Skip to main content

tv   Closing Bell  CNBC  October 29, 2015 3:00pm-5:01pm EDT

3:00 pm
will be a hot top i cic for you >> i miss you, brian. good to be back. >> thank you. but you've bean there, done that. >> "closing bell" starts right now. >> such a drip. hi, everybody, welcome to the "closing bell," i'm kelly evans at the new york stock exchange. >> and i'm bill griffeth. gopro, that's one of the highlights or low lights in this case getting slammed hitting all time lows after its ipo, the stock is down nearly 60% over the last three months. you will hear what ceo nick wood man had to say to defend his stock, that's coming up in just a little bit here. >> aetna shares up today on the back of earnings, ceo mark better lenny will join us, he is going to talk about those numbers, the humana acquisition. >> that budget bill that's making its way through congress
3:01 pm
right now. we are getting ready for yet more earnings, some big numbers after the bell tonight including starbucks, linked in and first solar, just a few of the big companies reporting in less than an hour. we will have all of that for you in just a little bit. >> donald trump also invoking the name of larry kudlow in last night's debate. >> larry kudlow is an example who i have a lot of respect for, loves my tax plan. >> they said that you have as much chance of cutting taxes that much without increasing the deficit as you would of flying away from that podium by flapping your arms. >> then you have to get rid of larry kudlow who sits on your panel who is a great guy who came out the other day and i said i love trump's tax plan. >> and larry is coming back to the panel, he is going to join us live along with barney frank to give us his reaction. all of that coming up. >> let's get to this gopro story, tumbling to this all time low relative to where it was from its oip, seema mody has the market flash for us. >> bill, it's on pace for its
3:02 pm
worst day on record, this after gopro reported disappointing q3 earnings and a huge revenue miss, but in a consumer exclusive gopro ceo nick woodman dismissing concerns about growth and be bill griffeth in a maturing market. >> we are still forecasting 23% dwroet for the company for the year at the midpoint. so performance still good, demand forego pro still strong but admittedly we took our foot off the gas from a marketing perspective in the second and third quarter. >> guidance for the fourth quarter was also weak, q4 earnings expected to come in the range of 35 to 45 cents a share, that's nearly half of what was forecasted by analysts. in response several brokerages cutting their price targets on the stock but there are some bulls out there. j & p security says this is a young company that can move fast the short coming comparing it to the apple's disappointing sales for the iphone 5 c. analysts there maintaining a buy rating and $90 price target.
3:03 pm
some analysts saying they will be watching their holiday sales price clothesly to see if the company can regain some of its lost momentum. >> has flattened out. seem marks thanks very much. let's get to our "closing bell" exchange for this urs. joining us at post 9 jim dee nan, we have new york stock exchange trader peter costa and rick santelli is back from boulder. peter, pretty good rally yesterday, we are holding our own today even with the weak economic data. earnings the highlights of stories like gopro. what's going on? >> i think this is a spike from yesterday's rally which i thought was overdone to start off w i thought that, you know, after you heard the feds, you know, not doing anything and then the talk is that december is the -- you know, the next flash point, which i still think it's not, you know, people rallied into that is correct now they are not doing anything, they are staying away from the
3:04 pm
market, the volumes are doing from yesterday's level. you know, it's just tired, the market is tired. sometimes it gets to a point -- very short-term oriented market. >> it has been. >> what about in credit markets, how are we seeing investment great, high yield, what's happening for the end of the year, and these mega deals will just continue at pace. >> the deals are going to continue. if you look at the environment where the stocks are, if you look at valuations and look at where people could borrow money, investment grade or high yield companies, you will continue to see companies do more and more m&a or transactions to grow their business. with regards to the credit markets low growth environment even if the fed does move a little bit here you are still not talking about really squeezing the growth out of the market, you're talking about a slower profit environment, that's still generally a positive for a credit environment and spreads reflective volatility. >> are you worried about
3:05 pm
companies over time, especially we are seeing it with some of the credit levels she was big companies will have, are we going to look with the economy growing 2% and thinking why did we think they could support this kind of debt. >> since the financial crisis we were on a run and management teams will start to stretch and create earnings. i think when you look back in a couple years there are going to be companies that won't necessarily make it. not that they won't make it but they might have to restructure either their operations or balance sheets. those things will happen but there is still a lot of good deals getting done in the market. this is a point in time where there will be a lot of dis pergs. in a low growth environment you will have your winners and losers. >> rick, the first blush interpretation of yesterday's fed statement was that it was slightly more hawkish, we had a
3:06 pm
dollar rally, yields have been moving up on the long end of the curve in anticipation that maybe the fed will, in fact, start raising rates maybe as early as december. is that how you read it? what do you think the market is trying to tell us right now? >> i think the market is trying to tell us that the market is more worried about what the fed may or may not do. it didn't really pay that much attention in a logical fashion to today's 1.5 gdp. you knew, kelly, at the top of the show it wasn't how the market is dealing with first look at third quarter gdp or after supply. it's how are the markets responding after faed. i understand the fed is important and that is the problem in my opinion. it's too important. it's way too important in the market considering the grade of the type of job they have done over the last seven years. don't get lost in the inter day swings. here is the easy way to look at the market. 217. exactly where we closed last year in tense.
3:07 pm
if i had to peg everything should be about unchanged. the economy should be unchanged. we have somewhere between 2.7 a 5% economy and everything is calibrated to that except for stocks, but stocks are calibrated white well to that. there is a bit of gravy that comes with ultra low rates, not everybody gets to put a couple ladles on their food but it definitely ends up as we see all the deals i'd rather see companies trying to satisfy consumer demand, trying to create new products but that takes some work, it's easier to do all the things they're doing and the less companies there are that is significant. i think carly fiorina had something to say about when you have less and less companies and i happen to agree with that interpretation. >> let's go to that for a moment, rick. i was wondering what your interpretation is of all the huge deals that we are seeing when we are talking about 100 billion plus energiers and acquisitions that are going on here just from a cycle point of view. what does that tell you about
3:08 pm
the landscape and the question? >> i think it tells you that there's partnering up because they are trying to make some magic, but i think it's a horrible way in my opinion, it's not the productive aggressive way i'd like to see economic magic. i'd like to see more companies opening up and competing with each other because i think ultimately when there's fewer it looks good, maybe the stock prices reflect t but ultimately it ends up at a place, you know -- when is the last time or when are the last several times you have seen this type of activity? usually it correlates are w. things that happened in the marketplace that we don't really hope for. >> i was going to say a, peter, you are nodding your head, are these mergers strategic or defense? >> there's a couple of things. i think if a company has, you know, several billion dollars of cash on hand, you know, they did this buy back thing for three years, that helped the market go
3:09 pm
up. worst spending of money in history because if you're going to spend $3 billion buying back your own shares the price of your stock goes up, your shareholders are happy but it's not helping your business. now they are merging, it's a defensive you play. they don't want to use that money to be creative and build a new environment, make their products better, expand their markets. they want to do it by, you know, merging or taking over other companies. i think if that money is going to be spent it should be spent building and employing people and building new businesses. >> i think you're going to look at at it broken down by sector. you look at companies or sectors where they have a good view on the trends of growth, the demand increases in the future. you are seeing a lot of investment in those because most of those management teams and the shareholders are going to say their stock -- the potential growth of their stock is better to reinvest in their products. in other businesses they don't have that. in the general economy you are growing at a 2, 2 plus percent
3:10 pm
range. so you see these mega deals as a way to create cost synergies, they don't have the expectations of a significant growth trend. where they're creating shareholder value is through these deals. >> we have had tens of billions of dollars out of corporate america back into the hands of shareholders to do whatever they're doing with it in recent years, jim. >> obviously we have been in an environment that has not produced a significant amount of corporate investment, but it certainly has helped the households continue to dee leverage since the financial crisis. >> that's a good thing. good to see you all. thank you. we have a news alert on facebook. for those of you on facebook, a new innovation. julia boorstin to tell us about it. >> bill, facebook a announcing a video ad format showed slide show. they will be made from still images to make it easier and cost effective for marketers to create ads and make them for engaging than photo ads.
3:11 pm
they are designed to take up less data. they work quickly on any device. this is the latest in facebook's push to make video ads more accessible to small basis. kelly, back over to you. >> julia, thank you. bill, i can't wait to see what you do with it. >> i can't wait to see what i do it, too, once i understand it. >> the puppy, you have the dog, the central feature. 50 minutes to go, the dow is down 41 points at this moment, the s&p giving up about 3, the vix still a little higher, the nasdaq down nearly half a percent today. >> pfizer and allergan in talks. why fiezer is pursuing this deal? >> we will get reaction from aetna ceo mark bertolini, pushing through their $37 billion acquisition of humana. >> a lot to talk with mark about.
3:12 pm
also ahead wells fargo's chief financial officer will be here to talk about the surprising drop in home sales last month and we will find out if he think it's a temporary speed bump or something else going on. still to come on "closing bell." (vo) what does the world run on? it runs on optimism. it's what sparks ideas. moves the world forward. invest with those who see the world as unstoppable. who have the curiosity to look beyond the expected and the conviction to be in it for the long term. oppenheimerfunds believes that's the right way to invest... ...in this big, bold, beautiful world.
3:13 pm
when you do business everywhere, the challenges of keeping everyone working together can quickly become the only thing you think about. that's where at&t can help. at&t has the tools and the network you need, to make working as one easier than ever. virtually anywhere. leaving you free to focus on what matters most.
3:14 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 ♪
3:15 pm
pfizer and allergan in preliminary merger talks. if the deal goes through it could be the largest in history in in space. >> cnbc's mike santoli has more on what could be driving this deal. >> from pfizer's point of view they have been open about wanting big international merger, they tried to do an inversion deal outside the states and the standard line is they want to reduce their tax burden in general going forward, which is true, pfizer's tax rate has been stuck around 25% for years, but there is another element to this which is pfizer needs to unlock access to its overseas health cash. they have $13 billion annually, about half of that is dividends.
3:16 pm
it's not as if they need the cash, but cash flow has been stagnant and a big merger that allows them to get at that cash and all the cash flows internationally from here on out is very attack track testify. two days ago on the earnings conference call management was very open thereabout this, about the kinds of deals they would look for, what it gives them in terms of being able to access global cash. >> where a allergan domiciled now? >> it would be an irish based company. most of it's business is in the u.s. but there's been so many moving parts with allergan, they have hold up a bunch of companies, so obviously many, many moving parts. a lot of people think ultimately pfizer goes with another target. >> they have a tax strategy but does it make sense strategically, by the way? >> i do think it makes sense. a lot of the analysts are saying these are great products that allergan has, it's a good asset, knots the cheap, there might be
3:17 pm
other options that look for attractive. there is a line of thought that thinks pfizer keeps running at this thing because they want tax rates to change. >> could this deal fall apart because congress realizes what's happening? >> it looks like there is going to be political pressure. they are in a tough spot. >> mike, thank you. >> see you next hour. >> sticking with the healthcare space, insurance company aetna out with its earnings today. >> joining us to break down the numbers is aetna chairman and ceo mark better leany in a cnbc exclusive. welcome back. >> hi, kelly. hi, bill. >> i'm going to begin on the issue we were talk being with mike it was the topic in the gop debate last night. one of the major topics in this country today, it's the price of drugs. is the high price of drugs justified because of what they're doing to solve different ailments in this country or is it a moral outrage? >> i have to say it depends on
3:18 pm
the drug and i would argue that it's really not about the price of the drug, it's about what that drug does. the hep c drugs, for example, expensive but solving a very big problem across the wide swathth economy. people my age and around my age category that were running around with hep c. so i think it really has to depend drug by drug. within we saw the hep c drugs come out we paid for them, we thought that was a good value for our members. >> let me ask you about the quarter. it looked good, the stock is responding positively. any head winds -- and i think specifically we've talked about this before, you announced the salary adjustment at the low end, other companies have done that and they've been coming out anecdotally and saying, boy, this has hit our bottom line. you don't seem to be doing that. why not? >> it's $27 million out of a $10.6 billion operating budget. it's rounding error. >> could you have done more? >> we will continue to do more.
3:19 pm
>> but -- >> when we -- when we closed the humana acquisition we will actually add 10,000 for people that will be -- have their wages raised as a result of our program. >> mark, on another issue that you brought up on the call, another contentious one here politically, too, but you were saying it's way too early to call it quits on the affordable care act. obviously a lot of insurers are struggling with how much they're paying out versus how much they're taking in in premiums. what's different about your participation in obamacare and do you think you can make it work? >> well, in the end analysis healthcare insurance premiums follow underlying healthcare costs. so we were very careful to find marketplaces where we had a cost structure that actually supported a product that was affordable for consumers in that market. to the degree we could not we would pull out the markets like we did in two markets for this
3:20 pm
year. >> that makes t by the way, an issue that's going to leave a lot of people potentially without access to plans in certain parts of the country going forward. how do you think we're going to address that? do you have a preference as to how we do that by sort of using mandates to push more people into the pool, waiting for an approach that might come out of the election in 2016 that changes the structure of this altogether, mark? >> evening the underlying cost of healthcare are important so we need to move away from fee for service reimbursement to value based design, getting value fort money we're spending. cms is focused on that, they want to get more than 80% of the population on a value based reimbursement by 2020. i think that's a great notion and a great idea. the problem we're having right now with the affordable care act is it's a political weapon and until we can start tweaking the program every year and making it better, we're not going to make it better. if you look at prescription drug program which is doing very well for seniors, you look at
3:21 pm
medicare advantage and medicare, those programs get touched up every year. >> right. >> policies change, et cetera. we have not done that with the affordable care act because it's a political third rail. >> the budget bill making its way through congress, they passed it in the house yesterday, vastly reduces the premium increase that was expected in medicare part b for 2016. what's that going to do to your business and do you think we are going to see a period now where we are going to see regulators try to reign in more costs here? ? >> well, i think we have to reign in more costs and the programs we offer in medicare advantage are zero premium plans, the kind of programs that humana offers, and those programs with r. very attractive to seniors because they don't have to pull anything out of pockets. whereas for medicare fee for service they have to pay a premium for their part b benefit. i think that change actually would have pushed more people into medicare advantage. we don't think it would have been fair to seniors, they did the right thing, but overtime we
3:22 pm
think seniors, people who are used to being in managed care plans in their commercial employment, will find that medicare advantage is a very easy transition when they retire. >> mark, just real quick before we go, the issue of how the savings account has been coming up in the debate, in the campaigns in the last couple of weeks, what do you think about using this assen approach for individuals to pay for their existing deductibles or as a way for them to save and pay for medical care going forward? >> i think it's a great idea, we use it here for our employees, we use it for a lot of our clients. the question is can people afford to put money away and that gets to the broader economy, wages, and how robust our economy is. we have a lot of work to do there before people have enough disposable income to put it in hsas. >> mark, we will leave it there. thank you. >> thank you. good to see you both. >> mark better leany. we are heading to the close here. yes, in fact, we are. 38 minutes left in the trading session. here is a rather quiet day, you missed a big one yesterday, the
3:23 pm
big rally we had of a begin of 200 points on the dow, but that's not the case today, down just 20 right now. >> it was remarkable to think about the effect of the fed being almost explicit about december, the market going negative, coming back and making up its gains and then some. looks like we're consolidating some of that. up next barney frank and larry kudlow weigh in on last night's republican presidential debate and larry became part of the action thanks to donald trump. we will get his reaction. another wave of after the bell earnings heading our way tonight, starbucks, linked in and first solar among the big names reporting. don't go away.
3:24 pm
3:25 pm
3:26 pm
here is a look at the gold spider gold trust etf, the gld kin ross gold and gold corp. look at gold corp. especially, down 10% as the precious metal itself is down 30 bucks. >> yeah. >> an ounce, 2.5% and it's continuing the move that began when? 2:00 p.m. yesterday. >> it had been flirting with its 200 day moving average on the upside, looked like it was getting ready to break out to the upside then the fed announcement came out and it's been down since that time. so the numbers are in. 14 million viewers tuned into last night's consumer republican presidential debate making it by far the most watched program in
3:27 pm
cnbc's history. here are some of the last night's highlights. >> we cannot elect somebody that doesn't know how to do the job. >> if we don't act now we are going to be the first generation in american history that leaves our children worst off than ourselves. >> somebody has already stolen money from you. are you going to give them more? >> 60% of the american people now need to hire an expert to understand their taxs. >> this party is over all the dictators. make me commanders in chief and this crap stocks. >> larry kudlow is an example who i have a lot of respect for loves my tax plan. they said that you have as much chance of cutting taxes that much without increasing the deficit as you would of flying away from that body couple by flapping your arms. >> then you have to get rid of larry kudlow who sits on your panel who is a great guy who came out the other day and said i love trump's tax plan. >> well, he's like the good housekeeping seal of approval. >> joining us for their post
3:28 pm
debate analysis, larry kudlow and barney frank. yeah, welcome back. >> please don't get rid of me. >> no. no. no that won't happen. is that an accurate statement? i know you have come out and said you liked t do you like everything about it, pick and choose, what do you think? >> well, look, for one thing i've been for a 15% corporate tax rate for a long time on this show. if you won't abolish this all together which is my first choice go to 15 and i think donald trump got that story completely right. it would help grow the economy. by the way, i think it would pay for itself regarding the rest of mr. trump's plan i think he moves the ball in the right direction. i think it's pro growth. i think you heard a lot of pro growth tax reform on the debate last night. >> we got a lot more detail on the plan that ted cruz put forward in the "wall street journal" today. if you had to pick between trump and cruz which one do you like or who gets further along the type of tax reform that you think is so desperately needed?
3:29 pm
>> i don't know. i like the sound of senator cruz's plan very much, it's flatten the rates, it's similar to trump's, doesn't go quite -- he goes further than trump. i'm fine with that, they are all moving in the right direction. i don't know what the details are. the point is this: most of these republicans have pro growth tax reform plans that would help the economy grow and create jobs. i think there is a contrast there between those guys and what we heard in the democratic debate which was the same old dreary tax the rich, punish the rich idea. punishing rich people does not help poor people get more prosperous. that's my point. >> segue to barney frank. what do you think? >> well, first, it should be clear that larry and many of the other republicans who are for these substantial tax cuts and history has not been they paid for themselves. you have people here to intellectually honestly and larry is more honest than some of the candidates don't object
3:30 pm
to that. they do not want the government to be spend ong a variety of programs on which it spends. if you think we should cut back on social security and healthcare benefits or housing for the elderly, et cetera, then you would welcome that, but i have to say i thought the best remarks on this whole tax thing came from john kasich and i think he is auditioning for the vice presidency but with hillary clinton. i was struck in john kasich's opening remarks when he said and boasted about the fact that he had helped balance the budget. he had led the charge to balance the budget in the '90s and he said when he left congress the budget was -- there was a $5 trillion surplus coming. let's fill in the dlals details. he balanced the budget in cooperation with wlk. when he left congress it was in 2000 at the end of the clinton administration. he said we were then face ago surplus. in came george bush and the
3:31 pm
republicans that's when the deficit started. john kasich, and he clinton were balancing the budget, bush and the republicans came in and the bottom fell out. >> well, look, barney' history is correct and i thought john kasich had a good night, however, there was bipartisan support for the tax cuts after 9/11, i will jest throw that in. just to clarify, look, i'm not saying every reduction in taxes pays for itself. i'm not saying that. there are two tax rates that are very pro growth, however, that will in my opinion. the capital gains tax rate when it comes down, growth in revenues go up and the corporate tax rates similarly throughout europe, they slashed corporate tax rates, we're waiting too long, and by the way, growth and revenues went up. the rest of it is a trickier matter, i agree, and is subject to a lot of, you know, discussion -- >> can i -- let me respond. first of all, there was some bipartisan support, whether
3:32 pm
there was not bipartisan support for a tax cut when george bush and the republicans came in as kasich said a large surplus was bloom looming. alan green span warned us not to do away with the deficit and wipe out debt because you couldn't do monetary policy. the degree of cooperation was a tax cut in general. there was not bipartisanship in the extent of the tax cut or the extent to which it hit people at the higher levels. yes, it was democratic support for a tax cut that was more middle income but the republican one went much, much further. so that is, in fact, where the deficit began in that decision and you said after 9/11, larry, but that's precisely the point. what we had in the early bush years were two wars, iraq and afghanistan and several tax cuts. even if you think a tax cut is a good idea to do it at the beginning of two wars, that's why you do those two in combination you have the problem. >> barn, before we go i want to ask, barney, before the debate
3:33 pm
hillary clinton was on steven colbert's late show and they talked about her wall street plan they helped her craft. i want to ask you about this. >> if you're president. >> yes. >> and -- and the banks -- and the banks are failing, do we let them fail this time? >> yes. zee we let them fail this time? >> yes. yes. >> wow. >> do you agree? >> yes, because here is what we say, we let the bank fail, we insist that it fail. we will pay some of the debts and this is the difference that we did after hank paulson and ben bernanke asked us to work on this so that the debts -- some of the debts would be paid to prevent them from spiraling out of control. any debt that is paid by the way with taxpayer money is recovered by an assessment on the large financial institutions. but there's no more too big to fail. if you can't pay your debts and you are a financial institution you are put out of business under our law. what you then have is the secretary of treasury is mandated to step in and pay in some of the debts, not all, enough to keep this from
3:34 pm
becoming a downward spiral, any penny that's paid for is recovered from large financial institutions. >> we've got to go. >> i'm opposed to too big to fail. i've been opposed to it for a long time but i will just say this, republicans have established a very good beach head here of pro growth tax reform which flattens the rates and broadens the base. i think it's a big plus in an economy which is growing in a stagnant 2%. i don't think the democrats have a growth plan and i think this is going to be significant in the election. >> can i say -- >> barn yeerks larry, we'll pick it up next time, we promise. >>. >> we've got to go. we could go on. >> barney frank and larry kudlow. >> they still need their own show on cnbc. >> thank you, guys. time now for a consumer news update with sue herrera. hello, sue. >> here is what's happening at this hour. passengers were forced to evacuate a dynamic international
3:35 pm
airways plane after it caught fire on the runway in fort lauderdale, florida. fuel was leaking from the plane before the fire occurred. the carrier says it's conducting an investigation into what went wrong and will issue further information when available. parmalat will receive $47 million from jpmorgan to settle a dispute stemming from the 2003 bankruptcy of the italian dairy group. they said as part that have settlement they will drop aup claims. hillary clinton says allowing medicare to negotiate prescription drug prices would be one of her highest priorities if she become president. she made the comments at a community college in berlin, new hampshire. sherwin-williams saying they have developed a anti-bacterial paint. they have earned certification from the epa for its ability to kill more than 99.9% bacteria like staph and mrsa.
3:36 pm
that would be a big improvement. that's the news update, back to you. see you in an hour. about 25 minutes to go here, the dow is down 22 points, the s&p, though, nearly in positive, it's only down by a point right now, the nasdaq has been underperg today, down 21 points. >> a lot of individual stocks that are moving big, plus a leading trader will tell us what's on his radar in this final and most important half hour of the trading session. stay tuned. here at td ameritrade, they're always working. yup, we're constantly making thinkorswim better. 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 lebration. (different holidays being shouted) back to work, guys! i love this times of year. for all the confidence you need. td ameritrade.
3:37 pm
you got this.
3:38 pm
3:39 pm
about 20 minutes left in the trading session here as we head toward the close. we have alan valdez joining me on the floor of the new york stock ex change. so much to think about in terms of earnings and economic data and what's going on overseas and the fed and the politics. what's meaningful to you right now? what are you watching to tell you where the future direction of this market? >> you know, we are watching the fast food industry. especially the so-called higher end fast food like shake shack, chipotle. >> fast casual. >> they are having banner quarters. shake shack hit it like they
3:40 pm
were kansas city. earnings were up 15%, revenue up 75%. they're really knock tg out of the park. one of the reasons we think is oil is so cheap, $600 discretionary spending, they are going to eat. >> the so the consumer in certain sectors is the place to be right now? >> correct. >> correct. in that regards without a doubt. oil at $44 a barrel, $600 more in your pocket. >> are you fading these rallies? what are you doing in the overall keep of things? >> we get more involved. we don't think the fed will raise in december. we're playing the game, staying in it. >> alan, thanks for joining us. kelly. >> thank you both. we have a developing story on is a could you i can't to get to. >> some developing news on two directors of the sequoia fund, as of late june managing over $8 billion in capital and really meeting the s&p strongly. it also happening to be one of the biggest holders of valeant,
3:41 pm
it's parent company single biggest holder of val yan. true want was supportive of valeant despite the ongoing jute knee. now we understand who independent directors of the sequoia fund have stepped off of the sequoia board in recent days and according to dow jones this comes amid the valeant issues. once again, the investors here broadly seem to be supporting valeant, but two directors questions are being raised about whether they were comfortable with that or not given their resignations. kelly, this is interesting because obviously the company has been embattled. tomorrow morning at 9:00 we will hear from the first time from bill ackman of per sling square about what he as an inn shesing thinks what's going on with the company in some detail. a lot of reactions coming out this week. >> kate, even as you're talking -- thank you very much, kate kell yeechlt for people watching valeant shares more lower, dow jones also reporting
3:42 pm
cvs can you get off its relationship with fillidor. although the s&p just turned positive, the dow is only down 5 points, the nasdaq is down 17. >> pending home sales were down today, the second lowest level we've seen of the year. we will get a view on the state of the housing from john shrewsberry. >> tomorrow we have a big morning coming up here. i will be at carnegie mellon university in pittsburgh for a bare of big interviews. david teper, that's going to be on squawk box, then at 3:00 p.m. eastern we will get the jute look for tech startups when i peek with kliner perkins ray lane.
3:43 pm
hello, ken jennings. i haven't seen you since that tv quiz show. hello, watson. you can see now? i can recognize people, analyze images and watch movies. well i wrote a few books, did a speaking tour, i... i've been helping people plan for retirement. and i help doctors identify cancer treatments. is that all? i recently learned japanese... yeah, i was being sarcastic. i haven't learned sarcasm yet. i can help with that. you ppremium like clockwork. month after month. year after year. then one night, you hydroplane into a ditch. yeah... surprise... your insurance company tells you to pay up again.
3:44 pm
why pay for insurance if you have to pay even more for using it? if you have liberty mutual deductible fund™, you could pay no deductible at all. sign up to immediately lower your deductible by $100. and keep lowering it $100 annually, until it's gone. then continue to earn that $100 every year. there's no limit to how much you can earn and this savings applies to every vehicle on your policy. call to learn more. switch to liberty mutual and you could save up to $509. call liberty mutual for a free quote today at see car insurance in a whole new light. liberty mutual insurance.
3:45 pm
welcome back. turning to housing pending home sales fell in september despite expectations they were on the rise. yesterday we learned that price right side still going up. perhaps our next guest can shed light on what's happening in the housing marked. >> if anybody can hopefully john can. chief financial officer of wells fargo. who is joining us finally here at post 9 of the new york stock ex change.
3:46 pm
welcome to new york city. >> thank for having me. >> the data on housing continues to be mixed. one month is looks great, the next month it looks terrible. >> i think it's better. >> are we bumping along? >> third quarter versus third quarter in our business, we were up about 15% which i think represents the broad swath of what's going on, new home starts are up, in general sales of existing homes are better, home builder confidence is better. i think there's something to be happy for. more people have jobs, more people are comfortable borrowing money and i think that's good for housing. >> we saw also the home ownership rate finally move up a little bit in the third quarter. do you have a view on that turning, on people getting back into forming households and buying homes and it will be back to the old normal. >> i don't know if it's back to the old normal. we survey customers and ask them about their tendency to want to buy homes. people are more bullish today than they have been. when we look at the age cohorts,
3:47 pm
how old people are today and when first time home buyers come into the market and when first time trade up buyers come into the market the next years look pretty good. >> i know one report does not a trend make and it's all local but i think about the last sales report nationally and the one i think about is here in the northeast, the hot bed of real estate down 61% in the latest report. is there a market that acts like it's sitting on the lowest interest rates in history? >> no, i don't think it is. i don't think that data is a trend, i think the broader national trend is i little more home ownership. homes are still affordable and rates are low so my sense is over some period of time you will start to see it. we see it in our mortgage base? one debate we have heard both on the campaign trail but also on the pages of the "wall street journal" comes down to whether it makes sense for the banks to be better as separate smaller chunks than one giant bank.
3:48 pm
what do you say? why does wells farg dpoe makes sense the way it's structured today. >> i think it depends on what type of a business model different banks have. we work great as one model. we have a lower risk business than other businesses of our size, we don't have a lot of businesses that stand on their own, we take deposits, we make loans, we make auto loans, credit card loans, middle market business loans and it works well with national distribution. so our customers large or small can do business with us wherever they want to do business. >> satisfied that that's going to be the end of the case -- >> especially as we go through the next 12 months i'm sure there will be chatter about t liquidity, business model changes big banks are safer today than they have ever been my observation. >> you can be sure there will be more chatter about it in the next year. >> thank you so much. >> thanks for having me. >> at post 9. just a little more than ten minutes to go here, dow is only off 11, s&p now up half a point,
3:49 pm
vix still higher on the session, the nasdaq down 18. >> last i checked it was thursday, but david darst is here today, so is courtney radcliffe of luke capital. she says she's getting her old man winter trades ready and will explain what those are when we come back.
3:50 pm
did we just, start looking for a house? oh did you see that listing on zillow i sent you. you see that bathroom? did we just decide to buy house? i think so. yay! find your way home. zillow. 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.
3:51 pm
3:52 pm
we've got with the market -- nine minutes left in the trading session, the dow down 15 points, art cashin said it's 150 million so buy. it's a nonevent as it was yesterday. courtney radcliffe, for some reason david darst is with us on thursday not friday. >> i have to visitity grandchildren in houston tomorrow, bill. >> give them our best here. courtney, we were saying before the break you're getting your old man winter positions ready. what does that mean? whast the seasonal play here that you're looking for? >> the seasonal play is the consumers still. it's retail, it's utility, it's really following through on what we know is coming in the fourth quarter and it's getting ahead of it with the anticipation we
3:53 pm
will see good stuff coming out the way we've seen with earnings. >> even though growth growth was down. what role is the consumer going to play? >> if you look at the consumer portion of the gdp it carries the weight and the consumer is doing what it should be doing right now. we're seeing good growth. >> one trader just told me he is going after the fast casual restaurants, think thinks they're doing well. >> i like the retailers, i still like luxury brand goods, i still love all of the kind of the apples of the world, amazon, santa is going to be in walmart, i think they are getting creative and i think it's going to be interesting. >> david, the president of the china said overnight he expects growth in china to be 6.5% for the next five years. is that market you want to invest in as a result? >> bill, that's been a halloween market because trick or treaters went to the door of china and china basically lowered interest
3:54 pm
rates and lowered the bank reserve requirements simultaneously which is a rarity as you know. china this month, bill, is up 12% and germany is up 12%. so both of those houses at which we trick or treaters have visited have given out nice treats, monetary stimulus, which takes the pressure off the fed to avoid raising rates. they can raise rates, however, that will hurt the united states so they are giving out treats in china and european central bank could end up giving the united states some indigestion as we -- as we lose exports. you've got next week the international capital report, bill, its trade balance and it will be very interesting to see what that does because the gdp now figure which we talk about week after week, the atlanta fed, .8% for the third quarter, i don't think that's baked into the market. this is a halloween market, we hope it's not a zombie market.
3:55 pm
>> and question is does the market try and discount growth in the economy or what the fed is going to do. that's what the markets, you know, is trading on right now. i have to go at this point. good to see. >> you nice to see you. happy halloween. >> courty, thanks for joining us today. we will take a break. come back with the closing countdown and then we will get you ready for the earnings that are coming out after the bell tonight. kelly will have these for you, starbucks, linkedin as soon as they cross the wire. important than your health.
3:56 pm
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. 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.
3:57 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.
3:58 pm
about two minutes left. quick review of what happened today. the dow here after that 200 point rally yesterday kind of holding its own here, down 36 points as we head toward the close. two other highlights today, the price of oil continued to be volatile, there it is, look at this. i mean, it was up almost $46.80 but it's come back now, we are down to $45.77 holding above that $45 level. gold getting slammed after the dollar rally yesterday following the fed announcement now down $30 today at 2.6% decline back to $11.45. we have a lot of earnings coming out, the three we highlighted include linkedin which is higher right now, starbucks down 178%
3:59 pm
and solar city is down. you're watching that linkedin number. linked >> linkedin had big drops in april for last earning period, again in july and they had been talking about deceleration in their display advertising business before that. so look -- >> where earnings were this year -- >> we're talking bsh. >> low or high. >> the important thing is the stock has gone nowhere this year. keep an eye on that after the bell. we're closing out the month -- >> tomorrow is the last trading day of the month. >> the dow was at 16,000 at the end of september and we are at 17 -- the dow has moved 1,. rk1 points. the s&p has moved 200 points, 8% or so it's been a spectacular month and everyone was pessimistic going in, 16,000 is where we were right at the end
4:00 pm
of september. everyone has been wrong. >> you don't expect it in october that's for sure. the folks from abbott are ranging the "closing bell" at the new york stock exchange at the nasdaq it's the u.s. fund for unicef. stand by all those earnings, here they come on the second hour of the "closing bell" with kelly evans and company. see you tomorrow. thank you, bill. welcome to the "closing bell," ever been, i'm kelly evans. let's take a look at how we are finishing the day on wall street. target starting with the dow down 25 23 points and s&p 500 we watched it fluctuate between positive and negative territory, couldn't quite do it, goes down with a decline of about a point. now, the nasdaq it was the underperformer today down .4%. so we've got our reporters to cover it auchlt mar began brennan, julia boorstin and
4:01 pm
seema mody will have results from electronic arts and first solar. joining today's panel we have cnbc mike santoli and cnbc contributor stephanie links and "fast money" trader guy adami. welcome one and all. mike, which one has your attention here? >> obviously starbucks, mostly because expectations are so high, i think the expectations for domestic comp sales really pretty heavy. >> and also the china issue which has come up, it's been the almost -- the give vice sieve decisive issue. the ones that don't do well in china are punished, the ones that do see their shares benefit. >> we've seen apple post strong china numbers and last quarter the beginning of the third quarter starbucks even early on said that the fundamentals in china were improving, mcdonald's saw improvement.
4:02 pm
sure, yum! is having issues, but i think there are pockets of consumer that are doing quite well in china. >> we will talk more about this in a second. christine, they have huge demographic changes happening with more encouragement about having more than one child. what about today, though, a strong dollar effect? are you looking for a big one? >> sure. you expect to see that over the last several quarters. i think at this point a lot of companies have learn how to hedge because we have seen this problem for about four quarters now. certainly interested in starbucks but i'm looking for linkedin. last quarter i had really high expectations going in this was going to be the quarter that linkedin stands out from the social media names but it has a completely different revenue model. disappointed last quarter, they did end up beating on the bottom li line, guidance wasn't great, subscriptions were down, i will be looking at their marketing solutions and ad revenues, talent solution still steams to be doing well, not sure to what
4:03 pm
to make this have name at this point. >> we did flash the adjusted earnings per share number for linkedin. again, we will have more in just a moment. >> guy adami. >> hi. >> hi. so many different strands to pick up with, earnings, the fed yesterday, the gop debate and all the if he had lines and fireworks. >> the residence of the broader market is pretty remarkable. what's most impactful to the market, i think the fed gave us tail winds for sure, i think the earnings mix has been interesting as you just said it, the companies that don't do well are getting punished, the companies that do do well are getting reward as it should be and that's what makes a healthy market. i'm surprise at how resident the market was today closing on change, the weakness in the semi-conductors is a little bit of a concern but on the other side of that i thought the bounce back in transports was good. again, a mixed bag. i will say and you mentioned it earlier that the continued weakness in oil has me a little
4:04 pm
bit worried, but that's been a saga now for the last 9 to 12 months. >> let's have a look at linked in. shares were up almost 10% after hours on this report. their revenues beating handsomely $780 million, adjusted earnings per share look like a sizable beat. we will dig through the results. why is this so important for new just for linkedin or does it tell you something broader? >> i think it says something broader. we have seen a lot of the tech names do well this quarter, some haven't. it's really a season of the haves or have notes and this is a very prizing number for linkedin, i think this is a quarter it looks like they're breaking out. end that purchase of linda has been helping. overall i'd like to hear more of the details. how are those premium subscriptions doing.
4:05 pm
people that are buying those subscriptions why are they doing so, how long are they holding them. >> julie boar stin has more detail right now. >> that's right. linkedin earnings beating on the top and bottom line, earnings coming in at 78 cents per share, that's adjusted versus expectations of 46 cents. so a big beat in terms of earnings per share. revenue coming in at $780 million versus expectations of $756 million. with linkedin there is always a big question about guidance. they say that q4 revenue expected to range between $845 million and $850 million. now, that is a little bit higher than what wall street estimate had been expecting. that's coming in better than expected. the company lgs did -- already issue the prepared statement that jeff wiener will be presenting in the earnings call which comes up at 5:00 p.m. eastern. we will be digging through those
4:06 pm
prepared statements and see if there's anything else that's driving the company's results. a huge beat on the bottom line and positive guidance for q4. >> also perhaps membership there at 400 million. let's take a look at starbucks. those results hitting the tape. morgan brennan has the details. >> so starbucks earnings per share nongap 43 cents, in line with analysts estimates, revenue $4.19 billion, just about in line with what the street was looking for. global same store sales coming in with 8% growth for the quarter. the expectation had been 6.1% growth, so better than expected. america coming in with 8% same store sales growth that was better than anticipated, the same for europe, 5% increase for the quarter versus the 2.7% that had been expected. here is where it's a little soft with same store sales, china, asia pacific analysts had been expect to go see 9.4% growth
4:07 pm
there, growth coming in at 6%. also q 1 guidance fiscal q 1 guidance the company issuing guidance of 44 to 45 cents per share, that's a bit light versus expectations of 47 cents per share. and 2016 global comps the company saying it will be somewhat above mid single digits. taking look at shares of starbucks in safr hours, they are trading down about 4%. >> wow. let's hone in, stephanie, on this asia number, the asia pacific comp expected to be almost 10% came in at 6% for starbucks. >> we have to get the break down. right? that region has a lot of places. let's see what china was specifically. this stock has been a home run stock here dwrooer date. the expectations could not have been higher, this company is absolutely embarking on the right things in terms of digital n terms of mobile pay, they are on the forefront and they are continuing to spend and invest and so you don't get that
4:08 pm
operating leverage, that powerful operating leverage, but these are great numbers for a company of this size. you might get an opportunity to buy this tomorrow. >> has anybody used the mobile pay app by the way? i just wonder how does it work? how do you get your hot drink so customizable? are they going to be able to gain traction with this? >> sure. right now their goal is to get to 4,000 stores out of the 7,500 stores. they are in their infancy at least they have rolled it out in the americas and also canada. they are just at the beginning here. i think that that is going to drive traffic and i think we want to hear what they have to say about those trends on the conference call. >> they seem to be forecasting a little deceleration on comps for the guidance, a lot of people crowded into the big growth name that's why you have this response, down 3% if that's what it's going to be really not that terrible. i do think it's much more about where the field position was before the report. >> guy, what do you see do you say? >> they nailed t when you trade at 33 times forward earnings and have a quarter that is excellent
4:09 pm
i grant that, but somewhat in line and you get disappointing comps although we have to wait for the par tick collars. has resistance become support? i think you buy it at 58 despite the rather lot offing evaluation. >> let me go back to the china asia pacific number again. starbucks is a huge company, for its size to continue to grow like this speaks for itself. that said for everybody who is wondering what's going on in china, you know, they are saying here the china asia pacific comp says up 6%. the ticket is not doing much there. obviously a lot will depend on what part of that is china relative to the rest of asia, but it's just light at least on the surface relative to some of the other numbers from the major consumer brands we have seen. >> 6% traffic i think people would till kil for 6% traffic. mcdonald's would absolutely fall over. they would fall over backwards
4:10 pm
to get 6%. >> you're lucky to get single digits and this company is doing a good job and really just at the beginning stages of building out in china. this is an opportunity, guy said t i think it absolutely let's tear what they have to say but if weak this is your opportunity to get into a good blue chip quality company. >> like we were talk being with mobile, stephanie said they are leading the industry in mobile of the places where the mobile app has launched, 20% of customers are using it, not only are they using it, they are spending more. this is a way to get people to spend more, it doesn't seem like you are spending as much when you are plugging it in on your phone. as far as china goes i still think those are decent numbers even though they are fallen short. we saw yum! doing absolutely terribly in china and i said, loom, yum! needs to be refreshing its brands just like starbucks is. that's something that kfc, pizza hut and several others that have been in china for the last 20 years haven't done yet and
4:11 pm
starbucks is actively doing that. i can forgive being a couple cents short on the bottom line. the fact that they beat on the top line and the other numbers are pretty strong. >> let's get back to morgan with more on financial moves from starbucks. >> investors will want to hear this. starbucks has raised its dividend 25% to 20 cents per share. we will keep combing through this release and bring more headlines as they come. >> thank you very much. starbucks shares didn't move often on that, still down almost -- i will call it between 3.5 and 4%. guy, what broader implications would you draw from that? >> from starbucks? >> yeah. >> >> i wouldn't draw any broader implications. i think there are certain companies that are unique and starbucks happens to be one of them. i'm not going to make a statement about the health of the u.s. consumer or chinese consumer based on numbers we see out of starbucks, apple, under armour, nike because in my opinion they are all
4:12 pm
aspirational brands and carry with it a sort of cache that other companies don't. people reach for certain things. it would be safe to assume that the consumer is doing well based on these numbs but i wouldn't make that leap. with that said i do think the starbucks report is very good, i think people are doing a shoot first, ask questions later. if it gets down to 58.5, 59 you buy it with both hands. >> everybody is on vesed with china, i understand it, europe a high percent comp that's good. almost every lodging company that i listen to on their conference calls host, hair i don't tell, star wood all are saying that europe is turning, mastercard said the same thing, europe is on the mend. >> a 5% comp in europe. okay. we have a earnings load on expedia. >> moving higher, the company reporting a beat on its bottom line, $2.07 for the third quarter versus the expectations
4:13 pm
of $2. revenue a bit light on revenue, $1794 billion shers us the simt statement of $1.9 billion. total growth bookings increased 21% that is higher than the analyst consensus. expedia noting that room excluding elon accelerated to 36% year offer year with domestic and international room nights growing 25% and 50% year over year. these earnings reflect the or bitz acquisition, that acquisition closed in september of this year. shares now down 1.6%. >> mike, anything stand out to you about expedia here, again, going back to starbucks and linkedin which we should check on those shares, too, up nearly 10% on their report. >> i go up 50% in that year, seems like this is a space that's been favored for a long
4:14 pm
time. a little bit of softness on the announcement. >> julia boorstin has been monitoring lind inn for us. >> in addition to that 400 million total number there are interesting stats about what's going on in china. i know you have been talking about china on your show toochld the company saying that since the last quarter china now has mor than 13 million members, that's up more than three times since early 2014 when they launched the local length badge version in china. in the prepared remarks that the co is going to be presenting there's some interesting growth stats that explain why the company's earnings came insomuch stronger than expected and why the projections for q4 the guidance that the company is providing are stronger than expected in both the top and bottom line. the company says that there are more than 4 million active jobs listings today, this up from a million a year ago. monthly page views up 90% year over year in september and they have also seen 575% year over
4:15 pm
year increase in the number of applications for those jobs. those are clearly the usage trends that are driving the results we're seeing in the earnings and revenue. back over to you, kelly. >> thank you so much. any thoughts? >> it's kind of nice to see this actually because linkedin was pushed on the back burner to facebook, twitter, google, you know, the companies -- >> especially after that last quarter. >> for sure. it's nights to see it and nice to see the operating leverage potential which is what we have all been waiting for. >> it's like delayed vindication. >> i came in thinking big things last quarter and they disappointed. >> timing is everything. all the levers being pulled here. guy, a quick last word, what are you going to be watching tomorrow? >> energy earnings. exxonmobil, chevron, correct me if i'm wrong, but these big cap energy names better say something good otherwise that huge run we have had from 67 to 82 may be short lived. i have to tell you something, i'm sitting next to mcc right now, she's coming up in the next
4:16 pm
block. i dig her, man. she is the best. >> guy adami, much more coming up with guy and the "fast money" crew. they will have all the headlines from that call and what is moving the stock today. up next we have much more on linkedin's results and what that to mean for facebook when this reports next week. gopro shares down the tubes after weak earnings and guidance but is the stock a beaten down bargain. you're watching cnbc, first in business worldwide. you totaled your brand new car. nobody's hurt, but there will still be pain. it comes when your insurance company says they'll only pay three-quarters of what it takes to replace it. what are you supposed to do, drive three-quarters of a car? now if you had liberty mutual new car replacement, you'd get your whole car back.
4:17 pm
i guess they don't want you driving around on three wheels. smart. new car replacement is just one of the features that come standard with a base liberty mutual policy. learn more by calling switch to liberty mutual and you can save up to $509. call for a free quote today. see car insurance in a whole new light. liberty mutual insurance.
4:18 pm
4:19 pm
welcome back. more, for you. solar city's results have come out. seema mody has the numbers. >> solar city reporting an earnings loss of $2.10 that's a larger than expected loss on its bottom line, however, revenue beat expectations $114 million for the quarter versus the estimate of $111 million. this is solar city, a company that went public in december of 2012, it's been on a volatile ride so far this year, down about 30%. on the back of this disappointing earnings report shares are down better than 13%. back to you. >> pretty big move. thank you. >> let's get over to an earnings
4:20 pm
alert on live nation with julia bore stin. >> live nation beating on both the top and bottom reporting, adjusted, for hair of 44 cents. revenue coming in at $2.76 billion versus expectation ofs of $2.44 billion. they are owner of ticketmaster, a couple of key trends driving these results, live nation says concert ticket sales for shows are up 8%, they said this past quarter they saw a 10% increase in fans attending the concerts. also interestingly here sponsorship and advertising revenue up 16% in cost in currency for the first nine months of the year. so growth really much across the board. in terms of guidance they don't have specific guidance, but they say they do have visibility into the full year performance and are, quote, confidence that we will deliver another year of record top line and bottom line results. we have an exclusive interview with their ceo coming up.
4:21 pm
it will be lots of interesting stuff to talk about with him. >> thank you so much. turning to linkedin which stock was popping after hours. let's bring in james shockmok. a 9% gain. what a different quarter from the one before? >> the first half of this year has been rough but we're seeing a lot of the issues that the company was seeing on the sales force reorganization, and accounting moved behind them and they're firing on all cylinders as it relates to their core competencies in advertising and recruiting and subscriptions. as you look forward you are going to see taking some of the learnings from facebook applying it to their new advertising products, whether they are advertise both on and off platform. >> what do you think helped them to gain this traction just in the last three-month period? did they change their approach at all? was it a particular country like
4:22 pm
china contributing or did all the factors you were calling for and everybody has been citing in the past just bear more fruit this time? >> on the sales force reorganization you did lose the ability to upsell a lot of the clients because we are changing the relationships with your customers and i think that is now behind them and they are able to expand that share with their customers. on the display side of the business, you know, they had been facing challenges because the display advertising as we know it secularly especially on desktop was falling. as they optimized for mobile and seeing the traction all those levers are kicking in on sponsored updates and so forth. pulling that all together you have a pretty complete package this kwrlt. >> mike? >> if you are going to dial back how investors should look at lincoln and categorize it, is it truly a social platform in the same way? the revenue sources are different. how do you view it in value? >> the revenue sources this is
4:23 pm
probably one of the only companies that actually have three growth levers versus other internet companies which is primarily advertising. from that standpoint you do have diversification. as you think about the product, compare it to facebook what they're doing is taking their ability for businesses to leverage advertising and taking that data on and off the platform. what i was telling your guest earlier back stage was, you know, as far as their sales navigator product, social selling when you get about that is correct i think that the way sales force.com is in front of every single salesperson in the world for crm purposes this will be in front of every single sales force as it relates to the lead generation. this is a communication, collaboration and a publishing tool. so i think, you know, this is a much more robust opportunity than we see today. >> where are we in the investment center in terms of the scale? i think some of the concerns are that the margins aren't going to be able to expand as they really
4:24 pm
invest heavily to grow their business. >> right. >> so there's concern next year that their margins are maybe too high. where do you come down on that? >> look, this is a lower margin business and when it's compared to facebook that's over a 60% ebitda margin that's tough to recommend mate. they will have to be in investment mode. they are the only social network able to separate am china. you have to do that and localize a lot of the things and you are changing the game and equation as it relates to business to business marketing. how does a business market to other businesses? you know, that's the whole thought process and creative process mind that is changing. it's a learning experience and they have to invest in it. >> your target is $2.85 on the stock. >> 2.85. >> james on linkedin shares. can exposure to china get a baby bump as they are ending their
4:25 pm
one child strategy. >> pfizer and allergan are in merger talks but will the deal pass regulatory scrutiny?
4:26 pm
4:27 pm
china is ending its controversial one child policy more than 30 years after it began. michelle caruso-cabrera has more details for us now. >> the economic impact may not be as big as one might think. the chinese government instituted this policy in the
4:28 pm
1970s out of fear they couldn't feed everyone. the reason for the reversal of that policy today is that their society is aging rapidly. so the working age population, the labor force, is getting smaller each year and as a result china has lost that cheap labor demographic edge which brought them so much success over the last 30 years. economis economists i've spoken with today is they say too little too late. first, large numbers of chinese couples start having more babies now it's pretty obvious it's another 20 years before those kids grow up and become part of the labor force. second, economists don't think large numbers of chinese couples will have more children because they don't think the policy is the reason that couples have only one child in china now because china has become a middle income country. when that happens in any country couples start having fewer children, raising a child gets more expensive, getting them into the best schools in china in particular incredibly competitive. there have been a number of
4:29 pm
in-depth studies and the estimate is that if the policy didn't exist the number of children per couple would actually increase by 0.3, going from 1.7 children per couple to 2 children per couple. if the policy is only one why is there almost two? because there were exceptions in the rural areas for minorities, et cetera. >> it is showing up in shares with a lot of companies today. >> yeah. if you're having babies, if you're selling baby food and .3 on a population of 1.4 billion you might still have an impact but the government is doing it to try to change the overall demographic trend of the country and that takes decades. >> i get a kick out of these pops in the stock. obviously by definition you have a minimum of 40 weeks before you have a new consumer for your formula. >> it's a discounting mechanism. >> the market doesn't have an attention span beyond that quarter but johnson has had
4:30 pm
issues in china. i kind of feel it gives us one more reason to bottom fish in this name. >> the things you hear about the consumer in china is they are not spending so much on all consumers they are focused more on education and that kind of thing and betterment for their kids and the next generation. that's why it was interesting to see the education stocks in china do quite well today. that made more sense than johnson. >> i remember a story in the journal not terribly long ago about trying to get diapers right in china, one of the big u.s. brands had gone too down market and they should have been doing these luxury diapers that the japanese were doing. >> the iphone version of diapers is probably what they needed. the people who are having children -- so in the past if you wanted to have one more child you could have the option of paying a penalty. so wealthier families were far more likely to have that second child because they could afford t you can imagine if that's the
4:31 pm
kind of demographic that's going to be to have more babies and afford the luxury diapers. so many questions only time will tell. thank you, michelle. michelle caruso-cabrera. time for a consumer news update let's get over to sue herrera. >> here is what's happening this hour. passengers were forced to evacuate a dynamic international airways plane after it caught fire on the runway in fort lauderdale, florida. fuel was reportedly leaking from that plane before the fire occurred. the carrier says it is conducting an investigation into what went wrong and will issue further information when available. secretary of state john kerry meeting with foreign leaders from almost 20 countries in vienna. the group is trying to try and craft a plan to convince syria's government and western backed wrebls rebls to agree to a national ceasefire. deutsche bank is reducing it's sales force, will cut 9,000 full-time jobs, 6,000 external
4:32 pm
contractor positions and exit some countries entirely. superhero window washers, look at that, thrilling kids at children's hospital in pittsburgh. batman, captain america, spiderman and superman dropping by the hospital hoping to bring smiles to the kids inside. and on that happier note that's the cnbc news update this hour. >> i don't know if that was a halloween thing. they should do that year-round. >> they do at some hospitals around this time they do the superheroes. >> that's fantastic. thank you, sue. sue herrera. coming up, how are concerns about the global economy impacting the concert and ticketing industry? the ceo of live nation will join us next. gopro shares in pre fall after pretty can i say appointing results. we will talk about whether it's time to buy this beaten down stock. that's later on the "closing bell." stay tuned.
4:33 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. you ppremium like clockwork. month after month. year after year. then one night, you hydroplane into a ditch. yeah... surprise... your insurance company tells you to pay up again. why pay for insurance if you have to pay even more for using it? if you have liberty mutual deductible fund™, you could pay no deductible at all. sign up to immediately lower your deductible by $100. and keep lowering it $100 annually, until it's gone. then continue to earn that $100 every year. there's no limit to how much you can earn and this savings applies to every vehicle on your policy. call to learn more. switch to liberty mutual
4:34 pm
and you could save up to $509. call liberty mutual for a free quote today at see car insurance in a whole new light. liberty mutual insurance.
4:35 pm
shares of linkedin up 10% after hours after beating on earnings. starbucks still down by about 3% and that asia that china number will be in focus. europe doing nicely. expedia a little higher on the session, solar city getting creamed down 18%. the earnings are still coming in. let's send it over to seema mody. >> a couple more big movers.
4:36 pm
deckers outdoors, the maker of uggs beating expectations. revenue topping expectations $487 million, current growth margins a bit, weak third quarter earnings guidance but strong full year guidance. up better than 12%. let's switch focus to gaming. electronics art q 2er earnings 65 cents versus the estimate of 45 cents, revenues a beat. shares maybe lower on its full year guidance which was light on the revenue front, now all eyes will be on the "star wars" game which comes out this holiday season. i have a feeling mike santoli might be getting in line for that one. >> are you a "star wars" thing. >> i'm the perfect age to be obsessed with "star wars" and
4:37 pm
i'm not. >> seema mody, live nation entertain out with its earnings those numbers beating expectation was ticket sales up 8% this year but the stock down about 1% intraday. michael rapino joins us in an exclusive interview with julia boorstin. >> thanks so much. thanks for joining us today. you beat on the top and bottom line, you're seeing strong trends like increasing ticket sales in the third quarter. what was really driving upside to price, though? >> well, you know, the business we've said for a couple years we are now going to probably end 2015 in our third record year, year over year, and we've said for the last couple years that the global business of live events is growing, the industry in whole as emerging markets as et cetera are growing the business is growing. the pie is getting bigger, we are the market leader and continue to take share year over year and we think that trend will continue for a few more years. >> now, it looks like you are continuing to sell more tickets
4:38 pm
and getting people to spend more once they come into those live events, my question then is how much more growth is there potentially out there? you gave some generally positive guidance for the fourth quarter but nothing too specific. how much more room do you have to grow? >> on the on site we think we have a lot of room to grow, we have over 60 million customers come to our show, historically we've done a good job of bhook the show and driving the event but we haven't focused as much as we can on actually monetizing the event. so we've recently staffed up with some new external employees, created a much more focus on the on site monetization plan. we are roughly $20 per fan, we think now that venues are wifi, internet apps, upgrades, you know, seats -- drinks to your seats, et cetera, come to light we can drive that 20 to 25 and $30 per head as we really focus on a much more disneyland model on site. >> wow. i was going to say it almost
4:39 pm
sounds like disneyland but you did, mic aechlt i'm looking at the millennial demographic. when you talk about the growth that you see, increasing prices, adding amenities to the site is that something you are confident will go over well with your core millennial audience? how is your audience changing and shifting as millennials grow up? >> well, we know that all our research will tell you mill meals more than anybody really look at an experiential economy. going to festival ranks up in two, three or one kpengd on who you ask in a that age category. they want to get out of their house and go to a live event around the world but they also want a better experience. they lovefest valls and love that part of edm. we have to continue to do a good job on not getting them to the show and putting a great headline or on stage but giving them better amenities when they get there and then you also have
4:40 pm
a revenue opportunity. >> this is mike santoli. i wonder if you can talk about ticketmaster. obviously pandora made an acquisition of a smaller competition there and focus on different venues, but is the core business of ticketmaster vulnerable at all? one of the selling points of pandora is tickets go unsold and there is always inventory there. >> yeah, i mean, we -- you know, we are very confident in ticketmaster's model, we also do theaters and clubs all the way up to festivals, over $23 billion in gdt this year. our business has been growing. to be a big ticketing company we have the end to end model. we have the technology, we have the content and more importantly we have the distribution. meaning we have a huge audience coming to ticketmaster, one of the top five commerce sites in the world. so we already can do our job and deliver that sales for that venue. now, we do see a lot of interest from all of the streaming companies who are out there look to go differentiate themselves
4:41 pm
and now that we have an api and a more open platform we will work with all of those streaming companies if we think they can provide an incremental sale at the right cost. so we think that we're going to have more opportunity to spread the word and drive our business. >> michael, quick question about advertising. it was kind of a surprise upside here in your report, you say that advertising is on pace to deliver accelerated growth in q4, it's advertising and sponsorship revenue grew 16% over the first three-quarters. how does advertising fit into a live events business and where do you see it going from here? >> you know, when you look at our business model on the amount of money we make on advertising, if you want to simplify when i talk about 60 million customers came to our show, that's bigger than the nfl, nba or nhl. let's call it a league. we have a lot of customers and a lot of brands want to talk to that millennial and music customer.
4:42 pm
we see more and more brands talking to us from our 800 brands of -- in our roster about spending more on site, more engaging, more experiential and we continue to add better ad units. we believe that experiential marketing will continue to grow and when given our platform we think as long as we continue to add better and more increased ad units we're going to monetize and kind of win as a madison avenue sends more on site. >> we will leave it there and we appreciate very much you joining us, michael. julie boorstin as well. keep an eye on shares of live nation. gopro 60% plunge over the past six months a can't miss buying opportunity? and what will the possible merger of pfizer and allergan mean for the drug space and concerns over pricing. medicare options until you're sixty-five, but now is a good time to get the ball rolling.
4:43 pm
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. 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
4:44 pm
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 to help you keep rolling with confidence. go long™. ♪
4:45 pm
gopro stock nearly in free-fall today, closed down about 15% after a disappointing earnings report. ceo nick woodman said part of the problem is we are not getting the word out to customers. >> we have been off television for a year now and so we're excited to bring gopro commercials back to tv, it was great entertaining shorts that really demonstrate the value proposition of gopro and get people excited about the brand. it goes beyond tv. we need to reach new consumers who are not already aware of our brand, you know. we recognize that most consumers
4:46 pm
still do not know about gopro. >> joining us now to drill down on gopro in dan fitzpatrick and edmond lee who is a managing editor at recode. welcome to you both. is he right? do they need to get the word out on gopro? >> yeah, they need to get the word out but what they really need to do is get their revenues up. this last quarter the thing i saw was revenue was impressive, i think it grew 43% but that was a lot less than they projected and it's been the lowest quarterly revenue growth that the company has had. you don't like to see that in a newly issued stock. you like to see revenue growth increasing. so that's a problem for hem. maybe they can when they get the word out then maybe that will help revenue growth, but right now, you know, i think the stock is a buy, but only for technical reasons. >> is a media and marketing
4:47 pm
blitz, ed, the way that gopro can see its revenues reaccelerate? >> yeah, i definitely think that's a good plan for them. just, again, for some perspective, the company sales going up 43% and still their stock tanks in the double digits, i think one of the overlooked aspects to what this company is really b they are not just about selling hardware they are a creating media. these days whether you are on facebook or twitter or any publisher these days video is becoming a part of the language and so, you know, of course our smart phones are a big part of that, but there's going to be room forego pro in that. >> i want to mention something on that note. i think -- i think apple can compete with gopro by slapping some velcro on a helmet and putting their iphone there. i just don't see the huge barrier to entry for competitors of gopro. i get that that's kind of the aspirational cam ration but once you have one if you want to
4:48 pm
upgrade you can just go on ebay and get it for half the price. i really think -- i think the video content aspect of this story is going to be overblown and there's not going to be much revenue there to make a difference in the multiple. >> i'm concerned that the growth margins were actually a little bit below expectations which suggests that people are buying the lower end products, they are not buying the new. maybe as they get the word out people will then shift, but i don't see the catalyst for someone who move from the low end what they have that's working quite well to the high end. does anyone want to speak to that? >> ed? >> i think a big part -- again, we are talking about the media side. i don't know if it's going to stay overblown. i think millennials they are going online to get their entertainment, gopro is a big part of that. as that becomes more part of the every day media language gopro will have a bigger role in how that plays out. >> one point to that. >> real quick, dan. >> when you compared this with
4:49 pm
apple the iphone, that's an aspirational product, consumers like to buy the newest one. with gopro the aspirational aspect to that is what's on your voochlt you don't need to buy the newest camera. >> we shall see, dan fitzpatrick, ed lee that you both. is pfizer's possible deal to buy allergan more about taxes than drug development. and tomorrow i will be at carnegie university in pittsburgh for a pair of big interviews, first up david tepper will tell us where he sees opportunity in this market, that will be on squawk box at 8 a.m. eastern and then i will speak with ray lane of kliner perkins. back in a moment.
4:50 pm
♪ today, we're seeing new technologies make healthcare more personal with patient-centric, digital innovations; from self-monitoring devices that can interpret personal data and enable targeted care, to cloud platforms that invite providers to collaborate with the patients they serve. that's why over 90% of the top 25 global pharmaceutical companies are turning to cognizant. our domain experts, technologists, digital and data specialists, clinicians and scientists are transforming the way clinical research sites collaborate with pharmaceutical companies, and enhancing patient engagement with innovative platforms and solutions. our population's growing healthcare needs present growing opportunities for our clients: to advance the future of medicine with digital, and improve the quality of lives. ♪
4:51 pm
4:52 pm
welcome back. we've got breaking news on valeant. a lot's been happening this hour. >> this has to do with that speciality pharmacy valeant works with that's come under scrutiny the last couple of weeks. the pharmacy benefits manager saying it determine nated its agreement with philodor.
4:53 pm
now express scripps saying it's in the process of terminating with filidor. it could spell the end of philidor. if these pharmacy benefits manager decline to reimburse products that go through philidor means it can't do business any more. valeant is reviewing that relationship. it will be interesting to see where valeant goes from here but could spell the end of that relationship. >> looks like valeant shares continuing to move lower after hours. when this news started to break when the markets closed, was moving down 8%. how significant is this to valeant if philidor? >> i would note tomorrow morning
4:54 pm
philles es adkins is going to h conference call. he planned it for days. it's going to go down again. >> this is not surprising given the controversy, right? cvs and express scripts? i thought they would have done it sooner. i don't know what you want to do with this stock. you could defend it. right now you are getting in the cross hairs of a very difficult stock. let the dust settle before you get involved in this thing. there are so many different pieces. >> how can somebody who looks so closely into the structure of herbalife and found it deeply flawed look at a structure like this and feel comfortable with it? the reporting in the "wall street journal" and others made it clear there is unusual activity going on from different names people were using to different accounts shuffled around. i don't know how much of that somebody could have discovered.
4:55 pm
>> somebody alone discovered it who was a short seller, so clearly it was there to be discovered. it creates a huge weave of scrutiny. these entities were set up to gain the system of insurance reimbursement, at minimum. >> the core issue does come back to drug pricing. got to ask about the other blockbuster deal today which will come back to bear on the issue of drug pricing, the issue of tax inversions. is pfizer going to be able to get a nod of approval to acquire allergan here? >> it feels like 2013 all over again. that is a great question. this would be the biggest health care deal of all time pfizer buying allergan $150 billion. it is bound to draw scrutiny of conversions again. they tried to do this last year and brought in a lot of scrutiny. they would rather do a deal under this congress because he
4:56 pm
knows what the rules are right now. will be interesting to see if this gets done. >> thank you so much. a lot of fast-moving stuff there meg tirrell covering it for us. the one you got last year? n if we consolidate suppliers, what's the savings there? so should we go with the 467 horsepower? ...or is a 423 enough? good question. you ask a lot of good questions... i think we should move you into our new fund. sure... ok. but are you asking enough about how your wealth is managed? wealth management at charles schwab. ♪ 800,000 hours of supercomputing time, 3 million lines of code, 40,000 sets of eyes, or a million sleepless nights. whether it's building the world's most advanced satellite, the space station, or the next leap in unmanned systems. at boeing, one thing never changes.
4:57 pm
our passion to make it real. ♪
4:58 pm
4:59 pm
welcome back. different things going back to the gdp report, the deal we are talking about. what are you closely watching? >> the deals are interesting. they are going to squeeze whatever they can out of that. also tomorrow morning, we'll get macro data, inflation numbers and cost index. it might matter. the fed has most of what it needs for december. >> stephanie, you've been bullish on the consumer. the consumer spending number and gdp was good? >> yes. final sales positive in the number today, for sure. i think the consumer remains choosey. if you have the right product, i think the consumer buys that product. if you don't, you are in trouble. i look at newell rubbermaid tomorrow because staples stocks have done well.
5:00 pm
let's hear what they say about raw costs, the consumer. >> the rubber bin indicator. thank you. mike, stephanie, on a busy "closing bell." "fast money" coming up. >> big declines in shares of nfpi. >> intel was holding down the dow today. straight to you guys. thanks. "fast money" starts right now. live from the nasdaq market site overlooking times square. a big step away from the drug maker as activists hold a conference call tomorrow. we've got a special report. the three high-flying stocks that could be on the verge of a serious move lower. gopro at an all-time low sitting $1 above its ipo price of

76 Views

info Stream Only

Uploaded by TV Archive on