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tv   Closing Bell  CNBC  March 15, 2016 3:00pm-5:01pm EDT

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what happens next? >> "closing bell". >> 16 times. >> they don't deserve it. >> yes, they do. >> i want a stuffed eagle that was manufactured in china. do you have that for me? >> i don't have that. >> no. ♪ >> welcome to "closing bell." a siren to kick off the show here at cnbc san francisco headquarters. >> you've got a siren going on there? what's going on there? >> siren, a clock tower, all sorts of things. >> right at noon. on the west coast. i'll bill griffeth, i can hear the trinity church clock going. the big stock story today, valeant pharmaceuticals, the shares plunging by 50%. never a good thing when the
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change in the stock price is bigger than the stock price itself. it's bringing down the entire biotech sector but the real warning sign for this company may not be in the stock move itself. we'll explain that coming up in a minute. >> well known tech investor -- it feels like that but it's warmer today. sitting next to me in just a moment, dan niles, he'll give us his two favorite stocks right now and one of them is not in the tech space. he'll join us exclusively in a few moments. >> the face of the election could look very different tomorrow if donald trump can beat both marco rubio and john kasich in their own states. we're going to look at both sides of who can be the candidate for business after the florida and ohio primaries. we'll talk to two former governors, christine todd whitman and jennifer granholm.
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>> the money behind steph curry, i'm a little bit of a fan girl. >> you're not alone. i know boys basketball team here in new jersey, they could wear a niksz and lebron james but they are wearing steph curry back here back east as well. he's a true fenom. >> trying to drop a lot of three-point shots. >> and half-court too. let's start with the market moves. the dow climbing back from 108 point deficit earlier today. closing bell exchange, we have greg sar yan from high tower at post nine and steve grasso from stuart frankel. >> i knew that. only been saying it about ten years. >> and rick santelli as well. steve grasso of stuart frankel oil going lower but the usual
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bias ahead of a fed meeting is up. we're sitting here like we did yesterday. what's going on? >> you have to look at it a couple of weeks back. we started with the g-20. then we went to china national congress. then we went to the ecb. the fed is the last leg of this hurry up and wait market. that's what you're looking at. volume is extremely light. people don't know whether they should buy into the market and don't want to have their picture taken. plenty of guys could not get the liquidity to hedge out their equity positions so they bought the commodities. so oil ran aggressively and the rest of the trading world thought it was an all clear sign. for me i don't think it's an all clear sign. i think it's a product of trying to grab the liquidity that fillered to the commodity space. i don't think anything substantively has changed but we are leaning more fiscal stimulus than monetary stimulus and market sees that as maybe a let's dabble a little bit.
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>> we also have data rick, talk about the data flow as everybody's hopes were brightening and data was coming in better than expected, how about that retail sales report this morning? >> it wasn't but i don't know if i agree on your premise. the sales -- data hasn't been really good. it's been kind of average. some of it has been slightly above. i guess nothing frames it out better than atlanta gdp now 1.9 versus 2.2. 1.9 is interesting, that's darn close to the average. if you look over five years of gdp in the united states and take 20 quarters, a whisker under 2%. that's it in a nutshell. we could talk all day about slightly lower glide pagts and vul recession. in the end that's what it's all about. i agree with grasso, he's completely right as well. people are trying to find
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anything to grab on to. literally i don't know the last time g-20 gave the perfect strategy direction for a trade. the globe demanding more stimul stimulus, that's wait until next year if you're a chicago baseball fan. it's always out there. in the end, i'm not sure what the fed is going to do but i wouldn't be surprised for the next three years we have around 2%. does that mean we stay where we're at in terms of all fed policy? i can't answer that but can tell you that retail sales to revisions were nasty. >> are you already writing the cubbies off in spring training? >> kind of. vegas is betting for the cubs, that gives me a shuder, i have to say. >> contrarian on that. greg, you're grasping onto the very popular sector, large cap dividend payers right now. that's where a lot of people are right now, right? >> you're right, this is a market of extreme volatility eight or ten years ago we were thinking about financial
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armageddon and made a 10% rally back. a safe haven or cash rich dividend paying names but we think this peak here will be indicative of what the market will be like. look at the peaks and valleys. rebalance portfolios and make sure they are properly allocated. we could be back in the valley in a matter of weeks. >> greg, what are places specifically you think investors should look for the yield if markets are going to be turbulent? >> this may sound really boring but we're big advocates of laddered municipal bond portfolio, 2% tax free. i think investors have to assess tolerance for risk right now. some of the utilities are good and manufacturing names. those are areas that are safe havens if we see that type of choppyness and volatility, markets nervous around what the
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fed is going to do. the fed has ammunition to begin raising rates and many have argued they should have already done so. investors need to position themselves in defensive conservative post tours to be in a more protected environment. >> are you saying you're not going -- you're going to sit on your hands until 2:00 tomorrow when we hear from the fed and get the last? >> i think it's very difficult to buy this market at this level in the s&p right now and feel very confident about it. you're walking into a wall of resistance. i've said on the fast money show that i think 2040 is a level where you say i was wrong as a bear. i need to dabble and buy and buy a little bit. but it must hold that 2040 level or we drip back down and maybe it's more than just a drip. we're moving right into a wall. you have a bunch of weak moving averages. then we have flat on year that's just a hiccup away from the spot. at least a dangerous spot to go back in after you've been
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sitting on your hands. wait until it proves itself. >> thank you all for joining us today, including steve grasso of stewart frankel here at post nine. kelly in. >> shares of cbs is lower, looking at three to four original shows per year. you can see the shares down a little, about 2%. this media stock is one of famed tech investor dan niles' best ideas right now. he's founding partner of alpha one capital partners and joins me now with why he likes cbs among others. it's great to see you. >> good to see you too. when you look at cbs, it's sort of epitome of old school advertising media company. what's really interesting about it this year you have something happening that happens once every four years. you have the olympics and you've also got a presidential election that will probably be the most costly in the history of whatever we've seen. and both of those things start
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to hit, olympics in the third quarter and presidential elections in the fourth quarter and that should really benefit the advertising companies like cbs. >> if you like advertising the cycle, do you also like it in terms of people spending on facebook and social media platforms or think that cbs will do better than some of them? >> facebook is our favorite by far. if you look at the advertising market and split it, you goo, the advertising market globally about 500 billion in size, grows about the rate of gdp. the online market, that's 32% of the total. tv is 38%. we think that 32% will get much bigger. it grew 17% while the overall tv market was flat. and facebook is the fastest growing within that which is social driving it. so facebook is our favorite over time because the growth rate more online video, them starting to monetize instagram, good for them. >> facebook is not cheap either. >> what would you do with
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twitter which could argue a platform as well for these trends and benefit from it but much less expensive by those metrics? >> here's the problem, right? stocks that look inexpensive, they are inexpensive for a reason. trying to bottom fish things because you think they are quote/unquote cheap. it's a problem. facebook puts up margins in excess of 50% and growing top line in excess of 40% and growth rates actually ak sell rited the last two quarters. if you look at twitter, my belief is at some point it gets acquired but people have been thinking that's going to be happening for the last year and it keeps going lower because fundamentals get worse. it can get a lot cheaper if the fundamentals continue to deteriorate. >> going back to the traditional tv spags, i don't want to put cbs in that bucket because they are doing innovative things. why cbs and not necessarily some of our parent company comcast is out there, 20th century fox and disney, other ways to play this,
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right? >> definitely. of the thing with cbs, you've sort of go one of the few peoples along with the other broadcast stations that isn't going to be -- skinny bundles, if you're offering 20 channels instead of the 100 we get, cbs will be one that's on there and pure play on advertising. you don't have some of these other issues you have with the disney where you have espn causing issues and cable side of the business as well. we own other media companies as well. cbs for us gives us the purest way to get a hold of what we want, that advertising upside for this year. next year it probably gets rougher but i think it's going to be a good rest of this year. >> let's bring in bill here. >> the thing that caught my attention on the cbs announcement, one thing where they are adding programming to the streaming side but they are also that they are exploring strategic alternatives for cbs radio, you know what that means.
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that has been a huge part of the cbs family for -- since its inception, you know, in the early part of the 20th century but radio has been in a funk. they are clear they are going to shed old media not working well and go towards new media, right. >> to your point, you have to keep moving and go where the money is going. i don't know the last time they watched appointment tv where they said, i've got to sit down at 7:00 to watch a program, right? i think the issue you've got is they are getting rid of radio to move to online and that's exactly what they should be doing in terms of investing in the future and sort of getting out of the past and trying to monetize as well as they can. >> quickly while we still have you, one issue we'll hear from or ka kel in terms of earnings, i know you've talked about a lot of companies slashing tech budgets and that being a concern. is that what you would say about
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a company like oracle here? >> we have deep concerns about it spending this year. you talked about lynn energy and pharmaceuticals. the big issue coming out of last year, if you look at i.t. spending, 2.7 trillion in size. banking and securities is 18% of the total and natural resources and manufacturing another 18%. all of these companies are slashing their budgets because the banks are under pressure from low rates. you know what's going on with oil and commodities and so they adjusted their budgets but i'm nervous about old school hardware companies as these budgets start to flow through the numbers. >> thank you so much for joining us this afternoon. >> thanks, dan. >> great to see you out here. they even brought the sun out for us. dan miles. >> we can actually see the san francisco bay today. it's nice of them to bring that out. we have 47 minutes left in the trading session and the dow is up three points right now. that wait and see mode as steve
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grasso is talking about as we get ready for the fed meeting announcement tomorrow at 2:00 eastern and we'll have live coverage of fed chair janet yellen's news conference here on "closing bell." pretty quiet in terms of volatility. much more ahead of our san francisco edition of closing bell. tim draper will speak with kelly where he stands on theranos and gavin newsome will way in on the presidential race and golden state warriors, their president rick wells and ceo larry bayer, on the challenges. up next, christine todd whitman and jennifer gran holm. sales event is on.
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choose the lowest and hit purchase. now...if you'll excuse me, i'm late for an important function. compare.com. saving humanity from high insurance rates. >> morgan stanley shares are under pressure today following comments made by the chief financial officer at the company's european conference. not very upbeat, among other
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things he said that investment management is having a very tough quarter for morgan stanley and he does not expect that division to contribute to the first quarter's bottom line. there were other things as well but that was one of the standout comments he made in today's conference there, kelly. >> all right, it is make or break tuesday for presidential candidates, ohio governor john kasich and marco rubio. they are campaigning hard to win primaries in their home states. scott could hen joins us know from columbus, ohio. hi to you, scott. >> reporter: hi, kelly, ohio is always big in a presidential year, this year it's huge. it is not lost on people here in ohio. the turnout has been virtually nonstop at this precinct and others like it as voters look at the potential future of the campaign really in both parties and voters that we've spoken to
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clearly realize what's on their shoulders. >> it seems it always comes down to ohio, ohio, ohio, it's good we get to make that decision, it's our voice that really counts. >> here's what's at stake in ohio by the numbers on the democratic side, 143 delegates will be awarded proportionally based on results and gop, 66 delegates and that is winner take all. there's a lot more to it than just the numbers. this is the state that really could either put it away for the front-runners, donald trump and hillary clinton on the democratic side or potentially give a boost to john kasich, the popular governor here and those rpz who want to stop trump and potential second straight upset in the treel midwest for bernie sanders. a big wild card here, crossover voters, widespread reports of democrats choosing the republican ballot when they got
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here. who they are voting for on that bol lot is yet to be seen. we won't know that before tonight. >> thanks very much. here now to weigh in on the race as it stands right now, we have a supporter of democratic front-runner hillary clinton. we welcome back former michigan governor jennifer granholm and former governor of new jersey, who supports john kasich. governor whitman, let me ask you about donald trump, no love lost between the two of you, but you have the classic outsider leading the race on the republican side. i think about what happened when barack obama was elected and jimmy carter, you had disgrantled voters who went for the classic outsider. isn't that what's happening this time on the gop side? >> it's certainly a lot of angry frustrated voters lashing out and taking anybody who will tell them they'll get things done because they've been so frustrated by congress and
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administration they they paid no attention to the real needs of the country. as people take a real look at donald trump, actual record as a businessman and the kind of hate he generated. he may not be a racist in of himself but encourages others to think that way. i don't believe the american voter will support someone like that. >> i wonder governor granholm, if you not only agree but how you would look at the race on the democratic side. hillary clinton is quite clearly running to carry the mantle of the -- >> let's be clear about what john kasich is bragging about, all of these jobs being created in ohio that is so much due to the attempt to save the auto industry, are you going to support somebody.
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>> who is going to carry it further or take it a different direction? you had a debate about trade and why the turnout is going to be high is one issue, jobs in the midwest. the question about trade is going to be, are you totally against trade? are you going to be against all trade gemts or in favor of fair trade bernie sander was asked, how would you negotiate, what would your leverage be? he didn't have an answer. hillary clinton has got both strategies to create jobs in america in a global economy incentives to create jobs here and tough on trade and enforcement. this issue about trade, the obsession about jobs has got to be the number one issue for these candidates and for hillary clinton, that is it. she represented upstate new york and knows what it's like to see people and look them in the eyes who have lost jobs. that's what this election will be about. tonight will be focused on that
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issue. >> but governor granholm, bernie sanders won your state's primary on those issues where he talked about creating jobs and -- >> he talked about being anti-trade is what he talked about. it wasn't about creating jobs. you can be anti-trade but what are you going to do to create jobs in america in a global economy? what are the sfrtrategies to gi job providers access to capital and lure incentives? that is why you need a comprehensive plan. >> this has hardly been bsh clearly hillary clinton is the front-runner but hardly been a cake walk. do you think if and when she gets the nomination that the people who support bernie sanders can get behind hillary clinton? >> yes, i do because she is going to have that issue about jobs and trade together. they will be united in the end. i do want to say this, tonight is such a key night.
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people cannot be kplasant about these polls the public polls are wrong. this race is close. people need to get out and vote. they need to vote for somebody who's going to win in the fall. >> governor whitman, i heard some kasich supporters say it's the last chance to decide if they have to leave the country or not. with a what is his path forward? for john kasich to make it from that to receive the republican nomination and challenge a democrat for the white house? >> we have a lot of states to go, even new jersey might make a difference. it's a question of getting enough delegates between he and marco rubio and ted cruz to stop donald trump on first ballot. then it's a wide open convention and maybe people will decide they want a candidate and team with whom they can win but people who can govern and really bring the country together and get things done. john kasich has done that and he
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did it in his time in congress and done it in ohio. he has shown that he has the scope of skills and experience to really make a difference. he's been an outside are. if you talk to people from the reagan administration, one of the toughest to deal with was john kasich because he thought they were spending too much. never thought they were saving enough. he has both inside and outside. that's a unique combination very much appreciated when it gets down to doing business of the people. >> if john kasich doesn't win, christine todd whitman, i hope you'll consider hillary clinton. >> you said you would probably vote for hillary clinton if donald trump got the nomination. do you want to tell jennifer if that's still the case. >> i'm certainly not going to vote for donald trump and i thought my vote would make a difference for hillary clinton, i could vote for her. it's not my first choice but i will not vote for donald trump.
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>> this is why she's my favorite republican. >> you're not such a bad democrat either. >> kind of interesting to read that hillary clinton was going to theranos for a fundraiser, technology has proven as not being being there. i'm not sure what the company is doing at this point as regulators are looking into it and what's the real story here. what's the benefit of hillary clinton having a fundraiser there? i understand there's some prom nept people on the board? what is she trying to accomplish? >> i'm sure she's trying to raise money. obviously coming to the area where there's high tech and making sure that there are people on the board, it's all about -- i'm sure at this moment a race to put -- have the funds to be able to make her case to people. we've seen that bernie sander has got a huge amount of money and she's going to continue to try to compete and only way you can compete with your message is
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raising money. that's why she's there. >> i get that but if i'm bernie sanders or anybody, i say, wait a minute, the association just -- i don't know, just doesn't seem to look -- i'm -- i don't understand why she feels that's a risk worth taking but perhaps that's how desperate the fund raising is at this juncture. >> if you're going to a place where you've got a lot on the board interested in investment and technology, whether this particular company is going to fly or not, who knows, but she is interested in investing and research and technology and part of her economic plan. she'll be with people who are interested in hearing what the role of government should be in fostering startups and creating incube ators and economic clusters, she's got a whole strategy around that. getting their feed back and interacting with them as well as raising money will be important. >> governor granholm and whitman, great to see you. >> thanks for having us on. >> a little over 30 minutes left
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in the trading session and the dow up ten points, not much volatility for a second day running ahead of tomorrow's announcement from the federal reserve. coming up though, why shares of val yant pharmaceuticals getting clobbered. down 50%, cut in half literally. we'll discuss the chances of recovery for that stock in a little bit. rick welts talks about keeping wins and profits on the rise. ♪
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the golden state warriors remain one of the hottest teams in professional sports. warriors became the fastest to get to 60 wins in a season and continue their quest to break the record of 72 wins in a single season. their historic season isn't the only thing exciting fans. they are plans to build a new stadium by the 2019 season. joining us now is the team's president rick welts. thank you for coming in. >> thank you. >> congratulations on an amazing coupling of years with the team. >> it's been a remarkable ride. we hope it keeps going. >> you have a huge bet on the fact -- stake on the fact it does keep going. this is a billion dollar stadium project. is that the most expensive in history? >> it will be close to it if it's not the most expensive. what's unique about it, the fact
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this is 100% privately financed, there's absolutely no public land, no public funding of this, the only way to get it done in san francisco -- >> how many investors are we talking about? >> the warriors are made up 25 investors from this area but it's a business model i wouldn't suggest trying in a lot of markets but in san francisco we have a unique opportunity. >> you have money here and people are used to speculating if you will on the next big thing. but still this will be a big deal. what do you think having facilities like this can contribute either to the success of the team or are you also looking for it to double as some sort of investment in the area, kind of leverage that as well? >> we're hoping to set the foundation for us to be successful for the next 30 years. we right now play in the oldest arena in the nba, older than madison square garden. we need a new facility to go forward. for the city of san francisco
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and whole bay area it's impossible to imagine that san francisco is the only city anywhere near its size that doesn't have a world class sports entertainment arena, the first time in san francisco's history that we've had that. the musical acts that have never been able to play and family shows that now don't play in san francisco, it's going to be bring a lot to the city in the region. >> you could have raised money by selling special edition steph curry jerseys or something. talk about what he's done for business in terms of merchandise? >> steph curry's jersey is the number one selling nba jersey in the world. the warriors branded merchandise is the number one selling team in the world. the amount of attention and success this team has had and the way our team plays to be led by a steph curry who is really a once in a generation kind of player. >> you're right, it's an incredible team. the way that everybody tries to compliment each other on the court and pulled off some of
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your victories, i couldn't see a path in oklahoma thunder game, unbelievable. you're holding a couple of hats here as well. we read about steph curry's ankle. god forbid something happens again and the success you're having right now will be hard to keep up at this level. what happens if you're in a situation with a brand-new stadium opening and for some reason the warriors kind of -- they are not playing record breaking seasons anymore? >> well, no team has ever been 60-6 in the history of the nba. this is new territory. but what's great about our team is that the core of our team is very young. we have great veterans to supplement the core but we have a lot of young talented players under contract that we're pretty optimistic we'll keep it going for a while. >> do players have extra incentive if they have a 72-win season? >> the incentive they have to
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get another ring. we got one last year and the 72 wins is a number that nobody ever thought would be challenged again in nba history. we may have an opportunity to do that but much more important being healthy into the playoffs and try to see if we can repeat our championship. >> we will be watching. for sure. thank you so much for joining me. >> rick welts. bill. >> 60 wins this early. unbelievable. time for a cnbc news update. >> here's what's happening at this hour. nbc news confirms one suspect has died in an anti-terror raid in belgium, two other gunmen are still at large. the federal prosecutor's office says the body was found while police searched a home in the town of forest. police were searching for people connected to the november paris terrorist attacks which killed 130 people. a special mass was celebrated in india after proep francis announced mother teresa will
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officially become a saint. the vatican confirmed the ceremony women take place on september 4th. she died in 1997 at the age of 87. air travelers spent less time waiting in january. a new report found flights arrived on time 81.3% of the time. they were also no tarmac delays of over three hours. take a look at this, perfect for kelly, take a look at that diamond. world's largest oval fancy cut to be auctioned off on display in hang congress. it weighs 10 karats and expected to sell $30 million. it's flawless and colorless and goes with any outfit whatsoever, bill. >> what are you looking at me for? >> i'm just throwing it out there. >> okay. it's a lovely piece. >> it certainly is. see you in an hour. >> all right. 24 minutes left in the trading session, the dow waiting for the
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fed -- we'll talk about that with a leading trader and what he's watching into the close. then later kelly speaks with billionaire venture capitalist tim draper about his early investment in thera nos, the blood testing technology is under government scrutiny. does he still support them? we'll find out coming up. you're an at&t small business expert? sure am. my staff could use your help staying in touch with customers. at&t can help you stay connected. am i seeing double? no ma'am. our at&t 'buy one get one free' makes it easier for your staff to send appointment reminders to your customers... ...and share promotions on social media? you know it! now i'm seeing dollar signs. you should probably get your eyes checked. good one babe. optometry humor. right now get up to $650 in credits to help you switch to at&t.
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i'm joined on the floor of the new york stock exchange by matt cheslock, you never short a dow market. >> you know my philosophy but the breath is very negative. >> no volume -- >> it really is an indication of what the broader market is doing. everyone is looking forward to the fed tomorrow there's going to be quiet. >> what do you want to hear at 2:00 tomorrow? you know what, it's an interesting question, whatever they say, they are in a box now an market could react violently either way. so one thing we're looking at is gold. the gold hasn't acted very well. that would lead me to believe the fed may be more indicative
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to a rate rise. we saw recession times and negative rates and gold rally. gold sold off in the last four sessions. >> your bias is still to the downside? >> there's nor threat to the downside. we saw retail data that wasn't supportive of the consumer. if the consumer is not involved, who is? is it more than corporates buying back stock? can we get others involved? >> we'll see what happens tomorrow. thank you, matt. >> good stuff. we've got a little less than 20 minutes to go before the bell. as mentioned, markets are largely flat ahead of the big fed decision but shares of valeant is tumbling. more bad news could be in store as well. mike santoli will have more next. tim draper wanted to carve california into six states, now has a new idea, give everybody 15,000 bucks. i'll find out what's behind it coming up in this bicoastal edition of "closing bell." stay tuned.
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shares of valeant down 50% on back of disappointing earnings report this morning. i sat down with jeff ubben.
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still confident in valeant mike pearson and future of the company. >> he is incredibly driven, incredibly smart. he's a great problem solver and we're solving problems as we speak, as the model changes and shifts. we think mike is the right guy for the job. >> do you think it will be a $200 stock again? i think you could earn your way into it. we haven't been able to control the narrative. the short sellers dying for some crisis like -- >> darn media. >> let's bring in senior markets commentator mike santoli for more. ubben also said, he only gets rewarded if the company can sort things out and today that looks tougher. >> i will say that the company still continues 24 hours later not to be able to control the
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narrative. what you're seeing in the stock is mass abandonment of this story. this is a $240 stock six months ago, it's not just about the earnings disappointment or guidance being lowered for this year. if you can believe the guidance of $10 in adjusted erngsz per year, this is a screaming buy. the complicating factors, $30 billion in debt. it's about a $12 billion market cap right now on valeant. $30 billion in debt. there is some concern they could be placed in technical default because they'll be late in filing their 10k. there's no real sense that the creditors want to force that but just the fact it's hanging over the company is an issue. the bonds have traded much weaker and valeant trade around junk bond levels, even though formally speaking -- all of this stuff is swirling around. we feel that investors don't believe that the ceo and management in general has a handle on the business because
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they've been citing everything. if you thought this was a kitchen sink quarter where they were saying all of the bad news is out there, then the stock would not be down 50%. >> jeff ubben was mentioning mike pearson but bill ak man sees value in here. when you pick through the rubble, are there nuggets of vally a with a from the controversy? >> bill akman owns close to 10% of this, has one of his people on the board. we're going to try to maximize value. at some level you want to start looking at the value of the company that valeant rolled up. it was a rolled up strategy. as a marker, boush and lomb, together, they have mentioned asset sales it's not clear this is the environment where they get real value out of these businesses. >> such a difficult time people
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are having trying to make sense of it all. mike santoli keeping an eye on it for us. >> the dow right now 13 minutes left -- yes, sir, 100 million to sell going into the close. not a big imbalance to the sell side and you're not seeing a big move with the market right now any way, we'll tell you why fedex could be the best of the transportation bunch next and check out cnbc make it.com. a new destination, giving you unparalleled access to ceos and entrepreneurs and celebrities in one place so you can get a little help along the road to your dreams and make them come true. cnbc make it.com.
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we have eight minutes left with the dow down 2 points. we want to focus on one sector, transportation. with me is donald rodden from
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after vonn dale partners who follows that sector which you're not high on. >> i'm a bear. i have my talons out. if you look at rail volumes and truck volumes you have to be bearish. we've been in an industrial recession now for over a year and trucks are starting to signal we may be slipping into general overall. >> a lot attributable to lower energy costs. >> less fracking and not moving stuff. >> people are not making the investment. a lack of fracking activity and hydrofrackers and refining capacity and building new tank cars, you name it. >> you like fedex. >> i do. that's a completely different part of the market. you're dealing with high value, low density goods and e commerce and global economy. it's a different business. >> how much business will amazon take away when they start their own? when they are leasing these jets
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and i realize that's not a huge part of fedex business but i wonder if they start moving in that direction more aggressively they could take more away. >> here's the bottom line. amazon did $109 billion of sale and walmart $550 billion. one fifth of the sides of walmart. doing what large retailers do. no matter who you are, large retailer, they build out the last mile. look at walmart. 7,000 trucks, over 20,000 trailers and the largest customer for swift and hunt and these other big truckers, it makes them more rational as well because a lot of demands they make will be lower because they'll be realistic on what it takes to get what they want. >> what about ups? >> not as positive. it is -- let's face it, look at the track record. ups came public in 1999 at 75 bucks a share and struggles to
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stay above 100. fedex in the same time frame is woefully outperformed. >> you're going with performance clearly. >> absolutely. we buy stocks and get long stocks because we think they are going up. >> that's a good strategy. that's why you are where you are. >> i've heard that. >> good to see you. >> good to see you. >> we'll come back with a closing countdown and we're back to politics. gop voters may turn out for donald trump in part for his immigration plans but california's lieutenant governor gavin newsom believes he's wrong headed on the topic and challenged him to a debate. gavin new som will give his side of the story coming up.
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mobility is very important to me. that's why i use e*trade mobile. it's on all my mobile devices, so it suits my mobile lifestyle. and it keeps my investments fully mobile... even when i'm on the move... ahhh. less than three minutes left in the trading session, dow up 8 points. it is a lot like yesterday, not a lot of volatility and not a lot of volume. and you just have to believe that the market is just waiting for tomorrow's fed announcement which will be at 2:00 eastern time. we'll xr that for you live along with fed chair janet yellen's news conference. it looks just like yesterday. >> valeant, the big feature today with the disappointing
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earnings and guidance and delaying of the filing with the sec and the stock literally cut in half. it's never a good thing when the change is bigger than the stock price itself. >> more importantly it hurt pharma and biotech. a number were down double digits. >> are we seeing a decoupling of stocks and oil. oil continued lower today, didn't take the stock market with us per se but down about 2% at $36.44. then we get earnings tonight and this might move the market tomorrow. we'll see. oracle reports after the close. kelly will have that coming up at the top of the hour. >> the bore domestic will end. low volatility, it's going to end fed meeting tomorrow and we'll get a lot of volume into the close on friday and s&p is going to rebalance on friday as well. we'll get volume on that. i have said this for two weeks. i think the risks are to the
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downside. the fed has to acknowledge that the economy is somewhat better than the january meeting they had and also you'll have to somehow find some way to lower the interest rate forecast. everyone -- in december they were talking about four maybe more. obviously if they are going to not hike until june at least they've got to lower that somehow. to communicate that in some way that doesn't concern the markets and i don't know what they are going to say on inflation. it seems a tad higher. any one of these things could cause the market to drop. they've got to convey the economy is better and may hike rates but the market is so sensitive. draghi says i don't see the need to lower rates and markets dropped. we're very sensitive still to anything central bankers say and it's easy to see why markets could go down and hard to make arguments why it's going to go up. >> so we'll wait until 2:00 eastern tomorrow.
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>> thank you, bob. >> little bit of a minor prally, dow up 20 points to finish off this day. don't forget tomorrow's fed meeting. right now ringing the bell is volaris. stay tuned for the second hour with kelly evans and company. i'll see you tomorrow, kel. >> thank you, bill. welcome to the closing bell. i'm kelly evans in san francisco. stocks were down sharply at the open but made their comeback throughout the afternoon and dow closed higher by about 22 points. couldn't say the same for the s&p and nasdaq, gave up 4 points on the bell but nasdaq down half a percent today. we are just moments away from or ka kel's earnings report. we'll get instant analysis and reaction to those numbers coming up in just a moment. first though, let's introduce today's panel.
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joining me for more, senior markets comment ator michael santoli and bob pisani. i think i saw oracle flash. before we get to that, what did you make of the market today? >> like yesterday, waiting for the fed and cpi tomorrow. i will say below the surface, a little more ragged today. you had 3-1 down stocks to up stocks and prominent blow ups like valeant too. it was more of a sellers in control even though at the top line level it looked like a flat day. >> what are you thinking, kenny. >> i think mike is exactly right. it's all anticipation of not only the fed tomorrow and mac co-data but ecb on thursday. overnight last night we heard from bank of japan. they downgraded the japanese economy and left everything unchanged and now the show is going to move to what's going to happen here in the states at the fed. it was a perfect day in the
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sense that the market is digesting and did feel sloppy today. i think people are just kind of positioning themselves. >> well, let's get to earnings here. those oracle results did cross the wires. how do the numbers look? >> currency factors in big here you have to keep that in mind. the headline number, 9.01 billion in revenue, street was looking for 9.1 billion eps beat at 64 cents versus 62 cents. the street expected. looking through the different business lines to see how this broke down, software and cloud revenues at $7.1 billion right what the street was looking for, cloud, sas, software and plas form as service revenue, street was looking for 555 million and came in at 553. you want to see that higher. cloud infrastructure came in a little bit light at 152 million
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versus 159 expected. going to look through for more detail and also perhaps worth noting that oracle's directors reauthorized the purchase up to $10 billion of common stock under its existing share repurchase program in future quarters. perhaps oracle leaving the door open, it's off the lows to taking advantage of what it sees as distress stock price. we want to listen for guidance on the call. next quarter is oracle's biggest quarter, that could be shifting based on the move to the cloud, however, oracle likely to give currently guidance in the call that investors will listen to before the q and a. >> john, thank you, it looks like shares moved negative initially but are positive on the results. aside from what they are saying here, it was interesting what dan niles told me last hour, you look what's happening across the energy space and look at financials and deflation, it's
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hard to see where there's going to be a lot of big cap exspending on i.t. going forward. >> you have to grell with that. mature companies like oracle aren't talking about that any kind of real thrust of i.t. spending from businesses, it's much more about managing these long-term transitions and returning cash to shareholders and now we have another incremental $10 billion buyback authorization. it's not any more about just exactly how strong is the spending cycle going to be but how to manage the finances and balance sheet and transition to long-term subscription business. to me the question is, how long investors give a company like oracle to have the transition take place and what kind of multiple you put on prescription revenues. >> the thing to watch, are they sabl to move their business to the cloud? that's what they've been emphasizing, you heard john do the numbers. they are clearly improving and $10 billion is pretty significant. we're dealing with 150, 160
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billion market cap on oracle. we're talking about if they execute the full buy back about a 5 or 6% reduction in the share count xbl people will look at the read through as well, right? >> i didn't hear more information on that. i heard about the cloud infrastructure. $583 million relative to the market's competition and 555 million. so many of these companies trying to translate a legacy business into a new growth space, those numbers while small in the overall scheme of things are the place the market will be looking. kenny, we've had a lot of people going back and forth about she's share buybacks, maybe it's not the worst thing. >> i think you're right. we can argue that both ways, certainly it has been very, very
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helpful to the market. the concern is what happened to the market if those share buybacks start to withdraw or don't keep them up at the pace they are keeping them up. have they really been responsible for a lot of market action? i think that's a worthy conversation to have. >> another aspect mike of of the discussion we had with jeff ubben was about a couple of old school names, microsoft and adob bee, saying here are two companies they left for dead a few years back and they are able to make old tech new again. they are having some success there, being able to give software as a ssts and owning that relationship and being able to move from a model of drrks to one where people are paying for these annual contracts. >> exactly. as a matter of fact, what you really want to see with a company like oracle.
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when you have critical percentage that do make the transition and become subscribers to the softwares of service and become plugged into the cloud then market re-rates the companies and gives them credit for that. it also happened with adobe. i always think there's a reserve of misunderstanding or just you won't give them credit for getting it done before they get it done. microsoft looked cheap for years before it speaker sueded the street. >> that's the exception to the rule though, microsoft was able to successfully transition to new environment and reinvent itself. oracle has been partially successful but look at other old school -- how tough it's been for ibm. microsoft may be the exception here for the old tech companies. >> let's bring john fortt back in. >> i want to point out a couple
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more detames in the release that are ger main to the discussion you've been having. a quote from the ceo saying our cloud business is now in a hypergrowth phase, pointing to the cloud sas and pass, software and platform service revenue up 61% in currency. our gross margins climbing to the target of 80%. these two factors will ignite cash flow growth over the next few quarters and the company goes on to argue that like platform and software service companies work day and sales for, oracle is growing really quickly and in full sales mode in this release. i've been talking to oracle customers who are noting when they come to the presentation selling cloud they bring accountants to the table, not just engineers, speaking the language of the customer in a way that the cloud upstarts are
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not. it remains to be seen whether that's going to fan out. but this release, speaking not just to investors but customers, it's not just the cloud results but also that investors are believing that oracle and going after that investor belief as well trying to ingender that same type of response. >> that's a point, john, thank you, shares are up 3% after hours. kenny and mike, give us a sense of what to keep an eye on tomorrow? >> it's going to be all about the fed tomorrow. the market will churn and stay in place and wait and listen. anyone expects a rate increase tomorrow at all. they are waiting to see what she says and how she says it and how definitive and they read body language and read between the lines and looking for any clue that will tell them when rates will actually move higher. that's what the story is going to be tomorrow. >> on that front, kelly, the dwo
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two-year traded rock steady, in other words the weak data has not taken away the idea that the fed is looking for an opportunity to go a couple of times later in the year. it looks like the idea of some kind of no move but some kind of acknowledgement of firmer data is in place. >> how do they lower their interest rate forecast without completely letting the market fall? very delicately. >> a lot of talk about the dots. >> appreciate it, guys, thank you. it's super tuesday part three. up next, california lieutenant governor gavin newsom tells us why he's taking issue with donald trump. and elizabeth holmes theranos being valued at billions and we'll talk to a venture capitalist who gave holmes her first million to start the business. tim draper joins us later on "the closing bell."
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donald trump is looking to increase his delegate lead. eamon javers in palm beach.
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nice assignment. >> big day here at palm beach fire and rescue station number one. traffic has been heavy all day. very steady foot traffic. people coming in to make voices heard. we think we know what's going to happen in florida today just based on the polling. hillary clinton has a very commanding lead over bernie sanders and take a look where they stand on the republican side. donald trump with a very significant lead in polling, trump 44, rubio 27, one of the most recent polls rubio the home state senator here in florida and cruz 17 and kasich just 9% in florida. what's at stake here? a whole lot of delegates for the party's nomination fight. republicans 99 of the 1,237 delegates, 214 delegates and 32 of the superdelegates of the 2,832 needed to win on the democratic side. we think we know where it's
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headed in florida but voters have a way of being unpredictable. we'll have to see bhapz here in florida tonight. a big win for hillary clinton and donald trump could lock this thing up or get it very close to being locked up. a loss for either could mean a much more extended primary season. >> it's going to be an exciting evening. that's for sure. thank you. one of thedy devicive issues, some claiming trump's policies are racist. my next guest calls him a loser and challenges him to a debate. gavin newsom. >> a shocking point of view to disagree with his point of immigration on the wall that cannot be build because you cannot build over mountain ranges and rivers and private property without years of litigation. tribal lands. it's just a farce. i can't believe we're having
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this debate in conversation. what a laughing stock we are for the rest of the world. >> what if i live in southern california and i say well what are you going to do and put an end? >> california has done a good job in border enforcement. it's not as segt an issue it was. the bigger issue is going back and forth for century lanes and we're the first state to provide for commerce and looking regional at creating economic clusters that can be vibrant clusters not just for the united states but also for mexico. we're actually moving past that debate into a deeper debate about economic development and workforce development and building partnerships and opening up doors and being more transparent and not focusing on the politics of division. >> a lot of people in business will take your point but the rest of the country will say you're blind to the problems including here in san francisco where there's been real violence by illegal immigrants, not listening to me as a person who is scared and thinks there needs
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to be something done about this -- >> we should secure our borders, no one is denying that. it's not just building a beautiful wall with a beautiful door. there's so many ways to secure a border. that said you have to embrace the fact that california has more to gain and more to lose by this debate. we have more to gain as relates to the h 1b vees is issue and workforce and particularly in agriculture that's reliant on seasonal labor and a state that understands the return on pluralism has never been higher. we want to focus on uniting us not dividing us. this state and region in particular is a regional asset because if is not tolerating its diversity and celebrates its diversity. we're not interested in people breaking the law regardless of where they came from. no one is condoning that. we had a specific tragedy exploited and continues to be by folks on the far -- well
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extremes of the political -- >> still happened and they can become political footballs and they bring deep seated an sites people have today. >> the steinly case in particular which happened right over our shoulders, it's a case study in a lot of -- there was a lot of misrepresentation about the facts of this and the fact that california has a number of sanctuary cities and san francisco is one of many cities. there are hundreds of them all across the country. they were aspects exploited and took play into political agenda and that was unfortunate but the tragedy occurred nonetheless and it cannot -- we cannot condone that and we've got to do our best to make sure it never happens again. >> if donald trump or ted cruz is tough on these issues, what will be your response to that? >> california will continue to stand tall in terms of embracing its diversity and respect for
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those from different walks of life, regardless of race and ethnicity and regardless if you're here legally or don't have documentation, we believe on securing the border but we believe we're all better off and better off and do it in a humane and thoughtful manner. not going to play into politics of division of demagogues on the issue and fall prey to the racist instincts that are aspects of the trump rhetoric. >> are you going to support somebody? >> i've been a long time supporter of hillary clinton. we'll campaign hard for her when she comes out here in california. and i'm very enthusiastic about my strong expectations of her presidency. >> there are some people who would say, california and florida are two interesting examples, florida a place they are constantly working to lower taxes and make it easier for businesses and california people often have the opposite kind of concept. a lot of regulation and red tape
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and taxes. is that something you can and will try to change? >> i chair the economic development commission, there's no doubt we can do better. but let me make a case to my former city, former mayor of san francisco. one of the most vibrant cities on the planet with highest minimum wage, universal health care and preschool. it's a city that requires paid sick leave. it flies in the face of all of the rhetoric of those that say you do those things and it will destroy your economy. the biggest concern in san francisco is success. >> no, it's how expensive it is. it's expensive to live here. >> because the demand is so intense. it's supply and demand. we cannot accommodate for the demand. the world sees something special, the values. it's the fact we're a universal city, universal state. i will make the point i made earlier because it bears repeating, the return on
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pluralism has never been higher as an economic imperative, not just from an ethical framework but from an economic framework in the san francisco bay area is proof, front and center in that debate. success leaves clues. >> thank you for joining me today. the excitement that you have just jump in the air. i can feel it. lieutenant governor of california. very much appreciate. >> we'll hear from the co-founder of one of the biggest artificial intelligence startups teaching robots how to trade the market. we'll hear from one billionaire who wants to give every american $15,000 to put more people on level playing field and discuss that and controversy surrounding theranos when we come back. us. 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.
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welcome back, elizabeth holmes is holding a fundraiser for hillary clinton after the controversy over the blood testing technology which is not as good or what they say it is. tim draper, an investor in thera nos joins me in san francisco. >> i take issue with that. actually theranos, any time we have a transformative company. taking two drops of blood and making 50 tests with it. it's the same blood as you pull out of your arm and they do 50 tests and whenever you have a transformative company, people come after it and say, something
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must be wrong. >> they are trying to make something wrong. >> you gave elizabeth holmes her first million dollars, you were neighbors or something. >> she was my daughter's best friend and said i'm dropping out of stanford and will change health care as we know it. i looked at her, do your parents know you're dropping out of stanford then went through the whole thij. well, here's your first million dollars, let's see what you can -- >> the vision is fantastic. it's also very difficult to do. >> to do? i've done it. >> it's very difficult. >> two drops of blood. >> saves you pints and pints of blood. >> if it works. >> it works. >> and what's happening with theranos most of the tests are not the thumb brick think, it's not billed -- >> you're old wall street journal reporter is doing what they can to go after theranos
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because they are getting fed nfrgs from competitors, whenever you have a transformative company. uber is attacked by taxi drivers. >> you can read the stories -- >> unless this turns out to be all completely false. nobody has -- i certainly don't have an agenda in it. you have a great idea but it's very difficult to achieve that idea. if it were easy, everybody would be doing it -- >> it works. everybody is doing it in arizona it's completely it's going and legal. and the more the wall street journal writes about the bigger their business gets in arizona. >> walgreens is talking about backing away. >> that's not -- not only is that not true but tleranos makes more when they set up their own facilities. this may be the way it moves. >> i give them credit, it's a
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difficult period. there are a lot of investors who need to know what's happening in the labs and not just the pitch they are being told obviously. let's move on. >> let's talk about cruz. >> we had -- draper associates has another big winner and it was fun because cruise automason is being bought by general motors and it was a self-driving car and when i met with kyle the first time, he took me for a drive and we -- we almost died and went off the road. i'm still willing to back it. things improve over time. you start with what you've got and he hit it at the right time. i know ces was filled, completely filled with cars doctor car whps that said we're going to do self-driving vehicles. you knew something was going on there.
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>> what about virtual reality space, i've done a couple of demos and everybody is excited about the technology. >> my son at boost.vc created this whole virtual reality accelerato accelerator. you'll go into this world you never imagined in your life, it's really fun. most new technology start with the fun thing and move to the practical thing and maybe the education thing and maybe the bids thing a long time. >> as this is maturing, a lot of companies are figuring out if they do have a business model and do have a future. is the cycle turned here in silicon valley? what's this one going to be like on the opposite side? >> i don't understand what you mean by opposite side? >> number of unicorns have peaked and valuations being written down -- >> i don't think that's the case. i think there are many industries that have been
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transformed over the past. there's the communications industry, there's your industry, journalism. our industry is about to be transformed by crowd funding and the electronics shares, e shares and cap share. these companies are changing our business. i think all businesses are going through major transformation because technologies are really getting better they will change anything where you can do it better -- >> so the point being though that this isn't -- you don't view this as a cycle that we may now be coming on the downside of, changes are coming out of this place and keep happening? >> perceptions are going to go up and down and stock market will go up and down. in general we're going through major transformational times. and anywhere where there's an industry where the margins are high or the charge a high price
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and you get bad service, those are industries where there's big opportunity for entrepreneurs and one of them is government. >> government, they give bad service for high price and you see it. i mean, you get bad service for a high price and governments are going to have to start competing with one another. there's a bell -- >> that's fantastic. >> you're right. >> i look forward to seeing what some of those projects look like i think you made comments about a $15,000 -- i don't know, is it a -- is it a kind of $15,000 universally guaranteed income? what kind of initiative are you talking about? >> the idea is to have everyone get a basic income of $15,000. >> from the government. >> from the government. >> that $15,000 and then the next $15,000 that they earn is free of taxes.
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then beyond that, then they pay taxes and hopefully it eventually becomes a flat tax. >> if you're talking about doing things to improve the government, why would you want the government to be responsible forgiving everybody $15,000 perpetually. >> this would be a great improvement. right now social security is almost bankrupt and government pension program is bankrupting all of us. >> would this replace those? >> every adult gets $15,000 and everything else they own up to another $15,000 they get to keep. >> you've got these big ideas, break up california and replace this stuff and give tim draper, thank you for your time today. >> i hope everybody thinks these through. we're doing research with these guys on this $15,000 program. >> keep us posted. >> i absolutely will. >> thank you, sir, nice to meet you. >> tim draper in san francisco. time for a news update with sue
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herre herrera. >> our local nbc affiliate in washington, d.c. is reporting the city's entire metro system will shut down for 24 hours starting at midnight for an emergency equipment inspection. a cable fire early yesterday impacted travel during the morning rush and government source just on the news wire saying that after the metro news conference tomorrow they are going to decide whether or not to close offices in washington on wednesday. florida health officials say a nora virus outbreak is spreading across an elementary school in the soush part of the state. 140 kids were absent today and additional 40 sent home. symptoms included nausea and vomiting. move over t-rex, there's a new dinosaur in town. the smithsonian unveiled a new species of dinosaur. scientist believe he lived $90 million ago and size of a horse. the fos sills were discovered in u beck stan. >> wicked is joining an elite group of shows crossing the $1
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billion mark in sales, "lion king" and phantom of the opera" are the only others to reach that milestone. that's the cnbc news update. back to you, kel, have a great evening. >> thank you, you too. valeant shares are having their worst day after slashing guidance and warning of a debt default. what other issues could drop for this company. we're talking business of baseball with san francisco giant ceo larry bear, whether he's concerned about skyrocketing player salaries and failure to bring in younger fans. stay tuned. sales event is on. with extraordinary offers on the exhilarating is... the thrilling gs... and the powerful rc coupe. ♪
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we have breaking news on chipotle. >> not good news for shareholders, look at the stock, it's down 4%. the company just said in an sec filing it is expecting a loss of a dollar a share or more for the first quarter. you might recall it expected to
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break even in the first quarter and company or analysts were looking for restaurant chain to earn a dime. they are facing higher costs in the first quarter related to higher promotions and marketing and higher food costs. chipotle has been hammer recently because of concerns and because of food born illnesses krrted at the restaurant chain. the company seeing a steep increase in cost in the first quarter due to higher food cost and higher marketing promotional costs in the wake of those food squares, expected to see a loss of a dollar a share or month. the company had said earlier in february it was expecting to break even. back to you. >> mary, thank you, mike, those shares down about 3% or so. we know they were handing out that free burrito coupons that might have been submission to do with this. >> you have to manage they are finding it harder to -- as volume of customers its used to
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back near its stores. 3 or 4% decline is not that bad, only in the context of a 20% rally since january in the stock. it's still seems to be a little purg tri, mid-7 00s late last year. >> that's a point. by the way, speak gs of much bigger decline, shares of valeant were hammered and warning it could default on its debt. down 51% today. meg terrell joins us with the other hurdles valeant could be facing. >> after the six-month valeant had everybody keeps asking what else could there be? we kept thinking this all along as we watched shares decline from the high in august down to where they are now and incredible lows down 51% today and 83% in the last year. folks are asking, are there any more shoes that could drop. the answer i'm hearing from everyone, we have no idea. here's what people are worried
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about. debt deadlines, mike santoli may have talked about this. but that is the key concern with valeant. they have $30 billion in debt. until we know when they file their 10 k they are a potential risk of default on that. everybody will be watching that closely over the next month. the second thing is trusting the targets they've given. there was a mess-up, type foe in the forecast they gave today but even the different business units, folks are wondering how do we trust? are we going to see more revisions there? there's employee retention. on the two-hour long conference call, went around a circle and tried to convince analysts that employee more ral was still good. the folks i'm speaking with are worried about more departures of unit heads and finally, the biggest thing people are worried about, just the unknown. what else is out there? speaking with one person that said that analogy when you find one cockroach there's bound to be more, that's the way people are talking about this right
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now, don't know what we're going to find. everyone is worried there's going to be something? >> it does make me wonder about a company also looking at this business refresh, maybe pivoting from the model got them to this point of acquisitions and price races toward something else. >> you're left with the question of how much value is there and growth potential is even there if you do close those windows of acquisitions. by the way, even if they don't have the wolf the door in terms of debt and deadlines in terms of maturity. they have a couple of years. the debt window is probably closed to them. a lot of cash flow has to be diverted towards servicing the debt over time and trying to reassure investors that the balance sheet is okay and that leaves less for what they might do. what was interesting and meg alluded to this too. they kind of threw out a lot of concerns about sales and inventory levels in these different product areas that nobody was scrutinizing that
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closely. now the question is exactly how strong the organic pieces of this business are. >> i totally agree with that. just to make one more point. the people are worried they made a lot of acquisitions of things they thought they could raise the prices on. folks are worried not only were those flat groeblg businesses but may be declining growth businesses. they are worry even worse than we realize. >> thank you, guys. such a tough one. the man who called the collapse, andrew left, will tell us where ez thinks the stock is heading next. another pharmaceutical giant that could be on a similar path. high frequency trading left many in the dust but the flash boys may get smoked from ai, big plans to create rob bots aots a buy short stocks. >> learning from the self-made
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entrepreneurs, how to guides and testimonial secrets of their success, cnbc's unparalleled access puts it all in one place to get a little help along the road to your dream business. cnbc make it.com.
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taking electronic trading to the next level, developed ai traders, robots that can buy
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sell and short stocks and deploying them to trading desks. we're joined by the co-founder of the company. thank you for joining me. what indeed you're up to, sir. >> we are using massively distributed ai to solve the world's most complex problems and what more complex than trading. >> do you call them bots? are we talking about program attic trading or something entirely different? >> the algorithm is discovered by the ai and we call them genes because they are evolved. >> let's make take an example. valeant pharmaceuticals today. is that something -- your ais in there sniffing it out and trying to figure out how to play it -- >> and short it maybe. >> what happens is they do decide whether to -- what instrument to trade, how to trade it, even in how to trade
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it, they discover if it's a order and at what price. all of those decisions, completely hands off. we get to watch a lot of cnbc because people can't be doing the trading, all the bots. >> got that on while you hope they are taking care of things. it reminds me a little bit of chess, the game that is being waged between computers and humans. i guess if you can program a kpiter to have intuition about making moves on a chess board you could program it to have intuition how to play the market? >> absolutely. that's exactly right. the significance of this go win by the folks at deep mind is exactly that. it's a machine learning system that you can say is developing intuition for playing go. it starts learning how to play and gets so good it can beat the grand master. >> i wonder fw it will make it easier for true investors to do their job. it's trying to figure out trading patterns or schemes, not
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necessarily looking through a corporate balance sheet and figuring out will this be a five-year investment as much as trying to pick up on xschematic of the markets day in and day out? >> that's absolutely true at the higher frequency trading. as we get to lower frequency and longer hold time you could inkofrpt the external data nonstructured data and so forth news, for example. >> how much of the trading volume do you think is ai right now? >> it's growing. it's not very significant just yet. i think it is growing. i think that's a good thing. you would want you know, to move from ultrahigh frequency speed game type of trading to a game of smarts, which is i think what's happening. that's the trend. >> fascinating. please be in touch because we've got to figure unite what it means and winners and losers and everything. we appreciate you joining us out here.
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>> you can check out much more at the spark cnbc.com/thespark. america's favorite past time is struggling to gain fans. up next, larry baer, president and ceo of the san francisco giants and how to fix the sports' age issue when "closing bell" comes right back. ic, digital innovations; from self-monitoring devices that can interpret personal data and enable targeted care, to cloud platforms that invite providers to collaborate with the patients they serve. that's why over 90% of the top 25 global pharmaceutical companies are turning to cognizant. our domain experts, technologists, digital and data specialists, clinicians and scientists are transforming the way clinical research sites collaborate with pharmaceutical companies, and enhancing patient engagement with innovative platforms and solutions. our population's growing healthcare needs
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spring training is officially under way for major league baseball and it seems like the san francisco giants no stranger to money and success. they have won three world series titles in the past five years, hat the fourth highest valuation of all major league teams and the fifth highest payroll for this upcoming season. we're joined by giants president and ceo larry baer. >> hi, kelly, how are you? >> i'm told because it's an easy year you're supposed to win a championship. >> we'll see. you know, a lot. you've got to take it day by day. we're in spring training and get ready. >> is the bay roll. the secret here. spending on the right players? >> we've been doing and making good judgments on players. not really spending. the way we look at it, an art,
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not a science and if you really look at it there's not a direct causal result from spending and winning. kansas city royals won last year and they were in 25th in payroll out of 30 so it can be done. can be done a lot of ways. you can spend a lot and win and don't have to spend a lot and win and really the judges that you make about players. >> there's a similarity between your success and the success of getting young kids to play baseball. speaking with the ceo of dolby labs. he said before you started winning his kids' little league baseball team had 8 teams in it and now there's over 20 so there's something to be said for the kids watching and seeing the success and then coming out to play but is that true, or are you really seeing an increase in youth participation? >> we are. it's been three, four-fold effect and part is also making players accessible to kids and we like to humanize our kids. have nickname for players. animal nicknames. tim lincecum was the freak. brian wilson with the giants was
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the beard and pablo sandoval, panda, and so we have nicknames and try to make it kid friendly and had a great bonding relationship between especially the younger demographic and our star players and that's a big deal for us. i mean, that's a fad of a lot of sellouts, 400 consecutive sellouts. >> i'm looking at your huge ring and wondering how do you keep wing? it's not easy. a lot of people are high expectations around here. >> well, i think, you know, it's just an amazing impact of culture, we think. we have a manager, bruce bochy who we believe is a hall of fame manager, a great coaching staff and they create culture and everybody feels comfortable. we have a great front office, a group that really focuses on making the right judgment on drafting players. really starts way down when you're looking at players in high school so buster posey, our catcher, our head of scouting was tracking him back in high school. >> and what about there's some issue with the oakland a's and trying to figure out whether they need a place to play and maybe you can combine up or no?
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>> i think they need a place to play. they are looking in their area in the east bay for a place to tough. it's tough, california, building a ballpark is tough. when we built ours 17 years ago we did it privately and the first privately built ballpark in our generation. california getting any public tax dollars for any sports facility won't happen. >> we heard that because we heard chase is doing the same thing. we talked to rick weltz of the warriors and they are looking for largely private funding and what do the oakland a's do then? could you play together? any prospect of that happening? >> what they want to do and make sense is to build their own ballpark in the east bay. they have announced they will look in oakland for a new ballpark and really we're doing real estate development in the shadow of our ballpark. this area, as you know, talking off air is a hot area and rents here, both in residential and commercial are very high so if you can do it and make it work, there soo a lot of disposable income and a lot of business to
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be had if you can get the ballpark up and running and i think the a's will get it done eventually. >> larry, thank you for joining me. >> it's an even year, as i've heard, you've got to win. that's just what you do in these even years lately. >> come on out and see us opening day, a month from now. >> april 7th, you're invited. >> opening day, april 7th. we'll make it happy. >> giants and dodgers. >> piece of cake. >> a new york rivalry from brooklyn and new york. giants and dodgers. >> kind of like the economy these days. larry, thank you so much for your time. >> thanks, kelly. >> larry baer. oracle shares are higher after announcing a buyback this hour. what to watch for on the conference call coming right up. stay tuned. driver-assist systems. it recognizes pedestrians and alerts you. warns you about incoming cross-traffic. cameras and radar detect dangers you don't. and it can even stop by itself. so in this crash test, one thing's missing:
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welcome back. checking in on shares of oracle here they are still higher after their earnings results by about 4%. the conference call starts in a few minutes, mike. what are you going to be listening for? >> i think you want a caller in terms of momentum in terms of subscription outlook for this existing current quarter. it's historically for the stock one of the stronger quarters and tends to run up into the summer so it seems like that's probably what people are tuned in for. we did have the extra buyback authorization so the two dark
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pronged approach and share the cash flows from the legacy business and also try to, you know, get some kind of a foothold in the new way of doing things. that's what -- i think the story oracle wants to hear, oracle shareholders. >> those shares up about 4%. turning our attention to tomorrow, we have that fed meeting and i'm thinking through the yellen call as people are starting to describe it here. do you think there is an effect like that on the market here from the fed? >> you know, potentially. it seems as if she really does want to exit's some sort of confidence in the economy. there's probably a couple of rate increases. i do think we have to be aler. the cpi report in the morning before the fed decision comes out. that's probably going to cover the reaction to whatever reaction. she's caught on the doves on the committee and vice chairman stanley firer who really wants to point to the top line. >> it just seems like, again, you know, if the market goes up the fed is going to hike rates.
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>> yeah. >> so sort of a cap there and then if it goes down it won't and then the economy -- i don't know, like the reverse temper. >> be careful what you wish for. >> mike. really appreciate it, thank you so much. that does it for us on "closing bell." thanks as well. a little more content for you from san francisco but i'm coming back and i'll see everybody tomorrow. "fast money" begins right now >> sav travels. "fast money" does start right now. live from the nasdaq market site overlooking new york city's times square imember is a lee. our traders, peter najarian, karen finerman, dan nathan and guy adami. tonight valeant shares down 50% today and the man who called the decline in the stock is here. we'll tell us where the stock is heading to now and the other name that could soon follow suit in a rare and exclusive interview and oracle beating on earnings and the stock is higher in the after hours. the call just getting under way right now. we'll hear on the quarter and a look at what oraclees

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