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tv   Closing Bell  CNBC  February 22, 2016 3:00pm-5:01pm EST

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transports is due for -- >> another decline, even after this? >> yeah. >> stay tuned to see if this rally continues for the day. thanks for watching "power lunch." >> "closing bell" starts right now. >> hi, everybody, welcome to "the closing bell." i'm kelley evans. >> and i'm bill griffeth. rally day on the stock market. as you heard by now, wiping out essentially the losses that the major averages had incurred for the month of february, over to oil, that's been calling the shots again today. the march contract expired a little while ago. you saw a short squeeze that pushed it up 8% for a time. we're just coming off those highs for the day but that's enough to help power the stock market today and of course in the dow, the best performer
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pinnedty top there of the dow components is united technologies, the company has been holding merger talks with honeywell. we have much more on that story in a few minutes. >> we do. facebook ceo mark zuckerberg giving the keynote address to the mobile world congress and making a big virtual reality push this weekend. we're live out of barcelona with those details coming up. south carolina's primary has narrowed the republican field. here's a question we haven't asked much lately, who does wall street want to win? the republican nomination? we'll have that story for you as well in near term here. >> listen up to this one, referring to the olympics for first time in 100 years and david feherty will join us. you better get in the car and get down here in 20 minutes time. >> i can't believe i'm not there
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for feherty today. but let's get to our closing bell exchange for this monday on this rally day. alan nukman from trading advantage is with us to talk oil. anastasia from jp morgan funds and sarnlg, steven gilfoil and rick santelli from chicago as well. sarge, we've had this running commentary, does this rally hold for you just because it's expiration day we see something else happen tomorrow? what does the stock market do about that? >> you know, it's hard to see it this way right now, but i don't believe we're extremely correlated. we're getting ag push in energy and transports but we're getting a nice push in everything else. if you look at the way stocks traded on thursday and friday, we had mild down days but generally speaking, they were not really risk off days. it was nor like traders were hedging long bets rather than taking them off the table.
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i think we're seeing today, you can't call it parabolish, but since we hit 1810 on the s&p 500, we're moving in a pretty straight line -- almost a straight like. >> up to 1941 and the fact the vix is below 20, what elimination are you looking at in this market? >> if you want to bring oil into the equation, it's highly correlated with the s&p right now. a move of 1950 in the s&p 500 we've been trading sideways, you take that 150-point range on top of 1950, if there's a breakout, you do the math, i don't want to be the one to say 2100 but that looks like it could be the asset market bottom and boost another time. we saw this in the fall and october of 2015 -- i'm sorry, '14. looking at oil, we have seeing that same formation if it gets above 36, a quick move to be made up to 43. >> you're saying the coast is
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clear for this kind of sharp upward move that we've seen a couple of times in the last few weerz? you think that can play out now again? >> i'm saying it's set up technically, a push above 36 could see a push rally. we've seen this same reversal of sentiment last month and what happened here in gold in december and january, the sentiment can shift quickly. we haven't seen any sustained rallies to shake out the shorts yet, there are a number of things helping, like the dollar relieved that currency pressure and seeing other assets move up. >> anastasia, you're not buying it. even with the rally we've had the last seven trading sessions here, you're still skeptical of this move, aren't you? why? >> i'm skeptical of this move because i think the fundamentals have to fundamentally improve. several obstacles but if this bottoming process we're seeing
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in oil, if this is a real deal, actually does help the fundamentals too, it doesn't wipe out the default risk in the energy sector by any means but it could help boost those earnings. we're watching very carefully. >> rick san telli i can't stop thinking about friday's cpi report, the month on month move was the biggest in four years. it was interesting to hear scott of guggenheim saying it's going to go down to 1%. that cpi report would seem to make the case for rates hanging in here, right? >> i think rates will hang in but i would never be shocked to see lower rates than we expect. most of the influence or driver that would cause that would come from outside our shores, whether it was interest rates in the eurozone or more disarray in the japanese economy, but i think all things being equal, i firmly believe that when you look at
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industrial commodities, i think they bottom the nickels and coppers in terms of oil, i wouldn't look at it the same way but i do think that some of the really wild volatility under 30 is going to recede. i think generically the commodities sector is most likely going to be contributed far less volatility. i think in that setup, yes, that the u.s. economy will probably keep rates close to where they are with an onward drift versus downward drift. if you're looking for rates to go lower, you'll have to look outside our shores and couple of places you might want to monitor, with the vote on the european union membership, the uk, the pound is getting pounded and euro versus the yen at a 34-month low. i think i would check towards japan and eurozone if you're looking for dynamic that fosters lower rates in the current structure that we seem to have found over the last several sessions. >> sarge, we're back to 1940 on the s&p.
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i know you're a big level watcher. that's pretty constructive here, i guess. but what are you watching right now? what levels are important to you? >> it's constructive. to be really constructive, i would like to see us regain and hold 1942, approach 1948. if we can't get back to 1942, think to save our really nice day here we have to hold on to 1935. >> it's interesting, i'm still thinking about the british pound speaking of levels, back at what was it a decade ago, call it almost $2 for that pound. now we're talking about 1.40 and some think it could be going lower anyway. are you booking that trip to london yet? >> as a matter of fact, we are talking about that. >> i just think, these things matter, the euro -- we've gone from the euro parity argument to that seems to have held its territory and certainly the pound and everybody talking
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about going lower. >> i mean, i think the differentials are going to only magnify if the fed starts to raise rates at some point. anastasia, what do you think? i mean, you're the one -- i build you as skeptical in this market but if the fed does start raising rates, does wall street embrace that or do they fear that right now? >> i think it's a double edged sword. yes, it is a good thing if the fed starts to raise rates because wages are rising and inflation is rising and labor market is tightening. that's good for the consumer part of the economy. but we already know what dislocation's higher dollar already cost. one thing in particular, not necessarily the strength of the dollar versus the euro or yen but we could see the continued strength of the dollar versus the emerging market currencies so that too could detract from the earnings of the mul national corporations and they are
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responding to metadata but capping the potential for the s&p. that's where the double-edged sword comes in from. you've got to favor consumer names certainly if the fed does indeed start to raise rates and banks, they have essentially discounted any possibility of rate increases but back on the table that could be the great opportunity. >> light a fire of sorts there. thank you, good to see you all. appreciate your thoughts on today's market action. this story broken a while ago, shares of united technologies rising after david told the world that the company recently held merger talks with honeywell. david? >> this is part of a large back and forth that's been taking place between the two companies over let's call it the last ten months at least. most recently involved honeywell approaching utx and saying we would like to make another proposal to potentially acquire you.
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it is some cash, largely stock, premium undetermined though, imd told it was a premium deal even though at the end you would end up with a shareholder basis of both companies more or less owning equal amounts of this huge cooperation. market value somewhere around 175 billion based on current numbers. but it comes after hopneywell wrote a letter back in september saying they wanted to explore a deal and offering a merger of equals that would have also included a small premium for utx shareholders and prior to that, utx under its ceo, greg hayes, having approached honeywell about a merger of equals. that deal didn't make it to the finish line because there were concerns on social issues, namely who would run the combined company and who gets what job. then when united technologies missed earnings number, sort of threw off the potential stock
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ratio they had been contemplating. then you get the scenario i've discussed. the question here, on antitrust there a significant i am pediment to a deal giving that both companies together would provide a great deal of what goes into an airplane to put it same my, would airbus and boeing, would you see serious significant objections from both u.s. regulators and/or the eu? you can remember and bill you may remember this -- >> i know where you're going to go. >> i reported that united technologies was about to buy honeywell in 2000. and that was utx, $40 billion deal. our parent company at the time heard the report and what do you know, ge ended up with a deal to acquire honeywell that never made it to the finish line. >> where is mario now by the way? >> that story is new to me. good one. but that makes the size of what
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we're talking about all the more impressive, $175 billion for the two companies combined. how likely is something like that to happen in these markets? >> i don't know if it's a function of the markets themselves. they have played an interesting role here because of the very versal in market caps of these two companies, honeywell rewarded with a higher multiple, it's operated pretty well and now, a significant -- a $10 billion until we reported this news edge in market cap over utx. so that's been an interesting change and that's affected the way that utx first approached them and honeywell has come back. antitrust has to be considered strongly here. it's from what i'm hearing in terms of my reporting, i think the utx side is certainly looking at that very carefully and saying, well, really, can we really try and do this? even though they were the ones who initiated the first discussions almost a year ago
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about a deal. >> are you surprised even after all of this time going back what, 16 years now, with honey well that they have yet to hook up with anybody? i mean, they tried first with utx, then the ge deal and triped again now with united technologies and still no major deal for honeywell. what's going on here? >> they've operated the business well though. i think david cody, the ceo gets fairly high marks for doing so. >> what's missing here then? >> i think they see the opportunity to create a great deal of value if they were allowed to do a deal with utx, you're talking about fairly significant synergies given how many areas they operate in similarly and cost saving thats would be quite large. and that always adds impetus to this potential deal talk and the reason why both sides have considered it and entered into various discussions along the
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way through the course of the year, most recently within the past two weeks about the potential deal. >> all right, we'll see what happens. good job, again, david, thanks. >> thanks, david. >> by the way, united technology ceo gregory hayes will be on squawk box on wednesday, that's an eternity -- a lot can happen in the meantime. we'll see what he has to say about all of this coming up on "squawk" on wednesday morning. >> we have 45 minutes to go in the market and the dow is up 209 points. what's interesting is the consistency of these gains across the dow and s&p and nasdaq, all up 1.2%, even though utx is pacing the dow with a gain of -- >> adding 35 to 40 points to the industrial average with the gains today. >> highlights from facebook ceo mark zucker burg's keynote address that did happen up two hours ago. john fortt is live there coming up.
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speaking of mobile devices, fitbit reporting earnings after the bell. we'll have instant analysis and these shares down about 45% year to date. we'll see what happens tonight. you're watching cnbc, first in business worldwide. opportunities aren't always obvious. sometimes they just drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances.
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the dow up more than 200 points, all of the major averages wiping out the declines we've seen for the month of february. oil has helped short squeeze as the march contract went off the boards today. april will be the new front month for wti crude tomorrow. but as the market rallies food distributor sysco has been declining, buying london based food distributor brakes group. that deal is valued at roughly $3.1 billion. >> all right, more deal news there. facebook ceo mark zuckerberg delivering the keynote address in barcelona a short time ago. john fortt is there and joins us now. any big surprises? >> reporter: well, kelly, it's interesting, mark zuckerberg was mainly here to talk about his vision for connecting the world as he has for past three years.
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part of what he wants to do now, rethink wireless networks the way he's been rethinking at facebook, how the data center is structured. they've kind of hacked their own servers and networking equipment on that end now want to do that with wireless. he also talked a bit about 5g, fast wireless networks on the one hand and the need to connect some of the poorest people and countries in the world. take a listen. >> one of the things that i've heard at mwc so far this year that is personally been a little bit disappointing is this idea that 4g was about giving people a good experience and 5g is about connecting things. what i personally hope is that we don't just do that but finish the job of making sure that everyone in the world gets internet access. >> so internet of people still a bit more important than the
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internet of things he was saying. he also talked about the head winds that facebook has been up against in india with its free basics program, where trying to give facebook and other apps to people for free for a period of time to get them hooked on data plans, hoping they will then pay later indian regulators ruling this was not legal under net neutrality. some people think companies only care about profits and he also said they are in tim cook's corner when it comes to privacy. take a listen to this. >> i don't think requiring backdoors into encryption is either going to be an effective way to increase security or is really the right thing to do for just the direction the world is going in. so yeah, we're pretty sympathetic with tim and apple on this one. >> reporter: and facebook put out a statement to that effect but there it is from zuckerberg himself. facebook stock did well today as
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he laid out his vision. more to come from mobile world congress here tomorrow, i'll have qualcom ceo. >> zuckerberg and everybody else you've come in touch with, is it a major point of discussion with people split on both sides or are we making more of it than perhaps it is out there? >> reporter: i think it's not a major point of discussion but among companies that do a lot of business with the u.s., it's something that they are tracking. mobile world congress, there are a lot of issues in different countries and different regions that come more into play but security is pretty important everywhere. this is one of many issues and storylines people are continuing to track. >> i'm shaking my head a little bit. i can think back after the facebook ipo and everybody said he was missing the ball and
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didn't know about mobile, needed to get mobile in his life and here we find him keynoting the mobile world conference here. there's some irony there, isn't there? >> reporter: quite a bit. for the third year in a row, it's really interesting how zuckerbe zuckerberg's vision defined this conference. remember a couple of years ago he had just bought what's app and everybody was talking about messaging and it was taken money from international carriers and changing that game. we've seen instagram and imaging in messages and social networks become a big issue. we've seen video also in facebook invested in that. they bought oculus and all of the smartphone makers are jumping into that. very much he's setting the agenda for the entire mobile industry, not just facebook. >> amazing. >> makes sense now. >> thanks, john.
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hasta la vista. >> in barcelona, that's what i know there. >> i think they pronounce it barth lone na. >> that's true. >> dow is up 205 points, it is the best gainer of the day and helped in part by united technologies up 6% right now. coming up, then there were five of the five remaining republican candidates still in the race after the south carolina primary, would would be wall street's choice, the head of policy research will weigh in. up next, the man, the myth, nice vest by the way, david feh feherty, will talk about jordan spieth and golf in the olympics for first time in 100 years and his role in the upcoming games coming up on "closing bell."
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welcome pack, a nice rally with all three averages up.
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oil notably is up significantly as well. that's pacing the energy sector, about 2.2% today. also participating materials and industrials and of course we have that purported deal or talks of a deal as david told us between utx and honeywell. consumer staples and utilities and telecom bill, anything rate sensitive is under performing. >> and not everything is going higher, we have a couple of big movers going to the down side, lumber liquid ators stock sinking after the cancer risk was associated with the flooring. people now exposed to some floors are three times more likely to get cancer than was previously estimated a few weeks ago. they miscalculated and very viced that. perrigo after goldman
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downgraded the shares, down almost 5% right now. kelly? >> we turn our attention to the world of golf -- >> let's do that. >> bill, i don't know why i'm reading this. the pga did continue with bubba watson ticking off another win out in california. but among the top story lines the world's number one golfer, jordan spieth, missing the cut. >> horrible round on thursday. let's talk about it. we have former pro golfer turned broadcaster, the man himself, david feherty, who kicks off season six of his talk show on the golf show coming up march 7th with none other than the aforementioned jordan spieth. i'm among your legion of fans and wish i could be there to shake your hand. with kelly there, you're getting the better end of the deal. >> very funny. >> thank you, bill, you're very
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kind. jordan spieth, you couldn't write a better script for a kid to be the next ambassador of golf. is he starting to spread himself too thin here do you think? >> i think there's a danger of that for sure. you know, he misses the cut. it's no big deal. people are going to do that unless you're tiger woods, maybe 130 something in a row. that's a record that will probably never be beaten. but he's such an extraordinary young man that we had to divide the show into two episodes so it will be two hours of jordan spieth, first time in 90-something shows we've done that. he is extraordinary in so many ways. >> are you giving that much time to george w. bush? >> well, i didn't get as much time with w. so -- >> he is going to be on your show? >> yes. >> beginning of march? >> that's right, jordan, george w. bush, and i think jason day. >> how did you get the former president? >> i've known him for a number of years and managed to avoid me
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the first five seasons but finally gave in and we spent some time at the george w bush presidential library at smu. >> they have a great history with the game of golf, the bush family. >> yes. >> is tiger ever going to play golf again? what do you think? >> that's a good question. i think he is. i know as much as you do about his physical condition and it depends on that but he loves the game. i don't think anybody can doubt that. what he's been through the last couple of years with injury and with -- been a basket case but still comes back and wants to play. i think he wants to play and hopefully he'll get fit and get back out there. >> especially with olympics looming. golf joining after 100 years. what do you expect? >> i think like most people i'm not really sure what to expect. it's been 112 years and we have our majors in golf and four majors and then there's the ryder cup and president's cup,
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that's the sort of pressure that is the pin kel. does the olympics get past that? i doubt it. it depends on how invested the players are. the thought of playing for your country is really going to put the tilt in their kilt for want of a better expression. >> so to speak. speaking of which, we're going to miss seeing you, hearing you from the 15th tower at augusta this year now that you're with nbc, you won't be past of the masters coverage. admit it, that weekend you'll be sitting in your living room quietly talking about reading the putts on 15, aren't you? >> i'm going to be doing a stand-up show in nashville. i find something else to do. as it turns out -- no, my voice was on that telecast for almost 20 years, so yeah, it's a special week, one that i'll miss. >> we are thrilled that your full-time with nbc now where you belong. and it's great to have you with
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us today. we wish you well. you're going to do the honda this weekend, right? >> yes, the florida swing starts and i'll be there for all of it. >> looking forward to it. you can tune into david's season six of his talk show that he never thought would get past three episodes, starts march 7th -- >> true. >> season premiere of feherty on the golf channel. here's what's happening. uber driver jason dalton has been charged with six counts of murder, two counts of assault with intent to commit murder for his alleged shooting spree in kalamazoo on saturday. six people were killed and two critically injured the attacks. a yemeni army militant was killed. a three-day gun battle ending when indian security forces killed three militants who stormed the government
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building. it began when militants shot at a bus carrying police before breaking into a development institute. two policemen and civilian died in the fighting. peter mondavi who led his family's winery through more than half a century of change has died. he battled his for famous brother robert for control of the business. he was 101 years old and worked right up until the end. that is the cnbc news update this hour. >> great stuff, sue, thanks. welcome back. >> thank you so much. >> 30 minutes to go here. dow is up 216 points and s&p adding about 25. rally across the board led by energy. the nasdaq, which had been outperforming last week today consistently with the other major averages up 1.3%. leading trader will tell us what he's watching into the close up next. >> i thought gordon was coming up -- >> i'm going to tell him you said that.
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>> coming up also, the head of policy research gives us his take on which presidential candidate might spur the biggest gains for wall street. that's coming up on "closing bell."
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the dow up 215 points, one of those days when the major averages now with this rally wiping out the declines we had seen for the month of february. and -- counter intuitive day, oil is also sharply higher but so are the transports. the transportation average up 1.7% and you can see among the components there, feddism is up over 4% and so is jetblue and delta airlines, we have a news alert on opec right now. morgan? >> so opec secretary speaking at the ihs conference in houston that just wrapped up. saying opec willing to cooperate to find a solution to the oversupply problem that members are talking nonopec producers.
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that unless a solution to the problem the supply problem is figured out this very nasty cycle could last for years. so playing up the fact it was u.s. shale that led to oversupply and inventory overhang is a problem with 70% of that overhang in the u.s. he doesn't know why the u.s. continues to import and store so much oil. elbadri says let's freeze production but adding any increase in oil price could bring more shale production immediately online that would cover the supply reduction. on iran, saying it's a country with huge potential reserves and he hopes it will reach an agreement with foreign oil companies and also that current cuts in oil investment are a recipe for a very high price in the future, not giving any suggestion or take on when that could be. his commentary coming ahead of saudi arabia's oil minister who will speak tomorrow morning on heels of saudi arabia and russia
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agreeing to a production freeze if other producers participate. getting comments there out of the opec secretary general. back over to you. >> thank you so much. on that note, i'm here on the floor with gordon charla and i'm sure you're watching the oil price closely. >> oil is a big factor here and i see bill is sitting down with his best fdr imitation, hope he feels better soon. >> he can probably hear you, i'll have to tell him about these remarks. oil price still leading markets and dictating things here? >> i'm not sure it's just oil. we've had about ten days ago, we sort of had somewhat of a technical response since then. very strong friday before the 3-day weekend which is encouraging. last week started off two strong days then they didn't set them off, they held them. this is a continuation of that move and right now we have sort of an in between, being that
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this is a leap year, end of the month doesn't happen until next monday and you have super tuesday. i think there's a lot at stake at that point. i think -- >> what's the best -- what do you think the markets want to see happen or waiting to see happen for next tuesday? >> clarity is always something people are looking for. there's so much being discussed at the party level, internally and then between the parties so the dichotomy of what the outcome will be is so extreme that i think it's causing the investors to be a little bit let's say reluctant to dive in full force. >> another event we'll add to the calendar. thank you. >> thank you so much. to politics now, hillary clinton and donald trump were victorious on saturday. mr. trump winning the republican south carolina primary and mrs. clinton coming back on top in nevada's democratic caucus. would either of those candidates be wall street's choice? question we don't often ask or haven't to this point but we're
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going to start doing that more often as the field narrows, let's bring in dan clifton. and i'll tell you what, let me bring in a little bit of breaking news. we're getting word ted cruz has asked his communications director to resign. i guess when you don't come in second in south carolina as you had expected, something has got to change. what does have to change for ted cruz do you think? >> that's right. i mean, ted cruz had a fire wall that was to win the evangelical voters and did not do. there's a side story where there was information leaked out about marco rubio right before the campaign. in iowa it was about ben carson. the distractions are getting weighed down and those get overemphasized when you're losing. cruz wants to get rid of his communication director and move own an start over with the new states coming in on march 1st. >> what about dan what we're hearing basically that this race
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is and needs to consolidate to trump and the anti-trump, the single anti-trump candidate if you will? >> that's right, when this republican race should have started consolidating at the beginning of february, we just saw that consolidation really start after south carolina with jeb bush getting out, you saw voters move away from bush and kasich, into rubio's camp at the final moment. you're seeing that consolidation, but if it doesn't happen fast enough, donald trump will run up the score and be the nominee and that has republicans in washington worried. >> the question we'll start asking, which candidate may be best for wall street or which candidate does wall street want to see? that hasn't been an issue no this point in the campaign. why do you think? >> because there's been so much uncertainty who the candidate is going to be. people haven't really focused on what the specifics are. i think the timing of your
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question is perfect because we're getting to that now. at the very least you're seeing bernie sanders momentum slow down. he has been the least person that wall street wanted to see because we would have the highest capital gains tax rate in the world because it's about taxing the middle class in his platform. now that is slowing, there's a sigh of relief coming from wall street this morning in light of the election results. the key is now who are the republicans going to nominate? i tend to believe equity markets are happy with most of the republican tax plans, unlocking $2 trillion of foreign source revenue overseas to a repatriation tax cut and cutting capital gains and even hillary is still very much open to many people on wall street getting those existing relationship. >> dan, real quick, speaking of cutting deals, i just wonder if that's how the field gets whittled down at this point. you mentioned one of these kinds -- maybe not crazy proposals that has marco rubio
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offering ted cruz a seat on the supreme court -- >> that's right. >> there could be something out there that's interesting to case it kasich. >> how about this, kelly? how about donald trump asks marco rubio to be his vice president. that would really change the game, right? there's interesting deal making going on. this field needs to narrow in the next couple of weeks if the republicans want a chance to beat the democrats in november. >> by the way, does donald trump need to release his tax returns. >> i think all candidates should release their tax returns. >> all right. good to see you. >> strategic research partners with sort of a monday morning quarterbacking of the primaries. >> lots and lots to watch here. it's been a fast moving election in terms of these developments, they seem to come every couple of hours. 15 minutes to go in the session. the dow is up 228 and -- >> look at that.
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just a moment ago each was up 1.39%. >> you don't usually see that on days when you have a stock specific story like utx and dow. we'll talk with steve forbes coming up and get his take on donald trump's primary win. >> the tech industry is backing apple, in the fight against the fbi, up next, tech's other battlefronts with the justice department after this.
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apple is engaged in a war of words that could lead to a courtroom battle over the cracking open of the iphone. that is not the only clash between silicon valley and doj. kpeters who are fast becoming apple allies. >> that's right. there's actually now a range of cases involving tech companies and the department of justice, for example, take microsoft, they are -- the government is trying to force the software giant to turn over e-mails stored in data centers in
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ireland as part of a narcotics investigation. microsoft counters that e-mail stored in the cloud belong to the customer. brad smith, microsoft's chief legal officer has also argued that the u.s. government must have a warrant but search warrant cannot reach beyond u.s. shores. then there's twitter, taken on the doj as well, the company says it is being prohibited from reporting on the scope of surveillance of twitter users by the u.s. government. twitter argues that it is entitled to do so under first amendment and government counters that twitter can't publish such report because it contains classified information and wants the case dismissed. the government aers motion will be heard next month. a staff attorney at the aclu says he expects the tension between tech companies and the government to continue. users he says will not accept a world in which they can't trust the devices in their pockets. tech companies know this, which is why they remain powerful
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advocates of privacy. the government will argue that these tech companies are making their jobs harder, namely protecting the very safety of those users. the doj did not respond to cnbc's request for comment. back to you. >> thank you so much. josh lipton with the latest in the fight. ten minutes to go here and art cashin walked by saying there's $600 million to buy on the bell but we haven't seen a ton of movement. it's a plateau just sitting there up 1.3%. >> with all of the indexes up and in the green on the heels of the solid week last week, are blue skies ahead? two of wall street's best join us with their views after this. it took dozens of prototypes. hundreds of crash simulations. thousands of hours of painstaking craftsmanship. and an infinite reserve of patience... ...to create a vehicle that looks, drives and thinks like nothing else on the road.
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seven minutes left with the dow more than 200 points and holding up. joining us right now, chris from riverfront investor and anthony chan at post nine. you have been putting money to work in last few weeks. do you feel like we've seen a bottom for the short term? >> i think it's very possible. we came into 2016 with elevated
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cash and in the first part of january we raised even more cash but looking to employ that open tunistically and picking our spots when the market hit 1840, that was an important signal and eurozone and japanese equities and -- >> eurozone and japan, that really had kind of the apple cart fall over in the last couple of weeks. why are you confident in that one? >> to be really clear. one of the places and specific spots in japan is in japanese real estate. if you think about the impact of negative rates, we think that's a good thing. mortgage rates in japan are incredibly low, cost of capital for the construction companies really low. there's a secular growth story in tokyo real estate. >> anthony, when you were here last week it was drama, markets maybe not last week but week before, there was a lot of angst in the markets. what's changed? >> what's changed is now we're seeing low oil prices rebounding
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and oil price in the equity market can move in the same way and price range between 20 and $50 a barrel. there's a 58% positive correlation between oil and equity prices and of course today with oil prices wti going up more than 6%, markets are just loving it. >> i wonder if it's sustainable though? >> i don't think this rally is purely sustainable over the next say week, two weeks. but i think that things are improving so we'll have a bumpy ride. when you see bad news like eurozone pmis and our own pmis weaker and market rallying, it's telling you the market is grasping for a bottom and looking for things to improve moving forward. >> chris and anthony, thank you both. >> we're coming back with the closing countdown. it's already time to ring the bell. >> after we do ring that bell, uber rocked by one of his drivers accused of killing six people in a shooting spree in michigan.
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we'll talk with someone with a stake in uber for what the latest trouble means and for future investments. you're watching cnbc, first in business worldwide. the life behind it. for those who've served and the families who supported them, we offer our best service in return. usaa. we know what it means to serve. get an insurance quote and see why 92% of our members plan to stay for life.
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that's like my grandma the kcooked, my mom cooked. i make a lot of banana bread because the baby likes bananas. (laughs)
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whatever home means to you, we'll help you find it. zillow. e*trade is all about seizing opportunity. so i'm going to take this opportunity to go off script. so if i wanna go to jersey and check out shotsy tuccerelli's portfolio, what's it to you? or i'm a scottish mason whose assets are made of stone like me heart. papa! you're no son of mine! or perhaps it's time to seize the day. don't just see opportunity, seize it! (applause) welcome back, the rally continues after the best week on wall street for the year. up 221 points and oil had a big
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part of that the march contract expired today for wti, oil up 6% today, mary thompson and we have retailers reporting earnings this week, it will be a busy week over all. okay, there she is she doesn't have a microphone so i get we'll see her later and united technologies was the big gainer for the dow gaining 6% on david faber's report that they had engaged in takeover talks with honeywell recently added 30 to 40 point, up 4.7%. david will join the group and give us the latest update on those talks coming up. that would create a huge bow heel oj with sales $42 billion a year. that is it for the first hour of "closing bell" with gains of 225 points, ringing the bell today,
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advocate for the james 9/11 health compensation act and co-founders of the check chick innovation awards. stay tuned for the second hour of "closing bell." [ applause ] >> thank you, lrk to "closing bell." starting off the week with another nice gain here on wall street. all major averages up on the session and pretty much the the exact same amount of 1.4%, nasdaq adding more than that on the bell but the dow up 225 points. helping to put the markets back in the black for the month and it has been a really difficult start to the year. one of the worst we've seen in some time. but that said, finding some bottom here, some footing maybe is the way to put it, oil prices having a lot to do with that.
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joining today we have mike santoli and stephanie and today's market action, guy adami. what do you think is going on here? >> you mentioned the exact same percentage move. this market today didn't deviate from the script at all it was let's go up to the levels and we'll finish this leg and whatever it was, it wasn't met with heavy selling and market hung around side ways at the highs all day and good tone through the leadership industrials and energy and consumer discretionary. not easy to assail it but proof it has more to go and not just a mechanical bounce. >> and same factors at play as were when we were selling off. oil price going down and transports going down too. even though it's counter intuitive, the same thing on the upside. look at the 125 points today and rest of the market leave tating.
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>> we'll continue with this volatility until we separate from oil. i actually think that today was a little bit of like reflection from last week's economic data, that was a little bit better. by no means really good but a little better an the initial jobless claims and manufacturing and transports lag but they hef been leading since the january 20th lows let's see if it continues. we have a very heavy week this week on the consumer, that is very important to me. >> guy, i want to mention it again because it is important, friday morning consumer price index comes out, core reading of the highest in four years. year on year was up 2.2%, that's also the highest in four years this seems like it's important. >> it is important. to stephanie's point, the data
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has been again i think the data for the last six to nine months has been good, not great or devastating. it's been sort of -- you have pockets of good numbers and pockets of housy numbers and i think they are all sort of muddling along. i think in terms of the market, we talked about this last tuesday, i believe, crude closed lower on the date but the ovx made a new 52-week high and closed down 8% on day. we talked about how although it did close lower, that should all go well for a rebounding crude price and subsequently move higher in the s&p 500. which is exactly what we've gotten. i think we've talked about that level a number of times, a couple of weeks ago the bears needed to prove themself and they did until that thursday. now the bulls need to prove themselves and get a close above 1950 for a couple of days. i'm sort of in stephanie's camp. she would say 140 points in six
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trading sessions in the s&p 500 is too much and maybe we retest that 1920 level that was sort of a bit of a turning point for quite some time. >> you mentioned the consumer too. what will you be watching for? >> home depot and lowe's and i want to hear from the department stores, remember we got the nordstrom number was horrific. >> not good. >> i want to see if that is a trend and see how the stocks bounce back. most bounced back nicely. they were down quite a bit and their action will be the tell as to whether or not they actually bought them. >> to flag a couple of other things, during this quarter that the atlanta fed's real time read on gdp became very famous for predicting a weak first quarter. it's up 2.5%, not accurate at this point but it's definitely encouraging to stephanie's point about the economic data. i think that does start to
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matter and the g-20 meeting, a lot of people are saying markets from january o february are throwing this tantrum to get concerted policy response. i don't think you want to bet on it. it's in the back of trader's minds i think. >> guy, on that point, you talk about the chinese currency, in some ways we can say it started this out. >> i think it was august 11th, 100% -- yes, i remember the day. >> exactly. if we haven't sold anything except the currency has been stable. we have the big accord coming up and whole period of time ahead of us in which are we hoping and betting teenagin it doesn't mov? >> i think when everybody started talking and when i say everybody, you had headlines about devalue of the yuan from 30 to 40% overvalued and chinese come and make this massive move. that spooked a lot of people. i think all of that chatter took that off the radar.
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it took it away for a period of time. i still think and people would agree that the yuan is still overvalued. i don't know what they are going to do but i would submit they are going to do something. they played in the sand box nicely but when they see the bank of japan go negative rates and chatter out of the united states, i think it's in the chinese best interest at a certain point for their currency to be cheaper than it is and you saw what happened to your point on august 11th. i don't think we're out of the woods by any stretch. >> as much as we're watching oil and other things, something to bear in mind. let's turn to the big stock story, honeywell and united technologies have held talks about a potential merger. david faber joins us with the latest. >> hello. >> big moves in uti today. >> we had a big move up but ended not as high as it had been previously. there had been discussions in the last couple of weeks initiated by honeywell about a
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pro pekt spirve deal in which they offered both cash and largely stock at a premium that was not -- i was not able to determine. but not first time the two companies have had talks and not first time they've been entertaining this idea. it started almost a year back when united technologies at that point approached honeywell about a merger of equals but did not follow through in part because of two companies could not agree on socialish dwrus and who's going to run this combination. and then utx's stock price suffered a fairly mighty fall as it missed earnings and that changed so much ratios of the honeywell revisited with a proposal of its own that it sent in september to utx proposing an moe at a slight premium and utx said no thank you and that is the first time they brought up antitrust concerns. they didn't bring antitrust concerns, my sources tell me when they were making the overture to honeywell but have
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brought it up significantly since then. that certainly is a important component and one of the reasons that utx and sources i've opinibeen speaking to me are saying they are not necessarily in favor of a deal. >> could they divest or do something to allay the and antitrust concerns and still be the deal they want to do. >> it's never the deal you want to do, the benefit of this combination is the synergies they would be able to achieve, not to mention cost savings given how much the two companies sell into an airplane. they also have other accommodations where they can see significant savings. but, there does seem to be a belief on the part of ceo dave cody that they could make this work. the question for honey well, not to get to deep into strategy, how much are they willing to push this. when they sent their letter in september, they decided not to follow up with a public
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announcement, not to pub public pressure on them. that was a decision point and wasn't taken lightly. now that this has been made public, will they decide to follow through? we're seeing united technologies fighting back and confirming the story with a significant antitrust concern that i know has come from utx side. >> what have you made of the fact of the thought that to get regulatory approval they separate aeropace and combine commercial and industrial? does that do anything for you? >> i don't know, does it do anything for you. i wonder from the investor standpoint, is that enough value creation to do the deal. >> i think there's enough on the commercial and industrial side for sure. dave cody is a master at margin and extracting cost savings much more so than other ceos. it tells me he does not believe or maybe both don't believe that the aerospace sector has peeked. we'll have to see.
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i don't know. >> again, the numbers that would come through from such a combination would be quite significant. very interesting back and forth here. the idea that greg hayes was willing to entertain a potential transaction is interesting. and then now honeywell, given the respective changes in the market caps, utx was here and honeywell was here, now it's the other way. >> maybe they were even making this approach as you had the johnson controls tyco deal come together. is there some general sense that the conglomerates are trying to figure out if they can rationalize or are these companies -- they've been circling each other more than a decade. >> it was 16 years ago i reported when utx was very close, a day away from getting a deal done that ge jumped that deal and couldn't get it done because of antitrust and eu. i think there is more to it. it's not just coincidence is my sense at this point. >> thank you so much. joining us again as we continue
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to see what happens this go around, david faber, be sure to catch gregory hayes on squawk box. seema, what's happening? >> fitbit reporting earnings that came in well above expectations, 35 cents versus the 25 cent estimate for the q4. revenues also topping expectations at 712 million versus the analyst estimate of 648 million. here's the thing, q1 guidance revenue and earnings well below estimates and that seems to be what's impacting the stock. in the press release the company saying it expects to incur additional manufacturing cost in first quarter to maximize production of new products to meet expected zmand which is expected to impact growth margins. we know heightened competition has been a big factor. one of the reasons the stock is under performing, 45%, over the
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last few months. trading well below when it went public. it is moving lower after hours down more than 16%. we'll continue to dig through the release. back to you. >> seema, thank you, a tough one here for this company. down 16%. let's talk to daniel for his reaction. if you just looked at the numbers in the release, you would think they had a nice quarter. what do you make of what they are telling us about q1 now? >> it seems like there's a couple of things going on. i think first, you might see some inventory readjustment here post pretty strong q4 off the holiday season sales. the revenue guidance is a bit below what the street was expecting. the second seems like margins, 46.5% is below what the street was expecting as well which is kind of in the 48 to 49%.
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and that's largely seems like because they are ramping up manufacturing of some of their new products that they've announced this quarter. the new blaze watch and the new fitness tracker. but that's leading to lower margins and that's i think that's the issue here. >> does this put your $29 price target in jeopardy? >> we'll wait to see for the conference call to see further what we're going to look at. we have a hold, neutral on the name right now. our concerns have been around the competitive dynamics, have been around margins and those have been the two issues. >> guy, what do you make of the quarter? >> i think the quarter was okay, good enough. first quarter guidance is disastrous. we all agree. but then you look at full year guidance and it's not a complete disaster. i don't know what toe make of that. they are hoping they get their act together. i will say this though, even with the guidance it's not a
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ridiculously expensive stock and has a huge short interest. for some miracle we held 1290 on significant volume, significant being anything north of 15 million shares, given the short interest in the stock which is mam moth, for a trade you may look at it tomorrow on long side. >> daniel, i wonder if you look at the stock right now, trading right back to the all time lows of a couple of weeks ago. it seems as if the street is maybe wondering with the seasonality of this business, what will we have to work with in terms of a catalyst. how seasonal is this business shaping up as being? >> it certainly seems like that based on the guidance here which is basically in line with what the street is expecting for the year. there's a big seasonality uptick here in the q3, q 4 time frame. so for investors looking to buy the stock on this dip, they are basing on there will be significant demand for these new products in the back half of the
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year. >> yeah, exactly. and we saw again the response of some of their new products part of the issue. they have a tougher hill to climb at this point. but thank you for joining us. appreciate your perspective on fitbit, down another 16% or so on its latest earnings results and guy, thanks as well. >> always fun. love it. enjoy it. >> yes, and you too. be sure to stick around. catch guy on "fast money" 5:00. carter worth says there's something about the rally investors are ignoring, find out at the top of the next hour. steve forbes gives us his take on a presidential race shake-up and who can win the nomination. plus, find out where he stands in the privacy versus security debate involving apple and the fbi. also, maserati unveiling a high end suv but can it compete if the red hot luxury suv market?
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man 1: he just got fired. man 2: why? man 1: network breach. man 2: since when do they fire ceos for computer problems? man 1: they got in through a vendor. man 1: do you know how many vendors have access to our systems? man 2: no. man 1: hundreds, if you don't count the freelancers. man 2: should i be worried? man 1: you are the ceo. it's not just security. it's defense. bae systems. stocks and oil both up this monday as wall street continues to eye a different kind of volatility, the presidential
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kind. marco rubio is the leader when it comes to wall street donations, taking $4 million, jeb bush was in second place with 2.5 million bucks. that money is now looking for someplace to go. joining us now with insight on what wall street wants, we used to say that about women, steve forbes, chairman and editor of chief of forbes media and former kand date himself for president. welcome back. >> good to be with you, kelly. >> even though we're talking about big donations to marco rubio, we hear of support for john kasich and seems to be a name that comes up a lot on wall street. who do you think people would like to bet on at this point? >> i think right now rubio is ahead of kasich in terms of what you might call the credibility race. and kasich has got to show and make a decent showing in nevada tomorrow night and then on the super tuesday, he cannot finish far back in the pack the way he did in south carolina. because to say i'm waiting for michigan and ohio, no, you've
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got to get through 12 primaries and caucuses to show you've got the chops to go the distance, otherwise, it's not going to work for him. he's going to be under pressure to support rubio. it's amazing how quickly these things change. hillary clinton is now the front-runner big time and marco rubio after a disaster out debate and showing in new hampshire is now back in the game. >> were you surprised jeb bush pulled out so soon? >> i was. i thought there would be a week maybe he would try to do something in the super tuesday. but he did the right thing. it was over. poor showing, don't prolong the agony, do it with dignity and grace and help a reputation that had taken a severe hit and now the shoe is on the other foot and they are going to him for an endorsement. >> one of the many observations about why donald trump has been so successful for this long is that maybe some segment of the public says there's so much structural dysfunction in d.c., nobody on the stump with a pro
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appointsal has a guy who is getting it done. might as well get a guy with his tone or emotional message. are we wasting our time looking at the individual policy proposals. >> no, what i think you're going to see with rubio and senator cruz is the realization, if they want to pull up and ahead, they've got to have something up front, exciting the way ronald reagan did in 1980 with the income tax cut proposal. even though he has been throwing brick bats and arrows everywhere, he's always upbeat about the usa. and that's something the others have got to take to heart. if you're not upbeat about the country, your proposals don't mean anything and criticisms don't mean as much, you're just another paul troling for votes. >> that made it interesting to hear him i am pro advising on the stump to say in light of
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the -- that perhaps we should be boycotting apple's devices. where do you come down on this particular issue and the way donald trump is handling it? >> his handling is what you would expect, company is not helping fight terrorism, it would be astonishing if he said they were doing the right thing. that would have been news. in terms of apple and the government, obviously there's been a huge breakdown, i don't know whether it's the fbi's fault -- those are usually resolved behind the scenes, every company has relations one way or the other back door in terms of these kinds of things and you resolve it behind the scenes, how this broke in the public, i don't know but it's a major you know what and i think it reflects badly certainly on the government that both sides couldn't work it out behind the scenes. >> but that said, they haven't and apple for its part has chosen to be pretty public what it feels is the wrong thing that the government -- >> apple has taken a hit.
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taken a pr hit. but the question is in the future what that also broadcast is to terrorists and would be terrorists and their friends with all of these hackers around the world it is possible to deadvise systems that are extremely hard to hack. so however this is resolved, apple will back down. they'll publicly have to do the cow -- the question in the future, how do you deal with this in the future? these are usually solved behind the xeends. you don't set a precedent and it's going to hurt you in the marketplace. >> you don't think tim cook has a point in essentially saying i don't want our company to become an instrument of the government or prosecutor's whenever they decide it's important enough for them? >> you may -- that's a nice thing to say but in the public's mind, they think fizz he cphysiu
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have a search warrant, it's a specific thing with a specific probability and you execute it. so something happened here, i don't know what it is, whether the fbi dropped the ball or apple dropped the ball or both, but those things can you deal with. it's not setting a precedent where they give the keys to the back door to everything. you can find a way to do it where they can bust into the thing and not jeopardize the rest of the products. >> real quick, supreme court, should the president name somebody or should the senate -- even hold a hearing. >> 80 to 100 years when somebody has been confirmed in an election year. very hard to do, i remember lyndon johnson tried to do it. and johnson came up with somebody and nominee got rejected, various issues came up. so it's a tough thing to do in the best of times. >> should chuck grassley hold a hearing? he may decide on his own to show
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he is in charge hold a hearing but that's a far thing from an actual vote and maybe in the hearings they'll find there's enough questions about this we should do it after the elections so he gets credit, gave a fair play to it but there's too much uncertainty, contention and 2017 here we go. >> there are so many balls in the air at this point. it's amazing today was as strong and calm on wall street. steve forbes, thanks for joining us. >> thank you, kelly. >> breaking news on bhp. what's happening? >> the mining giant cutting its interim dividend to 16 cents, adopting a 50% dividend payout ratio that we rephase distributions to hashareholders and its capital expenditure by a total of $3.5 billion. a couple of management shake-ups announced as well.
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their energy chief tim cut will be leaving the company. they are putting steve pastor in charge of petroleum division and daniel in charge of the americas operations which excludes energy. the company also saying that now expects the commodity price down turn to be prolonged. we're looking at the stock down 1.5% after hours. there were some concerns that this would happen, not just for this company but other minor giants in general, given the volatility in commodity prices and this an example of just that. >> thank you. it's interesting to see shares down 1.5% on base beiically a 7t to the dividend. >> all priced in but then again it's not up. that would have been a piece of bad news that at the end says we're going to rally these stocks. that's a big question for people who say the oil decline has worked through the credit system. you're going to have headline risk. these are going to kind of be a regular feature of the next several months or quarter. >> i think this is what these
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companies need to do. from an inest ver point of view, now it's -- i don't want to say it's a safe time to get in but the risk reward, the news is out there and balance sheet is better. you could kind of look more favorably when they do make announcements of dividend cuts of secondaries, you've seen all of these energy companies doing secondariries. >> 5 billion raised too date. >> and that was true last year. people are looking to put money in some of these names. coming up, why the pain in the hedge fund industry will be a gain for the broader markets and your money of the first, we've got first pictures of the m masera maserati's entrance into the luxury suv market when we come back.
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welcome back. breaking news on boeing. phil lebeau has details. >> dennis mullenberg who has been ceo since last july is now becoming chairman of boeing, effective march 1st. boeing just announced he'll move into the chairman's role. the current chairman and former ceo jim mcnernny is leaving the board after 14 years. not a huge surprise that mulenburg would be elevated to the chairman job in addition to ceo. current ceo of boeing is move into the chairman's role effective march 1st.
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>> but, phil, meanwhile, we're distracted by the maserati suv. what is going on here? i didn't know the luxury suv market was even a thing let alone so hot. >> it is red hot. if you've got $75,000 to spend, maserati has a suv you should be checking out. it's going to be in showrooms and pricing hasn't been announced but most i've talked to with are saying it's going to have a starting price of well over $80,000. at least that's the expectation. why at that price point is there so much demand. in the last four years because we've seen a increase in the number of models available and because of the market and look at the sales, almost 100,000 suvs starting at at least 75,000 were sold last year. increase of 279%. keep in mind when you look at these models from the egs ka laid to the tesla model x and
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bmx and mercedes and lexus, more than half of them are leased. that brings the monthly payment down to a much more attainable level even for the wealthy. but there are 12 models right now in the market with a starting price of greater than $75,000 and don't forget, we have bentley and lamborghini. chairman sergio has been asked, will you build an suv because there's demand there by the ultrawealthy? he says no, you'll have to shoot me first. that's a direct quote from him. ferrari is holding unite. >> i'll admit my producer thought the maserati looked kind of like a subaru. >> i thought it was cool. do you worry there's 12 of these products out there? i get the lower oil prices and
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people are shifting up, do you worry at this point? >> i don't worry primarily because when you look at the sales of high end cars, those costing more than 75,000, they've increased but not as quickly as the suv sales. what we're seeing with the ultraluxury models, whether it's cars or suvs, it's a rotation like the rest of the market. sure people want the $100,000 sports or performance car but they also want to sit up high and to have an suv and suv that will be decked out with the finest in terms of interior and features. that's why we're seeing that. i'm not very worried at this point yet, stephanie. >> thank you, good to see you, phil lebeau with more on the car market. time for a cnbc news update. >> here's what's happening this hour. uber driver jason dalton has admitted to the weekend shootings in kalamazoo that killed six people and critically injured two others.
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he waved his right against self-incrimination and admitted involvement. uber put out a statement saying it will not change its driving screening processes and there were no red flags in the background check of dalton. claire mccaskill tweeting that she recently learned she had breast cancer. it was detected through a regular mammogram and prognosis sis is good. a driver in oklahoma led police on a high speed chase on interstate 40 that ended when he barrelled through a fence and crashed into trees and then into a ditch. police surrounded the vehicle with guns drawn and took the driver into custody. it's not clear yet why that driver refused to stop. tiger woods agent releasing a statement saying that tweets over the weekend about the golfer's worsening health are ridiculous and absolutely false. marc steinberg says woods is continuing a rehabilitation plan for his back and update would come at a appropriate time.
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kelly, back to you. >> we were just talking about his health. >> that's right. >> interesting. >> sue, thank you so much. coming up, we'll be joined by an uber stake holder for how the deadly violence by a driver could impact its future and hear from a former legal adviser from george w. bush who thinks security should not take precedence over private when it kom comes to the iphone battle with the fbi. nobody move! get on the floor! do something! oh i'm not a security guard, i'm a security monitor. i only notify people if there is a robbery.
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the x1 voice remote is here. here's a look how we finished on wall street, gains of 1.4% across the board. we had rallies pretty much sat on the dow. closed higher by 228 points but that didn't deviate from everybody else. the broad index and s&p 500 of 25 points and nasdaq up 66. oil was higher and transports too. here's a look at fitbit as well. for the quarter it beat on estimates both top and bottom line but the guidance was lower than many expected and so those shares are down about 15%. now the battle between the fbi and apple keeps heating up. both sides garnering new support on whether they should help get into the terrorist's iphone.
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the families of the shooting victims plan to -- will any of this affect the battle? an attorney in private practice advising companies on privacy matters joins us now along with ron hasco, siftant director of the fbi and law enforcement legal defense fund. great to have you both with us. michael, i'll start with you, if you think apple is in the right. >> apple is in the right because the federal government has proved at this point that it's not capable of managing data well. it effectively abuses our private rights and neglects our security rights, n smt a seizing data of americans, sending out to local law enforcement and they are not disclosing to defendants and defense attorneys, this is information came from the nsa and federal seizure of data. furthermore the federal government has neglected the
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privacy rights and security responsibilities it has with respect to its own employees. the office of personnel management had its data stolen and federal employees have data out there. this data ultimately is responsible for providing funds to terrorist organizations that can then use those funds to attack us. this is a big issue. >> this a huge one. i was going to say it seems like the law still is the law and if there's evidence that the government needs in its case, then it should be able to access that, right? >> right, i think jim comey and the department of justice are doing their duty, what public expects from them and what the victim's families expect from them and we the public, we want to know not only why but we want to know where all of the offenders in this terrible terrorist act in san bernardino identified. think jim comey is exercising
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his fundamental duty and welcoming the federal courts and welcoming the congress to weigh in on these conversations and help us come to the resolution. >> but that's going to be necessary because congress has not weighed in. congress has granted the requirement to companies like at&t and verizon to make back door entries for surveillance purposes but that doesn't exist as it currently the law with smartphones, the fbi is trying at this point to require the companies like google and apple to do something that's not necessary, not mandatory under federal law. we have to remember that they've responded more nim bly to consumer concerns about privacy and security than the federal government has been able to. apple deserves a lot of credit here. >> why doesn't this -- i understand the smartphone is a complex issue and understand the potential ramifications of it. in terms of the simple facts of the matter, why doesn't the government have a standing or case if there's evidence in the phone to be able to access that
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evidence. >> current law has not created a mandate on these sorts of companies to create the backdoor accesses for law enforcement. apple companies of the world would have to create these new capabilities from the get go. that means the government is now requiring a private entity to be con scripted into government service, so can you force for example a neurologist to figure out a way to figure to convert the thoughts of a terrorist on paper? there's no mandate except that a judge might say you have to do this. but congress has not ruled. so there's no authority for this judge to issue this order. >> we should say and both of you mentioned it, it does sound like a commission may be the next step here formed and looking into how all of the issues should be dealt with going forward. >> that would be a great next step. >> thank you both for joining us, appreciate it. >> uber is holding a conference call to address safety concerns after one of its drivers went on a shooting spree in michigan. between picking up passengers. the latest headlines from that call are next.
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falling 8%, down 8.2% on this report from dow jones. we'll continue to dig on this one. >> seema, thank you. this is on top of a 20% of shares in the last two trading sessions. today involved cvs restricting access to the toe fungus drug -- >> the question has always been to what degree was the business dependent on these very kinds of relationships, just restating these known pharmacy relationships and all of the rest of it, maybe that's mostly in the stock but i don't think it really puts to rest those fears. >> i think health care has gotten hit enough that you can find other places where you have better visibility, rather than this where you have zero visibility. while it's come down a lot. i think it's a no touch at this point until you get the perimeters understood better. >> it feeds into the whole reimbursement situation and
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finding their ways around policy. you don't know what the historical revenue level is going to be going ahead. >> that's something that has been short the name. i think they have a sizable long position in it but tough road for this company. we'll probably get more details on how and exactly it's restating those earnings. dow jones reporting restatement is likely related to its sales to philidor. >> we'll hear from an uber shareholder on the latest driver issues. thanks for doing this, dad. so i thought it might be time to talk about a financial strategy. you mean pay him back? so let's start talking about your long term goals. knowing your future is about more than just you. it's how edward jones makes sense of investing. ngo 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.
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welcome back. uber holding a conference call this afternoon to address the tragedy in kalamazoo, michigan over the weekend in which a driver for the ride-sharing startup was charged with and a short while ago admitted to shooting and killing six people. kate rogers is here with details from this call. what did they say, kate? >> that's right, kelly. on that conference call uber defended its current policy of not using fingerprint and police background checks and said in the light of the weekend tragic estrength would not be changing the policy of using third-party background checks in their place. given the fact that the suspect jason dalton did not have a
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criminal history a background check would not have caught him. now, drivers are screened via third-party companies at county, state and federal levels. prospective drivers upload their license and vehicle information to the platform as well as their social security number. fingerprinting and police databases can provide false positives and in some cases can even be discriminatory. the company addressed also having a panic button feature on its u.s. app as it does in india. it's not available in the states as we have a sophisticated 911 service here. >> in this case we have the example of the rider who did call 911, that's exactly the bev may havior we want to encourage rather than trying to build something into our app into the united states. in india in the markets where we built that app, that feature for our apps, they did not have that same type of system that we could leverage. >> reporter: also of note. if a driver is reported to be
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violent they are suspended immediately. erratic driving complaints about investigated before action is taken because they say they get a lot of them. firearms are prohibited from being carried by drivers on the platform and the driver, jason dalton, had a 4.73 driver rating. he was approved on january 25th to drive on the platform and had more than 100 rides before the incident. kelly, back over to you. >> that's a pretty high approval rating, out of 5. it's interesting. stay right there, if you will. joining us is bradley tusk, ceo of tusk venture, has a stake as being an adviser to the company. they did the call today and are trying to be transparent and the issue do i feel comfortable putting my loved one in a car with an unknown uber question? >> you can ask the same question, do i feel comfortable getting in a taxi, subway, bus, down the drive? reality is people have to get
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from point "a" to point "b" and things happen and it's incredibly tragic but i think that's surprising if people change their behavior. >> uber as a matter of business objectives has to make sure that it has a large supply of ready drivers. >> yeah. >> is it kind of naturally reluctant to put up more barriers to getting these? what's kind of the company's self-interest here, you know, outside of this specific interest? >> i don't think so because i think for their self-interest something like this, the fact that we're sitting here talking about it, something they really don't want to have to happen so it's very much i would say in their interest to have background checks which we do. saw the report from kate, a lot that goes into the background checks and they are enforced in situations like this, background checks only works if there is a red flag that pops up, and when there isn't any they are uneffective and ultimately i can't imagine uber or any company would ever want to put themselves in a position to have to have this conversation. >> it raises the issue, just one second, raises the issue about
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how do they continue to get enough drivers as they expand? so if -- it's just -- you know, it's a cost benefit thing i guess. >> the reason that they are getting a lot of drivers for two reasons, one, a lot of people find it to be a very attractive way to make money. it's flexible, a lot better pay than driving a taxi and doing other types of works and fits into people's life-style where it can be a second job, part-time job and second, as you see the economy sharing and evolve the sharing economy continues to grow and as a result that's how uber gets drivers. they get drivers for the same reason they get customers which if you offer a good product that's appealing to product and passengers people are going to use it. >> kate? >> i would be curious to hear what bradley had to say about it. in new york city it's unique because the tlc conducts the background checks criminally and with the dmv with drivers in the city because that's what they do with their own registered drivers registered with the tlc and any sharing platform drivers
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go through the same thing in new york city but the tlc said they believe they are unique and the only city in the country where uecker has to comply with that. why in new york city and not elsewhere? >> taxi regulations, incredibly local. every municipality, every county and every state has some form of regulation around this, just like laws in all kinds of industries and sectors are different, different cities and states, that's the case here, too, and sometimes a tlc in new york does a really good job and sometimes they are guilty of overreaching. saw that this past summer when they tried to put a cap on uber's growth. every regulatory body does some things well. >> give you any qualms about using uber? >> what's the difference between a taxi and uber, and all other parts of life, right, so it's a tragic event. i guess my question is do they have to do anything now to kind of regain the trust of the public, or do they let this -- >> i think we'll see. but, look, the bigger question to me here is these types of
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shootings seem to happen all over society all the time. college applications don't go down when there's a shooting on a campus. people don't stop going to the movie when there's a shooting in a movie theater. obviously i think a lot of us would like to see different rules for access of guns so it's not as easy for people to get guns and use them but you won't see a change of behavior by customs. >> it would be concerning if the guy's background got past the screening process. >> exactly. >> kate rogers, thanks for bring us that story. up next, another check on fitbit shares are plunging after weaker than expected guidance. stay tuned. we're back in two. so what else is new? how's your mother?
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welcome back. until another blow to fitebit already struggling the last three months, stock down another 16% after results today. what's going on? >> we're in an earnings lull and the market is reacting to itself so it's a matter of these levels, 1950 in the s&p, the vix below 20 today. seems like it's stabilized. see if it has follow-through. >> the jpmorgan analyst investor day tomorrow will be a very big deal. really these stocks have rallied nicely since jamie dimon started to buy his own stock. >> the dimon bottom which some
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are calling t.february 11th, stocks up 6% for the s&p 500 since then and financials are up 8%. >> right. so i don't think it's going to be anything major. doesn't say anything that's a catalyst to get the stocks higher, i think we'll see. >> "fast money" begins right now. "fast money" does start right now. live from the nasdaq market side overlooking new york city's times square. i'm melissa lee. tonight on "fast" stocks surging but one classic market theory say things could soon take a turn for the worst. we'll tell you what it is and what it means for your money. not just geeks like guy adami, virtual reality and some of the biggest companies betting on its future. later, some. hottest stocks this month have one thing in common and it could be troubling. we'll explain what it is and what it could mean for the

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