tv Closing Bell CNBC October 28, 2015 3:00pm-5:01pm EDT
time. >> not this again. >> not this again. >> quick check on the currencies, sarah? >> sure. the dollar, that's where the action is. it is surging. what's interesting is that stocks are climbing back off the lows. even though you do have the dollar stronger and treasure yields higher, signaling that the fed is very much putting this number on the table. >> all right, thank you. "closing bell" starts right now. we do welcome you to "closing bell" for this wednesday. very busy day. i'm bill griffeth at the new york stock exchange. >> i'm kelly evans out here in boulder, colorado. we are just two hours away from our coverage of the gop debate here on cnbc. we've got plenty on the candidates coming up. and how their plans could impact your money. >> a selloff in stocks early on. oil has staged a pretty major rally today after being down sharply over the past week.
coming up, we'll tell you what's behind the crude comeback. that's coming up in just a moment here. >> janet yellen and the fed leaving rates unchanged for now, but a warning that a hike could come in december. we'll look at the impact that they're having. >> meanwhile, he's at it again. carl icahn revealing he's taken a large stake in insurance giant aig and he's urging the company to split into not two, but three separate companies. we have the latest details on that. the stock has been up about 4% or 5% in today's trade. let's begin with today's spike in crude oil. jackie deangeles, back about $45. >> good afternoon to you. this was a move that took a lot of traders by surprise. let me break down what happened
for you. the session low, $43.06. you can see this incredible range that we went through today. the rebound in part was due to the fact that there was some selling pressure in the last three sessions. not really enough conviction to take us down to 40 as some were predicting. ahead of the fed this morning, we have a weaker dollar. we had equities that were moving higher, so those factors were supported. i know those elements have changed a little bit after the statement came out, but long-term oil traders feel that those will still be supportive factors for crude oil. having said that, the inventory that came out, three million barrel build. it was a little bit more than traders were expecting a couple of days ago. it was set up by the api report last night. they explained it away as seasonal. this is the kind of action that we see in inventories this time of year. long story short, we did see this move higher today, because as i said, the conviction just wasn't there. at this point, now that we're over 45, closer to 46, traders are saying we can take a little
bit of a pop and maybe touch that 50 mark again. back to you. >> all right, thank you. watch it closely. we talk about how much that may play into a move in december. steve liesman has more from washington. >> the federal reserve downgrading its october statement its concern over global economic and financial development. it's now monitoring those issues rather than saying it's worried about their effects on the u.s. economy and on inflation. second, the fed downgraded the job market, saying it slowed, even while it upgraded the assessment of consumer and business spending, saying they're growing at a solid rate. finally, the big one. the fed put a december rate hike back into play in a big way. the new statement says, "in determining whether it's appropriate to raise the target range, the committee will assess progress both realize and
expected towards its objective of maximum employment and 2% inflation." look at that statement at its next meeting. that's what you want to focus on. these changes i think reflect the sense we've reported on. the fed went too far. and that prompted markets to overly price out the chance of a september rate hike. the fed wants that flexibility back. here's the question. should you infer this is a done deal? i don't know. it would be hard for the fete to put it back in play and then not do it. now the real debate. how much strength does the fed need the economy to hike? i'd venture not a whole lot. >> we'll pick right up with that in a moment. thank you for now. i am here in boulder, colorado. we're going to show you many of the candidates in preparation
for tonight's gop debate, where we also expect a lot of commentary about the fed and about the economy. there's ben carson, having a look around. he's onstage right now. carson the frontrunner in the latest "new york times" cbs poll of republican primaries. that's going to put all the more focus on him in just a couple of hours. >> they'll be tested about his views on some of the more contentious issuicon ten -- contentious issues. dr. carson being briefed. i'll give a shoutout to our coordinating producer who is briefing him right now on what to expect. after the debate. let's get to our "closing bell" exchange. we have keith fitzgerald with us from moneymorning.com.
john, i'll start with you. why did the markets sell off? the dow is up 110 points when the fed statement came out. and then it went negative. what happened? >> that's the normal knee jerk reaction. it would have had a knee jerk reaction. it's just normal. the computer systems start to read the headlines. the market really tries to figure out exactly how the market is going to react to this type of tape, this type of headline. that's why we've rebounded back to pretty much where we were before the announcement. no real news coming out of washington. they put a date of december on the timeline here. we've had timelines before. so how is that really going to contribute to market activity? we talked about the risk of negative rates here. it's been a topic of conversation. now with this commentary out of the fed. how much does that change the
investing landscape? >> the dollar is what's surging. we've had a massive run-up here in the stock market on the idea that the fed was not going to raise the rate and would remain easy for longer. it does not look like that's the case. the dollar is surging. you're going to get a massive dollar rally now. and in six months from now, we'll find the fed realizing whoops, we made a mistake. >> you and i talked about this before the show. you think it's more likely we're going to get a rate increase now in december. >> i think it's very difficult to come out and change that language and then not raise rates. >> things could deteriorate. the economy is getting weaker. we know that. so it will probably deteriorate a little more. that's a strong change in language. the fed is trying to use that as a signaling mechanism. i would suspect that they'd
probably follow through. >> just to read exactly the statement here that is shaking markets today. the fed said "in determining whether it will be appropriate to raise the target range at the next meeting, the committee will assess progress both realized and expected towards maximum employment and 2% inflation." what targets are you going to be watching? >> i'm going to be watching those things, too. what nobody's asking is why is the fed so very determined to do this despite a global chaotic situation? despite data that is what it is. and a labor market that's not as tight as they think it is. they're wanting to lower rates in 2016. so they've got to get ahead of that and actually raise them now. i think december is a good bet. >> we've got this rally in the dollar. brian thinks we've got a monster rally still to come. but oil is higher. we've got inventory that pushed that one higher today. is that bullish for stocks? we've come back. we're up 110 points again where
we were before. what's the expectation? >> i think it's bullish for stocks. the rally that we've seen here in oil and getting close to that $50 a barrel level. that's been very important. i think investors have really been using that gauge to determining whether our economy is healthy and what the ongoing environment is going to be with oil prices trading where they are. as we get through the end of this month here, later in the week, we are going to see some movement and some more volatility into this market. we have spoken about it. it gets earlier and earlier every year. i think we're going to have to see that again this year. historically over time, it does happen. it's just a question of how does the fourth quarter play out especially with goi dance moving forward? >> let me go back one more time to this statement.uidance movin forward? >> let me go back one more time to this statement. talking about the need to see progress towards maximum employment and the job gains have been steady on that front, but also the need to see
progress towards 2% inflation. which as you know, consumer sentiment, whether it's market-based sentiment. those will be moving in the opposite direction. do you think it's the fed's expectation we'll finally see a rebound? >> i think it's the fedex peckation. they've been expecting that rebound for a couple years now and it hasn't come. so clearly they're wrong. they're going to be wrong again. but that's fine if they want to continue to think that. i think for them being hawkish, it's a massive mistake. it's not appropriate. if fed funds were at 3% right now, nobody would be talking about a liftoff or a rate hike or anything. they should just wait. but listen, they've been wrong before, they're going to be wrong again. >> well said. >> all right, guys. good to see you all. appreciate your thoughts on this important day for the markets. see you guys later. appreciate it. we're heading to the close here. by the way, how you doing, kell? how are things in boulder? >> you know, it's exciting out here. i've got to say.
it is a full house. it is a full operation, by the way. tons of security. a huge setup. it's taken over the entire place and the excitement is palpable. it really is. >> the center of gravity is definitely in boulder, california, that's for sure. right now, though, with 50 minutes left in the trading session, we've had a comeback rally. the dow was up 110 points at 2:00 eastern when the fed announcement came out. we sold off, went negative, and now we're up 100 points again. and we have a busy show ahead, everybody. wall street heavyweights mohammed el erian will give us his take on the decision. >> after the bell, we'll preview the numbers coming up in a moment here. bring them to you when they hit the tape and break them down with our team of analysts. plus, the presidential debate kicks off in less than three hours from right now. we'll have pregame coverage starting at 5:00 p.m. eastern. be sure to join us.
if you're not near a tv, you can still watch the debate at cnbc.com and on your ios, android, or apple tv app. just sign in with your tv provider. pro users will also be able to watch the live stream on cnbc.com. we're back in two. hi watson. annabelle, your birthday is tomorrow. i'm turning seven. what did you ask for? a princess. and a pony. you like things that begin with p. i like pink frosting too. will you have a cake? yeah. i was too sick to have one last year. the data your doctor shared shows you are healthy. are you a doctor? no. i help doctors identify cancer treatments. i want to be a doctor someday.
it's been a tough 24 hours for twitter stock falling the most since late august on disappointing revenue and profit projections for the fourth quarter. 18 analysts have cut their price targets. they say they are concerned about user growth and user engagement at twitter. that despite the company's earnings beat. they are still concerned about the long road ahead for jack
dorsey and company at twitter. meantime on to mergers and acquisition moves that move stocks today. reversed yesterday's gains. likely to get involved in reviewing this deal. walgreens $9.4 billion buyout. third largest drugstore chains. better than expected earnings as well. also some merges in acquisitions action in the snack aisle, with sniders lance buying diamond foods for about $1.25 billion. meanwhile, cnbc broke some news about the hospitality industry. sources telling david faber that hyatt is in advanced talks to buy starwood hotels. >> you stole it right out of my mouth. for more, let's bring in patrick
schultz. welcome to you. what do you think is a primary motivating factor? >> i can't stay for sure. i don't want to speculate on rumors. but the reason a company would be in a brand or a company like starwood, first off, would be their global footprint. starwood gets the greatest amount of their earnings overseas at 50%. that would be reason number one you get a large international footprint just like that. secondly, there's the opportunity for a new management team to come in and help turn around the sheraton brand. sheraton has lagged such as the hilton or the marriott brands. and then third, certainly with any m&a here, there would be the
synergies of the corporate costs in the acquisition. >> you're being very coy here. there are some other hotel chains that have said they're not interested in going after starwood. but there is talk of maybe a chinese company. there are three that could be identified. but the chinese government would choose one of them to be the company to go after starwood. is that what you're thinking? is that a more likely merger than with hyatt? >> i don't want to say who is the most likely. a lot of companies as evidenced by various "wall street journal" articles and cnbc. information coming out. i believe that a major chinese player is kicking the tires just as perhaps a number of u.s. hotel companies, as well as private equity companies. >> where are we generally in the cycle for the hotel space? which has seen a nice recovery.
how much of those gains have been made? what's the outlook looking for their ability to increase revenue for available room going forward? is that plateau one of the reasons we might not see more deal activity? >> you're hitting the right spot there. we're at a very mature later stages of the hotel cycle. we had five, six years. that doesn't last forever. the challenge for the hotel companies is there's pressure by wall street and investors to continue to accelerate earnings growth. growth is no longer accelerating. revenue per available room. a key metric. you have to look at m&a to supplement that growth. >> you're hedging, probably for compliance reasons. >> perhaps. >> i respect that. you do expect more mergers than
acquisitions. does it make sense for international companies to merge with u.s.-based companies at this point? >> well, let's think about a chinese company and i'll relate that to a deal which has happened with the waldorf astoria. >> a well-regarded business operations. i think a lot of that goes to spreading your money globally. i think we got our answer there. >> good to see you. >> heading into the close. 40 minutes left into the trading session. the modest rally. nasdaq is up the most percentage-wise with a 32-point gain. the s&p up about 13, kelly.
>> the real significance. up next, why carl icahn is taking a large stake in aig, and calling for it to split into three companies. we're back right after this. 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. in panama, which is a city of roughly 2 million people, we are having 5,000 new cars being sold every month. this is a very big problem for us
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welcome back. things are really heating up. there you can see carly fiorina touring the stage, as many of the other candidates have already done. getting a feel for things, and as you mentioned, you can see different members. there's samantha wright talking about how it's all going to work. we saw ben carson do that earlier. there is quite a scrum gathering behind. >> yes. a lot of energy, i'm sure, in those two rooms tonight. meantime, back here, a lot of energy today involving aig. check out the company's stock, up 4%. the insurance giant getting that lift after cnbc broke the news that carl icahn is pushing for it to split up. bob pisani is on the floor here with more now. >> the important thing is, icahn comments have generated a lot of
trading. here they are. aig up 4%. that's very good volume for aig. here's what carl icahn essentially said to the board. he sent a letter saying he wants to split the board. he's proposing the company is split into three parts. a mortgage, a life, and a property casualty. they'd have a more competitive structure and the valuations would be higher than the individual companies that you have right now. the company is not standing stim. they've already responded. peter hancock is the ceo. he released a response to this.
a 99% drop that helps to have the government involved in the company and inject finances into the company, money into the company. as you can see, it's come back from there. right now, i'd say the company is much better than a lot of people thought it was going to be. reasonably good cash flow. they've doubled the dividend. it's got a 1.7% dividend. and they raised the buyback. i guess the question is whether this is really practical. i think a lot of people think it makes some sense to split it up and the companies may indeed have higher valuations. but i think you'll find hancock is going to try to say at the earnings call, the conference call, that it's not practicable
to do that at this time. there were a lot of questions about how they would do this. i don't hear people saying this is a crazy idea. maybe not practical. >> it's one thing to ask peter hancock his view of that. i wonder what hank greenberg would say, the very influential former ceo of aig who built that empire. i wonder what he thinks about the idea of splitting up into three companies? >> probably what he's doing is just smiling and saying we're trying to figure out how to add value to a company that i always knew had value, and had we had not had such problems with the government, it would have been worth even more. i'm not sure how they would split it into three companies. this is very much similar to what's happened with citigroup and the whole travelers thing.
they argued he put that giant company together. and then had them preside partly over the dismantlement. >> as carl icahn said, it was too big to succeed, the phrase he used. >> let's get to sue herera. >> here's what's happening at this hour. house republicans have nominated representative paul ryan as their choice to succeed house speaker john boehner. afterwards, ryan said that the country is on the wrong track and change is coming to the house. the full house will vote tomorrow and is widely expected to easily vote ryan in. the pentagon says that u.s. fighter jets are tracking an unarmed army surveillance blimp that tore loose from its ground tether in maryland and has drifted north. a one-mile-long cable is striking power lines as it moves, reportedly knocking out power to residents. ben fields, a deputy who flipped a disruptive student out
of her desk and tossed her across her high school math class has been fired. the sheriff calling his actions unacceptable, saying the video recorded by her classmates shows she posed no danger to anyone. and facebook founder mark zuckerberg telling a cheering audience in india that he supports net neutrality. he spoke to students and teachers at new delhi's premier tech college before holding his first town hall in india. you're up to date. that's the news update at this hour. back to you. >> all right, sue. thank you very much. a little bit later, we've got 30 minutes left, going into that critical part of the trading session. the dow just now continues to tower higher. i think this is the high of the day. we were up 120-something a little while ago, but we're almost there now, with a gain of 119 points, kelly. >> anything could happen in the final half-hour. coming up, a leading trader will tell us what he's watching as we head into the close. and then with the fed keeping rates at the same level at zero, mohamed el erian will
welcome back. one of the men who will be first to take the stage, the former governor of new york is getting a tour of what he is to expect when the first debate kicks off at 6:00 p.m. eastern time here in boulder, colorado. carly fiorina just walked through the spin room here. it is a bustle of activity. and it all will get under way here in just a little bit. >> we're getting you closer and closer. and we're getting closer to the end of trading here in wall street. we've got matt chezlock joining me here on the trading floor. with highs for the day, going into the close here, we figured out the selloff. >> right. >> but why the comeback, do you
think? >> i think it was just a little bit of hedging on their part. we gave them a lot of criticism at their last meeting when they said they weren't going to raise rates for the foreseeable future, and now we say they may come a little bit sooner. so the economy may be a little bit better. i think that's the reason we're seeing the route. we're not so fearful as we were of europe, china, and the economy here as a whole. >> it's not just the equities here. the dollar has rallied. oil has as well, but that's an inventory thing. gold sold off from its earlier rally. what's the market trying to tell us? >> i think gold has lost its luster. >> it was starting to perk up recently. >> oil sold off and got to a point where that's where you were going to buy if you wanted risk and reward in this market. this market is really surprising at these levels here. but 2100 in the s&p is going to be something we'll look to take out. >> i was just going to ask you.
are targeting the upper range or the lower? >> probably the lower range. we saw how quickly we could get there. now we've got to breakthrough to the upper side. one thing to look at the transports. they've had a really strong rally. that was a lagger for the last two days. we've had some other sectors that have been really strong. those are the ones i'd look at. if transports with follow tomorrow, maybe we get a pop higher. >> all right. we'll see what happens. thanks, matt. >> good stuff. let's get more reaction to that big decision by the fed today. joining us is the chief economic adviser. welcome to you. i say big decision not because they held rates steady, but because of the specificity of the language they used. what do you make of the market's early response? >> think of it this way. if i can use a traffic light analogy, back this the second quarter, the domestic situation and the external situation
flashed green. they didn't go forward. by september, the external had gone red. so they couldn't go forward. they've told us two traffic lights are yellow and they may be willing to go forward when it comes to december. the market now, we have seen make movements in terms of yield, especially at the shorter end of the curve. and it's pricing the dollar. the dollar strengthened because while the fed may move, the ecb is getting looser. i think the market reaction is rational. and i think the fed wants to keep it live. >> the question i have is about inflation. they set themselves a target of 2%. they wanted to see inflation expectations reach 2% before they would think about raising rates. we weren't aren't even close to that, especially with prices moving lower. do you think they need to
rethink that number, or will they be patient and wait for us to get to that? >> i think they are rethinking this number, bill. it already indicated to us that they're not going to wait for the inflation expectation to get to 2%. they want confidence that they're starting to move towards that. why are we thinking it? we're not in the world of best guess. they know if they maintain a current path, they risk collateral damage, specifically when it comes to future financial stability. >> there are two pieces of their decision making. the one is employment. obviously the unemployment rate is low. the payroll gains are steady. it's the inflation piece i find most interesting. frankly, they say they'll move if they see either actual or expected inflation moving back up to 2%. do you see any indications that that's going to be the case? >> that's critical. and that speaks to wagers.
we have two employment reports between now and december. if they see wages move, and become more responsive to the incredible drop rates we've had, they will go forward. they want to normalize policy. they want to get off 20%. what's critical and disappointing is they haven't made a bigger effort to shift the market obsession. we are obsessed with the timing. i would say overobsessed to what is likely to be the loosest tightening. that's important. because it reduces the trauma that the market would experience otherwise. >> so that slow process of normalization that you see, and you're not alone in that, obviously. but people have to make money by investing money in the meantime. history would suggest that financials would do well as the fed normalizes. but will they do that well if it takes so long for rates to get back to a normal area?
in other words, the question i'm asking is where do you put your money to work right now while we do wait and see the fed begin the process? >> in the short-term, with december being so live, every data release is going to cause volatility. not only are they going up and down, but they're liquid. they overshoot in both directions. prepare for more volatility. when that comes, remember, you're going to get very unusual contagion. you will have wonderful opportunities. just think of the opportunities that investors had. you're very agile. over the longer term, it's all about the handoff. if you believe the fed will succeed in handing off other policymakers, then these valuations make sense. as to whether the politicians realize that we need this critical handoff in economic
policy. >> we'll leave it right there. thank you so much. we are preparing to hear from the entire republican field tonight for the gop debate on cnbc. of course, just a little more than two hours away. let's move on. we have a news alert on deutsche bank right now. seema modi stepping in with that story. >> here's the alert. deutsche bank announcing its strategy 2010 financial targets. the main headline here is that the bank is eliminating its 2015 and 2016 dividends. further details of how deutsche bank intends to achieve these targets will be announced on thursday, october 29th. the main headline here, deutsche bank eliminating 2015 and 2016 dividends in response. we're looking at shares higher, just by around .6 of a percent. we'll continue to dig through this report, but for now, back to you. >> thank you very much. 20 minutes left in the trading session. the dow continues to set highs
for the session. right now we're up 151 points, and in fact, the nasdaq continues to be the strongest of the three major averages with a gain of roughly 50 points right now. still ahead, monster earnings. we have gopro, amgen, paypal, buffalo wild wings, yelp. pretty much something for everybody. and we'll have them all for you coming up in a little bit. >> the countdown is winding down to the presidential debate. donald trump wants to keep entitlements intact. sharon epperson will take a look at where the candidates are with entitlement reform. stay with us.
the rally continues. the dow setting highs for the session up 166 right now. nasdaq's at 53. that's a 1% gain. so it is for s&p. one of the leading sectors today, the financials. wait until you see bank of america up 5%. the s&p bank index is up three and a half. up 4.4%. regions financial up 4.3%. a big day for those financials.
>> that's what hopes of a rate hike will do. >> entitlement reform, the hot button topic in this presidential campaign. a subject that will likely take the stage at the gop debate. sharon epperson is with here with a look at where the candidates stand on social security, medicare, medicaid, and who's making the most strides on this issue? >> well, there are a lot of candidates with a lot of varying opinions. they'll have a serious impact on your finances. it will be key topics tonight. student loan debt and social security and entitlement reform. they don't all agree how to do it. let's start with the issue that's really at the forefront. that is student loan debt. he hasn't really revealed a clear alternative. carson says work is the answer to the student debt program. he has a plan to refocus aid for the media students and propose income share plans to pay back
those loans. that's also one of marco rubio's proposals along with several others that he's suggested to deal with the debt burden that he has experienced himself. there are a lot more common themes, a lot more common ground in terms of social security. have the wealthy voluntarily give up their benefits. and then several candidates want to raise the eligibility age for their ability to get those full benefits for retirement. from 66 or 67 where they stand right now, to 69 or 70. and then there are those who don't want to make any cuts. carly fiorina says she won't reform the program until she can show americans that the government is spending money in a smarter way, and mike huckabee doesn't want to touch social security at all. he says it's a mandatory program. we may see some real fireworks in this debate, but i think what viewers really want to know is what the candidates are going to say that's beginning to impact their own finances. >> we should remind people this isn't just because they want to mess with or not mess with their program. it's because they're concerned
about the trajectory of government spending. >> concerned about government spending. they're concerned about making sure that the programs are financially solvent as well when it comes to social security and medicare. but a lot of people want to know, what does that mean for me when i'm ready to have those benefits? >> especially when it comes on a day that the house is voting on a budget bill that cuts social security disability payments. i mean, that's a hot button issue for a lot of people. the crop insurance. some of the other probables in there as well. but they are touching social security in a rather delicate way. >> they absolutely are. a lot of people are watching that because we think of it in terms of retirement benefits. but those disability benefits very key to millions of americans. so we're going to be listening closely to see if they address that at all tonight. we'll be posting some tough questions. >> just a quick final word. one idea that seemed to gain some credence -- with the existing money, or with an
individual's money. do you expect to hear a lot more about that in the months ahead? >> i absolutely expect to hear a lot about that. here's the issue, though. a lot of folks just don't do it. they don't use that money. that's part of the program that we've seen with some of these health savings accounts, individual retirement accounts. are they really being accessed as much as they should? so it's an idea will definitely be talked about a lot. >> so much to cover. a lot of ground to get to. thank you so much. >> looking forward to that. break a leg tonight, sharon. we've got the dow up 177 right now. i'm looking for our cash, but we have a huge crowd around the post nine right now, kelly. i'm not sure you can get through the crowd to give us the impact coming up. we'll watch carefully with the dow at the highs of the session right now. >> a big night out here in colorado for the debate. but a big afternoon for earnings, too. up next, we'll preview the numbers for gopro, amgen, and paypal. stay with us. >> the republican presidential debate tonight. coverage begins 5:00 eastern on
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minutes. joining us to preview some of the big releases in san francisco, it's josh lipton on gopro. meg tirrell gives us a look at amgen. dom choo is waiting for paypal. josh, start us off. >> we know it's been a rough ride for gopro shareholders. now let's see if ceo nick woodman can win back. the stock in the green today, but it has dropped hard, down some 50%. when the camera maker reports analysts want to see eps of 29 cents on revenue of 344 million. also, how many cameras did gopro ship in the quarter? the street wants to see 1.7 million. finally, lots of attention on that guidance for the all-important holiday quarter. back to you. >> all right, josh. thank you very much. those biotechs have been very volatile. amgen very much in focus of late. meg, what are you looking for tonight? >> looking for numbers of 238 a share for eps and looking for
revenue of $5.3 billion in the third quarter. listening for competition. the first biosimilar, that generic form of a biological drug. listening for any color on how that affected their sales. also, any color on their new cholesterol drug launch rapathia. people very excited about that. finally, we've heard ceos weigh in all week on drug prices. so that will be something we'll be listening for any commentary on. it will be a topic in tonight's debate. >> paypal marking its first report since e-bay's spin-off. e-bay had a pretty nice corner. >> here's the card on paypal earnings. this will be that first earnings report since it split off from e-bay. from the online payment side of things, let's take a look at some of the expectations. analysts are looking at sales
per share. beyond those headline numbers, it's beginning to be about any indication on future business. any kind of forecast. also, commentary on what it's doing to maintain some kind of a leadership position in the payments business. it's evolving. maybe jp morgan chase's product. square, stripe. everything else is changing the landscape. a swing of about 6.5%, up or down in the stock. traders already trying to see if this could be a rather volatile first earnings report. back over to you. >> getting ready for them. we'll see you three in just moments when those reports come out. in the meantime, we're closing back with a closing countdown. we'll show you what has been a wild swinging day with the dow up 171 points right now. >> the federal reserve making some there. a little bit to go before the cnbc presidential debate. we'll preview the candidates'
debate strategy with michael steele. we're also going to have much manufacture from boulder, colorado. if you're not near a tv tonight, you can watch the debate on cnbc.com, and your ios android or apple tv apps. just sign in to your provider and cnbc pro users can also watch the live stream on cnbc.com. be right back. 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. for all the confidence you need. td ameritrade. you got this. [ that's a good thing, eligible for medicare? but it doesn't cover everything. only about 80% of your part b medical expenses. the rest is up to you. so consider an aarp medicare supplement insurance plan,
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two and a half minutes left. what a crazy day. here's the dow. can you tell where the fed announcement started? that would be 2:00. classic stutter-step. selloff and back we go. we set highs for the day. watch this. other markets and how they did after the fed announcement. the dollar index. can you tell where the fed announcement came out as the expectation maybe goes that they're going to raise at the end of the year? gold had been flirting with the 200-day moving average, sold off as the dollar went higher. now it's back to 1157. price of oil was strong anyway on the inventory data. it's now up 6 and a third percent late in the day. we've got earnings coming out. the things we're watching for, among others. there are plenty, not just these three, but we'll watch for gopro, amgen, and paypal, bob pisani.
all of them trading higher. >> what a day. my motto is do not yell at the stock market. it's a stupid idea. 2:00, the statement comes out. and everybody says, it looks like they're being more hawkish. and the markets seem to be taking it that way. stocks go up. the market goes down. and i kept looking and saying yeah, but where does it say that? i couldn't find it where they were clearly being hawkish. just because they used the phrase "at the next meeting," we're going to use the same criteria. that's really stretching it to say that that's hawkish. >> we've seen that before. i thought it was extreme. >> even higher where we were. august 20th, started moving down the two or three days where they were worried about china worries. we're back above the levels. we're still below the may highs.
it's not that far away. that's what the technicians care about. >> 193 points. charles schwab and company, ringing the closing bell here. farmer company ringing the closing bell. a lot of earnings coming up on the closing hour. hi, everybody. welcome to "the closing bell." i'm kelly evans getting things situated out here in boulder, colorado. where our coverage of the gop presidential debate will begin in an hour's time. here's how we're finishing the day on wall street, and what a day it has been. lots of big moves across different asset classes after the federal reserve statement that we'll get to here. the dow, interestingly enough, going out with a gain of almost 200 points after briefly dipping negative after that statement was released. that's a gain of better than 1%.
same for the s&p 500. the nasdaq, the outperformer today of 1.3%. we are waiting on trio of big earnings reports. our reporters are standing by to cover all of it. josh lipton is waiting for gopro's results. meg tirrell all over amgen for us. dominic choo is covering paypal. we'll have more for you in just a moment on all of that. >> ready to go there. joining us this hour, carol roth is with me here at post nine. so is our own mike santoli. and also with us for more on today's market action is the earnings set to report shortly, david seeburg. i hear amgen is out. how do they look? >> in the third quarter, reporting eps of $2.72 versus analyst estimates of $2.38. revenue coming in at $5.72 billion versus analyst estimates
of $5.33 billion. the company saying it's driven by drugs like enbrel. also increasing guidance for the full year 2015, up to revenue of 21.4 billion, to 21.6 billion. now expected to be $9.95. also giving guidance for revenue of 21.7 billion to $22.3 billion. big raise there for amgen. back to you. >> and the stock is up 2.25% right now in response to all of that. you get to be the lucky guy to explain what the market was trying to tell us today. is it about the fed? the dollar index clearly goes higher. maybe raises his rates sooner rather than higher. what's the message of the market today? >> look, i think it's pretty
simple. i think investors are really hyperfocused on what was going on internationally. i think the fed did touch on the fact that their concerns were alleviated. >> we've got a lot of moving parts and pieces. go ahead, david. >> i think it's much more important to have that. i mean, from the standpoint of the confidence that things are improving overseas. when you think about that, that's really what got investors' confidence build in here. honestly, it has nothing to do with the quarter point, a 25 basis point move within rates. i think that's a blip on the screen. it has to do with the confidence that china's not falling off the face of the earth and the fed believes that. >> do you agree? >> the statement was marginally more hawkish than a lot of people were believing coming in was going to be the fed's intentions. i do think it's okay. the fed is looking at the right things. so september, they like the fact that there was an acknowledgement of market
turmoil overseas. they didn't like the fact that the turmoil and the potential hard landing in china. now we're back to a data dependent fed. one that says they don't like to see inflation get to their target but has to be going in that direction. forget about liquidity concerns. all that stuff means we're back to responding to the stuff hopefully the fed should be responding to. >> they placed the football in front of charlie brown yet again. kelly, what did you want to ask? >> i was going to mention the dollar. maybe you want to chime in on this. obviously it's been a political foot fall for years. it's really going to be an interesting development for the family. >> you know, kelly, i've been in the camp that the fed is not going to raise rates this year. i still don't think they are going to raise them in december. i think what happened is the market saw the statement they immediately panicked and said december is on the table. but then they remembered that this is a fed that likes to be, how should we say, very careful
about the way they do things. i think they put december out there, meaning it's a possibility of march. they're never ahead of the curb here, but that is always behind the curb. i think once that's digested, there's still a lot of investors. >> are you among those who feel they would do a rally of sorts? are you fading these rallies here? >> i would absolutely do for a rally if the data is improving, and if the fed believes they're making comments about that, like i said before, it has nothing to do with the 25 basis pointsing whether it's three months earlier, or three months later. it has to do with the confidence people have, that things abroad have stabilized a little bit. that's what derailed the market. it's not about a 25 basis point move. out of their minds. it's about the fact that people thought china was going to fall off the face of the earth.
>> david, we're due for a rally after the market's up 12% in a month? >> that was my line. >> absolutely, when we get commentary like that, we get some sort of acknowledgement that things have stabilized or improved from the fed. 100% so. now, is it a rally that you chase? i'm not suggesting that. you're absolutely going to get a rally. when commentary like that is made. >> kelly? >> yeah, i'm just looking through here. trying to figure out you were saying. how much of the gains have we brought forward? >> that's obviously a very good question. there are a lot of data that say after a good october, you tend to have a little bit of follow through in the rest of the year. i don't think that there's huge land mines out there. but i do think you've obviously seen a lot of people trying to anticipate not just that fourth quarter rally, but this end of october strength. and a catch-up type move. i do think there's a lot of
tactical elements ahead of themselves. >> if you think about, with the strong dollar, with energy, still struggling, but still struggling in the grand scheme of things. you have to ask yourself what is the catalyst for tremendous growth to all of a sudden show itself in the fourth quarter. i don't know what the catalyst is to say that we're going to get a major multiple expansion here in the next couple of months, whether or not the international market seems to have calmed down. >> we've got to step in for a moment. we've got more earnings this time from gopro. those of you watching television see it's down 10%. josh lipton, what happened? >> gopro just reporting -- let's get you those numbers. reporting 25 cents on 400 million. remember, the street was looking for 29 cents on 434 million. so a miss there for gopro on both the bottom and the top. some news here about capital return. it's authorized a company to
repurchase up to 300 million of stock. that's going to start in the fourth quarter. but missing here in the bottom, a conference call. a lot more color about what happened. and guidance about that all-important q4. that conference call starts at 5:00 p.m. eastern and we'll be on it. back to you. >> this has been the hallmark of this earnings season. when you miss, you get hit pretty hard. >> you're not getting the benefit of the doubt. it's going to get better. gopro is a badly broken stock right here. this story really continues to unravel. that being said, it's no longer crazily overvalued. you can value it like a regular company now, if it isn't going to fall apart. >> there were a number of people anticipating trying to catch this falling night. they have a huge short interest. maybe something like 50, more than 50% of the float is actually short. the fact that they just missed. this is not a good thing for gopro. >> let's bring in an analyst who
follows gopro. a buy rating on this company. is this just the cost of doing business with such a volatile stock here? >> thanks for having me, bill. i would say it exceeded what we were thinking. we cut our estimates to get under 370 and 16 cents. so it's bad. i think there were a lot of stale estimates out there that exceeded what we were thinking. the q4 guidance, that's the all important holiday season. we'll see where that number shakes out. >> kelly? >> i'm thinking the same thing. when we look at that holiday season, i don't know. if it's not gopro that's the hot device this year, what is it? >> there are a number of things. fitbit obviously. there's apple products. quad helicopterers. they're showing off some of the prototype, or the imagery off their prototype drone. i expect them to talk a lot
about that. that's a market they'll be in any 2016. >> the issue you just raised about drones. gopro has actually been thinking a key partner for a lot of these guys. if this becomes more of the gift of the season ahead, why can't gopro do more to capitalize on that? >> they will be in some of these rooms. some will come with the camera. some will be aftermarket where you attach a gopro. >> carol? >> it's carol roth. when i see a company like gopro that hasn't been public for very long. all of a sudden announcing it's buying back stocks. it indicates that maybe this is a company that shouldn't have become public. what's your thought as an analyst when you see a company like this that all of a sudden is now looking to buy back shares, when it's supposed to be this huge growth momentum play? >> well, it was mentioned earlier, the shares are
inexpensive. i think when we look at the results and why they're missing, i think we had sort of a timing stumble here, a product stumble. there weren't a lot of what i would call high end products that were released after this year. i think they resolved that into next year. that's probably why they want to buy back the stock. i think they feel like their business is just going through a transitory issue. next year, we have a lot of new products. and we can be back. >> shouldn't they be putting that back into more products and more opportunities to grow the company instead of saying we have no better use right now than buying back the stock at this point? >> quickly, charlie. >> i would argue they're spending more than any company in consumer electronics history. >> charlie anderson, good to see you. thank you for your thoughts on gopro today. appreciate it. kelly? >> stick around, everybody. we've got more earnings to come.
and we're taking a look at more candidates. rick santorum there touring the stage ahead of the gop debate that will begin here. the first debate at 6:00 p.m. eastern. the next one at 8:00. now, donald trump, ben carson still the leaders of the pack. will this debate be a make or break moment for one or both of them? we're going to talk about that next. you're watching cnbc, first in business worldwide.
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our coverage of the gop debate begins at 5:00 p.m. all eyes will be on the two men at the center of the stage. donald trump and ben carson. eamon javers explains how these political outsiders have become the leaders of the pack. eamon? >> yeah, hi, kelly. fascinating political dynamic at play here. we've already got some of the candidates who have arrived here in colorado. ashley springer was able to talk to some of them as they come in and get a couple of words. take a listen to that. >> come on.
thank you. >> how are you doing? >> good. >> any specific thing you look to? >> just be myself. that's the key. don't try to be anybody else. >> very, very concerned that this country could be turned over. >> laying out my tax plan. >> so no major policy revelations there. the candidates warming up ahead of the debate tonight. we've seen them checking out the lecterns, getting a feel for the microphones, the crowd, where the other candidates are going to be on their left and right and getting really comfortable with that stage psychologically, emotionally before they get out there tonight. all of that very important as the candidates are preparing nor debate today, kelly.
as you've seen, just behind where you are sitting inside the facility, at the spin room, we've seep a couple candidates actually come in and start to work the press a little bit. we saw dr. ben carson in there. senator rand paul and other i think working the media a little bit, saying hello. just sort of getting familiar with the crowd. anticipation building and we're almost there. >> it's a big crowd and it's going to be interesting to see who can breakthrough the crowd of these voices on sta s onstag. let's talk about what they have to do on that stage tonight to connect with voters. >> let's stalk with michael steele, the former chairman of the republican national committee. he joins us today. michael, good to see you. i think back on when ross perot was running. a third party candidate who made waves back in the '92 election. he talked about how they would give away free candy. cutting taxes. a chicken in every pot.
and all that. is the electorate too sophisticated for that? can candidates get away with that tonight? our debate on the committee in the financial world? >> i don't think they can. i think they're going to have to be a little bit more substance, which will be the challenge for trump and for carson. trump, because this is his backyard. this is something he knows and has talked a lot about, and been in business for many, many years dealing with a lot of the very policies that as president he would have to implement. so for cars, he's got the economic chops to run this economy. the fed made news today. how does he react to that? how does he respond to the interest rates decisions that are coming from the fed and so forth? all of these things are in play. for guys like the governors, whether it's huckabee or anyone else, they have governed through some of these tougher times. certainly kasich and krstic talk
about the 2009, 2013, 2014 period, in a way that the senators can't. so there's some really interesting dynamics on this suggest that will play to the benefit if they do it right for a number of the candidates. >> and that is interesting. what chance do the other candidates have of breaking through and outshining trump and carson at this debate? >> i think they have a really good chance. if i'm the governor of a state like ohio, having had to deal with the medicaid, medicare issues having to deal with obamacare, deal with a flagging economy. oh, this is right up my sweet spot in terms of how i can distinguish myself from guys who just talked about it or know nothing about it at all in the case of position. >> they transition to that next level of conversation with the
electorate. >> it pushes out the debt ceiling question again until march of '17. it goes to the senate next week where rand paul has already said he's going to filibuster. how do you think each candidate needs to handle -- this is the party that positions itself as the party of fiscal speedomet . responsibility. do they side with what's going on in congress or do they try and distance themselves? what do you think? >> that's a very interesting question. it's one to watch for. >> this budget deal, the boehner deal is a bad deal, it is a bad way to do public policy. you even saw soon-to-be speaker ryan say the process sucks. a lot of grass roots folks saying why are you buying into
it? i think for jeb bush and marco rubio, you'll hear something very different. now as president, they'll be able to come in fresh and say forget the process now, let's think about what we do come january 2017. >> i still wonder how much of this is going to come down to financial experience, financial knowledge. >> oh, a lot. >> but how much -- at the end of the day is it going to be about style and about personality, which undeniably, people are responding to. >> yeah. do you like the guy still resonates. they can have the smartest, most sound policy going, but if you don't like them, you're not going to buy into what they're saying. that works for a number of these candidates. but i think this debate has a chance to create some separation there, to peel back some of that support. the voters are beginning to settle down. they're beginning to look critically. coming up on a very important
vote in just about three months time. so the voters will begin to look at how they respond to some economic issues. they're most directly impacted by that. they know people are unemployed still. they know people whose businesses are still struggling in this economy. so a lot of that will begin to resonate more and more with them, as opposed to what we saw with the foreign policy debate. >> i can't wait for things to get under way here. thanks for joining us. leading up to our debate coverage, which begins at the top of the hour. if you're not near a tv, you can watch the debate, cnbc.com. just sign in with your tv provider and cnbc pro users will be able to watch the live stream on cnbc.com. we're going to cut you loose, partner. you've got to get ready for your role in all of this. you and joe kernin hosting the pregame show and postgame show. we look forward to that. >> we'll see you guys in just a bit. meantime, let's go back to
business. paypal out with its earnings. >> they looked good initially. now we've got from what was a 4% or 5% gain after hours to looks like a 6% loss, 7% loss after hours for paypal on about 520,000 shares of volume. this after the online payments processor reported earnings of 31 cents a share. that beat the average estimate of 29 cents. revenues coming in just slightly below expectations. $2.26 billion. they did also give full year earnings per share guidance in line with estimates. they're looking for about $1.23 to $1.27, right in line with analysts' expectations. they also made comments about gaining market share in terms of total payment volumes. also expanding their customer base. the company did grow its customer base to 173 million active customers.
they did say that as well in their statement. the company, again, the first time they reported earnings as a company spun off from e-bay, they're going to hold a conference call, 5:00 p.m. eastern time. so there's going to be a lot of questions here about what people are looking for. what they think the competitive landscape looks like. so those shares are getting a big swing. they went from about 4% up to about 5%, 6% down in this after hours session. become to you. >> we will be talking about some of those challenges with kevin o'leary and others in our panel. thanks, we'll see you later. when we come back, a top ranked wall street analyst explains why she doesn't like the walgreens deal to buy rite aid. much more closing bell as we count up to the debate in just a moment.
we want to revisit gopro. the shares are really struggling after the disappointing earnings. josh lipton, what more can you tell us here? >> so we told you gopro reporting missing on the bottom and top another important metric here. that is also a missed bill. should be noted in q2, gopro shipped the same number. we knew there were some real worries, some concern about the performance of gopro's new session. tomorrow we're going to have nick woodman on live and
exclusive on "squawk alley" to walk us through this quarter as well as his outlook for the holiday season. so let's check in and stay tuned for that. bill, back to you. >> thanks very much. we're aware as well that other stocks have come out with their earnings. buffalo wild wings getting killed as well. and we'll get to those in just a few minutes. shares of walgreens sharply lower today after the company reported lower than expected quarterly revenue and issued weak guidance. investors are perhaps worried about the plan to buy rival rite aid could face intense regulatory scrutiny. we're joined by meredith adler. you're expressing that very concern, aren't you? >> that's right. we think there's meaningful antitrust concerns. >> so why do you think they announced this deal if they realize that they're going to have major headwinds from the federal government?
>> every management team, they get advice from smart people and they believe that they can get the deal done. what a lot of people aren't focused on is the fact that the ftc will probably look at the impact on payers and the government is a very big payer now. much bigger than they were last time rite aid tried to buy something. and, you know, we think that that could -- they'll weigh in. they'll have their opinion about the transaction. >> meredith, even absent any trust concerns, i wonder what you think of the strategy in general here, taking on a lot of debt, walgreens doing another big acquisition, trying to integrate that in. do you think the street would have liked it absent the possibility that the deal might be complicated by federal regulation? >> i think the market was looking for something more transformational. this is just getting bigger, and frankly the rite aid assets aren't really all that good. so i don't know that they would
have thought you're doing the right thing. and the company was very clear. this is about synergies. it's not about improving their strategic position. >> to follow up, this is carol roth. what do you think the right strategy should be? if you were in walgreens' shoes, i look at my neighborhood, now they're not just competing against the cvss of the world, but we've got a target across the street, which basically looks and feels a lot like the walgreens that is across the street. what do you think the right maneuver is to position walgreens to be successful in the future? >> i don't think it's about retail competition. i think it's really about being more of a partner with health care providers, health care payers. they have a very small specialty business. they're not that well-positioned in specialty and that's where all the growth is coming from. although they talked about becoming important in terms of
health care, this action does nothing to really get them there. and i don't know how clear their strategy is to get them there. >> not sure they can fit another name on walgreens' boots alliance. that would be just too much. meredith, thank you. appreciate your thoughts. >> sure, no problem. >> very good. time now for a cnbc news update. here's sue herera with that. >> here's what's happening this hour. wisconsin congressman paul ryan has been nominated by his fellow republicans to be the next speaker of the house. he was the choice of 200 of the 247 gop number. he needs 218 votes in a full house vote tomorrow to officially become speaker. the house planning to approve a bipartisan budget deal within the hour that congressional leaders struck with president obama after weeks of secret negotiations. the deal would authorize government borrowing to pay its bills and set overall defense and domestic spending limits for the next two years. bmw's mini brand is recalling more than 86,000 vehicles because the power
steering could fail. the recall covers the mini cooper and the cooper s models. in the years 2002 to 2005. prince harry joined by michelle obama and jill biden visiting the wounded warriors event in virginia. prince harry promoting the 2016 invictus games, which is an international sporting tournament that he created for injured servicemen back in 2014. that's the update. back to you. >> thank you very much. see you later. when we come back, rick reiter is with us. he'll tell us how the fed's decision could impact the market going forward. plus, hillary clinton bashing the banks. but how does her record stack up with her rhetoric? we'll do the fact check when we come back in a moment.
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classic stutter-step. became a loss briefly and then it was off to the races and the industrial average finished roughly at the highs of the day, up 198 points. the nasdaq, a gainer of 1.3%. but then the earnings came out. let's send it to seema modi. >> buffalo wild wings reporting earnings, missing estimates by a lot actually. revenue also came in below expectations. management citing a shift in the sports calendar, resulting in one last week in football and fewer pay-per-view accounts.
>> i'm sitting next to the biggest sports fan i know. and buffalo wild wings, does it only make money when football is in play? >> even if they do. they should have known this is their model that they're going to make most of their money. you would think that would be an important thing to put into your forecast. so it doesn't really explain to me why they would be less than their forecasted amount. >> it's the sports bar version of the easter shift. when the retailers say -- they took us by surprise. it wasn't in the right quarter. what's going on here, this is one of the great consumer retail stories in the last five years. it was a bulletproof stock, even though it was heavily shorted. what happened really is costs were going up. staffing caused all that stuff to work against them and they tried to raise prices. they had a little bit of a traffic issue. same store sales deaccelerating from pretty high rates.
with indications that a rate hike could maybe happen by december, what do we expect? rick reiter, the chief investment officer at black rock joining us right now.ieder, the investment officer at black rock joining us right now. good to see you. welcome back. >> thanks, bill. i can say you're among those who are just dying for the fed to finally get off the dime and raise rates here. do you think after what we've learned from their statement today that they're finally going to do it in december or not? >> i think they are. i certainly think they would like to. the data is a bit softer. they should start to normalize rates, we do think it's getting harder. do we think they're going to go? by the way, we think people talk about fed hawkish, fed moving. i think the markets applauded what is the right move today.
>> i certainly think the fed should have raised a long time ago. i think there had been windows a year ago, maybe a couple years back where it would have been a good time to do it. at the end of the day, does it really impact the economy? probably not. but i still think from a risk and rewards stointd, that they are going to not be a leader here. i think they're going to wait, as they often do, and i think they'll wait until probably march at least. >> what do you think? >> i think it's going to be a hard one, because the data, you need to have some decent payroll numbers. you need to have eci to be reasonable and global markets and economies to be reasonable. so i think there's a better than 50% chance that they're going to go. but listen, it is a fed that has waited a long time. could they wait longer? certainly possible.
>> i'll just push a little bit back on carol's point. i've been pointing to the 2013 example, when similarly in september, everyone thought they might taper. they didn't. everyone said wow, that's off the table for a while. october of that year, they put december back on the table. still, it seemed like they wouldn't go in december and they tapered in december. are we going to follow something like that script, do you think? >> by the way, i think that's a pretty good example. i think that's largely right. by the way, i think that example, the reason why it's a good example is that you think about what happened in december, after the fed finally went, markets didn't mind at all. it wasn't much of an event. markets are prepared. it's a very different dynamic when the ecb is becoming easier because they have to be, versus the fed that can start to normalize. that's why markets like it when they do what we think is appropriate. >> are you doing any repositioning in anticipation of what could happen in december? >> yeah, we have done a little bit. we think the yield curve -- similar to what happened today, we think it should flatten.
we've been adding a bit of risk in our portfolios. we think some of the high yield markets that have backed up a lot in the fall represent some value. and i think the fact that we know with greater certainty where the fed is, it gives us a bit more comfort of taking some of that risk. >> one trader told us he expects a big rally in the dollar to continue in anticipation. do you buy that? >> we are moderately long in the dollar. there are governing influences that make it difficult. i'm not sure that japan wants to see their currency deteriorate a significant magnitude. like it did at the beginning of the year, you'd see that same sort of move. >> always good to see you, rick, thanks. >> thanks. we'll come back.
"shark tank's" kevin o'leary joins us. he thinks paypal may have a major problem. mr. wonderful will join us to explain in just a moment. cnbc's gop debate kick off in just an hour. we'll head live to boulder for a preview coming up. stay tuned. big day? ah, the usual. moved some new cars. hauled a bunch of steel. kept the supermarket shelves stocked. made sure everyone got their latest gadgets. what's up for the next shift? ah, nothing much. just keeping the lights on. (laugh) nice. doing the big things that move an economy. see you tomorrow, mac. see you tomorrow, sam. just another day at norfolk southern.
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the earnings have been pouring in. there have been plenty, haven't there? >> there really have. let's start with vertex pharmaceuticals. sales for its new cystic fibrosis drug came in higher than expected. you can see the stock is higher, by 5.7% in after hours. if we turn our attention to online delivery player yelp, which has been dealing with heightened competition, it reported an earnings loss for the quarter of 11 cents, missing street expectations. revenue slightly better, $144 million versus the estimate of 141 million. the stock up by 2.5% after hours. and if we take a look at paypal, it's first earnings report since spinning off. 31 cents adjusted versus the expectation of 29 cents. you can see that seems to be what investors are focused on. the stock tanking after hours, down 6%.
bill? >> all right, seema. thanks very much. let's focus on paypal. bring in kevin o'leary from o'leary financial group for reaction. once upon a time, paypal was the only game in town pretty much in that category. but now there's plenty of competition, and that's what worries you about paypal. >> i have to disclose. i'm in partnership with paypal on many shark tank companies. honey fund, for example, processes around $200 million worth of gifts for honeymoons. paypal is our partner. i love the company. i love the management. when they recently went on a road show to talk to potential investors, of which i am one, i begged them to come out of the gate competing for my allocation of financial services with growth with a dividend. for example, visa. i've got a full waiting in visa. but they didn't do that. my explanation was if you could give me growth with a different dent, i would put aside my
covenant that would stop me from buying their ipo for six quarters. they didn't do that for me. i'm just another investor in financial services. here's the problem. look at the volatile on their first earnings report. there's no cushion of yield there. all their competitors basically have it. and my problem with this space is at what point did the margins get squeezed? make no mistake about it. this management team is incredible. they're one of the best to work with because we work with them across so many companies. but my concern is as competition comes in, some people may give away the transactional service for free, just to gather the customer data about their purchasing preferences. that may be more valuable. crushing for all the guys in this space. >> we had this conversation about gopro a little while ago. why pay a dividend when you have that competition and you're trying to grow a company. >> look what happened. gopro is basically consumer electronics. the rule there is don't buy ipos until you get the personality of
the stock over six quarters. had you done that, you would have avoided tragedy here. i don't know where the bottom is on this stock. if they wanted to at some point to provide stability -- i mean, look. it's been a disaster for people who bought it after the ipo. it reduces risk. that's my whole point. >> kevin, i'm going to get off your dividends, which i know you love and focus back on the things you said, which was the margin. to me, that's the real story here. this is a company that has incredible margins. when you look to google, you look to apple, you look at all the people who were coming into this space, not only is it competition to grow revenue, but it's going to bring that margin down. isn't that really the big risk that paypal faces? >> i think you're right. i think about it this way. you're an institutional inves r investor. you have a 5% waiting in, let's say, visa. it's very stable.
it doesn't add volatility to your portfolio. imagine somebody like paypal with a brand that everybody knows and says i want to compete for that institutional dollar. i want you to allocate 50% of what you nad visa to me because i'm growing faster. they could have won that race, that's my opinion, they didn't do it, and now i think they're going to pay the price in terms of volatility. and yes, i don't think margins ever get better than where they are now. the pressure that you've identified is on every institutional investor's mind. what an opportunity they had. and i think they squandered it. >> all right. good to see you, kevin. thanks. kevin o'leary. >> take care. >> o'leary financial group. and, of course, from "shark tank." just an hour to go until the cnbc republican presidential debate. the candidates are ready to go and so is our janine wells, who is literally getting ready to take the stage there in boulder. aren't you, jane? >> oh, my gosh, the most important guy in the entire place.
food. yes, i'm in the belly of the beast, guys. rick santorum in the green room right there. this is where you have to walk through to get to the stage. the candidates' security all around. they're putting on the finishing technical walk-throughs here. we've finishing walk-through and we have miles of cable, 11 cameras inside. it is a three minute walk to go the whole way so we'll see you on the other side of the break. good. very good. you see something moving off the shelves and your first thought is to investigate the company. you are type e*. yes, investment opportunities can be anywhere... or not. but you know the difference. e*trade's bar code scanner. shorten the distance between intuition and action. e*trade opportunity is everywhere.
welcome back to clb. i'm jane wells. we'd of we've made our way to the stage area. they have name tags for the candidates. all of the candidates have done the run-throughs today and many have left the event center and are coming back and some are staying and then they will come out on to this stage. 1200 people will be here. and our preshow debate starts at the top of the hour. and we have four podiums for jindal, santa, pataki and graham. these are the chairs where you will see carl, john and becky and guys that starts at 6:00 p.m. eastern, part two is at 8:00 p.m. eastern for what has become must-see tv, with ben carson in the lead. >> stylish jane wells there. why do i think of globe trotting
journalists brenda star when i see your outfit. >> you like my new coat. >> i do. i love that. it is very nice. very journalist kind of stuff there. >> thank you. it is a little warm for a coat in here but i wanted to show it off. >> it is perfect. can write that thing off. now mean while, one major candidate that everybody is talking about not at the debate tonight is hillic who is making headlines for bashing the backs and did it last night with stephen colbert. scott cohn joins us with details on that. >> hillary clinton just happened to make her comments while our fact patrol is on duty in full force for tonight's debate. last night stephen colbert suggesting that maybe hillary clinton is not quite the populist she claims to be. >> you put forth a plan. >> i did. >> for reforming wall street. ab wall street embraced it. is that a good sign? >> well, i'm not sure who you are talking about. because i certainly didn't get
that message, if they did. paul krugman, the columnist for the new york times. >> sure. >> nobel prize winning economist said i came out with a tough, comprehensive effective plan. >> well, actually, paul krugman never uses those words in the october 16th column that hillary clinton refers to but does say the plan is better than sander's plan. but she has not looked at donors to her campaign which include private equity and real estate firms. and she was also em fassic on future bailouts. >> if you are president. >> yes. >> and the banks are failing, do we let them fail this time? >> yes. >> we let them fail this time? >> yes. >> but in 2008 she said yes, yes, yes to the bank bail out bill and continued the follow year. and clinton would not reinstate
glass steegle, repealed while her husband was president. not to say that hillary clinton would be a friend to wall street. her plan includes a so-called risk fee on big banks and taxes on high frequency trading which critics say will end up hurting investors so we are a bipartisan fact patrol, turning our sights back to the republicans now for tonight's debate. >> and you will be working over time. you and your team. we're looking forward to that. thanks, scott. see you later tonight. we have one final preview of tonight's big debate coming your way in just a moment. stay tuned. become the only thing you think about. that's where at&t can help. at at&t we monitor our network traffic so we can see things others can't. mitigating risks across your business. leaving you free to focus on what matters most.
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my thanks to carol roth and mike sant olie as always. intelligence reins and all of the good things you bring to the panel. thank you. the debate begins in about an hour. lets head to boulder where kelly and joe are set. you went to school in boulder, welcome home, buddy. >> it was like a homecoming. i started to do the math when i was here, i said i'm not going to do the math. and this is just a one-time thing here, bill, relax. kelly will be back with you. >> bill, he made me adjust my seat height. >> i did.
>> stand up next to her and see who is the taller of the two. >> you have a very good self-image. >> but you got to hike this morning? >> did i what? >> i didn't have a suit to wear but the suit finally made it. >> we are looking forward to it. go get them. break a leg. we'll see you later. >> thank you so much. our live coverage of the republican presidential debate starts now. >> if we do not get our fiscal house in order, we're going to have a gigantic collapse. >> we'll pass tax reform adopting a sim pal flat tax. >> my plan works whether you are on main street or wall street. >> our illegal immigration system has been broken for decades. >> i eliminated taxes that crush mall business. >> when government tries to pick jobs they often get it