tv Closing Bell CNBC January 25, 2016 3:00pm-5:01pm EST
trying to solve things like police brutality. when you do that, it tends to get people interested in both sides of the issue. >> we'll see how it goes. thanks for coming on. good luck with that. >> we appreciate it. >> thank you all for watching "power lunch." "closing bell" starts right now. >> hi, everybody, welcome to "closing bell". >> i'm in for bill griffith, this is the last hour of the trading day, stocks kicking off in the red. oil is dragging on the market yet again. chesapeake, hess and marathon, just a few of the stocks getting hit hard in today's session. >> look at those declines anywhere from 6, 11% in chesapeake's case and goldman sack's commodity chief will join us for where he sees prices
going next coming up. tesla ceo elon musk revealing the impact cheap gas has on opportunities in china. we'll bring you comments from mr. musk himself coming up. four executives out at twitter, reports that new board members are on the way. a $34 price target on twitter, that's double where the stock is today. he'll make his case. we begin with a little good news, mcdonald's getting a breakfast food. jane? >> steve easterbrook, satisfies it with take six more months. my favorite chart, mcdonald's versus apple over two years. same result. same store sales growth in the u.s. best in four years thanks to all day breakfast taking market share during lunch and global growth 5%, places like europe are tough.
easterbrook partly blames terror attacks in paris. mcdonald's plans to open 220 new stores in china this year. >> volatility just plays a scrappier environment and nervousness and sometimes that market cost customers we need to be mindsful to that. china is a good example where that kind of volatility in the market just creates a little anxiety. >> new initiatives include the mcpick two value, you can get food brought to you at some stores in california and the app haents done a whole lot. a bunch of special offers but that's going to be improved bit by bit to become a hopeful contributor to sales 2016. investors expect another $14 billion returned in dividends and share purchases. >> i wonder if mcdonald's must be wondering whether the business they've been getting
from all day breakfast is sustainable and to what degree folks coming in for the first time and sampling breakfast during lunch hours and if they'll keep doing so? >> there is the sense that may not have this kind of continued growth and there are other initiatives going on. there's still fewer guests by the way coming in then there were a year ago. the people coming in are spending more and that's a lot because of breakfast at lunch. you're coming in and getting a big mac and fries and the egg mcmuffin. that sort of thing. >> who would ever turn one down by the way. jane, also wondering about the comparisons with chipotle. when is the last time mcdonald's had a food safety scare and they are everywhere? >> that's intding, there's a whole push by mcdonald's that our food is better, we're listening, we have cage free eggs and by the way, it's not spoken, you're not getting sick at our restaurants. and while some people think there is not a crossover
customer between the two, guys, i'm that crossover customer. i go to both places. >> ditto. >> i don't think it's an either/or. >> stock performance speaks for itself. stock is up 26 or 27% this year. are you look at wendies and yumg and shake shack and whole bunch of other names and blowing it out of the water. >> of course it was doing so horribly before. i mean really, mcdonald's while others were doing well, mcdonald's nobody would touch it and now it's in its turnaround phase. it is inevitable -- not inevitable but it's happening. >> if i have to hear can i get a mcpick two during football games, i'm going to lose it. >> the double cheeseburger on the mcpick and second biggest thing, mozzarella sticks. >> i didn't know about those. thank you, jane. jane wells. >> crude oil is sliding again.
showing the economic impact of the energy slump and steve joins us now with more. >> the dallas fed survey crashing through recession like numbers, registering a negative 34, expected to be just negative 14.5, the last time it was this low, the united states was in the middle of the worst recession of the post war era as in the last recession. the dallas survey corresponds pretty well with broader manufacturing indexes. is this all oil or start of something worse? there are four other regional surveys out there and they correspond well with the national numbers but they are more mixed than dallas. let's do an old nfc match-up here. the dallas fed versus the philly fed. the charts are not coming up. what you would see is that dallas is off the charts bad and philly fed is negative and kind of trending up a little bit towards zeer roext the texas economy with $30 oil is like the
dallas cowboys without tony romo. manufacturer is weak because of weak overseas growth and strong dollar. trouble in texas, it's amplified and bigger this time because of the oil downturn. >> i'm wondering, we have alan coming up in a little while saying to everybody, listen, falling oil is fundamentally good for the country. has anybody's minds bb changed of late? >> the idea that i'm still of the old school but the idea that oil is good for the u.s. economy is very 2015. the new thinking is that maybe we overestimated it. maybe the idea that low oil prices meant good news for the u.s. economy is certainly delayed and i guess there's a brewing sense it may never happen. you had pretty decent consumer spending growth around 3%. but you saw it fall off in the fourth quarter as we got more and more and lower, lower oil prices.
whatever happened, the idea that higher -- the huge production we had out of the united states, apparently was a much bigger part of our oil -- our overall gdp and the idea it's come off feeling worse for gdp than we thought it would be. >> what do you think the fed is going to say this week and if investors are getting hopes up about nothing happening in march, are they going to be sadly disappointing? >> i don't think they'll explicitly say nothing in march. they see what's going on around the country and world in the markets and they've got it under advisement and data dependent. and i think they are going to tell us that their economic outlook is a little -- has more downside risk than they thought it had before. that's going to make us believe that there's a much bigger question about march and that the next rate hike is much more of a later springtime affair than it will be a late winter affair. >> all right. steve, thank you for now.
steve looesman. >> joining our closing bell exchange, senior adviser at money matters and senior managing director at meridian equity partners and how does it feel after the first positive week of the year, no follow through today though? >> there's no follow through today. i think with what's on the calendar as far as economic data and earnings is concerned, today is somewhat of a quiet day. i think everyone is waiting for big earnings coming out tomorrow and key economic data. we're also going to get the fed on wednesday. today is a little bit of calm before the storm. i don't know how big the storm is going to be. volume not supporting this move today and took the market a long time to catch up to the falling oil prices. so a little bit of a mystery so far. >> ken, how big a storm do you think there's going to be here in these markets? >> you know, i always look at the stock market as a yo yo you're playing with as you're riding an on escalator.
and the he escalator is the tre in profits and earnings and in the economy. we've had three quarters in a row of declining profits, earnings, and i think this fourth quaurtder will be another one. we'll have profits but they are going to be a declining for the fourth quarter in a row and actually worsening each quarter. i think we're on a declining escalator. the fact that the yo yo goes up and market is up on day, that's a reason to sell in my opinion. if this is an average bear market for those of you who know the math, it's a 35% drop in the average bear market. that puts the dow at 11,500 and that's where i'm seeing the dow going to before this is over. >> depends i guess sort of rick, maybe what the fed says this week. what are your expectations? >> i think we're beyond the fed personally and i like the yo yo analogy. i think we're beyond the fed in the fact that in the yo yo analogy, which is wonderful. we're on a down escalator in equities and walking the dog. we have a 2% economy, 2015
pending on this week's look at gdp for the fourth quarter, most likely will be a bit under 2%. if the fed changes its mind, i don't see a big rally in the markets. i think what's dawned on investors is the notion they can fix everything. they can pull business forward and they've done that for a long time. it seems to have run its course. the question you just asked is going to be the defining trade for 2016. >> on that point, what event, what happens if something comes out of opec. what could help the market find a reason or catalyst to move upward? >> i think it could be any factor out there. any catalyst can really move this market, whether it's going to be oil or economic data or earnings. i think the market is looking for a catalyst just doesn't really know what that catalyst is and where it is on the calendar. >> we'll get away from lock step, 100 correlation? >> i don't know when we get away from that. it seem we're locked into that mode and mentality. like i said before, it took the
market a little time today to really get back into that mode. hopefully we do start to see a little disconnect. if oil stays down at these prices which everyone is assuming it's going to be, it's going to be a long year for the dow and s&p. >> nearly going to break the 30 level as we watch it. same kind of question, you mentioned how bearish you are on this market. what would it take for you to have to flip around and -- is it the fed or something happens supply side with oil, great gdp? what would it take for you to be more positive on this market? >> i think we would have to have a full blown bear market before i think it's time to get back into the market. in late november of 'o 7 we told clients to get out of the market and did the same thing in august of last year. i'm waiting for the market to ka pit late. the disconnect i see with oil, why would lower oil prices put money in consumer's pockets
result in lower profits and bear market? it's because oil prices are a reflection of global slowdown. the economies around the world are slowing down and the demand for oil is going down. it's always been the case that when oil consumption goes down it's because we have a recession on the way. >> rick, once again this today down at the etf conference in florida where cnbc has been reporting from all day, once again warning about the mess of high yield and as long as high yield can't get out of its own way, the stock market itself is going to have an awfully difficult time and continue to get worse. >> i agree. i think that some of the big managers especially bond funds are talking their position a bit. whether it's the first time with this rate of nominal gdp the fed has ever tightened, there's a lot of one offs, but the biggest of all time is central bank policy throughout the globe. at the same time pushing the
boundaries of all of their charters and i really do think that mr. gun lack may be right. i think the pickle will be rectified by normalization. so it's not a real question of what smart guys say but the positions they have and what they are saying. >> that's always, always key. guys, thanks for now. we'll leave it there. market near the lows of the day, dow is off 124 points and s&p down 19 and vix is higher, look at the transports again, we've talked about this forever, down another 90 points with the nasdaq 44. >> up next, twitter, it's sinking deeper ks more executives are leaving that company. a leader twitter analyst will tell us what it will take to fix the company and of course the stock, which just continues to
get creamed. >> also ahead, gold man sacks jeff currie will be here to state his case. opportunities aren't always obvious. sometimes they just drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances.
we are back and stocks are selling off a little bit more, dow is down 140 points and s&p is down by more than 1% as is the nasdaq. wti was down 6%. as that slide continues and it gives back some of those unbelievable gains from late in the week last week. it's taking the stock market a little weaker into the latter part of the session. >> it sure is. manufacturing giants tyco international are merging, a deal expected to save $150 million annually in taxes. they receive $3.9 billion in cash considerations and own 56% of the combined company. the merged company will be headquarters in tyco's current ireland home.
>> that's significant because this deal is drawing ire from politicians. bernie sandsers calling it a disaster for taxpayers and paul ryan, bipartisan agreement, saying this is another example of why we need tax reform to keep our employers and jobs in america rather than encouraging them to move overseas. again, the house speaker paul ryan, bernie sanders both agree they don't like the potential tax inversion here. >> four executives leaving twitter and more changes are expected to come in the board room. the stock now down again today. joining us now, mark from rbc capital markets, still maintains a $34 price target on twitter and sector perform. mark, i can't imagine you're not wavering at this point given the continued stream of bad news and a stock that just continues to go lower. >> well, we've been cautious on the stock where we've had a neutral or hold rating on it for the better part of 18 months it's a mistake, we should have had a sell on the stock.
i haven't seen this much management turnover at an internet company ever in the year and a half -- >> i thought you were going to say since yahoo!. >> yes, but right out the gate, the ipo, rare to see that kind of change early on. what i worry about still is that some of the metrics may get worse before they get better. and the bulls on the stock continue to look for this reacceleration in the monthly average user growth. it's possible they go negative. one of the ten surprises for the year. we'll see the stock continue to go down. the valuation looks reasonable but estimates still imply a lot of growth and with the immediate metric, if that goes negative the stock will go further down. you can't buy it yet. >> do you think dorsey is doing the right thing with the shake-up? >> you know, that's a very hard thing to know. maybe it's just a reflection of changes that need to happen at the company but who knows who
the next people that come in are. it depends on who the new hires are and people that run the business are. this company will be judged fwi the number of product and interface improvements they rolled out. they rolled out something called moments several months ago and we didn't think it really worked. that was a one big swing and far as we can tell a miss. they need better products and better user engagement that makes the site more intuitive for the mass market. user growth is only 3% year over year now. >> i think i heard you say don't buy when it comes to the stock. it's early. some of the commentary i've read says these events, especially these departures at a time where the company is trying to turn itself around, pushes the bull case out by a minimum of six months. >> that sounds about right to me. i shouldn't say don't buy it yet, i should say won't buy it and we'll see if there's a time to buy in the future. what keeps us at least interested and keeps us looking
at it, the model has proven, facebook has shown what kind of margins you can get off social media advertising and modernization level, only 50% of the ad revenue of a facebook. there's a couple of gap-up opportunities you can see if they get the products right and use erin ter face right which requires to get the management team right. there's a lot of things that have to happen in order for people to really with confidence buy the stock. at least six months, that's probably accurate. >> i would just say -- >> or never. >> not to be glib about it, but everybody's mother is on facebook. literally. they are not having a problem with growing their user base. it's grandma and mom and son and daughter, whoever. twitter can't grow the number that matters most. what makes you think they'll start doing that again? >> i don't know that we can assume that they will. they may have niched themselves from the begin. i say that and couple hundred million users is a nice niche to
have for most companies worldwide. in terms of the stock -- >> not when you're paying up a bill valuation for high growth that doesn't seem tok delivering. >> scott, that's absolutely true. when you ask which one we would buy, facebook ten out of ten days of the week. it's one of the highest quality advertising namgz out there in the space and through in google and facebook, no need to throw in twitter. >> twitter still isn't necessarily cheap, trading at a pretty lofty and multiple and how sentiment deteriorated on the stock, you had a 41 price target as recently as october. why keep a 34 on it at all if you're describing it as not a good investment? >> kelly, you make a really good point. i lead as a stock picker with the rating and we think hard about the valuation perimeters. i think valuation is reasonable if it really is ten times 2017 street numbers however, i think
there's nor likely to be a negative bias to those estimates than a positive one. numbers come down probably first so the valuation only as good as estimates and if the estimates are uncertain then the stock is uncertain, that's what we have with twitter. >> if anybody tuned in to listen to this interview or heard it on the radio and they've joined it in progress, they would assume that you're defending your cell call or making the case for a sell call that's not there. >> well, i said at the beginning of the show, probably my biggest stock picking mistakes last year was not being negative on twitter. whether it's too late -- my guess is right now there is not too far away from valuation floor and sentiment has clearly turned, hard to see this as a new sell idea but anyway -- >> i hear you. >> weren't the only one either. >> for sure, thanks for joining us. rbc capital markets talking a
little twitter. bill george will weigh in on how the challenges facing twitter could evolve in the next hour of the show. be sure to tune in. >> we have 35 minutes to go before the bell rings and dow jones industrial average is down 150 points, the lows of the session, the s&p nasdaq down 1% as well each. >> coming up -- >> we think particularly great about hong kong, it can serve as a beacon city for electric vehicles. it can serve as an example for the rest of the world on what to do. >> hong kong as a beacon city. phil lebeau has more on the ambitious goals for e lonmusk in china. >> jeff currie tells us when crude prices could potentially hit bottom.
same decline for nasdaq, sizewise, it's down 55. and caterpillar one of the biggest decliners, down almost 5%. goldman sachs downgraded to neutral, cutting the price target to 51 from 67. it's currently at 58. >> didn't even wait for earnings, which are i think in a couple of days. >> get a big swing of industrial earnings, that's true. >> throwing it out before you even get to hear from the ceo or numbers themselves. that ain't good as they say. >> exactly. >> tesla ceoelon musk setting his sights on china. >> china is expected to be a big growth area for tesla and musk was there talking about that. this comes at a time when you look at the price of gasoline, not only here in the united states but falling around the world. here in the u.s., $1.83 a
gallon, the lowest in seven years, he admits low gas prices are hurting electric vehicle sales overall. he believes they can attract buyers despite cheap gas. and one area they want to attract buyers, china, expected to be a huge growth market for tesla. super charger network is expanding and they are paying a special import tax and anybody who imports a vehicle has to pay a tax. that's adding to the cost of teslas and does not qualify for local incentives but he's confident that can change with local production. >> in order to address that in long-term, assuming the regulations do not change, we would have to do local production. we're investigating options for local production this year. >> no time frame for when they might make a decision on when they might build in china. i wouldn't be surprised if we
hear in the next year or two. sold more than 50,000 vehicles last year not given sales guidance for 2016, we'll likely get that when the company announces the fourth quarter results in early february. the battery production from that factory starts up later this year. so that's expected to increase the amount of lithium ion battery cells they'll have at their disposal. that's a crucial part of expanding production for now in fre montana but eventually if they build in china as well. >> this had me scratching my head for a couple of reasons. one is with everything going on with hong kong, booksellers critical of the government being seized for example and other ways that china is making its presence much more felt than anybody at home? that's kind of one thing i thought was interesting about this. the other is that electric cars -- china seems like the worst place for electric cars because of the coal fired grid and the pollution is so bad. >> but they also have huge congestion problems and if you look at their largest cities on
the coastline there, they've got to do something about the emissions from the vehicles and that's why electric vehicles at least in theory are going to be pushed by the government. we've heard this for some time and the question is, when do we actually see real ramp up in demand for electric vehicles in china? we're seeing some right now, byd is growing sales there. but when will we see it to the point where people say, aha, now they will leetd the world in terms of sales of electric vehicles? >> when we were in norway, it was interesting, there was a researcher there not sure that those subsidies amounted to much overtime to develop the electric car industry and saying about china, even the electric bikes there are actually really contributing to some of the pollution problems that they have. so i don't know where that would leave china with a growing electric vehicle market. >> the question, can they get that straightened out, you're talking about an infrastructure issue.
whether or not you have confidence that china can solve the infrastructure issues not only plaguing electric vehicle adoption but the coal fired power plants and pollution. >> so true. thank you, phil. >> time now for a cnbc news update. a british adventurer has died trying to across the an artic alone. he was just 30 miles from the end of the 1,000 mile journey when he called for help and was air lifted off the ice on friday. his family said he died following complete organ failure at a clinic in chile. with one week to go until the iowa caucuses, ted cruz is urging his supporters to get out the vote. he has three campaign stops planned for today in the state. the iconic ocean city fishing pier was heavily damaged by winter storm jonas over the weekend. parts of the pier were broken off by wibd and strong surf. the damage is similar to what
happened during hurricane sandy back in 2012. >> and florida state university says it is settling a lawsuit with a former student who said the school failed to respond when she accused former quarterback winston of rape. fsu will pay $250,000 and attorneys $700,000 to avoid spending millions on the lawsuit. >> and that is the cnbc news update. back down to you. >> thank you. we want to draw everyone's attention to what's happening with oil and this market as the dow is down about 165 points, art cashin said look at wti and crude benchmark. if it goes below 30 and it's $30.06, there is some pressure to close. if it goes below 30, all bets are off. >> you get more selling, everybody is watching that critical level. a leading trader tells us what he is watching into the close next. >> and goldman sachs head of commodity research is here with
us, to explain why oil could trade 20 and 40 bucks a barrel for a while. stay tuned. m going to take this opportunity to go off script. so if i wanna go to jersey and check out shotsy tuccerelli's portfolio, what's it to you? or i'm a scottish mason whose assets are made of stone like me heart. papa! you're no son of mine! or perhaps it's time to seize the day. don't just see opportunity, seize it! (applause)
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execution, we're watching peter, crude oil which has now gone below $30 a barrel. it's sitting right at that level as the dow itself is now down 189. that's the game it town now, oil. >> all about oil as my father would say. >> that what you were watching more than anything? >> we've been watching it for the last three and a half months. >> everybody has. >> been on air a million times about it. and we're following this right now it's the more important issue. a lot of people are talking about china and the fed. oil is what's driving today. >> do you think last week was a fool's rally? do you believe in it at all? do we hit a near term tradeable bottom? >> i thought we did. and i still will stick with that. being in this business for a long time we've seen this before. >> this was wednesday, around noontime. >> you could look at those stocks, any of the energy stocks and they are down 7 to 10% interday, it's a serious move. it felt like it, like that was the bottom. i'm going to stick with that.
i think that was the bottom. we'll probably bounce off it like we'll bounce off 1865. we'll keep seeing these things, potentially going through any of these levels is real, obviously because of supply issue and in oil, but we're going to keep watching it. i think it's actually pretty interesting, more interesting to earnings this week. >> you're watching crude now a few pennies below 30 and dow is down 200 points and by the way you have the fed this week. what are you looking for? >> i think the fed is not going to say anything. i would be more than surprised and almost feel that was a mistake whatever they do. they should come out and say nothing, which is they are very good at. we're not in that position i think economically going forward for the next couple of months, i don't think we're in that position to have any kind of rate rise. i think that doing something or mentioning anything by the potential qe would be a major mistake and send the wrong
signal to the markets. i don't think they are going to say anything. >> thanks for hanging out with us, good to see you. >> good stuff. oil getting hit hard right now just breaking the $30 a barrel mark. our next guest predicting a trendless market for oil in the coming months. jeffrey currie joins us here. let's begin with oil below $30 a barrel. when it was rallying everyone said it was fine, that was a mirage, today not so much? >> we think about what's going on in terms of the volatility. we say it's par for the course given the environment. the term we use for the current environment is the inflection phase of the bear market. what do i mean by that? before we saw lots of financial price volatility but didn't translate into fundamental volatility. we're seeing real moments in fundament fundamental, we're hitting storage capacity constraints right now which creates lots of spike to the downside. >> that what happened onsetling
day last week? >> absolutely. >> took the whole market with it. >> what we mean by blowing out storage, it's not a precise figure and doesn't happen global, it happens more locally. we look at storage levels in curbing, there was a 3 million barrels of storage capacity. we saw cash prices separate from forward prices tells us we broke the cash and carry and it means you can't store another barrel of oil in the system. we think this is going to be a feature of the market, continue to slam against the capacity constraints over the coming months, creating a lot of volatility without any trend. >> we're thinking the middle of what's going to be trend for 20 to 40 bucks for how long? >> where we come up with 40 at the top and 20 at the bottom. the 40 is what we call financial stress. it's a price level when you drop through, you start to create real risk of credit default in
real shifts in company's behavior because of financial stress. at the bottom, $20 a barrel, we generate that off the cash cost. when you hit the infrastructure constraints, prices have to come down to cash cost for producers. those are the two extremes the market will bounce between. >> what role is iran oil going to play in all of this? >> when we think about iran in terms of it coming back online, a lot of it was already priced in the market before the official announcement that came out about a week and a half ago. in terms of the implications that could likely have going forward, what it means is you're going to have to squeeze out more of that nonopec oil than you would have had it not come online. it means more volatility and finally you rebalance the market. >> go ahead. >> the other point, you know, taking commodities into consideration as a whole, you've made the case with me in the past that you think the commodity super cycle is not
dead or over. this is merely just a phase that we get back. have you changed that view or do you still believe that? >> i think as all cycles they have different phases and we're on the back side of it. historically they are somewhere around 30 year cycles if you go back to the 1950s. this one has the potential to be longer because you do have a real structural decline in demand, particularly in nonenergy commodities with what's going on in china. this is not a one-off event in which you'll recover. they have finished their cap x cycle and there's a lot of question marks what you'll do with infrastructure commodities as we look forward. >> are you confident we could go back up to 40 because there are a lot of people praying that happens at this point but with each passing day we sit here below 30, people are starting to look at the lower ends of that range. >> in terms of thinking about the type of volatility, when you hit these infrastructure constraints, supply comes down and market quickly rebalances and you typically see a pop. we rallied nearly 20% off the
lows last week so where we opened up this morning. ability for this market to go to 40 and come back to 20, it's trading right now shy of 80% volatility. which is enormous. >> just a quick final question, there are more people looking at the impact of the u.s. dollar here and saying why are you telling me about supply and demand? is it possible that crude is actually trading off the u.s. dollar which is trading higher for a lot of other global stress reasons? >> or make the other direction which the statistical evidence points it goes from oil to the dollar. clearly there's a significant correlation and it's part of this broader super cycle that we're talking about. we think it's had a large impact on the pushing the market down lower. however, what is really different about this market today versus even let's say a month ago, two months ago, we're now seeing physical adjustments for the first time. before it was all financial, now it's physical. >> fair enough, thank you for joining us. >> thank you for having me. >> 15 minutes to go before the bell rings and dow is down
we want to give you a picture of markets as we head towards a close. dow is hanging around, down nearly 200. take a look at the s&p, down 1.5% right now. doing something it has done every time this year it has been down at the close, that being a decline of at least 1%. >> wow. >> when the s&p goes to it, it goes for it. >> that also tells you how much market value we've lost this month. it's going to have huge ripple effects. let's look at hillary clinton taking aim at drug companies again. meg? >> hillary clinton again tweeting about the drug industry, remember back in september her tweet about drug companies price gouging, she's tweeting, there's no excuse for letting greed get in the way of people's health and companies like these should be ashamed and links to a story fight to lower drug prices forces some to
switch medication. that focus how they are pitting drugs against each other to get discounts from manufacturers. we saw that play out in hepatitis c but the story goes on to show that some patients have to switch drugs as a result of that. it's not totally clear if hillary clinton is talking about express strips, it did dip slightly lower or still talking about drug companies. the the index did dip slightly lower around the time of this tweet, down 1.6%. >> meg, thank you. those stocks also getting whip sawed by the broader move in markets with dow down nearly 200 as crude oil, look at this, that wti benchmark down to 29.90. >> much more on that coming up and it will be the denver broncos and carolina panthers super bowl 50. if you're long in the stock market you should be a fan of
panthers, sam joins us next to explain exactly why. ♪ every auto insurance policy has a number. but not every insurance company understands the life behind it. ♪ those who have served our nation have earned the very best service in return. ♪ usaa. we know what it means to serve. get an auto insurance quote and see why 92% of our members plan to stay for life.
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crude oil breaking below $30 a barrel. the dow jones industrial average was down 200 points, currently down 195. joining us for more, sam stoval is here. welcome to you. >> thank you. >> we begin with people came in ach the weekend and had a nice session on friday and then this happens. >> i think the worry is that maybe this counter trend rally itself doesn't have much momentum. a lot of people were writing over the weekend maybe we have to come to the 200 day moving average, about the 2,000 level on the s&p 500 but really, this counter trend rally does not have a lot of oomph behind it. maybe they are waiting for the fed no show us they want to be less aggressive over the year ahead because of turmoil. i'm not sure but it certainly is not pointing positively. >> does it at least have hall marks of a near term tradeable bottom like people have said, including a gentleman we spoke with moments ago?
>> when you have the cap it lags sell-off the early part of last week. >> you believe that's what it was, midday wednesday, that was -- >> wasn't enough to be called a true panic down day. i think actually when you think about it, we're down 12.7% on a closing basis for the s&p. this is the third longest advance without a decline of 10% or more since world war ii, usually after this kind of extended run, we see declines that are between 15 and 20%. so i think we got off easy if this is all we're going to see. >> but cam newton can save this market? >> i think he should save himself first and panthers. it would be nice if they win and the super bowl theory repeats itself. >> explain why that would hold. what's traditional been the case, if the panthers win, that implies -- >> the panthers team is from the current nfc, whereas the broncos
are for the afc. if a team from the nfc wins the market tends to go up or one of the old nfl teams like pittsburgh or indianapolis, that is -- >> tends to finish the year positive? what's the odds here? >> the odds are basically if we have an upward direction, then there's a good 89% chance that that's positive. a downward projection is more one of confusion, only about a 69% frequency of accuracy. >> got that, scott? >> yeah, i think carolina -- carolina is favored by four, i think, something like that. >> something like that. the market favored by four as well. >> good to see you, thanks. >> we're back with the closing countdown. >> after the bell, twitter making changes in the executive suite and the board room could be next. george will weigh in on twitter's attempt to right the
welcome back. we want to show you the dow jones industrial average, which is hanging out down about 205 points, now a loss of 1.25%. you see the interday move there and you'll notice in the latter part of the day you started to get accelerating declines as crude oil was starting to decline itself. you're looking at both of those and as crude went below $30 a
barrel, the overall stock market started to show a little bit more weakness. i'm here on the floor with mary thompson watching that story play out really every day. the direction of the stock market has been tied and correlated nearly 100% to the move in crude. >> i was talking to td am ameritrade and said the correlation is about 90 plus% and typically it's 55% or recently it has been. that kind of -- the higher correlation of course means that where oil goes, the markets follow and breaking below that $30 less was critical as well. >> we heard pete costa say that think that last wednesday we did find some kind of near term bottom for stocks. is that the prevailing thought, feeling you get from the people you talk to? >> i don't get the feeling, still up in the air. still think there are a lot of variables and have a lot of earnings coming out and want to
see what the federal reserve does and other central banks do as well. one thing we should note, volume isn't that extraordinary. it's not any kind of capitulation, we've been talking about the energy group as well but big banks are getting hammered today. steep declines across the board, citi, morgan stanley, bank of america down and goldman and jp morgan down. not only concerns about the yield curve but also concerns about exposure to energy as well. >> the financials can't get anything going at all, a sector you cover and know well. >> yes, this has been even last week when we saw a little bit of rally towards the end of the week they didn't really participate. let's get a number of companies reporting -- >> including apple. >> clark and gamble, apple is key, remember aig is unveiling its -- that will be something investors will be watching. >> they will be.
>> good stuff as always. mary thompson for us here at the new york stock exchange, the hole in the wall gang ringing the closing bell, uptown at the nasdaq, college of holy cross men's la cross team doing the honors, dow will go out with loss more than 200 and kelly picks up the story now. >> thank you, scott, welcome to the "closing bell." i'm kelley evans, the dow going out with a decline of 208 points, we're watching still bouncing around there. you heard mentioned there were large sell orders on the close, especially after crude oil broke below $30 a barrel and still there, $29.82 leading to declines to 1.5% across the s&p and nasdaq. oil down more than 7%. you can see that if you put the chart up next to the interday, they would look almost exactly
the same. we have mike santoli and kayla. welcome and fast money trader, guy live from hollywood florida. a beautiful scene there. thanks for joining us as well. >> let's kick this off again, maybe proposing we just stop oil trading at 230. forget the futures, that's where so many of the market pressure seems to be coming. >> you look at the stock market versus oil and it seemed as if stocks were holding up relatively well, about a 5% loss in crude. then all of a sudden you thought maybe the linkage was getting loosened a little bit. once we broke 30, you could not ignore it anymore. and also, it's not unrelated but the weakness in financials scott and mary were talking about, really con speck uous. regional banks are getting decimated. it seems as if people are extrapolating out from the oil weakness to perhaps kind of just desell race in credit conditions everywhere and growth problem. >> regional banks and large
banks and european banks, kayla, ich yet to fact check, deutsche market cap is smaller than tesla's. >> that would be quite drastic if that are were true. >> it's interesting to point about the regionals because the big banks and to a certain extent the european banks have diverse enough business models that they can resist these head winds, but the regionals, you've been hearing a lot more serious commentary from those executives and pnc did see con tagion and you had a couple of other regional financials, there was one issuer in particular that was leading to the bulk of their credit reserves. >> there's a lot of people drawn into this web of oil services. >> and the credit erosion, it could be absorbed if there was
other stuff going right. if net interest was looking good and you had really strong growth in mortgage loans and things like that. you don't have that case. >> guy, why is that? we'll have more of this discussion later, while we have you here, why is it the falling oil prices isn't unleashing positive financial conditions for the u.s. economy? >> that had been the argument for quite some time. i was one of the voices saying listen, although it's great for consumer in terms of when they go to the gas station, it's destabilizing and people are starting to come to that realization. i get it. tax break, money in the consumer's pocket, i get it all, with that said, more than offset by health care costs and other thengz, that's basically zero sum. but the destabilizing factors not only on companies but on entire companies is now coming home to roost. you guys mentioned deutsche bank. over the summer, july was sid, that's potentially the canary in
the coal mine. look where it's trading now. you brought it up and can't dismiss the fact that the financials can not get out of their own way. couple that with the weakness in the russell and transports have been horrible since november of 2014. i understand our economy has changed since the theory came around, no longer that type of economy. but at a certain point, transports have to get going and they are not doing it. >> guy, what's materially different about the market today than the market last wednesday when there was supposedly this change in sent. and supposed to be a bottom into stocks. why are we down again today when the sentiment was supposed to have continually charged higher? >> that's a great question. i think those dallas numbers you saw earlier were clearly not good. and what's happened now is you talk about the move last tuesday when we traded down to 1812 in the s&p and closed around 1850, six months ago, nine months ago, that trally would have continued
through today aej we would see the market significantly higher. that was the way the market was trading. it's no longer trading that way. it seems as though to me, that people have a much itchier trigger finger to start to sell things. you've heard different analysts say this is no longer a by the dip market. it is a sell the rally market. i agree with that. i don't want to be dooms day and stuff -- >> especially with the pretty scenery behind you. >> i cry try to keep that out. we tend to listen to people that speak our language. if you heard jeff today and last week in davos, seem to be saying the things we talked about for the last six to nine months. >> if you almost took oil out of the equation and just the move in the dow transports which we talked about and weakness in banks and yield curve, you could paint and pretty troubling picture even if oil had nothing to do with it and not part of it, just for whatever reason,
that's the main place people are looking for how the whole trade continues -- >> that's the immediate cue for what stocks are going to do. really what it is, oil going down doesn't let credit markets improve. credit is not permitting equities to rally. it's a capital markets interplay that's been a problem for a long time. i will say to guy's point, he's correct about that, there's a general inclination to selling but this does not say it much rather it was a decent lo or not. you always trade in a decent way through last week. >> one more point to make, welcome to you, allen, on the point about the rebound last wednesday, perhaps an under appreciated fact, rebound only happened when the oil contract switched over. february kept trading down. march was higher and the market kind of followed that move. so maybe we haven't really seen exactly what happens when the
current contract goes as low as it's going and continues to pull the market lower. >> that was part of the issue. the february contract, anybody that was left in it that last session, was at the whims of low volume and there was going to be extreme market movement in volatility. you want to start looking at the new contract usually about three days before the end of the old one. if we look at the march contract, the low is 27.50. legts look at that on a weekly basis. until we get back above 33, the 2009 extreme low from the financial crisis, the market is still downward. we did have a key reversal. higher weekly close in stocks and crude and a key reversal top in bonds. things may be changing one day doesn't paint the picture. >> say that one more time. we're following around. key reversal you're describing, did that happen last week or today? >> no, last wednesday when we saw new lows in stocks and new
lows in crude and new highs in bonds. then they came off of those and weekly basis actually closed in the opposite direction. that's typically how bottoms are put in. we need to see follow through this week. that's what's key. 1 1950 on the upside on the s&p, until we get above that, things are still looking down. >> that's where it goes back to the discussion we were havinging about who's most exposed, texas capital down and there's several -- those are just the worst. there's a bunk of texas banks and those are hardest hit, year to date. >> basically banks with exposure and i still think the market is kind of running ahead of the evidence of what's going on in the actual economy there in jobs and incomes and things like that. but that's what the market does. it sort of doesn't tolerate the possibility that things are going to get worse that fast. >> it's interesting that we haven't mentioned china. it's sort of the first half of
the month was a story about this is china as the culprit and back half of the month it seems more like oil just continues to fall and we're no longer looking for a culprit. >> they are intertwinned because the slower china grows the less demand it has for oil. you would hope if china continued to grow at the break neck pace had had been growing, they would be some sort of offchute for the oil that we have that's piling up. but until we get more data, the focus seems to be off of them. >> we did have a merger monday deal at least. johnson controls making its bid for tyco. there's something to say about market conditions that at least there's two industrial names that feel comfortable enough in the environment to swap or combine. >> that was the takeaway on the headline then you had people look through it, not much of a premium for tyco's business, doesn't seem people are thinking there's going to be much in the way of a bet on future growth. it's kinds ever putting two pieces together to fit. of course the inversion, tax
purpose as well. i still think it's a positive thing. i think we'll hear a lot from big industrial companies this week as they report earnings and it will be interesting to hear if they sort of not only say that they see an end to weakness in global growth and orders but also if the market accepts that. >> takes it that way. >> caterpillar was not a great sign on that. we'll leave you -- we would like you to leave us with a parting thought about what to do with the industrials and financials, any parts of this market you like? >> financials, we just talked about key reversal and bottoms and now you're getting this grind back lower, it is a critical week. one thing we don't talk about enough, mike just mentioned it, earnings still matter, so everything else you could say is conversation and fear mongering but guess what, you need earnings to come through not just eps and eps growth, you need to start to see the revenue growth which we're not seeing.
hang down here in miami and go surfing and stuff but the revenue growth is not there. >> you need to stimulate that economy, guy, get it going for everybody. >> right on. >> and meanwhile, alan, you mentioned 33 bucks is a target to watch to the upside. what would be the downside here? >> well, it's 30 on a weekly basis as a pivot is important. we've got to start over again, a couple of things to pay attention to that are important, obviously we know a lot of fundamental information has been negative and for a long time. none of these things are new surprises with china and iran and oil inventory and so forth. the demand is not slow -- this demand growth is slowing, not actually slowing demand. if you look at the numbers exxon came out with, 2% growth annually for the next ten years in china. there are going to be 300 million people moving into middle class and you'll start using products and energy more.
we'll have to wait and see. i think what's important here, we won't have a rate hike any time soon that will alleviate the currency pressure with the strength of the dollar. >> that's another topic we'll visit in just a bit. thank you. >> and twitter, coming up next, shaking up leadership and planning a high profile media veteran to its board. can the shake-up reverse the plunge that is next? >> is the market scaring itself into oversold territory? federal reserve voice chair alan blinder thinks so and he'll explain why on "closing bell." il freak... i like to think of myself as more of a control... enthusiast. mmm, a perfect 177-degrees. and that's why this road warrior rents from national. i can bypass the counter and go straight to my car. and i don't have to talk to any humans, unless i want to. and i don't. and national lets me choose any car in the aisle.
welcome back, a news alert on twitter, julia? >> more management movement at twitter following the departure of the media chief stanton, one of the four depart you'res announced yesterday. this according to a source, the news went out to twitter employees in an e-mail from dorsey as part of a update on executive changes. tomorrow will discuss the future of the company as cmo as
xpektded to announce this week, most likelilessly burland and more appointees to the board of directors. we were just speculating ourselves about that. shares of twitter tumbling today. in the last hour, mark ma hainny admitted he should be more negative on the stock. >> we've been cautious on the stock where we've had a neutral or hold rating on it for the better part of 18 months and it's a mistake. we should have had a sell on the stock. >> well, is this overhaul finally a step in the right direction for the company? joining us is bill george, senior fellow at harvard business school. great to have you with us. is jack dorsey doing the right thing here? >> i don't know. i'm very, very concerned. i think twitter is in very deep trouble. five executives leaving the company and i don't know if they are leaving voluntary or
involuntary, this has been a rotating door for a long time. i was on your show back in december of 2014, recommending that kes tell lo depart and bring in a product person. they took eight months to make that call and brought jack back, interim for a while. just a lot of instability here. i think they need fresh blood. the board is not strong. it's a group of ec and finance people. who understands product? the only business person came from pearson. but there's no product people and you compare them with boards like facebook and google, they pale by comparison. so the board has to step up and the number one decision they have to decide is can jack dorsey be ceo of square and twitter. my answer to that is no. i don't think -- this is a full-time job. any ceo job is 24/7, can't do two simultaneously. >> whether companies like it or not, they do trade in tandem,
twitter management is on a retreat in san francisco. if you're an investor in square, there are three days that jack dorsey will no be in person running square. it's a sim application of the kr trade and he talked about how strong his teams are on either side. when you have a revolving door like this and don't have someone coming in the other side, i'm wondering how you view this announcement? was this botched? should they have waited until they had other people to take the jobs? what's your take on it? >> they should have waited which makes me think that people left voluntary. they've been touting people, who are the product people? who's there with any technical knowledge. they can bring a cmo, high profile person but she can't turn the place around unless they have the product. i love twitter. i'm on there five to ten times a day, use it all the time. great broadcast medium. gets messages out quickly. why would a advertiser use the
site when i'm on there for a few seconds and locked into 140 character format, why not give me several hundred words, facebook does. >> i don't know if i agree. it is a lot of fun -- >> you look the short. >> but part of that have is because you can kind of scroll through a lot and take in a lot of information. i'm not sure we want to give people the opportunity to bog everything down by expanding more -- the people you don't want to hear from are the ones that say more than you do want to hear from anyway. >> i got that. but how about an alternate site, how about an alternative push a button or go to longer side or shorter side. let's give flexibility or video and other things to keep people on the site. if i don't advertise, i would have real skepticism because people's time on the site is so short, i want them to see my ads and sit there like they do on facebook site or google stit. i want that time and space. i think it's a major makeover. if they don't move fast, they
are not going to make it all. the market cap is down 75% in two years. down to 12 billion. maybe they are good acquisition -- can't figure out why google doesn't step in and put on their great news site. if you want to know about tsunamis or latest earnings report, faster than other media. why not expand that and why not -- shouldn't that be taken over by somebody like google? >> i wonder, with the market cap down 75%. how do you attract people in silicon valley and competitive landscape for talent, give them a lot of stock and say buy into the vision here. how are they exactly going to do that and convey that message that they have things figured out or at least is a promising place to work when the back -- in the background might be, we might have to admit defeat and sell this thing anyway. >> you get it. what is the vision? i haven't heard a clear vision.
i hear we're working on it. how long you got? this is a fast moving target. look how other people have faced from the landscape, look at mayor at yahoo! probably got there too late. blackberry gone, nokia, gone. you've got to bring these companies back quickly. even turned microsoft, that battleship very quickly. i think we need the kind of consistent leadership that zuckerberg and sand berg provided at facebook. it's the same people year after year. it may be boring to media, but they have a consistent strategy and kfrds they are going to get it done and attract a lot of talent. >> like the guys around this floor like to say, never sure to dull market or these dull management teams either and they are not that dull. you get my point. thanks for joining us. >> one final comment. >> yeah. >> thank you. >> okay, from harvard business school.
op-ed last week saying markets are scaring themselves. he writes, the traders who make stock market prices seem to have a few things wrong, china is not a big a deal as they think and falling oil prices should help, not hurt u.s. growth. well i took umbrage to that and alan blinder, thank you very much for being here. just again with the market today, would you repeat those same points you think that everybody is being irrational? >> well, i wouldn't say that. i want to say at the outset, i don't know how you tell whether stocks in general are too high or too low. i don't claim to know that. the claim was that the way the market has lately been dancing up and down to the price of oil as if oil going up in price is good for the united states and oil going down in price is bad for the united states, has got it backward. >> you mentioned china and
mentioned oil and why you think they are just not a real worry spot. but you don't talk about the u.s. dollar or tightening credit markets or the global dollar squeezed broadly that a lot of people fear is happening. >> sure. >> why not? >> well, you've got 850 words you have to pick about what you're writing about and what i had noticed is that this dance to the price of oil and also to china. now, china is different. it's not like they've got the direction wrong. bad news is china is bad news for the world and thfr bad news for us, there i think it's just the magnitudes and you think did directs linkages from the chinese economy doing worse to the u.s. economy doing worse, they are there but pretty small. oil is the opposite. it just seems like the direction is wrong. >> that said, there is one interesting way in which there's this feedback mechanism between the falling price of oil and strength in u.s. dollar and deteriorating position of a lot of emerging market countries which i thought would be the
point you would make in the piece. here's the way the one big investor put it to us last week. >> there's a short squeeze for dollars. the dollar because it's a world's reserve currency has a lot of dollar denominated debt. and because of that dollar, there's a squeeze. those emerging countries owe dollars. so they have to buy dollars. >> so do you think this is not a significant development? or is it that you think it could happen but still won't have a big impact on the u.s.? >> no, no -- yeah, sorry, let me clarify. i don't have a quarrel with the notion that the dollar, the rising dollar could actually be harmful to the united states, i think it already has been and will continue to be. i was writing about a much more specific issue than that. you're right t. does have something to do with the dollar, everything has something to do with the dollar.
>> i don't want to single out the piece but i thought it was i interest in light of experience of 2008, 2009 there does seem to be a difference in dynamic moves and international flows and a lot of recent work focused on how do we measure global liquidity and is it the federal reserve's responsibility to minister that liquidity? do you think the fed should or can play a role? it is saying to people, hey, the world is run on a dollar standard and want more dollars right now and we have to reflect that. >> i think that's a fair point. and what i would recommend is you take it up with the united states congress. because the federal reserve acts under laws passed by the congress. in fact the original laws 100 years ago. and those laws don't say anything about about whether providing liquidity to the world. they say a lot about the fed doing what's right, including providing liquidity to the united states economy and
because of that, that's where the fed is basically 100% focused. >> sure, and i understand that and i think there's probably more that they'll have to do if it's dollar swap lines or what have you to respond to those conditions and even just focusing on the u.s., we've talked about the dow transports falling in value since november 2014 and airlines like united, railroads like united pacific. the texas banks being one obvious and more concentrated example but people have really gotten hammered by the drop in demand and volumes. so i was wondering if you felt like that still wasn't a big enough impact that it should really have investors concerned? >> i think that's right. there are losers when the price of oil falls. you name some of them. you can say the whole state of texas, not that oil is the only thing texas does, but on average, probably the whole state of texas does worse. the state of north dakota these days because of fracking and shale does worse.
and so on and number of industries like airlines, i have a huge stake in energy although they do better when oil goes down in price, but the point is, if you look at the whole economy, what you really want to know, on net, is the united states buying oil from abroad or selling oil to buyers and the answer to that is clear. >> it is clear? markets seem clear about their concerns too. i do think perhaps we may be can play a role and explain more about what's happening in terms of the credit crunch is one is taking place. for now, alan blinder, appreciate you trying to add perspective to this market sell-off. thanks for joining us. >> former voice chair for the federal reserve. >> kelly, what we have our shares, a semiconductor company
up and this after the company reported after earnings per share of 18 cents which beat analysts estimates of 15 cents. sales coming in slightly better, $77 million, $74 million is what analysts were looking for on average. they also gave relatively strong full year 2016 sales guidance. they do see between 310 and 325 million dollars worth of sales and analysts were on average looking for 294 million separately. the company also said it's buying a british mobile payment and ticketing company for about $92 million to add to its cryptography or internet security operations, so a revenue, sales and outlook beat, also buying a small company to add to their payment systems and ticketing solution systems, rambus shares up 6%. they were up as much as 12 at one point but it's down 3% year to date and -- >> back over to you. >> i'm chuckling at the fact --
who knows why people -- exactly, thank you. >> here's what's happening this hour. the british government is teaming up with bill gates to pledge $4.3 billion to prevent deathses from malaria in five years. george os born announcing the spending at an event with gates whose foundation will trbt $200 million per year to that package. hopeful hillary clinton telling a forum of jewish leaders in iowa that she's the best candidate to handle america's challenges both at home and abroad. she projected herself as a tested candidate with global experience. former nfl quarterback vince young was con vicked of driving while intoxicated. pulled over after a police officer noticed him driving erratically. he posted bail and was released this morning. the world record for solving
a rubic's cube puzzle has been broken about i ai robot. over the course of several demonstrations, the quickest time was one second. fastest hul an time five seconds, the software engineers are playing for a guiness world record. >> i've never been able to solve it. >> any neither. >> back to you, kelly. >> thank you so much. former new york mayor michael bloomg berg weighing an independent run for president. we'll discuss whether he can win and which party he can affect most by running. the average ticket price for super bowl 50 is just over $6,000. that's dirt cheap compared to last year's big game. we'll explain why later on "the closing bell." so i'm going to take this opportunity to go off script. so if i wanna go to jersey and check out shotsy tuccerelli's portfolio, what's it to you? or i'm a scottish mason whose assets are made of stone like me heart. papa! you're no son of mine! or perhaps it's time to seize the day.
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(whispers) now hide-and-seek time can also be catch-up-on-my-shows time. here i come! can't find you anywhere! don't settle for u-verse. x1 from xfinity will change the way you experience tv. welcome back. another ugly session unfortunately this month. the dow declining another 208 points and nasdaq was down 72 and oil was the tell, continued to move lower all day, down 7% at last check, nearly 8% to about $29.71 a barrel. the race for 2016 could become a battle of billionaires if trump gets the republican nod and former new york mayor michael bloomberg throws his hat into the ring. robert frank joins us now
looking at their balance sheets. >> if bloomberg joins this race he would be the richest person ever to run for president of the united states. bloomberg's net worth estimated to be between 36 and $42 billion, depending on the estimate. trump's network somewhere between 2.9 billion and 4.5. let's call it a little over 3.5, he of course says he's worth more than 10 billion. but if we take those other estimates, it means it takes more than nine trumps to equal one bloomberg. by the way, bloomberg likes to spend big on campaigns and spent more than 260 million on his first three campaigns for new york mayor and an additional 380 million on charities and pet projects once he was elected. over 650 million during his three terms. trump has promised to spend about 2 million a week leading up to the primaries but since he's gotten so much free pub listcy throughout the race, his campaign right now is about $35 million under budget. bloomberg would take the title
from ross perot previously the richest presidential candidate worth around 3 billion when he ran in 1992. equal to about 5 billion today or about one eighth of a michael bloomberg. back over to you. >> i'm wrapping my head around all of it. thank you. many think bloomberg would only throw his hats into the ring in donald trump does win the republican nomination and bernie sanders wins the democratic one. he is the undisputed champ when it comes to money but senator sanders won more fights at the ballot box. we're joined by sara facten and what do you think the odds are he gets in? >> he wanted to run for some time and this would be probably the best opening he has to mount the campaign. keep in mind that the number of independents in this country is at a 75-year high, the country is ripe for an independent
candidate like michael boomg bloomberg. >> which party does he take more votes from do you think? >> takes more votes away from the democrats i think. but i don't see the point of his running. he has billions of dollars to waste i can think of a lot of better things to do with his money than giving to a presidential campaign that has zero chance of winning. i don't understand the point behind the campaign. >> you think there's no way, no chance? do you think he has any chance of winning sara? >> i think he does. i think it's a limited shot. i think it depends what the match-ups look like. he is to the left of hillary clinton on a lot of social issues, this soda ban, bottle size ban that he pushed in new york city. the rest of the country finds that bizarre. i think those issues come out. he's going to be to the left of hillary. but probably not to the left of bernie. so to me, i think keith makes a good point about the democratic race but if he is to the left of
hillary clinton, he probably helps elect her. if he's to the right of bernie sanders he becomes the independent candidate and of course it depends on who the republicans nominate. >> keith, it's so interesting to hear people make predictions in what has been one of the least predictable election cycles in recent memory. how risky is it to make me predictions given what we've seen so far? >> it is risky but the only prediction i'm willing to make mike bloomberg will not be president. i can't predict the democratic side or republican side. but independent third party candidates do not win in this country. it does not happen. mike bloomberg no matter how many billions he spends will not be first. america is not looking for another new york billionaire to join the race. we already have one in donald trump. >> today it looks like trump versus sandsers but there's a long way to go. but if today votes were being
cast, that's who would be the y respective nominees and in that case michael bloomberg looks like a viable alternative. >> any other reason you could see michael bloomberg doing this. >> i view him somewhat similar to his bermuda neighbor ross perot, he has the sengsible way between the two parties and he's willing to sort of give himself to public service again to try and get some sense talked into everybody. i don't know that that's what the public wants to hear right now. i don't think the public is say, let's get, again, a new york billionaire who is very establishment in every way, even if it's not washington establishment. >> as everybody is trying to distance themselves. guys, thank you, we'll see what happens after iowa. we'll be watching cloegsly for bloomberg's next months. apple reports first quart earnings after the bell. we'll give you the key figures
those results and what to watch. >> the drop in the stock is a lot worse if you take a longer view, apple down 25% since hitting a high since april. since this it has lost about 200 billion in market cap. when apple does report tomorrow, besides the bottom and top, investors will focus on iphone demand, estimating a 10% drop there for the march quarter. also mainland china accounts for 30% of revenues. is that business still going strong? and gross margins, looking for gross margins, 39.6%. and notes that apple's cfo has a strong record of delivering. bottom line for investors, how much do iphone units slip and is that was news already priceed in? >> that's especially a question. mention the shares have sold off, a lot of these concerns in the stock are enough of them.
>> everybody can look at it and say it's cheap on almost every measure but they don't have a sense how to treat an apple that isn't growing units, how much to pay today and i do think it's all going to be about let's look at the product rollout cycle from here on out and try to allay fears about china. >> what about the cars? what's happening with that project? it's interesting there's turnover in apple as well. i wonder if that reflects anything more broadly about the company's core business? >> that is sort of acknowledgement of the fact that apple may or may not have been tinkering with a car but so far as earnings are concern, we're looking for any sort of sentiment about china, whether that can keep growing at the pace it had been growing before and that other line. they had pretty high profile stumbles with apple music. can they make real revenue off of that and the watch. we'll see. >> we're debating whether google
or aftlphabet would have the larger market cap. >> it's not just about how close they are right now, relatively close. it's the fact that apple right now is trading a dollar less split adjusted as traded in september of 2012. it's over three years of side ways, a huge surge then a decline. that's when really the only thing that worked in the entire market in 2012 was apple. >> if they were able to beat and point to strong china numbers, is that enough to give the market some catalyst to slosh the larger concerns? >> it's the kind of stock that investors would love to have reason to get behind. you can make the case it's cheap and they are doing the right things and buying back stock. >> it was cheap all the way up, all the way down. we'll bring you the numbers tomorrow. >> carolina panthers taking on broncos in super bowl 50 in two weeks. it is the first time in history number one drafted quarterbacks
$6,000. that's the average price for a ticket now to super bowl 50, and that's considered cheap. some reasons why ticket prices are actually down from last year. what's going on? >> so it's tricky. $6,000 is less than the $10,000 that we saw right before the super bowl, but $6,000 right now, which is two weeks before the super bowl is way above the price that it was last year two weeks before the super bowl, so here's what happens. >> so it's a trick. >> it's a trick. so two weeks before the super bowl, this is by far the highest price. so you can look at the chart there. they are always between $3,000 hand 4,000 every year, and right before the super bowl happens one or two days before the prices start to go down, because people are trying to offload tickets, and so short sellers would sell tickets now to somebody like you and then buy them at the last second making a profit. but last year it didn't work. last year we saw a short covering rally which is why prices went from four grand to
ten grand, and a lot of people ended up with no tickets because brokers couldn't deliver on tickets they had sold kind of nowish. so the government cracked down and stubhub, all the marketplaces cracked down, so you can't do that as easily now. what does that mean? less supply, so now the prices are $6,000 relative to the 4,000 they were two weeks before, but we shouldn't see them pop in the next two weeks. that's the difference. >> kayla, how does that affect whether you buy them? >> when i personally. >> i know you want the panthers. we're going to go out there at all costs. >> i did go to the university of north carolina so i have a lot of friends who are panthers fans. >> aka inside connections. that's what she's saying. >> we were talking about this during the commercial break. i'm really impressed with the fact that carolina has had only one number one draft pick, first round draft pick, and that's cam newton in its 21-year history. >> they have done pretty well. >> so it's interesting this patch-up between cam newton and peyton manning, people actually want to go to this.
the ticket prices are looking pretty good. >> exactly. look at the graph right now, that shows you how the tickets get split up, and obviously the panthers and the broncos, they will each get 127% of the tickets, and each team, all the other teams, they get about 500 tickets each. a lot of players. i think every player in the league gets a couple tickets. that's how some of the tickets end up on the nfenvelop >> does the venue have to do what might be the cost, levi stadium, not snowfall? >> 50% of the tickets bought on the secondary market from people in california so half of it is california people and then another quarter of it are the states colorado and north carolina where the teams are from and everything else is just the general. >> people are going to ride their unicorns in. >> the deeper pockets. >> will they have the microsoft surface pro tablets working for the super bowl? >> it's a network issue.
everyone is blaming microsoft. i think microsoft got a bad rap there. >> it was a lot of dramatic action yesterday, and, eric, thank you very much for joining us. kimberly clark shares are down on missing on shares this morning. the chief executive of the company weighs in on the disappointing results. stay with us. rated #1 trading app on the app store. it lets you trade stocks, options, futures... even advanced orders. and it offers more charts than a lot of other competitors do on 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 derivatives pricing model, honey? td ameritrade. so since you have at&t and directv you can get our new unlimited data plan. unlimited data? so we're like rich?! you're data rich. data rich (we hear t.i.'s "whatever you like")
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welcome back. hillary clinton weighing in on the tyco-johnson control deal. sue herera has more. >> of course, you know, that's a inversion deal and miss clinton is responding with the following statement saying, quote, it's outrageous when large multi-national corporations gain the tax code and shelter money oversees to avoid paying their fair share, including through maneuvers like inversions. she also goes on to say that she has a detailed and targeted plan to immediately put a stop to inversions and invest in the u.s. and block deals like johnson control and tyco. she would do that by placing an exit tax on corporations that leave the country to lower their tax bill. so some details on how miss clinton would fight inversions. kelly, back to you. >> all right, sue. thank you very much. and we mentioned earlier bernie
sanders, even rand paul, indicating their concern with it as well. meanwhile, shares of consumer products maker kimberly clark lowered after currency head winds lowered. a preview of what jim cramer had to say on the topic. >> our organic top line was for the volume. for the year, that's the best volume performance we've had since 2007 so we've got great momentum in a lot of emerging markets, places like russia, china and brazil and we're winning in the stronger markets. it was a headwind for us, but to overcome that and deliver absolute earnings growth while returning cash to shareholders was a pretty good shareholders. >> catch jim's full interview with tom falk. >> i think actually a 3% loss on this miss is probably not that bad in this market environment in a stock that's up relative two years over the market. i feel it's the kind of stock that people have been hiding in
and 3% probably says we're not really rethinking the quality of the business. it was really just kind of an adjustment. >> trying to look for the consumer plays, dividend players, but, again, this is a market where increasingly there's fewer and fewer places to hide. >> defensive has become a really elusive thing to find, the defensive spaces. >> exactly. >> more of that interview coming up with jim. we turn our attention to tomorrow. the earnings that will start to come out. i know apple will get a lot of the attention, mike, but i wonder if some of the industrial names, dare i say it, could be more important. >> i think they will be more important in terms of the macro outlook and that's what we're looking for right now. first thing i'm looking for is the market to maybe respond to any of the business and fundamentals as opposed to just kind of these macro trades. we haven't seen much of that. >> or anything to indicate. the correlation with stocks and oil is breaking down, that itself would be a positive. >> i'm also looking forward to the aig strategic update. there, of course, has been a lot of pressure for that company to revamp itself a la what metlife
has become to become a non-systemically financial institution so to hear what that company has to say will be nothing short of interesting. >> kayla and mike, thanks so much. that does it for us on "closing bell" on another market selloff in the first month of the year. "fast money" begins right now. >> live from hollywood, no, not that hollywood, hollywood, florida. this is "fast money" coming to you from the world's largest etf conference inside the diplomat resort along the beautiful beaches of florida. etfs are now a $3 trillion industry, one of the most popular tools for the retail and institutional investor, and that is why we are here tonight to bring you some of the hottest trends and best ideas from this fast growing asset class. welcome to the show. i'm melissa lee joined by tim sure and guy adami and also joining us is our good friend dennis gartman, his latest view on the markets and the plunging price of oil in just a me