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tv   Closing Bell  CNBC  July 15, 2015 3:00pm-5:01pm EDT

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we're here we're here and we've got your back. legalzoom. legal help is here. 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. it could've been brenda. hi and welcome to the "closing bell," everybody. i'm kelly evans at the new york stock exchange. >> and i'm bill griffith. you have already seen the testimony by janet yellen before the house financial services committee. last hour, president obama's news conference talking about the deal with iran. now, we look ahead to greece. the protests if you've been watching have been heating up outside, the parliament building there as the debate on their
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bailout bill has gotten underway in the last hour. a vote on that bill is due within the hour. michelle caruso-cabrera standing by there where it's 10:00 p.m. local time in athens. and you've got a busy night ahead of you, michelle. >> reporter: yes, we sure do, bill. >> so yes, let's get everybody up to speed. there are crowds back in front of the parliament. things are much calmer than they were about 15 minutes ago. the last ten minutes of president obama's discussion with reporters is when we started to hear explosions outside. that's when we saw molotov cocktails being thrown. we weren't surprised because we had seen some of the protesters show up dressed in black, wearing hoods, some of them carrying gas masks. seemed to be a very, very small group. and we haven't seen any violence up until now. we thought maybe tonight it could has been. and, indeed it did. you can see from the video we're showing you, a round of fires lasted about 10 or 15 minutes.
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right away. the tear gas came out right away. the crowd started running. it's incredibly accurate and painful feeling when they use the tear gas. you know, some of the protesters are putting on gas masks because they'd brought them knowing exactly what they were going to do. but they dispersed everyone from the square. they were off to the side on the other side of the square. we heard more explosions and chanting that means no no and these were clearly people who want the parliament tonight to vote no. the parliament has begun debating this package of reforms, which includes more austerity measures such as raising the sales tax on a number of items across the economy, but also reforming the pension system that people have to retire later. some individuals will see their pensions cut. and then a number of vested
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interests, as well as the reform program moves through the various phases are going to see that they're going to lose the protections they used to have. there's going to be a lot lower barriers to entry to a lot of different professions in the country. and a lot of those individuals are feeling incredibly vulnerable. this is going to be a very contentious program if, indeed, it gets implemented. step one is tonight, they're supposed to get this vote passed by midnight. that allows the european creditors to begin the process of negotiating a full three-year bailout program with greece. this is all they're voting on tonight, right? the ability to get things started for negotiations by voting tonight, they actually don't get all that much money, except some short-term bridge financing that helps them pay the ecb by monday. we saw the dow and the major arranges move lower upon this violence, and it may be because there's this concern that even if you see a positive vote tonight, the implementation of the imf programs in the past
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have failed miserably. are they going to do that again? or is the prime minister going to take ownership? and is the political class going to take ownership and work to make changes in this economy so that way they can pass the reviews every time and the bailout money will come every three months like it's supposed to so they can support the economy and make the changes and also pay their creditors back, as well. so that's what's been happening here. it started about ten minutes before president obama finished speaking lasted about 20 minutes. and we'll see if more happens tonight. there are protesters out in front of the parliament as the debate continues. and we expect that vote hopefully, around midnight. >> last night is when the prime minister held that interview on tvx television where he said i don't like this deal, but this is the best we're going to get. this morning could you gauge public sentiment in the media. what was in the newspaper and television. is tonight's protest
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symptommatic of how all of greece feels? can you gauge that at all? >> so, the media has been pro-euro and pro-yes, the whole time the television media here has even leading up to that controversial referendum, which goes to show you how much influence the media did not have there because the greek people voted overwhelmingly no. so your question is what the people tonight in the square the vast majority of them and we've interviewed these groups before many times they're not pro-euro. they don't want to be in the euro. the european union. and we know based on very recent polling data. a representative of various austerity measures absolutely.
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it would have been a much -- >> michelle that's a great point. and stay right there if you would, we'll talk more about this. amid everything. looking at what's happening in athens, is this to some extent going to just be symptommatic as bill was saying of this very difficult choice that the parliament has to vote on, or is there something -- >> i think there's plenty of reason for markets to be nervous. you know michelle has maintained all along and i have no reason to disagree with her that greeks will pass this reform. and i'm sort of like so what i guess it gives them bridge financing for a little while. the idea that because the europeans decided to agree to them like every other -- to the
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extent the market's risk out of greece, i don't think what happens tonight or tomorrow, i think is going to reduce it very much. >> there has been a rush to safety in sorts in the united states today, they've been buying treasuries the ten-year went to 2.35. they bought dollars, the euro went to 1.0925 what do you make of that? and what do you do here with the u.s. stock market? >> it's happening in what is a fairly light market right now. we're not seeing big volume. and, remember the market's gone in one direction. to see it pull back a little bit, you know, is not all that surprising. you know, what i will say. i guess i'm reminded of the education, and i'm reminded of
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beware of greeks bearing gifts. they are the ones giving us this gift of a breaking market which is going to allow investors get in at digestible levels. and this is something people have been waiting for for a while. and what's really, i think, fascinating to me is that you also have our fed chair, and i know that rick has probably had a problem with this, who was absolutely brilliant today. especially in the wake of what we are seeing happen overseas. and together they are really making the market respond, don't take my word for it. we are less than what 1% off the all-time highs. the market is telling you the story. >> i don't know where rick is but he's maybe yellowing at the television screen wherever he is right now. he's not in today. >> that's what i was going to say. david kelly, perhaps pick up on that one. >> yeah. i mean, what we're seeing in greece is obviously a human tragedy. and i think there's a colossal political miscalculation by the party. but there's also been a colossal economic miscalculation for the last few years by europe. you cannot impose austerity in the middle of a recession and
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expect things to get better. but for markets, we've just got to recognize that this is a distraction. because, europe can get on with or without greece. this is a greek problem. greece is not contagious anymore. and what i liked about the testimony is she's on message. talking about the u.s. economy. if labor markets continue to tighten. then they will begin to raise rates. and i think that's right, i think that's -- i think people should listen and it's much easier to watch the pictures from greece. but i think actually listening to janet yellen is actually more profitable in the long run for investors. >> michelle, is there a time line to open the greek banks yet? where do we stand in all of that? >> oh, no. so if this vote goes well tonight, potentially the ecb could in the next day or so increase the liquidity to the greek banks a little bit. and steve liesman can talk to this a little bit more if you want. then, after that, what you have to do is you have to reinstill
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confidence in the banks. you need to recapitalize the banks. it's estimated between $12 billion and $20 billion needs to be poured back into the banks before that can happen. where are they going to get that $12 billion to $20 billion? from the bailout package they haven't started negotiating yet. so, full operational capabilities of the banks. i think is probably at least a month away. you may get an increase in the amount of cash that people can get, and then what will likely happen is they'll finally get their act together and start a rationing system. so when they have a pile of foreign exchange, they can say to the pharmaceutical companies, the hospitals and the food distributors, you get priority on cash so you can pay your importers, so we can have food, fuel and medicine. that would ease the concern about shortages. >> there's a difficulty, david kelly. >> i want to chime in on that. we know the ecb is going to meet
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tomorrow mortgage. and they will discuss the level of funding to the greek banks. michelle is absolutely right. what happens tonight is going to be absolutely determinative to what the ecb decides. the next event after what happens tonight is draghi tomorrow morning. and following that very closely. the ecb is meeting and the extent to which he is or is not a believer in greek reforms is going to give us a risk-on, risk-off signal early tomorrow morning beginning at 8:30. >> yep. >> david? >> well i think that's right. i think this is all political. the ecb will want to be kind to the greek so long as it's seen basically had to accept this worst deal. the one thing i think all of europe including the ecb wants to come out of this is they don't want to make it look like -- so long as the greeks accept this package, i think that the ecb will begin to, you know, increase and hopefully get these banks operational faster than a month out.
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it's obviously pretty tough on the ground there in greece. >> david, we're so obsessed over greece. we're talking about iran we haven't gotten to china today with their growth rate the gdp number they put out. is that all of that a smoke screen for you guys? you more focused on the fundamentals? or do you have to bear in mind this headline risk that exists out there? causes the kind of volatility we've seen. >> well as long-term investors, what you try to do is you desperately try to ignore pure headline risk. you know the chinese gdp numbers look strong. the numbers in vehicle sales and housing activity on exports don't look nearly as strong as the gdp numbers. i think there's a lot more weakness there than meets the eye. but overall, i think the european economy's doing pretty well i think the u.s. economy's doing pretty well. you know valuations look okay. i think the earnings season is going okay. i think six months from now, stock prices will probably be a bit higher interest rates probably a bit higher. and i think that's probably how
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people should be invested. >> hey, kelly? >> steve, last word here. >> there's one more thing. yellen made comments at about 12:35 that changed the game a little bit. she says she thinks the economy's close to a place not only can it tolerate but needs interest rate hikes. and that was the first time i heard them say that. >> that's right. >> the market didn't seem all that exercised about that change. but what it does go along with my thinking on the fed, which is she really wants to raise rates in september and really would be appreciative if the data would get to a place where she could do that. >> steve, that's exactly. i know we have to go but it's extremely dissident with what we heard. if you want to see interest rates in this country rise you know, that's with the fed and banks and everybody wants to see, the biggest risk is that the fed tightens too soon. >> you know i -- i heard what they said. but i'm listening more to what yellen says. and i would advice investors to do that as well. yellen's pretty transparent here. and i think she's signaling
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intention. >> that's always assuming interest rate hikes act as a drag in the economy. i think from these levels raising interest rates won't drag in the economy at all. >> the first hike actually tightening or not? anyway, we move on. thanks, guys. michelle we'll be checking back with you. let us know on the debate going on in parliament as well. >> tough situation in greece as they head towards that vote. 45 minutes to go in the session here. markets have a lot to digest today. dow's down about 33 points right now, s&p down about 5, and nasdaq down about 12. >> we'll continue to follow the developments throughout the hour. plus, the latest from our delivering conference here in new york city. we'll find out what bill miller says could be the next apple. >> stay with us. billionaires icahn and fink in what's sure to be a lively debate. keep it here for that. also ahead, a moment of truth for intel and netflix reporting earnings after the bell tonight. we'll bring those numbers to you the moment they hit the tape
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along with instant analysis from our pros zplchlt. >> and breaking down the chip giant's earnings with us exclusively before speaking with analysts. stacy smith coming up next hour here on the "closing bell."
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welcome back. take a look at macy's. those shares up almost 8%. higher on comments from jeff smith. delivering alpha conference today, bill. >> rounds up the big ideas after that conference so far today. >> so bill kelly, let's start with some news here. because first off, talked about macy's but we now have macy's response to jeff smith at the comments about macy's trying to unlock shareholder value there. in a statement via our own scott
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wapner. macy's says, quote, we work continuously to maximize shareholder value, including share repurchases, increased dividends, continued investment in our business which led to superior operating performance compared to the majority of our competitors. excerpts from macy's statement with regard to jeff smith's comments about unlocking value about macy's. and macy's stock almost immediately shot up after he was presenting his ideas about the company. he named the stock as his best idea. he thinks it can be $125 stock if it splits into all of these separate pieces and unlocks some value that way. that's more than double its current value right now. jeff smith also saying it's between its operating businesses, real estate holdings the retailer could function as two separate companies. macy's holds more than $20 billion in real estate value. so, again, those shares up on that comment, as well here. now, tom sandell outlined
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opportunities in furniture retailer. he sees also there value in the real estate holdings as well as the company's balance sheet and the strength of the brand name for ethan allen. said that the firm is one of ethan allen's largest shareholders, but he's not disclosed what the size of the stake in the company is. >> heath meister calling it his best idea for the year. called the investment bond-like risk with equity. that's what he calls those shares. he's seeing a number of positive catalysts for the stock down the line with between upside of 25% to 50%. so real estate perhaps, ha theme with regard to the three best ideas. and unlocking value from our delivering alpha conference kelly, bill back over to you guys. >> very true dominic. thank you for now. i was at that conference earlier today. speaking with jeff miller bill miller and jeff gunlock. i wanted to get their take on the shares. >> it's our largest position. we actually entered it via
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call options late last fall when we were down 30% last year. they became public at a $400 million market cap. today, they have a $215 billion market cap. they've never sold any shares to the public and they have billions of dollars of cash on the balance sheet. so, if they didn't make any money, where did all of that come from? >> i don't own amazon no. i don't know nearly as much about it as bill does it's clear. but i -- i'm allergic to things that don't make money, basically. >> that has been the classic debate about amazon as they celebrate their 20th anniversary today is that they've chosen not to make a profit even as they bring in the -- bill miller had a stellar year this year. >> well he has, and with amazon, that's an investment he got in. $21 average cost for this fund and now it's heading towards 500. i asked him if he does think that's the next stop for the shares. he sort of said well you know probably maybe but at $21, i don't have to worry quite as
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much about it getting in at that level. still, gross profit dollar he says remains the focus there. i sat down with bill separately for cnbc pro and had the chance to ask him what he thought the apple of the next decade in terms of an investment idea might be. >> it's in the biotech area. and while biotech had a big move, you're really at the cusp of another revolution in overall medicine and the way in which health care is handled. and i think the big area is synthetic biology. >> what does that mean? >> synthetic biology is to living things what software is to machines. able to manipulate dna to change the instruction set. so one of the really big areas right now is immunooncology. and that's basically, he said it's using the body to heal the body. >> immune oncology. when people hear immuno oncology, that's part of the
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broader area. >> yes. >> who are the companies that represent the biggest opportunity for getting into the space if it is going to redefine science? >> well, there'll be a lot of them coming public. the ones that have gotten attention recently. those companies are kind of early stage in the immuno oncology. everybody big is playing in this, as well. we own two. we own intrexon and zyopharm. >> why these two? what is the advantage relative to others big and small in this space? >> there's two advantages to interexon. most are involved in health care. it is involved in energy, health care, consumer environmental, and so, very broad swath of stuff. all of which synthetic biology can touch.
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>> so he gave a couple of examples including in the energy space where you can kind of turn things that were turning into carbon dioxide into gasoline. another being a simple apple we eat every day. there are techniques that are just to keep them from browning. but as you can notice synthetic biology. my head was spinning trying to -- >> i will say, there's a whole land rush going on there right now. it's very early, but boy, there's a lot of potential right there in that battle against cancer, that's for sure. >> naturally, you get into valuation discussions, saying if everybody starts to love these names, how much do they get detached from the underlying fundamentals? he says, actually this market still creates opportunities because risk managers don't like to buy stocks that are falling. so he's been getting into twitter, for example seeing maybe a $19 facebook moment. there's much much more of that discussion with bill miller on cnbc pro., you can check it out. >> i love bill miller.
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he's an idea guy. one of those great ideas. the great investors of the past. that's for sure. we got 36 minutes left in the trading session here. the dow's down 32 points. this is the narrowest trading day. and the last 14 trading sessions, the average trading range for the dow has been 198 points. today, it's about 65 points. so we're not seeing much volatility or volume right now with the dow industrials down 31. >> we do have big earnings on tap. an analyst weighs in. they're posting results within the hour after an all-time high yesterday. and remember, implementing that 7-1 stock split today. find out if it's a must have for the portfolio. >> also get ready for fireworks. billionaires carl icahn and larry fink together. they'll be debating activist, investing live during our delivering alpha conference. it's still going on in new york city. you will not want to miss that coming up live here. >> and we will take you back to athens where protests heating up
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outside the parliament. we're back in two. when you're not confident your company's data is secure the possibility of a breach can quickly become the only thing you think about. that's where at&t can help. at at&t we monitor our network traffic so we can see things others can't. mitigating risks across your business. leaving you free to focus on what matters most.
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welcome back. netflix shares down nearly 3% today. ahead of the earnings due out after the bell. >> joining us now for a preview. an analyst and managing director at morgan stanley. this has been one of the momentum stocks of the year. they just had the 7 for 1 split. what are you expecting from this company in the earnings tonight, ben? >> well as you know the focus is always subscriber growth.
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and we expect the company to deliver in line with their guidance for q-2. and as usual, the big focus will be on the forward quarter. so we think the company will guide to somewhere around 950,000 net adds for q-3 in the u.s. and outside the united states we're looking for somewhere on 1.7 million. we recently lowered that number because the company announced the timing of their new launches. particularly in southern europe, which have been pushing until october. we moved a lot of customer growth from q-3 into q 4. >> what about the comments where he took a swipe at the latest season. what was it? house of cards? and you have to reminder content is king. are they delivering here? >> yeah i think it's important to look at the lack of profitability in a couple different lenses. they are making money in the u.s. the model is fairly straightforward. they reinvest their u.s. profits into expansion. they've been consistently
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beating their margin goals in the u.s. market and we think there's upside to their margins long-term in the u.s. as we look out over the next couple of years. and the other thing to keep in mind was you were talking about amazon earlier. you know, this is a company who spends a ton of money on programming. if you want to compete with netflix, the size of the checkbook you're going to need is substantial. that lack of profitability today builds a mote around the business model. >> amazon being one, the big cable companies. our parent company, comcast, could be competition that category, as well. right? >> there's absolutely competition, but let's look at some of the statistics. amazon has increased their investment significantly over the last couple of years. hulu, as well. and as you mentioned, a lot of the cable companies have rolled out the tv everywhere services. netflix, we think, is growing their streaming, time spent over 30% in 2015. versus last year.
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they're now viewed from a time spent perspective more than any single broadcast network. and that's despite all the competition coming in. they've achieved a level of scale. again, particularly in the u.s. that has made it very difficult. even for those with a lot of money to spend to actually eat into their consumer wallet time spent share. >> ben we'll leave it there. what are your estimates for the top and bottom line numbers this afternoon? >> you know we're in line with their expectations, we think the company will deliver a contribution margin in the u.s. of about 32%. that's a number to keep your eye on. and generally, we think their guidance makes sense for q-2. >> contribution margins. thanks a lot, ben. we appreciate it. morgan stanley there on netflix. >> time for a cnbc news update with sue. >> here's what's happening at this hour. the former obama administration official in charge of the rollout of health has been chosen to be the top lobbyist for the nation's health
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insurance industry. tavenner will become president and chief executive. aetna, anthem and kaiser permanente among others. sources inside the union say that if brady is still suspended after his appeal the union will take the league to federal court. the national retail federation says families plan to trim back their back to school spending this year after splurging in 2014. but, on the other side of thing, the recent survey by the international council of shopping centers says 67% of consumers that they polled plan to spend more this year. speaking of spending the fao schwartz toy store on 5th avenue is closing its doors for good tonight. but may reopen somewhere else in the city. owners citing high rent costs. they've had a new york city
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location or presence since 1870. my kids have that piano. they love it. that's the cnbc news update this hour. back to you guys. >> i always wanted one of those. >> they're fantastic. >> great memories of that store. that's for sure. especially christmas time. >> absolutely. beautiful. >> thank you, sue. >> let's get back to greece. our chief international correspondent is live with the latest. michelle? >> yeah still several hundred protesters in front of parliament right now. it's a much calmer situation compared to, oh, within the last hour where we saw molotov cocktails fire in the street, police riot, riot police dispersing the crowd with tear gas. it was fairly chaotic and fairly violent for at least 15 20 minutes, last ten minutes of president obama's discussion with reporters news conferences, is when it all began. the reason they're protesting is because inside the parliament, the politicians are debating right now and set to vote later
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on tonight on a new bill that is going to introduce a new round of austerity measures including higher taxes, forcing greeks to retire later than they've grown accustomed to. and making changes within the greek economy that's going to potentially make it more competitive if they implement it properly. they haven't done so in the past, and there's a lot of doubt about whether they're going to do so again. and when you see violence in the street like this it raises concerns about whether or not you've actually got the greek population to buy into all these changes that theoretically are going to be imposed on them in exchange for more than 80 billion euros in bailout money if, indeed they finalize a deal. we're still waiting to see what happens with this vote. it's widely expected to pass. what could happen as a result of these clashes is maybe the prime minister sees more of his party members abandon him and leads to him having very weak majority or perhaps losing majority which will have political implications implications. as soon as we know more about this vote, it's supposed to
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happen before midnight. some time in the next hour and a half, we'll bring it to you. >> i don't know, let me just ask you, we've heard a rumor from a couple of different sources that said that the prime minister said as part of the debate he's threatened to resign if this thing doesn't pass tonight. have you heard that? >> so he's threatened to resign if he doesn't get a strong enough -- if he doesn't get strong enough support from his party. because what that would mean is if he leads what's called a minority government, he's hostage to other parties voting in his favor. so what he's doing there is he's saying to the members of his party he's like i'm going to resign, we're going to have to have new elections, and the way the election rules work here, he gets to bring up a list of mps that would be a member of his party if he won. and believe me, he would win at this point. so all of those mps who don't vote with him would lose their jobs. and, you know power is sweet, bill. he's using this as, i don't know
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if you want to call it a carrot or stick to try to get as many of them to vote with him even though, in theory it goes against the principles because, perhaps they'd like to actually stay in power. >> very interesting. michelle, thank you. once again, be talking soon. >> with 25 minutes to go here in the session and markets given all of these cross currents bill we're seeing the dow down 11 points, s&p two points away from turning positive. >> we'll come back, a top trader telling us what he's watching. the final and most important half an hour underway right now as we head toward the closing bell. ys you can talk to through legalzoom. don't let unanswered legal questions hold you up, because we're here we're here and we've got your back. legalzoom. legal help is here.
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ever. just the way she likes it. innovation and you. philips lifeline. lifeline is america's #1 medical alert service. visit today or call this number for your free brochure and ask about free activation. stocks giving back gains after the protests turned violent ahead of the controversial bailout bill vote in the greek parliament. keeping an eye on that situation. we will get back to athens in the next few minutes here. kelly? >> yes bill in the meantime, let's check in with ben willis on the floor. what are you watching into the close? are these markets going to turn positive? >> i hope so. obviously we saw, as soon as michelle went on air with the molotov cocktails, the buyers ran away. they weren't sure what they were
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looking at. and, again, the united states is a safe haven. >> we've had the iran deal to digest, the amazon prime day. what other parts are driving the market? >> energy is the worst performer. and again, i think what we saw a short covering ahead of the realization that iran oil is not coming on the market right away. however, all that being said the rest of the complex is under a great deal of pressure. it's going to be re-priced. at princeton, seems to be a rotation. taking profits out of the health care sector and finding more opportunity in some of the consumer stocks. >> i'll watch that one for sure. what about china in the meantime? >> very scary quite frankly. i think china's losing a lot of credibility. some large investors stood on the sideline for a while waiting to see. but you had 1200 stocks under
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600 stocks released for free trading. we're seeing a lot of pressure in the chinese stocks trading in the united states. people looking for bids. >> i think jeff put it well today at the conference. he said, look, if the managed system worked so well, everyone would be doing it. it's a lot tougher than it looks, ben. thank you very much. >> thank you. >> just before we go i just have something i'd love to do for you. so just bear with me. >> happy birthday to you! ♪ happy birthday to you happy birthday dear kelly ♪ ♪ happy birthday to you ♪ >> thank you very much! >> where's the lighter? let me have the lighter. >> now, listen the last thing we need is more flame around here. bill griffith has an excellent voice. i knew the four of you were extremely talented, but this one is news to me. is that my baby picture? oh, my goodness. >> i want you to see the
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pictures on there. >> you really shouldn't have. >> i painted that on there. >> oh my god. that's -- it's very curly and now the secret is out. i'm going to wish that everybody has a great rest of the week. >> you're do not supposed to tell the wish. >> you shouldn't have! let's get back to trading. >> happy birthday. >> thank you so much. >> she loves this kind of stuff. >> i'm out of here. >> we'll get back to delivering alpha conference at the pierre hotel there in new york city. we've got kate kelly standing by with a play by play of what people have been talking about, kelly? >> that was terrific singing there. you should think about starting an a capella group. but over to alpha. really fascinating afternoon and we had a keynote interview conducted by david faber. paul singer the founder and chief investment officer of eliot management. paul's obviously active around the world. he's known for some of his distressed trades in argentina and elsewhere. he also thinks that shorting developed government bonds is the hot new trade right now because he's very concerned
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about zero interest rate policies among other things. but, he turned his attention to china in a particularly interesting moment. and a lot of us have been talking about the wild ride that stock market's been on. way up and losing a ton of ground in the last month or so. the measures taken to halt quite a few stocks to allow people to use homes as collateral for trade. to do more to facilitate trading. and he said it's an issue of real concern. let's listen to him on that. >> the damage that's been done to people's perception of the reality of among other things, ownership. what does it mean to own a chinese stock? one could ask themselves if this can happen you know there you are. you own your stock. then all of a sudden, not only can't you trade it for days or weeks, you don't even know roughly what the right price is. and there's an edict that -- and
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your brokerage firm has become insolvent. >> and you know paul singer is not the only person today who has sounded alarms in terms of looking at china as an investment opportunity. we've heard it across the board, bill miller said you can't trust. concerns about chinese economic -- may have shared over the years. thinks the china situation is a phenomenon. it could be worse than the u.s. in 2007. also said that just seeing the role that leverage plays in the system is going to be crucial for any investor. a lot of warning signs there. even though some interesting opportunities. >> at the delivering alpha conference there. she's mad at me now. >> i'm still sweating. >> she's mad. >> you have a great voice. >> and you are sweating. >> yes, very much so.
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>> we're heading to the close, 16 minutes left in the trading session here. a very narrowly traded day today. a lot of the action there's been oil, which has been down sharply, the dollar has been struggling. ten-year down to lows of the session, 235 there. that's where the action has been there. >> watching the s&p down three points, see if it turns positive into the close. biotech stocks soaring on cel celgene news. details on that when we come back. the mercedes-benz summer event is here. now get the unmistakable thrill... and the incredible rush of the mercedes-benz you've always wanted. but you better get here fast... yay, daddy's here! here you go, honey. thank you. ...because a good thing like this won't last forever. see your authorized dealer for an incredible offer on the exhilarating c300 sport sedan. but hurry, offers end soon. share your summer moments in your
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we have some new pictures coming out of greece at this hour. violence heating up a little more than an hour ago. this looks like earlier in the day. but we're expecting parliament vote within the next hour or so on the bailout package. we will take you live back to athens as soon as that gets underway. the debate is underway right now. >> meantime, new drugs for out autoimmune diseases represents one of the biggest markets today. >> that was likely the reasoning behind celgene's bid today. more on that deal. >> that's right. so last night, celgene agreed to
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buy for $7.3 billion, about $232 a share. only about a 12% premium to where they had been trading. not a huge premium. but there'd already been a huge run-up in the stock. if you look at the stocks today, celgene up, as well. buyers are being rewarded here and people like this deal a lot. what some are saying it's putting pressure on other big biotechs to also start doing deals themselves. we've been talking about this for a while because they're bringing in so much money from hepatitis c. these are the other four big biotechs. trading at significant discount to the peers. a lot of folks say because you can't see where growth is going to come from after the big revenues start to peter out when they've killed a lot of the major patient population. folks think they're going to do a big deal. and they've got a lot of cash. if you look at the cash over the last couple of years, going back to 2011 $10 billion there, you see it going down to $2.5 billion in 2012.
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that's really what made them leaders in hepatitis c, but when you look over the last in the first quarter, $15 billion in cash. they've got piled up there. folks are wondering what they're going to do with it. and so i've been asking around we've been listening to what the company's been saying. they say they want to build out in areas where they already are. that's hepatitis c, hiv, other liver diseases. and they're also in cancer. that's an area where folks expect them to start building up a lot more. what the company has said is rather than potentially doing a huge deal because names like bristol-myers and celgene. rather than doing that they might want to do a company in the later stages of clinical testing where they can accelerate assets through and get them to market. we've heard names like intercept, incyte is one, they're big in cancer that can help establish there. another new one is chimerix. we were talking about them a lot during ebola, baa they're in other areas. so that would fit in well with
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gilead's sweet spots. >> it is amazing what is going on. bill miller i'm sure would be interested in all of this. >> and a reminder you have to be inquisitive to stay ahead of the pack. >> ten minutes to go into the close. s&p down a couple of points and nasdaq having a good day, partly in part on biotech. when we come back rob says don't get lulled by tonight's tight trading range, he sees great opportunities in technology and health care. which he'll itemize when we come back. sometimes, at last doesn't happen at first. ♪ ♪ your dad just kissed my mom. ♪ turning two worlds into one takes love. ♪ helping protect that world takes state
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welcome back. six minutes left in the trading session here. as we said you like health care. a lot of people like health care here. aren't we getting a little pricey with all of these deals being done and everybody agreeing that health care is the place to be? >> well there's a lot of activities. we do see a lot of opportunity -- these companies are looking a lot more compelling than some other areas of the market. add in the geographic aging of the populations, spending by the emerging markets on health care. >> more compelling, though? isn't this one of the most overvalued part of the market?
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>> we very much stock specifics here, kelly. talking about companies like the largest manufacturer of needles and syringes in the world. but when you control 70% of the market we think that looks good, and the price is right. >> and technology, that's a big umbrella, as well. what do you like there? >> we care for companies that are more mature. and even in direct expose you through companies like the business services group. there's a great play on the customers looking to use technology to become more productive. >> you're after meat and potato companies, that's for sure. >> profitable meat and potato companies. >> and they have to make money, too. that's important, too. >> thanks for joining us. >> thank you. >> we'll come back with the closing countdown. >> and then after the bell one of the hottest companies in the market netflix releasing its latest earnings report. we'll have those numbers and instant reaction for you. you're watching cnbc, first in business worldwide. random? no it's all about understanding patterns like the mail guy at 3:12 every day or jerry, getting dumped every third tuesday. this happens
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now. and then netflix reports. that's a big number they're expecting. and that stock is down 2.25%. we're seeing a rally now suddenly in the greek etf. >> i want to point this out, the greek stocks are closed. if you could put this up there. we are seeing a molotov cocktails in the street. the greek etf has been rallying in the last hour. now up 11%. and while there may be concerns bill, about civil unrest in athens, the market is saying that this is going to pass. >> it sounds like it. and michelle has been giving us handicapping and says it looks like it's going to pass. but it's far from over even after this thing passes. >> the we could put up energy names, it's a very ugly day in commodity stocks. steel stocks and energy stocks. >> stronger dollar. >> hurting them. and oil at $50 to be blunt is unsustainable. and is a lot of concern that we may be doing damage to our energy infrastructure down the road. so expiration production, oil having a very very ugly day.
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china weakness is weighing on the stocks. >> very good. thank you, bob. see you later. that's the first hour of "closing bell." but stay tuned, do not miss. coming up the earnings from intel and their chief financial officer stacy smith and then the big number coming from netflix, as well. all that coming up on the second hour of the "closing bell" with the birthday girl kelly evans. >> thank you bill. and welcome to "closing bell," everybody. i'm kelly evans. what a day it has been here between the news flow that we've had out of iran. hearing from president obama, the delivering alpha conference here events out of greece amazon prime. there's a ton to get to. markets trying to make sense of it all. looks like we're going to close with the dow almost, almost in the green, but not quite getting there. down about one point on the session today. same for the s&p. the nasdaq down about 6, and we are now waiting on earnings results from netflix and intel that will hit within minutes. joining our panel today, we have cnbc contributor in the house,
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our own kayla tausche and christine short along with steve grasso in a moment. welcome to everybody. carol, what do you make of this market? >> i think there's actually a lot of strength behind the market. if you think about all the various events that we have taken in over the last couple of weeks yellen talking today. i mean, it says to me there's strength in support. you know i believe that is probably for the wrong reasons, not for the right reasons. my take away from what yellen said today is maybe december probably next year. but i think that the market is showing us that it has resiliency. >> i think a lot of the market moved on comments of john gunlack. when he said i think that janet yellen is basically pleasing the people. saying a rate hike is still possible for 2015. he says he doesn't think it's on the table. if you came down from mars and look add the the economy we were
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in you would ask if the fed would be easing instead of tightening. it's a quandary that she's in. but she seems to be holding a rather hawkish tone. at least for now. >> we're trying to digest the early part of earnings season moving into the thick of it. people saying they i want to ignore things that are happening and focus on the fundamentals what are i they telling us? >> well negative so far for the companies that reported and estimates for those that haven't. we're still down about 3% for the s&p 500. but, we've seen some pretty good beats thus far. i saw it come across the stream. intel looks as though they beat. that's huge considering this is a company that everyone lost hope on the semiconductors in general. so with many of their peers coming out with negative guidance for intel to beat is quite a posztive here. >> you know as we go into earnings season here the one thing that i want to keep my eye on are the luxury consumer branded goods companies. given the crackdown in corruption in china, especially with these high-level officials
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who are now going to be on the down-low and not flaunting the brands. and what we've seen out of their stock market with so much wealth decreasing over the last couple of weeks, whether or not that hits in q-2, i would be looking for guidance for the rest of the year for some of these luxury names that china could really impact their sales. >> it was funny, kayla, even apple was down during some of the worst of the china scare, if we want to call it that over the past week. but frankly, the scariest headlines came from paul singer who compared it to the subprime crisis that it would be worse. >> i think people are still scratching their heads about exactly what it means. is the fallout stemmed? did the unprecedented actions taken by the authorities in china actually stop the fallout that we've seen? i mean we heard jamie dimon earlier this week say i'm not losing sleep over it. the government has $4 trillion in unencumbered money they can plug into the system any time they need. they're going toward a consumer-driven economy. this is a bump in the road. but then you get to today and you have everybody delivering alpha talking about how scared
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they are about it. >> against the backdrop, the results are out. let's get out to jon fortt with the detail. >> these numbers look good kelly. the street was looking for revenue of just about $13 billion, a hair above intel turning in $13.2 billion for q-3. eps at 55 cents versus 50 expected. and the guide is strong also. gross margin at 63% versus just over 61% expected. revenue at 14.3 billion at the midpoint. a hair above $14 billion expected. that's $14.3 billion guide. that's plus or minus 1/2 billion. so the range is above what the street consensus was looking for and the gross margin is strong. this probably would suggest that things are going well with their ramp of the new manufacturing
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process. all we have to wait to hear is whether the next generation chip is looking to ship on schedule because there are a lot of people in the pc industry counting on that to make for a stronger back half for that embattled part of the industry. but these results looking strong. that's probably why the stock is up some 8% after hours, kelly. >> this is a big move john. thank you so much for now. we'll talk to stacy smith about these results in a cnbc exclusive interview in a minute. an 8% pop, that's huge. >> how low has the bar gotten for these stocks? when you want to see this, there's a couple of rules of thumb you want to look at as a trader. in bad news does the stock trade higher, but when that bar is lowered, is that -- are the expectations so low now that a stock like intel is garnering some -- >> but the valuation is so low. and before this was trading under 13 times forward earnings. so forget about the bar being low, the valuation was low. and this is a company that's going through transition, but
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certainly has a really strong brand, a really strong management team and a lot of opportunities down the road. even if you're a long-term investor, i think this is a great opportunity. >> coming into this print, it was down 18% year-to-date. when you look at a stock like nxpi totally different game. up 21% year-to-date. so it depends on the semiconductor you're looking for and what you're looking for for the future. but to your point, tremendous brand with intel. is this the end? i think it depends on the marketplace. >> well we've been watching at intel trying reshape the company's revenue story to include more internet of things more cloud computing, and it does seem like at least, that's able to carry the day in the face of some of these really miserable pc numbers. >> right. >> sorry. q-2, pc sales were expected to be around 12%. i'd be interested to see how they did. they were looking for the business to offset that. we know that they've got a 20% stake in china to ramp up their
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mobile expansion. so we'll know they're focussing on that. they've got windows 10 debuting this summer after july 29th. you know there's some doubt whether or not the refresh cycle of that would be good or not. >> yeah. >> windows 7 and 8 customers do get to upgrade for free. but, perhaps now going into that, they will see a better refresh cycle. so there's a lot of things looking forward that intel has to weigh on. >> we'll come back to this as soon as we can. and netflix out with the quarterly results. let's get to those numbers. hi, julia. >> hi kelly. netflix coming in better than expected reporting earnings per share of 6 cents, that's two pennyies more than wall street analysts have been projecting and all important subscriber number netflix beating expectations, both in the u.s. and overseas. the company reporting total net additions of 3.28 million new subscriberses. 900,000 of those were in the u.s. and 2.37 million of those were overseas. so that's better than expected
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both internationally and domestically. in terms of the company's forecast the company's saying they project q-3 international net adds of 2.4 million, that is also better than expected. so really coming in strongly here, and in terms of subscribers the company says that was fueled by the growing strength of the original programming slate. i'm going to continue to dig back through here but a big beat for netflix. back over to you. and revenue right in line with expectations. >> julia, thank you so much. she mentioned netflix is up about 8% on the back of these results. steve grasso what do you make of this? >> he's out of the name right now. so between him, brett and brett's partner, this is one of the names that after the last earnings cycle, you saw this stock pop and everyone said sell it including me. i said sell it into the strength. and that's a couple hundred points ago. the only thing that slows netflix down is if apple comes to market with cord cutting and apple tv.
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something different than we've seen. and that's been rumored. and seems to be maybe, maybe in the next couple of months -- >> there's a lot more talk now about how netflix is no longer as unique as it was. the market's going to grow hugely. you know, even if it maintains, you know a smaller portion of that, carol. is it growing days ahead for this company? >> i think you have to look at it differently if you are a value and a long-term investor ve versus if you're a trader. a momentum name that the traders lo v and it's going to have support for the interim for a while. if you're a long-term investor and looking at five or ten years, is netflix a sustainable story? perhaps not. but i think that momentum is on this company's side. and even if apple does come into the market the market is changing so rapidly and i feel like whether it's millennials or overseas there are going to be people who have their apple subscription and amazon prime and a bunch of others.
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>> kayla. >> i think that carol's right and i think the right conversation for now is that it is still growing and obviously you can't argue with an 11% gain even though in the past quarters, we've seen 18% to the upside, 17% to the upside. this is always a very momentous stock after earnings. but it's having to spend more. to retain its place in the content space. and the growth in content spending is actually double its revenue growth. and i don't think it's at an inflection point yet. but you've seen hulu double down. >> seinfeld. >> exactly. >> subs are so sticky in this environment. i pay for netflix, i wouldn't think about canceling netflix. you can raise the price 20%. >> you're a well off guy. >> it's $2. >> exactly. >> we have that -- >> we had that exact discussion. we're not really watching it but should we cancel it? no, just in case there's something we want to watch. >> more detail from the report. julia? >> yeah, digging in here. looking at the projections for the next couple of quarters.
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now, the netflix says they forecast u.s. net additions of 1.15 million in q-3. that's slightly higher than a year ago period and that comes down to the strength of the original content. this past quarter, they had orange is the new black as well as marvel's daredevil and talk about how that's holding on to subscribers. another interesting thing here in terms of international. they didn't actually officially launch any new international markets in q-2. though, they did launch australian new zealand before the quarter started. they do say they expect international losses to continue to increase sequentially as they invest in that international rollout. but they are really continuing to expansion, japan, they confirm, is coming in q-3, spain, italy and portugal in q-4, and they are looking at china saying they're continuing to explore their options in china. obviously, a potentially massive market there. back over to you. >> jon fortt, these shares are up 10% after hours now.
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intel having a great after hours number here as well. what are you reading from it? >> well, here are a couple of things. one on intel, the pc business the client business that was one of the areas that actually beat expectations at 7.5 billion. it was expected to be $7.4 billion. and there's all this talk about the pc business being weak. intel was able to outperform despite that. and intel and netflix combined. what we're seeing is some confidence. a revenue beat, which a lot of people were expecting while, you know, maybe revenues would be weak. you have currency head wind concerns. not, perhaps, as much of a concern with netflix. but the fact that intel had a beat on revenue and was also projecting strength is important. on the netflix end, it seems that they are saying they're going to invest more in original content. they say and here's a quote from that letter. we anticipate as our global
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content spend approaches $5 billion in 2016 on a p & l basis, we'll invest in absolute dollars and percentage terms. normally, that might be a concern. but the fact that original content is performing so well for them it looks like investors are probably going to be willing to let them continue to invest in that because it's paying dividends for them. so this revenue growth, the core of both of these businesses performing well, despite somewhat lowered expectations in intel's case. that's a strong case for the beginning of this season. we'll have to see where it goes from here. >> what does this do now for earnings season? >> this just upped the ante a little bit. we've come to expect netflix to beat. last quarter their subscriber numbers were great. they came in at 4.9 million. we've seen the stock rally and we know that now. it's the barometer for the return on investment of the original content which has been wildly popular.
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they're known for tv. they said they're expanding into movies. they have a four-movie deal with what's his face adam samberg. i can't even remember. they have a lot of in the pipeline. and there's no reason to cancel it. it's still very cheap, especially if you're grandfathered in at $8. they can raise prices they have the breathing room there to actually raise prices if they want to offset some of these costs. costs are up for marketing. but they seem to do very well. >> got to leave it there. we're out of time everybody, but thank you very much. christine, appreciate it. thank you very much. be sure to stick around and catch more coming up on "fast money" with steve and the crew at 5:00. up next we'll head live to athens. the greek parliament is expected to vote on the latest deal any time now. you're looking at live pictures right now. it looks like things are settling down a little bit after some petrol bombs thrown earlier caused a stir.
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find out which way lawmakers are leaning straight ahead. later, carl icahn and larry fink go head to head on whether activist investors are good or bad for the market. trust me you don't want to miss this delivering alpha panel. you are watching cnbc first in business worldwide.
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welcome back. in case you missed it netflix reported earnings, and the stock up sharply after hours, almost 10% right now. let's get more detail from julia boorstin digging into the results. julia? >> netflix really attributing that growing subscriber number to the strength of its original programming saying nearly 99% of netflix members have been engaged with netflix original content. expects to approach $5 billion in 2016 saying they will devote more investment to originals both in absolute dollars and as a percentage of total spending. not only series documentaries and stand-up but also original feature films. made a big acquisition of a brad pitt film called war machine. as to the company's small revenue miss on the top line, the company grew international
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revenue 48% year-over-year. and that was despite an $83 million impact from currency. so it's really that fx impact that was the reason that the revenue did come in a tiny bit lighter than expected. >> what did you think, though on the original programming note? this was a point you were making. >> well i think there's going to be a point when investors will be scratching their heads trying to justify what they're spending on it and actually getting from it. there are a lot of people talking about the fact that netflix is running at a negative free cash flow. negative $392 million in the last six months $3.2 billion in revenue for the first six months of the year. they want to spend $5 billion on content in 2016. >> if you think about it if they have just one thing every month that you want to watch, you will not stop your subscription. i mean how many people join netflix just to see house of cards. one particular show. they have one movie, one show onnen a ongoing basis.
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that's all it takes for you to keep your netflix subscription. >> i think the bigger question is, what point do they have to raise prices again? >> and the shares by the way, they're over $100 after the 7-1 stock split. riding in the street this evening as greece's parliament prepares to vote on the bailout offer. on the scene with the latest. it does look like it's calmed down somewhat. michelle? >> it has, kelly. there's still a couple of hundred protesters out. they've hoisted a large greek flag on which they've spray painted we love you greece. but certainly, a much calmer picture than we saw earlier in the evening when there were several thousand protesters out and they began throwing molotov cocktails and we heard a dozen round of explosions lasted about 20 minutes. riot police came out, dispersed the protesters with tear gas. people running from the square gas in the air, very acrid
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smell. fires burning for roughly like we said 15 to 20 minutes before the crowd was dispersed. inside the parliament while the chaos was going on outside, the parliamentarians are debating a controversial bill that's going to include all kinds of austerity measures which include reforming the pension system, which means greeks will have to retire later than they have grown accustomed to. they're going to face higher taxes on nearly everything when it comes to a higher national sales tax, a lot of items used to be exempted used to be very messy, difficult to collect system. they're trying to streamline it but at the same time raise taxes. and then also a process of reforms that's going to be implemented over time if the greeks, do indeed implement. there's little doubt that this is going to get passed tonight. everyone expects it to get passed. the question is how many of abandon him. if enough abandon him, he becomes a very weak prime minister, doesn't have a strong enough coalition, and it leads to all kinds of political imply
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implications and raises the question about how fast can they finally negotiate the bailout package, which is what they are working toward. so we've got to wait and see that number. we expect them. they're supposed to vote before midnight, it's 11:21 at night here, so in theory it should happen within the next 40 minutes. when we know more and know the answer, we'll bring it to you. >> appreciate that, michelle. a question from carol here. >> yeah it's carol roth. i want to know in terms of the greek people right now, they do they believe that even if there is a vote to move forward with this that this is the end of this? from my perspective, it seems, again, this is pushing the can down the road a little bit and something that's not going to inherently solve the problems that greece is facing. >> well most greeks see the whole austerity picture through cuts in wages and raising taxes. what is also to have been carol, for the last five years were reforms to the economy that would make it much more dynamic and functional.
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one example, the pharmacists here the pharmacies you will never see a walgreen's here. you'll never see a cvs or boots. when it comes to pharmacies, only a pharmacist can own a pharmacy, he or she can only own one. the government tells them where to put that pharmacy what the hours can be the products they can sell and what the margins will be so they can determine the prices. if you want to buy an advil or tylenol, you've got to go into a pharmacy that has erratic and not consumer-friendly hours and pull them out of a drawer. it's not like in the united states you can buy them anywhere and everywhere. that's one sector of the economy, that in theory should've already been reformed and that they're promising to reform now. imagine that in nearly every single kind of occupation in this country, and you could imagine how dysfunctional it is here. if they had made those changes, things would probably be better now instead of just hiking taxes and cutting spending. >> michelle, that's a great point. thank you so much. we'll let you go.
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it'll be several more hours, maybe, possibly before we know what happens in greece. michelle caruso-cabrera. the chip maker did beat wall street's expectations. and up next cfo stacy smith joins us exclusively to break down those results. then we'll head to delivering alpha for two of the biggest hitters on wall street. billionaire investor carl icahn and black rock ceo larry fink. they'll be taking the stage in few minutes.
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well look who just arrived at cnbc's delivering alpha conference. it's carl icahn, and he's getting ready for his big debate with larry fink on whether activist investors like icahn are good for this market. we'll bring that to you in just a few minutes. carl icahn, by the way, likely to be asked about his position in netflix that he exited. he did say he thought the company was going to face more competition and was going to be less unique in the years ahead. that echoed in an analyst report today from mkm partners. nevertheless netflix and intel handsomely beating earnings after hours as we were just discussing in netflix's case. we'll get back out to delivering alpha in a few minutes. because they're responding well to that report up 5.5%. and joining us to break it all down in an exclusive interview is intel's cfo stacy smith. great to see you again, stacy. >> good afternoon. >> should we be worried about
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that? >> you know, it's just a sign of some of the economic uncertainty out there. i think you can see in our results, we came in as expected even with all of that uncertainty. >> sure. stacy, what did chip makers want? you bought altera. maybe going into the data system business. you're trying to move to a post pc world. is this quarter emblematic of that? >> yeah, i think you can see the transformation of our business in our results. when you look at the combination of the data center which is the largest, the memory business and our internet of things business, it's now 40% of our revenue and 70% of our operating profit. and that's grown dramatically over the last couple of years. >> and is that how you guys are choosing to play the mobile revolution to say, all right, maybe you're not in the device but you're going to be in all of the other equipment that powers what we do on our phones? >> well our ambitions are actually to be at both sides. we obviously have this huge client business that ranges from pcs to tablets to phones.
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we have large footprint in the internet of things which sits out at the edge of these networks. but then we have this very large data center that all of these devices are connecting to. and so we actually think we're uniquely situated to be able to play at both ends of the spectrum. >> many people making comparisons between your success and this environment compared with the struggles as we just heard last week from a rival like amd. what is going to continue to set you guys apart? and how much more consolidation might we anticipate in this sector? >> well i'll separate you know, what we're seeing today from the consolidation. what we're seeing today, i think, in a first approximation is based on our technology leadership. we invest a lot in technology leadership, we invest a lot in manufacturing leadership. and that manifests itself in having products that are higher performance, lower power with more features than what the competition can do. when we do that we win in the
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marketplace. in terms of consolidation, i think what you're seeing is -- it's really an economic phenomenon. the cost to build factories. the cost to have all of the different pieces of technology you need to do a modern system on chip product has gotten to be so high you're seeing some of the smaller companies getting consolidated by larger companies. >> stacy, if you guys were interested in micron would you buy them directly instead of going through a chinese company? >> so you know i'm not going to go into the space of market speculation. these kinds of rumors out there all the time. and we don't even comment on them. >> do you have any issue with a chinese company buying one of america's chip making firms? >> you know, every one of these situations is going to be fact dependent. i don't know all of the facts in this case, but in general consolidation is happening. it's happening for the economic reasons that i talked about. it's going to be one of the things that drives the industry. and if you look at us we're -- we are consolidating portions of the industry because we're
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expanding our product line we're expanding the ip blocks we participate in. that's our strategy. >> stacy, thank you so much for joining us on the back of that quarter showing that transformation taking place. stacy smith is the cfo of intel. appreciate it. i would say that in greek, but i don't know how. time now for a cnbc update with our sue herrera. >> many forces battling shiite rebels in the country es a south say they have taken control of the airport in the strategic port city of aiden. the advance is a major blow to the rebels basically trapping them on the small peninsula part of that city. house speaker john boehner calling for hearings into whether planned parenthood is selling organs from aborted fetuses. yesterday, an anti-abortion group circulated a video that it made secretly showing a planned parenthood official allegedly discussing the disposal of body parts. planned parenthood said the video was heavily edited. larry hogan endorsing chris
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christie during a campaign stop at a diner near annapolis. last year christie helped hogan in his campaign for governor. and nearly 12,000 da vinci brand cribs are being recalled. involves cribs made from may to december of 2012. there have been 10 incidents. luckily, so far no injuries. we hope that stays the same. and that is your cnbc news update. >> thank you so much. netflix shares soaring after the earnings report. the conference call about to start. we will bring you any breaking news from it in a moment. and then we'll head to delivering alpha for the ultimate debate on investor activism. billionaire carl icahn and blackrock ceo larry fink battle it out in a few minutes. when you do business everywhere, the challenges of keeping everyone working together can quickly become the only thing you think about. that's where at&t can help.
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welcome back. stocks giving back gains today after protests in greece turn violent after a controversial bailout bill. that said the dow almost finished positive. looks like we settled down about three points. the s&p down 1.5, and the nasdaq down about six. netflix shares soaring. the company missed revenue estimates, in part because of the strong dollar but did beat
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on the bottom line. third quarter guidance came in strong. and the netflix conference call just getting started. bring you any news coming out of it as the shares are popping 10%. and intel higher after it beat wall street's earnings expectations. investors were happy to see better than expected results. we just heard more from stacy smith and those shares up better than 4%. meanwhile, our john harwood speaking with republican presidential candidate ted cruz of texas. let's listen in. >> you think about a killer app that's a transformational app. let's think about an uber or lift that comes into a new market and redefines how a good or service is delivered. inevitably, there's massive pushback from the incumbent providers. the taxi cab providers fight back on the uber and lift. that's what's happening in washington. washington supports the incumbent providers, the
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dynamism of our economy comes from the ability of small businesses to do what are called creative destruction. that's what washington is strangling. and what i've been trying to bring to the political process is very much that same dynamic of shifting power out of the bipartisan corruption of washington and bringing it back to the people. i think if we empower the people people if we take power out of washington, that will number one, dramatically expand gdp, but it also expands income mobility. so, for example, president obama and hillary clinton love talking about income inequality. let me tell you, i love it when they bring it up because it's increased dramatically under their policies. the simple reality is big business does great with big government. i'll give you statistic you'll never hear president obama or hillary clinton admit. the top 1% the millionaires and
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billionaires who president obama constantly demagogues today earn a higher share of our income than any year since 1928. it's interesting, a lot of the folks here have done very well but they don't necessarily come from money. many of the people in here started in the mail room. >> well let me bring it -- >> and are interested in an environment where other people can start with nothing and move up. that has been what's been going away more and more big government takes away that mobility. >> let me bring the audience in just for a show of hands. any corrupt crony capitalists in the room that think we should keep the import/export bank? you did your job. >> in the legal biz, that's what's known as a loaded question. >> yeah. the fact that no one on wall street was criminally prosecuted for events that occurred around
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the financial crisis has prompted criticism from some people from the elizabeth warren wing of the democratic party. some republicans, as well. do you think it was wrong that nobody on wall street went to jail? and do you think hillary clinton said in her economic speech the other day that one of her objectives as president was to toughen the approach to those prosecutions? >> you know hillary did say that. and no one who has observed hillary clinton's policies for the last 30 years believes that for an instant. >> that she would do that? >> that she would do that. of course she wouldn't. >> why? >> because if you look at her policies -- let's talk about what the role of government should be. under the obama administration and for that matter under hillary clinton administration the role of government is twofold. number one, it's a santa claus. it's giving out favoritism subsidies, guarantees in exchange for campaign
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contributions. and nobody has been better at shaking those down than hillary clinton. but on the other hand, it's a thug and enforcer. how many wall street firms has the obama administration come after with bogus prosecutions to extract settlements of billions of dollars? how many regulators go to small banks and community financial institutions pressuring them to change their practices? i don't think government should be playing the role of either santa claus or thug. >> let me go back to what you said about hillary. there's a line of argument from many in your party that the democratic party and hillary clinton in particular have shift wildly toward the populist left. >> but they haven't. their rhetoric has. but let's look at policies. >> you think they have not shifted? >> i don't think they have remotely. i think the democrats are the party of the rich and big government and cronyism. that is the democratic party. you look at the clinton --
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>> you think if you're nominated against hillary, you're going to lose in this room. >> no, because i actually think a lot of people in this room respect the dynamism of an economy. they're not necessarily looking to the government for a handout. but they also don't want government shaking them down like enforcers. they want to let the market decide. and you see that. let's take dodd/frank. dodd/frank was sold to the american people as stopping the problem of too big to fail. how did that work out? the big banks are bigger. there's been greater concentration, and the people john, that have been driven out of business are the little guys. it's the small banks, the community financial institutions. >> we don't know if too big to fail worked because we haven't had a crisis. you only going to know if somebody's on the verge of failing. >> here's the point. the big banks were in the room with the democrats riding dodd/frank. driving the little guys out of business wasn't an unintended
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consequence. it was the intended outcome. >> barney frank says we put death panels in that bill. >> you know, they've already worked. they've killed hundreds and even thousands of small financial institutions. because if you're a local bank. look, if you're a gigantic institution in new york you can afford the extra 50 or 150 lawyers and accountants to deal with the paperwork. i talk with community bankers all the time. who are being driven out of business because they can't afford the additional paperwork. and that's not an unusual phenomenon. you look at obamacare. the insurance companies were sitting in the room drafting the legislation. what's happened? they got the federal government to mandate to millions of americans, you must purchase their product or we will fine you. insurance companies are earning record returns right now. >> just like drivers, right? drivers have to buy insurance product, too.
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>> but there's a difference there in that a driver typically a driver doesn't have to buy his own insurance. he simply has to buy liability for others. and what's happened? let's take obamacare. you want to talk about the income effects of obamacare? it is a massive wealth transfer from young healthy people to everybody else. it's very interesting. if you look at polling numbers, the last two elections, obama won young people 70/30. right now today the president's approval rating has plummeted with young people. obamacare's plummeted with young people. there are a lot of young people with faded posters of hope and change sleeping in their parents' garage. >> let me shift to a different topic. >> and, actually let me make a quick point. you want to sum up this race in one simple meme. a meme we put on facebook. reaganomics, start a business in
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your parents' garage obaman obamanomics, you move into your parents' garage. >> you made a very public deplay of being with president obama and then when it came up on a free standing vote you flipped and vote against it. why did you do that? >> well i'm a long time advocate of free trade. i remain a long time advocate of free trade. there were two things that changed in the arrangement. initially, i voted in favor of trade promotion authority. but two things changed. number one afterwards it became clear that leadership in both houses had cut a deal where they'd agreed to reauthorize the export/import bank as a condition of getting tpa. i think that was a corrupt deal. i oppose crony capitalism. that was one reason i shifted my vote to no. >> do you think that your republican leadership in the house and senate are, a,
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corrupt, and b, cannot be trusted to do things that their constituents, their supporters republicans believe is in the best interest of the country. >> let me answer that by telling a story. two weeks ago, i published a book called a time for truth. the first chapter of the book is entitled mendacity. and described what happened about a year ago. you remember that big fight? if you'll recall what occurred the debt ceiling has been the most effective lever congress uses to impose any spending restraint on the federal government. the battle began when president obama demanded what's called a clean debt ceiling. trillions more in borrowing with zero spending reforms whatsoever. house leadership joined with democrats in passing that a handful of republicans and 190 democrats passed a clean debt ceiling. then went to the senate. now, the usual rule in the
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senate is to move to proceed to a debt ceiling, take 60 votes. that's the way the senate has worked for decades. but any rule in the senate can be changed by unanimous consent. so the week we took it up our leadership stood in front of us at lunch on tuesday and said they were asking every republican in the room, every senator to consent to affirmatively consent to lower the threshold for harry reid to take up the debt ceiling, from 60 votes to 50 votes. and we were told there were two reasons to do so. number one, if we did it hallelujah hallelujah, it would pass. and that was the outcome we wanted. trillions more in debt, with no spending reforms. but number two, they said if you agree to do this the democrats will have the votes to pass it on their own. which means every one of us can vote no. and we can go home and tell our constituents we opposed the thing we just consented to allow happen.
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now, when i heard that i sat there for a minute and raised my hand and said listen there's no universe in which i can consent to do that. i spent two years traveling the state of texas, telling texans if you elect me i'll fight with every breath in my body to stop the out of control spending and debt that is bankrupting our kids and grand kids. if i were to consent to lower the threshold, make it easier for barack obama and harry reid to add trillions in debt while doing nothing zero to fix the problem, i think that would be both dishonest and immoral and unfaithful to the men and women who elected me. >> well, now, you and i talked about that a couple of months ago. you just said a few minutes ago, you weren't going to impugn the integrity of your opponents in the race. but that's a strong thing to say about your colleagues in the senate. i talked to one of your colleagues today. what should i ask cruz? and the answer was, ask him how
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he's going to get anything done in washington if he is impugning the character of his own party. >> you know, it's a very interesting thing. the entire debate over the debt ceiling. that remaining week we had three days. where my colleagues were yelling and screaming. i never raised my voice. if you look at my entire time in washington, the best of my knowledge, i've never spoken ill of another senator. when another senator, republican or democrat or any politician attacks me. >> mendacity is different. and here's the point, what is considered problematic is telling the truth. that is considered unquestionably rude. they would rather you call them an s.o.b. rather you stand and yell and insult them and impugn their character rather than make the case as i did. that so we had three days of the senators all yelling at me. and by the way, out of 45
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republican senators only one, mike lee, spoke out in favor of me. three days of them yelling at me. at one point one of them said ted, why are you trying to throw five republicans under the bus? because, with a 60-vote threshold, the only way to take it up for five republicans to vote with the democrats. i said listen i'm not trying to throw anybody under the bus. it's leadership asking you to dive under the bus. every one of you told your constituents the exact same thing i did. all i'm asking you to do is honor the commitments you made to the men and women who elected you. >> i'm going to note parenthetically that the -- that circumstance with every single republican yelling at you, only mike lee standing with you. that is exactly what you wanted in that situation. >> to be honest no it is not. >> that made you a star. that created -- >> and that was senator ted cruz speaking to our john harwood as delivering alpha coverage does continue here on cnbc today. and, in fact we'll have much more for you coming up.
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we'll get to carl icahn speaking with blackrock ceo larry fink. first, though we're going to take a quick break. stay with us.
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welcome back. it's been a hoppy after hours
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session here. netflix hopping up almost 10%. intel up sharply 2 after hours. this on results. earnings results in the second quarter for both companies. netflix beating on earning and posting strong guidance. that's despite disappointing a little on revenue. intel beating on both the top and bottom line. shares are off the initial pop but they're still higher by about 4 1/2% after hours. coming up here on cnbc billionaire investor carl icahn and blackrock's larry fink debating activist investing on the delivering alpha stage. stay with us.
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welcome back. it's been a busy day here. markets didn't quite know what to do with it. finishing roughly flat. and amazon by the way, doing its prime day to celebrate its 20th anniversary. now that we've been able to digest both the sales numbers and the social media reaction, was it a success? >> i mean, it seems sort of like a wet blanket. it just hasn't been mentioned that much. then again, the world that we live in was dominated by janet yellen on the hill dlifrks alpha today, a slew of earnings and as with the as this greek parliamentary vote. but nonetheless, courtney reagan did send around some index data measuring the buzz. 90,000 social mentions for amazon prime.
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20 times the mentions that black friday got. actually, black friday got 20 times the mentions that prime day did. >> i'm just sorry an important holiday became so commercialized. >> what, july 15th? >> yes. amazon prime day. a very important day in our history. to me i think this is so bizarre because amazon seems to be continually focused on customer acquisition when it seems like at some point in time they really need to be focused on their business model and they continue to -- >> we heard from bill miller who's been a long-time bull on it today, again at delivering alpha reiterating he liexz the story, he likes the gross profit dollars and -- >> 20 years, kelly. at what point is somebody going to say you need to make some profit, this cannot go on forever and ever into the ethersphere? and they just keep trying to acquire customers no matter what the cost. the fact of the matter is at some point they're not going to be able to give those discounts anymore and then what happens to the customers? >> i think at some point we're going to need to see the numbers
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for how many prime customers they actually have because that's sort of the black box amazon is working with right now. i think jeff bezos has a long leash because he's the founder ceo. >> 20 years is a really long -- the longest leash in wall street history. >> it's a little bit of a physics point as well. there are bulls who would argue like miller the company throws off a lot of cash throws off a lot of profit and reinvests it rapidly. that's different than perhaps what we're seeing from a netflix which we were focusing earlier on the cash burn. >> and i think bill miller made a great point there because they do reinvest immediately back in the business and if you look at their revenues their revenues are astounding. this is a company that does bring in a lot of money. but at some point you want to say okay you're putting your entire ranch on sale to get people into prime for a 30-day free trial. how many people actually did that how many people are paying you? >> even on a free cash basis you can still not justify the valuation of where the company is. it's still trading like a momentum stock, like this is some kind of a startup. 20 years into the company. at some point it is not a
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startup anymore. >> amazon web services, though, that was a startup within the company. there was a lot else going on we want to get to in the markets today. gasoline, oil we should mention we heard the president talking about this deal potentially reached with iran. yesterday oil was bid up. that was a little bit confounding. today, though, another sell-off. and just again going back to the case that some are making kayla, the bill miller view of this is that it's going to test $30 before it comes back up. >> well the metric that i'm looking at this week is how much banks are starting to put in their reserves. namely for oil and gas loans. we saw jpmorgan put a lot of wholesale business their loan loss reserves devoted to oil and gas. bank of america did the same thing today. and i think we're going to continue seeing that. >> and i think you're going to have to ask yourself this wonderfully fantastic deal that's been negotiated, what that's going to do for our economy if oil does continue to go down. where have our gains and really good jobs been with the energy companies? >> just just looking through the beige book today came out at 2:00 p.m., barely got a mention
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but they do say in the cleveland district drilling in the marcellus and utica shales declined further. something to watch further for us. thank you for being with us. does it for us on "closing bell." much, much more coming up on "fast money." we'll send it right over to you melissa lee, and the gang. >> thanks a lot, kelly. take a look here. this is a live shot of our delivering alpha conference where billionaire investor carl icahn is preparing to take the stage with black rox larry fink in an unprecedented debate moderated by our own scott wapner. just part of the incredible day of cnbc's delivering alpha conference. we are just going to get to it. we'll go to it live. but for now it's interesting because we've got a lot of big stories and the nexus of what has happened so far in the after hours session and what is about to happen is perhaps netflix. netflix coming out with blowout numbers. icahn sold at the end of june. >> international net adds were off the chart. total net adds were crazy. again, it comes down to the fact that they continue to add subscriptions. that's the story.


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