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tv   Closing Bell  CNBC  November 23, 2015 3:00pm-5:01pm EST

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not good, last week was, this week starting off in the red. >> i will see you tomorrow. >> i will be back. >> i will see you guys at 5:00 on "fast money." "closing bell" starts right now. >> welcome to the "closing bell," i'm kelly evans at the new york stock exchange. >> and i'm bill griffeth. a record breaking acquisition in the healthcare space to tell you about in case you hadn't heard already, nearly $160 billion deal between allergan and pfizer. it will allow pfizer to cut its u.s. corporate tax bill, the rate is around 25%, but it will go down to 18% once they domicile in dublin and will bring brands like zoloft, viagra and botox into the same company. we will talk about whether this could pave the way for even more deals in this space. >> and it's the old economy versus the new one, morgan stanley will tell us who they think will lead this market even
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higher. >> you have to define what new economy is these days. >> by the way, walmart talk about retail creep, they want to make cyber monday cyber sunday and consumers may be looking to make black friday a mobile shopping day. we have retail mavens dana tellsy to tell us how investors can judge the retail sector this shopping season. >> take a look at shares of chipotle, they are bouncing back a little bit after friday's big sell off as news of the e.coli develops, will consumers stay loyal? we have jane wells out at chipotle to get the story. >> let's start with pfizer and allergan's blockbuster pharma deal. meg terrell joins us from pfizer headquarters at least now now. >> i am here in new york city at pfizer's world headquarters, this will continue to be its global operating headquarters but it's tax base will move over to the ireland where allergan's tax base is.
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pfizer there will be paying 11.3 pfizer shares, exchanging those for allergan shares. this is technically structured as allergan buying pfizer, but it is the allergan shareholders that get the premium here. when this was announced this was worth about $363 per share based on pfizer's closing price on friday. pfizer stock that is declined, now it is worth less, about $355 as of pfizer's stock price today, about $150 billion be deal. this is already encountering blit cal backlash given ought the companies trying to move overseas. pfizer ceo saying there is more to the deal than just lowerel corporate tax rate. >> we're focused on sustainability of research. this is our high risk business, we are going to continue to pump in $9 billion globally into research, most of the united states, we are focused on finding cures to make of a difference in people's lives but focused on alzheimer's and on
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rheumatology and on cancer and vaccines and anesthetics which is important. >> now, both companies stocks are trading off a bit today, of course, pfizer the total value of the deal is coming down. analysts yeeg that the treasury or some other form of government will step in trying to lock it. allergan shareholders analysts saying may be disappointed in the premium they are seeing here, they expected maybe up to $390 per share. analysts saying that the deal makes a lot of sense, the combined conditions would sell lyrica, lipitor and viagra but adding botox. they will have more than $70 billion in annual revenue in 2017 and of course this also potentially facilitates a split of pfizer into a faster growth business and slower growth business, the company saying it will make that decision by the end of 2018. they expect this doo he will to
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close in the second half of 2016. >> meg, i wonder on that note how much when pfizer is making the pitch to regulators to get this done or lobbyists, how much is that potential breakup of the company going to factor into the discussion, do you think? >> well, the breakup fee that they are talking about here is up to $3.5 billion. you're talking about a potential breakup of pfizer down the road. >> yes. >> i don't know how much that is going to factor into the discussions with lobbyists here. right now all of the backlash is around this idea that pfizer is deserting the u.s. tax payments and they are saying this is good for the united states because they will be investing more in r&d. >> so far what you're hearing from them they're saying all the right things, it is from sttrag points. but the reason they're doing this it is for the tax inversion, isn't it? >> that's not what they say, they say there are other reasons
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and in our interview today the ceo of pfizer saying he would still do the deal if it didn't have these tax benefits but the price probably wouldn't be the same. >> it doesn't help probably that they made that bid for astra-zeneca as well, that was blocked by the you can. now here they go. there's clearly a strong incentive on their part. >> we will see if they learned anything from that point. >> ireland will be let reticent. me go, for now thank you. meg tirrell in mid doun. >> congressman sandra levin is leading the charge in the inversion deals. >> meantime, crude oil seesawing this monday after flirting with $40 last week. jackie deangelis has more on that. >> a little bit higher price right now, volatile session as you mentioned but we did close lower by almost a half a percent. 41.75 is where we finished. what gave us more support during the session because we actually
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were in the green, comments from the saudi oil minister, only he can oil the oil markets in this way, he addressed at an energy conference the stability of the oil market and also some efforts to cooperate with oil producing and exporting countries. that gave us a little support, some people thinking maybe we will see an opec production cut in november, but many analysts say there is not going to be a cut in december, opec isn't going to change its stance at this point, they've talked about this a lot before but talking about something and actually doing it are two very different things. this is the kind of chatter that does move the market although it was shored lived. the down side move today at the end to be by that dollar index move we saw, going up to 100, bearish for crude and also mother data point. chinese imports of oil fell to a three month low. two housekeeping items, gas bill $2.07 is the national average and i got your christmas gift at the golf store this weekend. >> wait.
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>> i'm stunned. >> jackie, give me a hint, please. >> it's something monogramed, something very small and a lot of fun and, kelly, i'm still working on yours but you are much harder. >> no. no. gifts coming this way. this is a special relationship kind of like the u.k. and china here. >> exactly. >> but seriously, jackie, just talking about oil and these comments from the saudis we do have that opec meeting coming up. are you hearing enough from all of the different members of this cartel that indicates they might be close to actually making a unified move on this? >> actually not. i think they're worried about the stance of the marketplace and worried about where oil prices are but the saudis have drawn their line in the sand that they don't want to cut production and are worried about market share. the consensus is that they may give it another meeting or two before they take that move to change their strategy. this isn't the time that they would be be likely to make that move. that's speculation at this point. nobody really knows what they
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are going to do but that's the chatter >> do i really have to wait until christmas now? >> you do, bill. >> thanks, jackie. see you later. >> you've got a gift to go find now. >> we have "closing bell" exchange for a monday to go inn this holiday shortened heat, joe heater, joe grasso and rick santelli. steve, you know, we hit some support levels is what happened here and that's what brought the market back down. we're sitting right on one on the s&p. >> it's about 20 handles lower. you look at the 200 day moving average and 50 week moving average, that's where you look for support around the 2065 level in the s&p cash. as i said, 20 handles above that. what you meant was we ran into a little bit of resistance that's what put us into a wall. we are taking our lead from the dollar, from oil, but these buy backs are large and in charge today holding the market right in line. >> what i meant was we hit some
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support levels and came back down, we are significant on 2085 right now which i'm going told is a support level. >> support level. the real support is 20 handles lower. there are some soft supports right here. >> okay. >> but the real support in the marketplace are your 200 day, that's what everyone looks for, that 50 week and then you have to go back to flat on year which is 2059 so a cluster or congestion in the charts is 20, 25 points lower. >> rick, the dollar index touched 100 for the first time in a while, certainly. kind of an under the radar story is what's happening to some companies like u.s. steel which is down, i think, 8% in the session. nickel, copper, a lot of these metals under pressure. what do you think happens from here? does that dollar keep going? >> the dollar keeps going, if the fed gets going. i think it's that simple. just to show you how weird 100 is, you're right, we touched it today, i think around 11:20 eastern, if you blinked you missed it, maybe it will come
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back. the only other time in recent memory was one session march 13th of this year we settled above 100. you have to go all the way back to pre june 2002 to find a sustained trade above 100 so it's rather unique and of course it's rather unique because the fed normalize are keeping rates at zero is rather unique when it comes to what's going on in the rest of the marketplace, you know, i like what steve grasso is saying and what bill was discussing with regard to support, you know, here we whoever virtually unchanged on the year on the dow, the s&p just a small fraction in positive territory for the year, forget the nasdaq for a minute. i know everybody is looking at -- it's baked in the cake, fed funds, all the issues of tight thing. i personally think i'd add another chapter to the book of tightening that if you don't have the s&p and the dow with some cushion in the black for the year on december 16th i'm not sure they go. i think that's an easy litmus
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test. >> joe, are you positioned right now assuming that the fed is going to move on the 16? >> yes, we think there's a better chance than not that they will raise rates on the 16th, given there is softness in the market, obviously we're flat for the year as rick and steve have mentioned, but the bottom line is we think overall even in spite of some of the weaker numbers that have come in in the last week, if you look at corporate earnings, profits and so forth, we think it makes sense to raise rates. we've been discussing it for so long. >> so what are you buying? what do you think can weather the first leg of lift off here from the fed? >> well, i mean, part of it is, obviously, we are looking at some alternatives with higher interest rates on them that we think will weather well, such as
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business development corps, basically loan pools, some of which are traded on the new york stock exchange, they're yielding over 7%, we think they will do very well in that type of environment. >> and that was something that made kelly evans go huh. >> look, you can get creative or you can just stick with stocks, but we will have more on that later today. the fees are a little bit lower. we have 45 minutes to go. thank you, everybody. the dow is down by 35, the s&p is down by 3. vix a little higher on the session today and the nasdaq down by about 4 points. >> when we come back why black friday could become cyber black friday. we're blending brands now. walmart turns cyber monday into cyber sunday. courtney reagan has details on that coming up next. >> chipotle shares are higher after one firm upgraded the stock. jane wells will do a channel check for us, maybe she will even eat a burrito. stay tuned.
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welcome back. tyson foods jumping the most in nearly two years. the u.s. meat processing giant is expecting full year profits
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to beat street forecasts thanks to rising demand in chicken. those shares which have been beaten down and expectations were bearish popping today nearly 10%. >> game stop is falling on disappointing earnings and a decline in some same store sales, the company blames a 20% decline in new video game hardware sales plus a 9% drop off in new software sells. >> alcoa is higher today. pull singer's elliott management disclosed a 6.4% stake in the aluminum producer. klaus kleinfeld's to split that company two two will create value and he wants in. >> building friday and cyber monday may be ready to morph into one shopping event. >> it's a moment that we've been waiting for for years, the day that online shopping surpasses in store, black friday goes
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away, we aren't quite at tipping points yet, but shoppers are planning to execute their black friday strategy differently this year. 57% of consumers plan to shop this weekend somewhere, in store or online, what's key this career the majority, 66% say will be online on black friday with 52% claim to go shop cyber monday, that's less than the online shoppers on friday. this is a survey of consumers plans. shopping in this case refers to browsing and or buying and including web rooming and showrooming where shoppers are comparing choices online either before they get to the store or while in store. thanksgiving has stolen thunder from black friday and walmart is starting cyber monday on sunday. they say there is no reason to limit the event to a weekday. walmart plans to launch 2,000 of their online deals at 8:00 p.m. eastern increasing the amount of specials from 500 last year.
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many retailers started their holiday deals the day after halloween to walmart moving cyber monday to sunday isn't the most innovative idea in retail. >> we're calling it black november now, cyber december. i mean, it's happening everywhere. >> one mushy event. >> it is. a technical term by the way. thank you, courtney. who is the winner out there, dana tellsy from the tellsy advisory group. people are going to shop, shop online anywhere and everywhere right now, right? >> exactly. what you're seeing is an elongated season and consumers have more choice of where and when they want to shop. let's not forget how big the penetration of mobile is and that's only growing with screens mobile phones becoming that much larger it makes it just as easy to buy off your phone as it does off your laptop or tablet. >> i love reading about -- being reminded that part of the reason
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there's cyber monday is once above a time people's fastest internet connections were at work. >> exactly. >> what does that for.tend for all of this going forward? >> i think what it means is holiday season does get started it almost seems like right after halloween. black friday is an event, an entertainment event, we are not seeing retailers push the button and open earlier on thanksgiving day. it seems like there is a little bit of a limit there and can the entertainment of black friday it's more than just shopping, but it's entertainment whether it's going to movies or being with your family or being traveling. it seems like the diversification of gifting ideas is wider than ever before. >> do retailers -- i mean, i know -- you can't generalize too much but do retailers want people to shop in the stores on or line? that will tell how they position the deals that they offer to customers. if the deals are better online that's where they're going to shop, right? >> i think what you're seeing is retailers are trying to be channel agnostic, they
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definitely want to see traffic come their way, gain share and they are being price competitive. in the apparel area overall it seems like this is one of the most price competitive seasons we have seen while nonapparel categories, whether it's jewelry, cosmetics, hard goods, it seems like there is a bit more interest in nonapparel categories this year. >> i guess one interesting question i see that some of your picks include foot locker also the beauty salon l brands. l brands being more traditional. we've heard from retailers it will be a promotional black friday. they have a ton of inventory. from an investment point of view do you go with those on the one end who might have a lot of traffic or stick with the winners. >> i want to stick with winners. sul ri not apparel, look at also with cosmetics, we've soon
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cosmetics have good increases and active continuing to be where the growth it and especially with the olympics coming up. >> thank you, digne in a. we have breaking news on auto sales. phil lebeau, what do you have for us? >> bill, the month of november has a long ways to go but already edmonds.com out with an estimate that will get a lot of attention. it is forecasting sales for the month of the november coming in at a rate of 18.3 million weeks. again, that's the rate of sales, not the total number of sales. if that happens and we still have black friday and the weekend ahead of us, but if that happens it would make three straight months where the sales pace is above 18 million here in the united states and, guys, that has never happened before. we've only had one other time when we had back to back months of 18 million before this2000, edmonds is saying november 18.3 million will be the sales pace.
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>> do they always project the sales pace for each month? >> yeah, usually around the 20th, 21st is when you start to see them coming in from the analysts. i suspect we will hear from others within the next 24, 48 hours. >> are they making money on these sales? >> i just talked with a dealer because we will be at a dealership on friday for black friday. their response is it's tough to make money, it's tough to get the margins on the new vehicle sales. where they're making their money it's the trade-ins and service. it's always been that way for the dealership. for the auto makers, yeah, the auto makers are making a nice margins on the sales. >> the shares weren't moving when we showed them a second ago, they still looked lower on the session, phil, i guess again we will check back in and see what happens after these numbers if they do top 18 million. thank you. phil lebeau. >> we have 38 minutes left in the trading session. the dow slowing starting to come back off the lows of the day, down 30 points right now. >> the old economy versus the new one, morgan stanley's eek
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wet strategist gives us his take on which group will lead this market higher. we will go live to brussels for the latest on the block doun that's been gripping their capital for the third consecutive day. stay tuned.
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welcome back. brussels is in lock down for a third consecutive day as the manhunt for isis terrorist suspects continues. >> we take you life to brussels
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where julia chatterley has the latest developments. good evening. >> reporter: good evening. the latest news here is that brussels will remain at the highest security alert level for at least another week. the read from this is clearly the authorities are very concerned about the imminent threat of a possible further terrorist attack, even a copy cata tack like we saw in paris just a week and a half ago. what does that mean for the lock down we have seen in brussels? today the sub waist, schools, universities were all shut down. they will remain shut tomorrow. they will start a staggered process of reopening tomorrow. so the authorities trying to get this place back to normal but as you can see behind me this is normally a pretty bustling street of restaurants and it's pretty much deserted tonight. there still is this real threat of concern about what might happen here. the other news we've heard tonight, of the 21 suspects that were arrested last night and this morning 17 have been released one man has been
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charged in connection with those paris attacks, the other thing is of course this manhunt for the suspect called salah abdeslam. he remains at large. there is a lot of talk here about whether or not he is even still in brussels. guys, just to give you the recap, we enter a fourth day of partial lockdown tomorrow, security level at the highest and of course the manhunt continues. >> julia, i'm struck by what you just said that this lock down could continue for another week. what do we know at this point about the details of these plots because this is pushing the limits of responsibility. >> you are absolutely right, kelly. this is the crucial issue. a lot of people here questioning even if they manage to find this suspect, this terrorist attacker, what then for the lock down because seriously it's about far more than just one man, it's a far broader threat and imminent terrorist attack so just how long is this lock down is this high security alert
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level going to continue? particularly at such a crucial time of year for shopping, for tourists, to the commerce area in brussels in particular. it's a really tough situation for the country. >> and i can't imagine what the citizens are feeling right now. you're going to start opening schools and the subways on wednesday when you keep the alert level at the highest rate. i mean, after the paris attacks there was a feeling of defiance for the most part after a couple days but the people in brussels must be terrified. can you give us a sense of what's going on in that regard? >> this is a really great question because if you go back to last week there was criticism, heavy criticism of the belgium authorities for not doing more to crack down on the extremists. i can tell you the vast majority of people that i've spoken to today are saying this current situation, it's an overreaction. things are okay here. so actually the authorities caught wind that kind of damd either way, either they do too
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much or do too little. the people are saying back off a bit, we don't need this level of security. quite interesting. >> it feels like a reaction to perhaps ten-plus years of failed policy, if you will, by them saying we're going to be overly cautious now, again, at the expense in many cases of commerce there and normal life in the city. >> but you're right, though, julia, it is a no win situation for the leaders there in belgium. thank you very much. julia chatterley joining us from brussels tonight. time for a consider news update. >> secretary of state john kerry meeting with the crown prince of abu dhabi, kerry telling him that the u.s. wants to destroy isis rapidly and is accelerating their efforts to defeat the extremists. new york state police announcing a new tool in the fight against terrorism, it's a mobile app called see something, send something, the app allows users to send photos and text messages to authorities when they spot suspicious activity.
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planned parenthood is suing texas over attempts to block medicaid dollars. they say it helped to protect healthcare access for. and german chancellor and dignitaries are beginning to pay tribute to hermit schmidt who died last week, henry can i ski delivered and address at the church. see you in an hour. the dow is down about 28 points, the biggest decliner is pfizer as we discussed there is some concern or doubt about its potential merger with allergan. of the s&p down about only 2 points, the nasdaq could turn positive. >> san der levin what he said about this may carry some weight on what people think about that deal coming up. anything can happen in the final and most important half hour of the session. a leading trader will tell us
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what he's watching. also ahead morgan stanley's strategist will tell us which sectors will lead this market higher. 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.
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entering the last half hour of the trading session for this monday, this holiday week. i've got steven guilfoyle with me on the door of the new york stock exchange. we come off the best week of the year last week for the markets. i guess you are watching to see how much of a come back there will be if at all here today. >> i like the action so far, the volume is light, it's a holiday week you expect that. we sold a little bit when the support level broke but made a nice rally, back above 2085. i want to see us make it all the way to 2091. >> the question is was last week just a bounce from after oversold condition or are we going to see real buying come out of this market. >> there is some truth to that and some chase for performance. a lot of funds are down 3, 4, 5% for the year and they have to make the decision whether they are going to chase or not and some will chase and chase each other. >> we are at the break even level for a lot of these stocks and markets. the question is do i start to think about taking losses at the
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end of the year or expecting to trade books and profits here. >> how about taking profits at the end of the year. >> that would be nice if you could. >> if you've got longer retailers you might want to get out of some of those positions ahead of black friday and cyber monday. >> that level that you're watching as we head through the goes. >> 85 and 91 on the s&p. >> we bounce at 85, see if we can get back at 91. >> we hold 85. if we head south we could go 10 points and we don't want to do that. >> old versus new, which group of stocks will lead this mortgage higher? affording to the morgan stanley old economy sectors industrials, materials and energy make up 20% of the s&p, new economy sectors, tech and financials are making up 65% and have better fundamental trends, morgan stanley's adam parker has his score card of what sectors we should be watching and joins us exclusively with much more on this. >> thanks for having me.
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>> so financials are the new economy? >> no, i don't think so. i just think people are asking about, you know, cuff -- you have such a narrow breadth so far, can you get it extending beyond that. the point i was trying to make is if you sum up the biggest four which are tech, financials, healthcare and consumer discretionary they are about 65% of the s&p 500. the older economy stuff that's really been hurt, industrials, energy, materials at only 20%. my point was i don't think you need that latter group to rally for the whole market to work, you can still have those underperform and have the market go higher. >> i thought of you -- i was thinking about a conversation we had on this program a couple weeks ago i think it was. as i was reading your report today about the old economy, new economy shift, there is a sort of a feeling that we as the fed starts to raise rates and get us back to, you know, old rates that we will get back to what was the old normal again, but
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maybe that old normal doesn't exist anymore. i think that's a point you are trying to make here. there is a shift going on in the economy that may more accurately reflect the level of interest rates that we have today compared to what we had, say, eight, ten years ago, right? >> look, bill, every day i meet with somebody who says this is like the 1950s or '70s or '86 or '96, '94, '99, they have a different year. my answer back to them is i don't think so, i think it is like no year before. people want to measure so they know what the playbook is and i think it's tough. the unemployment rate is in the low 5s. there is no playbook. i think we have to do -- it makes sense you think the earnings trajectory low to mid single digit growth, where is the shareholder return or relative opportunities and that's how we're positioned. >> how will we know when we get there? do you know what i mean? >> well, look, i don't know what
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the fed is going to do, i have no idea our house call has been december and our chief economist seems like she has had a good call, now it's kind of come to her and i think that makes sense. look, my overeights are in financials and consumer discretionary. what i'm sure of is the consumer has more money. more people working, working more hours per week, making more dollars per hour, obligations are down and oil prices are is low. i think the way to play that is to own the credit card stocks, we have big positions on growth and value side in the credit card industry because then i don't have to care about which land mine discretionary or retail -- i just know if people use their plastic i can participate in the businesses. >> there's also a discussion of productivity which is interesting at this time. you talk about how much your productivity is centered it may be the big 50 companies or fernl some of the sectors unlike economy which hired a bunch of people and then have been hit
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hard. do you think of the four core sectors that you mentioned that are hanging in there that productivity is looking good for them and will continue to support further gains. >> look, the line i heard a few weeks ago i loved which is productivity is everywhere around us except for in economist numbers. it's everywhere and i think companies will have higher margins because they're investing in technology and productivity. so to me, yes, i think -- here is the numbers to throw at you, the biggest 50 companies by market cap are almost as big as 51 through 1,500. when people say profit margins at an all time high they don't say how much it's influenced by those biggest 50 times and they have improved a ton through globalization and scale and productivity. i think it's a huge trend that's here to say. we are not just reverting back to the 1970s on profit margins. >> when all is said and done as we leave you here are they going
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to raise on the 16th? >> that's our firm's call and i have no reason to protest it. i really don't know, i'm not a fed follower. all i know is i want to own the financials into that event, it's not really priced fully into the equities there and i think it won't really impact the economy one way or the other if they raise it by 25 basis points. i think you don't have to worry about hitting the panic button because of that. >> adam, thank you for joining us. >> always productive to be with you guys. >> i think it was bob solo if i'm wrong i will learn it right away who said the computer age is everywhere except in the productivity statistics and that was in the mid or late '80s and today a similar observation about so maybe we will see a pick up there. >> meantime 20 minutes left in the trading session here, we are still slowly coming back, the dow down just 24 points. >> chipotle stock on the rebound today, it was getting clobbered
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last week. we will go live next to a chipotle and see how consumers are responding. >> also still ahead, facebook chief mark zuckerberg is going to be doing more than just posting photos on his page when his new baby is born and his actions may have an impact on shareholders. that story still to come on "closing bell."
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welcome back. we have a news alert on adele's new album. what's happening? >> kelly, in it's first three days of release they tell us that adele's new album has already sold 2.3 million albums in the u.s. they say that the album is on track to beat in synch's record of 2.4 million by the end of the day today. nielsen music tells me this projects 2.9 albums sold by the end of the week which would be a
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record by far. kelly, back over to you. >> big time. >> come on. that in synch album was amazing. >> name the album. >> it was a dark day. i don't know what it was called but it had that bye-bye bye. >> is that -- >> yeah. >> i figured you would know that. >> did you buy the adele album? >> i have not yet, but i plan to. i'm asking for it for christmas. >> so it's your fault. >> no, it hasn't been purchased yet that i know of. let's move on, shall we? chipotle stock bouncing back, it's up 4% right now after being pummeled friday on more reports of e.coli at various restaurants around the country. >> we want to see the impact on stores. to get a gauge on how consumers are responding to the recent headlines. >> we asked inn tread bid reporter jane wells to visit a chipotle restaurant somewhere in los angeles. jane, what are you finding? >> some customers are bag bye-bye bye but we are in the thick of the lunch hour there is a little bit of a line. after this news spread there's
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all kind of predictions that same store sales will be down, shares plummeted but they have bounced back today. while some customers to the all are aware of the outbreak they will still coming though not in droves. >> i avoid the salads. >> to be honest i feel like stuff is going to happen, if it's here it's here, if it's somewhere else it's somewhere else. >> it definitely looks a lot less crowded than usual. i come here a lot and usually the line is out the door but today the line was not even out the front of where you start the order. >> all right. at least four analysts cut ratings on chipotle according to thompson reuters but only one of the 32 analysts covering the company has a sell. maxim upgraded pa nare ra to a buy. now, the last victim to eat a chipotle did so three weeks ago. no new victims eating there since even though we got the news industry that it spread to more states. of health inspectors don't know
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the cause of the outbreak. not a single chipotle employee has gotten sick, even though they always get a free meal with their shift if they want one. >> you mentioned, jane, that this might be fresh produce, this is actually the key question which has not been answered. what is it that has caused these e.coli outbreaks, what ingredient or what preparation? >> they do not know. it used to be always in the meat, back in the '90s but suddenly in the last second kad or so as there's been more and more fresh produce, taco bell is the best example, ten years ago it was in their lettuce and they're thinking it may be produce here that it's not a meat issue. again, no one has eaten at chipotle since november 6th that they know of that has gotten sick, no employees and they believe chipotle is the source but they don't know for sure. >> initially you didn't see much of a response but if this does keep happening you get another
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state here or whatever you're going to start to see that kind of response. you saw that at a store in new york city. >> brand new store in new york city. in their defense it only opened on saturday and they are not trained yet but there couldn't have been more than a dozen people there lunchtime yesterday and almost nobody at lunchtime today. >> there's only probably three people in line now and this is always -- this is probably the best way to go to chipotle you know they've cleaned everything and this is no compliance so that's where i'm eating lunch, i will report back later. >> 12 minutes to go. chipotle shares up but broadly speaking the market has been weaker. the dow only down 25 minutes, the s&p down 2, the nasdaq is down by 3. >> and arts cash inn signaling $400 million to tell. the recent terrorist strikes in paris and isis threats on new york and washington have people on edge, but anthony chan of chase has researched similar situations in the past and he
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will share his findings, the impact it has on the markets and economy when we come back. other me move stuff, what are you working on? let me show you. okay. our thinkorswim trading platform aggregates all the options data you need in one place that lets you visualize that information for any options series. okay, cool. hang on a second. you can even see the anticipated range >> and arts cash inn signaling for all the confidence you need. td ameritrade. you got this.
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all right. we head to the close, 8 1/2 minutes left in the trading
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session. the joining us is anthony chan. we mentioned before the break you have done some studies of past situations of terror attacks or similar to what we're going through right now, the fear of another attack and the impact it generally has on the economy and consumers primarily and as they go forward after that. >> yes, bill. what i did was to look at the ten major terrorist attacks that happened since 1983 and domestically when those things happen consumer confidence ironically continues to move higher. consumer confident 12 months later is high up 6 points. however, when they are international attacks, believe it or not, it starts going down steadily and even 12 months later it's slightly slower. apparently u.s. consumers react more negatively when the terrorists attack happens overseas rather than when it happens in the united states. >> that's counterintuitive. >> it is. i think one of the reasons for that is when you see something
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major happening overseas you think that's a proxy or leading into what could happen here and more importantly it has been much more death and destruction when it has happened international alley with the exception of 9/11 in the united states. >> people who are looking through the fed move coming up and really uncertain context in the backdrop of what's happening with this terror stuff worldwide. so what are people supposed to do? how do they factor in if at all the state. >> i think if you get a big surge in violence and there is a lot of instability in the markets i think the federal reserve has played that playbook before, more than likely it will be more gradual, but what i did was to look at the market reaction to two more recent ones, spanish bombings and london bombings and what you see there is a similar situation. the market sort of wobbles a little bit in the early days, like in the first three months, but 12 months later the market in both instances, both us and
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european second wit markets are higher also. >> is this in you have what we've already seen? do you think to delay the fed from a december no of or would it have to get much worse? >> i do not think at this juncture that it does, you heard the comments from fed governor turullo hesitating but you heard numerous fed voices saying they want to move. given what we have and what has happened despite the excitement in brussels, we hope it gets resolved positively i don't think it's enough to hold the fed in december. >> do you think they raise rates on december 16th? >> i absolutely do believe that. >> you've been waiting for it longer thatten most people. >> september i said no but december i am in that positive camp and feel more than 80% probability in december. if what happened so far continues to happen. remember, the fed has said somewhere in the neighborhood of average of 120,000 is enough to keep the economy going and i think they will be much stronger when we get the next report.
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>> anthony chan joining us. we will come back with the closing countdown. >> after the bell not everyone is involving the mergers between pfizer and allergan. you're watching cnbc first in police worldwide. i'm only in my 60's. i've got a nice long life ahead. big plans. so when i found out medicare doesn't pay all my medical expenses, i looked at my options. then i got a medicare supplement insurance plan. [ male announcer ] if you're eligible for medicare, you may know it only covers about 80% of your part b medical expenses. the rest is up to you. call now and find out about an aarp medicare supplement insurance plan, insured by unitedhealthcare insurance company. like all standardized medicare supplement insurance plans, it helps pick up some of what medicare doesn't pay. and could save you in out-of-pocket medical costs.
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heading into the last two minutes of trade here we've got the market down 32 points. quick look at some of the markets and how they traded today, again, reminder coming off the best week of the year for some of the major averages last week watched carefully to see how it would respond this week to begin this week. doun 32 points right now. we were down 60 points at the low at 17,000 and change. the dollar index briefly touched 100, there it was just before noon eastern time. it has since settled back, up a quarter point at 9981. for good pressure wti crude, you know, you watch for a correlation between crude and equities that's happened lately, it's not happening these days. down a penny right now at 4189 as we now watch the january contract, december went off the board on friday. courtney reagan is with me in for bob pisani. this is a busy time for you
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following retail as we head into the big shopping season. >> it is. i'm glad it's appropriate to talk about retail stocks as well as what the retailers are doing with their strategies. earlier in the show we talked about the blurring of on line and off line shopping, the events as well as sort of where the shoppers go and how they do it. some of them are shopping online in stores, but amazon is an interesting one. it was up today about 1.5%, month to date also among one of the retail leaders in the consumer discretionary group, i'm talking just the retail nurse that group. >> does it usually do well going into the shopping season? >> it does, especially if you look at the wednesday, date before thanksgiving. 72% of the time amazon shares are positive the wednesday before thanksgiving, the day before for an average return of about 1.5%. so it's been good, it is history repeats it will continue to be a winner for investors. >> something to keep an eye on there. courtney, thank you. >> thank you. >> i will let you go back, you have a very busy couple weeks watching that black friday.
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the dow down 31 points, holding its own after the big week last week. closing -- the new york stock exchange bell cytex industries and over at the nasdaq nexvet bio pharma. sander levin weighs in on the merger between allergan and pfizer on the second hour of the "closing bell" with kelly evans. see you tomorrow. thank you, bill. welcome to the "closing bell," i'm kelly evans here at the new york stock exchange. here is where we're finishing up the next on this monday, a lighter volume holiday week but the dow down 29 points, the s&p down 2, the nasdaq down 2. none of the major indexes could get into positive territory today. we did have a couple other things going on. the move in the dollar, the impact it's having across the commodity complex. joining today's panel we have our own mike santoli and stephanie link from tiaa cref. with us for more on today's
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market action "fast money" trader tim seymour. mike, what do you think this market is trying to tell us? >> obviously a big week last week, up 3% or something like that and didn't really have a lot of momentum to carry through. i think the question you will get is the seasonal strength has been it front loaded a little bit. really it starts after thanksgiving, maybe we didn't have a test of thatted too, we are up in the levels in the s&p 500 where it has basically fizzled the last few times, maybe times this year, 2100, i do think you have to have more oomph behind it. >> there does seem like there's something happening beneath the surface, clear winners and losers in this market, whether you look at the consumer space or any other. >> i was encouraged to see the consumer stocks rally after the beating down they have gotten over the last couple weeks. unfortunately the reason it's happening is because the weather got colder, i think that was the impetus for this group to do well. energy rallied and that was on speculation that maybe the
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saudis would loosen up some of their rules to the non-opec members. let's see if those two groups can do well. the overall economy and people's psyche feels better when oil prices stabilize to trend higher. those are two sectors i will be watching. >> i was going to mention that aaa average gasoline price is down to $2.07 a gallon. >> i think the market likes to look at the oil price and it goes higher meaning there's better demand. that's what's really behind it. it can't go out of control but if it inches higher that's good. >> oil up means credit markets get firm and that helps the stocks. >> we haven't talked enough about what's been happening in on that space. is it less than a tell these days? plenty of people will say look at what's happening in high yield and spreads not tightening up the way you would want to see for a strong market. can we look past what's happening in the energy space?
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>> you never want to write it off and say it's no longer a tell but i don't think we're at necessarily acute levels for the short term to say stocks and high yield debt are saying totally different things right now. you would absolutely like high yield to rally more, that's definitely the case. >> tim, what do you think when you luke at what's happening in the markets today? >> i think markets got very over boat after being over sold, then we got a surprise fed reaction from the minutes and then that payroll number back on november 6 where ultimately we got comfortable with where rates were moving on the short end. markets i think could probably break 2100 if all that remains constant and energy can take off. this is more of a mechanical exercise on the s&p just in terms of the weighting of energy stocks. i look at the fed still december, flat in the front, fuller scope, this is something that's going to be difficult for markets to play the end of the year like they did every other
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year. i look at where the dollar s inches i think the dollar is going higher i think commodities and emerging markets have traded better even as the dollar has picked up strength. >> let me also mention in case anybody missed it last hour one really fascinating piece of news, edmonds.com comes out the november auto sales forecast of 18.3 million. this is quite a stretch. ron, i don't know if we can show the auto stocks, but why aren't they what i was better and what does this kind of strength tell us about the economy? >> the consumer clearly buying autos and housing. those are what they have been spending the money on, they have been choose yer buying other things like the iphone or apparel or shoes or sneakers or whatever but these are clearly the two themes in the marketplace that have been the drivers in consumer year to date. i don't see it changing anytime soon. i think the reason the stocks, the auto stocks, haven't done as well, i think people are nervous that maybe we're peaking, how much better can it get.
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i have always said you want to look at some of the auto parts, auto retailers, dealers because i think that's where you get more leverage, more bang for your about you can. >> the auto parts retail chains have been at all time highs forever. the autozones of the world have been doing great, o'reilly. the turn over in general in autos fuels that. >> let's go back to the dollar. it did touch 100 on the dollar index today, pretty unusual for that to happen and more new hints about the fed raising rates next month. sara eisen has more details. >> the dollar is surging. you mentioned the dollar index which measures the dollar's value against other major currencies notching that psychologically important 100 level, that's the highest since march and just about the highest point of the year, just needs to go a little higher than that. a big factor is the euro is tumbling earlier going as low as the 105 region, inching ever closing to parity, 1 to 1 with the u.s. dollar, something other
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wall street firms do expect could happen by the end of this year. the question is why the surge. this is a bet on the federal reserve raising rates in december. just this weekend san francisco federal reserve president john williams added fuel to the fire saying, quote, there is a strong case for raising rates when the fed policymakers meet next month. just adding more commentary toward the december call. money chases yield but here is why this trade is so intense right now as odds of a federal reserve interest rate rise europe are talking about going the other way, easing further or lowering rates or pumping more qe sinking their currencies and boosting the dollar trade even more. hedge funds and other spam laters and other traders in the futures market are piling into the dollar. there are noud a $42 billion bet in this futures market on the buck. that bullish dollar position nearly tripling in the last few weeks near the highest level of the year. >> sara, stay right there.
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tim, it's interesting as you reflect on this and think if this is a relative value the euro dollar it's the dollars reacting to the fed moving does europe have to do that as well? request they let the fed strengthen the dollar or do they have to act further? >> i think if the fed continues to move in the direction they're moving and the ecb stays silent the dollar will outperform. the dollar index is primarily 80% dollar, euro dollar yen so if you're playing the dollar you assume it's all that in terms of those primary but there is a lot of other currencies to watch. if you look at european data out today, pmi across the eurozone tied april for being the best numbers in four and a half years. you are at a police where eu gdp is probably going to be .6 of a perspective. i'm not sure we are in the same place with ecb, either. this is the one part to the dollar long trade you have to be
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careful about. this is something that will actually change etb policy, maybe not overnight, but it's something you have to think about. today very good data out of the eurozone. >> tim, what do you think? do you mean that the strongen european economy will keep the euro from getting too weak or they want that euro to stay weak and the policy response will be the first priority? >> they would never tell you this, i think they don't mind the euro being where it is, but there's no question if european macro data continues to get better today's pmi data, better unemployment, better on new orders. and also the etb needs to identify and say we don't need to throw a ton of stimulus at this market anymore. we need more than one month pmis, but these numbers coming out of europe is not terrible. the economy is not imploding. i'm not sure that's true. >> sara, what would you say to that? >> when it comes to europe and the european central bank
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looking for the next move you have to watch the inflation numbers. they have a single plan date, it always come back to inflation. mario draghi last quoted saying they are going to do what it takes to get inflation in the euro area, it's a pretty strong hint he would expand qe. i think the only question is whether he does it december 3rd almost two weeks before the federal reserve which would create the biggest policy divergence since 1994 before the creation of the euro when it was the germ man and perhaps even the mother of all currency trades or whether they are going to temper this trade. central banks even if the ecb wants to see a weaker euro it doesn't want to see something dramatic and violent and that's going to be the key, whether it moves in december or whether it keeps inching at it any further. >> sara, thank you. preaching it. we have an earning alert on palo alto. >> first quarter earnings from palo alto networks, a healthy set of numbers, 35 cents adjusted on the bottom line,
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higher than the estimate of 32 cents. revenues coming in at $297 million that represents a more than 50% rise year over year in revenue growth. also beating expectations. q 2 guidance looks good, above analysts consensus. expectations have been rising ahead of its q 1 report, the stock has been outperforming its peers in the cyber security category, up 36% year to date. a lot of its success going forward depends on security depending. you have to wonder if that will increase going forward. right now palo alto down about 1% after hours. >> some thoughts on this one. >> it looks like the billings information up 61%, deferred revenues up 71%. the metrics we look at in this space is strong, operating leverage was encouraging but the guidance should have been better given what we just got. maybe they're being conservative, maybe they are not. you want to see the operating margins going in the right direction. for them not to raise the guidance for second quarter i think that's something we have to look into on the call and get
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more color on that. >> mike. >> probably what the market is telling you actually as far as i'm concerned if a stock does not trade after hours more than 1% one way or the other the market has figured that out, probably was leading to rally on the actual report but the guidance didn't give them clearance for it. >> tim seymour, thank you, sir. much more coming up with tim and crew on "fast money" at 5:00. talking to den knit gartman about which commodities he thinks have to under a floor. pfizer and allergan merging in a nearly $160 billion deal aimed at cutting pfizer's hide u.s. tax rate. up next we will hear from the congressman leading the charge to end these kornt tax inversion deals. why the irs may focus more of their audit attention on the wealthy. you're watchingen cnbc. first in business worldwide.
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welcome back. it's the biggest tax inversion deal ever. the $160 billion merger between pfizer and allergan will call dublin home. as a result they will see their tax rate drop from 25% to 17%. white house press secretary josh earnest addressed the deal during today's press briefing. >> all along we have acknowledged that the treasury department is rather limited in what they can do
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administratively and that what is required is congressional action. >> well, representative sander levin a democrat from michigan has been trying to do that. he joins us now. congressman, thanks for being here. i can only imagine your reaction to this news. >> it's very disturbing. this is the largest of all the inversions, they have been going on rather wildly and there may be some business aspect to it, but clearly a major motivation is to reduce taxes simply by shifting the home, but everything else essentially stays here in the united states. that's just intolerable. >> america, congressman, is not an island as you know, these are global companies and global businesses why shouldn't they try to get to the lowest tax structure that they can? >> because they're gaining all the advantages from being in this country.
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pfizer and the other companies benefit from all the moneys we spend, for example, at nina, all the r&d moneys. they gain all the benefits from being in the united states and by simply shifting their so-called home, everything else more or less stays the same and essentially they lower the amount of taxes they pay to us taxpayers. so it's really more of a phantom than it is a reality in terms of their business operations. so we need to get at tax reform, but we need to essentially get at this issue right now. >> well, congressman, obviously as you sort of allude to there the reason that these companies are motivated to do this is because of this perceived divergence between u.s. tax policy and overseas policies. do you actually think that there will be any momentum whether because of this deal or for whatever reason behind anything comprehensive with regard to the corporate tax code?
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>> we should have comprehensive tax reform but in the mean while we cannot allow these inversions. they have very kind of cleverly, if i might say so, essentially set the level of stock that will be owned by the people who own stock at pfizer. if it were 60% they would be subject to the inversion rules. so apparently it's going to be 57 or 58%. so essentially a major motivation here is to evade or avoid taxes from the -- to the united states while they get all the benefits of being here and they are going to continue essentially to operate from here. the typical citizen can't simply change their address and lower their taxes and that shouldn't be true of corporations, either. >> so what is it going to take to get something passed in a realistic time frame? >> i hope this shakes things up. and we've been working at this for years. but the republican majority has
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refused to face up to it and they say, well, let's have tax reform. i say let's have tax reform but in the mean while would he need to get at these abuses. there's so much disillusionment in this country among taxpayers, they think the system isn't fair. this is an example of a system that isn't fair and we need to essentially address it and do it right now. >> before we let you go, congressman, again, the approach some others would argue is better, is one that would look at the u.s. corporate tax rate here, look at why companies aren't bringing cash back into this country, look at the fact that it's a worldwide tax system, anywhere you make the profit you are taxed on it so why would it make sense to further tighten or curb or increase the rules against inversions before addressing some of the core issues that are incentivizing companies to pursue these. >> because the inversions are going on right now and we have been trying to get at them.
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while we're arguing about tax reform why should we let companies invert and essentially skirt the present rules by having their shareholders instead of receiving 60% of the stock receive 58%. and they say they're going to reduce the effective tax rate from 25 to 17. the reforms propose a 25% tax rate. so it's clear that inversion is a problem that needs to be solved regardless of tax reform and we should do it right now. >> all right. well, we will be watching. thank you, congressman. >> thank you for having me. >> representative sander levin. let's send it over to seema mody for an earnings alert. >> brocade communications a supplier of networking equipment down -- or 5% after hours despite beating expectations on its top and bottom line, earnings coming in at 26 cents adjusted for the quarter versus the 24 cent estimate. here is why the stock, though,
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may be tanking. guide guidance coming well below expectations. q 1 earnings estimates 23 to 25 cents adjusted versus the 26 kent forecast, revenues also lower versus the $582 million estimate. the stock right now down better than 7.5% after hours. kelly. >> all right. thank you, seema. again, stephanie, echoing something we were discussing with palo alto, slightly different part of the sector but another guidance issues. >> i think you've seen mixed results from this part of technology between cisco and june per and that sort of thing. it's not surprising to me. i would slip it back to palo alto. if that stock got hit near the industry leader. this is where cio's are spending their money in cyber security and software. that's where i would focus my attention. >> although a stock up 40% year to date. >> but down from its highs pretty substantially. and you get a leader on sale. >> brocade again down 7.5% after
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hours. 2015 has not been a kind year to the hedge fund industry. the latest stats are coming up for you. first find out who will be running facebook's product development when ceo mark zuckerberg takes two months of paternity leave. we are back in a moment.
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welcome back. facebook ceo mark zuckerberg announcing he will take two months off when their wife gives birth to their first child. julia boorstin is here. >> with facebook shares trading
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near an all time high up about 45% in the past year zuckerberg's paid paternity leave plan speaks to his confidence in his management team. facebook won't comment on specific plans but it's fair to assume he will be reachable at home to weigh in on a range of issues while his veteran team takes on more things. cheryl samberg, mike chrepforward and chris cox is responsible for all of facebook's products and features. all of their other divisions with their own ceos. with zuckerberg's baby expected in the next few weeks it works in his favor that part of his time off will be during the holidays when business blows down anyway. with zuckerberg taking two months leave is drawing a lot of attention it is half the paid
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parental leave that facebook offers to all of its employees. >> stay with us. what do you guys think about this? which the way, the shares today only slightly weaker. >> i don't think people think of it as a strategic risk or business risk or anything like that. the only thing i would say is maybe that facebook is not going to make am i important acquisitions in the next couple months after this baby is born because it's the only thing you would think that the majority, you know, controlling shareholder would have to do with here. i think it's interesting obviously as a gesture for being family friendly in silicon valley it's kind of hard to see how it goes wrong. >> it's exciting because it's j a great signal for other people that you can take time off and still come back and have your job where it was and still succeed in a business and organization if the ceo is going to do it everybody else should be able to do it. he has a great team. sheryl sandberg runs that conference call smoothly and the cfo as well. i don't think there's going to be any issues whatsoever.
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>> what's interesting in a way is given how progressive silicon valley has become. this i almost would have thought would be more widespread or wouldn't be quite that news worth. what can you tell us about facebook or the other companies we think of and how common it is especially men to take parental leave. >> there has been a move more towards what netflix is doing, giving norma ternt and paternity leave and letting people decide what's right for them. this is notable in contrast to mara meyer and how she handles her own maternity leave. that sends a message to people at yahoo and also in silicon valley that you have to keep on working you can't take a break and even though yahoo has more generous maternity leave she was back at work almost immediately. this is a counterpoint to that and sends a different message to facebook employees. i think it's also worth noting that zuckerberg has been working with all three of those executives whose faces we just
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showed for many years now. so he has these deep embedded relationships with them and a lot of times they can anticipate what type of calls he will make on something and know when it's necessary to call him and when it isn't. >> i guess i would argue in terms of the comparison with marissa mayer that this is a guy who founded the company, the company is riding high, nobody feels like he has anything to move. you have marissa who was relatively new on the job and is a woman and has to prove she's up for this first time ceo role. i think there is a little bit of a tough standard there. >> proving things in the opposite way. >> i would be surprised if he checks out all together. i'm pretty sure he is going to be checking in with their management team on a pretty raeg already basis. work life balance. i only took a month off when i had my daughter. i wish i had a boss or ceo or company that was supportive of taking more time and not having that concern that when you come back what are you going to be
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left with. >> and when it comes to shares clearly no concern, you like facebook, you told it here? >> i do. it's expensive but you're getting a great growth story, if they're monetizing video, monetizing facebook, you have things on the horizon like october you a lus and what's app that haven't begun to show monetization. you have a path of growth to continue at a high level. >> in a way this all suggests he is in it for the long haul. they have a vision longer than a couple rs months. julia, thank you very much. time for a cnbc news update. >> two americans were killed when a u.s. military helicopter crashed in south korea. the cause of the crash has not been released but a south korean news agency is reporting the chopper may have hit high voltage power lines. russian president vladimir putin says he wants to boost trade ties with iran after meeting with the country's leaders. he says there are plans to
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create a free trade zone between moscow and tehran. the exhaust says federal agencies will reduce greenhouse emissions from their operations to levels 42% below 2008 levels and they will do that by the year 2025. the announcement comes one week before nearly 200 countries meet in paris to into esht a u.n. climate change packet. talk about a website. millions of spiders have taken over a memphis neighborhood buildings a web in a field that is a whopping half a mile long. it's a nightmare for residents and that's knots including those who cope with a rack ma phobia which is the fear of spiders. >> oh, my gosh. >> don't look, kell. it's really creepy. sorry. >> i have goose bumps. >> that's the news. thank you so much. up next, we will break down just how badly hedge funds have been performing lately. nd at dow has been virtually flat this year but mike santoli
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is going to plain why some could see this flatness and a bullish sign. coming up on the "closing bell." nors why some could see this flas and a bullish sign. coming up on the "closing bell." sure, tv has evolved over the years.
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positive territory, the s&p down 2.5 points, the nasdaq same amount, the dow down 31, pfizer the weakest today. amazon may soon be the new hedge fund darling, s&p capital iq out with its quarterly hedge fund tracker and they highlight which stocks were bought and sold the most. amazon, paypal and among the top sold ebay, price line and microsoft. with us with more is palvo. >> thank you. >> i don't want to be too flip about this, a lot of the times those crowded trades, whether apple, as everybody and the smart money piles in that's the moment they tend to buckle. now you're saying that amazon is potential one of these crowded smart trades. >> it seems like it. it seems like it is the top buy for their hedge funds and it was interesting because consumer staples was probably the biggest
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sector they bought into. i think consumer staples it's, you know, very noncyclical, bay at that, dividend laden so conservative from where we were last time where they loved healthcare. >> healthcare was the darling and we know what happened to a lot of those names. did they move out of those positions as far as you guys know? >> they did. in terms of, for example, valeant, i think that was an interesting play because i think persian square management get a lot of flak for that, old economy versus the new the share price dropped from 200 to down to the 70s. value act has been in this fund and in stock since the 2000 and it was trading at 20, that's a pretty good long-term gain, but in terms of the short play, yeah, healthcare has been getting a bit of a hit. last 12 months consumer staples have been doing fairly well but consumer discretionary has been played well and amazon fits into that. >> looking at general tendencies when you see these reports if i
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look at a list of the buys. something like amazon and then there's some potential catalyst in the few turks paypal was a spend on. mondalay people think something can be done there. what can we glean from what hedge funds are doing? >> it's interesting because i don't want to say they're bearish but they are definitely a little more conservative leading up to potential rate hikes, that makes bonds a little more attractive. i think the fact that they're pulling out of the stock market a little bit, so they had $200 billion ex wit assets under management in q it 2, now 191. it's not huge but it's momentum you will be looking at there and the drop. in terms of stocks 471 stocks with these top ten hedge under if, we are looking at activist hedge funds, now they have 441 so that's a 6% drop. there is momentum there in terms of a little bit conservatives if you like. >> how about the turnover in
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general from these huj funds? they are in these positions now, do you get a sense that these are the longer terms positions, they will stay in these for a while? >> that's difficult to say. it really is difficult to say. it would be, you know, your guess is as good as mine particularly on the volatility that you're seeing with the market, even more volatile market, so the volatility is volatile. the vix last week was 19 and 10, 12, so on, so forth. that's why a lot of people in the market don't really know. there is a lot of uncertainty in the market. >> let me come back to amazon. what did you think when you saw this one pot pop to the top. >> from a fundamental standpoint how good or solid are the company they seem to be doing the right things in terms of how they're operating, expanding, their growth ms in. i wasn't a huge shock to be surprising. >> the reason i ask is amazon is a name that has been hated for years because it didn't generate the profits and it was sort of
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seen like this company is a loss leader with a 20 year vision that they will never achieve. we know they had a blow out quarter, we've seen the effect across bricks and mortar. i wonder if the smart money is crowding into amazon other than being a contrarian signal does it indicate any activist pressure in the sense we come to talk about with some of the more traditional companies that are struggling? >> we said the consumer staples was a net buy for their hedge funds, the next two were materials and industries. materials have been hit a lot. maybe they're thinking let's go for -- they're trading at discount. >> it's interesting they're doing those groups and not energy which has been a horrendous group. we haven't seen any big energy plays. >> no and it hasn't been probably there all year. the prices have been down and they've been huj funds have been staying away from it. >> look at alcoa with la
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management. we will leave it there. are you about to be in the cross hairs of the irs? why the tax man is under pressure to you had a ut more of the nations wealthiest citizens. will retailers be celebrating a happy holiday season this year? nicole miller will join us later on the "closing bell."
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many wealthy americans already pay a big chunk of their income to the government, now the irs is being urged to increase the number of audits on the ultra wealthy. robert frank joins us with the
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details. >> the top 1% pay nearly half the federal income taxes but it's the top .1% who are becoming the biggest targets of the irs. a new report from the inspector general for tax administration says the irs should spend more time auditing the super rich and less time on those making $200,000 to 400 thousand dollars. the report says audits of people making more may be more complicated but greater productivity for auditors. of course, more money for the government. in response to the report the irs said it will consider raising the definition of, quote, high income for audit purposes and may index that level to inflation. the irs has already been targeting the rich with a new high wealth s.w.a.t. team. as of 2014 people making more than $5 million had a one in eight chaps of being audited, that compares with about a one in 70 chance for those making around $200,000 a year. if you don't pay your taxes the state department has a new weapon, taking your passport.
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that's right, under a new law likely taking effect in january americans with, quote, seriously dpling went taxes will have their passports blocked or rescinded, most cases will move people are $50,000 in unpaid taxes and twr not process of resolving. if you are working with the irs they are not going to take your passport but if you've ignored them it's going to be hard to leave the country. >> robert, that's exactly what most people want to do, leave the country, jet setters, passport removal is an interesting one. >> why is the irs going after the 200 to $400,000 range, why haven't they gone after that very high end? is it it's so complicated and expensive to figure that two ses out? >> they were going after both. they were still going after the higher end at a higher rate. what this investigation found s look, don't even bother from a productivity standpoint with those 200 to $400,000 returns, the irs says we do want to be
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productive and target those higher end returns but if we ignore everyone else it will seem like we are going politically motivated or picking on one group. they do have to spread the you hadities. this investigation from the inspector general says it's better to focus on the top. >> every business operates by the 80/20 rule, 80% of your business comes from 20% of your customers. >> but in this case the irs has to be careful with that because financially that makes the most sense, especially with their resources so constrained right now, but they are saying, look, if we only target the top we're going to get attacked as being politically motivated adds just going after the rich. that's the balance they have to strike. >> robert, thank you for joining us. >>. how is technology changing the fashion world? up next nicole miller tells us about her experience partnering with gopro. plus kate rogers gives you an inside look at gwyneth paltrow's wonder woman themed
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for a heart attack. i take brilinta with a baby aspirin ...no more than 100 mg. as it affects how well it works. it's such an important thing to do to help protect against another heart attack. brilinta worked better than plavix. and even reduced the chances of dying from another one. don't stop taking brilinta without talking to doctor. since stopping it too soon increases your risk of clots in your stent, heart attack, stroke, and even death. brilinta may cause bruising or bleeding more easily or serious, sometimes fatal bleeding. don't take brilinta if you have bleeding, like stomach ulcers. a history of bleeding in the brain, or severe liver problems. tell your doctor about bleeding, new or unexpected shortness of breath, any planned surgery and all medicines you take. i will take brilinta today. tomorrow. and every day for as long as my doctor tells me. don't miss a day of brilinta. actress gwyneth paltrow is bringing her online lifestyle brand goop into a pop up shop in
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new york city. kate is here to tell us all about it. >> that's right. some of the items in the store are wonder woman themed, debuting an exclusive collection between goop and valentino and some of the items that you can see behind me. it's a nod to today's modern woman. i'm sure there are many who would like for more like gwyneth paltrow. they're selling a mix of high and low end items. for example, there are gifts, housewares and makeup that retail morales than $100. then items that are part of the sal teen know castle collection which is nearly $10,000. we caught up with goop ceo and asked her if the high end consumer is back. >> i hope so. e want to service all of our readers in the whole second gram of people who want to come up and buy a t-shirt or a candle maybe on the lower end of our prices and also on the higher end the valentino collaboration is a special collaboration. >> and beyond just goop pop up
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shops are big business, especially around the holiday season. about $2.2 billion is estimated in sales this season alone with more than 10,000 pop up shops across the country. i'm not sure what's on your christmas and holiday list in year, if you want this jacket there are only two left including the one i'm wearing and some of the items in the collection are already sold out since this morning online. back over to you. >> i was going to ask you about the crowds. how is the scene, kate? >> i'm sorry? >> how was the crowd? >> there is a lot of people here. people have been milling about all day. definitely a lot of excitement around the collection for sure. >> we will watch and see if that jacket pops up in the hallways at cnbc in the next few weeks. retailers and shoppers are getting ready for black friday, too. one of the top trends for luxury fashion is tech and if a jets and accessories, wearables, phone cases, what else can we expect to see this holiday
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season? joining us right now and here at the new york stock exchange is fashion designer nicole miller. welcome to post 9. >> thank you. >> what's going to be the hot item as far as you're concerned this holiday season? >> gadgets like that, i sell tons of phone cases and chargers and that kind of thing, that's been extremely popular. of course, i'm more boo selling clothing. >> a lot of people are struggling to do lately. >> we've seen a lot of interest in blouses, a lot of people have been buying tops, we have had a lot of dressy sweaters and things with beads and we did a wear with denim campaign and all the tops that you can wear with jeans all the time are great and that's been doing really well for us. >> we mentioned some of the tech gadgets but also you have been partnering with companies like gopro, i think we're looking at traditional footage of your fashion show but they allow you to do what? >> you wear them on your body, strap them on your body when you are skiing or walking through the city and we use them on our
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runway shows, it was great. we had, you know -- it gave a whole runway show a different perspective, instead of just seeing it from the cameras at the end of the runway. >> in terms of what people are interested in, there is an idea out there for people that cover the nurse that younger adults, millennials, are not label conscious or don't care about the clothing itself and willing to do this kind of disposal fast fashion stuff. is that a phase? do you see that as evidence in your business? >> well, it is not just a phase, because i don't the companies are going away. i mean these czars are forever 21s, i think they are here to stay for most part. but it is too much of a glut of clothing. and you don't take it seriously and you buy it and wear it once and give it away. i think people should, like, have a little more value in their clothes. and they should want to hang on to them. love them so much they want to wear them more than once. >> how do you sell that message when so much of the attitude,
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especially among younger people today is that is wrong. it is wrong to love your clothing, it is wrong to value it and we shouldn't be so materialistic. as you have probably observed, it is a generation that is very philanthropically minded, concerned about the environment and even the successful companies like toms are the ones that package their products with a message. >> yeah. i think that is really important. and we as a company are environmentally involved as well. i haven't tied it directly into my clothing but we are involved in river keeper and rocky mountain institute. that is one of my primary concerns. i don't tie it into my clothing per se though. but i think there is too much stuff around and too many things on sale all of the time. so what we're trying to do is make less things available so things get sold out so you then appreciate it more. >> create scarcity stuff. >> could you talk about the internet and e-commerce shopping. specialty retail, apparel, i
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view as unique and people want to touch it and feel it and different than what you see at some of the lower end or mass market, if you will. do you think that people are going to continue to shop online at the specialty retailers or do they go into the store and continue to do that? >> i think they are going to do both. i'm certainly someone that does both. but i'm prone to shop in the boutique. i like the attention and smaller collection. i don't want to see 10,000 things so i like shopping in a boutiq boutique. but if they have a web presence, i might go back and shop on the web asing with. i go that is my style and like their clothes so i'll also shop both ways. and everybody knows when you buy things on the web, you can return it. >> right. on that note, what is your -- do you deal with amazon.com, in terms of the channels available to you, everything from -- >> we do some of those. >> what do you think of amazon as a partner? >> it is great.
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they are hugely successful. they do a lot of sales for us. it is really fantastic. >> and that represents potentially the competitive threat for a lot of your traditional partners in the department store space? so i wonder if there is any concern when you are choosing wear to place product. >> i don't think so. because i think they buy different things. i think they special buy different things. certain stores buy mostly my dressy collection and some stores bicep rat or some day -- by separate dressed and the different stores have to know who their customer is so there is not that much of a conflict on that area. >> and what sells most for you on amazon. what are people looking for. >> i call them my nip and tuck dresses. because they maybe everybody look great. >> spanx but a dresses version. >> exactly. you don't need spanx with this. >> i could understand the appeal. nicole miller, thank you for joining us and best of luck with
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the holiday season. up next, why trading sideways might be bullish for this market. and tomorrow, analysis of hewlett-packard's last report as one company. we're back in two. working 24/7 on mobile trader, rated #1 trading app in the app store. it lets you trade stocks, options, futures... even advanced orders. and it offers more charts than a lot of the other competitors do in desktop. you work so late. i guess you don't see your family very much? i see them all the time. did you finish your derivative pricing model, honey? for all the confidence you need. td ameritrade. you got this. sometimes they just drop in. always obvious. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities.
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the current sideways market may be a good thing. mike santoli explains in his latest piece. flat periods often good for the bull market. mike, what do you mean? >> often, not always, just for context, we made a run at the 2,000 level at the s&p. it has been 16 months at 2,000 plus or minus 100 points. that is less than 10% of a range for 16 months. we've had five or six periods since world war ii. they tended to resolve to the upside. it doesn't mean that exactly the same kind of environment prevailed but i do think it is interesting. and if i'm making a list of the bullish and bearish factors, the fact that we've sol dated and con seventied this big 50% ramp from late 2012 into mid 2014, it is probably a net good thing. now you could pick apart this rally and say it is too narrow and credit is not agreeing with it and it is true. but the fact that you held in here and gone sideways is
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probably net positive. >> what is interesting here is so many people right now are talking about this market, running out of breath, talking about the fed maybe choking off. but the business cycle just generally saying, look, it has gone on for quite sometime. we are asking for this to continue so maybe this is it. but you are saying maybe not. >> maybe not. hey look, david at goldman sachs was correct this year saying it was a flat year. he's also saying next year might be a flat year. and we have high valuations, relatively high valuations and currents underneath it. but if there is no recession, you rarely get a bear market or a lasting one. >> do you think you will see this rotation from growth into value. >> that is the big question. that is the interesting one. people say, hey, it is a narrow market, only the growth stuff is working. exactly. so the bear market already happened in industrial stocks and other things like energy so maybe you could have those guys come back to the fore. >> that might help. because we were talking to adam parker who said it is the new economy stocks that continue to power us forward.
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and that is what we've seen. >> i think adam is talking to portfolio managers that need a bench mark. if you are hunting for bench market beating stuff, don't go into the beaten up stuff. >> because it hasn't worked. i'm a portfolio manager. >> can tell you firsthand. >> he's preaching. >> if we go from growth into value, that would imply better growth from a gdp point of view. >> the way i look at it, if growth holds together in the u.s. and the rest of the world does okay, that is where you have to leverage to it, in the more cyclical stocks. >> growth itself doesn't become so dear. if nothing is moving, you have to find the amazon.com that is and let everybody buy the stretching dress that nicole miller is stressing and we're going to go google right now. thank you. mike and stephanie on "closing bell" this afternoon. "fast money" starting in minutes. melissa lee is is on top. >> we would play a game with
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dennis gartman on commodities, we're put ug his feet to the fire. >> it feels like the whole market hangs on this question, melissa. so let's have dennis settle it out. >> thank you, kelly. "fast money" starts right now. live from the nasdaq market site overlooking times square, i'm melissa lee. your traders on the desk. tonight on "fast," pfizer and allergan linking up. but one trader says it is the tech space that is right for the next round of in version deal making and we have the names and the ways to profit. and as chipolte deals with the fallout from the e-coli scare could another stock benefit. two stocks stick out and both of them were up sharply today. and later, low gas and record sales so why can't shares of form and gm rally. it is not china, closer to home and it could have big implications for the rally. but first we start off with amazon. another day, another-t

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