tv Closing Bell CNBC October 15, 2015 3:00pm-5:01pm EDT
we're seeing big mofls as we enter that final hour of trading. >> last hour we were a little bit below 1% gains on those markets and now above and significantly above 1% gains. folks, thanks very much for watching. >> yeah, "closing bell" starts right now. welcome to the "closing bell," everybody. i'm kelly evans here at the new york stock exchange. >> and bill griffeth. yes, look at this. a broad market rally right now. the dow up 179 points, but dow component goldman sachs has turned around after being down about 2% earlier in the session. >> yeah, look at it up there, it's the third strongest gainer in the dow, up almost 3%, jpm up more than 3 today. >> the pharmaceuticals and banks leading the way there. the biggest ipo of the year, though, first data is falling flat on its first day of trading
here at the new york stock exchange. we will discuss whether the oip # ipo market has gone flat. >> netflix getting crushed after disappointing earnings last night. the shares are down nearly 8% on the session today. someone who says the valuation still ridiculously high and he will tell us why coming snup lots of volatility on that one lately. a sports equipment company investing in new technology that it says could change the landscape for concussion injuries that we have all been focusing on so much recently. we have the ceo of this company, performance sports group, to explain the technology and the potential in the business world coming up. >> then after the bell, barney frank and larry kudlow together and both here at the new york stock exchange to discuss whether democrats are becoming too much of an -- >> let's start with first data's
first day of trade. bob pisani standing by. the payment processors post right behind us, not doing is well today, bob. >> the good news is it got done and they i had # needed to get done, they needed to pay down debt. $16 b 16% below the midpoint. 18 to 20 was the price talk but they got it done. the bad news, it's dropped below 16, $15.86 now and that's happened a couple times during the day. i've been saying all day it's good to close above $16 that would indicate that the price was right. they're floating 160 million shares, that's the offering size, but look at this volume, 53 million. that's a little unusual. a typical rule of thumb would be on a good day of trading, active trails for an ipo you trade almost 100% of the flow, that would be 160 million shares. this is a big ipo, but 54 3 million shares very much on the light side for a big ipo.
that indicates to me that the buying interest is very muted on this now. it has been trading at a narrow range, all anybody cares about did if it closes $16 or somewhere above that. mean 250i78, there are other payment processors, they have competiti competition, they trade right here at the new york stock exchange, here is global payments, up about 2%. the other major competitor that's publicly traded, move right over here, vantiv and their stock has held up well in the last few months. that's up fractionally. the other big ipo story of the day, albert sons did not price last night, they were going to try to price tonight. word out, though, is they may not make it as well. david faber saying it could be post pond as well. the bottom line that deal also looking very iffy right now. and remember neiman marcus also postponed earlier this week. so some lie profile ipos not happening at least right now.
guys, back to you. >> we are not hearing much about univision and petco. >> we will see how ferrari does next week. >> joining our "closing bell" exchange with the market now up 192 points, aroon daniels, steve grasso there at post 9 and we welcome back rick santelli in chicago there. steve, i am going to reenact what often happens on the floor when you get a rally like this, traders start looking at each other going you got anything? what's going on here? >> we're brushing right up against recent resistance, you started off the show talking about reversal in the financials. the market is more concerned with rates staying low and no fed increase on those rates and i've been consistent, i think that they're boxed into the corner. they are unable to raise rates. that sends not an all clear sign, but it really makes equities definitely the target
for a lot of these portfolio managers. they are shrugging off earnings misses and going right back into the equity market because it's the only game in town for now. >> it seems like lately when the fed has held off on raising rates markets reeked with a disappointme disappointment. are we back to an ak day testify fed equaling good news. >> yes. the market has a short-term memory like a four-year-old child and i don't mean that to be a derogatory comment. it just does. in this world of immediate gratification steve has nailed it. time has passed and the decision by investors that the fed isn't going to be coming to the table and raising rates anytime soon gives you a much wider interpretation to being long and trying to time it right thinking that you can dance between the rain drops. even today's data that really moved in the opposite direction on cpi versus yesterday's ppi, especially as bert bookfar
underscored in the service sector which is a wider sector and you have to extract some of the volatility due to energy. so, yes, i agree. i also think that tomorrow one of the data points we don't often discuss but traders have always liked it, treasury international capital flows, it comes out in the afternoon. with the recent impression that china has been in liquidation mode i think many investors are not only going to look at asia, china, you know, all the areas, belgium, that have involvement in purchasing u.s. treasuries, but also to assess whether there is others stepping up to take the liquidation side and neutralize t these are all big issues and of course the 2% mark today maybe if the treasury would have sold off as aggressively as it was bought up yesterday pushing rates briefly under 2%, maybe the equity maurkt would have made more attention. >> aroon do you dust off the quantitative easing playbook.
>> i think what we like to focus on is really companies that are dislocated due to the macro environment. number of companies, for example, in the consumer sectors have come in a lot. we like to focus on companies that can produce free cash flow over long-term and have double digit earnings growth. companies like tiffany which have pulled back, continues like jarden, we think there is a longer term opportunity in some of these companies where you could see solid earnings growth over the long-term that have pulled back and we can take advantage of it during this time of a short-term market dislocation and really take a long-term investment. >> would you buy walmart here? what do you make of what it told us and the market's reaction? >> i think a number of issues that walmart -- or are walmart specific really. if you look at it the lower end consumer is clearly struggling on their end, plus they have a
tremendous amount of investment that they are making. if you look at the actual reduction in the earnings growth for next year almost 75% of it comes from investment-related which they have to do because you are clearly competing with amazon with most of the revenue going to online retail these days, as you can see from the amazon. walmart and the brick and mortar retailers have to make a change otherwise they are going to suffer. >> walmart specific problems. tell them to albertsons. they are desperate to get something off the ground here. steve, lately you have been fading these rallies, this this market is sensing it's going to be a while before we get a rate increase are you going to rethink that? >> definitely. as a trader you have to adapt to those circumstances you are in. the investors for the last week or so has been served pretty well with selling the gains in the marketplace and the s&p cash right around 2020, 2030. so until proven otherwise i
would say this is probably a good place if you have some recent gains which i know a lot of people do to probably lighten up. >> we talked mean while, rick, about how autos are the one area of strength in this economy. we will see again how ferrari does when it lists here. we are going to talk to phil lebeau about tesla's new autonomous car technology. what do you think about all this, not having to touch the steering wheel for ten seconds? >> you know, i think it all sounds like science fiction and i'm very happy that yankee ingenuity are take # making these big strides. i think from an investor's standpoint these things are so tso far into future. if there is a trouble bubl in stocks how the teslas and apples and investments in space and cars is going to turn out. i think it's fascinating, but i think we are definitely putting the cart miles in front of the horse. >> kelly, i will give you one micro trade wheel quick. >> please. >> i did buy mobile eye today based on the exact thing you
just asked rick. maybe it's not a reason to buy tesla but mobile eye does have relationships with a lot of different auto makers. they are going to be across the board for now, not to say they are going to be the technology ten years from now, but for now they seem to be the premiere company. >> we will be talking about a chip space more in just a moment. i will wait for sit tron to deal with you when it comes to mobile eye. gentlemen, thank you all. good to see you chltd r. >> 50 minutes to go here into the close. mirror image of what we saw yesterday as oil is holding in about flat here, the dow is levitating up 179 points, led by goldman and jpmorgan, even though goldman missed on earnings this morning. >> one high profile company not participating is netflix, that's getting crushed on the slowing profit and subscriber growth that we told you about on the program late yesterday. when we come back a leading netflix analyst will tell us if he think today's decline presents a good buying opportunity or not. >> also ahead, chip companies
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suddenly a rally day just in the last hour, big gains for the major averages, the dow is up 182 points right now, in fact, all the major averages are up more than 1%. look at the nasdaq, that's up almost 1.5%. look at the i shares of the i bmplt b, the nasdaq biotech etf ridesing for the first session out of the last five, amgen, sell gene, gilead. >> ready or not autonomous driving is here. phil lebeau is taking tesla's model s equipped with its auto pilot software out for a spin somewhere near cnbc headquarters. he joins us live. i notice your shands are on the wheel for right now. >> put them on the wheel. >> it is. this is how you do it, guys, with tesla auto pilot, you put a button twice t activates. i will show you how you can do lane changing. all do you is signal, it knows
there's no cars blocking our path so we were able to change lanes. now i want to go back, it's as simple as hitting the turn signal, it makes a check all the way around, there are 12 ultrasonic centers in the car, in addition to a camera in the windshield, forward looking radar and gps. that's how the vehicle knows when it's okay to lane change and obviously it's regulating our path in this lane based on the lane markings, vehicle in front of you and all of the data it is taking in right now. it is autonomous driving and coming very quickly. this is the first place. so the whole idea is that not that you want to be hands free all the time but that option is there, especially on long drives on highways. >> wow. >> we are hoping our camera holds out while you are in there. have you tried parking yet? it's supposed to be able to parallel park for itself and find parking spaces and all those other fun things as well. >> i have not done parking, bill.
i have to be honest with you, so many auto makers have parallel parking that's a nice feature and i'm sure tesla owners will enjoy it, we wanted to join this because the lane change is what's new here. tesla is the first auto maker that allows you to have this autonomous lane change. i will do it one more time. >> don't hit the camera guy, he is next to you there. >> see, that waited until it was time. see. >> that's interesting. >> here we go. >> you might have to do it again, phil. >> one more time. >> the camera decided to hold. it's not tesla camera equipment, by the way. looks like you changed lanes pretty smoothly. >> yeah. do you know what, it senses if there is a vehicle next to you. go ahead. >> are you comfortable taking your hands off the wheel? kelly and i were talk about this before. you can take it off for ten seconds, i don't know that i want to ever take my hands off the wheel. >> or be near someone who has. >> i have to be honest with you, this is a lot like cruise control. it's comfortable once you have
done it for a number of times. i've done it now five or six different drives in the new york city area. i'm very comfortable. again, this does not mean is that you go like this and say i'm not going to pay attention. they want you to stay engaged. every once in awhile a chime will sound and they will say, okay, put your hands on the steering wheel. we are going to lane change. it knows to neighboring maik that lane change because our car behind us was, you know, not in the path and we are going by and at some point we are going to lane change here. it is a system that can determine when it is safe to do it and when it is not. >> i thought i read that tesla didn't necessarily seek approval from california regulators before coming out with this technology. the ten second rule is meant to keep the feds off its back. is it going to succeed or when this comes to market will people take a much closer look whether they are going to allow it? >> they have been in consultation with [ inaudible ] developing this software and this technology.
[ inaudible ] -- with your hands off the steering wheel we want you [ inaudible ]. this is that transition we're going through, guys, towards completely autonomous drive vehicles. this is the first big step in that direction. >> we're going to let you go, phil. you're getting into a dead zone. i think i know right where you are, you are on a road i take home. be careful of the cops in that area for excessive lane changes. they will be all over you if you keep doing that. >> maybe we can blame the car. >> it wasn't me, officer. thank you, phil, very much. our phil lebeau somewhere out in new jersey. >> he can cry, it works every time. >> netflix getting whacked, week weaker than expected third quarter earnings. the ceo reed hastings saying the company will continue to focus on original content. shares down 8%. >> the more that we have amazing originals, then over time we're going to be able to ask consumers for more, to be able to invest more and that's been
the rhythm we have been on. >> will it be enough? >> joining us is david trainer who is ceo of new constructs. david, are the shares attractive to you here after the selloff? >> not even close. the current valuation implies that the company's profits will grow 25% compounded annually for over two decades. still very expensive. >> what do you think is going on? one of the things that stood out to me as frivolous, but this idea that so many of the customers got the new chip cards, credit cards, and they didn't have time to change their card on their subscriptions and that's why they saw this slow down in subscriber rate. is that what's going on or is it something else here? >> i agree with you, bill, it sounds like a little bit of a head fake getting away from the fundamentals. they have quite a few customers, they have a 13% penetration in the united states, internationally they are still growing, but their margins are getting worse, more negative internationally. they are not making any money
internationally. another head fake is that netflix has been showing positive earnings for many years now, their cash flow are highly negative. they burned over $2.5 billion in cash flow over the last 2 1/2 years. this company is not making money, that's why we're seeing them have to go back to the capital markets to keep the business running. >> plenty of people are also focused on the content costs which were up 17% on the year. is there emphasis on original programming going to mitigate that? >> original content creation is expensive. there is an accounting loophole that allows them to meaningfully understate the cost this have content that they are acquiring and building. their earnings are meaningfully overstated. this is an unprofitable business. a big part of the reason there are so many missouri positive analysts is they're chasing the banking business for this secondary or debt raise. investors need to look through the headlines and the superficial earnings numbers and understand this is a highly negative cash flow business
right now. >> so you may have answered my question. is there anybody else you like in this category or you just don't like this category? >> well, i think the category -- it's a tough one in general. the streaming content, the advantage is going to be in creating original content and the people who do that well consistently over time are few and far between, but the one company that's sort of not really in the space but kind of is verizon and their ability to be first to market on streaming live content because you can't dvr the live content like you can a tv show or other types of -- >> are you talking about the nfl? >> yeah, nfl and concerts and things like that, yes. >> okay. and, by the way, yesterday we had a rowdy discussion about whether netflix could simply just raise its prices to the $15 level or even above it, especially in the u.s. in the years ahead. do you think they would have at least that pricing power? >> i don't know. i mean, look at the price of all the other services. you know, i think the max one is around 20 bucks a month, amazon's still at 8 or 9 bucks a
month, right, and that's what they're going up against. amazon is creating new content. the one of the things we did with our evaluation models and this is on our site as well, we looked at the implications of doubling their prices and doubling their margins. they still would have to have over 334 million customers at double the price and double the margins to justify today's stock price. there is only 320 million people in the united states. so the expectations in the stock price are extremely high no matter what they do. >> again, you may have answered my question. is it ludicrous to ask you is there a price it would get down to that would make it attractive to you, then? >> it's a long way from where it is today. i think we're talking down 70s, 80% before this gets to a place that's reasonable. >> wow. all right. david, thank you for now. >> thanks, david. >> david trainer. >> and the rally continues. we have about 40 minutes left in the trading session here with the dow now up 211 points, but the biggest gainer is the
dow is up more than 200 points today, paced by the banks despite some weaker earnings. nevertheless, shares ponding to the upside 3% rally and jpm and goldman leading the dow to the up side. all ten sectors are in the green. financials up more than 2%, healthcare as well as will has mentioned those biotechs boosting the nasdaq substantially today, utilities up 1.5%, consumer discretionary holding in there, technology industrials, too. >> let's look at some of the other movers there. speaking of the financials, citi group rising on those better than expected earnings reported this morning, the nations third largest bank by assets said lower costs more than made up for a decline in revenue overall. citi's legal expenses fell to
$376 million in the third quarter, that is down from $1.6 billion that it spent on legal costs a year ago in that quarter. meantime, we showed you earlier, garmin falling shorply after cutting its earnings forecast for the third quarter and full year. the maker of fitness and navigation devices blames currency head winds and a competitive pricing environment for that decline. >> and all those fit bits, too. wall street may like mergers and acquisitions but the pentagon's money man wants to see less of t jane wells sat down with him earlier. >> kelly, the defense gravy train has less gravy and one way companies are dealing with that is by consolidating and buying back shares but their largest customer isn't happy about that. >> it's natural to consolidate, repurchase shares, hunker down. >> uh-huh. >> isn't it? >> yes. and i understand that. but it's not necessarily best
for the government to have that happen. >> under secretary for acquisitions frank kendall says taxpayers now have less buying power with consolidation, though the u.s. government still the defense industry's largest customer by far. after lockheed martin received approval to by sakorski kenldsel decided the pentagon needs more tools and say in future mergers to avoid being left with only a few big companies to buy from. >> this trend toward consolidation through marijuanaers, a tool that gave us snash nl security basis for intervening i think would be useful. >> have you asked for that? >> i'm working with my staff and i will be working with the congress to make recommendations to the congress about what they might do along those lines. >> that's a shot across the bow. tomorrow kendall may have to cut $20 billion in blieg, where? shareholders of lockheed, boeing and northrop won't want to miss
this. >> what gentleman quite understand is why they would like to see some of these bigger companies better financed with government funds that have been affected by the sequester and if that's the bigger issue or if it's the fact that they wish they had, i guess, more companies out there to choose from and award contracts. >> he wants competition because comp tiffs drives down price, keeps people nimble and gives him buying power. >> is there an or else in this? don't consolidate, don't, you know, get down to fewer companies or else -- >> he doesn't have an or else. that's why he wants to go to congress to see if he can get a come sort of or else. you know, in other words, we want a seat at the table when these mergers are proposed. >> here is an idea, how about the government buy shares in those companies. >> how far are we at this point? jane, thank you so much. >> see you later, jane. >> jane wells on the defense
space today. >> i was just kidding, by the way. time for a cnbc news update with sharon epperson. >> here is what we're looking at. president obama announcing that he has ordered a slow down in the withdrawal of u.s. forces in afghanistan. the u.s. will maintain 9,800 troops through next year and leave a course of about 5,500 troops in 2017 after he leaves office. an increase in violence led to his change of strategy to leave afghanistan by the end of this term. >> russia releasing video of fighter jets taking off and landing at an air base in syria. they said its jets made 33 bombing runs over the country in the last 24 hours, hitting 32 isis targets. >> the younger brother of al qaeda leader eamon al zawahiri was a at which timed of terrorism charges. he is. >> a group of scientists from
stanford university have designed and manufactured plastic devices that can mimic's the skin's sensation. it can be made stretchable just like skin in the near future. that's the cnbc news update at the hour. >> they are doing amazing things in pros stet particulars technology. that's amazing. thanks, sharon. >> 30 minutes to go until the close. the dow still up more than 200 points, it was a 2020 level on the s&p. the fact we poke through that and held got some people excited, that index up 28 points while the nasdaq up 1.7%. >> a leading trader will tell us what he's watching as we head toward the close. we are going to take a look at new technology, this could prevent head injuries on the sports field. >> important. after the bell we are going to bring you earnings reporting from the lines of wynn resorts
the gains right now, the industrial average is up over 200 points at the hour. the s&p is up 27 and the nasdaq as we've been pointing out leading the way, biotech is on the upswing once again today. so the nasdaq up almost 1.7%. some high profile technology companies also higher today including yelp, fit bit both up more than 3% and gopro today on the come back trail up almost 2% right now. >> with less than half an hour to go on a strong rally day we've been talking a lot about levels to watch to the down side. now that the s&p looks to be holding the 2020 level does it signal more gains? >> we are going to have to have another couple of sessions for them to stay up here to say that we will get another leg out of this rally. we are far above my level today which was 2013 which goes all the way back to the 2011 trend line, the dow is back above it's 2009 trend line, the nasdaq has gotten there.
the one index i watch of the most is the russell. that's still got some ways to go. if it can get back up into the 1180 mark maybe today on the close, but certainly tomorrow, then i would feel more confident we will get mother leg out of this rally. >> we just established with our exchange everybody saying, well, now the fact that the fed board is talking back rate increases means we could have lower rates here to stay. a, is that true? b, is that what people are pricing in now? >> certainly fed fund futures are telling us it's going to be a rate increase in 2016 and not in 2015. if you think back to the september meeting when we sold off when they didn't raise rates, the capriciousness of this market has been tough to discern through, tough to analyze and now what we have is a situation where the economic data was weak today, the empire manufacturing data, philly fed was bad, cpi is weak. the only number that was good is at historic lows is the first time claims.
so that's the one good number we have. i think there's enough bad or weak data where people are saying they are not going to raise in 2015, let's get on this rally train now. >> if the data starts to get better do you think that's a stumbling block for this market? >> i think the mentality has turned back to that, but we are getting into a seasonally strong pattern inside of equities. i think that's dwr we are getting ahead her. >> we will let you get back to it. keith, thank you so much. >> i would point out that art cashin has been saying all year we won't get a rate increase in 2015. he would be the first to remind you of that, too. >> the nfl and nhl seasons are officially underway, football and hockey lead in concussion rates for sports. it is a health and economic concern as the centers for disease control estimates that direct medical costs and indirect costs such as productivity loss is upwards of $12 billion annually. several companies as you can imagine are trying to develop products to try to limit
concussions. performance sports group, they own popular equipment brands like bauer and easton, they just purchased a license to q 30 sport which is developing a new device with technology to battle back against these catastrophic head injuries. joining us with more on this is kevin davis who is the ceo of performance sports group. good to see you. thanks for joining us. >> good afternoon. >> i know you are not a doctor, i'm not a doctor, but can you give us a layman's term how this device works. are you going to incorporate this into your equipment? how is it going to work? >> let me tell that you we're really excited to have access to this great technology. as a leading company in helmet protection we are certainly always trying to be on the forefront of protecting athletes and one of the challenges for protecting against mild traumatic brain injury is that the brain moves inside the skull and traditional approaches have all been about helmet technology and trying to manage the transfer of energy from the outside of the head to the
inside. this technology is the first that we -- we have certainly come across that tries to help manage the injury from inside the cranium and we're really excited to continue to explore this and hopefully bring it to market. >> and, kevin, obviously we applaud any efforts to help mitigate concussion damage, but in this neck band you are discussing it going to solve the problem how do you know this isn't going to become a widespread widely available piece of equipment that people can get elsewhere down the road? >> well, we feel pretty confident in the intellectual prousht, that was a big component before you become a licensee of something is to make sure that the ip is slid, we feel pretty good about that. again, a lot of work to do, still to come, but with the results that they have had so far we are very encouraged. >> when will it become available? again, are you going to incorporate this into your existing product line up? when does that begin, do you think? >> you know, like other things
that we have in our line this is a piece of equipment that can be comfortably worn by athletes. tesla's not a helmet and it doesn't need to be necessarily attached to a helmet. >> okay. >> we certainly expect to continue working with fda and health canada and all the regulatory agencies around the world to make sure we comply with the regulations and we are going to be getting this product out there as soon as possible. >> how big a market do you expect? >> well, if you consider nonhelmeted sports today, the biggest one being soccer where there are a lot of discussions about mild traumatic brain injury, we think that this from a marketplace perspective significantly expands the address i believe market that we look at today and on a global basis as well. so the market is quite large. >> i wonder, kevin, how much more attention you might be getting as the concussion movie is released because i understand you are working with one of the doctors, julian bales, who is going to be a central character in the film. >> yeah, that's for sure. dr. bales is played by alec
baldwin in the movie. he will certainly be continuing a lot of discussion around mild traumatic brain injury and concussions. we are really excited. in november on the 17th we are going to have an event where dr. bales is actually going to explain to people how this device works and we are going to talk a lot more about the work that's been done so far. >> did you have other devices or apparatuses that worked to prevent brain injuries of some kind and is this going to can bliez that or is this a new introduction for your company? >> this is not only a new introduction for our company but if the product safety works as we expect it to and the efficacy, this will be a brand-new product for the world. >> all right. see if it makes it to the women's lacrosse field. you never know. thank you very much, kevin, for joining us. kevin davis with exciting potential new development there for concussion technology. >> those women go at it in women's lacrosse. >> there is a debate over whether there should be helmets. anyway, 20 minutes to go until
the close. the dow is trying to hold on to a 200 point gain, the s&p is up 26, the nasdaq 77 today and the computer ship industry is in the midst of a never before seen wave of consolidation. up next josh lipton will explain what's behind that. >> still ahead, the fbi not exactly playing games with fantasy sports right now. later we will have the details on this investigation. you probably have heard about into draft kings and fan duel. that's still to come on closing bell. i've got a nice long life ahead. big plans. so when i found out medicare doesn't pay all my medical expenses, i looked at my options. then i got a medicare supplement insurance plan. [ male announcer ] if you're eligible for medicare, you may know it only covers about 80% of your part b medical expenses. the rest is up to you. call now and find out about an aarp medicare supplement insurance plan, insured by unitedhealthcare insurance company.
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welcome back. watching markets here, the dow up 200 points today. the sheen on this one is interesting. all the sectors are in the green and a lot of trade remembers talk being how this might be taking into account a more -- or a less likely fed to raise rates. be that what it may, the s&p is up 27, the nasdaq 75, take a look at sea gate technology. it is tanking down 13%. >> wow. >> the maker of electronic data storage products warning first quarter revenue and gross margins will likely come in below estimates. citing low demand for its new line hard drives. >> according to barron's so far this year there will be more
than $110 billion worth of m & a deals for computer ship companies. for what's behind this grab in chips let's head out to san jose, california and josh lipton. >> analysts say you can expect that deal activity to keep right on coming. just this week we have seen shares of analog devices and integrated products, for example, jump on reports that the chip makers are in merger talks. that followed news that fair child semi-conductor as well as sandisk have hired banks to explore potential sales. intel agreeing to buy altera for $17 billion. avago saying in may it would buy broad come. the semi-conductor is maturing. gartner forecasts worldwide shipments of personal computers, tablets, smart phones are l. grow 1.5% this year. fewer devices mean fewer chims. chip sales will dip 1% in 2015
to $338 billion. that's according to mrk hong a research vice president at gartner n response chip makers are exploring consolidation as one real strategic option. the hope of course a combined company scales the business, cuts costs and boosts profit margins. rbc suggests that the next likely take out candidates could be company boasting relatively high gross margins, roughly 60% and where there's room for cost cutting on operating expenses, names that fit the bill, maxim integrated products, sem tech cooperation, power integrations. power integrations and cyprus declining to comment. guys, back to you. >> okay. joshua, thank you. our josh lipton. out on the west coast. 13 minutes to go, the dow is up 210 points, the s&p trading around 2022 at the moment. the s&p up 1.23%.
>> the last few days we have had flat close closes we haven't have a bias to the buy or sell side. after wall mark rocked the stock market yesterday you might think this is a time to stay away from retail. we have a guest coming up who says jump in. she will explain why when we come back. 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 every third tuesday. we have pattern recognition technology on any chart, plus over 300 customizable studies to help you anticipate potential price movement. there's no way to predict that. for all the confidence you need. td ameritrade. you got this.
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ten minutes left, the dow up 209 points right on schedule during commercial art cashin stopped by and said that the imbalance is to the buy side $900 million worth of stock to buy. >> wow. >> into the close. we will see if that has an impact here. amy woo from rbc capital markets is back with us. what do you make this have recent volatility? >> it's been interesting and i think for a lot of people it's been about rotation within the sector themselves. i think maybe a couple months ago we were talking more about a macro level and now what i see in the options market is a lot of people playing upside in energy, people playing down side on energy, people focusing on financials on the upside and down side. i'd love to tell you we're rotating from here to here. that's just not the case. the stalk is all on the sector level. >> individual names like walmart yesterday, what is that doing to shake up sentiment, if anything? >> i think that's been
interesting because that's a bigger story right about a traditional bricks and mortar company having to compete with something that really is outside its actual original sector. i was looking at that recently and if you think about retail volatility, we are actually heading into the months where that's traditionally very volatile because you get thanksgiving season, black friday right after, you get same store sales and then you've got holiday shopping season and that used to be something you could reliably count on for catalysts. what we're having with a lot of tech also being retail it's completely changing how we think about pricing because you have bricks and mortar companies competing against tech companies. so the question is what is your average vol now? you can look at what it historically was pricing for volatility but that may not necessarily be what it should be going in the future. >> so the seasonality is not working? in other words, would this normally be a time to be getting in? >> i think normally this is a
time to own volatility in the retail sector. i'm not saying that's not true now. i'm saying when you actually look at the stocks that make up xrt or xly you have to say, well, is my peer group now other retail names, other bricks and mortar names or is it actually tech? maybe that means there's actually more volunteering tilt, not less. i think the peer groups you are thinking about has to change going forward. >> i think the gift this christmas is going to be a drone? is what? >> is going to be a drone. >> can you buy that? >> you can. dgi makes a ton of these phantom drones, it feels like a moment after all the publicity people love pink ring with them. there were a great article about people setting up their homes. this is far from a traditional brick and mortar retail play. >> how you shop, is it on an iphone or app or do you go into a store physically. a lot of that is changing. >> thank you for joining us, amy
wu from rbc capital. i know someone who may be getting a drone for christmas. >> i don't know i don't want one. >> that's not what i was thinking of. >> six minutes to go into the close here. >> your secret is safe with you. >> we will be right back with the closing count down. >> after the bell wall street under attack, at least by democratic presidential hopefuls, still ahead here they come and they will be together here at post 9. former democratic congressman barney frank and cnbc's seen yorp contributor larry kudlow weigh in on the various sal voes waged or flung or something at the democratic debate. you're watching cnbc, first in business worldwide.
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. we started without you here. bob pisani with me on the closing count down. let's go to seema mody we have news on mcdon. >> we are looking at mcdonald's shares higher on a wall street journal headline that says mcdonald's is close to deciding whether to change the structure of its u.s. real estate. in conference with the board member miles white, mcdonald's borld d board and management from v. not made a decision, but, quote, we have had a lot of review and a lot of debate. again, we are look at mcdonald's shares, they were as high as 2.3% on this headline, still
higher by 1%. analysts have been saying there is a low chance this have actually taking place. we will wait and see. bill. >> we will. seema, thank you very much. we were wondering does that mean mcdonald's would become a real estate investment trust that serves a cool breakfast sunday witch? let's show you what happened in the market today. right at noon here, lunchtime on wall street and that's when the rally began in earnest and we are finishing near the highs of the session right now, a gain of 216 points or 1.25%. the better gainer has been the nasdaq today with a gain of last i checked 1.8%, about 1.8% or 84 points. also on the high of the day, biotech powering that to a great degree, the ibb has been up four out of the last five trading sessions gaining today another 4.25%. we have earnings coming out after the bell tonight, we will be following those for you on the second hour of the "closing bell" including advanced micro devices, schlumberger and wynn
results sorts which are all trading higher. one thing not trading higher is the big ipo of the day. >> first data. remember, priced at $16, price talk $18 to $20, right now $15.75 just off the lows for the day. volume is rather on the low side. we've priced -- look over here. 160 million shares, here is the offer sides, you look above that is correct only 61 million shares traded. in a healthy day on a big ipo you trade almost close to the float. this is about less than half of that size. bill, what this indicates to me is buying interest has been very muted today. there is not a lot of people out there. 15.70, you might say it's only 30 cents but perception matters, they want ad 16 on the close. i would rate this as a mild disappointment on the day. the important thing is that they got the deal done, a lot of debt, they needed the money to pay down the debt. from the company's viewpoint just getting the deal done was a victory for them. >> thanks, bob. see you later.
ringing the closing bell today here at the new york stock exchange executives from black rod and at the nasdaq glaad celebrating spirit day. that's why we are all wearing purple. stay tuned, we have barney frank and larry kudlow live here at post 9 on the second hour of the "closing bell" with kelly evans. i will see you tomorrow, kell. thank you, bill. welcome to the "closing bell." i'm kelly evans. a strong session across wall street but was it for strong reasons? the dow up 218 points, the s&p adding 29. that's 1.5%. look at that nasdaq, up 87 points. 1.8%. biotechs pasting the way, by the way. we are waiting or more earnings after hours today. they include wynn resorts, schlumberger, amd. yesterday some big moves, both on the ipo front of course netflix' earnings. we will see what we have in store this hour. joining today's panel we have
stephanie link from tiaa krep and our own michelle caruso-cabrera. welcome. with us for more on today's action "fast money" trader. dan knee than joins the fray. stephanie, since you are a bill -- relatively speaking mcdonald's shareholder there is some talk again about the real estate, moved the stock just before the close here. is this really going to happen? >> well, i don't know if it's going to happen but i think the important thing is that they have a new ceo, easter brooke, and he actually burned their european operation around. he is now the ceo and trying to explore a lot of different ways to grow this company, getting it back to a growth story. whether it happens overnight, it's not going to, but i do think that at least there are a lot of options. is it real estate, is it changing the menu, simplifying the menu, this whole breakfast decision. so i think that they are trying to find ways to grow sales and that's very encouraging for a stock that hasn't done much in years. >> sure. at the same time, michelle, last month the irs was indicating it
is not necessarily thrilled at companies that are pursuing a rate structure if it's going to allow them not to pay some of the taxes they should be paying. >> it sounds like financial engineering and i don't mean that in a negative way. it seems like it's away from the basic question stephanie a asking. mcdonald's problem has been people just aren't as interested in eating there as they have been in the past. that's got to be solved. this may help, maybe a different structure brings in more investors and moves the share price, maybe it doesn't, but ultimately they have to solve that other problem. >> dan, do you have a view on this? >> well, yeah, listen, mcdonald's is a brand that's struggled, been on the wrong side of taste buds, wrong side of gee graefs and the dollar and that sort of thing. i think that the new management probably needs to get creative. we have seen that with some of the stuff they have done on their menu and investors are taking note. it just broke out to a new all time high here, that's
suggesting that investors like at least what they are seeing. if you throw into some of the financial engineering that may be proposed at mcc calls it all of a sudden you may have a stock ready to create a new range above 100 bucks. >> you are a saying they don't necessarily have to do a full real estate investment spin off, there are other levers they can pull. >> i think so. if it's a read that's one way of creating working, working with their franchisees is another thing. what's clear is that at this analyst meeting in kauchl weeks they're going to have to outline exactly what their game plan is for this stock to continue its momentum because it has had a nice run off the low even though it hasn't done much in a couple years they are going to have to. the speculation is going to cut cut backs. >> while companies are purse ewing the best strategies for the years ahead here, the market today perhaps bolstered by the fact that a lot of federal reserve officials, especially board members, have been talking back the prospect of near term rate hikes.
dan, is that why you think this market did so well today, every sector levitating? >> no doubt about t listen, i think the reversal and some financials specifically goldman sachs, jpmorgan getting back its losses from yesterday, that was clearly a good sign for investor sentiment. to me i feel like if you're telling me that s&p was up 1.5% today because now the fed funds futures are telling us we are not going to have a rate increase until some point in q 1 or mid 2016 that's for all the wrong reasons. the fact the fed can't lift off doesn't speak to the sort of things that make you want to go out and buy stock. at six years in on zurup enough is enough. >> and meanwhile it's been a tough environment for companies trying to go public. look at first data which wouldn't hold its ipo price of $16 that was pulled back from the 20 and higher range it was seeking. albertsons, michelle, has shelved its plans for the time being. if you were to look at those
stories, the walmart story from yesterday is very different environment than anybody who would think this was a strong market, strong growth. >> and a reason perhaps to raise rates, the ipo market suggests that there is less enthusiasm for the stock market, you could go into the depths of each different ipo, but going back to this issue about whether or not they raise and how this fits into what they're thinking, i'm increasingly of the viewpoint it really doesn't matter what they do at the short end of the curve. the long end doesn't move or the long end does what it wants to do regardless of what the short end is doing. >> people will say the feds still owe so many strategies -- >> they are not buying anymore. >> look at the market. this market, the long is moving the way it wants to move. >> think about this, the chinese have sold tons and tons of bonds. if you had said a year ago, oh, my god, the chinese are going to unload those bonds we would think our interest rates would be skyrocketing. >> we would worry about it for
years. >> i think that if the fed doesn't raise, then the dollar which has declined 6% from its high can actually continue to decline or stabilize and that's very good for fourth quarter coming earnings. not so good for third quarter which we know will be mixed but i think that's a very important thing and today what you saw is a return to some of the growth sectors. so software did very well and biotech did very well because the fed is not going to raise. those are the stocks that were leaders and we lost their leadership and then one very important thing is we got financials today, financials are 17% of the s&p 500 so that group needs to do well for this market in my opinion to do well. they're able to grow earnings not to what we want them to, but they're able to see better credit and loan growth in the face of very low interest rates and that's very important i think. >> let's take a look at wynn resorts moving to the down side on the earnings report. it's matching the bottom line anyway, josh lipton has more.
>> wynn just reporting. let's get you those numbers. 86 cents on $996 million. the street was looking for 86 cents on $1.03 billion. just looking quickly through the release, las vegas net revenue $411 million street wanted to see $420 million. mic cow net revenue $585 million. you look at that stock, kelly, it had been down 50% this year heading into the print but it enjoyed this nice pop since early october of about 20%. you had chinese government officials suggesting maybe some support for mccow. mccall generates the bulk of that company's business, we will get more color on that business when that call starts at 4:30 eastern. >> dan nathan, let's look at wynn. it's still down about 1% on this report but that third quarter mccal revenue down 38%. >> revenue has been trending down more than 30% year over
year on that monthly basis. the stock has rallied in the last few weeks, people thinking st traufg especially when you get the government which has caused a lot of pain when you think about the crack down, smoking bans, all this stuff that has taken the money out of mccal. i think that normalized the sentiment. maybe it got a little too bearish and the quick rise of 30, 40, 50% in the last few weeks has taken a little air out of the stock. i don't think it's much worse than people were expecting but at this point you have to see some sentiment towards the business there traufg and i don't think this data, i haven't looked at it closely, is going to suggest that right now. >> stephanie. >> we just need to get color on the conference call from the management people and what they're seeing in that area of the world because that is what's driving the stock. >> is that why you favor an mgm. >> i favor an mgm because they have more las vegas exposure and we are seeing a nice pickup in
las vegas exposure and they have real estate value creation opportunities as well. i think you are going to hear something from in that regard over the next couple of months and that's a nice catalyst. >> dan, going back to wynn, if mccall is the real issue, what is steve -- what's -- what are wynn's options here really unless the environment in china changes substantially? >> it's not just the environment. they have more capacity coming on. when you think in the next year or two, to me unless they lose some of these casinos it's going to be hard to meet weakening demand with more capacity. so i don't really get it to be frank with you and i wouldn't lead -- this rally in wynn shares i wouldn't extrapolate it to much else that's going on in china right now. we saw yum!'s results last week and that's speaking to a broader segment. i know there is a lot of very stock specific or company specific issues with both of these, but i actually would probably lean more towards yum! and think about that middle class consumer in china rather
than nick thinking about mccaul. >> you can say what you want and try to predict the china economy and consumer, but it's true on the separate issue of mc. >> caller: it doesn't look like the boot is being lifted. >> if you are going to invest in this stock you have to decide what the chinese government is going to do or not do. if you buy it you are at the whim of whams to the vision of the government at that moment. before tusd to be full speed ahead and now it's cracking down on corruption, could change again. >> absolutely. we have an earnings alert on mat tell to get to. let's get over to seema mody with those numbers. >> q3 earnings from mat tell, looking like a miss, 71 cents versus the estimate of 80 cents, revenue $1.79 billion versus the expectation of $1.89 billion. they did break out some of their product sales. barbie sales did come down by 14% year over year. wheels that's another product up by 6%, but overall wall street was looking for signs of a turn
around given the mangs cha mattel has been changes on the management front as well as their product strategy, they have dealing with heightened competition from the on line gaming industry. perhaps those changes not enough, again, mattel reporting a big miss, 71 cents versus the estimate of 80 cents. shares were down by as much as 7% in after hours trade but now slightly higher. >> that's quite a nap back. >> the stock has been a big underperformer year to date and is almost yielding 7% and the management team has endorsed that deaf depend. are in it for that. there is a high short interest in that stop. if they think about inventory levels there is a good chance the stock could see a relief rally. >> i wonder if we could take a slick look on schlumberger before we go. a lot of focus on energy space.
wells fargo talking about it being a head wind. looks like schlumberger earnings were a touch higher. we will get you more detail shortly here. thanks, everybody. dan, thank you for your time this afternoon. be sure to stick around for more on dan nathan on "fast money" at 5:00. that's in about an hour's time. a federal drug pricing subpoena sending shares of valeant pharma sharply lower today. what that means to the company's future next. and wall street was under attack during the first skrat tick presidential debate. barney frank and larry kudlow go head to head on how worried investors should be if dems hold on to the white house.
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let's begin with an earnings alert on schlumberger. >> the company reporting earnings of 78 cents a share. so a beat on the bottom line. revenue came in light. $8.47 billion versus the expectation of $8.55 billion. the company referencing the drop in rig activity as well as reduced growth in chinese demand as some of the head winds. this is an energy player that
has been suffering from the drop in energy prices. the stock is down 18% over the past six months. you can see in reaction today's -- today's earnings report the stock down spooint 3%. >> shares of valeant pharma plunging after being subpoenaed over its drug price hikes. >> it really seems to be coming from all directions from valeant. i got those subpoenas from the attorney generals of massachusetts and southern new york. also responding to a letter from senator claire mccaskill asking about the drug price increases on a couple of its drugs, heart drugs, older drugs, the company acquired them earlier this year, raised the price business 200 and 500 plus percent. hospitals like the cleveland clinic saying this is costing them $8.5 million of unexpected extra costs. so they are trying to figure out both what went into those pricing increase decisions but also the attorney general's
office is looking into financial support that valeant is providing to patients trying to figure out how that's working. >> so food was really interesting. valeant down 5% but the biotech space which i would think if anything was lapping on the pricing front was affected was rallying. patient access. explain what's going on here and is it just valeant who is trying to pay people to say if you can't afford our drugs we will help you but now it's running into problems with that. >> a lot of companies have please patient assistance program, especially the big ones have these. i talked with bernstein's ronnie gal about this. he says right now it looks like the attorney generals are fishing around, trying to see if anything is going on here. it is legal to help patients with their copays if they have private shoornt but when you get into trouble is when you have medicare or other government insurance programs. companies can pay into charities but there can't be any direct connection through that. the attorney general is poking around finding out how that works. >> me go, how much do you think that this reaction to the stock
price is sentiment on how it soured so much since hillary clinton put out that first tweet versus the monetary impact of 5% of their total revenue -- this is 5% of their total revenue. if they cut prices 50% that's less than 5% of earnings to valeant. how much is this really just bad sentiment, bad timing? >> that's a great question. i think a lot of analysts are saying now is a good time to buy valeant. ronnie gal said maybe i would hold off for three months to see what happens with this investigation. most analysts are supporting the stock. there is a a lot of sentiment. folks are worried that that goes after something that underlies valeant's business model. other people are saying there are other things it does and not just about price increases. >> who else is susceptible, who -- especially on. patient access front if this is pretty widely practiced is there any indication they might more seriously crack down on being able to do this? >> typically it's been a point of pride for these companies
that they provide help to patients, however, this is kind of also seen as a way of them being able to keep the drug prices high because they alleviate any stress you would see on patients. where you might see pressure is in other companies that have this business model of making acquisitions and raising prices without doing anything. obviously there is turing pharmaceuticals but other public companies like horizon does this a lot, too. that's where folks are honing in potential problems. >> the pharmaceutical industry will ever get around to pushing their case when it comes to world trade and why is it that japanese people, german people who are very, very well off get subsidized and very cheap drugs because their governments say to the pharmaceutical companies, that's t we are just not paying so we americans pay for all the r & d that happens in the world. it's not right. >> that's an interesting question. the industry started saying maybe we should be communicating better, especially on the hepatitis c idea where people were pushing back so much on the price of that drug, gilead's
drugs, a lot of folks are saying they need to communicate what this drug is doing, how it's helping patients and why they set the price there. i'm not getting at your point that we pay more in the u.s. than other countries but it's tied into the same idea. >> potentially getting less protection under the tpp and some of the provisions there. >> meg, thank you for now. i expect we will be hearing more from you shortly. fair knows founder elizabeth holmes will be on mad money tonight at 6:00 p.m. if you haven't read this article get to it. a scathing report claiming the company is struggling to make its revolutionary blood testing technology work. you don't want to miss this interview it's all coming up and we may have further reaction tomorrow as well. a key market index hitting panic levels for the first time in four years. could that be a buy signal for this market? the justice department probing whether fan duel and draft kings, their advertise something everywhere, should be considered illegal. that is coming up on the "closing bell." my language skills,
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for over two centuries we've supported dreams like these, and the people and companies behind them. so why should that matter to you? because, today, we are still helping progress makers turn their ideas into reality. and the next great idea could be yours. welcome back. more earnings to get to. amd with our seema mody. >> let's take a look at amd. shares are moving on the back of it's earnings report, reporting a loss of 17 cents versus the expectation of a loss of 12 cents. revenue beat expectations $1.06 billion versus the estimate of $996 million. that represents a 13% quarter over quarter jump in sales. in addition to reporting earnings amd reporting -- or
announcing a joint venture agreement with nan tong few jit sue. they have have an 85% ownership of this jv which will result in paying amd approximately $371 million in carve cash. traders focusing on this announcement as well as shares, they were slightly higher in after hours trading. this market slowly finding its way back from the august lows. a key market indicator hit panic levels back in september. now it's at a level which indicates a strong rebound. we could still see another panic. what does all this mean for markets? we will talk to the man who developed thin decks, jonathan willmod, welcome to post 9. >> thanks. >> all the way from mon don. >> great to be here. >> are you worried about another panicky selloff? >> if depends on the fed. >> why? >> it's actually very strong he can keys of 1998 when i invented
the index, in fact. if you remember greenspan said i think it was america cannot be an island of prosperity in a sea of difficulty. i think that applies right now. so i think the fed would do well to wait until the global economy is looking better before they actually go ahead and raise rates. >> what evidence is there that the global economy will strengthen from here? >> the first question is china on everybody's lips. my view on china is simple. i think things have changed there a bit, over the last 18 months or so they cared more about reform than growth. now i think they need a bit more growth to carry on with reform. >> are they going to get it? >> i think they're positioning to get it. >> how? >> mostly through conventional monetary stimulus, a bit more fiscal measures. you saw how the markets reacted to hints that there was some more ease to go come. i think we're going in that direction. >> can we bring up the chart that shows the index or the panic level. we can see where it is right
now, it's clearly been in far worse polices than where it is right now. >> absolutely. >> so is it basically are you still getting back -- i think of the indexes as things that timing traders will look at, okay, we have hit such a low level, contrarian moment, let's go in. that tells me we haven't panicked enough at this point for it to be an obvious buying opportunity. >> it's not the biggest buying opportunity, we were in buying for two days, we kissed panic we didn't reside that tl. >> was that the loss that monday morning? >> the end of the month, the last of the volatility sellers, i think. back in '98 we were in deeper panic but we recovered strongly because global growth did. >> and u.s. growth was quite strong, too. what do you think now about u.s. growth spros spects and the fed holding off potentially as both you and the markets seem to be indicating? >> i think the slow down in the u.s. and the latest stages are a soft patch. i still think with the investors i speak to china is the number
one concern. there i think there is a bigger story which people are missing, actually, which is some -- what they've been doing over the last 18 months, i call this chains alexander hamilton moment. >> hamilton is big right now in new york so your time something good. >> this is fascinating because i think if you look at what they've actually done in the last year, they've been -- it's the central government taking on the debts of the local authorities, the states, if you like, in return for more discipline and control over their spending. the other piece of that to make that work in the long run they are going to create that large central government bond market that one day might rival the treasury market. >> what kind of growth are you expecting in china and do you think we are going to get further monetary policy changes from the ecb? >> okay. two questions. the answer is i don't look at the gdp figures, i look at things like production and stuff like thand expect production momentum to pick up end of this year going into next as they
commission some new projects and stuff. >> okay. >> and so in gdp terms that will probably take us above 7 for a while towards the middle of the year would be my guess. >> finally with regard to the european central bank? >> well, if they need to they will do more. if i am right and global growth improves, then not only will the first rate hike by the fed be possible, but it will be bullish for equity markets not bearish and the ecb might not have to do more, but if things go badly, they will be doing more. >> we all hope you are right, jonathan. thank you so much for joining us. >> thank you. >> time now for a cnbc news update let's get over to sharon epperson. >> scottish and u.s. investigators have identified two libyan suspects believed to be involved in the locker bee airline bombing almost 27 years ago, they killed 270 people in scotland. they are now seeking the assistance of libyan authorities to interview the two men. 11 freight cars have
derailed in east texas including two tankers carrying sul fewer rick acid. none of it spilled and no one was hurt. the derailed cars were part of is a 115 car union pacific train. california governor brown joining the california plug in electric vehicle event in los angeles. he defended the state initiatives for high price luxury electric cars. those incentives can cut the cost of those cars by thousands of dollars. atlantic city casinos rose by 11% from a year ago. the slim down market with four fewer casinos can is working in their favor. the casinos won $230 million from gamblers. that's kns cnbc's newspaper update at this hour. >> sharon, thank you. sharon epperson.
coming up, leftist leader of one emerging market is being forced to turn to the private sector to help fix his country's dme. plus, wall street, not republicans, seem to be the favorite target of democrats during their first presidential debate and these two gentlemen right here before me heading to post the, barney frank and larry kudlow will join us and talk a little bit about whether that n fact, is a winning strategy. right after this. stay tuned. mornings. wonderful, crazy mornings.
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to give you the best experience possible. because we should fit into your life. not the other way around. welcome back. let's take a look at how we finished the day on wall street. it was a positive session. the dow was up 217 points, paced by financials despite a miss from goldman this morning it and rival jpmorgan up 3%. the s&p up 29 points, good for 1.5%, the nasdaq up 1.8 with some biotech names strong. again, a lot of speculation about whether delayed fed rate hike may be playing into this positive sentiment. wynn is down 2.5%, schlumberger a little weaker as well and advanced micro up 2%, you heard about that stake by china as well. greek on yum! brands, seema mody what cuts? >> yum! brands a poising keith
middle easter to the board of directors. it expands to 14 members. mr. middle easter will be included in the company's slate of nominees for election to the board at the 2016 annual meter of shareholders. mr. miesder is one of yum!'s largest shareholders. yum! branlds appointing keith miester to the board of directors. the presidential candidates who debated each other this week seemed to speak with one voice when it came to their disdain for wall street. take a listen. >> the greed and recklessness and illegal behavior of wall street, where fraud is a business model, helped to destroy this economy. >> i represented wall street as a senator from new york and i went to wall street. in december of 2007 before the big crash that we had, and i basically said, cut it out.
quit foreclosing on homes. >> the people of this country need a president on their side willing to protect the main street economy from recklessness on wall street. >> joining us now barney frank and larry kudlow. both here sharing the set at post 9. welcome, gentlemen. barney, mr. frank, the most striking quote of the night to me was barney sanders saying fraud is the business model of wall street. do you disagree? >> yes, i disagree. i think that that's very much exaggerated and it's wrong. there was fraud, there were abuses but it's not the business model. wall street, the financial community, plays a very important role as the intermediary. i do think that for a period there the means were becoming more important than the end. that is, the end being to finance the private sector and the means, people were making too much money off that and
there were some elements of fraud, i don't think the fraud was the basic problem. i think there were changes in the incentives that came from secure zags being carried to excess. >> larry, you heard the whole tenor of the debate. >> i heard what i'm going to call them chairman frank now and i think you are did on right and it's a pleasure to have you say that. >> thank you. >> i think to accuse -- look, there were some bad apples, barney is right, we know that is correct in fact, i think they should have been prosecuted individually, still do, but to blame an entire profession of people who are in the main good people, hard working people with families. i have been on wall street 20 years, that's just stupid. >> is it a government owned congress. >> they wish they d but come on. >> when i was go b. to become chairman, let me say in favor of our financial system, mike bloomberg got a report that said
if we didn't drastically change our way of doing things we would have no more ipos. i urge people to go back there, they all were going to go to hong kong. america has become a major place for ipos and it is because investors understand the integrity of our market. the other point is to who owns the government, i encountered during the financial reform fill a lot of important and heavy lobbying, they were in their own from the realtors, the community banks, the community banks i will tell you situated as they are all over america and everybody's district outweigh goldman sachs and jpmorgan chase 100 times over on the influence they had on that bill. >> is this just politics? >> for what it's worth sometime britain, the labor party tried this in britain and lost and did not attack wall street or the london stock exchange. another point that does trouble me, we may disagree on this, the candidates talked about a lot of
free lunches yesterday or whenever it was, spending on expanded entitlement, free debt and free colleges. the wall street college has totaled it up for mr. sanders, $18 trillion. both he and ms. clinton said we are going to raise the money from millionaires and billion bl flares and wall street. there's not enough money to cover that kind of spending. >> $18 trillion. >> middle class people know when you hear politicians say we are going to tax the rich to spend, the middle class is going to -- >> first of all, i disagree with that, yes, there is an exaggeration there, they weren't just saying wall street, but here is the deal, when bill clinton was president i voted for a bill that raised taxes on upper income people. secondly there is another source of revenue. one of the things that we are seeing from the republican
candidates is spending unnecessary tens of billions a year on military interventions that wind out not in many cases being successful. >> isolation nichl. >> i'm for what barack obama did in liberia. we are talk being military intervention. there is a lot of ways to be involved without being isolationists. if you look at the difference. the democrats will save tens and tens of billions of dollars a year by inn not increasing the military. >> i disagree on president obama's foreign policy. i want to come back to the earlier point. bill clinton particularly in his second term was not a spender, he was a good president working for newt gingrich and a republican congress. the upper income taxes were raised. >> and not the middle income. >> he wasn't spend.
>>ing. >> he was balancing the budget with kasich. >> president clinton colored it by 8 percentage point, hillary clinton wants to double t she is against the pacific free trade act. we haven't read every detail. >> because we can't. >> her husband was a good free trader. what i'm saying is my opinion bill clinton was basically pro growth, so far mrs. clinton is not. >> can i ask you, larry, when clinton was running for reelection in 1996 or afterwards, i'm saying -- here is what i'm saying, among my republican friends tend to be somewhat approving of democratic presidents reit activity. there are a lot of republicans who love dead democrats, they love harry true man. >> i love harry true man. >> i have to go. let me just ask you -- >> i'm writing a book about jfk. >> how long does it -- >> it was a very close call. >> you voted republican. >> how long does a democratic
president have to be dead before you will talk nice about him? >> let me ask you before we go how much of tuesday night ease rhetoric is going to be a reality for whomever the democrat is in the white house if it is a democrat in 2016? >> well, much of what hillary clinton says will be reality, did depends on how you have in congress if the democrats take back the senate it's unlikely in the house they would give her more leverage. some of what she's talking about wall street shunned staunt u. understand and i approve of this not to do glass-steagall which is going back 80 years but some increased regulatory powers over some aspects of this which she could do by executive order. >> look, she beat up on republicans in the debate, i get that, i staurnds that's a debate. republicans are going to keep the house and they have a very good job much keeping the senate? >> are you going to be speaker? >> i am not going to be speaker. the next president has got to learn to deal with congress in the way this one hasn't. >> the republicans in congress have to learn to deal with each other. >> you two are dealing with each
other that's got to be a promising sign. thank you for joining us at post 9. means a lot. barney frank, larry kudlow, that's your up front page equivalent picture for tomorrow morning. it's not just major oil companies that are feeling the pain, up next michelle caruso-cabrera spoke with the president of ecuador about how lower oil price right side affect that go company's economy. the details after this.
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let's start with seema mody and a quick market flash. >> kelly, ptc therapeutics sinking after hours down over 20%. the company's experimentsel muscle disorder drug failed to meet the main goal in a key late stage study. it faltd to show a statistically significant benefit over placebo in a trial with patients with muscular dystrophy. data from all trials on the drug supported its u.s. marketing application. that stock down 16% now in after hours. >> ouch. a stuff one. >> the fall in the price of oil helps the american consumer but hurts oil producers. add to the list of countries suffers body blows to their economy he can with with a do remember, they produce half a million barrels of oil a day. michelle caruso-cabrera sat down with the company's ept and more on what they are doing with this. >> their oil revenues plummeted more than 55% in the first six
months of the year, $49 per barrel their budget was based on the fact that boil would be under $80 a garl. as an avowed leftist he firmly believes in state-directed bend spending, government spending as a percentage of gdp over 40% according to the heritage foundation that's up from roughly 20% in 2007 when he came to power. when he was in town recently to meet with potential investors i asked him point-blank didn't you just spend like crazy during the commodity boom and now you are running out of money, is that correct? >> that is one of the misinformation that we receive because it's not true. we invest a lot. that is different than to spend a lot. we have the highest public invest in the region. >> i think we lost audi for a second but he said that, you know, it's not spending, it's
investing. they have a lot of hydro electric plants, et cetera. bottom line according to the committee for protection of journalists you can see it on the website what we discuss -- sorry. >> technical issues going on here. just to go back for a second to what he's saying, using this, oh, we are investing a lot and this is -- you know, we are focused on the long run. how long has he been running this country? >> since 2007. he has been reelected three times and he is trying to get the congress, national assembly to change the law so there will be no term limits whatsoever. it has raised concern among people in the country and external people as well. >> i wonder what he is market to go potential investors. basically this is why i guess we are seeing these headlines, oil could rebound sharply and if it does we're fine. >> exactly. i asked him point-blank, what are you telling its investors when you are here? he said it's a great place to
invest, we have public and private partnerships. i said what about all these issues? he decide there were issues and couldn't articulate a clear vision about why it was a much more investor friendly environment. >> did he talk about what investments he was most excited about. >> the eight hydro electric plants that will come on in the next year, he says he has had bad luck with the fall in the price of oil. if only it had happened next year he would be in a better position those plants would be generating revenue. >> still not enough on his own to get the oil price back up. whether there is nor coordinated action that is the big question for people piece days. the days of self-regulation may soon be over for sites like fan duel and draft kings. the dod has advanced an investigation and the details are next.
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they spent last night and this morning trying to figure out if they could price tonight. hopefully, in their eyes, at least $20 per share level. the deal went out with a price target of $23 to $26. the momentum yesterday in light of the walmart store's renewed guidance that was negative was more like $17. essentially the deal sponsors weren't going to settle for that. they wanted a $20 price point. they are considering releasing updated financials as one way to improve investor comfort. they believe their perspective is valid. kroger which people consider to be a good comp to albertson's had an uptick today. general stock market conditions. optimism on this deal here. not clear if this market will
tolerate anything less than an exciting and good fundamental story. >> it's unfortunate timing they were going to pick the very day walmart comes out with this, you know, huge announcement. we just don't see days like that for a stock like walmart that often. i wonder now that it's happened, has it poisoned the well for albertson's or is it just going to be a distant memory by the time they look in the next couple of weeks to try it again? >> having talked to people involved in the deal and investors, one issue is the walmart retail story. to be fair to albertsons, the price momentum was around $20, $21 prior to yesterday when it sunk to more like $17. walmart did have an impact. on the other hand, albertsons is its own story. it's combined a number of different grocery store chains including safeway. a lot of people are not optimistic about grocery and
stories like that in general right now. that's another issue. >> tough environment for them. we'll keep an eye on it. thank you very much for the update. kate kelly with the latest on albertsons ipo. >> are fantasy sports leagues a game of skill or gambling? that is a question plaguing regulators and the fbi is launching an investigation. i'm here at the td ameritrade trader offices. ahh... steve, other than making me move stuff, what are you working on? let me show you. 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. to build something smarter. ♪ some come here to build something stronger.
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fantasy sports leagues under the regulatory microscope. the feds are getting involved. what can you tell us? >> reporter: "wall street journal" and "new york times" reporting that the fbi started to make inquiries into these fantasy sports leagues contacting some of the biggest players in the space trying to understand what's going on. let's tally up for you what we know as of right now about all the different investigations into these fantasy sports leagues like draft kings and fan duel what we know right now, media reports are that the fbi is contacting players in the space. we also know that the new york attorney general is probing this question of inside information by staff members of these leagues, whether that was taken advantage of in any of the game play here. also we've got potential for hearings up here on capitol
hill. democrats traditionally more eager to investigate. republicans might want to hang back. not so eager to regulate in this space. just as a matter of disclosure, comcast ventures and nbc sports ventures have stakes in fan duel. this is a big and growing industry with a lot of money flowing through it. >> you cannot watch tv, you can't walk through boston without being plastered with these fan duel and draft kings ads. companies are walking back a little bit. the question goes to is this legal or not? >> is that the bottom line question? that they are looking into? will they get the s.e.c. involved and put this under insider trading or something like that? >> this is legal under current law. the question is whether or not any fraud or misappropriation of funds is going on. if people inside the organizations are using what they know about how the drafts
are set up and what's going on with the athletes each week then somehow profiting off of that perhaps by betting on other sites. you could see an argument made there is fraud there. they have to understand that clearly. >> how do they not have a mass exodus. >> this is a make or break moment for the industry for that reason. a lot of people have gotten this bug over the past year or so. this is a brand-new industry relatively speaking. the question is whether you can give those people confidence that these games are honest and real. the sports leagues themselves have spent generations trying to keep gambling out, trying to keep organized crime out. all the things associated with that. these guys are going to want to do the same thing if they are going to have the same trust. >> why wouldn't it be real if there are individual employees who see all this information and bet on it? that doesn't mean the information or other betting
going on isn't real. >> the only question is whether or not people have confidence that they are getting a fair deal here. that's what consumers want. >> they keep winning in those commercials. thank you so much. >> they always win in the commercials. speaking of gambling, wynn struggling down 8%. time for "fast money" monitoring that conference call with melissa lee and the gang. >> thank you. "fast money" starts right now. live from the nasdaq market site, i'm melissa lee. tonight on "fast" walmart and target getting hit again today. sud amazon be worried if walmart engages in a price war of its own? kfc parent company yum! brands announcing a big board change after the bell. why deinvestors are devouring shares. market climbing 217 points, above 17k. the s&p gaining