it trigger a response at the fed at some point? are you worried we could get to see that kind of stock market rally instead of one built on earnings growth? >> well we're looking at, what about 17.5 sometimes this year's earnings, 18 maybe, and that's greatly reduced earnings as they have come down quite
3:40 pm
dramatically in the last couple weeks. in a very low interest rate climate, that's not excessive. remember back in 2000 we had 30 price earnings ratio in a much higher interest rate climate, and, yes, you should be scared in that situation. actually referring to the fed i would love to see a tenth of a point increase in the unemployment rate, an increase in participation rate. i like the job growth but i want more people to enter the labor force. i think if the fed sees that happening, they will put off any increase because that's their primary worry, is a tightening labor supply we need more people coming into the labor force with the good job opportunities. that's something that i'm going to be looking at on friday in the jobs report. >> all right. jeremy, always good to see you. thank you for joining us. >> thank you much. >> jeremy siegel of wharton in pennsylvania joining us. volume taltatility continues.
3:41 pm
we were up 110 points now up 50 points. >> 20 minutes to go. really could be anything at this point. the s&p now lower again by 3 points. the vix a bit lower on the session while the nasdaq up by about 2, and brace yourselves for another blitz of after the bell earnings. yum brands among the big names reporting tonight. >> we have 21st century fox, keurig green mountain, underarmour on the list. the numbers you need to watch out for are coming up next and we'll bring you those results the second they hit the tape along with the instant analysis. so don't go anywhere. you show up. you stay up. you listen. you laugh. you worry. you do whatever it takes to take care of your family. and when it's time to plan for your family's future we're here for you. we're legalzoom, and for over 10 years we've helped families just like yours with wills and living trusts. so when you're ready start with us. doing the right thing has never been easier. legalzoom. legal help is here.
3:42 pm
3:43 pm
know that chasing performance can mean lower returns and fewer choices in retirement. know that proper allocation could help increase returns so you can enjoy that second home sooner. know the right financial planning can help you save for college and retirement. know where you stand with pnc total insight. a new investing and banking experience with personalized guidance and online tools. visit a branch, call or go online today. you just got a big bump in miles. so this is a great opportunity for an upgrade. sound good? great. because you're not you you're a whole airline... and it's not a ticket you're upgrading it's your entire operations, from domestic to international... which means you need help from a whole team of advisors. from workforce strategies to tech solutions and a thousand other things. so you call pwc. the right people to get the extraordinary done. ♪ ♪
3:44 pm
okay. things are starting to make a little more sense. we saw a rally a little bit ago, a gain of about 110 points. now it suddenly has vanished and here is why. the ecb is just out now saying that it cannot assume a successful conclusion to the greek bailout review. there's been high hopes this week after the finance minister of greece was making positive comments on monday and tuesday, now the ecb is out saying let's not get ahead of ourselves. >> it seems the meetings with uk and with france went better than germany and germany is obviously the key player in all of this. so these remarks both from
3:45 pm
germany first earlier today now from the european central bank on the wires are certainly going to put markets into a more skittish mode here. >> and that's exactly what's going on right now. so that 110-point gain in just a matter of minutes is now up just 24 points. so we'll see how we do in the last 15 minutes here. meantime, another day, another full plate of earnings after the bell tonight. >> our dominic chu is here with a preview. the names and the numbers to watch. >> kelly, bill from the macro picture you were talking about to the micro company specific stories, here is the calendar for this afternoon and there's a whole bunch of them but these are the four we'll focus on some of the headlines, if you will. we'll start with yum brands. analysts are looking for earnings of 66 cents on sales of $3.97 billion. i'll be on those headline numbers. yum brands is about that china same-store sales number. then you move to 21st century fox. the media company is expected to earn 41 cents a share on sales of $7.1 billion. now, let's move over here to
3:46 pm
underarmour. a very big focus for investors. analysts looking for earnings of 39 cents a share on sales of $849 million. a lot of focus will be about the shoes. not all about the shoes but a good chunk of it for under armour. and finally a volatile trade could come via keurig green mountain. this is themaker of the single serve coffee pots. it's expected to earn 89 cents a share and right now according to think or swim the options market is already pricing in what could be a 9% move up or down in thoseg gmcr shares. >> thank you very much. breathtaking volatility right now. 14 minutes left. the dow moments ago was up 110. now it's down 4 points. nasdaq down 16. s&p down 10. >> and for anybody who says europe doesn't matter it certainly matters right now. so does greece. the ecb potentially suspending acceptance of greek bonds as greece indicates it won't
3:47 pm
necessarily be cooperating. >> as we talk about u.s. earnings, we have another head spinning round coming up and also how disney reacted to earnings gives you a sense of why you won't want to miss these stocks moving after hours. stay with us. we're back in two.
3:48 pm
3:49 pm
3:50 pm
welcome back. so after greece elected a new government, it took a tougher stance with regard to its austerity programs imposed upon the country. now we're seeing the effect first from other member nation now from the european central bank itself. potentially suspending greek bonds as collateral again and talking about whether there will be an ability to come to a successful conclusion of the program review bill. >> and that took the wind out of the sails of the rally. the dow moments ago was up 110 points. now you see down 3 points. on the news line we have our chief international correspondent, michelle caruso-cabrera. can you flesh this out a little more for us? >> sure. so this is a decision by the ecb that's going to put a lot more pressure on the new greek government to come to a deal sooner rather than later. the ecb is saying that greek banks can no longer bring greek government bonds to the ecb for
3:51 pm
collateral. this is old-fashioned banking. this is how central banking works in all the world. banks in a certain country can bring collateral to the central bank and that's how they get funding. now the ecb is saying the greek banks can't do this anymore and the reason they're saying this is because greek government debt is not investment grade rated at this point. they had a special waiver because greece was in a program and they were doing reforms, et cetera. the new greek government says we don't want to do that program anymore. so the ecb says if you're not going to stick with the program, then we can't give you that waiver anymore. they've given greece a little bit of breathing room the greek banks can still go to the national bank of greece a division of the central bank of the european central bank but that's much more expensive for them to do. and so it's going to be more costly for the banks, and at any time the ecb can say you can't
3:52 pm
do that anymore either. once the banks can't fund themselves, then you get capital control, people can't get money out of the banks, et cetera. this is going to raise the pressure on the greek government. >> that's exactly it. raise the pressure on the greek government using the financial system as the tool basically of doing that. what do you expect next year? is the new finance minister a little bit of a meet and greet tour with these other eurozone nations. what happens now? >> so they have backed down. the new government had all these demands they insisted they were going to do when they got into office. they were going to face down the european union and convince them to cut the debt in half. they were going to convince the ecb to give them more lenient terms. they have backed down on all of those things so far. the next thing is if they back down does this move force them to back down on all the reforms that they were trying to roll back? >> right. >> because the ecb wants them to be in the program.
3:53 pm
the program forces them to do all the reforms. if they don't do it the reforms, they're not in the program, they can't get the funding. >> this sounds like horse trading. they've taken the waiver away but they could still put a back couldn't they? >> oh yeah. they could absolutely put it back. they could revoke what they've allowed already, which is going to the local bank of greece right? that would be the next step that would be incredibly painful that would really bring the country to a screeching halt. >> we're watching the sausage being made and it's not pretty and it's taken the rally down. michelle, thank you, as always. >> thanks. >> thanks so much. >> we'll come back with a closing countdown. we've got seven minutes left. anything is possible here. >> and we should mention this on a big order to buy on the close. >> i forgot about that. >> the news really overwhelming even that positioning today. we'll see if earnings can make a difference. after the bell we get results from 21st century fox, yum, under armour to name a few and get this multimillion dollar amusement tower under development. it offers foreigners u.s. citizenship if they invest.
3:54 pm
>> really? >> is it legal though? diana olick joins us with a special report you have to hear. you're watching cnbc, first in business worldwide.
3:55 pm
i take prilosec otc each morning for my frequent heartburn. because it gives me... zero heartburn! prilosec otc. the number 1 doctor-recommended frequent heartburn medicine
3:56 pm
for 9 straight years. one pill each morning. 24 hours. zero heartburn. opinions. there's no shortage in this world. who do you trust? whose analysis is accurate? how do you make sense of it all? a simple unbiased stock score consolidated from the opinions of independent analysts... is that too much to ask? nope. equity summary score powered by starmine, will help you execute your ideas with speed and conviction. and it's only on fidelity.com. open an account and find more of the expertise you need to be a better investor. welcome back. 3:30. what a chart today. the gains for the dow much of the session attributable to disney with their big earnings last night. disney was up 7% 8% much of this day. that's disney until the close. we had this rally heading into the close here.
3:57 pm
we were up 110 on the dow until the moment the european central bank comes out and says they -- let's not everybody assume that there's going to be a positive resolution to the greek debt negotiations because they took away the ability of the greek government to use greek bonds as collateral in these negotiations. there went the rally into negative territory even with $600 million of stock to buy on the close and in balances. that has not helped this market come back here. the other big story of the day was oil. the rally we'd had since last thursday is gone as of today. for a time oil was down 10% briefly. it's down almost 8% now, back below $50. big, big day for oil. now we have earnings, more of them coming out tonight. we'll see if any of these can be market movers for tomorrow. they include 20th century fox, yum brands keurig green mountain and under armour all reporting in the next hour. ben willis oliver what a day.
3:58 pm
you love the volatility here. >> love the val tiltolt tilt volatility. get used to it. >> we have to look to the central banks for some direction. >> 15 central banks have cut their rates since january. the united states is still -- has to try to manage those expectations because we know our rates have to go higher and that's why you have this volatility and it's not going away. >> how are you navigating this now? >> you buy and hold. you stick with it. you stick with fort -- >> what are you buying? >> you buy right now some of the oil companies. they're good value. you can start stepping in. there's some stability in the market developing. you might be a little early but if you're a long-term investor that's fine and i think if you stick with the big names like an exxonmobil exxonmobil, like a chevron, like a total that have strong history, you're in good shape. look at some of the secondary financials and by that we mean the american expresses or visas. they're terrific buys here. we're going to differ slightly you and i. i don't think the fed is going to raise rates this year.
3:59 pm
i think they'll be hamstrung and not be able to. they want to but won't be able to. >> but rates are rising here. the 10-year is almost back to the levels we saw at that october low of 1.86%. >> you're having markets act naturally taking the reins that have been put on it with the central banks, particularly the fed. you're seeing the natural flow of rates the way they're supposed to be headed which is why there's a huge short position in anticipation of that happening. i have to also be looking at the russell 2000. i don't disagree is the oil place to be and hospital stocks. hospitals took it on the chin last week but that's a place i'd be looking at. >> what impact is oil having on equities right now? for a time they work in tandem then they are in opposite directions. now what are they doing? >> there's confusion, volatility. it should be looked at as a stimulus package being created by the oil producers because that's going to give buying power and the customer demand which is why i like the russell 2000. >> all right. good to see you both. appreciate your thoughts.
4:00 pm
oliver and ben willis. what a day, and after all that volatility, we're going to finish virtually unchanged on the dow jones industrial average. but don't think that's going to happen again tomorrow because we have a slew of earnings coming out right now. you will find them on the second hour of "the closing bell" with kelly evans. see you tomorrow, kel. thank you, bill. welcome to "the closing bell," everybody. i'm kelly evans. what a ride it's been. a storm of earnings about to cross the tape. here is how we're finishing the session on wall street. we saw stocks turn negative in the final minutes on this news that the european central bank will suspend greek bonds. greece can still go to its national banks. this is yet another step in a series of negotiations that will continue to play out in the weeks ahead. the sn&p closing lower, giving up 8 points. the nasdaq gig up 11 points. the dow managing to just stay positive and we basically have
4:01 pm
disney to thank for that. let's bring in today's panel. stephanie link nathan baccarat and sharon epperson and also with us is "fast money" trader brian kelly. what's going on here? is the ecb intending for this to be a quite serious step to keep greece on the back foot and force them to come to the table with negotiation sms. >> it's no doubt a negotiating tactic. most likely from the german side of the table. they are the ones that are ultimately on the hook here. and, you know, the market sold off here but two, three days ago when we had that announcement that greece had put together some gdp debt bonds, the market ripped 10 20 handles in 20 minutes. that was just as unjustified as this is in my view. >> that's a great point. as mentioned, we have a bunch of earnings hitting the tape here. you're going to start to see the numbers come through. we'll get more on results in just a second. stephanie, do you buy the weakness here because of the europe news if you think it's not going to derail the u.s. rally.
4:02 pm
>> i think the volatility will continue. i was most disappointed with oil prices today. instability is out of control. you cannot really get a handle on when you really want to be buying a big part of the s&p, right? that's about 9% of the s&p 500. what i was encouraged about was the consumer. macy's costco kohl's whirlpool, general motors ford last week. so we are seeing -- starting to see the benefits of the lower oil prices and it was interesting, starbucks a couple weeks ago said oil prices have not impacted their business just yet. the lower oil prices that he expected that to come in the coming quarter so we're starting to see that and i think that's going to be a continued theme as we go through this year, so that's a place where i think you can still buy and i still think the financials because the consumer gets stronger they lend more. >> even with rates doing what they have? >> i think the net interest margin is pretty well known. they're closing below tangible book value. i think that's a close. the loan growth will be the highlight going forward. >> here is a company that looks
4:03 pm
like it's a miss on the consumer side but a story all of its own. keurig green mountain out with quarterly results. sara eisen with the numbers. >> $1.39 billion in revenues. the street was looking for $1.5 billion. when it comes to earnings per share it was pretty much in line, 88 cents. the estimates were coming in at 89 cents. a big part of the story was the miss on sales of the brewers, of course, the very important product, and that came in very light. $308 million. that was about 18% lower than last year. you will recall that there were recalls over the quarter of more than 6.5 million of these keurig machines, and they were spewing hot water. that certainly had an impact during this quarter. when it comes to the outlook and the guidance keurig is taking it down to the bottom end of their previous range for the year. they're expecting now mid to single digit eps growth for the year and they're taking it down
4:04 pm
to low -- excuse me high single digit growth for revenues on the year. some of the reasons why, keurig international. they operate in canada about 10% of the business. the canadian dollar has been absolutely whacked, so that's going to impact business over the year. and they had to deal with this issue in the first quarter of the recall of the brewers. but keurig does still say it's optimistic about the sale of 2.0 which is the latest home brewing machine and they're still on track to launch keurig cold. i know a lot of investors are enthused about that later in the fall. they'll be holding an event for that in may to show it off a little bit to the press. it's been a really big mystery although they have been signing up partners including coca-cola and dr. pepper snapple. >> thank you. nathan, we're just chuckleing here because this is not necessarily the same kind of story like a disney if you want to talk about consumer strength. they've had some operational issues. >> i'm going to do something very dangerous. i will compare hewlett-packard and keurig. they will all be about the
4:05 pm
cartridges and that's about it. my wife still angry that the old cartridges don't work in the old machine. >> 20th century fox is out with numbers. >> 21st century fox reporting both earnings and revenue that are higher than expected. reporting 53 cents in earnings per share versus expectations of 41 cents and up from the year ago of 33 cents. so up 20 cents from the year ago period. now, revenue coming in stronger than expected as well. $8.06 billion. now, that's still down a hair from the $8.16 billion from last year, but it is stronger than the $7.4 billion that was expected. the company also announcing that it's increasing its dividend by 20%. now, as to what really drove the results this quarter, it was increases at cable network programming segment from both higher affiliate and advertising revenues. back over to you. >> julia, thank you. sharon? >> i think this is a good thing for investors to pay attention
4:06 pm
to in all these earnings releases is listen to what the companies have to say about what they're doing with their dividends. increasing that dividend is significant for those who are not going to go inside the numbers and try to decipher what is happening with the studio business, with the tv business. just pay attention to what companies have to say about the dividend. >> in a way that's exactly what the market has been doing. it's been trading not necessarily even risk day in and day out but almost yield. one day it's all the dividend and yield plays that are working and the next day it's not depend depending on the 10-year. >> earning season we always break it down so well but it can be so confusing. they want to know what i should be looking for inside the numbers. if you stick with that looking at that number can give you a lot of guidance. >> is that risky though stephanie, to not be looking so much at the fundamentals? >> i think you have to look at both right, and you have to listen to what the companies say. but i think it's really important to get perspective. the stock is down 10% to date.
4:07 pm
everybody is nervous about cable network ratings. meeting and exceeding on the programming side is encouraging. this is a quality company, and they have a lot more room on their balance sheet to raise that dividend going forward and i think that's very encouraging. >> even as we are getting word that allstate is raising its dividend by 7%. lazard playing out a special dividend. it doesn't take too much work to see the theme here. but it's important to so many of our investors who are approaching that age where they need the yield, the income. >> a lot of investors who need that yield now and those who may just need it for part of their portfolio who maybe much younger. it's still a very important part of many portfolios. >> i think with the rockiness of overseas, the unevenness in terms of the economies, i think some of the big global players are trying to figure out how they can create value if they don't see the top line overseas. sure, the u.s. is doing better but if they have that cash why not return it to shareholders. >> nothing lasts for however and by the end of the year janet yellen will have a little to say
4:08 pm
about yields. i don't think she will miss up the party but she will give everybody a chance for a pause. >> you don't think she's going to raise interest rates this year? >> she will but not enough to really spoil the dividend party. i think the dividend party has another year to go. you will look back just like 2014 and you'll go you know what? i'm an investment genius it will continue to work for a while. >> and we will have more on this topic later. coming back to just a couple of these names, stephanie, does it affect markets tomorrow? we know that gmcr is a specific story to some extent but it's a momentum name. >> it is a momentum name but they're heavily investing in their cold business and they have currency issues for sure. so not a very cheap stock at 32 times forward estimates, not extremely expensive but for what you're getting if you're just going to get the low end of that range, you're not getting the growth for that multiple. so this is a company specific issue. there's a lot of other good things happening in the consumer. i think you want to gravitate
4:09 pm
towards those. >> what do you make of the results as well as the results from fox and what are you buying? what do you like here? >> i'm not buying much. i'm not sure these two particular names are going to have a broad market appeal as we saw with the ecb announcement and oil. that's really what the market is focused on now. so in these particular two names, the only thing i would say about the folks out there trying to look for dividends is that, you know, this hollows out a company. the signal from them is that, hey, we have nothing else to invest in. we don't know where our revenue growth is going to come from so we're just going to do some financial engineering. >> that's so true but dividend payouts as i understand it are actually a rather historical low which is interesting because companies have had so much cash on hand. we're actually not even back towards something that's more historically normal for whatever that's worth. >> look at it because companies have so much cash there's nothing out there to invest in. they've had very low dividend yields. they're starting to pay it out. the point is it's just not a fantastic sign.
4:10 pm
i don't think it's positive at all. in the short term people will buy these stocks absolutely. but be careful because they are stocks. they're not bonds, and they have a lot more volatility than bonds and that dividend can go away like that. >> all right. brian, thank you. we got to leave it right there. catch brian kelly coming up with the rest of the "fast money" crew at 5:00. they will have all the after hours action on the conference calls from under armour and much more. don't miss a moment of that. we have a verdict in a major online drug trafficking trial. mary thompson has the details. >> this concerns the silk road trial after a three-week trial, a jury of six men and six women took less than an afternoon to find william ross guilty on all seven counts. those counts include drug trafficking and conspiracy to commit money laundering. what you might recall is that he was arrested in october of 2013 and charged with operating the online drug bizarre called silk road made famous in large part because the only payments that were accepted on silk road were
4:11 pm
payments made with virtual currency bitcoin. the government alleges can you agree the two years he ran silk road ulbricht profiting generating sales of over $200 million. the defense said while he did start silk road he actually left and then came back to run it right before the feds nabbed him in san francisco in october of 2013. the prosecution alleges that he was ruthless in protecting his criminal enterprise going so far as to pay over $650,000 in a murder for hire scheme to put down a client who had threatened to reveal the names of silk road customers. in a statement u.s. attorney preet bharara saying he bit built this bazaar to exploit virtual currency. his conviction should send a clear message to anyone else attempting to operate an online
4:12 pm
criminal enterprise. first four charges carry a maximum penalty of life in prison. evidently or reportedly, he was stoic when the verdict was read. his parents, who were in the courtroom, broke down. back to you. >> mary thompson thank you so much. with the latest on that. earnings continue. we have yum brands hitting the tape and jane wells is keeping an eye on this one. >> the top line beat slightly for the quarter at $4 billion, but the adjusted eps disappointed slightly. coming in at 61 cents. the street was looking for 66 cents. the real story with yum is the china story. it has been having to recover from a supplier issue there. same-store sales in china were apparently down 5% but that's much better than the street expected which was close to down 18%. we're going to get more. the new ceo has just started and he's on this. saying we're committed to restoring our track record of delivering at least 10% annual eps growth year after year.
4:13 pm
oshg okay. that is confirming that. he says i'm confident we will do this in 2015 as our china business recovers and we sustain positive momentum across. that's the latest right now. a little beat on the top, kind of a miss on the bottom but china not as bad as expected. back to you. >> thank you, jane. that's enough to 1e7ndsend shares higher by 1% after hours for yum brands. much more ahead. the unemployment rate standing at 5.6% or does it? the chairman and ceo of gallup says it's one big lie. he'll back that up coming up on "the closing bell." you're watching cnbc, first in business worldwide.
4:14 pm
4:15 pm
4:16 pm
welcome back. we've got more on this keurig green mountain results with sara eisen. >> stock is getting hit pretty hard. want to highlight some of the negatives investors are focusing on. stock down 7% in the afterhours. the sales missing expectations. as mentioned, $1.39 billion. street was looking for $1.5 billion and that was largely due to the hit in brewer sales, down 18% from last year. a lot had to do with the recall that they experienced over the quarter. the other negative, guidance. the outlook for 2015 keurig green mountain took it down to the bottom end of the range that
4:17 pm
it had initially forecast both on earnings and on sales thanks in part to the weakening of the canadian dollar and that hit on the bottom and top line and because of what it experienced during the fourth quarter. this is a stock that was one of the bess performers on the s&p. it was up 55% over 12 months. high expectations of growth. it's been hit pretty hard down 18% in the last three months and getting punished in the afterhours as well. >> all right. sara, thank you so much. as mentioned, that stock down 7% after hours. and the earnings continue. it's been wild, by the way, here. we'll continue the bar brage andrage and get the thoughts of dennis gartman, jeff cox, and herb greenberg. dennis, let me begin against the backdrop of some troubling 2k0e6789s in developments in europe. a mixed bag after hours.
4:18 pm
what is drawing your attention at the moment? >> what really captured my attention was this -- the ploy i think you should call it by the ecb denying the greeks the right to use their own debt as collateral. i think everybody expected that was going to be allowed. now it's not going to be allowed. this is a debate going on. these are people at the poker table and these are very high stakes games. in the end grease is going to be allowed to do who knows, something. they're going to be allowed to come out with some sort of bond issue. they're going to extend their debt. there's going to be some debt forgiveness. this we know. this is just the kabuki dance that goes on but you have to be very careful. when you're trading foreign exchange markets, when you're trading stock markets, this sort of news can come out of nowhere, and here you are in the afternoon trading the u.s. stock market and you get news out of germany, news out of greece takes, what 2% or 3% out of the stock market in a short span of time. be careful. use puts use positions to
4:19 pm
defend yourself. be careful. that's all i can tell you. the volatility of the past week and a half sun like anything i have seen in my career and i have been at this 40 years. >> we'll come back to this. first let's hit results from under armour with courtney reagan. >> that's right. so under armour reporting earnings of 40 cents per share. analysts were looking for 39. revenues stronger at $895 million. footwear revenue up 55% and i highlight that because that's a big growth driver for the company going forward. under armour announcing the acquisitions of some fitness companies. one is my fitness pal for $475 million in addition to another company called edmondo. it's a large global fitness community. >> courtney thank you. under armour shares are up 2.5%. let's get more reaction. we've got our jeff cox and herb greenberg. is this you chuckling, herb?
4:20 pm
>> no, that's me chuckling. >> herb i'm going to go though. let's talk a little gmcr. >> i'm looking at finished goods up 131% on brewers and accessories. you have to understand they say right up front, they say this was not the holiday season they expected, and you're talking about brewers not selling this new 2.0 brewer which does create, as you guys said earlier, confusion in the marketplace. obviously there was pushback by consumers. and the story here outside of the brewers, of course that they'll keep trying to keep people hooked to is going to be the cold machine with coke. that's really what the story is going to amount to. i was on -- stephanie link and i, when i was at the street with her, we would talk about this. i said they come out with that cold machine, all bets are off until we see how that goes. you're seeing the base business does appear to have some issues. >> herb they have already got
4:21 pm
you hooked on caffeine. what else do they need? now we have hackers going after them because people are building up resentment about the pods and using them more than once. i think you could look back a year from now and say that's a kind of resentment in the consumer that is not good for you. >> well that's the misread of the consumer. many of us when we were thinking about this other people i talked to short sellers and others when 2.0 came out, the question was how would the -- why would the consumer go to another machine? what was it? and so they tried to hook all the retailers in by -- with a patent and say, you know, you can only use these pods and that gets to be the issue, especially for consumer that's looking for a low price, especially if they're drinking certain types of coffee. they don't care as much about taste, they care about price and therein lies the problem. you now have caused some less than goodwill among your customer base. >> that's what i want to jeff cox as well. is a company like under armour striking the right chord with
4:22 pm
consumers? >> kelly, i'd like to take a little more macro view of what we're seeing from earnings. looking in the rear-view mirror is an easy came to play. the biggest message we're getting from companies is looking forward. i think go to keurig and some of the other companies. you look at the negative the positive revision history is staggering. more than five to one negative outlooks outweighing positive outlooks for the future. we're expecting the economy to hit escape velocity this year. goldman sachs just lowered their projection for cap ex this year from plus 6% to minus 3%. now, we're also hoping for the consumer to come through. the consumer the sentiment level is really high but the actual consumer behavior is not that great. the consumer is not spending. so i just think we're seeing the crystal ball for the future is not real great from what we're getting from earnings overall.
4:23 pm
>> one of the things i want to say about under armour, a lot of consumers consumers, including my 12-year-old son who is totally into basketball, as a parent buying for a son, they don't like to discount and they're getting into what a lot of consumers of fitness gear are into which is technology based fitness like my fitness pal. consumers are using it. >> sports apparel is growing at 9% on average versus regular apparel that's growing at 2% on average. >> i'm surprised it's even positive for regular apparel. >> that's right, i know. >> you wear fitness clothes on the weekend pretending they're going to go to the gym. >> under armour catches adidas within the year. >> i don't think it matters. i don't think it matters. the trend is the trend. and it's not going to change anytime soon. and the products are only getting better. the technology is only getting better and that's companies are
4:24 pm
fabulously well run. >> dennis s that you? >> yeah that's me. >> last word. >> i guess i'm too old guard. it's not cotton that's all i can tell you and it doesn't feel good. >> dennis -- >> they're not making this stuff for you or for me. >> dennis you are a commodity guy. >> you're talking your book we think. uh-huh. some cotton positions here to disclose. thank you for being here. dennis, appreciate it. herb greenberg and our jeff cox back at headquarters on the full session of earnings. we've got low gasoline prices helping consumers save plenty of money at the pump. is it threatening to hurt retailers? hurt retailers? we're going to explain that next. also look out disney. bungee jumping and free fall rides just two of the highlights at nearly half billion entertainment tower being built in miami and its financing is helping rich foreigners gain residency to live here. this is for real and it's coming up. oices in retirement. know that proper allocation could help increase returns
4:25 pm
so you can enjoy that second home sooner. know the right financial planning can help you save for college and retirement. know where you stand with pnc total insight. a new investing and banking experience with personalized guidance and online tools. visit a branch, call or go online today.
4:26 pm
4:27 pm
we'll begin with our dominic chu and another earnings alert. >> shocking, i know on this kind of busy day. two more companies reporting. we're going to start with tableau software. it's soaring after posting better than expected quarterly earnings. those shares up by 20% in the afterhours. then there's glu mobile. here is the big headline. it also announced it will partner with katy perry on the development of a new mobile game. you could say that katy perry
4:28 pm
is yes, bonding with glu. glu mobile up on the heels of katy perry's blistering halftime show. >> i want to know if the sharks get a deal too. a monster gain yesterday for oil. today it's monster losses. jackie deangelis joins us with the details. >> as they were saying in the oil pits today, easy come, easy go. we saw three straight days of massive gains in crude oil but a big loss almost 5 bucks. a 9% drop on the day. wti infinishing at $48.45. we got a big build in inventories from the department of energy. record stocks we've seen since 1982 since they started keeping records. so some of the reality started to come back into the market. but you also had gains in the dollar and weak data out of china reminding people that maybe cap ex cuts and rig count declines will start to impact the production situation, but that's going to be in the back
4:29 pm
half of the year. for right now there's a lot of oil out there. back to you. >> there is. jackie thank you very much. you'd think lower energy prices would be a boon to retailers, but it may end up hurting some of them. courtney reagan is here to explain why. hi courtney. >> so listen to this. while lower oil prices do help consumers by lowering the price at the pump there are regions of the country that could be disprofortion gnatportionately hurt. if oil companies are laying off employees or wages decline, pockets of consumers in oil-producing regions will lose discretionary spending. why is that a problem? wells fargo looked at the top oil producing states in the u.s. and which retail verselilers have a higher concentration of stores in those areas. more than half of all stage stores locations are in oil-producing states. similarly, boot barn has 38% of stores in these regions. the company's ceo says the worries are overdone. a quarter of walmart's u.s.
4:30 pm
stores are located in these nine oil reliant regions as well as a quarter of ross stores. jcpenney is only slightly less concentrated with 22% of its store base in those regions. a fifth of target stores are located in areas dependent on the oil economy. kohl's, tjx, macy's and nordstrom follow with 16% and 15% respectively. but it's not just the u.s. regions that analysts are watching because 21% of lululemon stores are located in canadian oil reliant economies followed by carter's tjx again, l brands american eagle, and kors. >> joining me with his take is joe feldman. great to have you with us. and so what do you short these names in the oil affected regions? >> no i don't think so. i think, you know, yes, there's exposure in some of the regions to all those stores but it
4:31 pm
doesn't mean that sales are going to just fall off a cliff as a result of this. and the lower gas prices actually can help the consumer and coincidentally most of those states are the most populous states the country. there's a reason for that. i think we shouldn't overdo it either way. it's not a big boom or a big bust. >> joe isn't the real issue -- this is sharon epperson -- wages and wage growth and regardless of whether oil prices and gas prices continue to decline, if wages do not increase consumers will not have the discretionary spending they need to go to some of these stores or to even purchase some of the necessary items that they may need at a rapid pace. >> yeah. i think that's absolutely right. all the analysis we've done through the years shows that employment levels and wage growth are really the key determinants of what's going to happen with retail spending. yes, there's inflections like the lower gas prices and impacts like that but it really does come down to do people have jobs
4:32 pm
and are they -- >> of course yeah. why are you shaking your head? >> i don't think to take issue with anybody. be the curmudgeon for the afternoon. if you look how credit card companies report, they will tell you simple half of everything that americans now have from the gas pump is going into savings. 25% is going to pay down debt and 25% of it is going to small items. when you save 10 bucks at the pump, i'm talking about a six-back of beer all right? this has nothing -- you don't start investing or spending more when you're getting it at the pump and you don't know whether it's going to be consistent. >> you don't think it would be good for retailers. >> just look at visa's report look at mastercard's report look at american express report. they all posted very good gross domestic volume growth of 8% to 10%. clearly the lower oil prices for the credit card companies will impact the volumes because of the lower dollar amount but apparently the consumers are still spending. i would say that consumer sentiment plays a very important part in addition to the wage
4:33 pm
numbers and the job growth would you say so? >> last word joe? >> yeah i think that's correct. we're seeing more going to savings. the savings rate went up in december. but people will slowly unwind that savings. they'll realize it takes some time. it's more like a tax rebate check from the government. people bank it for a little bit and then it gets spent. >> we can hope. joe feldman, thanks for being here. appreciate it. it sounds like something out of the "x" files, a big government lie. gallup chairman and joe jim clifton says the unemployment rate the government reports each month is simply a lie. he'll tell us why next. and twitter measuring your tweets to know when you're happy so retailers know when to try to sell you stuff. we'll discuss whether that's a smart business move or a creepy invasion of privacy. at ally bank no branches equals great rates. it's a fact. kind of like mute buttons equal danger. ...that sound good? not being on this phone call sounds good. it's not muted. was that you jason? it was geoffrey! it was jason.
4:34 pm
it could've been brenda. ♪ ♪ i love my meta health bars. because when nutritious tastes this delicious i don't miss the other stuff. meta health bars help promote heart health. experience the meta effect with our multi-health wellness line. ♪ ♪ the real question that needs to be asked is "what is it that we can do that is impactful?" what the cloud enables is computing to empower cancer researchers. it used to take two weeks to sequence and analyze a genome;
4:35 pm
with the microsoft cloud we can analyze 100 per day. whatever i can do to help compute a cure for cancer, that's what i'd like to do.
4:36 pm
the u.s. unemployment rate is sitting at 5.6% or is it? my next guest says that number is just one big lie. joining us now is jim clifton, ceo of the gallup organization, and also with us is diane swank from mesereau financial. you certainly have everybody's attention. there are plenty of people who agree with you by the way, but i want to be clear on what
4:37 pm
exactly you're saying that you don't believe this number or that you do believe that the unemployment rate is broader and that number is includeded in the report? >> thank you for that question kelly, because it's real important to me. i don't think that the government is misleading us at all. i think that the number that comes out of bls and the department of labor is very very accurate. i need to make that very very clear so i don't suddenly disappear. i need to make it home tonight. >> so you don't disappear? geez, all right. we hope that wouldn't be a follow-up. anyway carry on. >> but i think it's the way the number is being used. so gallup analytic teams -- they were trying to figure out where the middle class was. looked into the gdp and, of course gdp, your audience is very astute. it hasn't moved in five years. blended rate of five years is about 2.2%. we went to jobs. we said i keep reading in good papers "the wall street
4:38 pm
journal," "the financial times," and the president tells us that unemployment is the best it's been in ten years. okay. there's one side of it. our concern with our analysts is that it's very very misleading because what america really wants are full-time jobs. >> okay. >> 30-plus hours but here is the point, the misleading point. the percent of full-time jobs in this country to the population is the worst it's been in 30 years, and although you have an astute audience when you're at dinner ask people about this, nobody knows that number. that's why the middle class is hollowed out. >> so, diane, first of all, what does that mean in terms of the true job picture and what do you think the true measure of this labor market is? >> well i think it's really important to get to the broader issue of the household survey and i think there's an important point that 3 5.6% is not a decade ago. 5.6% rate. clearly it's not. we've gotten there for some of the wrong reasons, because people have literally stopped looking for jobs who are able
4:39 pm
and would like to work. and that's not something we want to discount those people. in fact, the household survey does look at them and that's why the federal reserve has said you know what? we don't want to focus on the summary statistic that the unemployment rate is because it is misleading right now in terms of how good the labor market is. it's better than it was. gallup's own poll show that is people are feeling better about the labor market and their ability to get a better job. that's good news but it's not as good as it could be and we've not regained the ground loss. if you look at u6 i think it's important that it really is an 11.2% unemployment rate down from 17%-plus but well above what it was before that. what we're seeing is that slack in the labor market and the underutilization out there and the situation with the middle class has been going on since the 1980s and it's been a steady decline. when we hit 3.9% unemployment rates in the 1990s, had a lot more people participating, all you needed was a pulse to get a job. i think it's important that we
4:40 pm
saw all boats rise with the tide, not just the yachts. and people are not as discontent. >> i got to ask you a question. you talk about u6 and underemployment being at 11.2%. my sense is and my calculations are it's getting somewhere in the mid 9s before we start to see wage gain and do we see wage gain when that happens? >> it's a moving target on wage gain. i think it's actually lower than that and i think the unemployment rate has to fall well below 5% given -- >> i'm talking about u6. what do i have to see u6 -- >> i think you have to see back below 9%. below 9%. and i think we're not going to get there -- we could get there in the next couple years but i think we're going to see -- you need to see sustained wage -- >> when do you think we will get there? >> i don't think -- >> staend inustained inflation of 2%. >> the accurate number of bls reported is 48%, and that's the
4:41 pm
lowest it's been in 30 years. where it's supposed to be is 52%. as soon as we go up 4% there's 250 million american adults that gets you 10 million. as soon as we have 10 million real jobs and we need 20 million, but then i think wage gains -- i think everything will change. we can do that, too. but the way we portray the current economy and job situation, the gallup poll i think it bothers me because the people shouldn't be as positive on our poll as they are about jobs because it's not that positive. but everything you read from the left to the right -- >> that's a good point because you're talking about -- >> quickly, sharon. >> you're talking about -- >> i don't think -- >> what it says in the gallup poll is really critical in terms of how people feel about their job security. so are they feeling better? you're poll seems to show they are more positive. >> last word jim? >> well, i think that they're more positive but, remember none of them understand about
4:42 pm
unemployment. next time at your dinner just ask people how is unemployment calculated? and they'll tell you that they think it's off of actually filings for unemployment. i know the viewers of this show know this but almost nobody knows where that number comes from. but generally people are pretty positive but when you hear the president talk he'll say that the jobs are the best they've been in ten years, financial times, the economy, everybody says america is back and unemployment is the best it's been. and i think that carries over and i think it's wrong, too, because it leads voters it leads leaders -- they have wrong assumptions. the worse they make things because they don't have the right root cause. >> we do know that some of the sentiment about finding a job has turned up but, jim, to your point we would love it if you and your website would sart to put that total number. you said we need 20 million full-time jobs. i would love to see a running tally on your website. >> it's on there now. >> i want to adjust that for
4:43 pm
retirement. >> now i know what i'm doing during the next break. thank you both for being here. really appreciate it. coming up investors are all atwitter. tomorrow the social media trendmaker reports earnings amid investors kerns over slowing use or growth. we'll have a review of results coming up. but first, we'll look behind millions of tweets to see what makes for a happy tweet and a happy tweeter. and why retailers are using that data to know when it try to sell you stuff for real. that's next.
4:44 pm
4:45 pm
4:46 pm
welcome back. if you take to social media to air out our feelings you're probably getting some extra attention from marketers. companies are looking for happy tweets and happy people to know when to pitch you to buy something. it's all explained in an article heating up cnbc.com. the author eric chemi, joins us along with our panel for more. welcome. >> thank you. >> what makes for happying tweets tweets and how are companies finding these people. >> a company analyzed a million tweets going back a calendar year. you look at how people use language to describe their day, their job, their friends, their family so they can factor out men versus women, factor out what countries are the happiest what states are the happiest what cities are the happiest. not surprisingly, denver
4:47 pm
colorado, the happiest city the happiest state. probably marijuana is helping these people be happy. but if you look at some of the worst, unhappy places like louisville, kentucky and boston massachusetts, and ft. worth, texas, places people aren't generally that happy. but why it hatters -- >> is that even true? >> america is the 41st ranked country out of 52 so generally not that happy of a place. this is why it matters. because companies will change the language of their tweets and how they sell products to people. so, for example, if you wanted to buy ugg boots maybe in a happy place they talk about why you might like ugg boots but in a sad place they might talk about why you hate the weather. so the language would change depending on the type of customer -- >> is it working? >> is it leading to better returns for these companies? >> it is leading to better returns. that's why you're seeing caps like brand watch spending their time analyzing it because they give it to their clients to figure out how to change what they're saying and when to say it.
4:48 pm
so for example, weekdays versus weekends, you sell -- things like food, basic things on week days, but on the weekend people think about changing their life you sell them insurance, education, new jobs. >> i thought it was interesting in your article, they're looking at what the tweets are on an individual day vorersus over time. that scared me they're looking at what i tweet over a period of time. how does that change where you market? >> they're looking at how people describe their day. we might say i had a great day today versus how you think about your life. so you might think i had a bad debut miy life is great. that's the type of difference that they're looking at to figure out. so, folk men and women talk about their life equally, but men are much more likely to talk positively about an individual day. >> when we have katy perry, justin bieber taylor swift, and president obama as the top four tweeters, tell me how this translates into business. >> last word. >> it translates into business because these are the people who are buying stuff. think about all the people
4:49 pm
buying katy perry albums and itunes downloads and we just saw that partnership that dom was talking about a few minutes ago. that's a real customer base. puck improve your revenues by 1%, think about what that does for earnings. >> eric thank you. >> thank you. >> eric chemi being here this afternoon. disney world may be getting new attention in florida. foreign investors are buying shares of half a billion amusement property in miami in exchange for u.s. visas. diana olick will take us on the wild ride 450i7ndbehind it all next. startup-ny. it's working for new york state. already 55 companies are investing
4:50 pm
over $98 million dollars and creating over 2100 jobs. from long island to all across upstate new york, more businesses are coming to new york. they are paying no property taxes no corporate taxes no sales taxes. and with over 300 locations, and 3.7 million square feet available, there's a place that's right for your business. see if startup-ny can work for you. go to startup.ny.gov.
4:51 pm
4:52 pm
. amusement parks are not known for their subtlety and a new one for miami is a sky scraper in the middle of downtown miami and foreigners can buy into it in return for visas. diana olick has more on this plan. >> reporter: the $430 million tower plan is under way on this site by the biscayne bay. they are laying some of the ground work but really the focus is now on fundraising, not here in miami but overseas in china and dubai where investors are hoping to get in on the ev 5 immigration program. that is if they have $500,000
4:53 pm
to spend. half a million to get there. now sky rise miami is the brain child of miami investor jeff berkowitz. it is stunning in virtual form. it will have a sky drop ride where you can plunge at 95 miles an hour with 11 of your best friends. it's a bungee jump like thing and a viewing platform that dangles you over the city. venture capitalists are seeing huge demand. the program is a jobs program and this project has been approved for it. miami-dade has put $900 million into the project. jeff berkowitz is going to put $30 million of his own into it. critics don't think there will be enough tourists coming to this site to make a profit for any of the investors. critics say it could end up
4:54 pm
costing taxpayers in the end but berkowitz says he expects to see millions of tourists 3.2 million coming here and this will be a profitable site in the end. he gave me a model of what the tower will look like. i think it looks like a hair pin. someone thinks it looks like an "l" and the ceo of related things it looks like an "r." and berkowitz things it looks like a money clip. >> thank you diana. diana olick this afternoon or that incredible project. it's been a busy week for earnings and the momentum pushes into tomorrow. we'll hear from twitter, go pro and linked in. the panel with what they are expecting and what they're watching tomorrow when we come back. closer look. it works how you want to work.
4:55 pm
with a fidelity investment professional... or managing your investments on your own. helping you find new ways to plan for retirement. and save on taxes where you can. so you can invest in the life that you want today. tap into the full power of your fidelity greenline. call or come in today for a free one-on-one review.
4:56 pm
4:57 pm
welcome back. an earnings update for you, 21th century fox is trending lower after posting their results. >> on the earnings call the company announced it is lowering its guidance for 2015 to the
4:58 pm
lower end of the mid single digit range before the guidance was to grow in the high single digit percentages. chase carry saying there are two issues foreign currency and broadcast advertising, a short fall that was too big to offset. >> thanks very much. just a quick response here fx that's a macro issue. broadcast advertising is what i think i heard her say. >> that is a big problem for the industry, given the ratings are poor and the alternatives. the stock was down enough in the print they only needed a good number. but guidance is overwhelming. >> is that going to hurt the whole space? >> cbs is the one i would take a look at. >> they took on espn. good luck. it's going to take them a while. >> what do you mean? >> fox is investing in their networks. >> but that is not broadcast.
4:59 pm
if they are talking about broadcast advertising that is the core fox. >> but they are putting money into their sports networks. that will be great no one dvrs a sports program. >> to stephanie's point about looking at fundamentals and dividends it's important to look at both. it's exciting to see the increase in the dividends. but the earnings are going to be less robust, that is something to pay close attention to too. but dividend paying stocks is something that investors are continuing to hold on to them in the volatility but the fundamentals are going to play a role. >> what is the biggest thing tomorrow for the market? >> it will be twitter after the close basically because the stock is up 13% on the year and they have to crush it on maus and i don't think they will. >> you can watch "closing bell"
5:00 pm
tomorrow. appreciate it. fast fast coming up in a few seconds with melissa lee and the gang. >> all the after hours action and everybody's focused on underarmor right now. but we have the ceo of a small cap sports equipment company that is up 62% in the past 12 months. >> got to hear this. over to you guys. >> fast fastmoney starts right now. a lot of breaking earnings news in the last hour. the yum stock is up after taco bell performed well for the fast food company we'll bring you the latest on yum, green mown an and underarmor. and we'll debate it and show you the extreme lifestyle. we start off with the top story, crude has moved more than 7% three of the last four sessions. oil

44 Views

info Stream Only

Uploaded by TV Archive on