tv Closing Bell CNBC October 13, 2015 3:00pm-5:01pm EDT
>> exactly. sort of the same thing, right? okay. tonight at 5:00 on "fast money," a big show, brian. we have two earnings conference calls from two major dell weather companies at 5:00, intel and jpmorgan tonight on "fast money." >> i know how you love your earnings season, melissa. >> i do. i do. >> "closing bell" starts right now. hi, welcome to the "closing bell." i'm kelly evans at the new york stock exchange. >> and im bill griffeth. we love earnings season, too. >> we do. >> it hams on our watch and three biggies are kicking off earnings season coming up. we're about to get numbers, for example, from intel, from csx and from jpmorgan. yes, jpmorgan is reporting after the bell this quarter, not per tradition. we will get you ready for those numbers coming up in the next hour. >> i don't care why they are doing it, just keep doing it, it's so much more fun this way.
>> good call, jamie. >> barry diller had stuff words for espn this morning on "squawk box" saying the cable network channel exists in a tools economy. we will talk about what he means and whether they can withstand cable network and bundling. >> and a takeover in the beer space. this deal surpassing $100 billion. but we'll tell you why the deal could face a few hurdles before it can be completed. >> and vladimir putin speaking out on the crisis in syria. we will take you live to moscow for the very latest. but first let's start with the jpmorgan earnings, the big bank reporting after the bell tonight. we will have those numbers for you. the wall street journal reported this morning that the bank is already taking cost cutting measures including eliminating support for employees' blackberrys. >> frankly, it's about time. you knew this was going to happen. >> what is that about? are things that bad? >> well, that's the question. right now joining us to break it
all down bill sneed. jpmorgan and his funds top ten holdings. what did you think when you saw them saying no more support for blackberrys? cutting a little too close to the bone for your liking? >> no, we think it's inevitable that there are going to be fewer human beings needed to provide the products and services in the banking business, especially as millennials become bigger and bigger players in the economy. so that's not a shock. how deep you cut and where you go with that i will leave that up to much brighter people than myself like jamie diamond. >> are these kinds of cuts meaningful enough to the bottom line or is this just something on the margins while they wait for the fed to raise rates so their interest margins go up? how much more cost cutting are they going to need to do down the road? >> well, it's symptomatic of the era that we're in. for example, they've done
studies on people between 25 and 35 and right now they're behaving more like prior generations did at 58 when they were getting ready to retire. so it's not just jpmorgan that's doing this, it's everyone and really what it gets at and really where the bright long-term future for jpmorgan is for the economy to hit escape velocity. in other words, for people to form households, buy houses, buy cars -- >> the retail banking piece -- it's not the whole story for jpmorgan, we're talking equity underwriting, trading, there is a lot of other levers to look at. why is it just the behavior of the millennial class that has you so concerned about thp particular bank? >> think of a bank like a restaurant rather than a bank. so a restaurant sells its tables over and over again. what the bank needs is for money to get turned over and over again, that's the velocity of money. if you get an economy growing at
4%, the velocity of money soars and the banks get little tiny knicks out of each transaction, credit cards, you mentioned investment banking, et cetera, et cetera. >> atms. >> exactly. you have two things going on, analysts want to see interest rates go up because that's one way they can get more profitable, the second way they can get more profitable is the velocity of money and that is really the key. now, warren buffet was at a conference and he said that their furniture stores have furniture flying off the shelves and their car pet company is super busy. so those are the kind of things that jpmorgan needs is velocity of money, economic activity and that will be driven by the emergence of this large group. >> i don't understand what you're saying. if this is about the velocity of money that is a macro issue totally separate from the behavior ever technology and the millennials. >> yeah, except for -- you have
to understand that mortgage borrowing is the largest source of demand for money in our society by a long stretch and when that accelerates it has a multiplier effect that is hard to imagine. the typical economic growth period including 1.5 to 2% of the growth being from housing and housing related and we haven't even seen -- we are not even into the positive territory yet. we are so early in this economic recovery and i think that's the thing that baffles most investors and even professionals. >> i don't know, it just seems to be nitpicking to be cutting back on paying for an employee's mobile device. we made jokes about blackberry, but cutting back on something like that -- >> they got rid of voicemail. >> nobody is using voicemail. everybody is using mobile devices so put back on paying for an employee's mobile device, do you that when you are in recession or when you are, you know, seeing a huge decline in business. this is jpmorgan for pete sake.
what are they doing here? >> well, yes, but how about this, will the human beings involved be more productive if they weren't looking at their business e-mails in off hours? >> i guess. i don't know. i don't get t but -- i'm not jamie diamond and he is. bill smead, thank you for joining us. >> we will hear from the company in about an hour's time. let's talk about this day and where we're going from here in our "closing bell" exchange. we have jim lowell, michael farr and new york stock exchange trader peter costa. michael, do you know what i mean? the cut back on mobile device, paying for mobile devices by a major company like jpmorgan? what is that about? >> bill, it seems awfully picky and tinning strikes most people that way, particularly for a company the size of jpmorgan. i think it sends a fairly loud message, though, that the
margins are getting tight. it's not easy to make money as a bank right now. they had a fairly easy period where they could draw down on reserves, where they could add those to earnings. we're kind of through a rate -- rates have been low for a long time so they really don't have that kind of loan portfolio, they've drawn down from those reserves, they can't add to those earnings and i think they are not seeing a lot of growth, they haven't seen growth in certainly the spread that they were hoping for if the fed had raised rates. they're really kind of tight, i think we are going to see more stock buy backs, but basically it's tough to make money as a bank. >> you know, on that pint, peter, though, expectations really have come down for the financials here. what kind of bar do we need jpmorgan and some of the others who are going to follow in the next several days to clear for this market? >> one of the things that we should be looking at is their forward guidance. jpmorgan is usually very good about their guidance going forward, they are usually very rarely do you see them cut that guidance or increase that
guidance. so we will see what they say about that. i think bank of america and wells fargo do the same thing. they're usually pretty good about it and i think that's going to be a pretty good sign for the next two quarters or at least the next quarter. >> jim lowell, there are those who feel that the expectations for the banks especially have been lowered so much that they will be able to just walk over these numbers pretty easily. are you among those or -- i mean, obviously the banks are a critical sector to keep an eye on to tell us about the health of this economy. what are your expectations? >> short term i'm focused on exactly what's going on inside jpmorgan, whether or not it's all about bottom line cost cutting to compensate for what is the lack of top line sales or growth expectations. forecasts are going to play a key role in our assumptions going forward into the end of the fourth quarter. that's not just on the financial services sector, that's really across every industry. we're very focused on what the forecast in some are predicting
in terms of either slightly moderately better growth or some sort ever retrenchment we know that the financials on a valuation basis like the healthcare stocks thanks to the third quarter swoon look fundamentally more attractive in a very near term view, but longer term we've got to see more sustained signs of broader scaled growth to get very optimistic about financials or other sectors. >> go ahead, michael. >> bill, i think the question was an important one. i don't think that we have set the bar so low that you can stroll across t that was a good question. i think the markets continue to be nervous, there is squirrely with what the fed didn't do, they're squirrely with what might go on in congress that will keep the fed longer on the sidelines. this is a tough time. i think investors will scrutinize these earnings closely. >> michael, i was going to ask that b. that. it does put the fed squarely in the name gaim or out of the game. the san francisco fed had study based on different impressions
about inflation and so forth, we might not see a fed moving if you take the politics out of it until 2020. if something like that started to get rid clee price nood bank stocks would that have much further to fall or do you think that a lot of pessimism is priced in. >> they are down 3%, we saw them down 6% from the highs earlier this year, they are off about 3% from where they were. i think there is more room to the down side. certainly the banks if conditions continue to disappoint or deteriorate. when the fed came out and said that their inflation target of 2% is not likely to be hit until 2018, wow. i mean, that's stunning. that tells us -- i mean, you are not going to have 2% inflation for over two years. that's got to bring your expectations a bit lower. >> peter, there is a line that's used in virtually every john wayne western and it goes like this, there are two cowboys sitting around the campfire late at night and one says, sure is quiet and the other says, yeah, too quiet. this market the last couple of days has within questionnairely
traded on quiet volume. i know it was a holiday yesterday but stood it's not. are they waiting for earnings? >> the way i see it and i think that a lot of my clients feel the same way, they're waiting for a full week of earnings, i think once you get through the financials which is this week and early next week, i think there's going to be a little bit better direction but i think this whole earnings season is going to be very choppy, but i don't think it's going to be choppy like a month ago when we were up 200, down 200. we are almost starting to go back into that narrow trading band and to me that's just boring. >> before we go, jim, just a quick question. it was having to read when j and j kicked off earnings this morning doing a $10 building debt fueled buy back apparently it's one of three aaa continues left by the s&p in terms of like the major -- the large caps that we have. are you getting concerned about corporate balance sheets as we have meantime what's going to be a huge debt fueled deal in the beer space as well.
>> we are not getting overly concerned about corporate debt just yet, but it's obviously on everyone's radar screen for a reason. it's never been as big as it is. we think some companies know how to manage that debt better than others. this will be an interesting time to be a stellar junk bond manager, you will be able to buy into some very interesting cycles. >> thanks, guys. >> thanks, guys. see you later. sure is quiet. >> 45 minutes a little more than that. the dow is down 12 points, the s&p is down about 7, small caps down about 10, the nasdaq giving up almost half a percent today. >> up next, vladimir putin sounds off on president obama's strategy in syria. our geoff cutmore has the latest from the russia calling investment forum in moscow. we have an interview with vladimir putin coming up here. plus we will preview intel's results and break them down right after they hit the tape with cfo stacey smith.
that he is also to come right after the closing bell. stay tuned. okay. our thinkorswim trading platform aggregates all the options data you need in one place that lets you visualize that information for any options series. okay, cool. hang on a second. you can even see the anticipated range of a stock expecting earnings. impressive... what's up, tim? for all the confidence you need. td ameritrade. you got this.
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one of the most rewarding parts of this job is after you help a customer, seeing a smile on their face. together, we're building a better california. welcome back. we have been showing you the three major averages and how they have been doing today. not a lot of volatility, down just 29 points on the industrial average, but take a look at the
dow transports. they are down sharply today, lagging the major averages, down almost 2% here. jetblue is down 7.5% after jpmorgan downgraded the carrier from neutral to overweight. that firm deciding pressure on jetblue because of increased labor expenses. there are some sectors on the move. russian president vladimir putin defending his country's intervention in syria. our geoff cutmore is there and putting tough questions to the russian leader. he joins us now. >> reporter: this was mainly an investment conference hosted by vtb, which is a state-owned bank, but when i had the opportunity to put a question to mr. putin, it was on the issue of syria, but i wanted to get some answers. let's listen in. >> mr. president, over the weekend u.s. president obama called into question your
leadership over syria, he said that you are propping up an ally rather than going after isis. he also said you're running down the economy here. can i ask you how do you respond to president obama's comments? and what would you say to international investors who are dissuaded from putting money into the russian economy because of such remarks? thank you. >> translator: as we say, you've mixed apples and oranges together. at the military level we asked them to give us the information regarding the targets they believe are 100% belonging to terrorists and what we received as an answer was that they want to do that. then the second question was asked please tell us which target should not be attacked by
us. no answer received. what should we do then? >> reporter: so the russian president making the case that he feels he has not been given clear direction from washington over which are the right targets to attack and thereby the russians have pursued their own policy. he also went on to say that he felt the giving of weaponry to the free syrian army have been a mistake and some of that weaponry may have found its way into isis hands. back to you guys. >> geoff cutmore in moscow. wow. what a crazy cat and mouse game going on between russia and the u.s. anheuser-busch has agreed to buy sab mill for create the world's largest brewer. dominic chu joins us with details on what a huge deal this is. >> not just because of all the beer fans. this bud is for you if you want
to look at it that way in a way. it's an agreement in principle, guys. it's a tentative agreement for anheuser-busch to buy sab miller. the deal is around $105 billion and would if the deal gets done create an absolute giant in terms of beer brewing. you have bands like bud and miller, but it also brings together international brands like stella artoire, corona, peroni beer. here are some of the details. first there are likely to be regulatory hurdles, some estimates are that a combined company would control nearly a third of the world beer market. will asset sales be enough to satisfy global regulators and cross all jurisdictions? second the deal would be for cash with an alternative choose to allow big share olders like altria and the santo do minute goe family to take it in cash and stock for tax returns.
third ab inbev is looking to life up $70 billion in debt to finance the process. if the deal fell apart they would pay a $3 billion break up fee. fifth a deal would need to be finalized by tomorrow now sab miller has asked for an extension to put the full deal together and that deadline will be at least in their request october 28th. so there it is for now, a tentative deal to create the world's biggest brewer by far. more details, kelly, bill, smurl to follow, all the logistics and what promises to be possibly a long battle to get this deal done for both shareholders and regulators. >> and you mentioned those logistics. obviously people are look to go what assets may be in play including the joint u.s. -- what is it called -- >> joint venture -- >> the jv together. there's a son of other plands that have all these different potential ownerships that have
to be sorted out, don't they? there to be a lot of upheaval in terms of ownership for a lot of different well known beers in the next several months if this prog guesss >> not just here in the u.s. you talk about this idea that you have this molson tap venture for those brands in the u.s. those assets some analysts are looking at are already on the block as possible sale proceeds to apiece regulators, but then if you talk about european regulators, talk about the chinese that's coming newspaper a lot of conversations because sab miller is one of the people behind snow beer one of the most popular beers in china, also ab inbev as well. china could be a big market. a lot of these regulators will come down to whether or not their particular markets will be impacted by this. you're talking about putting together a laundry list of asset sales possibly with multiple jurisdictiones in play just to get this done on multiple fronts with multiple regulatory bodies all over the world, guys. >> i just still want to know
what you are going to call a company that combined ab inbev with sab miller. >> just call it bud. >> i like it. >> thank you very much, dom. >> 40 minutes to go into the close. i was surprised to read snow is the number one beer in the world. i had no idea. >> the dow is down, we are seeing a little bit of a move lower in stocks, the dow has given up almost 50 points, the s&p down to about 2004 as you can see they are giving up 12, the nasdaq now down three-quarters of 1%. >> media mogul barry diller taking a swap at espn with a worry about its valuation. listen. >> you have 100 million people paying for it and only a small portion of them watch it. >> two leading media analysts will weigh in on the espn economy and how much it could be worth in an unbend ld world. also a safe pimco's ceo
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here is a look at ryder systems down almost 9% on the day. transportation company we told you about its earnings miss yesterday cutting its quarter and full year earnings guidance setting lower than expected used vehicle sales. >> you add that in with the downgrade of jetblue. >> tough day for the transports and affecting the overall index. the future of espn is being called into question by barry diller this morning on squawk box barry diller put the blame for high coarse of sports rights squarely on the disney-owned property. >> the biggest buyer of sports is espn and espn is a wonderful but false kind of economy, meaning that you have 100 million people paying for it and only a small portion of them watch it. they are subsidizing everybody. if you priced it -- if you
priced it real, god knows what the price would actually be per sub, but that's why sports rights go to high is because espn has all the money. >> is diller right, has the espn brought in a false economy? doug, you take issue with what he said here. why? >> barry is -- >> well, i think -- >> go ahead. >> doug, go ahead. >> the issue i would have with what he said is first he says only a small number of people watch it and i think it's a little misleading he is probably using ratings data. in my household i probably only watch espn, 20 or 30 days out of the year but in those 20 or 30 days when duke basketball is on or michigan football i pretty much have tofr t i think it's a program that the network that has hard to replicate programming and possible replicate programming that makes it different from many other
networks that are in the bundle. >> what do you think, porter? there have sob some could you tell tiffs of other network that have to be worried when the unbundling starts in earnest that their cable network channel may not be included in so smaller bundles here. is espn one of those? should they worry about it do you think? >> espn is a must have for any cable network operator. it's the glue that holds the audiences together, even though out of the 100 million people that are generating the retransmission fees of almost $6 billion a year for espn paid by the cable network guys, they cannot afford to drop espn. bob eiger countered barry with the false economy said and said we will begin to pay when he stream digitally, but we are a long way away from seeing any kind of material change in the structure right now and it's not
that espn has all the money, fox sports has come up and as a real disrupter has grabbed a significant amount, a huge, huge premium prices of major sports. the olympics, world cup, a whole slew of very, very hot and desirable sports content. >> you brought up -- >> they have thursday night football now. >> no it's not just espn. here is bob eiger said on squawk box back in july when he was asked about espn and unbundling. >> i think eventually espn becomes a business that is sold directly to the consumer. where there's an engagement in that espn will know who their consumers are, will use that information to customize their product, enable personalization to engage in a much more effective way and also offer advertisers more value as well.
>> going back to the whole question of a false economy, there seems to be some real demand there. how much for you would be too much to pay for espn? >> i think if you look at the u.k., sky has a sky sports offering, i forget exactly but i know it's north of $20 a month is what they charge and they get a pretty high uptake on that. i think there's definitely an argument to be made if the cable network bundle were to disintegrate tomorrow that espn could put together a package for $25 a month and get enough subscribers. into that package to where their economics would be okay. i don't think there is a lot of other networks that you could make an argument like that about. >> porter, what do you think? as barry diller pointed out they have 100 million subs. how many do you think they would end up with in an unbundled world? >> of the 100 million cable network subscribers that are representing the retransmission fees that espn gets there are
only 14 or 15 million who actually actively watch on any given day espn. you take that 14 or 15 million people and you move it over the top and start charging $20 or $30 a month for the sports addict and you replicated that retransmission revenue that espn is generating right now, but the reality is it's not going to happen soon because the cable network guys even if bob eisner decided to go pay purview, on demand over the top today the table guys cannot give up espn. it's too valuable a blew that holds all the cable network content together. >> they are building out fox sports network, nbc sports network and maybe offer people a skinnier bundle option in the future n a way it almost sounds like what you're saying is the broader sports economy is a real one people will pay up for it but the question is whether it
will be espn or fox sports or somebody else doing that. >> we are not going to get free sports forever. look at the music business and how it's transformed itself. look at the movie business and how it's in the process of transform tgself. the same thing is going to happen to sports and espn is going to do just fine and bob eyeinger is going to be right. barry diller is right but he's using the wrong terminology. it's not a false economy at all, it's a very really economic factor that both the cable network guys, the network broadcasters and espn have to deal with. >> all right. porter, doug, good to see you both. thank you. appreciate your thoughts today. >> i agree. when you want to -- if you live in one part of the country and you want to watch a game in another part of the country that's not broadcast where you live you should be able to watch that at some point. >> that's why all this disruption -- try watching a nar race on the weekends. good luck with all that. as all these different rights shift around.
time for a cnbc update. let's go out to sue herrera. >> here is what's happening at this hour. the islamic state calling on muslims to launch a holy war against russians and americans over what they call their crusaders in war in the middle east. this is according to an audio message distributed by their supporters. the former head of the chicago public school system bleeding r pleegtd guilty to a fraud charge in connection with a fraud scheme. barbara bennett admitting she steered big contracts worth millions of dollars to two educational consulting firms in exchange for cash and consulting positions. south carolina head coach steve spur yer announcing his immediate resignation from the college's football program. he has been at south carolina since 2040, winning 86 games, losing 49. he says the program isn't where he thinks it should be. call president obama a wedding crasher. a wedding she are moan was put on hold so he could play through
the 18th hole. he posed for pictures with the bride and groom who were thrilled to meet him. beautiful part of the world, too. that's the cnbc news update at this hour. back to you guys. >> is that a thing, bill, people getting married on the golf course? >> absolutely. joe kernen got married on the golf course. >> yes, he did, in hawaii. >> thanks, sue. >> you got t guys. 25 minutes to go. here the dow down 41 points, the s&p trying to hold that 2000 level, it's down 12 points did he moment, oil has been a big weaker on the session. we are reopened across all financial markets and the nasdaq it's a weak performer down 36 points, three-quarters of 1%. >> when we come back a leading trader will tell us what he's looking for as we head into the close and all those earnings reports. >> pimco ceo of global credit making the case for jet markets in developed country especially the u.s.
not a lot of green here, kelly. >> bill, let's pick up on that with steven guilfoyle on the floor as we head into the final half hour of trade. things are looking weaker. is it the transports in your view that's causing this? >> the transports and small caps got heavy. we tested 2020 on the s&p 500 today and that was a crucial level. if we could have cracked that level -- >> to the upside. >> we might have got a short squeeze and been off to the races. now we are looking at defending 1997 going into tomorrow. >> we have a couple of ecom reports coming up. is it the macro data or corporate earnings? >> individual stocks of course corporate earnings but the macro data is so important with retail sales, cpi, industrial production and all looking like they might have negatives this month it's dangerous. >> volume a little on the light side today. what is the main sector? if we will talk about a jpmorgan or some of the big banks is that
something that the be a big tell. j and j saying lower currencies -- >> why not buy back stock if you have problems? >> that's this market in a nutshell. >> i love trader talk. transports are down, they got heavy. transports are heavy today. i love that. investors -- we're focusing so much on equities but investors may want to pay attention to bonds as well. that according to our next guess he is pimco's chief investment officer mark keisel. >> hi, bill. how are you? >> i'm good. you know, we do talk so much about we canities because there is a clearinghouse for that and, you know, we can follow averages and so forth, but you can't do that with corporates and high yield and so forth, but you are here to make the case you can make a pretty decent yield in this market right now, can't you? >> yes, bill. it's really a great time to be invested in corporate bonds, corporate bonds today can earn
investors between 5 and 8%, that's basically an equity return with half to a third the volatility and fundamentally we think the u.s. economy is actually doing well such that the default rate should be pretty low. a lot of the weakness in corporate bonds has been due to elevated supply, but if the fed raises rates and rates were to trend higher we think that supply will actually come down next year and also you will bring in demand from insurance companies. basically from a valuation perspective, fundamental perspective and technical perspective corporate bonds are set to perform going forward. >> mark, what about what's happening with u.s. treasuries general aechlt the rate everybody has been saying for years is going to be going up and frankly we are sitting here around 2% on the ten year. >> no, our view is ultimately rates are headed higher, we think the fed ultimately is going to get off zero. you basically have an unemployment rate of 5.1%, this is a reflationary economy where the fed clearly has the
ammunition to start moving. we think in a 2% inflation ten year treasuries will not be at 2%. the reality is that at the do see inflation trending higher which will bring yields higher over time. >> we're getting to a point in the cycle where mergers and acquisitions are picking up and the deals are getting bigger in terms of dollar value. when you look at the dell deal announced yesterday, the beer deal that's being worked out right now and the amount of debt that's involved in those deals r we going to get to a point where we are going to start to be ringing our hands over debt levels that will not be able to withstand a rise in interest rates? >> i don't think so, bill. if you look at most companies, particularly investment grade companies, you have ten times interest coverage and just over two times leverage. clearly there are a handful of companies out there where, yes, the m and a wave is causing some companies to have to put too much debt on the capital structure, but most -- most of these companies are actually the
fund amountless are quite strong. the key with credit is where are you in the economic cycle? >> right. >> if you believe we're mid cycle like we are now then credit should perform quite well. >> mark, just to go back to this question about the inflationary outlook, fed board governor dan true low just told steve liesman he thinks we are in a globally deflationary environment he's sounding like it's going to be a 2016 call for him to raise rates, the cpi report aren't going to give people any confidence we are in a 2% inflationary environment. >> i think a lot of that data is backward looking. sfu look at 2016 the unemployment rate has come down 2% in the last two years, we are finally at 5.1%. pimco is seeing evidence on the ground that wages are picking up. look at the housing sector. if you're building houses today you're getting 8 to 10% wage increases. the fed can't wait too long because inflation is right around the corner, particularly with a 5% unemployment rate.
we think there is very credible evidence for them to move in december and get this thing going. >> what will the market do with that, do you think? will we see an appreciable rise in long rates when that happens, do you think? >> no, bill, i don't. i think the front end of the yield curve is most overvalued so maybe the 2 to 5 year will sell off a little bit, but we think once the fed goes it will be relatively grad uchlt we are not anticipating a significant rise in, say, 10 or 30 year yields albeit the curve might flatten somewhat. >> thanks. >> mark keisel, managing director at pimco joining us today. we will see. 17 minutes left -- can you feel that? can you feel what i'm feeling? earnings are coming. >> i don't know if it's earnings train is coming or this stock market definitely moving a little lower as we head into the close. dow is down 63 points, s&p 15, the nasdaq down almost 1% down
gotten heavy -- >> as the traders would say. >> and a lot of that is biotech. the ibb now down 3% as we read into the close. >> it was fighting back into positive territory earlier today but it just couldn't hold there. again the market more broadly a weakening along with it. >> the twitter layoffs are official, but jack dorsey is trying his best to rally the troops with a memo, the newly returned ceo sent out to his employees. >> julia boorstin joins us with the details. >> that's right. newly appointed permanent ceo jack dorsey announcing today that at which timer is laying off up to 8% of its employees, that's as many as 336 people. twitter shares spiking as much as 6.7% earlier today on the news as the company revised up its earnings forecast for the third quarter to the higher end of its previous estimates. of course, also on news of a restructuring designed to help the company more faster.
jack dorsey writing in a letter to employees, quote, products and engineering will going to make the most significant structural changes to reflect our plan ahead. we feel strongly that engineering will move much fast wr a smaller and nim bler team. the company said total restructuring expenses are estimated as much as $15 million. most of that will be in severance costs. bill and kelly. >> thank you. we will see how that improves the product experience here. he talked about moments in the memo, too. an early indication of what may be to come for the social media giant. 12 minutes to go. keeping a close eye on these markets with big earnings on tap. the dow is down 58, the s&p 15, the nasdaq 43. yes, we are only moments away from those earnings. thank you. csx, intel, jpmorgan all reporting after the bell tonight. we have a preview on what to expect after this.
>> jpmorgan of course the first of the financials to report this time around analysts expecting the largest bank by assets to earn $1737 per share on $23.7 billion on revenues. that would be a revenue decline of 6% year offer year. jpmorgan like other banks likely to feel the effects of the macro head winds we saw in the third quarter, low rates likely to squeeze margins even if they did cause a short term uptick in things like mortgages and then low oil prices meaning more money could be reserved for potential energy losses and volatile markets mean lower trading revenues. we will see the extent of those head winds just after the bell, kelly. >> we will see you in a bit. joshua in san francisco with the preview of these big intel numbers. hi, josh. >> well, kelly, listen, intel we
know dealing with a challenge pc market. pc shipments down 11% in q3. the street not expecting much from intel's computing groups. jmp thinks sales will be down in that business by 12% to $8.1 billion. the real number, though, investors focusing on chips for data centers, hope is that growth in that division will offset declines in the pc. doug friedman is looking for
revenue there jump 16% to $4.3 billion. i'm tell stock up 30% from it's 52-week low. we will see whether bulls can stay in charge after the bell. back to you. >> dominic chu taking time away from golf wo watch to see how csx has coped with that steep drop in coal freight volumes. also what that impact is going to have on its earnings. also watch for signs of whether the railroad has managed to maintain at least some semblance of solid pricing gains despite that challenging freight market side of the equation. according to our data partners we did crunch the numbers, csx has beaten earnings expectations nearly 80% of the time going back the last five years so the stock doesn't really reflect that kind of outperformance. what it does missed on the five times it's missed the stock gets punished down 2% when it beats the stock has a negative average return it only trades positively half the time. you get the picture here. csx will need to deliver to get that stock up. csx shares are currently down 2% ahead of those results. back over to you. >> dom, thanks very much. we don't have a camera on them right now, but the applause you hear -- there we go -- members of the navy are here today and they will be ringing the closing bell to commemorate the 240th anniversary of the founding of the u.s. navy.
of course, we always honor the military when they come to the floor of the new york stock exchange and rightfully so that's what's going on right there. >> no shortage of things they're working on right now. >> that's for sure. >> we will take a break, come back with the closing count down. >> after the bell we will get the low down on intel earnings from the chip maker cfo stacey smith. you're watching cnbc, first in business worldwide. important than your health.
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about two and a half minutes left. here we go. shear what happened today. we start with the dow just because of tradition, but not a lot happening. a bit of a selloff on the open this morning and then sideways after the down 52. of more interest the transports. after the rider report last night with the warnings and the downgrade of jpmorgan today transportation average took a hit, down 2% in today's trading. late in the afternoon also getting heavy to use sarge's terminology the ibb biotech sector continued to move lower and that pushed the nasdaq down 1% down 3% on the biotech. here we go, we have earnings coming up at the top of the hour, so this lack of volatility probably will end tomorrow after we get a sense of these three sectors here, intel -- by the way, we are expecting bob pisani i have the numbers here from intel a profit of 59 cents which
will be down 11% from last year, from csx and the transports expecting a profit of 50 cents down 1% from last year and jpmorgan chase they are expecting a profit of $1.37 which would be up 1%. >> predictably the banks are getting weaker, they always weaken going into earnings season. we had two problems, closing near the lows, two problems, one energy stocks moving down as oil moved down in the middle of the day and the other problem is healthcare and not just biotech, i wonder if we could put up the pjp which is the healthcare -- the pharmaceutical etf that's out there and the important thing is the reason that's dropping is there's concerns that hillary clinton is going to again call for cuts in drug costs out there tonight during the debate. so ibb was down, the farm suit al is also down, there you see the pjp moving to the lows today and i believe this is on the debate issues tonight. >> thank you, bob. see you later.
ringing the closing bell at the new york stock exchange today the commissioner of veterans' affairs and other members of the u.s. navy as they commemorate their 240th anniversary and at the nasdaq the ceo of cloud based management company cornerstone on demand ring that go closing bell. buckle up, here come the earnings on the second hour of the "closing bell" with kelly evans and company. thank you, bill. welcome to the "closing bell," everybody. i'm kelly evans. a big show on tap, but first here is how we're finishing the day on wall street, the dow giving up 50 points on the nose there, the s&p down 13, the nasdaq struggling especially into the end of the session as you just heard healthcare and also down transports, squarely being watched here, crude oil was lower on the session as well so a couple different factors weighing on the market today, a day back from the holidays had credit markets, u.s. treasuries all trading and now of course the attention shifts to
earnings. we are just moments away from big trio, kayla tausche will be all over john mccain's numbers for us, jp is waiting on intel and dominic chu covering the results from csx for us. we will get the full breakdown shortly. some are already hitting the tape. intel reporting 64 cents on its headline eps. joining me on today's panel, mike santoli, and our own john ford is with us as well. we will have more on intel in just a moment and the "fast money" trader steve grasso will be joining us when he finishes there on the floor. first, mike, what do you make of the stock market trade activity? >> i think even if you were bullish, even if you thought the recent lows were solid and we have upside into the fourth quarter you would have expected some kind of a pull back today. i see yellow lights in the action, small caps underperforming, credit still a little wobbly. also we have to prove that it was a little more than just the
beaten up laggards that were going to lead this bounce. we haven't done that yet. i do think that at least in the mix with all the two and fro of earnings reports it was a timely pull back, it was well timed, we needed it but still not great under the surface action. >> we will get the macro reports in just a moment. it's interesting to look at johnson and johnson, talk about the currency impact there, 16% off their international revenues, 8% off total revenue. >> this quarter and next the theme is going to continue. i think also with j and j, it's having, the market didn't take the big buy back sedate, m & a and buy back, the market just shrugged for the most part. >> a couple of huge deals of course this morning helping to spur those animal spirits, dell and emc, that big deal in the beer space. why those animal spirits? why wasn't that enough to sustain this market through the session? >> i think they are seen as these horizontal mergers, more are efficiencies, mature industries, not a lot of excitement, and also they will pressure the credit markets,
there will be a lot of debt that needs to be sold to get a couple of these deals done. >> that's so true. intel results as we just mentioned there, revenues just thigh of $14.5 billion that's good enough to beat the expectation of 14 points. we told you about the headline eps numbers, shares up 1.25% on a 64 cent result beating a 59 current street estimate. joining us is alex gonna. what do you make of it? >> well, kelly, on the surface it looks like the revenue is pointing toward somewhat of a worst is behind us kind of revenue tra jekt had i ri for intel. it's been a tough year for
intel. they have clean their pc group declining at a double digit rate. it looks like the most of those head winds are behind us, i'm expecting to see the key strength coming from data center and that's fundamentally what keeps intel in the game is an interesting technology stock. >> alex, i thought i maed flaed your note that their 90% share in the cloud. is that true? >> that is true. fundamentally intel is the cloud right now, they are completely dominant with their xion family of chip sets. that really is the opposite side of the weakness in pc, keeping in mind that as workload and technology moves to the cloud it makes for lower demand for more powerful pc clients. it's understandable that that group is under pressure. >> tells you a lot about this company. let's get more detail from jp hi, josh into kelly, intel just reports. intel reporting 64 cents $64 ce 14.4.billion. the street was looking for 59 cents on 14.22 billion.
looking through its results, client computing, chips for pc's, 8.5 billion, of course, expectations were reasonable there. pc shipments were down 11% in q3, not much was expected there chips for data sent officer a bit light. that's a big source of optimism for intel bulls, the hope is that growth and data center can offset some of the declines, the pressure we're seeing in pc going to keep looking through this and will get back to you with morehead lines. >> john forde looks like it came in pretty well. >> it's interesting, people were expecting data center to make up for pc weakness. it looks like what happened was perhaps the other way around. the oem had more inventory than expected. maybe they were able to sell in more this time. you hear what they say about inventory and demand this time around especially with their new chip out and windows 10. it looks a to me like their capital spending projection at $7.3 billion plus or minus a half a billion is down from $7.7
billion last quarter. so they appear to be tightening the belt a little bit. i don't know if this is silicon valley theme here, we see twitter tightening the belt, snap chat as well. those are of course really small fries compared to a titan like intel. to see them pull that leverage is interesting. >> steve grasso is here. what did the session tell you today? as sarge was saying earlier we couldn't punch above the 20 point level on the s&p. that's been the resistance number that was from a month ago basically. that's the number we could not breach. 2020 in the s&p. very weak close. if you are going to gain any information from today's close, very weak action, short start piling n worried about earnings, but one good earnings review or preview can change the whole show. >> what about intel here? >> it looks like the market doesn't know what to make out of
intel here. this is a group that's been punished before. with the exception of a couple of names, intel has always been tied to pc's. >> csx, the transports were having a tough session today, we know about csx and some of its struggles. dominic chu has the numbers. >> it's going to continue for a little bit. we are seeing a pop in shares, csx shares up by nearly 4% on light volume, 15,000 shares have traded so far. csx reporting headline earnings per share of 52 cents a share that beats the average analyst estimate of 50 cents per share. revenues $2.94 billion narrowly missing the analyst estimate of $2.98 billion. we also have guidance with regards to their full year forecast. csx still targtding full year expectations for earnings per share growth in the mid single digits. we heard that before, they are just reiterating that right now. they also say the company now
expects dominic coal volumes to decline by more than 10% in full year 2015 with the full year outlook for export coal volume remains 30 million tons. these significant coal head winds are now also expected to continue in the full year of 2016 as well. so you're talking about a stock right now up about 2%, 21,000 shares, the setup into this trading wise, shares are already down 23, 24% year to date, down 12% for the past 12 months. csx shares the conference call it should be noted is not until tomorrow morning. more details i'm sure to come then. back over to you guys. >> the early read on this, thank you, dom, does look positive. not a lot of encouragement for that full forecast certainly extend to go 2016. >> no. exactly. the extent of t also the market's reaction to these numbers is going to be the paramount thing. you have had a lot the pessimism built into the heavy industrial,
the dirty industry. this stock was above 40 not that go ago. there are not a lot of people saying the coast is clear. >> it's amaze that go we are still listening to coal and coal numbers being dragged down when you look at how annihilate that had industry has become. when you see a stock like this popping to michael point it seems like a lot of this was already in the stock price already. maybe you do get that relief rally when people were betting that worst things are to come. >> by the way, csx one of those companies that's also helped by lower fuel like a lot of those who are even still reliant on the strong industrial section of this economy. it's expenses were down 11%. that might be something for investors to sink their teeth into. >> let's keep an eye shares of csx up 2.5% on what's happening for intel for you as well. key barometers in the tech sector. what's interesting is maybe this is about the pc forecast being slightly better than expectations but i'm surprised that the cloud business couldn't
quite deliver. >> i will have to hear what they say about t something else that's catching my eye the guidance is? line in terms of $4.8 billion in revenue projected. just what the street was looking for they are saying plus or minus a half a billion on that as well. so, i mean, you see them tightening the belt, you want to hear what they say about delivery of these new chips, they are doing a tic toc tok which shod field better gross margins into 2016. demand i think so is really important here and as long as there's not some really big issue that they see in data center, after hours we will be able to get a better gauge of what investors think. >> alex, would you echo that? what are you going to be listening for here? >> i think we are going to be looking for signs that intel has a path to reasonable growth going forward in 2016 because even though these results are better than expected, they are
still a far cry from being strong right now. we want to hear how the tic toc toc strategy will play out in 2016, we will want to hear about spending plans and also some of the other growth initiatives like mobile. intel looks like it's taking step in the right direction but not out of the woods yet. >> alex, thank you for joining us. steve grasso, thank you, sir. >> thank you. >> much more with steve coming up on "fast money" at 5:00, both intel and jpm's conference calls will kick off then. >> jpm is moments away from reporting those results, those numbers up next and then cfo stacey smith joins us to flush out the quarter. you are watching cnbc. first in business worldwide. and it offers more charts than a lot of the other
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we've still got low rates, we still have a situation there's not a lot of loan growth out there because the economy is not growing. for jpmorgan it's their fixed income trading, principle trading, they already have that down slightly but that will drive those headline numbers. >> what did you think of bark clays reportedly choosing daily formerly of jpm as its ceo. >> a lot of guys coming out of the jpmorgan shop were good. a lot of those guys are all over the street. it's not surprising at all. >> what does that signal about barclays intentions? >> i don't really follow barclays so i can't tell you where they're heading down there. to me it's that they're picking up american talent and moving forward. >> actually, what does it say, though, about jpmorgan at least the long-term succession planning process? there is a perception that a lot of the decent candidates have gone off to become ceos of other
companies. >> i just think it shows that these guys have great opportunities outside of jpmorgan. everybody is always trying to guess what jpmorgan's success plan s as soon as somebody leaves another person steps up and gets the job done. i'm not too worried about the succession plan. i don't think jamie is heading anywhere anytime soon. >> by the way, looks like their numbers are starting to cross the tape here, paul. it's interesting last hour we had bill speed tell us how interesting he is on the financial division. >> how jpmorgan and retail it's an okay category. it's something these guys really like, it draws a lot of deposits but it's not what drives i think jpmorgan to me. what drives jpmorgan is their principle trading desk, broker-dealer, private wealth is probably some of the top in the business and those are the things that we look at. mortgage side is not shabby, either. that's where we look at
jpmorgan. their retail side still i think in a workings a lot of its been patched together and they continue to strengthen that but that's not what drives jpmorgan stock. >> the numbers look like a business bit of a miss $1.32 and the headline earnings number adjusted $23.54 billion. kayla tausche joins us to run through the numbers. >> $1.32 is it's adjusted earnings per share on the revenue front $23.54 billion of course that compares to $2377 billion which was expected to be a revenue decline year over year. we did see provision for credit losses $682 million that is down by 10%. it will be interesting to see what the makeup of that is. we heard paul miller talk about how he is looking at fixed income trading, we will pull that number for you as well as firm wide expenses.
the headline numbers do appear to be a miss. back to you. >> paul, your reaction. >> you know, we've still got to see what's in those numbers. could be noncash charges going in there through the debt, there's a lot of stuff you have to look at. that $1732 doesn't mean anything until i can delve into these numbers. >> what do you think is at stake? >> i think if it is just kind of the trading positioning it's okay, i don't think the market pays up for trading revenues but it also doesn't necessarily penalize these companies for that. i do think we want to see some kind of a path here not just on the principle transactions line but just in general why these stocks will work. if jpmorgan can give you more clarity, emphasize its capital return and it's balance sheet, but i don't necessarily think that's enough to get the stock to get out of its own way. >> this pretty much in line paul for your expectations provision for credit losses, $682 million? >> they've been guiding down for lower credit loss force a while. some people are nervous about
some of these companies energy exposure but i think jpmorgan is well hedged across the board. the word that gets these stocks moving is economic growth, higher rates which we are not getting right now, we are getting lower rates. as these rates stay low it's going to be difficult for these stocks to move. >> what about return on equity they're saying is 15%. it's been worse. >> i mean, that's in liechblt that's not bad. there are some other banks not even get 11% roe. jpmorgan has been able to get those mid teen roe. 15% is not bad at all today. >> re they goal post still for 20? we're looking at shares which on a top and bottom line apparent miss are only down 1.3%. it doesn't appear at the moment to be terribly shooking investors, maybe there's a lot of negativity priced in. >> i don't think $1.32 is going
to spook investors. you have bank of america tomorrow, you have wells coming up, usb, a lot of banks tomorrow morning, everybody is going to digest all those numbers. given where i think things are, relatively speaking these stocks will trade flat. they've already come in from, you know, where they were in july and august through that market turmoil and i think that's where they will sit for the rest of the year. >> paul, what would you like to hear from jamie dimon on the wall. >> caller:? >> i want to see where the long growth is, how competitive the long growth s are we starting to see real growth out there. i don't think we are and that's why the fed hasn't moved and that's why these stocks have given up some of those gains and probably going to remain flat until we get insight on how the economy is doing. >> there are a few numbers in here i can tell you it looks like at least in the consulting and banking business average business banking at least average loans up 6%, average
deposits up about 9, roe in that unit was quite good, corporate investment banking roe much lower. other areas -- some decent, i guess, paul, numbers, but we will continue to walk through t thank you for joining us, paul. what's your rating on the company, your price target? >> what's that? >> what's your rating and price target on the company. >> >> we are a buyer with i believe a $75 price target right now. >> thank you, paul. appreciate it. >> yeah. >> paul miller from sbr. we will have more on these results for you in just a bit. also moving back to intel whose shares losing their initial earnings. cfo stacey smith breaks down the numbers. forget cord cutting concerns, why the ceo of cbs said viral netflix is boosting his company's bottom line.
welcome back. let's get more details on jpmorgan's earnings. kayla tausche has been combing through the report. what can you tell us? >> we want to give you a little more information on exactly what the cost picture looks like at jpmorgan. we know the bank is in active cost cutting mode. total firm wide noninterest expense for the quarter $15.4 billion. that was a slight decrease from last year, but specifically within the investment bank we saw costs increase by about 2%, john mccain says that's because of slight ly higher legal expenses for that unit. they also saw credit costs rise
$232 million that they say a reflecting higher reserves driven by oil and gas. we're hoping to get more information from the executives on whether they expect weakness in the oil patch to continue and exactly what that means for the distressed debt market. fixed income trading $2.9 billion in revenue, that's a decrease of 11%. in the market we're in 11% drop is not that bad. some firms saw about double that drop in the last quarter. core loans finally we should note up 15% year over year, up 4% over the last quarter. so it would appear that loan growth, loan origination is strong. kelly, the story of lower rates means they are going to be able to make less money on each those loans but we'll hope to break down each of those complicated macro dynamics on the call in just a few moments. >> mike, i'm going to single out that core loans number. 15% year on year. >> it's really not bad actually the parts of jpmorgan that are
expose to the domestic economy, small business economy look like they are okay, 11% decline absolutely could have been worse but i feel as if the subsequent banks you will see somebody who came out on the other side of that. usually you have one bank who says we were on the wrong side of t the next says better than expected. >> i'm just thinking through tomorrow morning, obviously we will get more earnings before the market opens from the big banks but right now you have intel on the inside, jpmorgan on the other. is this the kind of early results we need to see for this market to regain some of its footing, mike? >> i don't think we have a narrative of what the earnings season is. it's company by company, expectations were depressed but weren't totally washed out. >> time for a consumer news update let's get out to sue herrera. >> here is what's happening this hour. russia's air force continuing around the clock air strikes over parts of syria with 88 bombing runs over the last 24 hours. the russian defense ministry releasing some of the footage to the media earlier today.
the pilgrim nuclear power station in plymouth will be shutting down, the owner says the site will close in june of 2019 because of rising costs and declining revenues. last month the federal agency downgraded that plant's safety rating. gop presidential candidate donald trump will host "saturday night live" on november 7th. he first hosted the show back in ach 2004 when the apprentice was in its first season and taking the airwaves by storm. and a business earlier today we told you about jennifer connell, the new york woman who was suing her 12-year-old nephew for 1$127,000. she claims she broke her wrist when he jumped into her arms upon here her at his birthday party two years ago. it took a jury 20 minutes to decide she was entitled to no money. >> 20 minutes. all right. what a precedent. sue, thank you very much. >> you're welcome. >> our sue herrera.
here is a look at how we if i know negotiated the day on wall street, we started stronger than we finished, the dow was down 50 points, the s&p gave up 14, the nasdaq was down 42 with particular weakness in healthcare space again. the big names reporting after the bell, a check on how those are moving after hours, jpmorgan in the red down two thirts of a% at the moment, intel still in positive territory and csx interestingly up nearly 2%. let's send it south to seema mody for a quick market flash into spandex is said to be working with bankers to explore a sale of sandisk. interest from micron and western digital which is interesting considering the coal dags in the semi-conductor and chip space earlier this year. nsc announcing their merger but one to keep on is sandisk. moving higher in after hours
trading. >> sandisk up. >> there have been rumors out lately about the chinese being interested in getting more into the memory market and more into man. i'm kind of skeptical about total take out of a name like sandisk for a number of reasons. one, the rumors have been that the chinese are looking to make an investment not an outright buy because there are all kinds of intellectual property issues. sandisk has this tie up with toe sheeb ba on the manufacturing side where they share the balance of ip and manufacturing, anything that sandisk would want to do -- >> would involve the japanese. >> yes. >> haven't there been rumors connecting san dis tok others as well besides the chinese manufacturers torques western digital, samsung. it seems like a constant rumor mill around it. >> there is. i have a little bit of history of talking to the management team, they've been through a
number of cycles. whenever you get a down cycle in flash memory that's been overbuilt on supply there are all kinds of rumors about what might happen. we're seeing big deals happen that look unlikely on paper. this is one to be careful of. >> thank you, guys. >> there's constant talk about video streaming being the end of traditional tv but the ceo of cbs declaring that netflix is more friend me than enemy. >> dealing with netflix, an zon, hulu -- >> making a fortune. >> we are made over $2 billion in four years from those services. now, that's really helped my bottom line quite a bit. now, one day and that day may be now are they a competitor as well? absolutely. but frankly everybody in our eco system is a friend and a competitor. netflix clearly they are producing 30 original programs, trying to compete with us at cbs and at show time, but by the same token they give us a lot of
money for our content and god bless them every quarter we thank netflix. >> got to bond what are netflix shareholders think about all this. content costs are going up. >> absolutely. i think that's really what underlines his comments right there. by the way, cbs among all the media companies is probably the most insulated from a direct head to head threat by netflix just because it's a little bit less dependent on the the cable network bundle than others. it actually is true. content creation has not really been the odd man out in the netflix versus video services. >> and are we thinking, jon, of it wrong if we're thinking of netflix as a competitors instead of a potential audience. >> they definitely are a competitor as well. biting the hand that feeds you is the most popular sport in corporate america. look at microsoft building the surface, if you are dell or len over voe, you're thinking do we like this or not like this,
they're drawing the attention to the operating system and it's our job to build the hardware. right now netflix is a great distributor of over the top content. if you're cbs you like the check they write you, but netflix is working on making its own content but exactly the content that its audience wants. eventually you have to imagine they're looking at that expense line and saying we'd rather not give cbs this money if we are able to make exactly the content that our audience wants. >> just as the jurm was emphasizing the death of tv has been greatly exaggerated. look at what the daily mail might be doing here with dr. phil coming up. we are seeing a lot of these new whatever you want to call it outlets trying to get new tv products. >> it's a declining audience but still the single largest pool of collected eyeballs at any time or place. not because it's growing or going to go back to its former -- >> people are going to watch something, the question is are they going to be watching your stuff or -- >> it's screens and signals.
if you want to call it tv, over the top scream streaming, it's the same stuff. >> netflix did just raise prices. different things going on there. longer term when people start to add all this up, amazon prime and netflix, the cost is significant and i wonder if that makes a bundle ultimately perhaps attractive. >> one. things that netflix has got is data. they don't report their ratings but they know who is watching, how long they're watching, exactly what types of content they want to watch. so they have leverage they can pull where they know exactly what's going to happen or at least maybe not exactly, they have a pretty good idea what's going to happen if they raise that price a dollar. a lot of the traditional tv they are really concerned that they don't have good data on exactly who is watching, how much they're watching but they're charging advertisers for it. they have to pig fig that out. >> the bull case for netflix is its price point is so low there is a lot of headroom there. whatever knitted together bundle of services you will do on your
own they just want to be i indispensable as part that have selection process, not to replace everything that the bundle gives. >> you they're doing a fairly good job of it for the time being. that's for sure. democrats gearing up -- speaking of tv -- for their first debate in the race for 2016. we will head out to las vegas for a preview of that show down. jpmorgan reporting third quarter earnings. let's check in on the stock still down by about two-thirds of a percent. we will get you the latest headlines into the media call and the analysts call coming up. and why stop what you're doing to find a bathroom? with cialis for daily use, you don't have to plan around either. it's the only daily tablet approved to treat erectile dysfunction so you can be ready anytime the moment is right. plus cialis treats the frustrating urinary symptoms of bph, like needing to go frequently, day or night. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain, as it may cause an unsafe drop in blood pressure.
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tomorrow another big day for earnings and it's a full rest of the week, guys. i guess the question becomes, mike, you were saying this, it's still too early to tell what the real headline grabber is from intel, jpmorgan so far. so now we have to look to tomorrow i guess. >> i think the banks -- it will get a clearer picture of exactly how the banks are set up and whether they have anything to say that's going to motivate the market. netflix is always a market mover, i mean always, on its report just because you have people really on pins and needles about every decimal point of their metrics. earnings will decline, we knew that is correct how much was it priced in, that remains the question. >> i didn't realize that even though in the first and second quarters we had negative expectations going in we managed
to squeeze it out. if we don't do that this time around it will be significant. what with what intel has just told us? >> we want to read through on pc demand, see if there's anything to counter the hoe hum data we have been getting about where that's headed, data demand was cloud was lighter than expected. we have microsoft next week. ibm also has a different kind of global exposure than intel. i think those are more likely to have an influence in overall tech than intel. >> i also wonder how much the dell emc deal will cast a shadow over what ibm. will announce. they think this could be the catalyst for big mergers across the established tech space. >> i hear that but then i think what deals could there possibly be? you look at cisco, it used to do more deals than it does now. what's it really going to buy? if somebody buys san dis that can would be interesting but nothing along this scale. cloud consolidation might be
interesting, but does another older guard technology company buy another larger older guard technology? >> right. >> i have a hard time imaging who that might be. >> we keep getting reports about this microsoft sales force kind of tie up. why is that just so -- so juicy for people? >> i think what's interesting about that kind of a tie up is you've got very few mega scale cloud players now. microsoft, you have amazon, you've got google. i'm talking about those who can afford the capital investment of billions of dollars a year to build out these huge data centers. once you do that, one image ins you look around at the applications that are actually making money running on the cloud and you say, okay, that's where i can get some profit for this huge capital investment that i've started to make even if i'm still spending tens of billions of dollars on that i can see a path to profitability down the line and to offer more of a vertically integrated suite of services. we saw the same thing happen in enterprise software in the last data center age when oracle went out and bought people soft.
that could happen in the cloud as well. >> bit time markets open tomorrow morning we will know more about the individual players in the financial space than we do at the moment with just jpmorgan. >> without a doubt. the regional bank stocks have put in a lot of room of outperformance to the money center. people want to warm up to the domestic long growth idea, the idea that the wells farg goes and the smaller regional banks have a pretty well position and we will see if that makes sense or if in fact trading wasn't as bad. we didn't have a massive financial accident in the third quarter even though markets were so unsettled. >> that core 15% loan growth at jpmorgan is nothing to sneeze at. we are just hours away from the first democratic presidential debate it takes place in vaccination, john that aharwoodt there and joins us with a preview what have to expect. speaking of the banks they could well be in the cross hairs. >> reporter: oh, yes, they will be in the cross hairs. ukt expect bernie sanders and
martin o'malley to talk about their advocacy for a return to class siegel. i want to run through the major players and talk about the burdens on them. first of all, hillary clinton. we already know that she is broadly acceptable in her policy viewers and persona to democratic viewers, she is doing well, it's going to be a friendly audience on television and in the hall but they need reassurance that the problem she has had with e-mail and questions of trustworthiness is not going to be a problem. she needs to be at ease and perform fluidly as a candidate. bernie sanders is somebody who has made a surprisingly strong impact on people, he is calling for a political revolution, people look at him as somebody telling it like it is who is not a typical politician. the third significant candidate is martin o'malley, former governor ever mrd chltd he is a conventional poll significance, has been attacking hillary clinton from the left on issues
like trade and closeness to wall street. he needs to make a good impression, may not have as much incentive to go after hillary clinton this time because he has a big audience that's seeing him for the first time. remember, an audience that likes hillary clinton. finally you have two wild cards, lincoln chafee, jim webb, both of those are to hillary clinton's left on iraq and they are expected to bring that up again. not sure whether either of those are capable of the carly fiorina break out that we saw on the republican side. i think this debate is going to be about hillary clinton's performance and she needs to reassure democrats that she is okay and remains the overwhelming front runner. >> warren buffet indicates that
he thinks clinton is the most likely to win. does that leave a boot on bill banks? >> i don't know if it matters who the candidate s people think no one is going to want too run as fraend of the banks. i honestly don't think the banks have any extra reason to be scared no matter who -- >> john. >> i'm wondering what you think are the chief economic concerns for the democratic side of this presidential race. we've seen the republicans go through a couple debates already, we know what economic issues they put out there. is it minimum wage more here or the tax code?
>> i think with hillary clinton and bernie sanders it's going to be the fairness of the tax code, wanting the rich to pay more and arguing that that's fair. more regulation, changes on top of dodd-frank. hillary clinton will not call for the repeal of glass stegall hillary clinton will get criticism on trade. she has haste ri of first of all getting that deal started, supporting other trade deals, her husband pushed through naft tachlt she is going to take heat on that. on this question of the banks i wouldn't think that a hillary clinton candidacy is going to be a big boot on the neck of the banks. it's more like a comfortable cushy wool sock. >> what's the deal with biden? what's the latest on whether he is entering the fray? >> i do not expect joe biden to enter the race. this is a difficult decision for him because his last shot at the presidency, an office he has been thinking about for 30 years now but very tough tone vision a path for him defeating hillary clinton unless she outright collapsed and there is no particular reason to to think that she is about to do that. we will see how she does tonight. >> anything could happen in the next couple of hours. john, thank you so much. john harwood out in vaccination. the next republican debate will take place on cnbc, it's october
28 and coverage will start at 5:00 p.m. eastern time. let's send it out to seema mody for a market flash. >> we have a mover in the after hours trade and that is dollar general. the company says it's restructuring it's corporate support functions to eliminate 255 positions. the low cost retailer says its restructuring includes 115 vacant positions all in an effort to drive stronger growth and improve efficiency. the stock is down almost 1% in after hours trade, kelly. >> seema, thank you. some struggles there for the dollar giant. up next, we've been monitoring jpmorgan's media call and another big bank, wells fargo reports its results tomorrow morning. john shrewsberry are join to us talk about those results tomorrow. that's fast. my analysis shows your major themes are that time passes. and love fades. that sounds about right.
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welcome back. we start here with a check on csx shares. chugging along after reporting earnings this hour. dom chu has more. >> let's bring you up to speed. the stock is up about a percent now. sos it given up the gains in the after hours session. about 962,000 shares have traded so far. the number coming in at 52 cents
beating the average by 2 cents per share. $2.9 billion in shares. and folks like to look at csx for the transportation, specifically for the rail stocks. first of the big ones to report the numbers out. and the coal volumes, it ships a lot over the 134e78 of rails -- system of rails texas was a huge.that investors were looking for. they came out with the forecast and they expect that the significant coal headwinds though thought would happen in 2015 will extend in 2016. michael ward, the ceo of the company, say inning the statement, our perform abc does continue with efficiency gains as we continue to drive value for customers and shareholders despite they have environment where commodities prices and the strength of the u.s. dollar are challenging many markets. so again, michael ward, you can
expect more comments tomorrow. the conference call for them, csx is 8:30 a.m. eastern time tomorrow. some commentary about what they feel will be for coal, the national gas play and anything else commentary wise about whether they see rail volumes improving. so kelly, a stock on the transportation side seen by many as a leading indicator for the over all market and possibly the economy. but remember, a stock down about 24% just over the year-to-date period, back over to you guys. >> thank you, dom. mike, briefly, the transports were softening into the close here. can they support the market. >> seemingly not. it is a muted response. even the 1% pop. this stock has been beaten down significantly. i don't think anything out there thought coal would turn. i don't think this is a reason to start disliking the rail sector in general. but the transport agt factor has
been a head wind to the market taking down. >> down about 2% on the session today. you can scratch coca-cola off of tom brady's list of sponsors. called it poison for kids and also shook shots at kellogg's frosted flakes cereal. and coke said all of hur beverages are safe. we provide calorie and sugar information so people can choose what makes sense for them and their families. guys, is this going to be a real problem for some of the big soft drinks, john and frosted flakes, giants? >> i think it is. but i find it refreshing. you watch companies put celebrity faces on their products to endorse them. you doan often see big celebrity dishyphen dorsments. that is what you have here. and we are used to the companies
saying we know how bad it is for you, you take your chances. and someone through the ringer himself this year coming out against what he says are unhealthy food choices. >> but that is injuriesel drinking a coca-cola. >> not a kid. >> not a kid. >> and everything in balance, i guess. you can fit one in once in a while. and you see her under arm your commercials and she does work out. >> and this is an interview with his personal trainer. i think we've been lied to over the years and that is what we have been conditioned to. we believe frosted flakes is a food. nobody thinks these two are good for you. come on. >> i think they do, kelly. maybe not good for you, in a sense of this is like string beans. but when they think of things bad for them, i don't know if they think about coca-cola. >> and pepsi, a big nfl
responsor, have -- sponsor, have been something that the core product is an occasional thing. >> at least they say that now. >> tasting customer use is the focus. >> up next, jp morgan call with the media. stay tuned. excellent looking below the surface, researching a hunch... and making a decision you are type e*. time for a change of menu. research and invest from any website. with e*trade's browser trading. e*trade. opportunity is everywhere. theno one surface...out there. no one speed... no one way of driving on each and every road. but there is one car that can conquer them all. the mercedes-benz c-class. five driving modes let you customize the steering, shift points,
checking in on shares of in tell. losing the early pop in the after hours. we promoted we would have an interview with stacy smith. due to a technical issue we can't bring that to you. keeping a close eye on shares tomorrow morning. and jp morgan wrapping up media call this hour. let's get out to kay lar with the headlines. >> i'm going to start with the good. is that jamie diamond called the underlying credit loans exceptional. they were not bearish on the ole and gas space saying it is good to be in and calling exposure reasonably modest. and low exposure to glenn core as well. moderate trading. down 11%. mary ann lake said it is tough in commodities and that is the first outflow we've seen in 25 quarters for the company.
they said there was broad market turbulence and the bad news for investors, she said it has been a reasonably quiet start to the fourth quarter as well. we'll have more from the analyst call starting in a few moments. >> thank you kayla and mike. and that does it for us on "closing bell." and more from the "fast money" crew starting right now. >> "fast money" starts right now. overlooking time square, i'm melissa lee. breaking news coming out for jp morgan. josh lipton is monitoring the intel call and kay lor is on jp morgan. meantime, be here for us for the hour. and later on, is a bombshell about to be dropped on biotech tonight at the first democratic presidential debate. the sector got creamed. we'll head out to the stip and hear from john harwood. and normally jp morgan wou b