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tv   Closing Bell  CNBC  February 1, 2016 3:00pm-5:01pm EST

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>> wow. good discussion, guys, we'll see how mr. griffin does with his sale. >> peter griffin has a house for sale -- thank you all for watching "power lunch." "closing bell" starts right now. >> don't call it a comeback yet but welcome to the "closing bell." i'm kelley evans. >> this is something we haven't seen often, oil deep in the red but broader market is fighting back. the s&p 500 looks about to turn even for the day. >> amazing, we were down how much at the low. >> down about 20 points, s&p down 167 and kind of ground its way higher through the day. >> and oil prices still negative. >> and energy names like chesapeake and apache and hess
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getting hid hard. >> eigaetna ceo saying more chas need to be made to obama care. coming up. google's first earnings report as alphabet, the final member of fang reports after the bell. >> typically it would be fonda or something -- >> we're going to be watching for that and talk about what it means here and also a look at apple's potential push in virtual reality. we have the analyst who says virtual reality could be a huge platform for the tech giant coming up. let's begin with the energy weakness weighing on stocks today, what's happening and why the late day come back? >> it's great to see a late day come back, with oil down 6 prosecuti6%,
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we're projecting warmer weather and it's the same thing, here's murphy, big beta oil names down 7%. other names in these spaces, devon down 6%, a lot roughly down 6%, big drillers out there. take a look to your left, all are down. all of those groups are down. partly on oil and nat gas being down 6%. as for february, not one of my favorite months. the reason is, it's a trendless month. let me show you the last 15 years for february, it's kind of af split picture. nine up, six down, average change down 0.4%, not enough of a trend to get enthusiastic or unenthusiastic about the month. here's the good news, short term we should get a bounce. the big move on friday, our friends told us that hasn't happened that 2.4% move and 100% of the time the last six times it's happened, since 2012, s&p
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has been up the following week. and 100% of the time the average gain has been 2.5%. we're flat today. it's nice to see us coming off lows but the bottom line is we should have an up week if history holds. >> back to you. who knows maybe this is one of the reasons the market did come back. stanley fisher sounding a bit more dovish on the outlook for more rate hikes a short while ago. steve liesman has the detail. was this a change in tone? >> a little bit of a walkback, didn't say outright there would be fewer hikes but did suggest the economic outlook is changing in a way that could mean fewer hikes. >> declines in oil prices and enkriss in the value of the dollar for an exchange value of the dollar, suggested inflation would likely remain low for somewhat longer than had previously been expected before moving back to 2%.
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>> so inflation lower for longer means that the fed could take more time in hiking rates, he was speaking at the council on foreign relations in new york, increased market volatility could mean tightening financial conditions and could hurt global and u.s. economies and previous bounce of volatility had proven to be false alarms, he repeated the fed is watching the global economy and financial developments closely but said this outright, he doesn't know what the fed will do next. if it did, he said, why would we meet eight times in a year. >> i guess a candid remark there steve. some of the analysts notes coming in saying maybe he was just dovish enough for this market. is there a danger people are actually putting too much emphasis on him walking back these four rate hikes? >> i don't think so. i don't even think he needs to walk it back. look, i think the fed is in this zone that's pretty easy to understand that if you don't get
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the inflation, if the dollar causes and oil prices cause the outlook for inflation to decline and this economic weakness and the fed isn't going to hike, i don't really know that the market needs to hear that. you have some guys come out and say if the fed would only say this, is that really true or don't we all really know that the fed is not going to hike under the current circumstances? >> i also wonder we had that ecome data and you have to describe it as soft, right? >> this is a week where the bulls hope the u.s. economy might rescue the u.s. economy, the economic data would show that the u.s. economy is doing well regardless of what's happening overseas. we got off to a bad start. personal spending was not as good as expected and manufacturing for a fourth straight month but it's only monday. that's the good news. we've got a week's worth of data to come. for example, jobs and services that could show the u.s. economy is at least rebounding somewhat from the weakness in the fourth
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quarter. >> i was going to say good or bad news, more on tap depending on your perspective. >> it's always good when monday is over. >> thank you so much for now. steve liesman with the latest out of the fed. we have kim forest joining us from capital group and steve grasso and along with rick santelli. great to see everybody, kim, the point was made that the u.s. economy will come to the rescue. how do you feel about conditions and investing in this climate right now? >> we're long-term investors and we like to think that we buy collections of companies as opposed to trade stocks. so that being said, we're looking for 2016 to be a flat year for earnings and most likely revenue for most of the companies that we follow. so it's pretty much a treading water sort of scenario. and so far the data is pointing to that. there's pluses and some minuses and it's pretty lackluster out
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there. >> kim, does that mean there are opportunities for you guys? where do you then look around and say this sell-off is maybe an opportunity to get into x or y or z? >> sure, there's always opportunity if you're looking and you're a value person. let's put it this way. there's always a sector that's unloved and always a sector or bunch of companies that are in the midst of reinventing themselves and turning themselves around. of course we see that. so you're going to ask probably what the sectors are next? >> no i'm asking for the names. we want to be really specific. >> i can't tell you the names i'm looking at that aren't in the portfolio but nice try. but no, consumer discretionary is one area and technology i think productivity never goes out of style. so i'm looking for those business oriented productivity enhancing most likely software. so there you go. >> thank you. >> steve, how about how the
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market kind of held in here today? we were up more than 2% on friday. you had a little bit of a morning sell-off and it managed to grind its way back. is this kind of a win even though we're just flat. >> i think the market is in desperate need of some type of support. you know this better than anybody. the pension rebalancing had a pretty decent number coming into equities on friday. and it's not just the calendar thing. you sometimes get a couple day event on that. goldman sachs also made some comments about the corporate repurchases coming back in. we were on the floor on friday and i gave her that 1928 level in the s&p. that is short-term support. and it's so important because guys get a little flustered when they trade and some people don't believe in technicals but we have one day where we focus on china's bad manufacturing, our bad manufacturing numbers. you better understand the technicals, this market is not viable if it dips below 1928 and
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you're shooting for the upside, 1965, 2000, sell it, reassess. >> steve, i guess also looking at the sector breakdown today, the leadership was pretty defensive once again. you had the telecom utilities and bond like stocks. it does seem if money maybe wants to participate here but not necessarily take on too much more risk. >> there's no way -- i shouldn't say that. any rally that's been led by energy names that we've seen that -- just think about what rally crude last week, it was when they were considering or there was some chatter that nonopec countries were going to cut production, that to me, you better not hold your breath for that. that is ridiculous. if opec countries aren't cutting production, no one is cutting production and i do think we see the slide to test 2655 recent low. >> where does that leave us? where are we going to find that risk appetite come back? >> well, why do we need our risk appetite to come back?
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we've had a voracious risk appetite fueled by the hunger pill called easing and zero interest rate. we've never reached that 3, 4% economy. when i think of that old adage so goes january, so goes the year. i've heard it zero times in the last four weeks, we have down 5% s&p and dow down about 7%, nasdaq and china and shanghai down close to 25% and i think it fits. we're finally getting a more realistic pricing in the equity markets, as for stan fisher, you can't have somebody tell you the truth that knows no truth. stan fisher doesn't know what the next month is and janet yellen doesn't know what the next move is. i'm sure that whatever moves we see aren't going to change the fact that at some point we're going to be in a recession, probably with the fed still in a
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tightening mode. i don't think it's going to give up the roost. it might have a bigger spread in between meetings that have a rate tightening. >> before we go. you mentioned things are getting more realistic, how much more realistic are we talking about? what does that mean in terms of current pricing assets snts. >> the last several years i think so goes january and the year going to end up being a very true tale. i think we'll be off more than we are now in stocks and there lr times we'll be off a lot more. i don't think we're going to close the year out on the lows. if there's any optimism to be had, normalization would be the adjective to describe it. the further we get from normalization, i think the further we get away from any type of true growth. >> thanks, rick, thanks to kim and steve grasso. let's go to seema for a marketplace. >> take a look at barracuda network, saying the company is working with morgan stanley on a
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potential sale and that no deal is imminent. keep in mind barracuda, a security company has a market cap of about $600 million, shares up better than 8%, kelly. >> a lot of takeover. mike, we have twitter moving on takeover rumors and barracuda but no major merger monday activity. >> people under water in the stock and rumors start to fly. we'll see how much stock -- >> we didn't even have an ipo last month. >> that's true, keeping an eye on markets here, we have little more than 45 minutes to go. the s&p is only down a point and nasdaq is positive, up five. >> just about an hour, google will report earnings as alphabet, we'll bring you the abcs of what to expect coming up. eliminaaetna's ceo talks ab impact of obama care down the road. you're watching cnbc, first in business worldwide.
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up four points and s&p could turn positive. we'll watch it with 45 minutes left in the session. all of this even though crude oil was having a horrible session. any sign of that correlation is breaking would also be good news. chipotle shares after the e. coli outbreak is declared over. shares had plunged 25% since this began in late october. today they are up almost 4%. >> i would imagine it would have been a better bounce than that on this news but it shows that people feel you're not going to quite trust it was fixed. >> it didn't help they couldn't determine what caused it in the first place. >> aetna reporting earnings this morning that beat street estimates, let's get more on what's behind those numbers. we're joined by aetna ceo. thanks for being with us. >> good to be with you.
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>> if you could just run through, what is exactly is going into the 2016 outlook for you happening in the industry or with your own business that maybe come in a little short of what the street was looking for? >> i think street consensus was built off a number of other assets. our number was in the $7.75 a share which is 10% off the baseline for 15. we think our guidance is appropriately pru dent given the changes that will happen in '16 around the affordable care act and changes in taxes and fees and affordable care act. >> we see your commercial membership declining by almost half a million. by the way, i think we're part of that. we switch providers. what's going on there? is this obama care related or is there something else in terms of pricing and demand that's changing? >> i think large employers are now what we call slicing up business in all three multiple carriers and that's largely what happened across our national
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accounts book. this is really a predecessor towards employers looking at buying in the market level and moving employees to define contribution. >> so mark, you said in your earnings release today that you believe you're on track for the closing of the humana acquisition later this year. what are the hurdles you have to clear and what is that going to bring you in terms of new market opportunities and efficiencies, what's the real advantage of doing this merger? >> first and foremost in the process we're in the final parts of data collection for the second request, which then will move into a discussion on what markets appear to be problematic. and decide on any divest tours if necessary, it is moving at a pace we expected it to with the close of the second half of the year. for us the idea around humana acquisition is one bringing two very complimentary companies together.
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when we get done with this transaction, we'll be able to address markets that comprise 91% of the seniors across the united states for medicare, which will give them a real opportunity to have a national product. but more importantly, it will allow us to invest in moving care closer to home, getting higher quality care at home. and with these two things together, we expect that the earnings per share will be $11 a share as a result of putting two deals together. >> you mentioned how complimentary the businesses would be. does that mean humana won't see big layoffs as the acquisition is completed. >> we made a commitment to the louisville marketplace that that will be market headquarters. we see that organization growing actually as we move more of the government business and combine our government business out of louisville, kentucky. >> also you mentioned that the idea here to be a big player in medicare and am medicare advantage you would be huge once this deal closes. do you expect those medicare
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advantage rates to be going up? is this an area you think is more and more lucrative going forward? >> i think one of the misconceptions around medicare, we actually just put rates in the marketplace, we don't. we get our rates set by medicare. so then we have to figure out when those rates are set how do we provide a product and plan of benefits that fits within that rate structure. so we don't see that happening. any rate differentials you see in the market are largely on the basis of the morbidity or sickness of that population that's being served. so we don't see this being anty competitive from a rate structure at all. >> you mentioned that the industry is adapting to obama care as it now stands, cheerily we'll have a new administration next year. how are you seeing things develop in the industry under obama care and what changes, if
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any, would you like to be made? >> we need to decide first who we're serving. right now the population we're serving under the affordable care act is a population that's older, sicker and highly subsidized which means they are below the 400% federal poverty level, almost 90%. if that's the population we want to continue to serve, then we need to decide how to create that kind of program with risk pools and being able to manage higher risk individuals. if we want a more level population and younger people in the program, then we need more flexibility on product. quite frankly, a 25-year-old or 28-year-old for that matter, depending on what state you're in, doesn't want a $6,000 deductible to go to the doctor's office twice a year. you don't see the mortality as clearly as some of us do. so we need products that have more flexible and more product rating varability, more consumer
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oriented towards the young population. >> but you also need the younger population to get in the exchanges. are you saying as things stand there's the risk that obamacare exchange is in some type of death spiral or is that putting it too strongly? >> without changes in the current program and in medicare we make changes every year in concert with cms, without changes in the program, this pool of risk isn't going to change and unless we agree to finance that pool of risk that way, they won't be supportive and sustainable over the long run. getting everybody into one exchange isn't really the issue. it's offering a set of products that gets financed by the government or by the private sector that makes a difference and that can spread the risk over larger population. >> mark, thank you very much for your time today. >> thank you. >> and with less than 18 minutes
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left -- excuse me, 38 minutes left -- >> i do that all the time. . you think you're good at mouth until you have to countdown. >> we're turning positive in the market here. we have the dow and s&p and nasdaq all in positive territory. we had a low around 10:00 a.m. and we've slowly made our way back. >> up next, it's the countdown to the iowa caucus, we're going to go live to des moines for a special reports on how much iowa does or does not matter. >> apple's big push into virtual reality. we have the analyst behind a new report coming up. >> cnbc's spector sort is sponsored by
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. welcome back, markets trading at session highs, dow is up 167 earlier, also backed off in the morning and back in positive territory. i think a lot of people would take it considering thought maybe we dof -- >> don't try to diminish this with -- >> it's a valid point. >> definitely good to held on to friday's gains. twitter off the highs of the day after fortune reported server lake is not interested in acquiring part of the company much this was after a report in
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the information website said silver lake and the tech investor considered a deal for twitter. it wasn't specific about a deal pending or price or anything like that and the price whether it was unsure whether anything was active. twitter stock trading near the all time lows and a lot of talk has been eventually the way out. >> how many times have we seen the stock pop on takeover rumors on the last months. >> it's up about 6%. the much anticipated iowa caucus kicks off in a few hours. john harwood is in iowa and with a look on why tonight's results should or should not matter to the rest of the country. >> reporter: kelly, we've had the final caucus weekend with the top four candidates, bernie sanders, hillary clinton, ted cruz and donald trump having last minute rallies and we're waiting to see whether the poll numbers hold up. the last numbers you see hillary clinton with a narrow 3 point lead over sandsers, hopes to
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hold that night. on the republican side, donald trump went into caucus day and that register poll with a five-point lead over ted cruz and marco rubio behind in third place. some people might say who cares. look at the fast results from iowa's caucus and you see how much of a weather vein is this for presidential politics? in the past we saw in 1980 it wasn't ronald reagan it was george h.w. bush and '88 wasn't george h.w. bush but bob dole and mike huckabee in 2008, rick santorum in 2012. the important thing about the iowa caucuses is not picking the winner tonight, it's about shaping the race going forward. so the person who comes out of here, a couple of people will come out of here and go into new hampshire. somebody will be limg ping into new hampshire and somebody will have a lot of wind at their back. by shaping the race, that's the contribution iowa makes. on the democratic side it's been more successful in picking the
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winners, picked al gore in 2000. it picked barack obama in 2008. so it's iowa wants to protect that status and donald trump said over the weekend, iowa, if you give me first place in the caucuses, as president, i will keep you number one and so on a practical level, iowans are interested to hear that. >> also pledged to keith ethanol in the mix. >> you betcha. >> and connection between those two things. >> yeah, no, exactly. we'll keep ethanol in the mix and your state will do quite well. what i'm interested, last time around, the early headline was romney had won then it turned out to be santorum. this can go on late into the night, correct? >> yes, if it's really close we could be deep into the night to get the results. now, it was very anom house in 2012 what happened. that was kind of iowa's version
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of what happened nationally in florida in the 2000 race because there was just a few votes separating them and ultimately when they finally counted the very last votes, rick santorum was slightly ahead but that's functionally a tie. you could have a repeat of something like that tonight because while donald trump has the lead, ted cruz is widely considered to be a better organization than donald trump and so the prospect of trump underperforming his poll numbers is the real mystery we go in tonight wanting to see how that resolved. >> what about on the other side? where are the stakes highest for a candidate to outperform and get a lift here? >> well, what happens is if you outperform, you get a ticket to go on and compete elsewhere. in 2004, john edwards did very well in iowa. and went on and was a serious challenge to john kerry for the nomination and ended up as john
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kerry's running mate in 2000 george w. bush won here. john mccain pretty much skipped the iowa caucuses and he went because new hampshire sometimes likes to go in a different direction. he went and upset -- upset george w. bush there. the closest phenomenon to a slingshot on the democratic side, walt ter mondale had a huge lead and gary hart in second. because he was second he became the challenging to walter mondale and went deep in the primary process and had a chance to become the nominee in 1988, had he not had a few personal problems that we all remembers. >> our events intervened. >> that's right. >> time for a cnbc news update. >> here's what's happening. two virginia tech students appeared in court in the death
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13-year-old girl, her body was found in north carolina right over the virginia border. she reportedly snuck out of her home tuesday night. police say 18-year-old david eisenhower somehow knew the victim and he's been charged with murder and kidnapping. the other student, 19-year-old natalie keepers is facing accessory charges. there is a report this afternoon that investigators have ruled out issues with the train, track and signals in that deadly amtrak derailment in philadelphia last may. the train was traveling at twice the speed limit when it derailed and ntsb is expected to determine a probable cause this spring. meanwhile in china, 21 workers at the nation's largest online finance platform have been arrested. they are suspected of fleecing close to a million investors for more than $7.5 billion. it could be china's biggest financial fraud case ever. and hockey fans certainly had their way in nashville this weekend. john scott, a career journeyman
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and enforcer was voted in by the fans and lived up to the challenge, scoring two goals and leading pacific team to a win. he was named the nhl all-star game mvp in addition. that's his bilittle boy. >> we're looking at iowa for the demonstration of democracy and we had it in the nhl. >> did you read the player's trib book bun and posing with the commissioner as he's voted for mvp by fans? >> i think part of the controversy started when he was traded down and had to move from phoenix to new foundland and his wife is pregnant. a lot of fans thought that was a bid to keep him out of the majors and that galvanized the fans. >> and we heard the commission's re-signed. >> re-signed, yeah. >> and we'll see if he stays
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traded in the minor leagues, especially after becoming mvp. >> pregnant, 37 weeks with twins, a lot going on. >> incredible story. >> see you in an hour. >> here we go. less than a half hour before the bell. the rally is picking up a little bit of steam. we are positive on all three indexes here. dow up 30. it was down 167 earlier. look at the nasdaq, up now. >> ahead of the alphabet report, yeah. leading trader tells us what he's watching into the close next. >> and also ahead, why virtual reality could be the next platte fornl for apple. he'll be here to make his case next. here at the td ameritrade trader group, they work all the time. sup jj, working hard? working 24/7 on mobile trader, rated #1 trading app on the app store.
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welcome back. dow is up 31 and s&p 500 up five and the nasdaq is the leader ahead of the alphabet earnings report, crude oil is down. so stocks aredy verging a little bit. one of the big winners today is facebook which topped exxon-mobil to become the fourth largest company by market cap. only apple and alphabet and microsoft have larger market caps. >> i'm joined on the floor with
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30 minutes to go with matt chesslock, do you have a facebifac facebook page? >> i think my kids set one up. >> tells you a lot about the market and how much of the market is driven by alphabet reported earnings and. >> we filed china and oil so aggressively for the last couple of weeks, we thoilt today might have been shaky off a huge gain on friday but they like the stimulus, and market keeps rebounding. >> stainly fisher? >> i think he was the catalyst for today's rally. tomorrow morning we have major oils reporting and we'll see if we follow lock step with those. for now it's about the teches. we have new leadership group. >> it's a better sign if it's the tech than the fisher. the u.s. data disappointed and we're it acknowledges that.
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you would rather see a rally by tech companies doing better/. >> bad news is good news that means the fed may be off the table going into the summer and that's good for the u.s. economy, maybe europe gets back on track. hopefully we are focused on earnings but i'm not sure if that's the case today. i think it was more the fed. >> we have a big batch after the bell. thank you so much. >> thank you. >> thanks, kelly. the financial times reporting apple has a secret team building a virtual realty prototypes and a new note saying vr will be a hot new platform for apple. ben thanks for joining us. >> thanks for having me. >> what do you imagine apple is trying to figure out. we hear reports of hundreds of employees trying to figure out what the move is going to be in virt you'll reality? >> lots of companies missed transition from desktop to
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mobile. they are looking it saying is this going to be the next big thing. if it is, they need to be there. >> you say it's the next platform potentially but what do you think specifically apple is looking to do, a piece of hardware, some other kind of move here that will integrate virtual reality with other devices? >> i think apple will do what they typically do, allow others to have the first maneuver and have their own version. given their strength in mobile devices, it's pretty clear they would do something to what samsung has done with and google has doen with aloiing other devices to pop into some sort of viewer. you can see a scenario where your iphone would snap into it and cover your eyes and see the experience through the device. >> this is all soon becoming a reality for the market. everywhere you look now you see people testing out products. first mover advantage is key here but at the same time apple comes into a space not
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necessarily first but often tries to be best. do you think they'll follow a similar playbook this time? >> you're going to see a lot of products over the next six months or so with the new oculus and sony playstation vr and there's a lot of products coming into market and we don't think apple will come any time soon but they are well aware what the competitors are doing and expect them to respond. >> when it comes to talk of any new product, will it matter? will it be enough of a swing factor in apple's results even over the long term to reelgly fuel the bottom line and get investors excited again? do you think there's any shot vr will fit that? >> i think it's very early. i don't think it's going to change the trajectory for any of these companies in the near term. you have others saying this could be the next big platform. and certainly if that does take hold and apple can win, then it can move the needle.
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>> do they need to be then a lot more inquisitive in this space, just going and thinking back about the apple car then reports of a guy who headed up that team with a couple hundred people is leaving. how important is it to have the internal resources and potentially to continue to acquire people or technology that can help them get a foothold here? >> apple certainly has the capital to do whatever they want to do in terms of acquiring smaller companies but talent is going to be key here. in general what you're seeing is a lot of players trying to find vr talent. there's not that many that know what to do it. everyone wants to figure what can happen with this. we believe over the long term it could affect every industry on the talent. >> thanks very much, we'll keep our eye on it. appreciate it. >> with less than 18 min us, this time it's 18 minutes to the close. we have all three indexes still
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in positive territory. just narrowly so but kind of hanging on to friday gains. zika has officially been declared a global health emergency. we'll talk to the ceo of mount sinai. >> we'll have instant analysis as soon as the alphabet report is released. every day you read headlines about businesses being hacked and intellectual property being stolen.
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welcome back, you're seeing green, the first trading day of february and many people hoping that jan is horrible's month would end as we turn the calendar. so far it looks okay and that wasn't the case this morning when markets were red with the disappointing date at a. you heard matt say maybe it was stanley fisher's comments. >> the timing sort of matched up with that but crude oil still down 2 bucks. >> exactly. shares of diagnostic test company alere are soaring. a 51% premium to its closing price on friday and i should amend my remark there's not been
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any merger monday activity. we've had the strong are the start to merger and acquisition this year since 2005. >> it is surprising. >> the board has come back and start to meet in january i guess. we know google but investors are triering to wrap their heads around the new name and structure as alphabet. josh hipton in san francisco with the abcs of today's earnings. will investors have a big adjustment in looking how the company did? >> we'll find out in a few minutes. let's talk about the abcs. a is for analyst estimates, eps of 8.10 on revenue of 20.8 billion and b is for the bow nan saturday they are expected to report for the core business. he's expected 7 billion for the quarter. investors want to know how profitable the core business has
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remained in spite of more competition from rivals like facebook and c is for capital expenditures. how much is alphabet spending on other bets including nest and fiber and moon shots. 90% of analysts do rate it a buy. we'll have a better sense of whether they are right after the close. back to you. >> i love it. josh, i was hoping you would have the whole alphabet but we'll settle for ab and c for now. we're waiting on big earnings after the bell but for now the dow is up 25. the nasdaq outperformer up 18 and s&p 500 up 4. the next guest says there are three variables causing market instability. she'll tell us what they are next.
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welcome back, the dow is up 11 but we had a comeback in the afternoon. markets were weak coming into the day. >> now we'll see, we're only up 12, we were up about 30 points earlier. >> true, we're playing it to a
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tie today. >> we'll take it. >> joining us now, gab rye ella santos at jp morgan funds. what do you think when it comes to currencies and credit markets and the rest. what have we figured out so far this year? >> we personally figured out that the concerns around china, oil, the dollar, they create a lit more uncertainty and less visibility towards growth and earnings but what we figured out is that the strength in the u.s. economy is still there. and we think in the medium term the market is going to start focusing back on that rather than all of the risk we see in other parts. >> so that does seem pretty much of the crux of the question, everyone is talking about, does the u.s. go into a recession and your case is probably not? >> our case is that the positives outweigh the negatives and that strength will be able to support earnings coming back this year. especially if we get more stability some of those key
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variables like the currency and commodities. >> today we have a lot of defensive sectors leading the way. how are you recommending people all locate? do you go defensive and say if everything looks better, more traditional names should do better? >> we're still focusing on the positive domestic stories and not defensive ones. we're not going back into utilities or telecom but sticking with the positive domestic stories like the consumer like growth and credit and we think they will start coming back later in the year. >> you mentioned financials, kind of a hard hit group and there's some talk of some firms that perhaps sof ren wealth owns a lot of financials. now what actually are the financials right now when we're not seeing interest rates go up at the pace we expect? >> that's the crux as well. expectations getting shifted down this year that we are barely going to get another rate hike and that is not our view. we think we'll be forced to
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tighten quicker than the market is expecting, make three times this year and that's part of the support to financial. >> it's so hard to imagine how conditions could change enough that policy makers really want to tighten and do interest rate hikes and that the entire apparatus around that will respond positively? >> it's part of focusing on a domestic story. the market has been in turmoil all this month but we got december payrolls 292,000. the employment story remains positive and that supports further rate hikes later this year but cautiously of course. >> and tells you what rides on next jobs report as well, comes out friday. we hope we see that kind of strength. thank you so much. >> thank you so much for having me. >> we'll be right back with the closing countdown. >> a lot of earnings after the bell. alphabet leads the way.
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papa! you're no son of mine! or perhaps it's time to seize the day. don't just see opportunity, seize it! (applause) less than three minutes before the bell, it's going to be a squeaker, the s&p and dow right around the flat line and came back from losses this morning. the s&p 500 managed to grind its way back to the flat line even with crude oil prices down still more than $2 down 31.41 right now. that seems for one day a bit of a di vergence. >> around 1:00, oil bottomed and stan fisher came out with
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comments in the mid of the day who said we don't know what we're going to do and market took that to mean they are open to the idea of doing nothing and maybe as you have said they might end up reversing, i saw the big turn around when that happened. >> absolutely right and the fact he didn't belabor four moves in the ballpark. i don't see how they can do if other places are going to negative interest rates, that's the equivalent of the fed tightening by comparison. and the dollar gets stronger and stronger. i think they painted themselves into another corner. so we'll wait to see the markets also a little concerned about a surprise in iowa tonight. iowa is not very friendly to whoever is leading the national polls. you can ask howard dean and ruye giuliani. >> fisher ratified what the market already thought. we're hanging on to friday's
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gains if nothing else. >> that is very beneficial but as you alluded to early on, tell me what the crude market is going to do tomorrow and i'll tell you where everything is going. >> take a look at the defensive dividend payers and utilities and telecom stock and verizon. they have been on fire. when were earnings like 21st that was the bottom for their earnings there on the 21st and they were $44 the day of earnings and been up every day, 4.5% dividend yields and continue to go after very quietly telecom and utilities and investors want dividends. >> the 10-year yield is below 2%. >> that might be it. >> sysco had good earnings but boy they really jumped on this thing. it's a stable company, 3% dividends. >> the thing you want to watch for, when they start drilling for oil on the floor of the new york stock change. then come out and take over -- >> all right, thank you very
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much, art cashin, thanks very much. we have the closing bell and we have lucky rice ringing the bell. summit financial ringing it at the nasdaq [ bell ringing ] >> welcome to the closing bell. here's how we're finishing up the 1st day of feb. only the nasdaq managed to pull it off on the bell, up six points and s&p closing down by 1. we'll make sure that doesn't change as things settle out and dow looks like lower by 19 points. the tone here, we're looking from a difference from the sharply negative tone we saw in january and we are waiting on key earnings just moments away. joining today's path, mike
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santoli and winter storm kayla as we're calling her this week. and for more on reaction, we have lee droeg an here and fast money trader tim seymore. mike, does it matter so much that we were negative or positive? >> i think the fact that you kind of came back and as we were just saying bond equivalent stocks doing really well. people seemingly wanted to get involved in the stock market after friday's big 2% move up, clearly that seemed like it was institutions reallocating into stocks, i think the fact you can hold flat is probably okay. although they are saying this still could be considered an oversold bounce. >> and you might have thought it would look worse here at the bell? >> abowith oil down and brent d 5% and the fact the relatively able to shrug it off has to tell you there's a little positive momentum to focus on companies
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and earnings and the things that matter to the individual stocks not just the broad sweep of the macro under currents. >> we don't want it to be correlation one. that usually means there's a panic going on of some sort. we'll get earnings from alphabet and mattel to name a few. what's most important here? >> the bigger theme is rewe're moving into an extremely defensive environment. but the problem is that ford one year eps expectations getting whacked over the last couple of years. the big picture here you have energies material and industrials and couple of other industries doing incredibly poorly while everything else is doing incredibly well. do you care about the forward one year expectation or does it not matter because you're put teenager off to the side. >> a lot of people are hoping technology can ride to the rescue. here's a look at shares of
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alphabet. a bottom line beat of $8.67 a share relative to the expectation of $8.10. there was some changes in the way the company is reporting so be careful as we report all of this to you. the revenues also beating on the top line as well. 21 billion there. a little bit better than that. that was relative to the $20.77 billion estimate, a gain of more than 15% on the year. look at these shares, up almost 8%. >> is it does look like to with the pop in the stock it will have eclipsed apple. seemed it had to get above $780. >> tim, a smile on your face here? >> it's what's really interesting about google, people have always said how big can these companies get and move the needle. they are different than apple when they were close to the levels, it looks like a much more sustainable business. if you think about google now versus a year ago, they should
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be trading at the higher multiple, the breakdown of business lines. all of things that gave investors confidence, i haven't seen the detail but ultimately a company that seems to be executing, the ad revenues growing 25%. it's hard to find fault right now. >> how long have you going to be confident in their ability to continue to deliver? >> it gets back to for me always on some level valuation. if you think these guys are going to earning roughly 35 bucks a share, this is a -- a 22, 23 time stocks, around 700 bucks. it's well through that at this point. the valuation to me is still reasonably supportive, two years ago trading at 30 times and follow the valuation, that's ki. >> two of the very closely watched metrics of this company, paid clicks and expected to be up 22%. actually up 31%, which is quite a bit beat. on the flip side, the amount of
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money that the company makes per click, which is described as cost per click, it actually deteriorated by a rate of double what was expected. that happens when they transfer to mobile and transfer to digital. it's less of a profitable endeavor to actually have those ads be clicked on. they fell by 13% per click. >> only expected to drop 6%. what do you make of it. >> 18% year over year revenue growth print is amazing, the highest in over two years. if you look at google as a advertising reap, they are saying when is that going to seriously deteriorate. the longer they can put that off and invest in other alphabet businesses, the more the investors will give them the benefit of the doubt. >> you mentioned revenue up 18%, if we grant them -- >> it's like 24%. it seems like they basically
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kind of hit the marks they were looking to hit the revenue growth on google websites, their own sites up more than the networks. this some quarters where people take pains to note where they are getting the money, also other bets revenues, $450 million, so they are making money on those moon shots but they are losing money too. they are losing $3.5 billion for the 12 months into december. are those losses roughly in line with what you expected or do you think that's a little bit bigger? >> you could ask for the street on this 2 and 4 billion. per versely showing 3.5 billion in losses is positive for the company. people want to know what's going on in underlying businesses, they are more than rewarded for the transparency. after facebook they thought tchs a zero sum game and they were
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going to suffer to facebook's gain, i don't think that's the case and case where both companies are showing how far ahead they are in monday tiesing ad growth, it's not even close. >> alphabet shares up about 8%. josh lipton has more. >> i've been pointing out also beside that beat on bottom and talk to look at the operating income, that was a big focus with investors here getting a clean look of the income stripped away and clocking in around $8 billion. that gives you a lot of confidence for the bulls making that argument that once you strip away google operating income from the other bets investors would like what they say in the same way they did when amazon began breaking out the cloud services, that number is even bigger than the bulls i was talking toe. some analysts had around 7 billion. that's why you're seeing the stock move like that in afterhours. >> which number? >> the google operating income,
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remember that -- google now we're talking about search and ads and youtube, that is this driving this company's business, and who bulls once they broke this out, seeing a more clean version of the number, not encumbered by other bets. clean look at that number. >> that's a great point. thank you. those shares continuing to drift a little bit higher. there are a couple of things here you could take issue with, plea. kayla mentioned cost per click declining significantly. the fact that even as their other bet segment is growing, the losses are growing substantially. are the positives still justifiably offsetting concerns. >> it's what investors want to say to take those shots. what's interesting to us, we saw a lower disburgs of estimates this quarter and everybody was kind of around the same place, and they absolutely blew that number out of the water on eps,
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we were at 6.17, 7 cents higher, that's a big beat and i think people are caught off guard by exactly how much they push to the bottom line. >> i guess the question would be, is this a one time this is great and we have this detail now and value this company in a new way or is it going to pay off from future quarters that you have a new transparency. >> i don't think we'll give it a different multiple. a search business is what it is. people say that google can basically rach et it up or down a little bit based on how much they want to push the regulatory side and i think they pushed it a little bit further this quarter. people want to see them spend more money on those shots and they'll give them the benefit of the doubt. >> they also paid them a lot of money and given them a lot of confidence in terms of buying
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shares because they've expressed some discipline and specifically their cost of revenues as a percentage of overall revenues is flat. so they are seeing some discipline, cfo has laid that out over the last few quarters and delivering on that. >> tim seymour, are you comfortable with them continuing to spend in these areas? >> 18, 19% coming down from 21% last quarter. but i think, yeah, once you've cleaned out and show people what they are spending and overall impact on the total, i think people are comfortable with the growth the company is giving you. so yeah, i think transparency and breakdown and new format gives this company a much better multiple. >> let's go over to a couple of other earnings. morgan brennan begins with an earnings alert. >> better than expected but
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still pretty rough results. anadarko reported an adjusted loss of 57 cents per share, analysts were looking for $1.08 per share so that was better than expected. revenue of $2.05 billion was a small miss. the other big headline here is that anadarko expects to reduce 2016 capital program by nearly 50%. they usually come out with the capexguidance and that is quite a large number. we'll dig through the results and bring you more headlines as they come. in the meantime, it looks like shares of anadarko are down about 2% -- closed down about 2%. back over to you. >> understandably light volume there but thank you. a beat on the bot oom line but
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other things going on here. let's flip over to mattel for a moment and see what's happening there with what also looks like a bottom line beat. >> more from toy maker ma tell, a beat for both the bottom and top line, reporting earnings per share of 67 cents on sales of $2 billion, slightly outperforming what analysts expected and marking the first sales rise in about two years. barbie sales rose about a half of a percent. also slightly better than what some had been fearing for the company and chris saint clair makes a note that they are making continued head way in emerging markets like china and russia. >> thank you, those shares doing pretty nicely, almost up 5% after hours, you have any interest in barbie? >> sure, come on. you kidding me? maybe g.i. joe but think about this, when everyone is concerned about global growth, toys make
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sense more than tablets for certain people. you're still seeing growth in this sector. a company pays 5.5% dividend yield and a company that although you've seen a good rally back off the lows but somewhere around 28 bucks puts a base in and builds from there. it's a turnaround story, new management team, give it some time. >> mike? >> tim hit the 5.5% dividend and declared a dividend flat with last time and preserving the i dividend. beat on the revenues means they have room to do that and value investors are starting to get interested in mattel. >> what do you make of their remarks, anadarko? >> it is interesting they didn't lose as much as everybody was expected. we were a bit above the wall street numbers but they blew that number out of the water too. people are looking at the revenue and oil price. the problem with the energy sector as a whole is that we're going to have to go through another full year of earnings to
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get to a flat year over year number. until that happens, people are going to continue to stay away. and it's going to be really hard to put a bottom in for these stocks. >> kayla? >> making my way towards the bottom of the statement, one reason the stock is potentially popping as much as it is, the board actually authorized an additional share repurchase, 514,000, it's not that big but because the per share price is to expensive, it is pretcy sizable, $3.7 billion is what's remaining outstanding on the repurchase. so certainly worth noting that that's something that's a relatively new phenomenon for this company but they are sticking with it. >> what will you be listening for? >> i want to hear how they continue to monoties u youtube, we know they've started to break it out and it is growing. it's great to seep a company
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like google and facebook that don't have to get knocked down by china headlines. >> that is a great point. thank you so much. those shares up nearly 6%. more coming up with the rest of the crew at fast money at 45:00. there's something boone pickens is missing about oil. and it could mean troubling for stocks. we're just getting started and we'll debate whether you should buy or sell the stock right now and how worried should you be about the zika virus outbreak? the head of the mt. sinai health system will weigh in later on "the closing bell." you're watching cnbc, first in business worldwide.
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alphabet popping 5.5%, it means by the way that alphabet's market cap surpasses apple's 570 billion compared to apple's 535. let's get more from raymond kessler and ed lee. anything you would nit pick here? >> it's nice to see more detail on google earnings itself,
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google proper broken out of the moon shots and big experiments they are doing. what was interesting, the operating income is slightly better than it was the same quarter previous leer, like 32% versus 31%, maybe we hoped for a slightly higher margin given that. it tells us google is still ate great business that moon shots weren't eating into margins that much in the first place. it's a nice sign. >> is your price target still 790 on the shares? >> it is, we have to update our model after the call, numbers look like they are going up given the strong beat. we'll take a look at it but numbers look like they are going higher. >> i wonder how much, tim mentioned the youtube, for example, talk to us what in the report and what still out there that could drive google's valuation higher? >> yes, they haven't broken out youtube business yet, we estimate that's in the $10 billion range.
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the display advertising business is growing at the pretty healthy growth rate. we would like to see more details around youtube and display advertising business which are both growing at fairly healthy growth rates here. >> we have a wall street veteran as cfo for three quarters now has given wall street what it wanted, they upped the share buyback although it's min xul when you think about the overall mark cap. do you think they are conditioning wall street to expect these types of financial engineering that they'll have to keep up for a really long time? >> i totally agree. once you start doing that you can't sort of let it go. that's what wall street has come to expect and you're seeing the stock pop as you pointed out earlier. it's a good and bad that way, tip of the sword a little bit. so i don't think it's ultimately a bad thing. they want to hold back stuff to invest more in the moon shots but as we can see, it's not costing a ton but relative to
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their google proper business, it's not that much. >> you said you were going to update the model after the conference call. what exactly are you paying for these numbers as good as they are? what kind of multiple seems appropriate for now? the biggest market cap company in the world earning at this level. >> we think google can trade around low 20s multiple. we think long term earnings great in the mid teens, roughly 15%. a peg of 1.5 is appropriate valuation for google. >> what about, aaron, this cost per click situation here, down i guess about 13%, in other words the revenue they are getting per click is falling. i understand that's a transition to mobile but mobile is where it's at going forward. >> we think we said for a while you can't take cost per click in isolation, you have to look at it as well as clicks combined and they've had this problem for a while. the clicks are going really fast
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and getting wiped down by the cost per click. if you look at the net revenues, that remains strong in the quarter here. >> and also going back to a discussion we were having, the loss on their other bets category is pretty large and it is larger than even the revenue growth they were seeing in that area. what happens if that continues? >> that's where you need to talk to wall street a little bit more. communicate more in terms of the way jeff besos had done for so long, conditioning certain investors to say don't expect huge margins on this. google needs to tell a story that says we're going to spend and continue to spend and it's going to cost money but in the long run it's going to benefit us and benefit the company. the way they message that, that's as important right now as anything else. >> and before we go, just sort af broader thought. the company changes its name, alphabet now, we're trying to get used to it. you could see it back firing, right? if it back fired people might
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have said the numbers aren't there but it all seems to be lining up for this company. why -- what is it about their positioning or their branding? is it helping them with talent acquisition? is it just clarifying how strong a company this has been all along? >> i think it's a fair question. their new cfo is a real expert and professional in this and wall street responded to that. she knows how to talk to them. it was to google's credit that they hired her in the first place in a important position. the other side too, for a talent acquisition, google is still the place to be or alphabet you want to call it. separating out the shots gives a bit more clarity but says we're serious about investing in these experiments. >> that's a great point. >> and more talent. >> thanks for joining us this afternoon. ed lee and care ron kessler. >> what's going to be your question on the call?
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>> we're on the size of the losses, which assets those are going to and what's the return on assets of these over the next several years. how do they improve the other losses going forward? >> we'll bring everybody an update from the call. aaron kessler and ed leon alphabet. tesla making a dramatic comeback today. we'll get you details on that and the latest move to sell cars in the car capital of america. first though, larry kudlow joins us live from des moines for which takes on which candidates have the momentum into iowa's caucuses, we're back in a moment. ♪jake reese, "day to feel alive"♪ ♪jake reese, "day to feel alive"♪
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♪jake reese, "day to feel alive"♪
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welcome back, it started last march 23rd. 11 months later he's fighting donald trump to win first election stop in the race for the white house, iowa. larry kudlow is in des moines tracking the gop and democrats as the iowa caucuses are few hours from starting. is trump going to pull this off? >> well, i was afraid you were going to ask that. here's what i think i know. it's a tricky business. i think that it's really close. i think trump and cruz and rubio are really close. and one reason i think that is
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that they are all out still campaigning, in facts, into the evening they are all three in the state campaigning. >> all three, you're putting rubio in there. >> all three of them. i'm putting trump and rubio and cruz. they are pollsters are doing overnights and showing it's tight and that's why they are out there campaigning their butts off. i think it's going to be too close to call. i think the democrats may be too close to call also. i'll tell you one little anecdote today. the university of iowa, which has a great basketball team has no game tonight. that means the whole town, millennials will be voting for bernie sanders so hillary may have problems too. >> we've heard people go out and ask iowans, whosz on your mind and is this your first time? there's a surprising number of people, i'm deciding between
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trump and sanders, things that would seem like they make no sense except there must be something going on here that's drawing people, including those who haven't participated before into the event this evening. >> listen to this. the way the rules work, this is a great story, whether you're republican, you want to vote for bernie sanders, guess what? all you do is march over to the democratic caucus place and reregister, right then and there. reregister. it's cleverer than chicago where they vote -- you can be republican or democrat, i love this story and that makes it even more unpredictable. and then they are all attacking you so i want to run a clip. i interviewed dr. ben carson earlier today and asked him about the economy and which was more important, inequality which is the democratic message or poverty, which is kind of nobody's message. take a listen if we have it.
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>> people have no clue what's going on and people come and take advantage of them and tell them things like the reason you're not doing well is because of those rich people. if we take their money, everything will be fine. no, then everybody will be poor. that doesn't work, that's socialism. solving poverty takes care of inequality. >> i love that. the doctor is? fourth place, getting 10% of the vote. think he's going to be very interesting tonight. but his message, inequality, taxing the rich is not going to solve poverty. what you need is economic growth. he has a very strong corporate tax plan. i'd like to see the republicans emphasize that more. the problem is middle class, the problem is poverty and problem is not inequality. inequality is a democratic theme and it shouldn't work but the gop has got to go after it. >> we'll be keenly watching to see what happens in the next
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several hours. thanks for joining us straight out of iowa. >> let's send it over to seema for another earnings alert? >> aflak, shareses moving higher, a beat on earnings 1.56 adjusted versus the estimate of 1.47. revenues topping analysts forecast as well at $5.32 billion. of course this is one of those multinationals that does have a significant exposure to japan and interestingly enough in the press release, the company says aflac growth rates were suppressed as a result of the yen/dollar exchange rate and 5.6% to $3 billion in the fourth quarter. another example how of currency charges can impact the bottom line of these multinationals, shares up 1.8% after hours. >> this company was not trading well during the day today. we still haven't gotten back above the opening price.
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>> people were bracing for something here, maybe a partial relief on absolute results but this stock really does trade with the yen and outlook for japanese economy. >> increasingly as the rest of the global financial markets seem to. >> let's go over to sue herrera. >> here's your update. chinese kmd xi jinping presiding over the creation of five new military regions to stream line the 2.3 million people people's liberation arm mixt the north, south and east and central regions replacing the seven previo previous regions. officials are expected to make an offer this week to u.s. creditors suing over unpaid bonds. that case locked argentina out of the global capital markets for a decade. cvs making plans to make an opioid reversal medicine without prescription. ohio is among the u.s. states
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with the highest rate of oepiate overdose deaths. the pope put aside his prepared remarks and instead spoke about o bead yens and how difficult it can be. the pontiff called it something that quote must be swallowed at times. that's the news update. back to you, kelly. see you tomorrow. >> it's a great theme, o obedience, tough, resonates with everybody. >> the pope is big on trying to empower people in the religious community that he knows that it's difficult so -- >> that's true. he can do it. sue herrera. alphabet's conference call is moments away. we'll bring you all of the highlights with the share up 5% after hours. find out how bad the sezika vir could become and if we're anywhere close to a vaccine when we hear from the mt. sinai in just a minute.
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more proactive selling. what do you think michal? i agree. let's get out there. let's meet these people. herthey work hard.ade, wow, that was random. random? no. it's all about understanding patterns. like the mail guy at 3:12pm every day or jerry getting dumped every third tuesday. jerry: every third tuesday. we have pattern recognition technology on any chart plus over 300 customizable studies to help you anticipate potential price movement. there's no way to predict that. td ameritrade.
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checking in on names moving after hours, mattel and alphabet, moving higher by nearly 6%. we'll bring the headlines in a
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bit. the world health organization declaring zika an international health emergency since it was first identified last may detected in 23 countries and more than a million people infected and appears to be linked to birth defects as a result of this disease. no reported cases in the u.s. but health care systems are making preparations including mt. sinai health system and president and ceo kenneth davis joins us now. >> how have you been? >> what kinds of preparations? >> we're going to ask travelers who come into the emergency room with a rash, fever or joint pains or red eye where they've been traveling and if they've been traveling. if they are traveling to latin or caribbean basin, we could be a little bit concerned. >> and the tough thing about zika, that for people adults who are infected, that the symptoms aren't that bad but obviously for any babies it is devastating. >> this is a very mild disease,
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four out of five people won't even have symptoms that they will notice. what we're really concerned about is the pregnant women because of the microcephaly. >> what's the next step? if you're tracking it at this point, what would be the response if you did see somebody come in to your emergency room under those conditions? >> you with a want to find out if they have zika in their blood. and then if they were pregnant, you would want to follow their fetus with ultrasound. >> what do you do at that point? i know this is a very difficult question, but there are people trying to figure out canceling trips, anything that has to do with latin america, horrified somebody will happen to their child? >> quite clearly, if you're thinking about getting pregnant or you are pregnant, you don't want to travel to central or latin america unless you have absolutely have to. if you have to, you want to wear clothes your skin isn't exposed and you wear insect repellant and to the degree possible you're going to stay inside during the day because these
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mosquitos bite mostly during the day. >> do you know at this point how long potentially zika could stay dormant in someone's body if they are not showing symptoms but in a year or so they are thinking -- >> i don't think you have to worry about that. you would think that within a few weeks after a bite, you'll be fine and able to become pregnant. >> what about prevention? meg terrell has been reporting on different companies that might bring a vaccine to market. now that the w.h.o. has acted, how much more might that bring resources to bear? >> vaccines are tough. and clinical trials take a long time to get a definitive answer. but there are other possibilities, i mean there is a company that has a genetically modified mosquito, male mosquito that when it's been tried in a small community, it wipes out the population by over 90% -- >> that intrexon, we had the ceo
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last week. >> yes, sure, if you can wipe out the mosquito population for 90%, that's a huge advantage. this is fundamental public health and about sewage and cleaning up areas that are the natural habitat for these bugs and that just takes the right people in rit plaright places dg the right things. >> do you think it's a matter of time before it comes to the country in a significant way? >> i don't know if it's going to be a really significant problem, the free standing sewage problems don't occur here. but this is a quite manageable problem with the right public health. >> we desperately hope that's the case. dr. kenneth davis for mt. sinai. >> let's head over to seema. >> stock falling after the company reporting mixed
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earnings, this is a diversified manufacturing that specializes at home furnishings. revenues a bit light at $945 million, expectation was for $997 million. 2016 guidance did come in above estimates and stock down above 4% after hours. >> google's earnings call started a few minutes ago. we'll get the highlights from those on the call. and tesla making moves out of michigan, applying for a dealership license despite existing legislation that bans direct vehicle sales to owners. does tesla have a chance in the motor city?
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shares are alphabet are up 6.5%. first though, tesla shares also higher today, this was interesting, despite a big price target cut from one of the street's long time bulls, more on what's behind the downgrade? >> this is interesting, adam jonas has long been one of the most bullish analysts on wall street when it comes to tesla. today he cut the price target by a lot. 26%. it was at $450 he dropped it down to $333 a share. the average estimate for a price
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target average price tarkt on wall street, $284 a share. what are the concerns? one, increased cost when it comes to the model x and engineering challenging regarding falcon wing doors and model 3 will be delayed and not coming out into well into 2018 and mobility competition, whether it's established automakers or our tech firms or other companies, more company are getting into the business that tesla has been targeting and also, the energy business at tesla, the power wall we've talked so much about, he believes that that valuation needs to come down. as you take a look at shares of tesla and last year they did hit the lower guidance of delivering just over 15,000 vehicles, keep in mind that tesla -- you shouldn't say -- take a look at the shares. there we go. keep in mind when you take a look at tesla and delivering just over 50,000 vehicles last year, that estimate of 70,000, that is the general consensus among analysts but there's no
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formal guidance coming from tesla at this point. another story regarding tesla, they have applied to michigan, state of michigan for a dealership license. michigan has already said it's banning direct sales of automobiles from automakers but this is all about setting up for a legal challenge in the future. if they apply, the state of michigan over the next month or two will review that application and they'll say, okay, we have said you can't have this license, that sets up tesla for a legal challenge. don't forget, tesla reports fourth quarter and full 2015 earnings next week. back to you. >> stay right there, phil. it's interesting, a legal challenge this could be a years long process. >> it could. i don't think it really -- a not of those things phil mentioned don't necessarily fit to the core of the tesla these sis if you're buying and holding the stock. yes, you want to see them sell the cars however they like and maybe pick a fight in michigan
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because i'm sure they pick that state at random, right, to go get a dealership. but the delivery in 2020, if you're going to get ramped up production to that point, that's kind of what matters and with the stock at this level, almost 100 bucks off the recent highs, maybe this stuff doesn't matter quite as much in terms of downgrade, also, elon musk, exercised options to buy the stock and he's at least putting his money where his mouth is. >> that's true. >> the interesting thing to watch next week with tesla, what kind of guidance they give us about annual sales for 2016 and as well as looking further out. right now 500,000 is the number they've thrown out about 2020. adam jonas was out saying see it at 246,000. let's see what kind of guidance they give next week. >> i love how he says not 245,000 but 246,000, just to be clear to put a point on it but, phil, thank you so much for now
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keeping an eye on those shares for tesla. >> the alphabet conference call is under way and the earnings momentum pushes into tomorrow, yahoo! and chipotle, to name a few. don't miss it. ashley bryant, you are a teacher of small children. that's right. i have read it is the hardest job in the world. that's why i'm here. can you... i can offer advice from the accumulated knowledge of other educators... that's wonderful but... i can tailor a curriculum for each student by cross-referencing aptitude, development, geography... sorry to interrupt. but i just have one question: how do i keep them quiet? (pause) watson? there is no known solution.
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welcome back. alphabet's earnings call is under way. let's get to victor anthony who has been listening to that call and joins us on the "newsline" now. what's jumping out to you so far, victor? >> el with, you know, they are still going through the numbers. the headline numbers are 24% xfs revenue growth, paid clicks growth on the google website of 40%. that accelerated. the company bought back $1.8 billion of stock and reauthorized more bond share buybacks. core operating margins on the core google business, that expanded by 250 basis points year over year for 2015. they talked about mobile search being the key driver of the business in the fourth quarter. they talked about momentum and youtube video ads that essentially use the same sort of the statements that they use for youtube in the past which is
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significant growth for youtube so a search, youtube continues to be in main drivers of that business. they will continue to prioritize investments and they talked about, you know, the revenue growth will remain essentially the priority for them. however, it doesn't get a task and improvement on results so i expect them to be -- to have a lot of focus on expense growth. >> yeah. >> and expansion growth over the next coming quarters. >> mm-hmm. >> overall it's a good quarter. >> victor, i wonder now that the street has this added level of detail in terms of google's business, what is the next thing that investors are going to crave in terms of more detailed information because you mentioned youtube. they will talk qualitatively about youtube growth. is there any way to drill down into the economics of youtube any better? do you think google is ever going to become forthcoming with some of that? >> well, i think at some point investors will put enough pressure on them to release youtube's results because i think if you look at estimates across the street they vari
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across every single land so at some point may not happen this year but probably 2017 there may be some pressure to tell us exactly the revenue impact from youtube, the profitability from youtube if they are indeed profitable. >> and victor, what does it say to you that the company is now worth more than apple? >> well, i think it's a testament to the fact that, you know, google i think is one of the best in class operating companies in the world, and that's what you're seeing reflected in the market cap today. >> thanks for joining us, victor. we'll let you get back to the call. >> thank you. >> victor anthony there from axiom capital. by the way, kayla, you started to pull on twitter about how long people think this might actually last. >> i did. i asked my twitter followers how long this would last, a week, a month, a decade. so far 30% of the respondents have said a decade. >> wow. >> that's interesting. this happened after hours and this has to happen at the open tomorrow for it to be official and just reminded of all the companies that have been at one
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time the largest company in the world to cisco, dupont, exxon, ge, philip morris, walmart. >> the turnover has been pretty rapid. >> going back years ibm has a tremendously long uninterrupted stretch and at&t before that. a decade, therefore, makes a long term especially when it's nip and tuck with apple for the moment. >> and to see so much consolidation of tech with the large ranks of the largest company, google, apple, facebook, three of the four largest companies. >> what sector do we think will next generate move to the front? if it can't be front, what's going to be next that takes us to the front of the pack and becomes of the most valuable company in the world, something to think about as we're falling asleep? >> let the viewers at home answer it. >> unless you want to answer, mike. >> very hard to see outside of tech because you don't have the kind of winner take most type companies. >> i'm going to go with biotech, maybe health care but on a much longer term basis. he's not saying anything. coming up, we'll look ahead to
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tomorrow's reports including yahoo!. "closing bell" is back in two.
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what alphabet's earnings reveal about google's big best for innovations and investors. inside the numbers "squawk alley" tomorrow at 11:30 eastern cnbc. >> welcome back. we're still did i guesting what
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is happening after hours with some big earnings movers tomorrow and then we'll get yahoo! and chipotle out with their results, too. you know, both of them like so i had sinocratic. we have a company like alphabet that can be a tell for the whole market and yahoo! and chipotle, what do you think there in. >> they are both perceived as companies at a crossroads or ones where everyone else thinks they have the answer for what they ought to do right here to get out of whatever the predicament is and for that reason chipotle is fascinating. this was more than a $700 stock several months ago. you know, it had a hard time rallying very much on the news that the cdc is declaring the e. coli event over so chipotle is an interesting one. a lot of people will say if this growth mod sell not broken let's give it a try. >> having the cdc ruling or opinion come out this week before earnings i think will be really helpful in in fact that story stays intact because the executives can talk about it, putting it behind them and what they are doing to go forward to
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ensure their process is a little better. i wonder if they will have lost market share in the meantime to other competitors, other fast casual restaurants. saw mcdonald's have a really good quarter. people were wondering whether that was because of chipotle weakness. ironic become that mcdonald's used to be the cornerstone shareholder but we'll see what they say. >> turning back to today, take a look at how shares of alphabet are trading. the most valuable company in the world now and the nasdaq was higher today. outperformer, and we have had pretty good results from so-called fang, at least from facebook and now from alphabet. mike, what does that tell us? >> the nasdaq 100, the ndx, has been the outperformer for a while now. it does seem as if the market right now is preferring these large kind of platform growth companies, and i do think that's obviously going to give a lip at the open. should keep in mind, people are saying, hey, netflix, reflex it response to their numbers were up and then people rethought. >> amazon, clearly a different story.
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>> anything can happen on the call. they could say we expect elevated expenses in the back half of the year and could say anything. >> we'll have to tune in 9:30 tomorrow morning to make it official. for now that does it for us on "closing bell." mike and kayla, thank you so much. "fast money" begins right now. "fast money" does start right now. live from the nasdaq market site overlooking new york city's times square i'm melissa least. traders are tim seymour, dan nathan, karen finerman and guy adami. tonight, stocks in a three-day winning streak and one classic market theory says take profits now. there is more pain to could. we will explain. plus, chipotle has been cleared of e. coli, but there could be something else that might begin to weigh on the stock as early as tomorrow. a top analyst weighs in. later, boon pickens out with a bold call saying oil is heading to 452 bucks a barrel but dennis gartman says he is mixing something very important about the crude equation, be a he'll us what that is and what it could mean for markets. first starting off with alphabet. we

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