tv Closing Bell CNBC May 6, 2016 3:00pm-5:01pm EDT
positively? >> your off pricers. they'll be the week after. >> okay. >> you're going to get a gap in the didn't store. my guess is you guys are going to be talking about retail and apparel. >> got to leave it there. matt boss, thanks. >> have a great weekend. all you mothers out there, happy mother's day. thanks for watching "power lunch." >> "closing bell" starts right now. ♪ everybody's working for the weekend ♪ how do they know. >> boy, are we ever. can i just say happy mother's day to my mom at this moment? she's the best. >> mine is probably not back from lunch just yet. she watch 20s minutes later. >> on dvr? >> no. live, all the way. >> doing it live. welcome to the "closing bell." i'm kelly evans at the new york stock exchange. >> and i'm bill griffeth. fad devices, fad stocks. square, gopro, fitbit, they're all being hit hard. we'll look and see whether the best days are whienld them with these gadgets that have been hot
and so cold. >> meanwhile jeff bezos is at amazon selling $7 million worth of his shares. that stock has reached a $3 trillion market kapp. we're going to have a stock brawl on what to do with amazon coming up. >> everybody loves to debate amazon. then there's the jobs report coming in this morning coming in below expectations. does this guarantee a summer without a rate hike. that's also coming up. but let's start, though, with the nasdaq on pace for its first three-week losing streak since mid-january. bertha coombs running down some of the biggest losers for us, bertha. >> one of the biggest losers is apple as well as nasdaq has come off the lows. take a look at apple trading low. we've gotten a bit of a lift this afternoon as we receive a little bit of buying come in on facebook, amazon, and netflix. the usual fang names have been holding things up, but that move
on apple, down for three weeks in a row, is really part of what is causing that downward plunge on the nasdaq. but a small cap here today really helping things out. yelp amove the stocks left for dead. it's seen a huge move after earnings and sales topped expectations. a real relief rally here. the stock is down nearly 50% from its recent highs. biotechs are the week's worst performing sector, down nearly 5% for the week. we've had a lot of disappointment and today the big drag is coming from endopharma. take a look at this chart down off the cliff, sinking to a seven-year low after cutting its year forecast by about 23%, talking about price and pressure. it's oolz also weighed on others. one analyst at ma zoo low calling the stock toxic. they say the surprise was really just that magnitude of the
outlook cut real estaather than itself. kelly? >> the specialty names especially. bertha, thank you. the slowest growth in job creation in seven months. steve liesman has more. this was supposed to be the reliable indicator. if this is reliable, this is a big disappointment, right? >> i don't know about that, kelly. reliable doesn't mean perfect, but we're getting different takes on the jobs report from one fed member and the market. i want to go through this. three prominent wall street firms changing their tunes for when the fed will move operates. they're all changing their forecast for the next rate height from june to september. barclays says we now expect one hike in 2016. that is in september. we believe it will take longer for policy makers to accumulate it. but new york fed president bill dudley in a "new york times"
interview release this afternoon said while the report was, quote, a touch softer, he was not putting much weight on it. said it was still reasonable and hiked twice this year. here's what's going on. you know, it's within the margin of error more or less. ice softer than the market expected. unemployment rate unchanged at 5%. labor force partition rate ticking down after really coming up for several months in a row here, but the bottom two are actually pretty good. average hours worked and wages up. that puts more money in the consumer's pocket. here's the deal. they're grueling out a hike. a jobs rebound together with evidence of a bounceback in second quarter growth could, in my opinion, put a rate hike back on the summertime picnic table, bill. >> steve, i'm also wondering, those are the two most sensitive facts. the fact of the pace of it. remember they told you it does
mean something psychologically to see a 200 round number to see that condition. that moves against them but the wage number which is probably the most important, that missing piece in the outlook moving in the right direction. >> i think people have to put this in perspective. there are no economists who think that the economy should be creating 200,000-plus jobs nchl general it should be closer to 200,000. it's a stable unemployment rate which is a job growth number that marches demographic or population growth. that's what it should be. the idea that it's been 200 doesn't make that right. doesn't make that the only healthy number out there. i think 160 -- next month, kelly, if we come back and this thing is revised up to 180, would that mean it would change your opinion? it's within the range. if you were down 100 and a quarter and you did it a few months in a row, i would be crazy about it.
it takes more than one to make a trend, steve. >> right. >> good reminder. we'll see. that's our steve liesman. >> all right. let's get to our "closing bell" exchange. joining us stevery sciutto, so is keith bliss from kit tonen company and rick santelli is in company. steve you're the resident. your numbers weren't particularly high, were they? >> no. i do think there's this disconnect between the employment numbers and the confluence of other economic numbers that roll into the gdp numbers and i'm leaping more toward those numbers. i think the fed is off base in this regard. >> i'm surprised. it's a tick up. from the market data and the price action, it's going to be
weaker heading into the summer. you've got seasonal factors at play, technical factors that are lining up that are counter to a market going up. again, i've been beating this drum for a whieshlg even through the strong period in april that i see the path of least resistance at least as we trend through may and june going down as oppose goingd up. we're starting to see that in some of the price action. >> eric, what are you going to do with this market then? you know, the trend lately has been to get back into those defensive stocks again dwrouchlt want to stay with that or go for growth here? >> those defensive stocks are pretty defensive at this point. right now you've god
got middling growth and profit margins very high. we think u.s. equities will do okay but we think european equities with bar these lower and emerging market equities that are much more attractively priced probably a better place to put your money than bet oong the u.s. certainly until we get more clarity on the back half of this year and that's going to be a while. >> rick, anything you can do to put a spring in our steps here? pretty -- it's a troubling set of data and analysis. >> you know, i never look at up or down as putting spring or taking spring from anybody's step. down here, there's a red side of the card for selling, blue side of the card for buying. you can make money either kwachl it doesn't have to be a one-way street. to me it's all about the dollar. the dollar has been getting trounced. monday it had the lowest close. we've talked about this since january of 2015 and it
stabilized. while that's going on and maybe it's just the low gist ticks of the market going through the distribution phase, we see there's even less horse power to the notion the fed's going to be tightening. you know, it was two times. you know, we talked yesterday. second quarter, first look is the 29th of july, 27th is the meeting. so we were talking about it yesterday. it seems like the big firms took july off the table. the election is a week after the meeting. so, yes, it's going to be september, december. my guess is maybe only december, but the point is if that's true, the dollar should take another leg down and if that rejiggers all of the foreign exchange relative value arguments, then the best place to invest may not be so much europe and our countries. even spain in the southern part that are starting to look a little bit better, but the foreign exchange side with the biggest economy, whether it's france or germany is going to take a toll on experts.
this week aside, to see if the dollar index can hold that 93 mark which is very significant. >> which brings me to you, keith. clearly you're watching the dollar, i would imagine. but what it does to oil and things, what impact do you think that has on equities. are we going to see this synergy that occurred between energy and stocks come back here again, do you think, at some point? >> it's an excellent point to examine right now. i'm not sure we're going to. we've seen the uncoupling over the last couple of weeks. i think a lot of that has to do with how we trend. we've gotten through seasonal patterns. people have looked elsewhere for what the global picture looks like. there is some valuation concern. when i talk to clients. we've had the foreign looking eps kind of disengage from where stocks have been trading right now. and, of course, you factor in the global growth concerns. a lot of that, rick is right, is
going to have to do with how the dollar trades in the summer and how it impacts on the rest of equi equities. >> steve, before we let you go, a quick comment on the wage trends. are they moving in the right direction even gradually or are you still just not seeing enough oomph there? >> when you take out january, which has a lot to do with the minimum wage increase, that's really biased the entire year over year numbers. i think rick's comments before about the currency are the key thing that's going to drive markets and monetary policy going forward. i think the dollar's going to continue to weaken on the back droch of u.s. inflation being stuck around 1% and global deflation dominating their currencies. so i think that's the key issue to watch. the currency and the dollar will move lower. >> all right. gee, this has been fun. thank you, guys. >> my pleasure. >> have a good weekend and happy mother's day to all of them.
>> was just thinking here, it's amazing the way the market anticipates these things. we watched the dollar go from 100 to 93. this soggy payroll report lands in our laps. we mentioned it yesterday as if it anticipated yesterday. it's fascinating. >> the market always knows. >> seems to. >> the market does. we have no idea. >> we have 52 minutes to go. >> so is today's decline of gadget stocks, fiit, gopro, and square a good buying opportunity for investors? mike santoli has a special report on that. up next, the update on the fire raging in alberta plus we'll speak with an analyst who says the barrel will drop back. heal make his case. keep it right here. you're watching cnbc, first in business worldwide. real is touching a ray. amazing is moving like one.
valeant issues. several different things going on. >> i wonder why utilities will be lower if you're not expecting rates to rise here and, in fact, yields have gone down on the treasuries but yields are down. maybe they bought the rumor and sold the news. >> energy and financials, not a lot of leadership there. >> let's check a couple of other movers. teradata. they're replacing their ceo immediately. they're upgrading their stock to hold from sell citing what they say is this newfound sense of urgency at the company. meantime activision blizzard rising. the visit owe gamemaker's earnings trounced street estimates. it provided upbeat guidance for the current order of cal of duty black ops 3. >> your favorite.
>> i was going say the same to you. the update on the wildfire in alberta, canada. deirdre, this one looks like it's getting worse. >> reporter: that right to. give you an idea how big this fire has become and how quickly it has spread, it went from 25,000 acres to 250,000 acres within just 24 hours. it is now bigger than the entire city of chicago and it does continue to grow. if it does continue grow even further, canadian officials say they may have to ask the u.s. for help. with no rain expected until next week, it's becoming a real possibility, guys. this is all taking place, as we keep saying, in the center of canada's oil industry. this is a region that produce 2/million barrels of crude day. estimates report that they've procut that in half now. canada's economy is already suffering from oil prices. bank of montreal has come out
and said the wildfire, the damage from the produced output could grind the canadian economy to a halt. guys, back over to you. >> that's incredible. >> i certainly hope that's not the case. by the way, dear degreirdre, wh this? >> the fire has been moving south. we went out there. we wanted to go to ft. mcmurray but the fire has been pushing us back. there's nothing past ft. mcmurray. we were talking to people on the ground. those who were pushed north because the highway was cut off completely they went to the sands. they call it a bridge to nowhere. they've been stranded for a few
days. they've been airlifted and back down to edmonton. but, again, ft. mcmurray itself is a city and the towns around it less populated but you're seeing evacuations around it. >> deirdredeirdre, has any of t been destroyed sits? i wonder if any can get back online after they get this under control. >> there's no employees to man the operation because they've been evacuated as well. the flames earlier this morning, it was report they'd with were just mile ace bay from two oil sands sites from ft. mcmurray. all it takes is changing winds to push the fires further to affect some of the facilities and make the damage even worse than it already has been. so right now the actual
facilities, oil sands facilities not affected but certainly the workers are leaving the area. >> all right, deirdre. thank you. he thinks the wildfires are giving them short-term strength. you think we could see $35 again by the end of the year, don't you? >> bill, we certainly do. we had a seasonal rally. last time we spoke to you it was january and we were talking an rally in march and april. we've had that. the fundamentals have not changed that much when it was around $30. there's a lot being made about the production in the united states. of course, we're losing barrels out in canada right now. but as we get past driving season, we're going to have once
again a glut of oil and we're losing places to fill storage tanks around the world and believe it or not, we're starting to import oil here again and i think this fall we're going have a big supply problem on our hands once again. >> before we get to that, james, to your point about what's happening in canada, bp canada has just declared a reduction in available western canadian select crude among other grades and that's reporting to roit ters which cites true trading sources. so bp is saying delivery of oil would be affected during the month of may. so focusing on the direct impact of this, james, what do you anticipate it would be? >> you know, today crude oil is trading $2 under its previous high over the last week or so. we hit 47, $47.50 recently. we're down $2 below that in the summer months. if, in fact, we thought this was going to be a long-term
fundamental change, we would be trading. the fact that we're down, tells us that the seasonal rally and a play that a lot of invests took part in is just about running its course. we're probably in the third period right now of this market rally. >> you know, for me, i wonder why we're not at $35 a barrel now. i get the whole concept of the seasonal rally and all that, but we're in unusual times if not unique times right now with the glut of oil that we've seen with the pre tre men does overproduction that's gone on around the world. we still have tankers, i'm told, out in the ocean waiting to find some place to drop off their oil. so why does the seasonal -- you were even making point that fundamentals maybe aren't supporting this seasonal rally and we'll have this glut down the road. there's a dichotomy there. what's going on there? >> the market rally is practically every february
through may, whether we have the largest supplies in history like we do right now or not. if, in fact, the fundamentals bode well for the market, it then moves into june and july. bill, you nailed it. the supplies worldwide are enormous. the united states has supplies near 100-year highs. iranian and iraqi barrels are going to start coming onto the market, september, october, november, and we're going have a glut of oil again and no one knows how low we're going to be. we'd expect we'll be in the low 30s in the fourth quart ore thf year. seasonal rallies are interesting how, in fact, they do take place. they did this year. we would be shorting oil over the next 30 days with both hands. >> james, thanks for joining us. >> my pleasure. >> james cordier from
options.com. >> did you see buzz aldrin is here. and her sister. >> now i understand why he would go with buzz. 30 minutes left in the trading session here. the dow was down 80 points. it's been up 80 points. we're up 73 as we head toward the close. >> coming up, amazon founder jeff bezos selling more than a million share os testify company this week. we'll talk to amazon watchers to see if mainstream investors should be following suit. and up next, gadget stocks. we'll talk about whether investors should be buying them at these levels. stay tuned.
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change the way you experience tv with xfinity x1. welcome back. 35 minutes left. tough week. that's a weekly chart for the index. you can see down roughly 3% to 4%. >> they keep getting hammered. >> yep. >> gadget stocks like gopro, fitbit and square have been getting socked. >> mike santoli takes a look at these stocks and the common threads we should all be wary of. >> three different companies and three types of products. there are some things that unify these three companies an not that the stocks are having a hard time of it. here are common themes about these relatively young
companies. first of all, they had a hot product in a buzzing category. wall street saw them in rare direct play on a fast growing area. whether that be the motion cameras or gopro. obviously fitness bands and fitbit, and square while it's not a device it's a better mouse trap for payments of smaller businesses. they've all struggled with finding a second app. with finding a product that was as successful. it raise as question of whether the high percentage of the likely customer base had already bought into the first gen racing and of course we're talking about hardware for fitbit and gopro. very punishing and product and development cycles. wall street not satisfied with the highs on these stocks. also bigger competitors could steal some thunder. and by the way, all these companies had these critiques very loudly out there. it's not like they were blind
sided where the big companies could absorb or compete with these guys. as you look at the stocks, are they cheap yet. they trade at modest valuations relative to revenues and even the cash on the books. all have 12 to 27% of their market cap is basically cash they have in the bank. they say we don't see these as growth companies anymore. the problem is value investors have not come back. i would point to some companies of the past that remind me of some of these. this isn't necessarily destiny for them. but pal. . you had the palm pilot that was ahead of its time and the flip camera. that was eventuallying a soushed by cisco systems and paum was brought later on by hp. so these things. the 3-d printers, you can go down the list. when it's first out, people ask the question, is that all you've got. >> it makes me think of drop cam.
that's a huge hit and what's happening at google. it's almost like for these devices, the best thing that happens is they get bought. in that case, it's not clear whether that's a platform for them to go to that next level or not. >> it's not. any one of these could theoretically have a comeback. they can make another gogo of it. but to that point, kelly. tivo is a great example. this was a $60 stock 15 yea$15 ago. it's $10 right now. >> i can't believe they're keeping the name tivo. >> i said tivo the verb will outlast tivo the company. >> when you combine rovi and tivo, what are you going to call it. how they became public with these one-trick ponies. >> fitbit is operating. they're a true business. >> they're trying to diversify. >> gopro had a right to try to
go public. it didn't have a reason to be trading at $90 a share. >> we should add, by the way, a lot of hopes about gadgets as a service. it was we're going to sell the device. there will be content, software, all of that, ecosystem. >> something's always on it. by the way, square obviously, it's the different one in here. payments, no doubt about it. but even they are trying to give you working capital. >> right. >> right? it's not just about the little card reader device. >> all right. thanks, mike. mike santoli. see you next hour. >> time for a cnbc update. let's get back to sue herera. >> here's what's happening at this hour. house speaker paul ryan has invited donald trump to meet with republican house leaders on thursday. ryan's office put out a statement saying they would begin a discussion about republican ideas that could win the republican election. the suspect in the three
fatal d.c. shootings is now in custody. 62-year-old eu is lalio tordil is in custody. scientists believes a new test for zika could be used to test the device sooner. yellow would indicate it is free of the virus. and new england quarterback tom brady releasing a limited edition of his nutrition manu uall online. including avocado ice kreechlt it's sold out. >> he has the weirdest diet on the planet. >> it's a strict diet. >> to me, to have tom brady and
a cookbook, it's an oxymoron. >> we're sharing carrot cake. >> by the very talented ian. >> who's going to eat tom brady's diet. >> other personal chefs to get hired for people who want to be like brady. >> there's the business a. there you go. and the 200 bucks. that's a lot. >> crazy. >> anyway, i'll see you next hour. >> thank you. >> you ate more than half of that. >> i know. now i'm coming on your side. holding onto modest gains. we should point out, nasdaq was down enough to be in correction territory from its all-time highs. a leading trader will tell us what he's watching on this final day a when we come back. >> and on this jobs friday our mary thompson has a special report on where the jobs are. she's at environmental firm in
i'm here at the td ameritrade trader offices. steve, other than making me move stuff, what are you working on? let me show you. okay. our thinkorswim trading platform aggregates all the options data you need in one place and lets you visualize that information for any options series. okay, cool. hang on a second. you can even see the anticipated range of a stock expecting earnings. impressive... what's up, tim. td ameritrade.
on the floor, i'm here on the floor. are you surprised? even the ten-year yield is starting to creep up. >> we're giving free money. >> the fact that everyone is pushing out their rate hike forecasts? >> it's a place to put it. it's continuing to be the case. we're seeing that today. i'm surprised with the rally at the end of the week with the outflows, you know, from the money flows. it's a good sign. we needed it. the nasdaq really stabilized here at some point. it looked like it was looking ugly. the earning season is kind of coming to an end. we're not so focused on oil as we were. >> that brings up questions about the oil sectors. does any of that change now? >> you're going to be very selective. you see the stocks performing well. it's quick. it's a rotation. you earn for two or three days and you're out. that goes back to the trading environmental. they'll do pretty well in this
environment. it's going slow down as we get to summer. to your point, ily will be some select stocks and rotations. >> all right. three days out. it's a crazy way to make a living. >> it certainly is, but it can be done. >> thanks for joining us, matt cheslock. >> he doubts when we get to summertime. tell him. he can't hear me. not the best jobs report but there is good news on the employment front with fast growing sectors. cnbc's mary tom sn is here with the may edition of where the jobs are. mary? >> reporter: hey, there, bill. behind me a firm called arcadis is doing soil remediation to make it fit for future development. work like this is plentiful around the country and so, too,
is the demand for engineers that can do it. over 150 years old, the global engineers and consulting firm ar kay disis finding lots of old and making it new again. cleaning up sites and making sure others follow the regulations is a big business. this is an environmental recruiting firm. he says jern racingal turnover means these workers are in high demand. >> if i could get some genetic material and shoot it into individuals, i would be a very wealthy man. >> speaking of wealth this median wage nr these workers, over $88,000, a price tag that gets bigger with experience, added degrees and professional licenses. the number of job openings is
getting bigger too. they's a higher than average vieshtal and engineering jobs by 2024. arcadis is adding more. this year it plans to add more than 400 scientists and engineers and expects to increase their payroll by 15% to 20% in the next five years. back to you. >> thanks, mary. not that anybody would ask i long thought engineers wou sing be a great career. the infrastructure needs are enormous. >> and you can't learn that overnight. >> no, you cannot. great report. mary thomson, thanks very much. >> i hope you're not thinking of a career change. >> too late now. >> 20 minutes to go in the session. the dow is up 59 points. the transports are doing okay today. they're up 64. the big, the small caps are up three. >> my father was an engineer, by the way. >> really. >> yes. i failed him.
>> what kind. >> aerospace. >> wow. >> yeah. >> jeff bezos, he's selling a record amount of stock this week. he talks about whether it means anything and whether you can follow his lead. >> and in case you missed it, spacex had another successful launch last night that will sit with famed apollo astronaut buzz -- what did you say his name is? >> edwin eugene? >> edwin eugene aldrin who will join kelly on "closing bell." stay tuned for that. everybody knows that business today is built on data.
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turns out amazon's ceo bezos sold some of his holdings. he sold over a million shares of amazon. >> that's a lot of money. it was reportedly predetermined. when we reached tout amazon, they declined comment further. it comes out as the top venture capitalist conference. listen to this. >> when you think about amazon jourks to think about the long term secular favor. the first thing is people want to buy things immediately.
it's going to be at least worth a trillion dollars in ten years. >> ten times in ten years. let's bring in robert luna who is playing the part of the bull in this conversation. he's from surevest welgt management. jeff is our bear. good to see you both. robert, are you that bullish on amazon? >> i believe this is the best long-term story. this is company that's basically dominating its marketplace. we saw what it's done with sports authority, radioshack, up next, jcpenney and those companies. it's a long-time share that everybody has to own right now. >> jack, do you feel differently? >> yeah. when the stock was not up 30% in the last 13 months, it might have been a more reasonable argument, but i think if you look at this and you -- the ceo,
jeff bezos himself said we'll swing. i don't think a ten-bagger is appropriate. they've gotten away for 20 years without being profitable and now their're profitable and their profitability, i think, their operating margins are around 4%. that's less than half of the industry average. >> to the analyst who made this call at the sohn conference, jack, if you're investing long term, five years, even ten years down the road, does it matter that it's been up that much in the last 12 months? >> absolutely because i think you're going to reach a point where, you know, the costs are not -- the revenue -- the costs are going to pick up with the revenue. and i really think that people are, first of all, overstating their cloud ability. i this they you've seen already that apple has taken their platform away and gone toward
google. you receive that. spotify has gone off the amazon platform and microsoft is taking a lot of ---al i think you've had four or five other deals where they've migrated away from amazon web services toward the more cost-effective options. and then on the retail side, retail is not a great investment. i do think it's not reached a maturity point but the type of value that people are describing, you're assuming 25%, 30% run rate at high margins. >> yeah. i was just going to say, robert, you know, we have seen such a halo effect around the stock and around jeff bezos lately. we know what happened in the past when apple was the darling and are you confident that sentiment can keep improving at least for now and long term they can keep executing to meet these high expectations? >> yeah. i believe so, kelly, because amazon is the company, you've got to remember that's still growing active users by 20% and they're starting to gain traction internationally.
this company is growing 3% compounded on an annual rate. if you look at the third party rate, that's growing at 43%. like i said, eliminating competition is not inexpensive. i think the idea that this is a company not profitable and not expensive is really a specious argument. it does have 4% margins right now but they're not going to continue to spend like they're spending forever. when you see a raise in price, they're getting traction. i think there's a long way to go on the stock. i wouldn't be surprised if you see a price tag on the stock. >> no time, but i just am curious for both of you. jack, what prices do you need to get back down to get you back in. >> i would say in the 500s. the expectations that they're going to lower price -- raise price is going to absolutely kill the entire volume argument. you can't have price and volume growth. >> got it. robert. what number would give you a nose bleed? >> i think in the short term i
wouldn't be surprise. by the end of 20$2017 is a thousand a share. >> good to see you both. thank you. robert luna and jack mohr for joining us. $300 million to sell is the market on closed orders. with the dow up 53 points, we've got 11 minutes left in the trading session here. >> and you'd almost forget given the weather around here tomorrow is the 142nd running of the kentucky derby. it's also the focus of him and we'll see if he can rival the greatest two minutes in sports. a vested investor in vests, i invest with e*trade, where investors can investigate and invest in vests... or not in vests.
everybody in alberta, canada, know we're thinking of them. many displaced their homes. also on mother's day, every one of your viewer, if moms say don't get me anything, they do not mean it. get out there and get somebody. derby, "d" is the dollar. that's going to be an important determine ant of earnings and the commodity prices. it's down 4.7% thus far this year. the d.e., the "e" is earnings. that's more critical than anything else. earnings, how are they going to come through and the estimate is to be up between 11% and 16% this year meaning the bottom of the cycle now. so that might be a positive for the market, okay? >> okay. "r" is the recovery in china. this week's economy in china which hit the newstands has a debt bond. so all of your viewers should
have a look at the viewer situation there. d -d-e-r. and the "b," thai obama and them have asked them and "y" is yell en. janet yellen. the feds policy. keep interesting rates slowly rising and rising for good reasons. that's for the market. >> was going to ask you for your horse picks tomorrow. >> i have no idea who's running. >> i've got my money on kelly evans and bill griffeth. >> enough fishing for
compliments. >> thank you. >> thank you. >> thank you all. happy mother's day, everybody. >> and to you. we'll come back and wrap things up. after the bell, facebook wildly popular. the consumers, the social media giant is in trouble. a lawsuit claims fab photo tagging violates privacy. you're watching cnbc, first in business worldwide.
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coming up on the two-minute mark. bob pisani joining me. we finish a quarter percent down after all that. >> all of this up and down, up and down, up and down. it was a tough week for a lot of other sectors. this was a slow growth week. the big industrials and material names. >> we're going to look at the sectors in just a moment. firsting oil, and how it did when we saw that decline and the spurt, as a matter of fact, with the inventory numbers coming out this week and for the week overall down 3% on oil. now to those sectors. let's see how they did for the
week. the ten sectors inside the s&p 500 index. >> the weakness is in energy industrials and materials. there's your cyclicals, your slow growth story right there. that's the problem. you can see some of the mixed week overall. we're just now fractionally on it. this is the week slow growth came back and bit us on the butt. >> what would you say the rate increase is? >> down 5%. i don't think it goes down until the middle of 2017. we have removed the uncertainty of a fed rate hike in june at this point. you mentioned oil. the good thing about oil is we're still right around that high level at $45. it's down a little bit, but it's certainly tough to get over that. but it's not fall ag part in nejdra mattic way at all. of course t dollar volatility
has been up and down a little bit this week. steady overall. the jobs report. >> have a good weekend. going out with that gain of 70 points on the dow. the wnba ringing the "closing bell" here. the 20th anniversary. at the nasdaq it's genetic technologies limited. stay tuned. buzz aldrin on the second hour of "closing bell" with kelly. have a good weekend, kelly. >> thank you, bill. welcome to the "closing bell." i'm kelly evans. we got the jobs report at 8:30 this morning. stocks were mostly negative but we went out with 789 points gain. about a third of 1%. teen nasdaq which we mentioned really has been a laggard of late was able to add 19 points or about 0.4% today. still on your screen you can see the s&p reporting their second straight week of losses. coming up, we're going to talk
to astronaut buzz aldrin and space exploration, the 2016 election and more. we have mike san foley along with cnbc tribtder. for more guy adami joins us as well. thanks for stopping by, guy, as well. let's talk about the markets. we closed positive. e heard what matt cehslock talking about. why was the ten-year yield up? >> that's a good question. i think it does come down to coming into today's jobs number the market did put on that very defensive trade. so, you know, the treasury was down from 1.93 to about 1.97 in ten days so bonds were potentially overbought and pricing in even more of the slowdown story and the jobs number clearly a disappointment but nothing that really dushs
the overall trend. you've got the wage growth, so i think the market was able to get kind of a kick save because now we're looking out september is when you're looking for the first fed rate hike and that's not really an odds-on favorite. to me the vix flalg shows the market saying i don't see much of a catalyst that's going to disturb things too much. >> evan, if we can take a step back. they finally raised interest rates for the first time in december. what's it going to be a year before they do it again? what do you call that? >> it's interesting. part of me wants to take the other side of this. when it's almost -- when there's nobody on wall street thinking june is even on the table, you think about it. the wage growth was up. the consumer borrowing numbers.
those were up big. what if wage growth is very strong and is 200,000 jobs created. i'm not saying there will be. >> what if it's strong and there's only 100,000? it seems to me like the most important one are wages are finally going up but at the same time if we're at the end of a cyclical expansion, that's good too. >> it's interesting. i don't know how the bond market figures these things out. all i know is when all the analysts throw in the towel or when they're all on one side of the boat, i'm going the other way. >> that makes a lot of sense except when you have federal reserve decision makers don't want to surprise the market. so it's kind of a heisenberg thing. >> guy adami, what do you think? what impact does that have. even jpmorgan suggested it could be the tightening if you go back to the end of quantitative easing that's actually starting to slow the economy. >> yeah. i think, you know, you said it before. it's going to be december and we'll see you again. i remember being with you back
in december saying, i'll tell you what. they raced here because they talked themselves into it and needed to do it. you're going to come back and next december is the next time you're going to see a hike and i absolutely believe that. i understand what evan said and i get it, but i don't think there's any way the fed is going to raise it what we're seeing now and both guys can speak to this, an earnings recession and a revenue recession. they're going to make that worse. by doing that the market will rally. this deflationary spiral that in some ways they created will only be exacerbated. again, did they paint themselves in a box? absolutely. they got a reprieve with the numbers in a lot of ways but there's no way they can hike. we can have a conversation if they should. that's a different conversation. i don't think it happens in june or happens until the end of the year. >> one of the aspects i'm curious about and i'd love to sit in and talk be the fed policy makers is something like this. the fed takes the u.s. economy
as its mandate and yet decides to challenge its mind every time there's some international problem, you know, brexit or whatever it is. when does the fed go, you know what? negative rates all over the world, that's a real problem. we should take a leadership role in determining monetary policy instead of getting caught in these currency wars. >> isn't that what they've done to some extent? if you look at the fact they did raise rates and every time they talk, you can kind of get the sense they are frustrated. they don't want to have to take into account what's happening but it fundamentally impacts the dollar if nothing else. >> all i'm saying is we seem to be caught in a vicious circle or cycle where negative interest rates kind of, you know, very slow motion currency evaluations take place and people don't think rates matter. >> what's the interest rate? >> being at half a percent or
quarter to a half a percent on a relative basis, they've gotten a little bit tighter. i do think they can stick here and not really have to answer your question as long as the core inflation measure they watch is below 2%. they still have the cover of core p.c. has not reached 2%. >> right. >> that's why it's so interesting to see those two pieces of data going in different ways. looking at the sectors today, you know, what do you -- there's been a lot of different kinds of themes beneath the surface here, the weakness of health care and technology. the outperformance of anything with a dividend yield and the consumer kinds of stocks going into retail earnings season. where does it feel? >> the unfortunate reality is the weakness in health care is going to continue. you're going to get fits and starts but on the margins, health care is going to continue to be under the pressure because they're under the magnifying glass of so many agencies, not the least of which is a political cycle that will continue in november.
evans had this right. the move in energy in a lot of ways has bailed out the broader market. it came just at the right time. contrary to what i think. it's continuing to move higher. i this i these fires are helping the commodity. it's a horrible event but it's helping the price action as well, but i think the energy market is bailing us out as well. i'll say this. banks, look at the european banks, kelly. i'll keep going back to it. crude oil has gone back to 25 or 45. the story against deutsche bank was the move down in the componented market. look at what they've done. yes, rallied today but that stock has been under tremendous pressure for the last few weeks. again, i think the european banks are telling the story. whether or not they're choosing to acknowledge it doesn't matter and the resilience is something to behold but there are clearly warning signs if you take a look below the surface. >> can you see how gracious he is? >> i need all the compliments i
can get. i do. i'm soaking it all bit. what i do think is interesting, kelly, is just that -- >> just briefly. >> i'll be brief. >> brief. >> there's been this rotation, but really the s&p in 20 months not going anywhere. we're basically flat. flat since the start of the year. the one word i would urge all investors out there, be patient. you don't have to do something. >> you sound like larry robins. this is a larger trend here. it's down about 12% just over the past week. ice sitting at lows not seen since 2014 and this as reports that tim cook is going for visits to china for a government meeting. josh lipton has more. hi, josh. >> well, kelly. that's right. ceo tim cook now reportedly plans to visit beijing later this month to meet with high-level government officials. this visit comes at a critical time for apple with the chinese government suddenly seeming to take a tougher line with the tech giant.
recently, for example, the chinese government shut down the company's online books and film services and already that market has become more challenged and q2 apple sales in mainland china did slip due in part to economic growth and at least one well-known investor is concerned. carl icahn told them he sold his stop. that stock dropped more than 12% this year. more than 25% over the past 12 months. when i spoke to cook after that last earnings report, he told me that china is more stable than widely believed but a year ago you had the wind at your back there, he said. now the wind is not blowing anymore. now, giving the challenges in china, india has become a much more important opportunity for apple. its market share there is small but growing quickly. the government tells me that the company is evaluating its request to open apple stores there. guys, back to you.
>> a lot going on with this one, josh. thank you so much. >> you know, mike, last hour you were talking about the gadget stocks, the kind that has never really blossomed. what makes apple different fundamentally here? >> obviously the scale that it reached. not just the $600 million in market value but the fact it created whole categories and came to really dominate them. those companies i talked about, fitbit, gopro, if they disappeared, you wouldn't necessarily notice that much. that's a big difference. plus they have a massive software business and media software business. but i think that the bottom line risk to any kind of device company is that the cycle just punishing. >> it's brutal. >> that's why i think apple was never going get a, quote, fair market multiple because the market just didn't want to put a decent multiple on this much earnings when you are still somewhat hit driven, when you have to ride. >> it people who say apple is so
cheap for get that it was cheap even at its highest share price. >> it's one of those things. what was it. 650, $750 billion. you're just -- the numbers start to get really daunting. i know we've had this discussion. i won't call it the law of big numbers. i'll call it a big number. when companies -- >> it's the base effect. >> but the base is too big. thanks. when the base is too big, you just -- it's hard for any company much less one. iphone 6, iphone 7. >> he said last year we sold, you know, we had this huge upgrade cycle. it's just almost impossible to show the kind of growth on top of that. you know, to show growth at all on top of that really. >> it's like being a hedge fund that gets -- i think if you look at it in this context. at a certain point it's extraordinarily difficult to move the needle, right? i think that's what's happening here. here comes the hate mail and i'm
going to enjoy reading it over the weekend. when i was in kid, high school -- sony was taking over the world. you could not turn around without bouncing into one of sony's products and now they're basically irrelevant. why? they made things that people wanted to buy. it was a cachet. they were cool. and lo and behold, other people made the same stuff. they lost that cool factor and it went into on livion. people say apple ecosystem, i get it. but at their core, they make things this people want to buy. and when you sort of lose the cachet of coolness and when price becomes a factor, which it's starting to, this is what you have. >> guy, here, that certainly could be the way it goes with apple like following the sony path which is still a viable company but no longer the leader. some people think rca is a more disastrous one. but what's going on with the stock. this is pure relentless liquidation of name that was widely owned by a lot of potential investors. >> i this i that's a great
question everybody's trying to get their arms around. you talked about it or maybe josh was talking about it. it's not like this is a recent phenomena. here's a stock that's underperformed. apple's probably what, 25%, maybe a little more off its all-time high. probably a little more than that now. you have to ask yourself why has it underperformed for what's close to 18 months or so and it goes back to what mike was just saying. the market doesn't kwablt to reward them the premium valuation because of the situation i think they find themselves in now. >> we have to go. all i'll say, evan, is when you start buying apple -- >> you know, by the way, if the shares had a 6 in front of it or 7, i'd start getting interested. >> guy, thank you. >> wish your mom a happy mother's day, kel. >> absolutely. happy mother's day to your mom, my mom, all the moms out there.
stick around. guy adami coming up with the "fast money" crew coming up at 5:00. we have our market flash with our seema modi. what's going on, seema? >> real estate investment firm colony is said to be closing in on a deal to acquire north starr asset management. this according to bloomberg. this actually following news last year that north star realty was looking to explore retail combination with the management. we're looking at the stock up better than 16% on this reported deal. back over to you, kelly. >> all right. seema, thank you so much. up next, breaking news. a meeting set with likely gop presidential nominee donald trump and house speaker paul ryan next week. this as president obama had sharp comments on the billionaire businessman. we'll break it all down with mr. larry kudlow next. plus facebook facing a big
who? guess. i don't know, some kids in a basement? you watch too many movies. who? a small business in china. a business? they work nine to five. they take lunch hours. like a job? like a job. we tracked them. how did we do that? we have some new guys defending our network. new guys? well, they're not that new. they've been defending things for a long time. [ digital typewriting ] it's not just security. it's defense. bae systems. welcome back.
the u.s. labor department said we only brought in 160,000 jobs. let's bring in larry kudlow for his reaction. let's start things off -- thank you for joining us -- to the jobs report. >> the jobs report was mixed as you discussed. look. wages were better. jobs were slower. i just -- i have a hunch that we're going to see slower jobs going forward, kelly. as we talked before, i think business is in a mild recession, not yet the whole economy. i don't see that. but you've got falling business investment, falling profits, falling profit margins and falling industrial production. since business creates jobs, i think you're going to see slower job creation in the future. it's not a catastrophe but the economy is in low gear. >> it's unusual, isn't it, larry? we had the rebound and collapse. do you think we stay stuck in
this mild recession or does it get worse? >> well, that's a good question. this is a very peculiar cycle. you've had a lot of anti-business regulation passed on. the animal spirits haven't been around for many different reasons. you know, the financial system itself is still very clogged. so i think this can't go on forever, okay? i don't believe it can go on forever. therefore i think the risk of recession is there. it bha 30%, 35%, but it's definitely there. look. the stockmarket -- look. i know we've got two stockmarket jockeys in there with mark and -- >> evan. >> -- evan. but the stockmarket hasn't done anything in how long? a year? a year and a half? i mean profits have been flat to down for over two years. that tells you something. the economy is fundamentally not healthy. >> that leads us right into the next piece of discussion, larry, about what could help out here. let's start with politics where house speaker paul ryan is going
to meet with donald trump next week. he said he's not ready to support trump who was on "squawk box" yesterday. some of his comments about the economy, i should say, didn't sound like something you'd hear from a republican candidate. >> the middle class -- many of them haven't had an effective wage increase in 20 years, and some of them are making less money. many of them are making less money now than they made 20 years ago. if we start raising rates -- i've always been a low interest rate person. if inflation starts coming in and we don't see any signs of that but if inflation starts coming in, that's a different story. have to go up and slow things down. right now i'm for low interest rates and i think we keep them low and we have to compete. i am the king of debt. i love debt. i love playing with it. >> probably that last part caught the most attention. what are your thoughts here, circulary? >> well, kelly. i don't know. for at least two years, three years, you heard me say i don't
want the fed to raise interest rates. i don't like fed policy over the last ten years. but here we are. i think trump is actually right. you have no inflation, a soft economy. this is no time to be jacking up interest rates. he also made a good point, by the way. financier, debt lover he is. why not finance the entire treasury debt. you can get everything down, i don't know, 1%, 1.5% and save us tens and tens and tens and tens of billion dollars. i don't know why the treasury doesn't refinance. here's the thing. trump has a big corporate tax debt. you know i love thachlt it's going get better as they tweak themselves. let's cut the corporate tax sharply. let the economy reignite as it will in about six months. and then the fed can follow real interest rates higher. that's the thing. first fiscal stimulus through good taxes. second, let the central bank get
out of their hole by following the economy higher. you just don't want to raise rates willy nilly. that would be a terrible idea. >> larry, it's evan. i'm wondering how you managed to square donald trump with what i would say are a few of your core beliefs like free market, free trade, entitlement reform. your man -- trump's doing nothing about entitlement reform. and given the way he's looking at washington, he's not going to get any tax reform either. how do you square what he says with what is your promarket, protrade policy? >> i think he will get it in. if he wins it will be a republican senate and republican house and i think you'll see a major, major tax reform. he's going to get that through. you're talking the art of the deal. the one point you have and i've acknowledged this before. i have been uncomfortable with
mr. trump's trade policies. yes, i have. i don't deny that. >> is nafta a bad trade really, larry? we understand that people have been through a tough time here, but do you think that's a true statement? >> i supported nafta and i continue to support nafta, but on that particular point, mexico does break a lot of trade laws. they're not as bad as china. china breaks all trade laws and something has got to be done about that. trump has a point there. on the other hand, i'm opposed to tariffs who do more harm and that good. they will thwart growth. one thing that's good. we've had interviews. he's not talking about a 45% tariff anymore. that's good. what we need to do is renegotiate these trade deals. and, again, a strong guy like trump, the art of the deal, maybe he can do it. maybe he can't. but, evan, i admit. you've got a point on me.
i've always said this. i've been uncomfortable with donald's trade position. >> we've got to go. i have on the screen jeb bush won't vote for trump or clinton. i believe that comes from lindsey graham's comments earlier. we'll see. >> paul ryan. paul ryan is going to make a deal with trump. paul ryan is a superb politician. i forget which broadway show it was but there's something like i have a little list, i have a little list, da-da da. it might have been fieorella. ryan has a list. a list of programs. trust me, they will make a deal. >> that meeting is next week. we look forward to seeing what comes out of it. larry, thank you for joining us. >> thank you. >> have a great weekend. we have an update. seema modi, what's happening? >> no big surprise as berkshire hathaway give their numbers. they missed their wall street
estimates. book value increased since the year end and also the insurance float as of march 31st was approximately $89 billion. the stock really not reacting after hours. we'll continue to dig through the press release. for now, kelly, back to you. >> seema, thank you. we also have breaking news on the zika virus. sue herera has those details. hi, sue. >> yes, kelly. it involves not only puerto rico but major league baseball. they announced moments ago they're scrapping a series in puerto rico between the pittsburgh pirates and the miami marlins because of player concerns over the zika virus. major league baseball and the players' association had coordinated with the cdc to try to allay some of those fears of the players but they'd did not succeed.
they're scrapping it. they're moving it to miami. it will be played in miami and they plan do some other things in puerto rico wu w some past players because obviously a lot of fans in puerto rico are going to bedy appointed by that. kelly, back to you. >> they sure will. all right, sue. thank you. our facebook users having their privacy violated by the facial recognition technology. the lawyer suing the social media giant next. plus former astronaut buzz aldrin is here to discuss the successful spacex launch and landing and whether it should be a public or private venture. buzz aldrin coming up. there's a lot of places you never want to see "$7.95." [ beep ] but you'll be glad to see it here. fidelity -- where smarter investors will always be. if only the signs were as obvious when you trade. fidelity's active trader pro can help you find smarter entry and exit points and can help protect your potential profits.
welcome bachlkt facebook is being sued over the photo tagging suggest feature. you may be familiar with it. the lawsuit was filed last year. the judge declined the motion to dismiss the case yesterday and the lawsuit is proceeding the court. we reached out to facebook. the company has declined to comment on it but they have confirmed users have the option to control the photo tagging setting. only your friends can tag you and only if you have a facebook account. joining us right now is jay edelson. he's representing the plaintiff in this case, welcome and why don't we start with what this particular case is about. >> sure. first, kelly, thanks so much for having me on. this is an incredibly important
case for all of us who care about privacy. facebook has been collecting the largest stash of facial prints in the history of the world and what we aelectrical that they've been doing that without consent. now, to really understand why that's an important case, you have to understand what facebook is going to do with that. >> wait. let's -- hang on. i want to -- that piece -- you say they're doing it without consent. >> correct. >> facebook says, no, actually consent is part of this. if you could just explain why you think there's no consent here when it comes to this photo tagging suggest feature. >> sure. facebook did not say in the quote that you read that they got consent. that was something clearly written by their lawyers and they tried to be clever about it. what they said is people have control over facial tagging but what the law requires is that people actually first have to know that they're checking this
information and have to get consent to let facebook take it. and we're very confident that facebook didn't do that. at the beginning of the program and even the lawsuit has been filed ill still hasn't gotten consent. >> what it sounds like is you want prior consent. when i get on facebook, if from that moment they're collecting that facial data, i should be aware of that and accept or not allow them to do that. >> that's exactly right. it's not my view but the illinois ledge lay tore who passed a statute that says this is what's required. it's a very easy statute to comply with and facebook for its own business reasons doesn't want to tell people what it's doing. they know if they try to get consent people will know what they're doing. >> jay, e oom going bring in the panel here. >> i don't have a facebook account. i've never used facebook and
this is one of the reasons, though. i mean -- i don't know legally whether it's impolicive. you sign up on for apple or facebook, you know, people, there's an assumption that will are lots of terms and conditions that people are not aware of when they sign up for it. i'm sure embedded in this thousands of words of facebook. there's something about photo tagging. >> that's what i -- >> it may not meet mr. edelson's standard or what the illinois ledge lay tore has but somewhere it mentions photo tagging. >> we're out of time. the unlikely outcome going forward they throw in this there where i accept terms, something like that, right? >> yeah. factually, though, that's not in the terms and conditions and
we're going to be able to demonstrate that to the jury. we feel extremely confident about that argument. >> thank you for joining us and explaining your case. we'll be watching that closely, jay. that's jay edinson from edelson p.c. >> do you know what photo tagging is? >> yes. >> remember when they let you upload photos in the first place and then they could recognize your friends. yeah, i might have deactivated the account since but at one time i was quite the expert in this technology. time for a cnbc update with sue herera. police have temporarily stopped allowing evac years to drive south through the burning city because of the heavy flames and smoke near the highway. a convoy of some 1,500 vehicling started traveling in groups of 50 with police escorts. a fire official says about 500 gallons of pesticides were
stored at a houston warehouse complex consumed by a large blaze on thursday and now authorities are trying to determine how much ran off into nearby creeks. they're warning the public to avoid the affecting areas. potatoes where everywhere on a in fahighway after it spilled. the truck driver fell asleep at the wheel, hit a bare yore, and overturned. get ready. the 142nd run for the roses gets warnld tomorrow. this morning the horses and their jockeys were getting in some last-minute training. nyquist with a wshot of 3-1. that's the newsy up date this hour. kelly, have a great weekend. >> thank you, sue. happy mother's day. >> thanks. that's so sweet. >> our sue herera, who's a great mom. coming up, you won't believe
welcome bachlkt k. elon musk going where no one has gone. let's get to jane wells. hi, jane. >> hi, kelly. spacex has two successful landings at sea and add a land landing. more successes than failures. the latest landing at sea on the so-called drone ship happened after the launch of japanese satellite. this booster would be coming down faster and hotter. so here's what happened. >> oh. >> it looks like we have a landing. >> if you can see it there. at mission control here in southern california for spacex they erupted into cheers of "
"usa, usa,." still cheaper than building a new rocket or at least that's the idea, an idea that will be tested in june when spacex will for the first time reuse one of its boosters on a launch. of course, spacex also wants to send an unmanned space capsule to mars in two years. kelly, that will be on a much larger rocket to be usable. to spend the money to make a rocket to reuse it. it doesn't make sense when you're only going to mars once in a while. makes a lot of sense when you're going to the space station. >> incredible stuff. thank you. our jane wells. joining us now is buzz aldrin. in 1969 he walked on the moon and since then he's been a tireless advocate of space
exploration, written nine books and invented a spatial orbit plan. join know what these words are, buzz, for mars missions. you're out with a new book, "no dream is too high." thanks for joining us at post 9. >> you have to learn the word "cycling orbits." >> cycling orbits. >> that's my word for the future. cycling plans for mars. >> explain that. >> psych ler cycler is around o spacecraft and other spacecraft join up with it and they do something and they leave and they do something else. so when the cycler swings by earth, landers join up with it. then it takes the journey to mars. >> they're drafting.
>> i think it's a bit like -- >> wait a minute. we're not there. >> we're still cycling? >> it comes back to do it again. that's where the psych ler. >> it's like the space odyssey >> this is for real. none of this mickey mouse. none of this buzz lightyear move. >> what you do think of elon musk. >> we think -- he's a thinker like me. we're on different paths. i want to go to mars. he's a johnny come lately, you know. it's occurred to him somewhere, i may build a car. a car won't go there. oh, rocket. we need a rocket. so we're going to talk about
going to mars with the cycling orbits? no, no, no. i don't want to hear about that. i know how to get to mars. >> wow. >> we're going to build a big rocket. there's another word that goes along there, you know. >> sit for family television? can we go there? >> it's a bfr, okay? anyway, it's got a dragon on top, and he's going to send the dragon to mars. i said, wow, that's beautiful. tell me. when that dragon gets there, is there going to be anything else there to keep company with you? he thought a minute like he hadn't thought about it before. >> you don't think he can do it then? >> he said, oh, yeah, yeah, yeah.
we'll send an unmanned dragon first. >> so you're skeptical maybe. >> no. i'm just inquisitive. >> sure. >> because i'd love to help him and i'd love to get those ideas that he has combined with other ideas so that it becomes a joint project. >> and one that's doable. >> i don't know if this is a segue or not. donald trump, correct? >> i don't know. listen. whoever is in the white house is my friend. >> you sound like uncome tom. >> i want him to be my friend. >> he says that there's internal priorities. >> there are people in the congress that have these oversight and budget. but that's not the end result.
>> you're not worried if he says we have priorities we need to put before nasa if donald trump is in the white house in november? >> who's going to do what? >> that donald trump is going to neglect space exploration. he's made comments about focusing on airports first. >> infrastructure. >> yeah. >> no. i heard that. so i'm going to say to him, you know, i've looked at history, and it's not nations that fix their potholes or their bridges. i mean after all the audubons didn't make hitler win the war, right? what makes a nation great is to inspire the world doing something that they may have thought was impossible, that will go down in history. >> yeah. >> you want to know something,
mr. president? the president that makes that commitme commitment to do that, to inhabit mars, will go down in history for thousands of years. >> just as you will because of 1969. thank you for joining us down here. it's really a pleasure, buzz. >> thank you ever much. >> buzz aldrin. much more in the book, the latest book, i should say. sumner redstone is not censoring his feelings over his ex-girlfriend as the trial of his incompetency kicks off today. and a conference between cvs and viacom. so consider an aarp medicare supplement insurance plan, insured by unitedhealthcare insurance company. like all standardized medicare supplement insurance plans, they could save you in out-of-pocket medical costs. call today to request a free decision guide.
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td ameritrade. the trial over sumner redstone's competency started today. he didn't mince words when he talk about his ex-girlfriend. julia boorstin has the latest. hi, julia. >> reporter: shares. it was certainly a dramatic day. both sherry redstone and she were present. they were both quite emotional at times. ridstone's video was played for the judge. the video was closed to the press, but we did receive the trand script. redstone's transcript used amply the "f" word. he said herzer stoeld money from him and he didn'ted want her in
his life. when asked if e he loves her, he said he hates her. he's happy with his care and wants his daughter sherry to be in charge of his care. the burden is high for herzer's camp to show why redstone's testimony and desires should not be desired. tl interpreter often gave answers before redstone had a chance toance himself. redstone's attorney says redstone will show exactly what he was doing when he threw out herzer from his home. the doctor testified that redstone's mental status was severely compromised and that he did not understand the consequences of his actions. now an additional twist. sumner redstone now plans to sue manuela herzer and other
girlfriend sidney holland to recover the $150 million that he gave him. the suit will also accuse herzer and hollande of elder abuse. kelly? >> wow. that was a tricky one to try to navigate to bring it want to start a new business but can't get a loan? you may have to look no further than your 401(k). how you can roll over your retirement investments to launch a new venture. ndrone? can't blame you. it's a drone you control with your brain, which controls your thumbs, which control this joystick. no, i'm actually over at the ge booth. we're creating the operating system for industry. it's called predix. it's gonna change the way the world works. ok, i'm telling my brain to tell the drone to get you a copy of my resume. umm, maybe keep your hands on the controller. look out!! ohhhhhhhhhh... you know what, i'm just gonna email it to you. yeah that's probably safer. ok, cool. this cit added this other level of clean to it.
fund their own business by money from their 401(k). it's tax deferred. you won't be charged a penalty fee. joining us is the president of pango financial. welcome. >> hi there. thank you. >> there is part of this that i didn't quite follow. you won't be charged a penalty fee? >> you're actually rolling over your retirement funds to another qualified plan. we call this type of plan design, the dream spark plan. it enables you to invest in the stock of your own nonpublicly traded business, as well as having the ability to diversify into the publicly traded offerings as well. >> is this an intended element of the rollover rules? in other words, have you always been able to do something like this on your own? >> you actually have, since the mid-'70s. this has been available through the irs and arisa rules. >> i wonder -- >> make you feel any better, evan? >> no, it doesn't.
the average size of a 401(k) plan, it can't be very large in the united states. the average -- i'm going to make up a number. it's going to be $50,000. i don't even know if that's close. you're basically saying to somebody who's got $50,000 in 401(k) savings, maybe the only capital they have, you can take as much of that as you want and try to spark your dream. to create a business. which is high, high risk, really venture capital. which is not really what people think of when they think of retirement money. >> well, it is a high-risk investment. it's a nonpublicly traded business. so you need to be comfortable with the -- basically the potential for success within your chosen industry. very well utilized in franchisi franchising. and you can do it where multiple employees invest. it doesn't have to come from one 401(k). nor does it have to be your only investment. another point that may make you feel a bit more comfortable is it can be paired with an sba-7-a
loan. it can just be a small piece of what's needed to fund that business. >> it seems like a lot of moving pieces for not that much money. >> i guess what would be the other option be? what are the other options if i'm trying to improve my life standing by getting into a franchise and the bank won't lend me money? >> even if the bank will lend you money, you will need an equity injection of your own capital. in order to pursue your dream of business ownership or you're outplaced, you have to find a job anyway. we're sharing this as an option so that you can really have the potential to turn that into a longer term investment. >> candace, thanks for joining us. >> thank you so much. >> fascinating look. candace caruso. we'll get results from disney and some of the major retailers, tell you what to expect right
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city and honda and shake shack and nordstrom. >> i think the focus on retail is probably going to carry over through next week. the stocks have been very weak. we seem to have a very hesitant consumer. you also started to see the destruction thing to get really destructive. >> costco, yeah -- >> in other words, the have-nots have really been losing. i think you might see that in focus for a while. >> maybe a headwind. not like retail has been an area of leadership. if amazon was so strong, talking about consumer credit and other things going on, how much is that more broadly? >> we don't know -- is amazon dominating more than 100% growth in the area? >> i think the secular story is going to be like the story of the next six months. well into the campaign. because you have somebody like donald trump going at you. the entire industries right now are undergoing dramatic change, like the retail industry.
they're never coming back. they're never going to be, you know, what they were ten years ago. it's just not going to happen. there's a view, and it's going to be increasing discussion among politicians. i know we have to go, about this issue. you can't bring the old america back. >> you finished just in time. thank you so much. we're done on "closing bell." have a great weekend, everybody. "fast money" starts right now. "fast money" does start right now. i'm melissa lee. steve grasso, david, and guy. a curious thing is happening in the market. it's got traders flat-out frustrated. we'll tell you what it is and how you can take advantage. plus, we've got the one group of stocks that could benefit if either hillary clinton or donald trump win the presidency. and later, this is no fairy tale. how would you like to get paid to buy shares of disney at a