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tv   Closing Bell  CNBC  February 9, 2016 3:00pm-5:01pm EST

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the $700 million ranch apparently. thank you all for watching "power lunch." good to be back. >> glad to have you back, ryan. "closing bell" starts right now. don't move. >> thank you and welcome to the closing bell. i'm kayla tausche. another wild day for stocks but you couldn't tell it from the dow right now, which is up only 17 points. but global bank fears continue to weigh on this market. it happened earlier this morning but we are on the komtback trail and oil was dropping as the international energy agency warned the demand for oil will ease considerably this year. >> no investor wants to make a move ahead of tomorrow when janet yellen will be testifying on capitol hill about whether the market turmoil could influence her decision on rate
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hikes. just cut the number of hikes his first is expecting to three from four. he'll join us exclusively to discuss coming up and wells fargo cfo said they are working with an assumption of zero to one. >> the fed funds futures right now are saying maybe we don't get one until february of next year. even then, that's 25% that they are betting on. crazy. >> meantime, media crush viacom stock sinking on the back of weak earnings this morning. we're about an hour away from disney's results as well. they are coming fast and furious, we'll tell you what to expect and we have a live interview coming up with ceo bob iger. >> she's moving away from me. >> that's not true. the primary in new hampshire is under way, could results change the face of the election? we'll take you there live for the latest. it is sure shaping up to be an interesting race. >> yes, it is. let's start with the market
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volatility, bob pisani has been tracking, down 145 on the open and now we're positive here. >> this has been a pattern the last four or five days. big plunge at the open. they tried to rally in the morning and it fails. largely because oil keeps going down as happened today. last four or so days, we've had little rallies in the last hour or so. that's happening again today. the big move is the plunge in oil late in the day, talking about the global oil glut worsening and new 12-year lows in oil. all of the big oil names are down. chevron down another 3%. not quite a new low right now but it's down and big european oil names, i say european oil names and you'll see down 3.1%. very heavy volume. been going on for a few days. the one thing happening exxon-mobil continues to get a pass, only down 0.1%, people are shaking their heads in disbelief.
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they are up on the year believe it or not. we're getting new lows again in the big bank names and big money center banks, goldman and citigroup and others are down and e broker farms like etrade as well. finally, another predictable trend, consumer stocks at new highs, your campbell's soup at a new high and mccormick's and tyson food, 52-week highs. >> bob mentions the banks not only here in the u.s. but the europe european banks are down sharply, despite the fact that deutsch bank trialed to put fears over the debt payments to rest. when that didn't work, the ft floating the idea that the company is looking at a bond buyback in the form of multibillion dollar euro bond buyback. that was short lived so far as it affected the stock. john cryan calling the bank rock solid, cfo maury shrank said it had three times more money than
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it needs for an april debt payment on what are believed to be its riskiest bonds. default swaps have been spiking to 2011 crisis era levels, sort of a per verse trade because they want to acknowledge the issue so investors don't think it's an issue but just by acknowledging it means there might be one. jillian compared to yelling fire in a theater. goldman sachs ceo was at a financials conference this morning and addressed it head on. here's what he said. >> the question is has our confidence in our institutions eroded to where worry about it? no, not at all. >> he says the market doesn't understand the capital issues for the banks but there are more issues than just that. you have negative interest rates and that's going to hurt the business model and a lot of exposure to oil and emerging markets and russia and china and the fact that sovereign funds will be selling financial shares
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whenever they need to shore up cash. there's also the fact that these banks and these issues are coming to bear at a time when major institutions are transitioning to new leaders and a handle of them you can see right there. they are eyeing new layoffs and big strategic overhauls. doing this at a time when markets are this volatile and there's still a lot of legal issues why the market interpreting this as such a risky endeavor. >> this is what you call a perfect storm or imperfect. >> if you're one of the ceos of those companies. joining us to talk about the troubles facing big banks, robert albertson, you think that this is an overreaction by the markets to what's going on over there. why? >> i think it's a big overreaction. if anything the banks have more capital than is useful rather than not enough. it's a whirlwind of factors and everyone is trying to find another 2008 in this. and there is no 2008 in this. china's weakness which started
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all of this last fall is very limited in terms of its impact globally, only 9% of global imports, oil prices and commodity prices in january going down are a positive not a negative. there are winners and losers but there are more winners, you have regulators coming up with more issues. i understand that you doeblt have interest rates going up as soon as you would like and we might as well throw in the fact amongst the very large array of presidential candidates, everyone one is terrified to say anything good about banks. you can see all of the pieces bothering people but put them all together, you can't explain, 20% correction since december, 40% drop from the highs for the european banks on average since mid-summer. >> if you're looking at your stock as an executive and you see it's lost a third of its value and bonds are trading at 80 cents on the dollar, it would be common sense to think you would want to buy that back. when the concern is capital and you don't have enough of it. is that the best use of your
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money as a company? >> i don't think any senior banking security out there thinks that they really need more capital. regulators may require more, they may come up with an math narry crisis that puts you at risk of adding more but nothing that would explain these levels. if you're an executive watching your stock go down like this, it's a big tem tags to finally send out a press release saying this is crazy, you're wrong. trust us. of course, when you do that, you in inadvertently start a frightening things. you saw the same with u.s. banks over last four months, they are talking about the reserves and every time one announces a reserve ratio and wants to ends the conversation, another puts in a higher number, bidding against themselves and the message is back firing. there's nothing out there that would fundamentally explain the weakness.
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>> so you're going to start buying these guys what you're saying here? >> absolutely. obviously the markets have volatility in them and they are unknowns but at some point you have to say, can this add up to this much damage? this much drop in this short of time? the answer is no. you have to face it and go in there and place some sensible investments. >> all right, we'll see what happens, thanks for joining us today. >> as deutsch bank went positive and u.s. banks went positive -- >> i saw that. >> the influential robert albertson. let's get to the closing bell exchange. wisdom tree investments and keith bliss at post nine and rick santelli from chicago as well. keith, as we stand here the dow has popped up 102 points after being down 145 earlier in the day. similar to yesterday's late day rally.
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what's calling the shots here? what's going on in this market in your view? >> quite simply what you're seeing in the last couple of days and first four or five weeks, you're seeing a sloppiness in the market which is indicative of a lot of indifference in some circles but indecision in most circles. we've seen a consolidation pattern start to emerge in that. when you're setting lower highs and higher lows, that means we're consolidating into a decision point that has to be maintained. but i think it's inescapable when you look at what's happening with oil prices in the correlation to the equity market, we need to talk about that. but the news on chesapeake was very revealing by why oil prices are impacting the markets so much today. not about a global growth story but the fact that energy has been the biggest growth driver in our economy in the last six years, that's going to be taken away and there's a lot of concerns that tech and health care and some of the other growth industries will not be
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able to take up the slack. you're seeing valuations come in. unless we get a resolution on that, we'll see real pressure on the equity markets until people try to figure that out. >> we have seen valuations come in in tech, health care financials and makes us wonder whether these companies are trading at 25% off or whether they were 25% overvalued before. what do you think? >> well, i would say there's a lot of risk aversion going on in the market. with the 10-year coming down to 1.7%, what's driving that a lot of it is the fact that 25 basis points today. you can go ten years in the japanese curve and the rates are negative. you have pressure on the 10-year and i think you're seeing that reflected in general risk aversion. they took out a few of the market generals from last year. they took amazon down and took down google. but there's still leadership in the market. you've got to look where it is, it's in consumer staples and in
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the telecoms and in companies that can go do it even in this environment where it's difficult to grow profits. i would just say if this was a true bear market, the market bears would have taken the generals out from the front of the line and dragged them through the snow and take them apart by now but they haven't. you got 10% of the s&p in ten stocks standing between the s&p 500 and bear market. i would just say, 1800 is a dividing line. if they can hold it there and rally back up, you'll continue to see a trading range up to 2100. >> denver won by playing defense and this market is definitely playing defense right now. rick santelli, i know, do you have any sense of where the bottom might be for the yield right now? >> no, i think the only way to answer that is no we're in the bottom of trading a couple of basis points negative or bottom of a settle of 23 basis points
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or just be astonished and look 15 years out in the swiss curve, minus 21 basis points. i still harken back to the previous kris ses and subprime and denial and maybe it's different. does it really matter that it's different? what is an evaluation, how do you price anything? the only way i know to truly get prices you can build rocks on top of is to have a discovery process by many players. but we've dialed in too many prices and at the same time we're changing business models, whether it's inventories of securities and how many securities you need with regard to your regulators. all of these things are taking a toll. add in the training wheels are off and energy and commodity markets which usually have this anti-correlation, you know, usually you put on commodities to alter. you don't have everything going in the same direction. all of those things are up in the air. to me, i don't think we should be debating when it's going to
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end. i think what we need to debate is stabilization of banks in europe is it still not fixing them and the difference between stability and reform, have we not learned our lesson yet? >> it's a good question. i know it's one investors keep asking. but the dynamics of this market that have been spurring us along for years at this point aren't changing any time soon, where do you put your money and can you trust any rally as anything more than short covering? >> i think rick has it right on the head. we talk about that a lot with trading booth and customers, it went out the window a long time ago as markets were manipulated by policies not only here in the u.s. but around the globe. the situation we're in right now, all of the negative things i spoke about about the growth sector now going down. that being energy, you're also starting to pile on a negative feedback loop from company ceos from all industries very concerned what the future looks
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like and that will not get positive until we get through a quarter's worth of earnings. the question you ask, where to put the money, i would still stay very defensive in here right now. we now if something bad were to happen, people still need to buy food and still need to buy diapers and no types of staples, that's where i would be sticking my money right now as a safety play. i do agree with bob albertson where some of the banks have gotten so beaten up. if you believe the banking system will still thrive, even in a period of probably stagnatured earnings over the next few earnings -- >> thrive might be a strong word but they'll survive in these low interest rate virmts. we have to go at this point. we appreciate your thoughts. the dow was down 145. we're up 88 right now. look at the transports as well, finally when you have low oil prices today, the transportation stocks are moving higher. that index up 110 right now. >> that is bucking a trend we've
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seen throughout the year so far. after the bell do you component disney will lead the charge of tonight's hearings. bob iger will break them down with julia borsten. of course the "star wars" quarter. >> what results did they produce? we'll go live to new hampshire where larry kudlow sat down with governor kasich. he breaks it all down for us coming up next. you're watching cnbc, first in business worldwide. in new york state, we believe tomorrow starts today.
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apc have been down about 4% in earlier trading and we've just gotten word it has been halted for news pending. i have a feeling we'll see a lot of these in the energy patch -- >> another one. >> if these headlines continue. let's go to bob pisani with details. >> i don't have a lot of details. we're standing in front of the post here, ana darko halted for
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news pending. there could be a lot of reasons. they could have an announcement concerning some kind of internal development. there could potentially be an inquire rer of a small production company and could themselvesen acquiring, but it could be unlikely. if they have a market capitalization of roughly $20 billion. that's a lot for a company to chew off. if somebody was going to acquire them they would have to be a really big fish, for example like an exxon or somebody on that caliber. we don't have any indications that any of that is happening but certainly when you have these kind of prices, there have been people eyeing assets out there they might be able to potentially buy cheaper. so again, we don't know exactly what's going on. i suspect we'll probably find out. normally what we they try to do, they try to reopen the stock before the close, at least ten minutes before.
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if there's any news that's going to come out, hopefully it will be out within next 15 to 20 minutes. >> i'm looking over your head on the board. doesn't look any indications yet at this point. >> no. >> we're waiting to see. >> there wouldn't be any indications, bill because you don't put indications up until -- >> the until the company makes a statement then the nyse would call the company and said is all the news out then say go ahead, you can ask for indications. >> we just getting some word that the company is likely to be announcing a cut in its dividend, following a couple of other companies in the oil patch that had decided to do this. the company did report earnings on february 1st. they saw a loss widen over a year ago which is a familiar story. >> this is a company that's only yielding 2.82%. i say only because you've got plenty of companies in that area yielding much more than that, 4 and 5%. it's -- >> and remember -- >> be that as it may, that
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appears to be what they are doing. >> conoco was yielding more than 7%. that wasn't a surprise. we had a couple of these relatively small dividends in the 2% range. i think we're going to see more of these going forward. >> just a reminder to any investor we keep talking about with analysts and others who say that you've got to go with the dividend payers right there and you've got to be careful which one you're going to buy these days. >> when we just heard our pry erin investor panel talking about people are still going to buy diapers and staples. those staples and health care dividends viewed as being much safer than the dividends in the energy patch. i believe the conoco was the first time they cut it in 25 years. >> that was the first major to actually cut but you're right, there's not only trend tore dividends but safe dividends. utilities are seeing dramatic price moves up and dividend
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yields moving down because so many people are piling into utilities because they perceive them to be safe. they are safe -- >> they are not going to go under and very unlikely they'll cut the dividend. they generally have an increase in dividends and in the event there might be an interest rate hike in the next six to eight months, this could be vulnerable because there's been so much money piling in as rate plays here. here you see anadarko still waiting for it to open and other stocks that are around it. >> we're getting an indication that the magnitude of the cut, it's 81.5%, from 27 cents to 5 cents a share. a major haircut here. >> we don't see any indications -- we have any indications? nothing on this, right? no indications yet. the company has not notified the nyse that all of the news is out. they'll try to open this before the market closes at 4:00.
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so i would expect to see some indications very shortly on this. >> and i'm just watching overall market, no real movement or response to -- this news here, right. >> here's a greatest. whether or not we see notable move down, not just the anadarko but energy stocks in general, this will be an interesting test. we had a number of these already. so the market must be anticipating that some of these companies are going to be cutting dividends and the question is how far into -- how much is already priced into the market right now? this is going to be a nice test. >> we have the comment from the company now as they announce this dividend cut of 81.5%. we believe this adjustment to the dividend is the approach action to take in the current environment on an annualized basis, providing $450 million of additional cash available to enhance our operations and
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financial flexibility. our board will continue to evaluate the appropriate dividend on a quarterly basis. >> this is exactly what conoco said and marathon said, exactly what a number of other companies said earlier in the week about this. >> it shows you, bob, how desperate some of these companies are to shore up cash because the dividend is viewed as secret. the last thing a company would want to cut, they already cut expenditures mul time times. the guidance was they would cut the cap exto half the level from last year. the fact even that wasn't enough to shore up the cash shows you how they are viewing their outlook for the current environment. >> the capital expenditures have been cut as far as they can. they cannot cut capital expenditures to zero and still be an exploration and production company, it's not going to happen. >> we don't -- we're still getting indications -- we're
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getting some indications right now, looks -- 36 to 38, somewhere around there. close to 38 or so. give it another few minutes and we'll firm it and get a clear idea what's going on. >> all right, thanks, bob, keep us posted. >> obviously that's going to be a huge story this afternoon. we're also keeping our eye on a new hampshire, with just more than four hours to go until polls close in new hampshire, and polling seems to give donald trump an edge, the battle for second place appears to be very close. let's check in with larry kudlow who joins us now live from manchester. larry, your thoughts now? >> let's show a picture. a picture in his campaign bus he was very bullish about his numbers in today's primary. please, take a listen. >> i think giving people hope, saying that these problems are
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difficult, that they can be fixed with leadership and we can work together, that everybody can rise, that's what it is to be an american, to believe that. >> you need second? >> i need to be a big story and i think i will be. >> and what is your own expectations? >> i'm not mohammed ali, i don't count what round or whatever. i think we're going to do very well for these reasons. positive message, and i got to tell you the best ground game anybody has seen here in 40 years. >> as you're going to south carolina? >> this bus is heading down there and i'm going down there. >> you're going to the scc primary and florida. >> we'll go to florida but we'll be in michigan. >> do you have the resources? >> yeah, we'll have the resources. we'll have to raise more money. if i come out of here and larry kudlow is saying, watch that john kasich, we'll get the money we need. >> i for goat he said that.
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i will say, watch that john kasich. actually he has developed a very positive message, optimistic, we can solve problems and grow the economy, it's kind of like a reagan camp message which goes back to john's earlier years in congress. i've known him for a long time and i think his positive message is resonating. it's hard to predict these things but i think he is going to be in pretty good shape today. >> anybody does this make or break for anybody else? what's your handicapping on this? >> do you really want my forecast for this thing? remember my first choice. >> that's why god created larry kudlow. >> rick perry at the beginning of this process so take it for what it's worth. i think there's a very good
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chance john kasich could finish second. think jeb bush could finish third or maybe second. bush is on a roll. he also is developing an optimistic message. those are my top three. >> it's interesting larry, it's interesting to hear you talk about the optimism because new hampshire is a state with 3% unemployment and immigration is low on the priority list for those voters and we thought we were going to go into new hampshire and have the rhetoric become much more civilized and it hasn't. it has become much more vit tree olic and i'm wondering if you think that's working? >> i wouldn't say it's vitreolic in every case, there was one specific case with christie and rubio. we interviewed donald trul p yesterday and he's been fairly low key, been on message too. optimism and growth, tough on trade -- i think it's working
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for them and very well. just remember this, middle incomes are not doing great. unemployment rate may be low, middle incomes not great. that's why people want a sense of hope and optimism. you're seeing more of that. we'll see. >> very good. we always enjoy your analysis larry, thank you. see you later. >> tell us about it. >> anadarko was halted for news pending at $31.38 they cut their dividend rather notably, not completely an reopened at $37.37. look here, it's come back here. it's now -- just at 38 but it's $37.93. so the answer to the question which is how much of an impact will this dividend cut announcement have, we were trading down about 4%. ana darko trading 4% before the
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announcement and now trading down 5%. it is an impact but bill, i can assure you, if this announcement would have been made a month ago, this stock would have been down 10% or more immediately. my read on the markets is that they are starting to price in expected dividend cuts from all of the major players and anadarko is one of the big ones. it's a very interesting development. >> i went back to look at the earnings transcript from last week. they were asked whether the dividend was safe. they said it's yielding about 3%, which is maybe higher than we would like in this environment but we have a board meeting next week, which is this week and the company said obviously the decision around the dividend are solely there. clearly the board met and felt like this was the prudent thing to do and they have made a very quick decision on this. >> two things. this safe dividend comment everybody is making, nobody puts any stock in store in that much
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anymore. and number two, the market is starting -- we're right back to where it was prior to when the announcement was made. we went out at $38.31, just short of it. we're over $38 here. let's not quibble, it's almost unchanged. i think that's rather remarkable given that these companies were often held by investors for a while and tells me the people who were holding it have essentially already sold out or good portion of them have sold out already. >> thanks, bob. >> see you later. >> with just about a half hour before the closing bell, we have still seen that turnaround in the market with the dow in positive territory. by a fraction of 1%. that's pretty much the same story for the s&p and nasdaq at this hour. >> when we come back, we're vegas bound and jane wells have been working the strip it says here, to file a special report on whether chinese tourists will flock to sin city in record numbers like they did last chinese new year.
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>> and also, coming up, goldman sachs chief economist says the risks of recession both here and the u.s. around the world stay low. he'll state his case when we return. on tv working with canines. are you a dog lover, watson? i do not own a dog. but i work with veterinarians. how do you do that? i help them analyse over one hundred thousand pages of medical studies. that's great... 'cause they can't exactly tell us what's wrong with them. isn't that right, rusty? rusty. who is a good boy? who is a good boy? you are. yes, you are. watson, i think you need to work on your dog voice.
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yesterday rang in the year of the monkey. i was born the year of the monkey. >> china's new year could play a big role in that city's economy, jane wells is in sin city. she joins us now with that story. jane? >> reporter: hi, bill, happy new year. this week vegas is putting it all on red. last year chinese in vegas, the game of choice for high rollers fell 24%. this year they are hoping for flat. ♪ at least las vegas is expected to do better than the cow where the gaming business has dropped 35%. macau may be near ag bottom because visitation is up and the president said changing the way they are going after vip in
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macau, post government corruption crackdown. listen. >> we'll have to go to work for ourselves in macau and the vast majority in terms of top line not necessarily bottom line driven by junket operators, we're prepare to work for ourselves and we've begun to do that. >> in vegas, 42 million visitors and rising room rates. >> so we're really optimistic about vegas. we like the prospect of limited use supply but it's completely mismatched with the story they are telling. >> the concern though is that the u.s. economy falters, could it hit this town which is finally recovering from the great recession. so far so good guys. convention bookings which is really the long view here. very promising for 2016 so far. back to you. >> so far. >> thanks, jane. jane wells in las vegas.
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with a little bit less than a half hour before the closing bell, we have the dow up just 18 points, it would be one of only six days this year that the dow did not have a triple digit move in either direction. how's that for a fun fact? >> there's a fun fact. a leading trader will tell us what he's watching as we head into the close in 23 minutes left. >> and goldman sachs chief economist on how many rate hikes we could see from the fed this year. we live in a pick and choose world.
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20 minutes left in the trading session, here we go in the last hour. here's mark newton, you want to see the progress if there is any of the s&p and throw in this one indicator that a lot of traders watch. >> the one thing interesting about the strength index, higher levels than mid january despite prices having gone under january lows. if you look at just since where we are, here's the august lows and obviously, january here and
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we've actually gone a little bit lower, rsi at higher levels down here. that's one thing that's sbha encouraging. we haven't seen any real signs of capitulags, to think a true trading low is at hand when you look at the put to call and sign with the vix half of what it was as of yesterday the s&p closed at the lowest level since april of 2014. we have roughly 60 rs of all stocks down 20% or more. we're certainly in a bear trend. it's tough to get too optimistic until we get over 1865 at a minimum, my thinking is we could test 1780, getting closer to a low, i don't think we're quite will just yet. there are a couple of things encouraging, we need to see the washout before we see a more meaningful trading bounce given the financials and -- >> we're expecting flooding on the jersey coast because of this storm but we're not seeing a washout on wall street yet.
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>> not yet. >> thank you, mark. >> meanwhile, a news alert on the fed. jeff cox has the details on that. >> negative interest rates may seem far fetched for the u.s. but the federal reserve is telling banks to prepare for just such an event you'llty. the fed is telling institutions to prepare for the possibility of negatively yielding treasury rates. cnbc learned this is part of the severely adverse scenarios the fed wants the banks to prepare for. this comes as european bonds have seen negative yields for month and the japanese 10-year yield turn negative overnight. a fed official says this is not a forecast scenario but merely a hypothetical for banks to consider. however, given all of the speculation over the where the fed is going next with rates, the timing is certainly interesting. >> back to you. >> thanks, we'll get more on
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those in the coming months but would be an interesting development there. investors are gearing up to listen to fed chair janet yellen's first congressional testimony of 2016. it begins tomorrow. let's bring in goldman sachs' chief economist jan, welcome back. what are we expecting from janet yellen tomorrow? will dove fly once again? >> she needs to walk a fairly fine line between not appearing like she's completely ignoring the turmoil in the markets but at the same time, also to indicate that she expects expansion and that the scenario that the fed has laid out, the forecast the fed has laid out is still the basic view. i don't think the basic view has changed by all that much. at least not as much as sentiment in the financial markets.
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>> but your view has changed a little bit back couple months ago you were thinking we were going to get four rate increases this year. now you've cut that to three. >> we took out march because of the tightening and financial conditions, it seems unlikely that with all of that volatility they would want to go in march and i think they will want to take some time to assess whether this is really telling you something different about the real economy. so yes, it has changed. >> your firm touches so many parts of the economy. i know you don't sped for goldman sachs but we have lloyd blankfein not worried about the european banks and one of the chief equity strategists saying he seize the s&p 500 at 2500 by the end of the year and you saying risk of recession -- >> 2100 i believe. >> he made a forecast for 2500 for a later date. i'm wondering, what gives you so much confidence with so much weakness elsewhere in the world?
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>> well, to us it seems that the risk of recession is -- i do think it's higher than it was a year ago but it's still relatively low when i look at the factors that have historically predidded recessions. the two biggest ones, economic overheating, output and employment above potential and big increase in leverage in the economy, big increase in debt. i don't see either of those two things. from an economic perspective, that's still seems like a pretty good environment for avoiding recession. clearly some of the market indicators have deteriorated quite sharply in some cases and that has raised the risk somewhat, but overall, i would still say that the overwhelming probability is that we will avoitd a recession in 2016. >> i don't know if you heard jeff cox was reporting that fed officials are telling banks they should start preparing for a stress test that would anticipate zero rates in this
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country. how unlikely or likely is the possibility? >> i think it's pretty unlikely. >> negative rates? >> i think it's pretty unlikely although it's something that is pretty closely tied to the risk of recession. the risk of recession isn't zero, it's higher than it was a year ago. if you were to have a recession, i do think the fed would respond and in this case we would be thinking about negative rates. >> can the fed raise rates three times this year with the 10-year at 170 right now? >> i think the market is not pricing in rate hikes that year but that could change if the turns out the economy is in somewhat better shape than most people in the financial markets now believe. >> jan, good to see i. thank you for your patience here today. be sure to tune in to janet yellen's testimony live on cnbc
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tomorrow. it begins at 10:00 a.m. eastern time. i know you'll be getting ready for that. >> oh, yes, always a very interesting testimony. and with just about 15 minutes before the bell right now, we have seen all major averages dip slightly back into negative territory. they are very close to the flatline, the nasdaq faring the worse, down a quarter of 1%. >> will cord cutting overshadow the block buster from the latest quarter. we have disney earnings when we come back. need to hire fast? go to ziprecruiter.com and post your job to over one hundred of the web's leading job boards with a single click. then simply select the best candidates from one easy to review list. and now you can use zip recruiter for free. go to ziprecruiter.com.
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welcome back, as we await disney's earnings after the bell, all eyes are on a different media giant that reported this morning, viacom, its shares plummeting down 20% today on the heels of revenue that declined as well as comments from newly appointed chairman and ceo saying that the facts have been distorted and obscured by the ney sayers fueling concerns and other media stocks moving down, fox shares down 1.5% after the company lowered its earnings guidance on currency movement in concerns about the film business. ahead of time warner's earnings
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tomorrow, its shares off about 5%. cbs reports thursday afternoon, shares are off 3.5%. next up is disney and reports fiscal earnings after the bell, expected to grow 14% and revenue expected to grow 10%. i'll be back with those numbers and an exclusive interview with disney ceo bob iger. back to you. >> thank you very much. and art cashin just stopped by. no sell or buy bias, they paired off. is that an indication what the market is thinking about? >> that's an indication -- >> sit on are their hands right now. strategic research partners says there are clear signs the economy has slowed down ahead. he'll be explain next.
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up next, we'll be right back with the closing countdown. after the bell, we'll have disney earnings and disney ceo and chairman bob iger will join us to break down the numbers exclusively on "closing bell." in new york state, we believe tomorrow starts today. all across the state the economy is growing, with creative new business incentives,
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evening, film noir, smoke, atmosphere... bob... you're a young farmhand and e*trade is your cow. milk it. e*trade is all about seizing opportunity. inside three minutes to the close, the dow is down 8. you have missed a lot again today. another one of those volatile days. the dow was down 145 at the lows of the session and late day comebang on a day when oil hit $27 was one of the prices and the yield on the 10-year overnight hit 1.68%.
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crazy market right now. >> crazy market. >> where are we going? >> moi even view, i think people are worried about a fed policy error and we have 24 hours to go before we hear from the fed and -- >> what do you think she's going to say? >> i think she's going to undershoot the mark. i think the fed should be more respectful of tightening financial conditions and deteriorate gs inflationary expectations, they'll be more focus odd the labor markets. >> you don't think she'll back from the notion that they are raising rates down the road in. >> i hope so but i don't think it will be enough to satisfy the market. >> i think everybody is expecting they want a clear, nothing in march. >> i'm not sure you're going to get that. i have a feeling that you're going to get -- i hope i'm wrong. i have a feeling they are going to tell you every meeting is still live, monitoring the
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situation closely. >> and stick to the script. >> i think so and it's difficult because they just eased in december. >> what do you think they think of a 10-year at 1.7%? >> i think that's got to scare the day lights of out of them. that's something that's telling them -- very difficult when rates are so low at this point, but all of the financial markets are basically telling you the same thing. and i think the economic news is good but it seems like a strange time to start tightening when the unemployment is down 5%. maekz you wonder whether the fed missed the business cycle completely. >> the metrics she looks at, the job situation, the key metrics on the u.s. economy, she has to be mostly glass half full. there are some metrics, gave me a little pause, but overall, i thenk she's going to stick to that script. >> we will see. >> always good to see you. bob, stick around, we have at lot more to come with the dow
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down 22 but more like a coiled spring ready to go. stay tuned. much more to come with earnings from disney and other companies in our exclusive interview with ceo bob iger on the second hour of "the closing bell." [ bell ringing ] [ applause ] >> welcome to "closing bell." bill griffith is getting hooked back up and will rejoin us in just a moment. dow ending down 8 points of being down as much as 145 points in the morning session. that was the low of of the day for the dow. but it quickly reversed and followed much of the volatility in the oil market. crude settling down nearly 6% today but some late afternoon news, potential speculation on whether deutsch bank could buy back some of its bonds, we lost
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some of that but we have created a little bit more value this afternoon with the dow just down 11 points. the s&p and the nasdaq ending just slightly lower as well. it's going to be a busy hour. julia will bring us disney results and morgan brennan is covering panera and seema will be all over solar city. a busy hour coming up and we'll get to all of it this afternoon. we have senior markets commentator mike santoli and o'leary and steve grasso will join us shortly when he finishes up his day job. mike, we did see the bid from the deutsch bank. >> it allowed the bank stocks to finish about flat. i think it sort of pushed against this fear that these big banks are trapped, that they are
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in this kind of liquidity straight jacket. they can't get out of it. who knows if it will come to pass but the idea that they feel they have the flexibility and it's not a one-way, they have '08 echoing in their head. i don't know if we're patting ourselves on the back for finishing flat in the stock market when oil is down that much but if seems the other storyline was the industrials and transports managing to gain some ground. >> kevin, there's fear in this market. i don't know what they are afraid of. are you afraid right now? >> no, i'm actually -- i'm going to develop a new idea here today and that's what i'm going to be investing on for rest of this year. we're going to decouple from oil at some point. if we could have an economy with energy prices at zero, that would be an interesting place to invest. with all of the input costs at zero, we're on our way, $28, finally broken through the 30
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with good i am pack, i don't think it's going back there any time soon. i think at some point investors will wake up. i'm waking up to this now. x energy service and x energy transportation, they are dead, gone. so i don't care about them anymore. i'm going to look at earnings from guys who will benefit from a zero energy cost base and want to invest and at some point i'll be rewarded when you tell me we've decoupled. we'll decouple and i'll make a fine return on my real companies, that's what's going to happen. >> you'll be the first phone call i make. >> thank you very much. >> snuck up on you. i was about to go to the satellite picture there but steve grasso snuck in on us at the post nine. so here we go again, we had a late day rally and fed meeting tomorrow. what's going on here? >> i always think that people get ahead and investors get ahead of the fed meeting, they
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are nervous there's going to be a shock. i still don't understand how they think there would be a shock out of yellen. there's no transparency. we know exactly what she's going to stay but we don't know how to play it. i think that people have to realize she's probably never going to raise rates again. i think that's the takeaway that i take from there. and to kevin's point, what does energy -- what does that mean to the overall economy? i happen to agree with him. what does it mean to the overall economy and psyche? >> if you lose the darwinism of corporate america, what i should say, a lot of these companies can't survive, forget about oil going back to 60 or 70, it doesn't matter if it stays right here, they can't survive. forget about going to 20 or 15. >> anadarko cutting the dividend and is that why the market didn't seem surprised by it this
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afternoon? >> i think the market is hunting for energy cuts, doesn't want these companies to go to every length and last minute before such coming to the idea they have to cut dividends rngts not every one will have to do that. when you see these -- where was conoco phillips before cutting its dividend, 7 or 8%. >> that's the market telling you it had to happen. i don't think at this point it has much shock value. >> even 3% is rich -- >> you're not going to get that much credit, might as well preserve the cash. saving $450 million -- i'm sure they can use that. on shark tank you're mr. wonderful but here you're mr. dividend. you're seeing companies that a 2.8% yield had to cut by 81% today. >> doesn't that put fear in snu. >> you don't have to invest in
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those, invest in those turning it over and being productive. as a result of testing balance sheets you'll have good dividend years over 3 or 4%. had you invested only in the s&p, you would be 9% ahead of the market now. finally, things are coming back to my view of the world. if it doesn't pay a dividend, you could get linked in and completely wiped out because it's speculation, you can be an investor, not a speculator. it's coming back to quality, low volume dividend years, i'm so happy. >> i wonder what happens when you start to look at linkedin and mike you and i discussed this, multiples coming in. it's a game -- relevant game the market. relative pricing mechanism. when you start to look at the high flyers, not only do you have to pull in the or contract the pe, but it contracts pe on
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everything. they come in, maybe kevin's stock lbz sort of bullet proof and still lose capital if the market falls off but all come? >> what about a company like ibm, the stock is down 20% in the last year. do you care if you get a 3% yield when the stock is down 20%? >> i don't own ibm because the balance sheet is deteriorating and so are the margins, i don't get emotionally involved. if i see margin compression or slow or returns of unproductive assets, if i see overleverage, i don't own it. i don't care what the story s we'll have to get back to that kind of investing where in cash we trust. and the ability to generate on the consistent basis why you are rewarded by owning stock as they used to invest in the 50s, you couldn't even get people to buy companies that didn't produce huge dividend yields of 5 to 7%. >> i must have had three cups of
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coffee. i apologize. how many screen for that criteria you just stated and what was it like six months ago versus now? >> six months ago 156, today 138. i happen to own the companies in usa, outperforming by 9%, it's a whole new generation of saying i'm going to be disciplined and put rules on my investing and not going to move. no style drift. i don't own apple although i use the products because in september its balance sheet began to deteriorate and got kicked out. >> you got a column on cnbc pro where you can find yield in the market. >> if it is not something you want to take right now, there are parts of the market that are starting to give you a little bit more income for taking somewhat -- a good deal less risk. if you look at the broad universe of investment grade corporates back up to a 3.5%
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yield, obviously you have a little more premium in yield than this entire run of the bull market. that stands for quality long term bond is a corporate bond basket that looks at the lowest tier of investment. it's pointing out that you finally had the markets soften up enough to where you're getting paid a little bit for taking slightly more risk than treasuries. if we remember, there was the whole idea there was no alternative to stocks during the whole run-up. there are now alternatives that give you a little bit of an income. >> also i will say, you have to be willing to forgive the possibility that this market snaps back. these aren't going to anticipate if stocks bottom sometime soon. >> you go for that heavy bet at a play and guys have been brought out in a body bag. you look at names in the industrial complex and energy complex. and the names to mike's point that have outperformed and have been utilities and everyone is saying the same thing, you might as well lock in those profits
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that you've gained in the utilities space because you don't want to ride this horse too far. you're not in any danger of riding too far right now. i just don't feel it. >> what are these companies that are going to be immune to oil and the decline there that you're talking about? >> it's not just immune, they are going to benefit. any company that uses energy as an input, let's talk airlines and chemical manufacturing and any using transportation to move products to markets, they all benefit, even before we talk about the $2,000 plus each consumers get as a free credit as paying so much less for energy. we have not given credit to any of that yet. >> it hasn't happened yet. >> why don't we say it's going to happen and that is the investment thesis. >> not as easy as you make it sounds. >> you strand an enormous amount of capital already put in place and losses are there to be
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taken. that's why the market wants a trade on that for now. >> i think you'll be rewarded for focuses on companies that benefit from zero input cost on energy because it was less than it was last year. i'm willing to wait as long as i'm getting paid a big fat dividend while i'm waiting. >> always playing d, this guy. >> we have solar city that just hit, seema? >> we're looking at the cloud company, reporting a strong beat on the bottom line, earnings of 72 cents adjusted versus 62 cents. revenues also topping expectations at $579 million and break out its revenue segments, clear standout, cloud security solutions in the fourth quarter, that revenue for that business up 46% year over year. the company also announcing a $1 billion buyback program. that's helping the stock move higher in afterhours by 12%. this is one of those tech stocks
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that has been caught up in the recent carnage around the sector. back to you. >> all right, thanks so much. >> what do you think when we say akamai? >> it makes sense when you look at cloud and cyber and when it gets pulled into a sell-off why a company can pop 12%. it speaks to the point that they sell it and sell it indiscriminately and don't care. they take winners and losers alike. >> there was a $75 stock in october and now it's 40. >> that's indiscriminate selling? >> so, it's not in fact whether it deserves it or not. but when you start to see any hint of positive news in a stock that's moved that dramatically on a percentage basis, it's nothing. but if you're shorting it and late it the game, you can get your face ripped off. >> i was checking short interest, only 3%. >> they have covered all of it from that move that mike was talking about because you become a pig after a while if you're
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shorting a stock all the way down and don't lock in the profit. >> you've got to go i guess. >> i think so. i take the subway up, it's very efficient. >> see you later. the rest of the guys are going to stick around the whole hour. you can catch steve grasso on "fast money", he will be in times square. will disney impress the street? they will have all of the reaction to disney's earnings call kicking off at 5:00 p.m. eastern time. get going. >> earnings from disney, paner and solar city moments away. and then we'll hear exclusively from disney chairman and ceo bob iger how cord cutting and star wars are i am packing the bottom lines. violent protests erupting 234 hong kong. we have the latest details on what sparked the violence and whether it could continue. that's straight ahead. you're watching cnbc, first in business worldwide.
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kind of reminiscent of what happened in 2014 with the pro democracy protests shutting down the core of the city for many, many months. take a look at this. the pictures tell the story. early morning late night protests getting violent, taking place in a more local area with a lot of mainland tourism visitors. what were they protesting? they were protesting the shutting down of illegal street stalls usually set up during the lunar holiday. it was dramatic. there was blood scuffles and pepper spray and this time more concerning even live fire. that's right, police firing live rounds into the air, not into the crowds. this was an attempt to try to disburse the crowds and calm events. we saw nearly 90 police officers sustaining injuries in this and 54 protesters being arrested and this adds fuel to the fire of the anti-china sentiment in hong kong. anyone that has been to hong kong knows this. i majority of those in the city think there's been too much
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china intervention. you can say there's still kind of angry over the occupation 2014 movement with those protests which didn't really yield much in terms of concessions from beijing. for one they still can't vote for the leader ofthy city. with the slowing economy that is being felt in hong kong. anyone who has been to hong kong knows it's quiet these days, you might see more social unrest in the future which is something that beijing and authorities are most concerned with as a result of the slowing china economy. >> you were just in hong kong recently. where is this going? what's the sentiment say at this point? >> the sentiment is saying they want their own choice, they want authority over their own city. this is getting more and more violent, first with 2014 and pepper spray, baton charges. this time we're seeing crowds attacking police officers and people are really concerned about what this might turn into over the next say, 12 to 18 months, especially as the
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economy continues to slow down. real estate is coming down, real estate a heartline of hong kong. what do people do when they can't find jobs and not earning as much and can't still freely elect their own leadership? what happens going forward? that's a big question right now. >> susan, it does seem since 2014 the level of unrest has been elevated. do you think it will stay this way given the chief executive will still be elected by this electoral college? they will not have a say? >> these are prescreened candidates from beijing and then the people of hong kong get to vote amongst those individuals. i will would say over the next while there's going to be an anti-china sentiment and hong kong is something to watch out for. i argue that hong kong is probably the final capital of asia. a lot of fixed income trading goes through hong kong. it's the gateway to china. we know a lot of activity comes from hong kong these days and
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majority of banking heads usually put their asia offices ahead quarters in hong kong. this is something to watch out for. >> mike santoli another test for chinese leadership. >> just this week in particular, the fact these events are going on when the chinese and other asian markets are closed for the lunar new year. it brought up the issue that people try to quantify. if you want to layoff risk in this world, gleebal capital flows being what they are, you have to do it somewhere else. you can't act on it the way you might otherwise. >> did you say you want to go to that now? okay. >> kevin, we are coming up on the 20-year anniversary of the british handover of hong kong. it was not a secret that this was going to be a territory under chinese rule. why do you think there's so much unrest now? >> i feel sorry for the people that are injured in this protest but want to point something out from the other side of the equation. the amount of tolerance the
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government is providing is remarkable. it's a transition to a democracy and this is going to happen. i take this as a good thing. >> i've got to transition to disney. we got them out and want to make sure julia had what you needed. how do they look? >> it's a big beat on the top and bottom line. disney reported adjusted earnings per share of $1.63. that's compared to expectations of a $1.45 per share, up from 1.27 a year ago. revenue beating coming in $15.24 billion in its fiscal first quarter revenue kpued to expectations of $14.75 billion. the company saying that due to the success of "star wars," delivered the highest quart ily earnings in the history of the company. looking at what's driving the results, the studio coming in remarkably strong, studio revenue up 46%, $2.7 billion.
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studio operating income, a billion dollars topping a billion dollars for first time. now looking at other divisions here, media networks revenue increased 8%. but operating income declined 6%. that's the only segment that saw any decline in either revenue or operating income. the company explaining that was due to higher programming cost from the college football playoff bowl games that were in this quarter versus the fiscal second quarter last year. that's due to a shift in the quarters when those bowl games both the cost and revenue was realized. so looking through here, the different divisions, cable networks revenues increased 9%. that does look like revenue growth from affiliates was partially offset by decline in subscribers and unfavorable foreign currency impacts. parks and resorgts saying increase in guest spending due to a higher average ticket price
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and increased food and beverage spending. better than expected results, really across the board here. we'll be back with bob iger in a couple of minutes to break down these earnings. >> the good and bad for this company. >> based on what julia said, it looks like almost entirely a dwts star wars driven beat. the fact that it is a beat is not surprising. i do think the scrutiny is going to be on the cable networks and we knew when the timing of the college football bowl games were, championship games. i don't know they are going to be given a pass. it's all going to be based on bob iger's outlook for espn and other cable nets. >> it will be hard to handicap, the decision to put the bowl games on new year's eve was panned for viewer issues and now you have to think that's the last time -- >> the costs are recognized and revenues fell short.
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that's the reason it's a net negative impact. >> where do you stand on disney? >> this is going to be about what happens regarding the tonality of the decoupling. really -- >> meaning? >> espn is too much of a free cash for the economy, the whole star wars things. a very nasty way this week, if you look at the undertone regarding revaluing assets in old media, in other words subscription services, that's going to be challenging. but what you can't deny about disney, which is why the stock is holding water right now, there's no company on eartha can execute entertainment assets the way disney can. they hit it out of the park. can they somehow diversify their capital flow out of the subscription model? if they can, this is a screaming buy. >> there's been criticism on that front. when you think how strong "star
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wars" was, how hard does that make comps for next year? >> we were saying the same thing about "frozen." "frozen" kind of came out of nowhere. i do think they'll get a pass for lumpiness in studio revenues when they are this strong in a given quarter. >> bob iger will be along shortly but first solar city is back with its earnings. how do they look? >> elon musk owns solar city, narrower than expected loss on the bottom line of $2.37. revenue beating expectations, $150 million versus $106 million estimate. a bit disappointing on guidance, it will install 180 mega watts in first quarter, that is lower than what analysts were expecting of a roughly 200 mega watts. the company in the press release crying higher than usual slowdown. this is a stock under immense
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pressure over the past 12 months, lost nearly half of its value during that period. analysts have been saying not only slow installation growth as a big concern but higher operating expenses, but the downturn in commodities that resulted in many investors questioning pricing around renewable energy thaen that's one of the things to consider. you can see moving sharply lower after hours on guidance, stock down 23%. we'll continue to dig through the press release. >> was that a jaw drop i saw over there? >> tell me that stock is an investment. i don't believe it. that is a casino, 22% of your capital gone like that? why would you ever own that? >> that the company or industry? >> who cares. somebody just lost a quarter of their investment. who wants to own that? like that's crazy. >> do you want to own that business, that industry? >> apparently no and no one else
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does either at this moment. that's the kind of thing that is going to get squeezed out of this market before it turns around. all of this stuff is going to get wasted before this thing turns around. that's a joke. somebody lost 23.64% of their investment. >> they've already been cut in half beyond that, right? >> this company over time is dependent on the capital markets and burning cash and have to raise capital over time and i do think the market won't be toll rant of a slowdown in installations in the fundamental results of business. >> the incentive to move towards solar is that much lower. >> way, way down from where it was. >> we're going to take a break and come back. disney chairman and ceo bob iger will break down the earnings in just a moment. >> we'll tell you what you need to know about tesla's earnings, also elon musk owned which will be released after the bell tomorrow. you're watching cnbc, first in business worldwide. it's a fact.
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owned comparable sales those were up 3.6% for the quarter, that was better than 3.1% estimate. for the current quarter, panera saying company owned comp sales up 6.4%, also better than the street had been anticipating. now in terms of full year 2016 guidance, eps growth target of 2 to 5%. that's towards the lower end of street expectations but comps for company owned stores of 3.5 to 4.5 expected this year. they are up 4% in afterhours. >> thank you very much. we move on. walt disney chairman and ceo bob iger will be here exclusively to talk about his latest earnings and how he's adjusted to that cord cutting trend. stay tuned. 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...
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major averages closing lower for the third straight day. the dow sold off out of the gate falling 146 poibts at the lows. we did see a comeback late in the day again, rallying to 110-point gain in the last hour
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of trade rkts but then gave back those gains, traveled more than 1,000 points from top to bottom. >> that sounds exhausting. >> it was exhausted by the end of the day for sure. >> we've seen a choppy trade in disney shares, let's head out to california where julia has a cnbc exclusive with bob iger. >> thanks so much. bob, thanks for joining us today. big first fiscal first quarter, revenue up 14%, earnings per share up 28%. what drove these better than expected results? >> well, we had great performance across the board really. clearly dwts star wars drove the studio performance and the studio, as you mentioned earl yes, earned a billion dollars in a quarter and that's just tremendous. we also had over 20% growth from parksz and resorts and consumer products and media networks was down because of the timing of
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the college football playoffs. we had four businesses that had a good quarter or good quarters. these are historic numbers for the company. highest quarter in the history of the company. it was overall just a fantastic quarter for us. >> when we were off camera before you were reacting to some stuff being said on cnbc. what were your comments and thoughts about how people really need to understand disney differently? >> i think we were being judged as an old media company. when you look at disney, you have to consider a number of things, we've spent the better part of a decade constructing a company that was built to last and essentially bimt to be able to contend successfully with ups and downs in global marketplace and ups and downs in territories and ups and downs in individual businesses. we have an unbelievable collection of intellectual property. great brands, disney and marvel and pixar and dw"star wars" and
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abc for instance. we have a pipeline as robust as it's ever been. some cases like star war were just getting started. this is a company that is going to thrive in a new media world. technology is propelling a lot more consumption of media. but it's -- it's propelling consumption of media that people want and those big brands that i mentioned, those brands in storytelling and franchises in demand are really really setup well in this new environment. we can reach more people, more ways than ever before. and they are consuming media more often in more ways than ever before. we think that we've set ourselves apart from media in general and certainly we don't look like anything close to old media. >> i want to ask you specifically about espn and media networks. in august you raised a lot of concerns for all of the media companies when you talked about delivers in espn subscribership.
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give us the update now. where do things stand in terms of subscribers, tv bundle and espn in particular? >> we're going to stay on call for a few minutes, we've seen an uptick recently in espn subs, we did reference in the august call that we had seen some sub erosion and that was the case. but last few months in particular have been encouraging. >> an uptick in subscribers, what's that reflected in the fiscal first quarter? >> no when it ended. >> do you think the trend will continue or will we go back to the trend that wall street is expecting of decline subscribers? >> i think there were probably a few factors. you have to start with the fact that sports, interest in sports, passion for sports has never been greater. people love watching sports live and love accessing sports news and information. and espn certainly serves them well. if you look at in a given month
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about 200 million americans consume espn on one platform or another. americans watch about 95% of americans watch sports in a month and 80% watch espn. there's clearly an interest in espn. that propelled some growth and addition of some light packages that -- light cable packages that had espn in those packages also probably helped. what we're seeing with dish and the sling package that they launched is they are bringing some folks back who had cut the cord and also bringing young people in to the bundle. and espn is part of that. one of the reasons they are seeing success with the light bundle because espn is part of that. >> what do you envision a successful e sespn look like? >> i think the prediction there would be a rapid demise of the
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bundle is way too exaggerated. this is a more competitive marketplace, no question about it and new platforms have come in and have competed for people's time and money. we don't take that lightly but we do believe that there is room for espn to be on new platforms as well as our other brands. so i think, looking ahead three years, espn is still going to be an enormously successful and enormously popular brand and it is going to continue to deliver growth for the company. that growth may come in different places but or in different ways bought it's going to continue to be a growth business for us. in terms of espn direct to consumer, we though that with disney and espn and marvel and "star wars," we have brands that at some point we probably will have the ability to take to consumers directly as we're doing in the uk with disney. do we have any near term plans to do that? no. we're going to watch the situation very carefully, that
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multichannel bundle and you know, the mvpd business model is still very valuable to us and much healthier than people give us credit for. >> a lot of content, like say the marvel deal and owner of hulu, an ad free subscription option. how do you balance giving content to new streaming services that could threaten the bundle with the revenue you're getting in in terms of digital revenues? >> hulu and netflix are pretty attractive today, mostly to the young people in particular, i guess i should say. the reason for that, they have great ue user interface. hulu is a good long term strategy because the popularity of that platform is only going to grow. we've seen netflix grow significantly the last few years
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and they have been a real revenue driver for this country, both for movie, that's really more coming up because the movie deal is just kicking in. for tv shows both offnetwork and original programs, we're selling original marvel shows to them. programs we would not have made for ourselves. what we're trying to do, we want to be presents on the new platforms and want to be invested in these new platforms and want to balance the revenues that these new platforms are driving with the revenue we're getting from the more traditional forms of distribution. we're going to continue to take an approach that i think is smart in that we're not going to sit back and let the disrupters just disrupt. we're going to participate in some of that disruption. and we'll decide when the time is right to be more disruptive than we have been if we really think the business model is shifting rapidly. so far we do not see that. we see some shifts in the business model but we don't see it as dramatically as some
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people are suggesting that it is. >> shifting gears over to look at the global economy where you've just watched a video of violence in hong kong. our own markets have been incredibly volatile. how do you see that market uncertainty and volatility impacting your business and your parks in particular? you're about to open a park in shanghai, you have a park in hong kong. >> we've never looked at a given time in terms of the market, performance of the market to really dictate the nature of our investments or where we invest because we've always been in it for the long term. that's how this company was built by walt and how we built it over these decades. so when we look at hong kong or we look at china, we're certainly mindful what's going on in the marketplace but the investments we've made there, the park in hong kong the park in shanghai that opens in june, they are not made for 2016, they are made for decades to come.
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we actually are very, very bullish about china. we're extremely excited about the opportunity we've been given to bring disneyland to shanghai. biggest city in the biggest market in the world. we think the product we're building is great for that market. it's big and bold. it's exciting. it's locally relevant. we feel great about that and seen no shorlt-term effect on the chinese consumer in terms of their spending. there's nothing that's occurred really in china that would cause us to be concerned. >> we're almost out of time. just a quick final note on state of the consumer. do you have any insight in terms of bookings for spring break or summer at your theme parks to give you insight into the health of the consumer? >> generally speaking what we're seeing with our domestic parks is a pretty good marketplace. we've managed to increase pricing and increased spending and increased attendance. we expect that to continue. we've had issues in europe with paris, that's largely due to the european economy. we've had some issues in hong kong, because of what's been
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going on there. japan has been generally healthy. in terms of the consumer, i guess we focus on the domestic consumer. we feel great about that business and great about the environment. >> unfortunately we're out of time and you have to go off to do your earnings call which starts at 5:00 p.m. eastern. back over to you. >> thank you very much. nobody was taking more notes on the old media comments from bob iger than kevin o'leary a moment ago. know that "shark tank" is always welcome on cnbc. >> i think i got from that conversation that probably going forward, we're going to see espn be less and less of the total cash flows of that company if all of the other initiatives take off, that will solve a lot of problems. >> he did say the revenue they are going to try to balance the old with the new, i imagine that's a question analysts will have. >> yes, it will. >> meantime we have a news alert on a big ipo filing. seema has the details on that. >> us foods holding filed for
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initial public offering under the ticker symbol usfd, owned by two private equity firms. the two private equity firms bought the u.s. food distributor in 2007 for $7.2 billion. last year sysco was looking to buy it but terminated the acquisition last year due to antitrust concerns. the merger would have been -- would have combined the two larger foods distributors in the united states but now the plan is for the two private equity firms to take u.s. foods public and kayla, an interesting time to file for ipo given the offerings we've seen this year. >> especially any sizable offerings, we've only seen small biotech companies fare the waters. >> they were trading at all time high it's a very defensive business.
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maybe they feel the time is right. >> maybe turning down the merger was a good idea after all? >> not a bad idea. >> we're a few hours from the polls closing in new hampshire. when we come back, we'll hear from both sides of the aisle who they expect to be winners tonight and what that will mean in the race for the white house when we come back.
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to advance the future of medicine with digital, and improve the quality of lives. ♪ advisor and team who understand where you come from. we didn't really have anything, you know. but, we made do. vo: know you can craft an investment plan as strong as your values. al, how you doing. hey, mr. hamilton. vo: know that together you can establish a meaningful legacy. with the guidance and support of your dedicated pnc wealth management team. the voting is under way in new hampshire, first primary of the presidential election year. >> joining us now to help sort it out, ceo of sproglet and
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matthew hail politics professor and former aide to bill bradley and kerry. thanks for joining us. >> good to be i don't you. >> thanks for having us. >> we have heard so much about the storm hitting the northeast. how much does weather affect primary turnout versus caucus turnout? >> these are people from new hampshire. come on. instead of a baby rattle they get a snow shovel in the crib. i'm not worried about turn out. they know they are important to the country. they will show. >> the polls said trump wins but they said it in iowa, too, for a time. >> do you think that's what happened? >> yes. trump will win. he'll get the most votes. >> it's who gets second . >> who comes in next. >> it's important to find out who comes after trump it's clear trump will win and it's important who comes after.
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it looked like marco rubio but in the debate chris christie gutted him like a new hampshire moose. it will be interesting to see if he can come back from it. >> he doesn't care who wins iowa, new hampshire. it's a fight over delegates, not taking the top spot. >> it's a question about momentum going forward from new hampshire. so if for instance john kasich or chris christie does better than expected then the lights will be on them. if they look good under the lights then they are going to get the momentum in south carolina. it become as different story as to who will challenge donald trump. >> bernie sanders will win on the democratic side. does hillary clinton need to recalibrate? >> nate silver has the odds of hillary clinton winning her primary are the same as chris christie winning his. they are both at 1%.
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it's clear bernie sander wills take it today. the question is how close can she come? closer than expected you will hear voices about time to get out. i think it is a lot tougher for sanders down the road. he's in his backyard. down south out of his neighborhood he could be in trouble. >> we saw candidates throw in the towel after iowa. we'll see. we'll now in a few hours' time. we have to go. we've out of time. thanks to you both. >> thanks for having us. >> the shares down 26% after reporting earnings. e lan musk's company tesla reports tomorrow. we have a preview coming up in a moment. your path to retirement... may not always be clear. but at t. rowe price, we can help guide your retirement savings. for over 75 years, investors have relied on our disciplined approach to find long term value. so wherever your retirement journey takes you, we can help you reach your goals.
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call a t. rowe price retirement specialist or your advisor ...to see how we can help make the most of your retirement savings. t. rowe price. invest with confidence. weyoung company around but if we want to keep the soda pop flowing we need fresh ideas! >>got it. we slow, we die. >>what about cashing out? no! i'm trying to build something here. >>how about using fedex ground for shipping? >>i don't need some kid telling me how to run a business! i've been doing this for 4 long months. >>fedex ground can help us save money and deliver fast to our customers.
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shares of tesla down nearly 38% this year. the company reports quarterly earn ings tomorrow after the bell. phil lebeau has a preview. what should we watch for? >> a slight profit. that's the expectation for tesla in the fourth quarter. ten cents a share is the estimate we see from analysts now on revenue of just under 1.8 billion. again, that's the expectation as of now. there are really three things to
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look for. numbers within the numbers and the guidance, if you will. first of all, what's the cash burn as well as how quickly is tesla going to keep those gross margins over 25%. model x production, we'll talk about that. 2016 delivery guidance. tesla delivered just over 50,000 vehicles. this 70,000 number on the far right isn't guidance. that's generally speaking what analysts expect. though some have said they could get as high as 80,000. the key to the delivery, however, is the model x. there have been a lot of comments from analysts about problems and challenges regarding those falcon wing doors. let's see what elan musk says tomorrow one way or the other. moving heavily after hours. >> you'll be all over it. thanks for the preview. phil lebeau. >> phil mentioned the cash burn will be closely watched. maybe the smartest thing the company has done in the last
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year is raised more than $700 millionle in a stock sale with the stock $240 a share last summer. that's going to keep it going for a while longer. the stock now down to about $140 and change is where it was two and a half years ago. ultimately it needs to raise more capital. >> musk bought some of the shares. kevin, do you like tesla? >> why isn't it like another car company but it's at a ridiculous multiple. g gravity is working now. >> kelly is back tomorrow. >> "fast money" is up now. they . 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.
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"fast money" starts now. live from times square i'm melissa lee. tim seymour, brian kelly and guy adami. if you are a value investor would you pick google over procter & gamble? the answer may surprise you and could explain what's going on in the market. plus, disney now lower after hours to the tune of 4% now. the moment the street has been waiting for, the conference call just getting under way now. whether the dreaded two words -- cord cutting -- over shadow the success of "star wars" and

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