tv Closing Bell CNBC February 10, 2016 3:00pm-5:01pm EST
big investor in puerto rico, but also in shale. bring back rum and bonds, in that order. thanks, everybody, for watching "power lunch." "closing bell" starts right now. \s hi, everybody. welcome to "closing bell." i'm kelly evans. >> my turn to welcome you back. >> good to be together. >> it says another volatile day on wall street, but the dow is down just eight points right now. we've been all over the map on the back of janet yellen's testimony of the house financial services committee. now investors are looking to a slew of earnings coming out after the bell tonight. we'll have reports from twitter, cisco, tells la, whole foods, expedia, all of them compelling stories by themselves. >> what have we seen after hours, disney, viacom, linkedin
last week, some of the companies on tap today. speak of volatility. european bank getting a bounce back. robert diamond joins us. he'll explain why. >> we're looking forward to talking to bob about that very important story. donald trump and bernie sanders, as you know are the big winners. we will tell you what the financial markets are focusing on politically, as we look ahead now to south carolina and even down the road to super tuesday, which is soon to be upon us. >> i heard art cashin earlier saying the market will start focusing on who is leading, more and more focus on what's happening on the campaign trail. jim grant sis the fed is apparently unshamable, quote, and we'll discuss that. >> love jim grant. let's start with janet
yellen's comments on capitol hill this morning. you saw it live here on cnbc. steve liesman was monitoring it word by word. what were the key takeaways for you? >> from the apparently unshamable fed chair to threaded the needle, i would say, between the hawks and the dove who wanted never to hike again. that's pretty much ever. so yellen maintained a positive view of the labor market. inflation would reference ilmove toward the goal. most important she stuff to current policy that the next likely move is a hike, not a cut. the -- will inflation will take long other. the outlooked. hawks have to think that after this testimony that march is unlikely at this point threaded the needle there, too.
i am not aware of any -- anything that would prevent us from doing it, but i'm saying that we have not fully investigated the league issues. that still needs to be done. >> many economists see june as a possibility for a rate high, but that is so far off that it's almost not making a forecast at all. is the difference in yield between the two-year treasury note, the shorter-term view of where everybody think it would be, and ten-year less than a percentage point spread, and we know other stuff has been happening, collapsing, you know, different kinds of gyrations in terms of money markets, yet that
financial stability piece got almost no mention. she did point out that market volatility is something that the fed is taking note of. but it's interesting, kelly, when i look at 173, and i know you have jim grant coming up, i wish you would ask him what is the signal of the market here? it seems the market is screaming rates ought to be lower, i know jim has offered vociferously for higher rates. is the market seems tore saying the fed is too tight tight in here. >> let's face is what he's arguing for is a market rate. >> but the market is setting a rate, you know, it's always been interesting -- >> within the context of the monetary policy. >> i don't want to debate jim grant through you, but it's always been interesting houses it is jim would have the market set its own rate, given you have
to decide how much money to put out in the economy, either that or it's a gold constituent, but that's an argument for jim. my point is left to its own devices, the market seems to be saying, you know what? we think rates ought to be lower. >> and i think this was milton friedman who said never confuse lower gnome mall rates with tight monetary policy, if anything it's the other way around. steve, thank you very much. >> fair enough. >> jim is probably yelling at the monitor. >> is he pelting us with something? >> probably. we'll get to him in a few minutes. keith fitzgerald from monday morning.com, and -- and don't adjust your set, that is ashes on his forehead and rick santelli checks in from chicago as well. sarge, you and i were chatting
earlier, janet yellen was -- >> i think you it's mon tier policy if she would have put down the microphone and said questions, i think that would have summed up the entire half daye. where does that leave you? >> very, very cautious, because i didn't see anything in her -- that indicates she's in control. it's a totally reactionary policy. i was flabbergasted. she said recent market turmoil. we've been talking about how volatile things are getting. or -- is absolutely flabbergasting to me. >> in fairness it's got precipitously worse than
anything we saw at the end of last years. that's a very, very fair point, but the market is trying to tell you -- to steve's point, it's trying to tell you. they're trying to take merits into its own hands. rick, what did you hear janet yellen say today? >> we didn't fully look at the legal issues around that. and the "that" she's referring to you are negative rates. to me i was flabbergasted, floored. anybody read ben bernanke's blog? they started discussing negative rates in 2010. an institution controlling 4$4.
trillion of money without anybody sitting there elected by the public is telling us that not only don't they have a plan b, but the plan b they're discussing, they're not sure if it's legal. i was just floored by that, almost as much as steve liesman saying the market is screaming for lower rates. a, if it wasn't so crazy and true, why did the fed brings us to the martial orbit in the first place, a. b. we know the answer, if they let go of the balance sheets, which makes hindsight a little clear, but maybe the biggest answer of all is, low growth, less filling. that's what they've been paying attention to the last five years. >> i want to be back to sarge in a second, but keith, i was struck. you're one of our more level-headed analysts we bring you on the exchange here. >> thank you. >> i was struck by your market
comments. you really are feeling very exasperated about the impact that monetary policy has had on your ability to put client money to work right now, isn't it? >> well, here's the thing. if you look at a financial crisis, everyone wants to run for the exits. the problem is nobody actually gets through. so when you start meddling, we know from history that societies fail when public treasury becomes a public proxy for the handout. i submit that the fed is acting like a pendulum, which means as a client, as an investor, you need to look very logically and very -- and look for opportunity. you need to pay up for risk protection, but keep your eye focused on the up side. what levels are you keying an eye on here? >> right between -- every time
we get to one of those -- we just had -- if we could hold that level, i think i'm feeling all right. and how about 27 on crude, too? we've been watching it as well. guys, thank you. >> thanks, guys. now to the downturn in media stocks. we mentioned a bit off the top. julia boorstin joins us with more. what's happening, julia? >> that's right. netflix was a bright spot. and not impressed by time warner raising its guidance thorn, disney shares down 3% despite the company reporting the best quarter ever. on ongoing concerns about the health of the capable tv bundle. time warner shares are down over 3% on concerns about its tv business as the revenue missed expectations when the company's
earnings call, the announcement that hbo notice, failing to inspire investors. after viacom shares plummeted 21% yet, as felipe demonday failed to reassure investors other than concern about him taking overt chairman role. that stock is off another 2%. there are two media winners. fox shares rebounding, the shares are up about 3% today. cbs shares are also up 1.5%, but a new media names, netflix, helping report some of is losses from earlier in the year. bill? >> thank you, julia. we have breaking news regarding cal karli fiorina. you know it's probably a suspension. in this case karli fiorina, we have confirmed by a statement
from her campaign that she is suspending her run for the white house. again, karli forneya suspending her presidential campaign. in her statement, she talks about this idea she wants to continue to travel the country, to fight for americans who refuse to settle for the way things are. she goes on to say to young girls and women in the country, i say do not let others define you. and concludes really by saying she's going to continue to serve in order to restory set zen government to this great nation. in a statement she's now officially has suspended her presidential campaign. so this thins out the herd a bit, brings more clarity, both in south carolina and nevada coming up, all ahead of that big super tuesday. back over to you. >> thanks very much. hillary clinton was taking in women voters to task for not voting for her. karli fiorina could have had the same thing. they're finding that gender is not is a defining movement. >> not a pavlovian response.
in this case it does leave only hillary clinton as the woman in the field. that whittles the field down to make six? depending on how we read with what's happening with chris christie. after iowa, there was the first exit, now after new hampshire the second, and this field is star are starting to narrow pretty rapidly. with a republican debate, with only five people in it, so it is getting smaller and smaller, the field, that is clear. >> we have about 45 minute toss go in this market. a gain of about seven or eight points well off the triple-digit highs. by the way, the dow is actually underperforming a brought market by a stretch. the s&p is up 0.7, today up 12 points. nasdaq is up 1.2%. jim grand, the author of the newsletter that bear is his name. we'll have his take on the
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shares of solarcity getting hammered today. guidance, lower installations, a decline they're seeing. just not a good time for the solar industry, especially for solarcity, all of this leading roth capital to downgrade the stock to neutral from buy. they have lowered the price target on solarcity to $19 from $65. >> jim heart shorting it, wished he could borrow. european banks bouncing back today after reports that deutsche is considering a bond buyback program, this after the co-ceo released a memo say the firm is, quote, rock solid.
a gale who's been there, guy diamond, founding partner and kreismt off of atlad merchant capital, and of course the former ceo of barclays. are you among those thinking that we're -- at least one pundit said we could shake the feelings of what happened in 2008, there's a fear we could go back. what do you think is going on? >> i would say it's a bit of an overreaction, but i think the underlying fundamentals, in early january, i think it was we had weak earnings from three of the european banks that kind of kicked this off. it was a weak equity market in upin january regardless, i think a req any that relative to the u.s. bank, it is european banks were slow to raise capital.
while i think it's been somewhat indiscriminate, i think there's some underpinnings for it. >> what's going on? there are people across both they see continents and going, are you kidding me? did we mitt the crisis? you know, which is pretty extraordinary 13469 implications of the price action. >> if you look at the european banks, most of them are down between 20% and 35% just as el enter the first week in february. that's an incredible amount. that lead me to say possibly it's overdone. >> but is that the question a lot of people have, or you sump
that some of the market is already leaning towards, is deutsche bank the lehman brothers of 2008? >> i think the market is camping up to what i said earlier, that they were somewhat slow yet all of them have taken -- i haven't got the exam number here, but billions of write-downs and positions that were on the balance sheets. most of the u.s. banks did this six, seven years ago in a period where we've seen nothing but tightening and credit spreads, so there is somewhat of a loss of confidence when people look at that data piece. i think the second thing is are the banks meteorology quick enough to adjust the business model to an environment where the bigger banks have buffer upon buffer of capital. post importantly, as you think about the larger banks and their
global operations, for the last five, 10, 15, 20 years there's been a capital synergy, a client synergy to broadband large, global and interconnected. i know you praised john for his memo yesterday, that their balance sheet what, in his term, rock solid. but it was also -- there was a feeling that maybe he was like yelling fire in a theater. was it necessary to point that out? >> i think so. >> unless there were valid fears about what the balance sheet faced. >> i think he did absolutely the right thing. as he reference in his notes, i think as recently as last week, john is a very thoughtful guy.
i think it was bold to write that note internally. i think at the end of the day leadership matters. >> when people say are we -- in 2008, what would you tell them? can we at least acknowledge some similarities in terms of a global kind of credit event? for whatever reason? >> when you say 2008 to me, i think the bear stearns, lehman brothers, i think of insolvencies. three years ago he introduced the long-temperature repo operations. three years ago when i think that many of us were concerned about the potential insolvency of european banks because of lack the liquidity in the money markets, governor draghi was very, very clear he'll do what's necessary. in my mind that issue of 2008 is off the table.
i think this is much more about an adjustment of the business models to the environment we're in today. >> at the very least, is it possible we're headed toward a global recession, though? two consecutive -- it's not out of the quick that we could have two consecutive quarters of negative growth. >> what will the fed do with that? >> well, you know, i come back to what i said earlier with the ecb. i think the bigger issue right now for the global markets is confidence that governor draghi and the ecb are providing the liquidity that's necessary i think one of the things the fed has to thing about, the dollar today is a much more global
currency. so just a few week ago when theation infrastructure investment bank led by the chinese announced that their transactions are going to be done in dollars, the commodities markets, most of the transactions there happen in dollars. there's many -- >> 60% of global iffens. >> sure. so it's a much more global currency than 5, 10, 15 years ago. >> which unfortunately drags the fed into the equation even when it's not necessarily the u.s. itself. >> i think that's right. always good to see you, robert. >> good to see you bill. bob diamond, former kreismt or of barclays. heading to the close we've been hovering near the lows of the day, the dow down just 50 points, but we have the s&p and nasdaq higher. >> the nasdaq still up nearly 1%. a storm of afterle bell earnings is headed our way. we'll deliver the results the
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broke the news that karli fiorina tweeted this statement -- for more on this and what it means for business, john harwood and dan clifton. welcome to you both. john, first your reaction to this news? >> noestible. i think it will also be inevitable that chris christie will leave the race, though his senior aide texted me that they haven't made a final decision. they're convening to take a breath, that is advantageous to donald trump who heads with a steam into south carolina. you've got a fractured situation, where, yes, he has ted cruz taking some of the conservative populist vote from him, but you also have jeb bush, john kasich and marco rubio dividing the anti-trump vote.
that's a prescription for him to keep winning until the field consolidates. >> are the big stories starting to emerge, or could there be a primary -- >> well, there's always surprises. we've seen them two weeks in a row, but if you think about this, the republicans were in a good position to start coalescing around marco rubio, and him mussing up saturday has led to this increased fracture. i do believe wen we go to south carolina you'll see at least one more republican drop out, but as long as there's two or three establishment-style republicans in there, i think this is going to continue to benefit and particularly as you go into the march 1st super tuesday races, deep in the south and work to benefit both ted cruz and donald trump on the populist
side. >> dan, i'm sure you're getting calls from clients saying, just boil it down for me. what would you tell them? >> i still think it's early, but i think people are starting to say, okay, what do we do in this type of environment? you look at donald trump's proposals on prescription drugs, very similar to hillary clinton and impersonalie sanders, so there's some risk-building in there we're wit fog south carolina on the democratic side. if hillary can hold there you're sitting up a hillary race, but if she starts to fall it will start opening up a much more populist discussion, one that talks about much higher taxes, not just on the rich, but on the middle class to finance increased government spending. >> go ahead, john. bear in mind that bernie sanders is raising an awful lot of money as he goes into the south here. >> no question.
it's a more difficult demographic terrain for him given the importance of african-american voters, and then in nevada latino voters, but he's going to extend this i think on policy. it's important to remember the top four candidates, the four who have won in either way or new hampshire has come out against the transpacific partnership. that's a priority of president obama, a priority of speaker ryan's, but that diminishes the likelihood that will come many this year. if you're a business counting on tbb, you have to be a little anxious right now. >> dan, broadly the theme again seems to be one that's kind of frankly antifree trade. is there any way to get more specific in terms of the outcome? >> absolutely. you look at a company like nike. they were going to bring the production back tariff-free, so investors were anticipating
that, you saw big pops in etfs in the emerging countries, when it was announced, they are going to be larger beneficiaries of this field, so you could probably see more weakness there. >> all right. go the to go at this point point, guys. always good to see you. >> compelling is -- >> is vietnam the market's way of telling you what the odds are for donald trump or somebody becoming president? >> an awful lot of tea leaves out there. sue herera has our news update. puerto rico and other u.s. territories are likely to see significant number of the zika virus cases, that projection coming from the cdc director. he told a congressional subcommittee that additional resources will be needed to fight the coit-borne illness.
a budget surplus of 55.2 billion helped by a timing quirk that shifted benefit payments to december. both the white house and congressional budget office are still forecasting, though, a $439 billion shortfall for the year. 9 italian coast guard rescuing 91 migrants, including women and children in the ajean egean. and irs identified as automated attack. thieves tried to get information. it was not related to last week's outage of irs tax processing systems. that's the news update. back to you goo is. thank you so much. we have really seen this market turn to the bottom topple over if you want to put it that way. the dow is down about 70 points at the moment. holding on to a gain of four. the nasdaq up about 31. >> a leading trader will tell us what he's watching as we head
welcome back. these markets are continuing to move lower. the dow is down almost 100 points, which has happened in just the last couple minutes. it's been the underperformer of the three major indices. still about a 2 :1 decliners to advancers today. disney down, since its earnings release. ibm is down there about 3%. on the flip side nike still in the green, gaining 3%, bill. we'll continue to keep an eye on things. meanwhile, as we head towards the close. 1.70%, and the price of oil is threatening to go below $27 on wti. alan valdez joining mess right now. we weren't joking which i said how low can we go, and you said maybe a lot lower. >> the market is just following
oil all the way down. they're not even watching them. we're watching the price of oil. she was destined to raise rates every couple months here. now it looks like that's off. she may not raise for a long time. around the world, no one is raising. her big problem is can she go negative? >> any opportunities? anything you're looking at to buy? >> no, i'd stay on the sidelines. >> we'll put you back on the sidelines. see you later. kelly? >> thank you, guise. janet yellen telling contingencies she doubts the fed will need to cut rates. she also said the fed has not looked into whether implementing a negative interest rate would actually be legal. jim grant of grant's interest
rate observer is here. >> kelly? strikingly you said a interest rate would be a mistake and they might have to backtrack. how much worse do you think things could get. >> what jan ed yellen did not say today is say uncle. she was steadfast in the view that the fed is right and the markets are wrong, and i think that it's the other way around. >> why? everybody loves to say you've got to ignore markets. markets just want more cheap money. why do you say it's worst listening to the message here? >> i think that the fed was trying to do the right thing, but turned out to be the wrong time. let's not forget what low rates do is they pull the good things forward -- consumption, auto sales, and they push the bad things back, namely business failure, recognition, and the express of no -- you know,
interrupt sis. they push those back in time. so what the fed has done is to create a kind of a fantasyland of risk, that it's injected nerve blockers into the risk per sectors of the market. in 2014, june 2014, the subbasement of spec -- triple cs were quoted, with yields of 8%, now 21%. >> wow. >> so the fed doesn't actually control all rates, and it influenced all rates to the down side for many, many year. the consequence of that influence has been the mispricing of risk and misallocation of capital. >> now we have this grand experiment in japan of negative rates. >> notice how well it's worked, though. >> it's early. i'm not placing a value judgment, but to try to get banks to lend the money out. europe may face that.
>> yeah. >> janet yellen had to admit they looked into it in 2010, but they haven't looked into the legalities of it all. does it make sense? >> interest rates are meant to express the common human preference of having something now rather than later, so interest rates tend to be higher, the longer you have to wait for what you want. negative rates is an expression of human behavior to the upsidedown. you don't want this now, wait for it, it's better for you. it's a contradiction. it is a confection of the formerly tenured academics who run the central banks that they think they can impose this. they have idea imposed it in europe with consequences that i'm sure will be just as unhappy as the consequences of zero rates are now being shown. >> do we have to go into -- what would be more -- >> they're going to do something.
the tom-toms are beating in the journals of advanced thought. the op-ed page of the f.t. is a showcase of the thinking. and what they want to do is abolish occurrencery and impose negative interest rates and do direct monetary funding, which is have the central banks infusion of individual, and bypassing the financial system altogether. these are the radical ideas on the horizon. my observation is it begets more radical voluntary policy, and i think that's. do you think we're going to a recession? >> i think we're in one. the atlanta fed's instant analysis of 2.5 the first quarter. >> i know. i know. maris, for example, the danish shipping giant say the
conditions are worse than 2008, the yield curve is the flattest since 2008. i said yes rather glibly to your question, but i think there's a defensible case to be made that a recession began late last year. you don't know until the scorekeepers tally it 18 months later. >> but it would be unusual for jobs to keep growing. >> let's not forget that employment is a lagging indicator. >> nothing is the same now that donald trump is running. >> we're going to let you end on that note right there ex jim. always good to you you. james grant. heading to the close, 17 minutes left here, the dow down 106 points, the s&p has turned negative. jim alluded to what's happening in japan, the yen is so strong, i mean -- it's at 113 and change, and that could be some
of what's roiling the markets here. we'll get you ready for some of the big earnings reports she'll be covering. >> stay with us for earnings from twitter, the social media giant announcing new features for its product as well, perhaps. stay tuned. tomorrow starts today. state, we all across the state the economy is growing, with creative new business incentives, the lowest taxes in decades, and university partnerships, attracting the talent and companies of tomorrow. like in utica, where a new kind of workforce is being trained. and in albany, the nanotechnology capital of the world. let us help grow your company's tomorrow, today at business.ny.gov
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welcome back. we're starting in front of the twitter's trading post. it's one of the companies up on the session, though it's been a tough year, and it's only february for twitter. cisco, whole foods, tesla also some nasdaq-related companies releasing their results as well. let's goat a preview from susan lee. >> hey, guys, speaking of a tough year, tesla down 3.5%, today down more than 40% on the year, year to date. tesla is coming out with result. good news for the company, since they finally expect to report a profit, for the first time in five krars. a sequential decline when it comes to earns for tesla. i think cash burn will be a big concern for tesla. we're looking also at seven straight quarters of negative cash flow for the car company.
another name you mentioned, cisco, q2 numbers later on today. a stock is down in the session so far. when it comes to eps at 54 cents a piece, up from a questioner revenues are coming down 2% from a year, though, calling for maybe 11.85 billion during those three months. analysts have been ratcheting down their expectation, but they till remain mostly underwater. whole foods is another company with results, with very puts are gale. the year to date, the stock is down 15% or so. currently calling for 14 cents apiece. irthink same-store sales is a main concern for whole foods for three months looking for down of 2% or o that's the story from the nasdaq. now back to you guys. >> the world traveler susan lee. she's lived on three continents in the last six months, but we think she's going to stay here
for a while. >> oh, you think so? >> yeah, i know, anything is possible. anyway, art cashin stopped by, and said $600 million to buy going into the close here. right now the dow is down about 93 points. a little more than tend minutes to go. the s&p up less than one point. russell up about one point. janet yellen spent a couple hours on capitol hill, testifying about her thoughts on the economy, and the impacts it's having on the markets. we'll talk to corti rad live about that in just a moment, as we continue on "closing bell." student. stay tuned. ♪ rootmetrics, in the nation's largest independent study, tested wireless performance across the country. verizon, won big with one hundred fifty three state wins.
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joins us is courtney ratliff, from lurk capital. >> thanks for having me. >> i know you wanted more direction perhaps from janet yellen, but name any fed chair who wants to be that explicit about their intentions in this market? >> you know, it's interesting, none of them do, none of them will, and she maid that vole clear. i think she is, though, giving a little more i would say that
maybe some of her predecessors, and incredibly cognizant of the impact of what she says and what the market does. >> what's she saying? >> nothing, which is why the market should kind of do not. he aabsoluted to if in the event how that maybor may not slow the u.s. growth. how she is pays attention to that, but she's not concerned as much. >> we're also standing here where nike trades, it's leading the dow today, one of your picks. why? >> i think some of those names have been oversold. when you think about nike and last year, it was up close to around 30% a lot of our clients tended to start selling some of those big winners, whether it was the fangs, or -- to start to shift that portfolio in the event we start to see some slowing growth and things
happening in the economy. >> are you assuming no rate increases for the foreseeable future? >> i wouldn't take it off the table. i notice the market's futures have indicated that that's the case. i think it's very much a caseby-day basis, i think we might look at two, and in march we'll probably she some of those data points shifting and moves, but i think two potentially are still on the table, but you never know. >> and in the event we are, as we talked a bit about, if we are, we're already in and have been in it, but at the end of the day i think what ends up happening is we may come out of it. >> thank you very much, courtney. we'll head to the close and come back with a closing countdown in just a moment. >> and a bunch of earnings after the hours. you're watching cnbc, first in business worldwide.
and i'd like to... cut. so i'm gonna take this opportunity to direct. thank you, we'll call you. 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. two and a half minutes left in the trading session. the dow down 100 points, until like other days we're not seeing that today, in fact we're moving in a negative territory.
the yield on the ten-year now we're at 1.69%, so that continuing to move lower, as they head to the hills and wti and crude was at 27 and change, now 27.40 after that settlement. now a slew of earnings. >> tesla is falling apart here. you also have twitter coming out. all kinds of stories after the top of the hour. >> it's very tempting to bottom fish and you try. this sort of droops there at the end of the day, breaks your heart a bit. we 4e8d the january lows, we're above it, but no follow-through
at all. i think everyone agrees janet yellen did a competent job. so we're still in this situation where people are not being rewarded. >> sarge gill foil was with us, very much a chart watcher, and hess was saying 1860 is the new support, and we goth below that 1851 is the trap door and we're sitting at that number. moving until end seems to be -- down about 2%. thank, bob.
>> see you later. janel janellesh stay tuned for the earnings. we have ringing the bell at the big board, and it is nasdaq, it's zillow. all yours, kelly. thank you, bill. we're trying to figure out what's going on with the markets today roughly unchanged. and this was after a decent rally earlier today, the nasdaq up about a third of 1%, and a lot of different aspects to watch. from oil markets to the yield on the ten-year treasury note, which is like 1.7% yule yay
borisen is standing by, and jane wells all over whole foods for us. thank you so much. we also have carol roth. and guy adami, and lee drozier here. >> what happened today? >> the bounces in this period. i will say for most of the day, the s&p 500 was outperforming a lot of the other tells. like cried owl, like dollar/yen. for that matter, the credit markets and treasury markets did not really give the green light, either. so by the end of the day they
all came together and were no longer diverging, and that mend that stocks gave up their gains. if you're going to say that the pro-money is the smart money at the end of the day and the bond market knows what's going on, it seems those things came together, but it is staggering, kelly. >> is it that people have more time to digest, or are there other things going on? >> i think they came to the realization that our fed has painted themselves into a corner they could get out. they could control the rest of the can usual. 1.685%. >> pretty attractive, when you have a japanese ten-year either side of flat.
u.s. interest rates, despite raids are going higher, all that garbage that you've haeshd, rates are going down, and in my opinion they're going down for the wrong reasons. >> there's a difference though, guy, between what they should be doing and what they likely will be doing. i certainly believe that the fed's best interests, or at least the best interests of the general economy is to get out of the way. they have painted themselves into such a corner that it is very unlikely that is going to happen. >> lee, bringing you into the conversation. we've seen some huge swings as recently as disney's, but obviously larger in sides was linkedin's results last week.
one of the sectors of keeping the market afloat they just took this to the woodshed. i don't think enough is being talked about enough of these stocks are 30%, 35%, 40%. the last cup 8 weeks, it's pretty amazing, and we lost this entire sector. i think it's very interesting -- >> i would throw in another sector, which is media. look at a name like disney, which got absolutely crushed today. i still really like disney. i think the entire espn narrative is just way overblown. this is a company that has a deep content library, that even if you think about the transition, who's better position it is for that?
>> without really ignoring the message like trying and material stocks. we're toward the later phase. >> when a stock like viacom, this has been someplace where hedge funds have been hiding out for years, finally they start to say there's real description in the media space, and down 30%. pulling them out of their portfolios. >> shares of amazon for a moment, and there's the banner as well. the company announcing a $5 billion buyback. interesting for a number of reasons. shares look like they're up
about 2.5%. guy, what do you think about a move like this? >> think about what the stock has done over the last couple weeks, the knee-jerk reaction makes a bit of sense. what it says to me, though, and i don't want to get too wonky, but one of the unintended consequences is to create easy money that companies aren't putting to use, for all those good things. that hasn't necessarily helped anyone. >> wohl, guy, i'll grant you that on a broad level. can anyone accuse amazon of not investing enough -- >> no, no, no mike, you're right, and 100% i'm just using it to sort of fit the narrative that i'm trying to make.
no, i cannot accuse amazon of that, but in the aggregate when you look at companies like ibm, there's a laundry list of companies. to me the descript of doing things and maybe improving their businesses along the way. josh lipton gives us the results. >> kelly, cisco just reporting. cisco reporting 57 cents, kelly, on 11.8 billion. analysts were looking for 54 cents on 11.75 billion. looking through the product lines here, routing increased 5%. switching, though, down 4%. datacenter looks also down about 3%. q3 guidance, kelly, 54 to 56 cents, analysts had modeled about 5 cents.
in this conference call, a lot of attention on what does ceo chuck robbins have to say about the macro economic climate, and the bigger trends and themes he's seen playing out, all of that on a conference call which kicks off at 4:30 eastern, kelly. we'll be on it. >> thank you, josh. lee, any color you would add? as you said a lot of the technology sector has been in the crosshairs. so a bit below what the buy side may have priced in here. it will be interesting, the guidance actually was pretty decent. >> and by the way adopt my a first a cnbc interview with chuck robbins, so between the call and that interview we'll get more context. we have an earnings alert. jane wells has the numbers on
whole foods. >> a beat, kelley, on just about everything. revenues coming in for the first quarter 4.83 billion, a little better that the street expected comp store sales, everyone expected them to decline probably an 2.1%, instead only down 1.8%. gross margin, this is what people have been looking alternate, decline about a half point, and for the year it is reaffirming that it expect sales to grow 3% to 5% and raising the full-year eps to 1.53, three cents higher than last quarter. that is in line with what the street had been expecting. we'll have more for you in the next hour. jane, thank you. "squawk on the street" don't miss a first on cnbc interview with whole fools' walter robb. so set your dvrs if you won't be
in front of the television. so whole foods, guy, is a beat and frankly i think they've been missed for the last couple quarters. >> absolutely. the competition -- if there's one word to explain, what's been going on, it's kroger. if you overlay a chart, you'll see what i'm saying, but this to me can get the stock back into the low 30s. i don't think that's as eye greejous as it's been, plus about a 12% short interest. i think shorts covered into this. i think it trades up to 33 bucks on the back of this report. >> carol? >> this is a company that hasn't beaten earnings in a very, very long time. however, intoic to guy's point about kroger, you have to look at the overall narrative for whole foods, and the fact that so many of the other retailers are getting into the space, plus they're facing a lot of competition from the prepared
food sides. i think the overall value proposition that son of brand premium that you wanted to give to whole foods just isn't in that stories today. how much of this is reaction to a huge stock price swings. >> well, this stock was sitting right at its lows, and i do think that the bar was low. when you're affirming full-year top line guidance, that's the equivalent of a beet in this environment. by the way, some of your gas savings is going there. everyone keeps looking for it. whole foods is up in a environment where there isn't a lot of pricing power. >> by the extra-premium rice cakes, because i saved some money on gas? is that what you're saying? >> i think on some level, probably. >> they've been buying back a lot of stock. i'd like to look terr earnings quality here. stock popped, and people looked
at the report and then it collapsed again. so that gross margin compression is what i'm looking at. that really is, again, up against kroger they were doing better. >> so they're rolling out the new 365 stores, which tend to have lower margins. let's look back, as mentioned whole foods were doing quite filesly after hours, but josh lipton has a bit more detail. >> kelly, you can see cisco shares in the after-hours, enjoying a nice pop. news on capital returns, cisco saying the board of directors has approved a $15 billion increase to the authorization of the stock repurchase program. cisco's board had proefly thor iced up to $90 billion repurchases. you see the stock moving on that. kelly, back to you.
>> this is a company where i can get behind the buyback. >> i think this is a -- >> plus ten times earnings. >> this is a company where that makes sense, versus where -- where they're buying back at all-time highs. >> $15 billion buyback at this point -- >> you shouldn't be surprised by that at this point. >> not in this market, mike. >> absolutely. the stock is very cheap. this is one of the handful of companies where the dividend yield is high other than the company's own five-year debt yield. so basically nothing is giving it a lot of value. so you might as well -- this is the -- >> these shares are up about 9%. >> to the point about acquisitions, they just made an acquisition a couple weeks ago, and they're jamming themselves
into the cloud space like everybody else. the concern has been is it goods to cannibalize -- or take away from their existing businesses? this report says that it probably will not. i think the stock can trade higher, but you want to look at an interesting chart, go back to '99 and look as cisco. it's been disbetween $23 and $27 effectively for the last ten or so years. yes, it's cheap, but you have no revenue growth to give it a giddyap. it's palsry growth. there's going to come a point where you sell it again. >> it's interesting, it sort of remind -- will they have the bench culture change at cisco to be able to effect the change they're trying to make in their business model? microsoft has been able to navigate that, do that, and certainly far break out of the
range they were bound to. the question is, can cisco as a company do that? >> by the way, lee. before we leave it, for now we're still waiting for tess ra and twitter to come in. what's coming out -- as we get some of these early releases. >> i think it speaks to the market, that cisco is now up 10%. i mean, people are running for safety, and everything in technology that small cap has been absolutely demollitious. i think when the risk manager comes around to their desk. >> like you said, mike, a dividend yield, you know people -- >> if this was not $115 company, it would be an lbo candidate. we'll leave it there for the time being. we won't just yet. let's get back to josh. what else is happening? >> i hear you talking about cisco, you see the stock. it was down about 20% year to
date. clearly chuck robbins saw a buys opportunity. also we should know that cisco is declaring a quarterly dividend of 26 cents per common share. that is a 24% or five cent increase over the previous quarter's dividend. so more news here on capital return here, kelly, this call starting in about 15 minutes. we'll bring you headlines as they come. >> i don't know if we can have a look at pioneer natural shares, but obviously people are very headline-driven here as well, apparently cutting that are forward shale count to zero. we'll see if that supports of oil price today, which traded near $27 a bare, carol? >> yes, as i said, one of these days we'll wake up and oil will be free. >> like you come in buy a couple
burritos, it helps the price, you get some oil with it. >> i think you're on to something, but the old joke is oil could go to zero, but gas could cost $2 a gallon. >> you're either going to paid it because that's the crude price or the tax built into it. >> exactly. no break for the man on main street. that's the problem here. at some point you're injure forcing it on people. it's a sapped think, one of the what happen on wall street or may street. >> a what does it hurt? it hurts the average citizen, and if we want the economy to
grow, it needs -- tesla is out. phil lebeau has the earnings. >> this is a big miss nongaap basis, they lost 88 cents per share. 1.75 billion was the revenue in the fourth quarter. the street was expecting 1.792. the company delivers 11,603 vehicles in the fourth quarter. the factory, to tesla, is on schedule. we're going to see if we have any guidance for deliveries. that's one of the key metrics that people -- say that again -- 50,000 and 52 though are,000 was the number of vehicles delivered, now the question is what do we expect in 2016? as we go through 9 letter, we'll see if we have an estimate on that. some people had been expecting
anywhere from 65,000 up to 82,000. once we have that metric, we'll let you know. phil, thank you so much. interesting to see tesla shares now in the green, up 2%. again, the revenue number a slight miss. >> i don't necessarily thing that anybody really cares about the number. they did miss big. it was 1.78, which was below the 1.79, but they missed that as well. i think the reason it's probably up is this is all about expectations of how many cars they can get out of the plant. and it looks like they're saying they can, but they didn't deliver this quarter. >> mike? >> and the stock was at 240 when they raised capital, and it's down to 145, so clearly the market was braced for this delivery number to maybe be a disaster. >> you said this was all about the revenue, but aren't
investors really highly focused on the free cash throw here? and what's going on with that? >> it's similar to amazon it's elon reinvesting that money into future different lines of cars. i don't think they necessarily care about it today, but that he they care about he's thinking about it. we'll have more. guy, just a thought before we go? >> rough week for elon musk. look at similarcity. this stock is going to bounce. i think we'll have ben callo on hear to talk about it. you've had a monster sell-off, maybe just get a relief rally. and then what phil said, it's not horrible. now we have to talk about valuation, about guidance going farther, but if nothing else i think you see relief. phil? >> we have some 2k3w50idance on deliveries of visible. this year tesla expects a total
of between 80,000 and 90,000 vehicles this year. remember, they already set by the end of the first quarter, they expect between 1600 and 1800 vehicles every week at their plant in fremont, which would mean a run rate of 82,000 a year, so tesla is saying its projection this year between 80 thousands and 90 thousands vehicles. kelly, back to you. thank you, phil. guys, thanks so much for joining us. i don't know if we are going to take a commercial break. be sure to check around. thank you, guy coming up on "fast money." straight ahead twitter results and whether the stock is a bargain at these levels. plus reaction from tesla's results. you're watching cnbc, first in
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its results, the real news here is the company adding a buyback. again ven a different that entices a lot of investorsers here. those shares up. roughly unchanged. >> i was going to say tesla offensely, all that martz. you have to remember we're getting close to that year 2020. also they are going to have to raise more capital. there's no secret about that. that's okay as well. >> yeah, this is a don't that wen from momentum to no-ment tum, and i think it's about elon musk being able to delivering.
twitter's results are out. julia boston has the numbers. >> hey, kelley, in keeping with twitters, the monthly active numbers twitter's user numbers delivered from the third quarter to the fourth quarter, so that is up 6% year over year. it is down 2 million from the prior quarter. so that's really what's weighing on the stock down about 7%. looking at the other factors here, the company reporting 16 cents, that's four cents better than expected. revenue of 710 million, right in line with expectations, but it's the user numbers actually contracting from q3 to q4. we'll be hearing more from the call and periscope q&a which will start at 5:00 p.m. eastern. that thank you, julia.
twitter chief operating officer will discuss the results and the company's future at 10:00 a.m. eastern the for more on these numbers, kevin landis, who owns twitter and the fund, bought the stock before the ipo. what do you think now, kitchen? this is kind of uncharted territories. that's something they can't let continue to happen. they have to fix that. >> are you going to sell your shares? >> uh, no, no. selling anything in the last two weeks would have been smart the next day, but what to remember with twitter is they still have something. there's no ready alternative to
tweeting. they just haven't yet figured out how to productize that and make it part of everybody's daily routine. these shares down 14% now after hours. a few times you saw one of these downward moves and thought that was the purge, that was people throwing in the towel, but you know, the absolute valuation of this company, you know, you x out the net cash and it's getting down towards $6 billion, it really is becoming kind of bite will have sized. i hate to go to that well they were sell the company, because it's a terrible position, but i think it does become support for the stock at some point. >> this is an incredibly valuable platform in so many people's lives. it seem the management of this company keeps getting in their own way. i feel like every using out there.
going off in their own direction. they need to get out of their own way orderically or -- >> i know you wrote this back in november, and i agree with social of it being on it. add a bookmarking feature, maybe -- at me to your board of directors, put up a trends database, and make a freemium model, there's a laundry list. >> i'm certainty not the only person who's cobbled toes a list like this. there are obvious things they can do to make it much easier for new users to understand the plaid much.
kevin, if you're there, i would will you be to know from you the company seems hamstrung between these suggestions of how to change the product and loyalty to principle of what at this timer should be. i wouldn't leave the house we're my smartphone, but people just checking their feed and not tweet i tweeting that's what they have to fix. >> i was thinking of giving up the smartphone with lent.
let's get back to julie boorstin. julia? >> keeping here for twitter is guidance, announcing it's between 595 and $610. that range is below consensus of about $630 million, adjusted earnings, the range that the company is projecting for q1 is at the higher end, but that revenue guidance looking negative -- back over to you. >> kevin, you know we were just talking about the challenge that they have, what some people would like -- without alienating the core users. and just teague on a huge task here trying to figure out what makes twitter more of a niche. what do you think the answer ultimately will be? what are you willing to wait out? >> well, first of all, comparisons so facebook are not
fair for anybody. that company is doing well, hitting the ball square on the note. it's not fair to compare anyone to them. that said, it's a little late for management to get credit for addressing issues quickly, so they might as well take time, at proathletes tweet to get around sports writers. a lot of people tweet to get their names out there. it's indispensable for certain in addition applications. they need to mainstream it properly. believe it or not. they actually do have time to get it right, but they have to get it right. >> all right. being patient, kevin, thank you so much for joining us. kevin landis. also cisco's conference call should be under way now, and we'll bring you those highlights coming up. plus from a tesla analyst who is bull beenish on the stock
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expectations. the company did say it saw a drop this demand in travel to the european cities after the november 13 paris attacks gross bookings increased, expedia saying that foreign exchange, which has a big headwind did have a negative impact of six percentage points. the stock was down, now up 2.6% after hours. let's switch focus to zynga. breaking even, bookings revenue at $182 million, higher than expected, but a big disappointing on guidance. the company forecasting bookings in the range of 150 to 165 million for the current quarter, below the average analyst estimate. management says we made progress in our transition to mobile on a bookings level, but due to the lack of significant new releases we saw an overall decline in our audience. stock down 7% after hours,
kelly. >> seema, thank you. news alert, morgan, what's happening? >> two pieces of news for you. ups a raising the quarterly dividends, that's on all claismt a and class b shares that are outstanding. that will be payable on march 19th. also, a change on the board. ceo david abney will succeed scott davis as chairman, that changes is effective as of the 2016 annual meeting of the shareholders. so again u.p.s. raising its quarterly dividend and david abney also taking on the position of chairman. you look at shares of u.p.s., down about 1% in after-hour. up next we turn back to earnings, we'll hear from a tesla bull. those shares are up almost 11%. stay with us.
you guys talked about it all right. that's the key point. there's a lot of fear mongering. customer deposits were up sequentially. a lot of questioning coming in. they reiterated 30% target. i think we need to see what the model 3 looks like. they reiterated the timeline. they did tax cam exup. they were looking for 1 1/2. we also want a better sense of the initial margin for the model 3. we get the sentence that comps leg lower, but the rest of the car, how does that fit into the puzzle? >> shares up about 3 speakers, guys. it's apleasing, a very different story. it's the same as twitter, they
want to see the growth, they want to be the trajectory almost no matter what the bottom line number is. >> i think the difference is, you see the path there. if they're on track with the delivery of volumes for this year, you can see the path to where the business model works well. especially if their cash flow positive. >> it's not a demand i think on the twitter side with the average users there's a concern of a lack of demand. i think it's more every an execution play, and are they able to deliver what it is they say they can deliver, especially with the model christmas being so complicated, does that become a sticky widget, so to speak. >> about 14.5%. james, your price target is 3.25, how do we get there? >> well, look, there's been a re-rating of high-growth names. this is momentum stock and people are pricing in bigger
risks, whether it's recession, whether it's sort of auto-related risks. clearly the way we get to 325 is predicated on the gigafactor coming out on time, and therefore the margin benefits. i think they can execute. that's the big question right now. seeing the model on march 31st already important, but understanding the trajectory of margins i think will get the bears to capitulate. >> the stock was here a week ago, so it's not as if we're gaining back a ton formed. >> james, thanks for joining us. >> thanks for having me. up next, what does it need to fix twitter? shares down well off their lows, only down about 4% right now. top analysts are listening into cisco's call right now. we'll have details in just a few
qorei. saying those were offset by declines due to some seasonal trends. they do say the marketing is working and that users have been being held on to at higher rates, trying to make the service simpler. thank you, julia. twitter shares down about 3.6%, after-hours on the results. there's sort of a tweet storm going on from the twitter i.r. account right now, but one pick lard metric, as of the end of january they have seen users return to q3 levels. as we talk more about, lance is joining us. welcome to you first of all, what is going on with the whole timeline thing that's happening or not? what more does that tell us
about twitter's execution strategy. >> they introduced an algorithm that would prison, at the top there's a tweet that are supposed to be the best tweets that follow. there was a loft of rumors about this coming out. it launched the rest in peace twitter hashtag all weekend long, and jack dorsey came forward and said, no, no, it's not happen pg this week, and now it's happened, but they didn't get rid of reverse chronological order, but they'll put the block at the top. nine other ten hours later, it still hasn't shown up. when they announced in the morning they used the word "now." now has not happened, and this is about making the service more palatable to news users, and gosh, do they need them, because there's no user growth. >> mike, the shares are down
only about 1% after hours. >> they are recovering, and make that assures it hasn't been a free fall might be contributing, but lance, let me challenge the idea, which i don't really argue with, but challenge the idea they need to accelerate using growth. they had -- so can this mo be a growing business on top of relatively static use base? i believe it's a about business. they're under tremendous pressure to grow, service has perhaps a 50% churn rate. they both lose people and get people who aren't active all the time. that's a story you can't even see in these numbers, but they're under this extraordinary pressure, because that's the benchmark that everybody expects. >> with twitter fighting to almost turn positive despite all of this, we'll continue to keep an eye on it.
lance, thanks for joining us, almost doing the 140-character version of what happened with the timeline. but we have breaking news for chris christie. john? >> justchristie. >> reporter: wanted to pass on the official word. chris christie, keynote speaker. 2012 republican convention, once seen as a republican front-runner, derailed by bridgegate and fighting back, may have taken down marco rubio in the debate last weekend is now out of the 2016 presidential race. simply wasn't able to make it all the way back. staked it on a strong showing in new hampshire but finished sixth in the voting, less than 10% of the vote. simply not viable for him to continue as the race goes south to south carolina. he told his staff at 4:00 p.m. he's suspending. no word yet on whether or not he'll endorse anyone else though it's not clear that that would matter much at this point in the proses. >> two now, chris christie and carly fiorina susspending their campaigns after the new hampshire results have been at
welcome back. one of the big movers after hours is cisco. shares up 7%. conference call sunday way and let's get to j & m retail analyst erik suppeger. the shares are off the highs and a lot of focus on the financial aspect of what's happening here. what do you think so far? >> well, kelly, i think there was a little confusion actually at the close. they -- they announced their numbers, but there was some adjustments that you had to make so i think the initial reaction was a little overstated. i also think there's probably a bit of a relief rally. overall the numbers were probably relatively close to what we were looking forks and i think others as well, so i think in general there was a relief rally, just because we've seen so many negative announcements from other vendors at this point. >> relief there. just real quick, erik. can you be more specific on what adjustments might have turned
people a little more less optimistic? >> well, the growth that they had talked about which is 1% to 4% year over year. that after adjusting out for a -- a divestiture that they had made so actually the year-over-year growth unless you make that adjustment looks to be considerably bert and that was part of it and then there were also tax benefits that they had on the earnings front. >> got if. >> thanks so much to clarify for that and at share reaction. we'll let you get back to the call. >> very good. >> thank you, kelly. >> coming up, other earnings conference calls about to get under way. we'll set you up for them when we come right back.
twitter by the numbers, the company c.o.o. talks to "squawk on the street" tomorrow cnbc. welcome back. we've got a news alert on mylan buying sweetup and company reporting earnings above expectations. shares are down 8% after hours and the ceo of mylan will join "squawk box" tomorrow morning to discuss the deal. more conference calls after a slew of after hours earnings reports and cisco's call has already begun and a lot of news to get to including twitter and tesla. what are you watching for? >> i think you want to hear twitter's game plan. that's the one with the greatest
suspense attached to it. the one that may make the most news. >> we both have a personally vested stake in twitter doing well. i think everybody who uses the platform which includes a lot of celebrities and a lot of influencers wants to see twitter succeed so we want to see that plan in place that we all seem to know so well and feel like the management team is just not delivering on. >> also want to bring to your attention expedia on the board, up almost 16%. up about 1% in its results. apparently the guidance is talking about growth of 35% to 40%. >> this is perhaps a case of taking the guidance and expectations down so much and bringing it back to where it was before. maybe hoping that the international travel will pick up post what's happened last year, you know. hopefully, you know, god willing, no other things happening, so my guess it's more about the guidance and the expectations, but not necessarily anything that blows you away. kind of getting back to where it was before. >> and tesla showing had a hefty
gain. a lot more to explore on that call as well. guys, thank you so much this afternoon. that does it for us on another earnings-heavy ebb "closing bell" on a day when by the way at the end of the day the market just took a slide lower. dow closed down almost 100 points. "fast money" begins right now. live from the new york market site overlook new york city's times squares i'm melissa lee. traders on the desk are peter najarian, steve grasso, karen finerman and guy adami. coming up, earnings palooza, twitter, cisco, whole foods and stocks are moving in the after-hours session. live team coverage. the headlines and instant reaction. also with us for the entire hour sun trust's bob peck with a buy rating on twitter. listening into the call right now manage the red phone. could he be on the verge of changing his tune? we'll check in with him shortly hand highly respected strategist says things have gotten so bad they are actually good and he'll tell us why he