Skip to main content

tv   Closing Bell  CNBC  October 26, 2015 3:00pm-5:01pm EDT

3:00 pm
announced its uber rush program in new york, san francisco and chicago, amazon has a same day delivery options and its own handmade story. >> i guess we will see. >> we will have to wait and see. >> i always have last minute birthday gifts that i forget. >> thank you very much. brian. >> share ration thank you. we will see you soon. thanks for watching. "closing bell" starts right now. >> hi, and welcome to the "closing bell," everybody. i'm kelly evans at the new york stock exchange. >> and i'm bill griffeth. valeant pharmaceuticals now firing back finally at the short selling firm comparing it to enron. the company says that there is no evidence of any illegal activi activity, but are shareholders buying their argument? we have details on valeant as it continues to get slammed. >> the pharmaceutical sector has fallen 11% since early august.
3:01 pm
we will hear from one asset manage who are says now is the time to buy into this beaten down industry. >> where is the broader market heading as we wind down here. >> we're winding down the year? it's only october. christmas is around the corner. morgan stanley's adam parker and david rosenberg will weigh in with their view of what happens as we make our way through the fourth quarter. >> uber seek to go raise another billion dollars and you won't believe how much that could put the company in terms of valuation. details coming up. let's get to our "closing bell" exchange with the dow down 30 points and we have had some economic data out this morning, a lot of cross winds in the earnings arena as well. anthony chan from chase is with us here at post 9, so is kenny polcari and our own rick santelli joins us. here we are again not a lot going on for the major averages. there are certain individual stock stories certainly but overall the market just me and
3:02 pm
rings here. >> it's meandering today but it wasn't last thursday and friday. we had this big move -- listen, we are up 11% off the august lows, and remember in august it was all doom and gloom, the end was coming now we are closer to the highs than we are from before. action like today when there's mixed data, there's mixed macro data, new home sales and dallas fed comp numbers were disappointing and all of this talk about more stimulus coming from central banks around the world, we have fed on wednesday, people are biding their time. >> anthony, what do you make of it? >> i'm encouraged by the fact that market volatility since august has come down dramatically, whether you look at the reasons for, the shanghai equity market index in china has stabilized and we also see there is less enthusiasm for a fed rate hike going into the end of the year. >> is the stock market with this come back that kenny was describing trying to forecast a stronger economy or just more monetary ease sng. >> i think it's a combination of all these things, but remember
3:03 pm
that when you consider what was bothering the markets in august, it was global financial market instability and if the european central bank is ready to do more, bank of japan is ready to do more and the federal reserve might be willing to wait a little longer that should soothe a lot of concerns. >> also soothing concerns, what's happening in the energy space, if it weren't for all the companies directly exposed to creating energy in this country the mere fact that oil continues to drop the way it does, prices at the pump are catching out now and natural gas could go below 2 bucks for the first time in years. what do you make of it all? >> terrific news. wonderful. i want to hear that he ever day, it's just a shake that we've put all our marbles in things like electric cars when dual fuel natural gas and unleaded gasoline cars where consumer could switch a button, i've installed them, they run per rifk, too bad america can't more directly share in that.
3:04 pm
maybe that will change over time. here is what i see. who things be better for housing since the crisis? we have a federal reserve who has cemented, super glued, nailed the rates to zero, what's wrong with housing? down 11.5% on new home sales, a little over 500,000, go back about ten years it was just high of 1.4 million. so the notion of what drives housing is much more of a credit availability and a cultural change into renting where all the inflation seems to be hiding but atlanta fed now at 0.9 of 1%. all these central banks are willing and able for more stimulus. why? why? see, that's the real question. why? because the current growth is insufficient. >> in the third quarter we know we have an inventory over hang. of course it was disappointing down 11.5%, remember, that's 10% of the share of the housing
3:05 pm
market. when you look at total new home sales and total existing home sales for the month of september they were still up 3.2%. probably existing home sales are ruling the day and telling us more. when i look at the national association of home builders, that's where the rubber meets the road. they are at the most optimistic point in the last ten years. it tells me that yes this was disappointing but i don't think it's a sustainable trend. housing is going back up. >> i'm not so -- i've got to tell you i think there is a mind shift in housing. i think you've got a lot of the millennials, the generation behind me that are really look to go spend more time in the city, live in the city, they don't want the big house in the suburbs, they don't want to cut the lawn and make care of the pool. i think there is a shift. >> that is true. >> i think there's going to a big shift in housing. >> what do you make of sam zel selling his huge home portfolio today. he has been bearish on real estate but did acknowledge that the tide was shift ag way from him, sold a bunch of office properties.
3:06 pm
keby, what they see happening is so many new especially suburban apartments coming on line, vacancies will be an issue. >> i think that is very true. the younger generation behind me they want to be in the city. listen, i live just in northern -- i live in westchester north of the city, housing by me still struggling. those are suburban homes, lots of land, blah blah blah, strug snoolg sales in the northeast were down 61%. >> looks what's in the northeast, new york, connecticut, jersey, the financial capital of the world is really here and it's been forever slaughtered after the crisis and what's happened in our industry. i haven't seen it. >> part of the reason why you have that plunge in new york city was due to a regulatory change that they were going to make in the latest month. part of that is that. in terms of residential investment it was growing more than two and a half times faster than the overall economy in the first half of the year, whether it's apartments or houses, residential investment is a force to be reckoned with in
3:07 pm
this economy. >> so is the consumer. >> if this persists, rick, do you sense now that the chinese are being more aggressive with their quantitative easing that we are heading toward yet another leg of majorieesing by the world central banks and could we see another rally for equities down the road? i know that's not your primary focus but that seems to be what's jump starting this market lately. >> i just don't see what's going to derail stock market rally. it's not going to be continuous or without its bumps and bruises, but for the most part all of our arguments about the dooms day scenario still in my opinion equities are somewhat away from that argument. listen, the world's liquidity among those that are investing isn't necessarily going to change when bad things happen. i continue to say that we could put a positive spin on a lot of things. i know friends that can't afford ferraris so they talk down ferraris.
3:08 pm
you can't afford a house you might talk up apartments. but in the end these things have changed post crisis and growth is lackluster. we could put as much lipstick on it as we want, those are the facts and we can kind of work in a world of denial, yeah, it's great that we are building a bunch of rental properties but it isn't the optimum choice and certainly isn't what central banks thought would happen after they pushed interest rates down to zero in 2008. >> all right. >> thanks, guys. appreciate all your thoughts on today's market action. >> let's get some details now on val yebt's conference call. meg terrell has been listening in. what are you hearing? >> it was a big morning for valeant, a few of the key points, valeant coming out strong, coming out strong against sit ron research. valeant working with outside counsel the call to the sec to investigate that short seller sit ron research and its founder. the board coming out early reiterating unanimous support for ceo mike pearson.
3:09 pm
confirming the appropriateness of the accounting around that specialty pharmacy, but also saying new allegations about the way it does its business and some of its practices it will reveal the business practices and fillidor operations. >> fill yant details that ownership option or the option option to buy part of philidor. now, folks are wondering why they didn't disclose that and the nature of an option to purchase something you've already spent money for and then it won't cost you anything else. skroefr hang on the shares of course remains pending the outcome of this outso many into philidor's business practices and the government investigation noose valeant regarding its pricing and its patient access programs which all ties into this. still a lot of questions remain despite annual is e. lists saying they did a good job
3:10 pm
regarding the accounting practices around philidor. >> sit ron research not backing away from its claims, continuing to go after this company and insist the government does as well. >> what people are worried about, maybe not the fraud claims here, but just what else investors don't know and when the next shoe will drop. the next short seller report and what that's going to be about. what people have been saying is there's so little understood about this specialty pharmacy network, will r. there other aspects of their business they don't understand. >> for now, meg, thank you so much. our meg terrell with the latest on a company many in the space will say is a financial company not a pharmaceutical one. that model under more scrutiny than ever. >> dow is down 20 points, same for the s&p down about 3rks the knack dak slightly pos i have, up about 3 points. >> what a busy week this is going to be for earnings. tomorrow, for example, apple and twitter post their numbers, a
3:11 pm
leading analyst will tell us if he's expecting hits or misses and how he's playing those stocks right now. that's coming up. plus two wall street heavy weights will be here, adam parker tells us why he likes financials and david rosenberg says airlines could be the ticket to big gains. stay tuned. when you're not confident your company's data is secure, the possibility of a breach can quickly become the only thing you think about. that's where at&t can help. at at&t we monitor our network traffic so we can see things others can't. mitigating risks across your business. leaving you free to focus on what matters most.
3:12 pm
3:13 pm
[female announcer] if the most is the staying awake part, day sleep train has your ticket to a better night's sleep. because when brands compete, you save during mattress price wars. save up to $400 on beautyrest and posturepedic. get interest-free financing until 2018 on tempur-pedic. plus, helpful advice from the sleep experts. don't miss mattress price wars at sleep train. ♪ sleep train ♪ your ticket to a better night's sleep ♪
3:14 pm
kelly, we mentioned the major averages aren't doing a whole lot, but kelly mentioned earlier natural gas, have you seen what it's doing today? now down 8.7%, you certainly hope it bodes well for heating costs this winter. chesapeake downel%, anadarco down 4. >> and this is the ultimate double whammie for some of the energy names who saw the first shoe drop with oil prices and now the second shoe drop with natural gas prices. >> on a supply gut that's for sure. we are awash in natural gas right now. >> it's also a big day for apple relaunching a product that analysts say is more important than an ipad and microsoft
3:15 pm
opening a flagship store in new york city. >> julia, what's happening with apple? >> kelly, the new and a improved apple tv is available for pre order today. while it's projected to add 1% to apple's revenue according to piper offfree it is a key play for the growing farkt for streaming video. apple is in third place with 13% share of households with streaming media devices following roku and google chrome cast. we will get the latest on the sales of all of apple's devices within they report their earnings after the bell tomorrow. >> we look forward to that very much. let's send it over to morgan brennan on this flagship store that microsoft has opened in new york city. >> this is the opening day of microsoft's first flagship store, this is a glass covered
3:16 pm
five story destination in midtown manhattan on swanky fifth avenue just a few blocks from apple's own nyc flagship. the new retail location spans over 22000 square feet, it's the company's largest so far of 113,000 stores, there's tech support for customers and displays including the not yet for sale hollow lens. it is focused on boosting direct hands on contact with consumers and the store opens just as new products go on sale including the first ever laptop the surface book. >> morgan, thank you. julia, thank you. microsoft among other big tech names including alphabet and amazon have reported quarrel earnings that beat expectations. we are waiting for apple whose numbers are due out tomorrow. >> getting used to saying alphabet that's just weird. what should we expect from the next wave of earnings? joining us is irwin fine stuff.
3:17 pm
what do you think still to come from some of these big names? >> i think apple is going to have a very good report, i think they are going to have strong iphone results and i think they are going to continue to announce additional return of capital to shareholders to increase buy back an dividend increases. soim -- overall i'm very optimistic. >> ivan, so many people are focusing on how many iphones they will sell. what's the break number for new at what level do they report a number that you say, forget t i can't buy apple shares here? >> i don't really focus on the number of phones, i focus on the overall profit they make on the phones. i still think the phone right now the estimate is around 92 or something around 90 million phones already, it started off very strong. the launch of the 6s has been the best launch they have ever had. each new iphone has sold better than each of the iphones prior. i also think the apple watch will be the number one requested gift this holiday season.
3:18 pm
i am very bullish and optimistic on the apple tv, especially as an app platform. i think they're hitting on all cylinders and will continue to perform well. >> some of the themes they're watching is this migration -- you know, to the cloud. mobile. i think of an ibm that has stumbled, their sales are still going down even as they attempt this transition to the cloud and other types of services. who is going to dominate there? whar your expectation those areas from the companies that are yet to report? >> i think google and i still would call it google even though now it's alphabet, amazon, microsoft is starting to have a better showing in the cloud, i think that they will continue to dominate. as far as consumer or individual access to as communication over the cloud, i'm very bullish on facebook, i think facebook is the best platform for sharing experiences, for communication. so i also am bullish on
3:19 pm
facebook's earnings later on in the beginning of november. >> let me go back, ivan, for just a moment to apple. you mentioned them pulling a couple of levers in terms of increasing the dividend or buy backs this quarter. what expectations exactly do you have and what happens if they don't do this? >> well, if they don't do it will be disappointing, however, they have the -- they are never going to use all the cash they have and they continue to generate record amounts of cash of over 50 billion a quarter. they have to accelerate the return of that to shareholders which is part of what will drive the stock price higher. they increase their return on capital which to our firm is the biggest driver of shareholder value creation. so the more they contract their balance sheet the more the return goes up. the more cash they hold that dill luds the return. it's a very important aspect. >> just briefly here in the market today apple is down about 3%. some of it the buyers are as
3:20 pm
well on the report overseas about potentially falling short for one of the key suppliers of revenue numbers. are you reading anything through from this, from the reaction in the stock market today? >> other than i think it's an opportunity to buy apple, i think it's an opportunity to buy sky works, to die corvo and a number of suppliers, no, i think even if the reaction in the stock is negative, i believe the report will be positive and stock -- the apple -- apple as a stock is so unbelievably cheap i think it will over time continue to go higher. >> twitter reports tomorrow, should we consider that ancient history since that's before jack dorsey was named the ceo and starts to clean things up or will that give us a sense of whether they can begin this turn around or not. >> i'm not sure. we're neutral on at which time, we have a strong buy on apple. i think twitter has a great brand name, tinning does a great job of engaging users but what i'm not seeing them do is create
3:21 pm
revenue and make money. we are going to have to see how somehow they engage the users and engage the advertisers. that is going to be the key thing. >> still in the show me phrase. all right. >> yes. >> thanks, ivan. good to see you. >> thank you so much. >> we have 40 minutes left in the trading session here, really the major averages aren't telling the story today, down 23 points on the dow right now, some of the features of course we have already highlighted some of those and natural gas in the energy sector and oil continue to move lower right now. >> just extraordinary moves. coming up, an amazon exec explains why they have a better solution for mobile payments than apple or google. >> whole foods is lower after a recall across several states. we will have details on that when kelly and i come back after this. (patrick 1) what's it like to be the boss of you?
3:22 pm
(patrick 2) pretty great. (patrick 1) how about a 10% raise? (patrick 2) how about 20? (patrick 1) how about done? (patrick 2) that's the kind of control i like... ...and that's what they give me at national car rental. i can choose any car in the aisle i want- without having to ask anyone. who better to be the boss of you... (patrick 1)than me. i mean, you...us. (vo) go national. go like a pro.
3:23 pm
awe believe active management can protect capital long term. active management can tap global insights. active management can seek to outperform. that's the power of active management.
3:24 pm
welcome back. about 35 minutes to go here and the nasdaq holding on to some positive territory. the real session as the dow and s&p are slightly negative. consumer discretionary again outperforming the top sector up nearly three-quarters of 1%, healthcare is next. on consumer discretionary aside from some of the company
3:25 pm
specific stories that have been a catalyst lately i have to go back to energy, the worst performing today down more than 4%, at some point you expect gas price relief at the pump, maybe relief in heating bills to be a boone for the holiday season. >> you would think so. we will see. we have other movies to tell you about as well. whole foods is lower today, the organic grocery chain recalling bulk and packaged curry chicken salad and sandwiches plus deli is a lads from maine to new jersey after a recent sampling tested positive for listeria. >> panned dra is surging. an list raising them from neutral. she says pandora has several growth options that can be used to monetize its user base. that stock is up 5.75%. >> companies big and mall are rushing to make their mark and disrupting the financial
3:26 pm
services industry. more than 3,000 of them are gathering in las vegas for a money 2020 conference. >> mary thompson joins with a man who is spear heading amazon's efforts in the payment space. yet another payment service here. mary. >> that's right, bill. thanks so much. we are here with patrick goatee a who is president of amazon. amazon has a bit of a checkered past in payments, they haven't always been successful. so what is behind pay with pack zon that you think might change that track record? >> quite simple. we started from what do our customers need when they shop online. you realize there are many instances where it's a high friction environment. as a matter of fact, on your average e-commerce site only 35% of customers who start check out end the check out. so our customers over the years have already grown accustomed,
3:27 pm
familiar with the amazon experience and trust it and we are enabling the amazon customer to shop at another merchant with that environment. >> let's tell our viewers what you can do with this if you are online shopping at another retailer's site you could use your amazon -- >> your amazon account. you will see a button at checkout that says pay with amazon, you click on it and now you are executing exactly the you would on amazon what would make another retail who are would be your competitor decide to use your payment service? >> well, many retailers realize that the best shoppers online actually buy on amazon and have this relationship of trust and familiarity. when they integrate this experience with their site, which does not take away anything of their experience, what it does do is create a better conversion rate and it's really about doing what's right for the consumer and when you do that it's generally good for your business.
3:28 pm
>> i would suggest that it probably wouldn't be found at a walmart site or target site or anything like this. are you targeting smaller retailers and maybe service providers as well with this? >> we're definitely not focusing on the super large merchants because they have a brand of their own, right, and, therefore, this is not where we can add the most value. our sweet spot is merchants that are anywhere between a million and a billion dollars in sales where the connection with the amazon brand helps lift their business and certainly not limited to retail but also in services. for instance today we did a keynote with golf now. great example of that. >> etsy has something similar to this. is this another way you are trying to compete with etsy. >> no, amazon is known for 20 years focusing on the customers. the customer obsession is really at the core of everything we do. so we literally do not create products because of this competitor or that competitor. we create products because we feel it's going to help our customers. >> is this also about the amazon
3:29 pm
prime customer? if they feel comfortable paying with it you are directing some of these customers to retailers an helping to build a partnership there. >> absolutely. that's totally true. as a matter of fact, users that pay with amazon are 61% more likely to be prime users than on amazon site itself. so clearly we are engaging with our prime customers wherever they want to be and that is clearly a very important part of the value proposition. >> patrick, thank you so much for joining snus my pleasure. >> we've been speaking with patrick who is the vice president of pay with amazon. back to you. >> and now we will know the story behind the pay with amazon put ton. great stuff, mary. thank you very much. time for a consumer news update let's get over to sue herrera. >> here is what's happening at this hour. an oklahoma judge ordered a psychological evaluation and set bond at $1 million for a days i can't chambers, the woman suspected of plowing her car into a crowd during a homecoming rally at oklahoma state university. four people were killed, dozens were injured in that incident.
3:30 pm
a gun battle erupted after turkish police raided a house of a suspected cell of isis militan militants. at least seven militants were killed, two others taken prisoner. texas senator ted ruz picking up the presidential endorsement of the state's lieutenant governor dan patrick, the two appearing together at a news conference at cruz's campaign headquarters. his backing is seen as a big boost to his efforts to win the texas primary. an indiana woman is recovering after being shot in the foot by her dog. alley carter had laid her 12 gauge shotgun on the ground without the safety latch on, her dog a labrador retriever stepped on the shotgun and accidentally set it off. the name of her dog, would you believe, trigger. that's the cnbc just newspaper
3:31 pm
date. >> i said i don't believe t we wish the woman well, i hope her recovery goes well for her, it was an accident, but i cannot believe the dog's name is trigger. i just don't buy that. >> it could be. however, it's a labrador retriever, it did step on the gun. maybe -- i don't know, maybe it's just one of those weird coincidences. >> it is just one of those weird coincidences. thank you, sue. >> thank you, sue. >> you're welcome. >> 30 minutes to go. dow is trying to come into positive territory, it's off 16 points, the s&p only down 3, the nasdaq up about 5. >> up next, adam parker standing right there, david rosenberg, they will be chiming in on the markets, we will find out which sectors they think will finish the year with a bang it says here. >> be sure to watch cnbc this wednesday, all the action starts at 5:00 p.m. eastern live from boulder. don't miss a moment. opportunities aren't always obvious. sometimes they just drop in.
3:32 pm
cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances. or the freedom to choose what doctor you want to see. so if you have medicare parts a and b, consider an aarp medicare supplement insurance plan, insured by unitedhealthcare insurance company. like all standardized medicare supplement insurance plans, these let you choose any doctor who accepts medicare patients. you're not stuck in a network, because there aren't any. plus, these plans help cover some of the part b medical expenses medicare doesn't pay. so why wait? call now to request your free decision guide and find the aarp medicare supplement plan that works for you.
3:33 pm
like all medicare supplement plans, you'll be able to stay with the doctor or specialist you trust, or look for someone new - as long as they accept medicare patients. but unlike other plans, these are the only ones of their kind endorsed by aarp. rates are competitive. so call today. and learn more about choosing the doctor's you'd like to see. go long.
3:34 pm
well dock back. lab corp. is among the biggest gainers in the s&p 500 after the medical testing company said its acquisition of covant helped boost revenue by a better than
3:35 pm
expected 46%. earnings ended up in line with street estimates, that stock as you can see up 5% today. kelly. >> all right, bill, thank you. let's look at these markets with less than half an hour to go, i'm joined by steven guilfoyle. a know not a lot of movement on the big indexes. what's happening in the energy space? what do you make of these moves in oil and natural gas? >> oil is getting murdered, the energy sector is getting murdered, you do have british petroleum in the morning which is an interesting play the options are cheap. as far as oil goes i think we can test the high 30s once again. >> going back to the previous lows just as everybody was talk being a rebound to 60 or 70. what happens if we go back there? >> i think a lot of those guys have corrected those positions that's why it's priced where it is. i don't think it's the danger that you might think of. i think this is something that is going time packet the next three to six months no doubt. >> another catalyst coming up, alibaba as as they start to get a slue of tech earnings. what is that going to mean.
3:36 pm
>> you have seen what the internet retailers have done. $3 volatility pricing for the options, the stock has had an $8 range, even if you are wrong tomorrow you have four days to be right. >> if playing it through options. >> which can be expensive if you play it too much but also the cheaper way, it's the lower form of risk. >> the broad markets a little quiet. we have the federal reserve two-day meeting but not expecting much to come out of it. are people saying better safe than sorry. >> you also have the bank of japan this week and we have a lot of macro. we have gdp this week. today is the quiet day. >> the big fish get in after those reports. >> i think you will see three active days this week. >> over to you, bill. >> let's talk about these markets. joining us exclusively for more on that two market heavy hitters, we have with us morgan stanley chief u.s. equities
3:37 pm
strategist adam parker and david rosenberg joining us as well. good to see you both. welcome back. >> we have had a pretty -- he said, stating the obvious, a pretty good month of october for the u.s. equity markets here. i will ask you what i asked somebody earlier, is the market trying to forecast a better economy down the road or more monetary easing by the world central banks? >> my personal view is the markets shouldn't have been down so much in august and early september and we are up 11% if from the lows. earnings underneath that are much more stable. earnings do tend to modestly, you know, lag economic growth and the market tends to modestly lead economic growth itself so you could argue that. i just think people got too negative and things are fine. >> we're playing catch up? >> yeah, a little bit. >> adam, why do you like the financials here? >> one, we have a big bet in the portfolio in credit cards, both
3:38 pm
the value stocks, you know, with discover, amex, capital one and also the growth, everyone likes mastercard, i think the consumer has more money. >> but we are not talking about the money centered banks, the asset management companies. >> we have two prongs, credit cards and a couple of the big banks, on the credit card front you want to play consumer have been more money. it's a fact. if they just use their card you're fine. a lot of those stocks got too cheap in my view, we have a big bet there. the big banks, we have a couple positions there, there is the specter of cost cutting to drive earnings, you see that for bank of america during earnings season. you have a successful c card driving growth in return and you don't have the same currency issues other stocks have. maybe there is a better path to going forward. if rates rise you know where you have to be. i think you're okay and if rates rise you're really good. >> david, what's your view of what's going on in the market,
3:39 pm
why we have had this rally lately? i'm hearing from some money managers that they expect money managers overall to be trying to play catch up through the end of the year and that might move this market higher. what do you think? >> well, i think first and foremost what we've been seeing is a fairly dramatic short covering rally. we have a short squeeze going on. it's probably going to continue in the year-end. we have over 40,000 -- contracts on the mercantile exchange. the market was positioned going into october very bearishly and i don't think the news incrementally got all together that -- you know, that bearish. we're seeing some of that slows in terms of short covering creating the demand. at the same time, you know, when they say that the bond market leads the stock market they're usually talking about high yield spread. if you remember high yield spread started widening in june and july ahead of when the trapdoor opened up in august and
3:40 pm
just over the course of the past three to four weeks high yield spreads have come in about 85 basis points. so you count in that sort of risk appetite coming back into high yield, short covering rally, the shorts coming out of the market and then you have the positive seasonals. i think that sets us up nicely going into year-end. i don't think that the market is telling about the economy because you are not buying the economy when you are buying the stock market you are buying corporate earnings. i think there is a sense of comfort that fourth quarter will be the trough on the earnings side. >> i agree with what he said. he is a smart guy, that he been doing it for a long time. i absolutely agree. some of it's a positioning argument, some of it is just we think earnings probably has tail winds that are underappreciated for 2016. once you start anniversarying the big decline and the dollar euro you could set up that mid to high digits earnings.
3:41 pm
the s&p earnings are growing 4%, flat down 1% now with energy. you have a better setup, big buy back and, big dividend yield a lot of people that are negative and chasing the fourth quarter. that's why we're optimist sniek david, on the market itself being different from the economy or whatnot, you do like technology in particular, is that right? >> i think that a lot of the names both in tech or whether industrials basically materials -- a lot of stock that got beaten up in the correction some of them were priced for borderline recession. all you have to do is not have a recession call and there's tremendous optionality in some of these areas of the market. i think adam hit on a couple things. for example, the u.s. dollar is no longer making new highs, with a lag you will find that impacting positively technology, industrials, the export sensitive areas that have been hit hard. the u.s. dollar was a strong currency, no longer is a strong currency. the fed told us last month that
3:42 pm
the bar for raising interest rates is extremely high, they are out of the picture t means there is going to be some automatic of into the interest sensitive sectors over the next several months. we can debate which which sectors will outperform, how you will deliver alpha but i think there is a broad menu of areas you can probably dip your toes into. >> before we go you are not the first person who has identified the high yield spread as an indicator for the market, but my question is how much of that is distorted by the fed itself and what it's done to the yield curve? can we really look at those as valid indicators when the market itself has got the fed's thumb on the scale right now? >> well, you know, fair comment except what has the fed been buying over the past several years, it's been fresh years, not buying corporate. i'm not talking about the absolute level of where the yields r i'm talking about where are the spreads. you know, the oxygen tent for the market is liquidity, there's different measures you could
3:43 pm
use. i'm not talking about the absolute level of yields which the fed has distorted. they haven't distorted the spread and the spread coming in is telling you the market signal, leading indicator for equities that the clouds are starting to part and it's time to start participating. >> we are bullish high yield, too. at the end of the day you have probably 12-month view according to adam richmond, zero percent down side in the bear case and 8, 9% in the bull case. >> adam, good to see you. thank you. david, thank you for joining us. >> 15 minutes to go. dow down 32 points, s&p is down about 5, nasdaq, let's see if it's still in positive ter toer. the vix is about a point higher on session. we do have several key events, the two day fed meeting, the gdp
3:44 pm
report is going to be a busy one. >> inter continental exchange touching a record high on news that it's buy booig a major financial data firm for $5.2 billion. we have details on that story coming up. mike santelli officially joins the team today. now is your chance to ask him anything. he will be here in the next tower haur with some answers.
3:45 pm
3:46 pm
3:47 pm
welcome back. inter continental exchange touching a 52 week high earlier on news it's buying interactive data. remember, we're sitting here in one of the properties of ice. >> dominic chu has this story about the acquisition. >> how can we forget the fact that we are in an ice building right now. they are the parent company of the new york stock ex change. i'm right here at post 6. this is where ice did trade, you can see the quotes today, down three-quarters of 1%. the more important part about this is being taken over. ice buying a market data, financial platforms company that's going to integrate into its operations across all different types of exchange. $1.6 billion of this particular deal is going to be in ice stock in addition to $3.6 billion in
3:48 pm
cash. they're paying it to two big private equity like companies, so this is a big deal, they're buying it from private equity. this does put, again, ice and this interactive data situation here, it will put them in competition directly in certain markets with companies like thompson reuters and bloomberg as well, but a very big acquisition, one that has the stock halted today, a big deal for this company and the nyse in some ancillary fashion, guys. >> thank you, dom. we will be doing the count down together in a few minutes. 12 minutes left in the trading session with the dow down just 28 points. >> look at that, the nasdaq is now negative on the session as well. up next, joe zoss says he sees opportunities in the pharmaceutical sector. he will tell us what you may want to consider. >> art cashin signaled $400 million to sell going into the close.
3:49 pm
3:50 pm
3:51 pm
dow still down 29 points. let's talk about where we go from here as we head to the close. joe zock is with us today. what's watching your attention
3:52 pm
this earning season? are you seeing opportunities? >> i see many opportunities. we are a value manage sore we see a lot of names that have been under pressure. i heard the previous speakers talk being biotech and pharma. we see a lot of value where tl. >> where? >> i can't talk names because my compliance department would be talking to me after this shoot, but i can tell you we're looking at existing companies that have joint ventures with the larger chains, those types of names are there and we would stay away from the ones that have drugs not yet approved. all of the stocks are under pressure for a variety of reasons, not just the rhetoric that you see from politicians but because of their own product lines. >> a lot of focus on the consumer typically in the fourth quarter. what role do you think the consumer will play? >> we love companies that have real earnings not virtual earnings. we are looking at a toy company might be something that would do well in the fourth quarter.
3:53 pm
a lot of retailers are coming back with low inventories but probably will report stronger earnings. that's catching our attention. >> can you be that traditional in this environment when people are said to be giving apple watches and drones and other type products for the holidays. is there a risk by taking those assumptions for granted that they will be repeated that he end up missing out. >> clearly there is that risk but we have to be specific about what's being sold. i mentioned mattel, they have defined products, they have been under heavy pressure because of missteps by management, they alienated disney, but bar bee still tells, hot wheels still sell and dolls still sell. we think that is a name that will surprise. most importantly it's fairly valued for us n this market that search for value is getting a little more difficult. >> does energy present an opportunity yet for you value players? >> it does, like a moth to the flame we are drawn to look at them, however, three names, they
3:54 pm
are all large cap names that are recognizable, the trick is where is the bottom in the commodity area and we are not clever enough to have picked that. it's a very dangerous spot. we're looking, it's just we need to see a bottom. >> but is that a sector you could look at and say where is this going to be in five years? >> sure. >> would you go would you get in at that point. >> sure. easy names would be schlumberger, anadarco, mobile or exxon is going to be a leader, but the morale if a driven sclekss will be the ones that are out of favor now. we think as a firm which has a heavy emphasis on preservation of capital that's too early for that. i can see that contrarian attraction, it's just too tough. >> listen, we appreciate you naming some names, we hope we didn't get you in any hot water with your folks back at the ranch. >> we can't have that, joe. >> dominic chu and i are coming back with the closing countdown
3:55 pm
to show you what happened today. >> after the belle we're welcoming mike santoli to the team with your questions. we will make them answer all of the questions. you're watching cnbc, first in business worldwide. we decided to give ourselves stickers for each feature we release. we read about 10,000 suggestions a week to create features that as traders we'd want to use, like social signals, a tool that uses social media to help with research. 10,000 suggestions. who reads all those? he does. for all the confidence you need. td ameritrade. you got this.
3:56 pm
3:57 pm
when you're not confident your company's data is secure, the possibility of a breach can quickly become the only thing you think about. that's where at&t can help. at at&t we monitor our network traffic so we can see things others can't. mitigating risks across your business. leaving you free to focus on what matters most. two and a half minutes left in the trading session to begin
3:58 pm
this monday. here is what the dow did, kind of bumped along just underneath the unchanged level, that really wasn't the story. energy was a big story today. wti crude which had lately the last few months had stayed in that trading range between 50 on the high side, 45 on the low side, today now back below $45 a barrel, we will see if that sends it lower back to the lows of the year from a few months ago. natural gas an even bigger story, down 9% today on these supply concerns. if you are a bull and that puts us now at $2.07 precariously close to that $2 level. we will see if we can go below that. it's a three-year low for natural gas right now. we're waiting for first data's earnings out. dominic chu is with me. this will be their first report since coming public in a less than spectacular ipo recently. >> it's been amazing. bob pisani has been talk being it for a good while here, a lot
3:59 pm
of our reporters have been focusing on this idea that you have an ipo market that may not be quite as robust as some would want it to be and whether or not that's a leading indicator perhaps of what's to come. with these ipo markets you are talking about a certain level of risk appetite for certain investors and traders and if that starts to dry up what does it say about the overall scheme of the markets. we saw this, renaissance capital, cathy smith's shop has that etf that tracks this and you saw the divergence from the overall market earlier this year. you wonder whether or not that kind of performance holds true for the final four. >> what a busy week for earnings. >> massive. >> tomorrow morning we have a large number of companies reporting. >> macro and micro. you have durable goods tomorrow, the fed rate decision, then you have got the first look at gdp for the third quarter as well as what's happening with pending home sales. in addition 150 companies in the s&p 500 reporting earnings, a lot of possible catalysts to see if it will break us out from
4:00 pm
this level that we've seen right now. >> going out just with minor gains -- minor declines, ringing the "closing bell" today a heart warming story say hello to four-year-old cancer survivor owen hogan, it's the danish american chamber of commerce ringing at the nasdaq. here is hour number two with kelly evans and company. i will see you tomorrow, kelly. >> thank you, bill. welcome to "closing bell." i'm kelly evans. let's look at how we finished up on wall street the dow a decline of 26 points, the dow did barely manage to stay positive there. oil much lower, natural gas, we will get to to all of that in just a moment. it's a big day on "closing bell" as we welcome mike santoli as a cnbc comment dater >> thank you. >> we're going to haze you shortly. we've been asking people to
4:01 pm
tweet us your questions and we will have you answer them @mike santoli or #ama. also on the panel is our own kayla tausche. >> i have a shoe questions for mike. >> for more on today's market action guy adami joins the fray as well. welcome to you guys. >> thank you. >> guy, let me begin with you on thoughts here on what's happening with oil and natural gas. >> it's not over. we've talked about it with you -- welcome, mike santoli, that's a great move by cnbc, great for us, decided to have him on board in that official capacity. that said, you know, the ovx, oil volatility index has been heightened for quite some time now. historically that should be trading in the teens and for whatever reason it has not been able to trade down through 40. there is mother leg down in the energy move. this friday i believe exxonmobil reports, that stock is 68 to 80, i can't for the life of me
4:02 pm
figure out what they're going to say that could be construed as positive. the energy earnings as we get into november will be really, really interesting. >> we know the estimates for them to be down 66% on the year. let's get more on this, these big moves in the energy space. our jackie deangelis monitoring the action for us. >> let's start with that the gas prices, $2.06 the lows of the day, down 9%, also looking at that 2002 low not far away of $2 at this point. traders do think we could potentially break that. this is a supply and demand story, abundant supplies, demand is trailing off because the weather models are showing forecasts will not be as cold as they would be usually at this time of the year. that's where we get an imbalance. we will get data on that gas on thursday. look for that. let's talk about oil prices, $43.90 was the settle today. this was significant because we have closed between 44 and $50 every day since late august. so breaking out to the down side
4:03 pm
of the range to those who have said that we were going to see that second leg lower may be time pretty soon for that victory lap. i also want to mention in the oil patch a significant piece of news. chinese investors making a bid to buy some oil fields in texas for $1.3 billion just shows you that they are eyeing these assets, they find them attractive especially as oil prices are this low right now. >> that caught the attention of a lot of folks, jackie. thank you. let's bring in brian young berg as well here. you heard guy mention some of the big earnings on tap and there are a couple of those really big fortress balance sheet names in space you could feel comfortable with, but everybody else you see action on a day like today it might give them pause. what do you make of the moves today and how does that impact the way you value the space? >> well, in the near term it's very uncertain as to where oil prices go, we are also very bearish in the near term with natural gas prices.
4:04 pm
we do believe oil prices will eventually rise here, we may have another leg down on the short term, we think for individual investors focus on long-term, we think they will look at today in this environment as a great opportunity. you may not time it exactly right but that's okay, think five, ten years out, we think there is a lot of value there. >> do you think the chinese are making these moves because they are able to take a longer term view or something? >> i think so. also there are just really not the main buyers out there. the big oil companies generally have their own problems, i think exxonmobil might be able to make a deal, but chevron has had operating problems, shell is buying bd group in the u.k., i think there's really just not many buyers out there and so i think the international companies and maybe private equity are really the potential buyers of any acreage or companies that go for sale in the next few months. >> we are reminded, mike, as well how unanticipated this move, especially in natural gas
4:05 pm
was going back several years when so many deals, including some of the biggest ever, were predicated on holding in at $5, moving higher, what happened now. >> it's been called cheap forever. it doesn't stop coming out of the ground. this is a weather related move, too, more short term market dynamics at play today. i think obviously natural gas dragging crude down with it. to me i'm interested if there is a read through on what this chinese deal valued this acreage as in terms of what the overall sector is. if that's the going right for a willing buying dur duz that mean good or bad things for the rest of the space sthuf to expect it's going to be more deals that ultimately help some of these assets find a bottom, right? >> it was here on this show where dennis gartman said you will not have a bottom until you have distressed assets, bankruptcy, things that start to scare the producers into ceasing some of that production. they have been unwilling to do that so far. my question is brian is now we are getting back to the point where prices at the pump is a
4:06 pm
morning show phenomenon, down 11 cents in the last week. are we at that point where these kpts have right sized and lower prices may mean more money in consumer pockets versus fewer jobs for these companies? >> obviously the consumer is the big beneficiary of low oil prices and low gasoline prices. we believe these companies are working to right size themselves more and more. they are cutting their costs as much as they can and at the same time, though, know, a lot of these companies, the midsize and larger company companies have pretty good balance sheets and have a lot of cash and i think they can survive for quite a while here, at least a few more months with low oil prices. we think prices will start improving as we get into 16 and so we are really not thinking that much about m and a activity in the near term. we think more pain will have to come. >> brian, we will leave it there, then. appreciate your perspective. that's brian youngberg some of
4:07 pm
the big energy names and a tough day in the market. >> it was a tough day for apple. interesting one we are about to get its results. today some concerns about a supplier which, you know, perhaps, mike, again, people just a little ante of what we will hear tomorrow. >> i don't think people have been very comfortable with how the stock has traded in general because business has been great since the launch of the iphone 6 and yet the stock can't get out of its own way. i see it as much more about people clenching ahead of the number as opposed to anything tangible happens. >> i agree with mike. there seems to be this fear that apple and netflix are both functioning as piggy banks, anytime an investor gets a little nervous or wants to take some profits, apple, very big, very liquid stocks. netflix for the same reasons. so it's hard to know exactly when some of these stocks are moving because there are real fears on the supplier front like we saw today or whether it's investors saying this is a good time for me to get out. >> guy, we have a lot of kpts reporting tomorrow.
4:08 pm
before the bell we will hear hear from ups, alibaba, take your pick. who do you like here and who are you still wary of. >> i think ups could actually surprise to the upside, fedex recently has had some bullish comments. if amazon is a read through for anything maybe ups and fedex are beneficiaries of that. i think apple will be fine. i agree that the stock has not traded particularly well for the last few months but i don't think you will get crushed here at 115. pete najarian talks about putting on insurance in the form of options, i think people probably are doing that in terms of apple here. i think a name like allergen, agn, i think they will report -- i think they need to report an amazing quarter in the next couple weeks given what's going on with valeant over the last few weeks. the fact that microsoft continues to hold their gains, facebook to me on the back of the google earnings is
4:09 pm
fantastic. i think they are going to crush going into earnings. again, i think there are a lot of really individual great stories out there against the backdrop of a confusing broader market. >> how do we synthesize? how do we take a market in which energy earnings are down 66%, pep boys is up 23%, the auto space of gm and we will hear from ford tomorrow morning doing quite well. how do you put this all together? >> you have a small group of multi-national companies, a lot of the growth leaders, the nifty fifty type stocks that are able to defend their margins. people keep talk being how it's a tech rally, you have the microsoft and alphabets and amazon, but it's also been home depot, starbucks, the mega cap favored names. >> mcdonald's. >> it's been narrow and i think that's what you're seeing shake out. the ones who missed earnings are getting obliterated. >> kayla. >> one of the stats that people are looking at is sort of this chasm between the stocks that
4:10 pm
are the haves and stocks that are the have notes. and earnings show you which stocks fall into this camp. when stocks rise they rise an average of 2.5%, when they fall they fall an average of 2.5%. that's about a 5% differentiation. that's the highest we have seen that gap be in several years. so it certainly seems like the market is beginning to punish the companies that can't put the numbers up. >> and it goes back to the questions about the economy at large. today front wage of the "wall street journal" talks about the industrial sector, profits recession, material stock, caterpillar and a couple of others that maybe them emblematic of the u.s. economy, maybe not, maybe nor emblem mat tick in terms of china's economy change and the energy story, et cetera. it's just unusual to see what they describe as a recession that isn't dragging the broader economy down with it. >> i agree -- i think in the back end -- i do think it has it a lot to do with china but my
4:11 pm
push back would be this, you can't look to china a couple yooers ago and say that's the growth engine, that's the driver, that's what's going to take all these markets higher and discount china when it has the ability to take everything lower. it can't be one or the other. it needs to be both. if you look at a caterpillar over the last few years, look at macnaman. we talked about natural gas, look at lng, that's trading within a whisper of a three-year low. another name that he has for raid into. already great individual names but that is bee lying what is a slowing or stalled u.s. economy. >> we will have to leave it there for the time being. guy, thank you. appreciate your perspective. guy adami much more coming up with him and the "fast money" crew at 5:00. if you missed the tech rally they have three more names still worth a buy. >> got a question for mike santoli, the newest member of the cnbc team. ask us now to ask mike anything,
4:12 pm
we will get his thoughts on the market, the economy and whatever else you want to know next. >> uber continuing to raise money at a furious pace. we have the latest eye popping valuation for the ride sharing service coming up. you're watching cnbc, first in business worldwide.
4:13 pm
4:14 pm
4:15 pm
welcome back. in case you haven't heard today it's mike santoli's first official day as cnbc commentator. to welcome him to the family we took to twitter and asked him questions in our version of ask mike anything. i hope you're ready for this. >> i hope so, too. >> ivan tweets what's your favorite investing fad of all time? >> i think it's the bowling stock of the early 1960s, bowling alleys and all related bowling stock. i was not here to see it, but that's one of the most fascinating -- >> bowling. >> yeah, like amf. there was a bagel stock bubble in the mid '90s, too. >> ed preston tweets what is the likelihood of the fed embarking on a negative interest rate strategy. >> highly unlikely. i feel there's lots the mechanical reasons. the fed has said that's not a good idea for the u.s. >> importantly, mike, are you a cat person? >> i co-exist with two cats in
4:16 pm
my apartment. i do not consider myself a cat person. >> are you a dog person? >> more of a dog person. >> why not dogs? >> i have a wife and two daughters. they want a dog. i might be talking myself into getting a dog right now. >> emily tweets, michael, are you excited for your last name to be mixed up with santelli. >> there are vast -- >> i think guy adami said this. i thought i heard a santelli instead of a santoli. >> you created the tea party, right? >> i get the credit and blame for that all the time. >> michael, what's your favorite halloween candy, mine he says is the milky way midnight. >> i'm going to have to out myself as not being a candy person. i'm not going to say apples. i would say mounds. >> you don't have a sweet tooth. >> not much. >> very lucky. you are allergic to chocolate. >> i have started slowly eating some chocolate again, retesting the waters, it's going okay so don't jinx is t. >> why haven't they tried to
4:17 pm
find a koour yet on walking dead? >> excellent question. i have avoided the walking daddy. >> i don't even know what this question means. >> this is one of the wife's questions that i don't watch. >> what do you watch? >> i was a huge mad men freak and i like the leftovers right now. >> how about movies? i only ask about the box office last weekend was pretty week. >> i saw bridge of spice which i thought was good, very spielberg yan with three happy endings in one movie. >> who is going to take t mets or royals? >> i'm going to alienate all my mets followers, the mets are overbought, i say kc in six. >> let's get back to the markets. art paul asks, are you worried that the run up by facebook before earnings will be problematic? >> you know, only in the short term. i feel like facebook is kind of its own -- it's own micro economy right now. i don't think it's a tactical trade into earnings that matters. >> you are not on facebook. >> i'm not on facebook. >> are you going to get on
4:18 pm
facebook? >> that's when you should sell the stock, when i get on facebook. >> you need to get on facebook when you kids get on, monitor their activity. >> instagram, senate chat? >> none of it. >> anything -- >> at which time. >> reporter: you are. >> you are on twitter. >> mike, i missed your article in barron's, will you be writing for cnbc or just doing live commentary. >> i will be writing on cnbc as well. >> kayla tausche tweets -- >> for the guy who is almost always right what's been your worst call? >> i have plenty to choose from here. two worst calls, bullish on mf global right before it blew up and i actually had the benefit or detriment of meeting with john core zien right before then is that. >> that trade was a good trade just no time. >> also healthsouth and i was right in richard skrushy's office and he almost gave it to up to me and i said this is a contrarian buy. wrong. >> we love the candor.
4:19 pm
we won't ask you about yahoo yet. >> let's let that percolate a little while. >> we hope you are not a big fan of processed meats, a new study is revealing how bad they can be for you. >> doctors and the american cancer society have said eating too much red and processed meat can increase the risk of cancer. 22 scientists evaluating more than 800 studies from several continents conclude consumption of ham, sausage, bacon and other processed meats with lead to colon and possibly stomach cancers. putting processed meat in the same danger category as cigarettes and has bess toes. the organization says red meats is probably cancer causing, as with most health warnings already skeptics and those on the defensive. the north american meat institute claims there is no correlation between meat and cancer, also sites many studies showing the health benefits of
4:20 pm
balanced diet. cattle and pork features are lower but not substantially on n. today's date. con ago gra foods that stock relatively flat, who are mel down 1%, shares of tyson are down sharply but that's in response to a jpmorgan downgrade separate from the warning. analysts say we aren't seeing much reaction in the market because we have heard about the potential linkage between meats and cancer before. it is something we should at least think about. >> everybody certainly will have to now. thank you. are you surprised that they went this far to put this on par to some extent with tobacco. >> the headline was a little surprising insomuch of an edge it had to it. who are mel down 1%. that stock has been hitting new highs every single day for that not to give up more than 1% tells you that the market is saying, you know, if you eat it every day it's a slight increase in risk, not a big deal. >> the study does say that the incremental risk is very small. what i wish is that the who would give us a recommended
4:21 pm
diet. here is what you -- here is what you should eat every day to not get cancer. i'm thinking one cup of black coffee, egg whites, kale and a glass of red wine. that's pretty much what's in the bucket of being good for. >> you until we prove it's not which feels like how every decade has unfolded. maybe there is enough of a consensus on this one. >> i don't think anyone thought it was maelt reyand therefore this -- >> let's send it over to sm. >> a couple big movers. let's start with rent a center, 47 cents adjusted versus the estimate of 45 cents, it's a beat on the bottom line. revenue came in lower than expected and that seems to be what analysts are focused on. 2015 eps guidance was lowered. you can see the stock tanking after hours down better than 18%. let's talk about chips. broad come reporting earnings third quarter revenue came in at $2.19 billion versus the expectations of $2.14 billion.
4:22 pm
a beat on the bottom line -- excuse me top line, that was revenue of $2.19 billion. earnings 77 cents versus the estimate of 74 cents pending that evago deal which would be the biggest merger, $37 billion deal in the cards. broad come up after hours, kelly. >> our sm. hoover hoping to raise another billion dollars from investors. you won't believe how much that will value the company. the stunning details are next. donald trump taking credit for ford's decision not to shop work from the u.s. to mexico. does he really deserve it? we will fact check trmp coming up. don't miss trump with the rest of the field debating on wednesday right here on cnbc. coverage begins at 5:00 p.m. eastern. don't miss t .
4:23 pm
♪ approaching medicare eligibility? you may think you can put off checking out your medicare options until you're sixty-five, but now is a good time to get the ball rolling. keep in mind, medicare only covers about eighty percent of part b medical costs. the rest is up to you. that's where aarp medicare supplement insurance plans insured by unitedhealthcare insurance company come in. like all standardized medicare supplement insurance plans, they could help pay some of what medicare doesn't, saving you in out-of-pocket medical costs. you've learned that taking informed steps along the way really makes a difference later. that's what it means to go long™. call now and request this free decision guide.
4:24 pm
it's full of information on medicare and the range of aarp medicare supplement plans to choose from based on your needs and budget. all plans like these let you choose any doctor or hospital that accepts medicare patients, and there are no network restrictions. unitedhealthcare insurance company has over thirty years experience and the commitment to roll along with you, keeping you on course. so call now and discover how an aarp medicare supplement plan could go long™ for you. these are the only medicare supplement insurance plans endorsed by aarp, an organization serving the needs of people 50 and over for generations. plus, nine out of ten plan members surveyed say they would recommend their plan to a friend. remember, medicare doesn't cover everything. the rest is up to you. call now, request your free decision guide and start gathering the information you need
4:25 pm
to help you keep rolling with confidence. go long™. ♪ welcome back. ub uber reportedly raising another billion dollars. at last call in august the "wall street journal" reported the company's valuation was at $51 billion. some are saying this new round could value the company at 60 to $70 billion. which makes it bigger than caterpillar, hue let pack card. >> steve, i guess there are a couple different questions here. the first is quite simply are they going to be able to do it? >> oh, yeah, they will absolutely be able to do it for sure. >> why do people keep giving uber money? is it because they think that the valuation is justified or are there other reasons for them to get this capital?
4:26 pm
>> i think there is a little dirty secret with uber and other companies that are bigger and at this scale and that's that they have -- what they're selling is preferred shares and they have special rights, including liquidity preference and sometimes a discount to the ipo even. so you are essentially getting in line to get a discount. and even dividends. so if you get a discount on the ipo and you know that the company eventually is going to go public if it's a big enough discount how much are you willing to pay for that? the preferred shares as they clear that price are worth that. the question really is the junior shares, the common shares. >> everybody else. >> everyone else in that stack. that's, i think, subject to quite a bit of debate, but almost definitively not for junior shareholders. >> and also what valuation at which the company would eventually go public. if they go public at $150 billion a lot of those
4:27 pm
shareholders if not all of them will be in the green. the fact they have already got $8 billion in their war chests and need a billion dollars more at least does that tell you that the company is either burning so much cash or they think that the market for private money is drying up? does it tell you either of those things? >> i don't know the micro machinations of the company and their burn rate. they are spending a lot. they have a massive market. massive market. and the anticipate is maybe. so just to give you a sense, in san francisco today the market for taxicabs is 150 million, uber makes 450 million in san francisco. so three times the taxi market in san francisco. the whole u.s. market for taxis is $100 billion. so if you extrapolate what that could mean, that could mean a 400, $500 billion opportunity for uber just in the u.s. >> mike. >> play this out as we move
4:28 pm
toward an ipo, which the folks at uber say maybe is not imminent at all. they've already raised enough capital it would be one of the top five or so u.s. ipos in history. does it raise the risk of the ipo investor because a lot of the value appreciation has already been there? >> yeah, no, i mean, i think that's a big issue that faces a lot of public investors is that a lot of the juice, if you will, has been extracted from that process. but that being said for uber specifically it's another financing event. an ipo is just another round. uber faces very specific regulatory challenges, country challenges by the government, by regulators that make it kind of a little different than a typical company like any of the others that you guys talk about. >> their challenges in china have been well documented. they are going up against a huge rival with close ties to a lot of the different agencies and governments in china, too. at what point -- here in new york, steve, you can now use a couple of different apps, one is
4:29 pm
called harrow, one is called way to ride to hail a yellow cab. at one point will uber be forced to partner with municipalities if ever in countries outside of china where that's becoming the successful mod snool they really are. they're saying, hey, listen, we will be good players in that community, where i live in new jersey all of a sudden they are now legal to go to the port authority which is newark airport. so they are already making nice in regional areas, but you don't want to play that out in public. it's a private company now, if all of a sudden it was public their ticker would look like -- they would have 400 reports every day, you know, we just settled with the country of zimbabwe, we just had a strike here. so everything would have to be reported. it would be quite a mess. so what the company is saying is, look, we need to mature out a little bit, we have to get our house in order. >> the bottom line is the prefer
4:30 pm
still attractive at these levels be beware. >> because of the structure but beware the junior classes. >> thank you for joining us. time for a cnbc news update. let's get back over to sue herrera. >> the baltimore police department rolling out a new body camera program, 155 officers will test three different camera systems, officials hope that program will create transparency within the community, however, the officers will have the discretion to turn off the camera during an investigation. >> the los angeles department of water and power is considering changes to its water conservation ordinance, it would impose fines for heavy water use and make the names of the violators public. a nissan recall for possible fuel leaks and crashes has been expanded to include 59,000 vehicles worldwide. it covers certain 2013 to 2016 at mas and 2016 maximas, the
4:31 pm
problem was discovered in crash tests there have been no incidents reported. for the first time since 1992 the chevrolet camaro is being produced in the united states. look at that. a 2016 camaro you see rolling down the general motors assembly line in lansing this morning, the car is entirely new, it hits the markets later this year. what a beauty. that's the cnbc news update this hour. back to you. >> thank you so much. our sue herrera. wearable tech is the latest way to pay. coming up we will check out one major credit card company's latest gadget. first does chris christie have the best record on amtrak quiet cars? we will see how he stacks up when it comes to handling amtrak as a politician. a look at his record as he forge ahead with the presidential nod.
4:32 pm
4:33 pm
4:34 pm
the nasdaq managed to stay positive by about 2 points, remember we had a nice rally the end of last week and a couple of key events looming, the federal reserve's meeting, the bank of japan's meeting, lighter volumes than usual today, the dow down 23, the s&p down nearly 4 points, nrj was the worst as oil as natural gas fell again.
4:35 pm
donald trump holding a town hall in new hampshire on the "today" show nbc's katy tur joining us with the details. >> it was an interesting event for donald trump, he is used to to his thousand plus rallies, this was intimate, within just a few feet of him who were pressing him on his policy and demeanor, one even asking if he has ever been told no before. he says he has quite often. take a listen to what he had to say. >> it has not been easy for me. you know, i started off in brooklyn, my father gave me a small loan of a million dollars, i came into manhattan and i had to pay him back and i had to pay him back with interest. >> it has not been easy for me. that's making a little bit of a news, matt lauer pressed him on that, said a million dollar loan would be pretty easy for a lot of people in this room. donald trump said in the scope of his wealth and success a million dollars just isn't that much money. as for how this is playing
4:36 pm
across the campaign trail, there are many on social media who are taking trump to task with it. among his supporters this is something that they are very excited about. they like that he is boisterous, they like that he is wealthy and they like that he boasts about his wealth. back to you, kelly. >> i thought by the way it was your birthday. if so, happy birthday today. >> thank you very much. it is my birthday. >> all right. >> i appreciate that. >> katy tur with trump in that town hall. she brings up an interesting point which is the million dollars that his father gave him he said he turned it into much more than that. how do you think that message sells? >> he is bragging about they underestimate his wealth at $5 billion. i don't think anyone is actually looking at him as a self-made guy. >> really? >> well, self-made but i don't think they feel as if he came from absolutely nothing. >> kayla. >> that sounds like someone who sat down with his advisors and said do we have anything that would resonate with people? are there any stories we can dig from that actually would play well with the gel russ right.
4:37 pm
sounds a lot like the parable of the mustard seed i should say. >> interesting choice. >> there was a lot of analysis that his stake in his family's business that his father built was worth $40 million 40 years ago and if he put it in the s&p 500 index he would have more wealth than he has right now. >> all the same we know plenty of -- i don't know what the -- heir iss that have blown that merchandise and then some. we're gearing up for that cnbc gop debate just about 48 hours from now. it means our cnbc fact patrol is getting into gear. there is pre debate sparring over jobs that may or may not be going to mexico and we have more in-depth look with the govern who are wants to be president. >> we start out with more about donald trump. this was the tweet yesterday and he repeat it had again this morning on that "today" show town hall. >> mexico took a ford plant. i've been very if you have on
4:38 pm
ford, you've heard me talk being ford. i heard last night that ford is moving back to the united states. they may not do that deal. i should get credit for that. >> but john kasich tweets, no together ohio brought ford back from mexico. ford says it made the decision to move some truck production back to ohio in 2011, long before any candidates announced for president. on our auto reporter it reports that the real force was the united auto workers union which negotiated the move in their last contract. our fact patrol is looking at all the governors including yk of new jersey. the state's credit rating he has been downgraded nine times. krissy's response it was even worse before he got there. here he is on "meet the press" last month. >> there was no net private sector job creation, chuck, in the eight years before i became governor, zero. we've created 198,000 new jobs p
4:39 pm
and the fact is we spent $2.5 billion less than we used to. >> actually it's more than 180,000 jobs, private sector according to the bureau of labor statistics, as a growth rate less than half the national rate. krissy's budget is $4 billion higher than the last budget processed by jon corzine. he has blamed the credit west coast on the tension system and he says even that is on the road to recovery. >> we took a pension system that was ready to go under and we put it in as a pension system that is paying its bills and done better over the course of the six years as governor than the two decades before. >> according to a state commission that krissy reported they face $90 billion in unfunded obligations. >> on the subject of rankings, new jersey 39th in our top states for business down from 24th before chris christie took office. tomorrow we wrap up this series
4:40 pm
on governors with the former governor of florida, jeb bush and a lot more about all the governors. >> great stuff, scott. the next gop debate will take place right here on cnbc this wednesday, october 28th with coverage starting at 5:00 p.m. eastern time. first data is reporting earnings for the first time since going public. seema mody has the details now. >> reporting earnings for the first time as a public company, releasing numbers for the third quarter. first out of revenue up 5% year over year to $2.92 billion. they did cut their net loss roughly in half to $126 million. since these results are from before the company went public there are no estimates or per share numbers, but of course this is first data payment processing company. was the biggest ipo of the year, a lackluster debut, shares at $15.35. cheeser cake factory, 59 cents versus the 56 kent estimate.
4:41 pm
the player it's revenue came in slightly lower at $527 million below expectations, you can see the stock falling after hours by 3%. kelly. >> okay. seem marks thank you for now. we have breaking news on walmart to get to with courtney reagan. >> walmart is asking the faa for permission to fly drones. in a letter sent today walmart is asking for exemptions for the federal aviation regulations to three drones for data acquisition for air space below 400 feet, r&d test flights at distribution centers, grocery pickup to deliver packages from the store to the parking lot and lastly for test flights in small residential areas with permission from owners of the properties along the flight path and the site of delivery. very interesting, kelly, as walmart tries to move the way forward as it comes to solve that last pain point in that final mile getting that you package. >> not only that, but to use
4:42 pm
drones in the parking lot to get them from the door to your car. >> exactly. one of the exhibits it's an 11-page letter sent to the faa and lays out one of the exhibits and actually says grocery delivery but in the explanation itself it says product merchandise basically delivered from the store to the parking lot. again, they're going skg for permission to test this. who knows how far out this would actually be rolled out. if we would see it now, years from now. very interesting step. >> they've been talking about big dollars sent on investing in the stores. thank you, courtney, for now. >> apple pay allows users to make purchases with their iphones and apple watches. now credit card companies are getting into the wearable payment space with something like this ring. up next we will show you how mastercard is gearing up to change the games with products like this which frankly doesn't look anything like a mastercard.
4:43 pm
4:44 pm
4:45 pm
welcome back. paying with those plastic credit cards is so yesterday. how about paying with a pair of sunglasses or favorite ring. mastercard is rolling out a new program that will allow you to do just that. mary thompson is at the money 2020 conference in las vegas ready to show and tell us all about it. hi, mary. >> here at money 2020 you hear a lot about people saying you can leave your wallet at home because you have your mobile wallet. now mastercard has a way of leaving mobile wallet at home. if you take a look at all these products on the table and this
4:46 pm
model, this dress, the sunglasses, they will all allow me to pay for my coffee with a near field communication enabled device. >> that's right. >> this is ed mclaughlin who is the head of emerging payments for mastercard. tell us how this works. >> one of the things -- this is so exciting. everyone is getting connected, what we're also seeing is everything is getting connected. it's not just your mobile or pc or tablet, what we're seeing is more and more devices are being able to be connected so we can make them more useful. for example, my car is basically a computer on wheels, so with this program and working with partners like gm i could use my key fab to make a payment. when i'm going in the convenience store i carry my keys and that becomes the platform for everything now the card can do, it's smart and payment enabled. >> i remember mobile path but that was only at mobile stations. this is connected to your mobile
4:47 pm
wallet. this glove that i'm wearing, and i go to get my cup of coffee i can go like this. >> absolutely. >> and i pay for my coffee with my gloves. or if i'm wearing this dress i can just -- >> there we go. >> right there, i can pay for it right there, is that it? >> yeah. >> right there. so it can all be done. >> let's use the gloves as an example. transit in chicago accepts mastercard contact with payment so with just the gloves you are wearing you can tap it and through the turnstile and on the transit system. this does replace anything just brings greater convenience. the best news is all of this works against your existing mastercard account. you can use your mobile phone nor payments, any of these things for payment. >> i think kelly evans has a question. >> thank you. ed, hello to you again. as we hold up this ring and show people that's just a typical ring and i'm shocked that even just the glove and belt you just showed us they can allow to you make payments. what happens if it falls into
4:48 pm
the wrong hands? what's the security like? what's the aut case like? >> one of mastercard's passions make sure all the digital can be as or more secure than anything we have done in the physical world. you have a controller, you have an app which controls these, you can turn it on an turn it off, you can choose which of your cards you want to enable for t when we enable it it's confirmed with your bank, we put a secure payment token on there and make sure every transaction is unique. literally from your ring you get access to the most secure payments in the world. >> ed, i have one last question for you. adoption of mobile wallets hasn't been quite as fast as many people expected. in leapfrogging the mobile wallet to have wearables like this are you maybe getting ahead of the client, the customer? >> weigh want consumers to know when they're ready to do it mastercard is ready for them. i think what you're seeing is use your mobile wallet sometimes and also have all sorts of other things that you will want to use. so we're making sure that you
4:49 pm
can pick and choose whichever way you want to interact with your mastercard. >> ed, thank you for joining us and bringing all these wonderful products. >> it's been a lot of fun. >> we've been speaking with ed mclaughlin, head of emerging payments for mastercard. gary would fit right in with the stark family on "game of thrones." in his latest book comparing vladimir putin to isis. he will join us at the new york stock exchange next. when you're not confident your company's data is secure, the possibility of a breach can quickly become the only thing you think about.
4:50 pm
that's where at&t can help. at at&t we monitor our network traffic so we can see things others can't. mitigating risks across your business. leaving you free to focus on what matters most.
4:51 pm
4:52 pm
welcome back. concerns about russia are growing as reports surface that submarines and spy ships could be near global cables. there is criticism of vladimir putin and there is a new book coming out. gary kasparov joins us now. welcome to you. >> thanks for inviting me. >> it is amazing how quickly russian influence has increased. now we have reported about russia submarines trying to sniff out under sea cables. is this a new chapter for you if. >> it is a new chapter but we can predict it because putin
4:53 pm
will do everything created by american nature, whether it is syria and next stop it is benghazi and now he looks over the water. his goal is to destroy national stability because he has no rational for power in russia. he has to present his case to the russia people and the economy is in shape and people in russia understand he will not improve it. so aggressive foreign policy and addressing interest of russia, that is his only trump card. >> and in your book, you urge the west, and other pours to understand this and balance it. but my question is when it comes to syria, if suddenly the interest of russia and the u.s. are aligning, as kiginger suggested, if they try to defeat the islamic state, is that the right approach. >> no. he has no interest in destroying the islamic state. the opposite. he wants to preserve assad andez
4:54 pm
bombing, american backed rebels. he wanted to leave assad and the islamic state as the only players there and say what is the choice. i think his dream is to push isis, islamic state, down south to the saudi arabia -- because it is a big sunni state, there, and that will create another explosion situation. he needs much higher oil prices and it seems that iraq and syria is not enough to create havoc in the reasonable. so saudi arabia could be the next target. >> what form should a more affirmative response be taken by american allies. >> there are many forms. if you think that the diplomacy and engagement is not working any more, it doesn't mean you have to send soldiers immediately. there are many things in between. this is not chess. black and white. there are many colors in between. so i think they can step up diplomatic and pressure. from this room you can do more
4:55 pm
damage to russia than the american administration could do during the cold war. and you have to understand one thing, i don't know what will happen to putin or how it will end but we know from history every day of delay will increase the price of opposing putin. >> so what would sanctions look like in russia, and we're being helded by oil prices which is out of the government's control but insisting what they've put in place. what more can you do in addition to that. >> you have to createib sentives for people in russia. the russian olig arcs have a rise. and staying in russia, being denied a visa. as long as you with operate and finances abroad, it is not incentive. rising against putin today is deadly and too dangerous. so people have to be put in front of this tough choice.
4:56 pm
you go against putin or the russia goes bust. >> is anybody in the race for the white house in 2016 hawkish enough in your view. >> there are many hawkish candidates on the gop side. you hear strong words from carly fiorina and ruby and i think rubio is cuban and it comes natural and it is in his genes. >> thank you for joining us down here at post nine. we appreciate it. another busy week for earnings. results from apple and twitter after the bell tomorrow. we'll give you what to watch for tomorrow when we come back here on "closing bell."
4:57 pm
bob dylan. to improve my language skills, i've read all of your lyrics. you've read all of my lyrics? i can read 800 million pages per second. that's fast. my analysis shows your major themes are that time passes. and love fades. that sounds about right. i have never known love. maybe we should write a song together. i can sing. you can sing? do be bop. be bop do. do be do be do. do do do be do.
4:58 pm
yup, we're constantly making thinkorswim better. here at td ameritrade, they're always working. like a custom screener on your desktop, that updates to all your devices. and you can share it with one click. wow. how do you find the time to do all this? easy. we combined every birthday and holiday into one celebration. (different holidays being shouted) back to work, guys! i love this times of year.
4:59 pm
for all the confidence you need. td ameritrade. you got this. . blah. welcome back. we do have apple and twitter reporting after the bell tomorrow. but it is a full calendar. mike, what are you watching? >> i like the ford report. because i'm curious where we are in the auto cycle seeing what they say about volkswagen and all of that. >> gm was up 6%. >> watching alibaba before the bell tomorrow. it should be a clear indicator for how the chinese economy is doing. whether there is weakness in the economy will benefit alibaba. i think the company didn't have a good message during the last quarter.
5:00 pm
>> it started all of this. when they talked about gross merchandise volumes. >> and bypassing short-term questions and focusing on the long-term and that is not what they want to hear. >> and drones perhaps flying in the parking lot in the near future. thanks. that does it for us on "closing bell." "fast money" begins right now. all right. "fast money" does start right now. live from the nasdaq market site we're overlooking time square, i'm michelle in today for melissa lee. our traders are tim, pete najarian, karen finerman and guy adami. >> hi, michelle. >> nice to have you. >> nasdaq is nearing a record but don't worry if you missed the rally, we have the three technology names you can still buy to bring you serious profit. plus the bills taking on the jaguars yesterday from london. and it marked the first time a nfl game was live screened

47 Views

info Stream Only

Uploaded by TV Archive on