tv Closing Bell CNBC May 9, 2016 3:00pm-5:01pm EDT
market. >> is this because the market has soured or because of what's up for sale? >> both. it's a different market from where it was last year. >> all right. thank you very much. appreciate it. >> hey, world. thank you for watching "power lunch." >> "closing bell" starts right now. hi, everybody, and welcome to the "closing bell" on this monday. i'm kelly evans of the new york stock exchange >> and ai'm bill griffeth. commodity stocks are the big story. getting hit on the back of a strong dollar, concerns about growth in china. we have all the latest on oil, that move lower than particular. that's coming up in just a moment here. >> meanwhile, too much pressure on the fed. mob tair policy can't be the only tool used in this market. he'll join us shortly. >> peer to peer problems.
it's sent the stock down. we'll explain that further. >> and as donald trump takes center stage as the presumptive republican nominee, how to trump-proof your portfolio. >> let's start with the decline in oil prices. jackie deangelus walks by. were you going to tell us than? no. it's all despite news of the wildfires in canada and a big shakeup with the saudi arabian government. its oil minister is being replaced adding more questions on who's in charge of the oil. >> let's talk about what this
means for the energy markets. was this entirely unexpected? >> no. the mr. everything deputy crown prince he's really been setting oil policy for some time. this was not unexpected. it was a little brutal the way he was dismissed by a royal decree. >> he's kind of the alan green span of oil in saudi arabia almost frankly for the whole world and to see him -- the news didn't go out as he resigned and we all have to read between the t tea leaves as to what happened. it was pretty clear. he was kind of unceremoniously moved out. why do you think that is? >> i think he was sacked in part because of what happened at the
do ha meeting a few weeks ago. nigh emeigh had said they were willing to sign on. think he was trying to assert he was the energy policy. he was part of a previous era. he was king of an dobdullabdull minister. >> now what? you say it doesn't necessarily mean a change in policy. he seems to have little use for the oil opec cartel. he seems fine with the environment. he's very focused the big overall of the saudi economy, the privatization. i think he's basically saying look, we're going to press ahead
and say business as urinal. saudi arabia's really standing aside from the rest of the opec cartel right now. >> even as they're trying to take part of that company public, even as they're trying to take part of their own stockmarket public. there are a lot of interesting reforms being pushed through and yet the perm naimi. >> the real question is, again, does he have the authority to set the policy. and one of the reasons that people think saudi policy has been eradicated is because of the deputy crown prince. the policy could swing quite wildly depending whan what he wants on a given day. >> swinging today it is. crude's down nearly 4%. thank you so much.
now in edmonton. deirdre, what's the latest? >> reporter: we're outside of edmonton. there are so many questions from thousands of displaced residents as to when they can go home to insurance companies strieing to assess the damage. remember, oil plays a huge part and ft. mcmurray, which has been impacted, which much of it has been burned, structures have been burned. that has been hugely impacted. today the weather is cooperating a little more. here at the evacuation centers insurance companies are out in full force.
>> the industry is deployed. they're active. every insurance company has their own catastrophic response plan. >> reporter: while still so much is unknown at this point, one thing is known for certain. this is going to be the most costliest in canada's industry. bank of montreal says insurance losses could cost $17 billion. guys, that doesn't even take into account loss of the production which is estimated to be losing about 1 billion barrel as day per oil capacity. that's something to keep in mind as we continue to see this. back over to you guys. >> you know, that was one of the reasons. if we had come in and seen oil prices on the up, people would say, hey, it doesn't take a lot of supply at this point to try to push the global market to something off balanced but we're not seeing that hold true today. >> exactly.
it's the same question we had last week, when they might be able to get this back online, but that's still very much in the air at this point in terms of production, right, deirdre? >> reporter: yeah. that's right. that's a best-case scenario. remember, this fire is still being called the beast here. it is still hugely unpredictable. the weather today is good. if it changes directions, it could change a lot of the oil sands facilities and that could prove to be disastrous for the industry. >> deirdre bosa in edmonton. thank you. let's get to our "closing bell" exchange as we kick things off. the dow is down five points right now. ken more raf with money matters is here and jack more ruchian is in chicago and we've got peter costa from empire executions at post nine here. peter, i always joke, when the market is like this, we didn't get much to the jobs market on
friday, it feels like the market has since figured everything out. it knows what it needs to know and it's sitting there. what's going on there? >> i think it's a little bit of that and i think there's a little bit of push and pull between biotech and between the health care stocks which you can see, if you look at the dow, it's down a little bit, but the s&p is up a little. >> nasdaq is pretty strong. >> yeah. the nasdaq is doing very well. we have that going on. plus you have the oil market and the equity market starting to dislodge a little bit. to me that's a positive. i think they give you a sense. >> meanwhile, jack, we had them giving us a speech. we talked about how they're too focused on fed policy. interesting coming from one of the fed guys himself and he'll be joining us shortly. is he right and what changes
that? >> oh, kelly, he is 100% right. if nothing else, look at the past eight years of sub-3% growth. with no fiscal stimulus is the answer, that's it. it does not work. what we have seen now it's why the market has turned on friday's number. prior though that they put on the economy deterioration spreds. then all of saud when it came out and they had a number come out the other day and they thought we're going to push off the fed rate hike, all of a sudden the bid came off. that tells you exactly what the market things. >> ken more raf, you're still holding your bearish stance and it's all about earnings. the fed doesn't matter right now? >> well, you know, in -- just so that we clarify this, in 2014
and 15, i'm not just a bear. in august of last year we became bearish and i can explain the drop that happened in august. i can explain the drop that happened the year in january around february. i have a difficult time understanding why the market has risen as much as it has since then. we have half a percent gdp. the jobs numbers are terrible. we have the imf saying the global economy is slowing down. corporate earnings are down for seven quarters in a row. i mean where's the beef is what i'm asking on this. and the average bear market is a drop of 35%. if we have an average market, it puts at 11,500. that's why we're very cautious. despite the rally we've had, i don't believe it's real. i think this is a very dangerous place to be with this market.
>> all right. peter, any context you'd add to that? >> i'm on the other side of that coin. even though we didn't have a great jobs report, unemployment or employment in this country is getting better. wage growth is starting to happen. it's starting to excaccelerate little bit and that's going to show through by consumer spending. once you see it picking up and legitimately have consistent growth in consumer spending the market is going to react to that and i think the market looks 3 to 6 months ahead and we're going to see that as far as the summer period and going into the fall. conversely, i think that's why the fed is going to react and raise rates at some point in the summer, early fall. >> jark, listening to this, you were warning this could be a tough year for the market and it was definitely the first five or six weeks of the year until things turned around. are you still concerned we could
see much lower prices. >> bill, this is a hedge in may. there's absolutely no reason for me to be long on this market, and, bill kelly, you've heard me. i was bullish as can come. there are way too many headwinds right now. one thing is whether or not the new oil minister is a wartime counsse concillary. if that's the case, watch out. you're going to see crude tumble. >> you know what? quickly, with quickly. >> go ahead, ken. >> we receive that poll stishians have been see daded by the federal reserve, relying on them to do everything. they're coming on the end of what they can do. now we're going to look to the poll stishians to save us. i have a feeling that's not going to end very well either.
>> you're leading us into our interview with neel kashkari in a few minutes. that's what we're going to talk about too. thanks, guys. appreciate it very much. we have a news alert on carl icahn. it may be telling that john harwood has that news alert. what's going on, john? >> it's an interesting injection of carl icahn. he's been mentioned often by donald trump as a treasury secretary. he was targeted by bernie sanders in atlantic city who went off donald trump and carl icahn for failed casino projects that have caused job losses. and carl icahn has fired back against bernie sanders who's accused him and donald trump of greed and saying that they can't have it all in this country. carl icahn said that bernie sanders was doing the bidding of a union that was profiting from the health insurance policies that the union ints sold to
employees, but he also said that he agreed with bernie sanders that the income gap in this country is too large, it's a big problem to be dealt with and he said owners in capital including ceos are ridiculously overpaid and that's a problem the united states needs to deal with. an interesting acknowledgment from that side that they're raising, a come of them, significant and worth debating, guys. >> actually we've heard that from donald trump too. he talked about raising taxes. it's the same kind of dialogue. >> sort of. donald trump has proposed a tax plan that deeply cuts taxes for the wealthiest americans by a very, very large amount, and he said over the weekend that some of those numbers are going to go
up in his plan. some people interpreted that as donald trump was proposing tax increase on the most affluent americans. he said that's not what he's proposing. he might end up in a negotiating deal. >> that's goijs to ng to be a g deal though. thank you, john. it's interesting to watch it migrate from our neck of the woods into that realm. we have 45 minutes to go. the nasdaq is up, adding 29 points on the back of some strength and bioteck. >> very, very volatile sector. when we come back as we mentioned, minneapolis fed neel kashkari with why we're too focused on the fed. >> and shares of lendingclub are
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hcr manner care portfolio, specializing in nursing and assisted properties, kelly. >> he joins us now in an exclusive interview. good to have you with us. welcome. >> welcome back. >> thank you. it's great to be with you. >> i guess the key question goes right to the heart of your speech here and it's everybody is so focused on the fed, and it sounds like you're saying they shouldn't be, but you can hardly blame them, right? >> well, i understand. i think we're having a slow summer. i want us all to step back and remind ourselves whether our children and grandchildren are better off than we are is really not going to be determined by what happens in june.
it's what the executive branch and koj set. that's what determines how competitive our work force is. we need to get those other tools moving. monetary policy can't do it on its own. >> but you know that even in a busy summer, you don't get any policy decisions out of washington on fiscal policy. how long have we been talking about a corporate tax break, policies to help repatriate taxes overseas, a flat tax of some kind. none of that is happening, so it falls to the fed to be the only entity that can get anything done, and even now, lately, it's in gridlock mode, too, right? >> i think the fed is doing whatever it can to get the economy moving. obviously i said, i think it's appropriate because we're coming up short on both inflation and they're still slack in the labor department. but importantly you look at
what's happening on productivity. economic growth is slow. that suggests productivity growth is slow. we don't fully understand why that's taking place, so my message is to the markets, to investors, and to the country, let's focus on these issues that can drive long-term performance. it's simply not going to be the fed. >> neel, i've got an idea. step down. turn our attention elsewhere. go to a startup or something. what would help productivity, do you know what i mean? what is it we all need to be doing in this environment? >> i think it's -- look. where is wall street focusing its analysis. instead of having the 75th or 76th analysts, how about helping us understand is productivity growth slow because the new technologies aren't that remarkable as some suggest or is
it a mismeasurement of what's happening? maybe productivity is better than we think. there's a lot of brain power going on. i'm suggesting that brain power could be more productively targetted at o'economic issues to help the country moving forward, at least understand what direction they're going. if we're focusing on the fomc, i think we're focussing on a bigger picture. >> point well taken. you know why they're focusing so much on the fed and the data is because the fed set the expectation up. they say they're a data driven entity and they've given us the metric to watch for in terms of the job growth, in terms of inflation and economic growth. stan druckenmiller said in his view this is the least data-driven fed he's ever seen because those metric have been met at various times, not all at once and the fed just holds still, you know, even at this point. what do you say to that? >> well, but i just say look at
where we are on inflation wrrks we are in the job market. the fact is labor force participation is creeping back up notwithstanding friday's data. that suggests to me that there's still some slack in the labor force and if we could bring people back in, we should absolutely do that. but, again, other things like productivity is one big area where we need to do a lot more work to understand that. and, you know, we used to all begrudge quarterly earnings because it's forced them to be focused the near term benchmarks. we're data dependent. if we're not careful, we're going to be so focused on the near term data releases we're not going to look at whether or country is better off 10, 20, 30 years from now. >> we're already there. face it. we're all focused this data. are you ever going have a moment when all arrows are focussed in the same direction, when you hit all metric at the same time? is that what we're waiting for
here? >> i don't think you have to see all of the metric. whether we're at maximum employment, my judgment is we're not quite there yet. remember, the 2% is not a ceiling. it's a target. we can tolerate it both above and below. right now we're coming up short on both of those and so i don't see mr. druckenmiller's argument that the data has been flashing in a certain direction. i know we're data dependent. we're watching it. we want to do the right thing for our dual mandate. i don't want them to lose sight of the bigger picture. the bigger picture is a bigger fed. >> are you going raise rates in june, neel, or not? let's talk about what markets want to know here. >> i know. i've also said as an foc participant, personally i don't want to get into the business which month we're going to raise or how many times we're going to raise.
i don't see a benefit to the markets saying it's going to be one, two, three, and four, and when it's going to be. we' all need to react to the data. whenever possible, i'm going to try to push people to think about the long term rather than just the next meeting. >> by the way, i think the bank of england is just cutting in half its number of meetings a year. do you think you guys would do something like that. >> i don't know. i haven't talked about it with any of my colleagues. i've only been in it four or five months. i'm just reacting. i'm asking is it healthy there's an obsession. i think it could be better used elsewhere. >> just one more question because i'd love to know your point of view on this broadly, neel. is the cycle turning? we've had a number of startups. we had the deceleration on job growth on friday and people have a sense already of markets being fully valued. what is your read on conditions?
is the cycle turning and turning lower here? >> you know, doing know. as we know, we get so much data every day and it usually points in certain directions. i'm certainly not forecasting a recession this year. as you know, given all the data, we're notoriously bad at predicting these things. there's always the possibility. it doesn't strike me the odds are any higher than i were six years ago or nine years ago but we have to pay attention and watch. >> before we go, we lied. because you're a fed official, what do you think? june or september? what does the data suggest at this point? >> when the data allows. >> all right. >> again, i just don't think it's productive. so that's why i'm not going to -- >> i know you've only been on the job a couple of months but you're learning the language very well. we appreciate your time. thank you. >> thank you for having me.
we have a little over 30 minutes left. the dow is down 13 points. 's not the whole story. the s&p is down, the nasdaq is up half a percent. up next, doughnuts and fintech. why krispy kreme and the loaning tech are going in opposite directions today. >> we'll deliver the results the second they hit the streets and break them down with various analysts coming up on "closing bell." i'm only in my 60's. i've got a nice long life ahead. big plans. so when i found out medicare doesn't pay all my medical expenses, i looked at my options. then i got a medicare supplement insurance plan. [ male announcer ] if you're eligible for medicare, you may know it only covers about 80% of your part b medical expenses. the rest is up to you. call now and find out about an aarp medicare supplement insurance plan, insured by unitedhealthcare insurance company.
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welcome bachlkt a unit of german investment company is buying the doughnut chain for about $1.35 billion. you recall the $14 billion deal. also own caribou coffee and pete's coffee and tea. >> it's perfect. >> it's delicious. >> let's keep looking at those doughnuts. they look great, don't they? krispy kreme up 24%. meantime lending club heading in the other direction. showing he violated the company's business practices. josh lipton has more challenges
facing peer to peer. >> reno le plaun. lendingclub's founder, chairman and ceo has resigned. the problem was an internal review. they found that the company sold an investor $22 million in loans that did not meet the investor's conditions though exactly how isn't clear. on top of that it was also discovered changes were made in the afternoon indication dates of $3 million of these loans and finally there was evidence of the conflict of interest. now the investor was reportedly jeffries which declined comment. in a statement lendingclub saying while the financial impact of this $22 million in loan sales was minor, a violation of the company's business practices along with lack of a full disclosure during a review was up acceptable to the board. right now it is not clear what role le plaun. exactly played, but dow jones reporting he was ousted in part
from misleading personal investors. you can see the stock is down 25%, in fact, on track for the worst day ever, there following a tough day. reported and missed and prosper laid off nearly 30% of its stack. it erodes that trust which will take time for the company and the broader market to rebuild. guys, back to you. >> this has been percolating for a couple of months, josh. we started to see rates go up in part it seems because the whole basis of these.
why you do think that appetite is there? >> listen. you look at lendingclub, certainly, look at its board, kelly. this is powerhouse board. larry summers, john mack, used to head morgan stanley, a group of very smart membership and women who believe in lendingclub and this business model and there are certainly strong tail winds which you can argue long term would benefit the industry. you have a young audience comfortable doing business online. they want a better priced financial product, whether that's a student loan or mortgage. they want a better student experience. so long term you can see how these companies can benefit, but near term you now have a real issue, the heart of any financial transaction is trust and that now needs to be rebuilt. >> a peculiar case as well. josh, thank you very much. josh lipton.
the journal pointing out it has a problem. they've been repaying the loans too quickly and so it's not making -- >> they're not making their interest payments. >> right. they're paying sometimes 30% more than what typically would be expected. it's really interesting to watch how this all shakes out. by the way rngs we're going to boo b speaking. time for a cnbc news update with sue herera. here's what's happening this hour. a suicide bomber killed four, injuring nine others. >> a new era with the swearing in of a new police chief later. he comes from miami where he witnessed civil unrest as a police officer. he's foregoing his job. a man is alive after a
sheriff's deputy pulled him from a burning car. the driver was airlifted to the orlando bush center where he's still being treated. >> and it was the shot heard round the world over the weekend. new york mets pitcher bartolo colon hitting the first home run -- his first home run at age 42. that's according to espn, nearly 9,000 cards of that event were sold in a 24-hour period for $9.99 each, you can do the machlt the announcer was skreechling. totally cool. >> i saw pictures. they posted pictures of babe ruth next to him because he started his career as a pitcher as well. i want to know what happened to the ball. >> i want to know why these cards are still selling. i would have thought it was
digitalized. >> they want to hold onto the cards. >> baseball like wall street is traditional. if they had trading cards of wall street trader, i they would be papers. >> in some cases they do but they're police blotters. >> thank you, sue. 24 hours left in the trading session with the dow down 19 points. >> also coming up, 000 trump-proof your portfolio. julian tell has a five-point list of dos and don'ts. stay with us. & in a world held back by compromise, businesses need the agility to do one thing & another.
the first quarter. ceo joseph papa expected to speak with jim cramer tonight. don't miss it. >> papa comes to cramer. thank you, kelly. we've got ben willis on the floor. we were talking earlier, the collapse of commodities. strong dollar, slow china growth. the stockmarket is sitting there. >> i don't know exactly what to do. in the meantime i think what's playing out in china is very important. the fact of the matter is most of the components' complex collapsed last night with the exception of oil. it's the only number that remained unchanged. all the others, the iron ore, rebar, it's continuing. >> is this a one-day wonder? >> no, no. it peaked at the end of april and is collapsing.
it looks like a mt. everest on the chart right now. that being said that is correct's a function of currency translation and what exactly the fed is going to have to do to play nice in the sandbox. the reality is our economy is doing just fine which is why it's seen some of the stocks today meaning the health care stocks holding it up while the dow is not fairing as well. >> do i even bother to ask you about levels today? i've got to go here. >> 2050 have held. rangebound until another central bank makes noise. >> thanks, ben. see you later. kelly? >> up next we're going to talk about trump-proofing your portfolio. we'll get julia's take right after this. you pay your car insurance
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welcome back. donald trump is stirring up quite a bit of uncertainty. his republican party can't quite get behind him. he has a plan to lower taxes but says they may pay more. here to tell us how investors can, quote, trumproof their portfolio. welcome. >> thank you. great to be here. >> let's start with where do you think the impact will fall
hardest. what should people look out for? >> the reality is we don't know what he's going to do. i don't think donald trump knows what he's going to do. here's what is key in emerging that investors should look at. firstly he loves infrastructure. this is a way who built his fame and fortune. if i'm an investors, buy some cement stocks. >> you're saying don't buy the banks. >> it's interesting. he's had a difficult relationship with wall street. if you look at his statements, he's very much on the side of main street, main street, main street. he doesn't like financials that much. i don't expect to see him repeal dodd/frank that's going to be particularly beneficial tr the
banks. i'm quite worried about the banks by trump. >> by the evercore is looking at it. these are the kinds of companies that would benefit. what about the defense names? we have heard, you know, quite a bit about -- we have have heard of people buying the defense names here. >> here's the issue. the point about infrastructure and banking policies, they're pretty similar. i would imagine quite something as well. we're going to see son inventure it. >> you say finally and most importantly investors need to invest in assets with an eye to capricious government intervention. i'm hard-pressed to figure out where you're going to invest then. >> exactly. the reality is there are some
seths that benefit from it. i have a friend of mine -- >> capricious is what got me. >> here's the issue. if you are investing, you need to think whether the government could intervene or not. for example, sensors, that's an area where you're going to see more government action. so trying to turn this thing around on its head and say, okay, what's going to benefit from it, it's quite a smart thing to do. but certainly when it comes to pharma, when it comes to technology stocks and tell cons. all of those areas are governments where you can see them getting a lot more involved unpredictably going forward. >> unpredictably and capricious being the key word. >> exactly. a good reason to keep watching the news and reading the paper. >> we only have ten minutes to go. keeping an eye on the markets. helped by biotech to some extent. it's up 20 points.
nearly half a percent. the nasdaq sup. the dow is down 20. up next -- yes, sir. down 150? 150 to the sell side from mr. ca ca cashin. when we come back. i am benedict arnold, the infamous traitor. and i know a thing or two about trading. so i trade with e*trade, where true traders trade on a trademarked trade platform that has all the...
attorney general loretta lynch has just announced a lawsuit against north carolina over the controversy on the bathroom. >> that's right. any minute attorney general loretta lynch is expected to hold a conference. the lawsuit filed just today. the justice department claims that the access rights of transgender people are protected under the 1964 sister-in-law rights act. you might recall that earlier this morning north carolina ice governor pat mcquarry signed a lawsuit claiming they're basically trying to make law that is not based on the law. but the justice department is
saying, yes, indeed, the rights of transgender people are protected under the civil rights act. of course, what is at the cover this controversy is that north carolina passed a law that would prohibit transgender people from using bathrooms and locker rooms according to their chosen or preferred gender as opposed to the gender on their birth certificate. so, again, the legal controversy or the two sides continuing to fight over this law which, again, has brought national attention to this issue. and, of course, for many businesses they have supported the justice department's efforts to protect the rights of transgender people over this issue. so once again the doj filing a suit against north carolina. back to you. >> all right, mary. thank you. we've got seven minutes left in the trading session. the dow down 34. anthony chan from chase, the chief economist joins us. we were talking about the seeming diswecht between the market which relatively speaking
is still relatively high, close to all-time highs and will yet the economy seems to be slowing down. what's happening? >> you've got a half a percent growth on real gdp in the first quarter and gdp is up almost 2%. you've got to remember when you look at more than 60% of the profits are coming from goods producing sectors. when you look at the overall economy, less than 14% of the jobs are there. main street america is a lod broader and that, i think, is why you're seeing the disconnect right now. >> so which do you expect? can this persist? >> i think right now when you're seeing the overall economy, they're hopeful. there are red flags out there. for example, i've looked at it as to whether or not we're going to have a recession.
everything is great. it's not so grchlt 1.9% in the last quarter is not a good number. that's why it's so important. nonresidential, not good. 14.8% in the first quarter, very good number. we've got a mixed picture. that's why the federal reserve is having such a difficult time. that's why neel kashkari is saying we have to look at more data. >> thank you for being with us here. we'll come back with the closing countdown for this monday with the down down about 30 points. we then turn our attention to solarcity and hefrts global. we'll have the numbers. you're watching cnbc, first in business worldwide. (announcer) need to hire fast?
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and i never get tired of it. are you entirely prepared to retire? plan your never tiring retiring retired tires retirement with e*trade. two minutes left here. there we are. they were taking all my graphics away from me on the floor. i was trying to see where we were. the dow is down 38 points. not a lot of volatility today. even after the weak growth data. we had a minor, very minor rally on the open this morning and we're finishing down about 38 points here. the big feature, though, bob pisani, had to be the commodities collapse. that really doesn't reflect the true weakness of some of them like the metals and some of the other commodities out there.
>> we have a strong dollar, the dollar on the upside. the trade data was not particularly great. and then we have the chinese regulators claiming that they're investigating speculative activity on the china commodities markets as well. that's caused a big drop. the rebar, which is a reinforced steal was down 6%. iron ore is down 6%. throwing questions on how strong the chinese recovery might be. the bottom line is it's been a long day. all the big aluminum copper iron ore, keep an eye on that. >> kelly will have the earnings for you from solarcity. that will be a big one to watch. up 3%.
birch global down 2 and a third percent. >> we'll see if that trend continues. a minor gain for the nasdaq. stay tuned for the earnings. milacron ringing the bell along with nasdaq. stay tuned for the second hour of "closing bell." see you tomorrow, kelly. >> thank you. welcome to "closing bell." it was the only index in the red actually. it looks like the s&p was able toed a a point and a half and the first part was a stronger performer. although its gains moderated. it add a third of a percent. 47.50 is the level there. we'll have more on these markets in just a moment. consumer protection financial
bureau richard cordray will join us. it's received a lot of press. as mentioned on the press, we have cnbc's commentator mike santoli. "fast money" trader guy adami joins us as well. mike, interesting day. a lot of dispurersiondispersion. what you do think was going on? >> at the index level you could hard by be more flat. a little bit weaker. the stronger dollar and then health care up and also those defensive sectors up again. it seems like the yield chase is back up. i think what's interesting is the broad market is being tested for whether it was a little bit overly dependent on its. the revival in those emerging
markets. that's what we're waiting to see as we pull back. >> it's interesting as we go further into may. is it going to be a month more like the beginning of the year with some of those a little more troubling? the bond yields have failed to lift. it feels like the april optimism has gone way. >> i'm wondering whether or not the market has taken a june rate hike too far off of the table. it's not something we should be writing off entirely. i think one important piece of information that got overlooked is the competitors. they had a great piece, a great interview with bill dudley and he said to not read too much into friday jobs reports. this was done after everyone was so concerned about the labor market. he said he's not worried about it. he felt two rate hikes felt
appropriate for this year so they're still operating from their base line. >> you know, but, guy, neel said we talk too much about the fed. >> honestly, our show at 5:00 we'll spend five minutes talking about the fed. pretty much a nightly event. with that said you almost have to because they've inserted themselves into the conversat n conversation. as elan said my level of respect would raise ten fold. not that they should at not that it's going to unsettle the market but it gives them a sense of krezability. >> let's go to that sound. now, here's what he had to say among other topics about the
next potential rate hike. >> personally, i don't want to get in the business of trying to predict which month we're going to raise or how many times we're going to raise. i don't see the benefit to the markets of having me out there saying it's going to be one, two, three, four, and when it's going to be. i think we all need to react to the data. we're being transparent about that. whenever possible i'm going to push people to think about the long term rather than just the next meeting. >> fair enough,y lan, so what about june? >> in those forecasts every quarter they have to submit the number of times they expect to raise rates throughout the course of the year, where they expect rates to be by the end of the year. to say it's not part of his job, it actually is a big part of his job. >> it almost sounded like he was going to push for it to be less so.
he sounded like he might agitate to ittet. >> it will be toward fewer. i would also bring up this point, which is if the fed disengages, that actually can make investors more focused on what the feds' next move might be because there's less clarity out there. he said when they try to whisper t market leans in to hear what the fed is trying to say. so the move toward transparency, the move toward trying to offer great er security. >> cicadas are like every 15 years. >> everyone feels that's a virtue, stepping back. but, look. those forecasts, to ylan's point, and their expectations and theying about their next move, they exist whether you tell them or not.
to get a handle. i don't think they fully understand what they're trying to do. is it to make the markets go higher or is it to stabilize things? it's all what you want. they're more a hindrance than a help but that's to my vantage point. >> i think the wish to not have to pay close attention to the monetary position says. we wish the world was growing at 3.5%. we wish they were doing something more dynamic. >> there's been so much focus on the fed in the absence of fiscal policy, in the absence of other generators and there's been all the attention on the fed rightly or wrongly. >> it's also a productivity issue and it made me think about pa barron's this weekend. have we moved from the age of apple to the age of amazon. your iphone is fundamentally a tool.
humans are developing by using tools. what does amazon offering you, even if it's better voice activity if it's a little thing sitting on your desk? what does it represent? >> it's a mavis deflation machine. it's a machine for attacking profit pools elsewhere in the economy and basically enhancing consumer experience along the way, which is a tremendous way, making living standards better at the expense of somebody else. >> does that make you want to bet the horse on amazon as we go through reteal season here? >> i'll say, mike just said. this i've said it with you. i've heard larry kudlow say it. technology by its very definition is extraordinarily deflationaire. when you start talking bond yields and this puzzlement to why they're so low, i think about the age we live in and understand that we're in a huge
inflationaire cycle offset by inflationaire element bus the wrong type. you have it. almost by definition, that can't end well. >> let me make the point. you know, the shares are up 25% on a buyout. what do doughnuts have? they have pricing power, right? ultimately you're going to be able to ratchet it up. >> hershey's says they get their nickel and dime. ly point out. crispy traded in the mid-40s 13 years ago. >> there's your price deflation overtim over time. >> they gone through every as spoefgt the blass sheet and turned the cost center into a revenue stream. whether you look at it in terms of it.
transportation costs, they're starting to bring more of that. look at the deals that continue to sign up with atlas and others. it's not just about retail earnings season. >> neighbor it could be turned into something else. i know a lot of industries are doing that. >> that was a chill going down the spine of the advertising space, which we may not ever know the answer too. >> i think the federal reserve would certainly say that, you know, they have within way below their inflation target for too long, they want to make sure they hit it. charlie evans out of chicago said today that he felt that the feds should actually target overshooting inflation. so it's one of the first times you've heard a fed president say we're willing to target it in order to ensure we have a see
men trick average. >> i thaumd caought kashkari sa something like that. hang or for a moment. let's head over to seema modi. >> they're announcing a secondary argumentative. in addition to that con edison, they're offering 1.32 additional million shares. offering is being made in connection with the agreement announced back in april by this year to purchase an energy interest but is not on the complex of a purchase. there you go. down 2% on the secondary announcement offering, kelly. >> thaerngnks, seema.
guy, good time to do that. >> when they priced their secondary looking where steel stocks have been, i think that had a ford dollar handle and you go back to where it traded five or six years ago. i say good for them. you might get a good opportunity to buy something on the cheap here. >> there you go. keep an eye on it. thanks for joining us. >> right on. >> i'll be coming up more. mohammed elaryian will have a call. we're going to bring you those numbers richard cordray on why it's easier to bring class action lawsuits against firms.
you're watching cnbc, first in business worldwide. ♪ i could get used to this. now you can, with the luxuriously transformed 2016 lexus es and es hybrid. ♪ [so i use quickbooks and run mye entire business from the cloud. i keep an eye on sales and expenses from anywhere. even down here in the dark i can still see we're having a great month. and celebrate accordingly. i run on quickbooks.that's how i own it.
car insurance search. here's the latest. problem is, we haven't figured out how to reverse it. for now, just log on to compare.com... plug in some simple info and get up to 50 free quotes. 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. welcome back. courtney reagan has it. >> gap out with its april sales.
it's another disappointing month. it fell 7%. old navy falling the most, down 107 year over year. banana republican and down. that's far below consensus of 44 cents. gap, remember, reports its full rumts for the quarter on may 19th but a further note is gap is, quote, evaluating its banana republican and old navy fleets" primarily outside north america. had a meeting with art peck and in 2015 he focused on the processed within. he continues to say evaluating stores outside north carolina is a pivot from last year and he's now looking aet the global footprint to make sure he's taking advantage of the biggest opportunity for profitable
long-term growth. kelly? >> trying to follow this line of reasoning, they're saying it's gap, old navy in north america but what happens outside of that. >> yeah, exactly. remember they announced big call backs as far as closing a number of stores doumestically in thei fleet. noum they're making sure they're being smart about that. they still see a lot of growth but we know that doesn't always need to come from a store. that's after focusing a lot of attention. >> those shares, guys, down 50% from the market cap, $8.5 billion? >> clearly the market is saying this is belated, not fast enough, in terms of re-evaluation.
>> stock was up. it's a relative. >> you know, kelly has been a tough month from the retailers that we've heard from so far. remember, l brands had a tough quarter. so i think this all cause as little bit of concern and worry ahead of the big flood of retail earnings that we're going to get this week and next. >> yeah. it's true and peculiar and we look forward to more explanation. for now the gap shares are down. courtney, thank you. auction house sotheby's reporting a first quarter loss today and what could be a red flag for our high end art world. >> sotheby's reporting a net loss of $26 million.
shares are up after cfo mike goss said the company had recently been advised by an outside investor they may make purchases of our stock to bring holdings to 10%. it's unclear whether they're talking about a passive shareholder or coming in to take it private. they're going to go head to head for four days with auction totals expected to top $1 billion. that's less than half last year's total. the top estimate this year, $40 million compared to last year. this untitled work expected to fetch also over 40. now, we don't know who the mystery investor may be for sotheby's that they referred to on that call, but we wanted to show you billionaires who were noun to be big art collectors and they're being talked about.
of course, he's on the sotheby's board and he led the battle. steven cohen, of course, ken griffin. sotheby's is equal to nine mow dill jannes. guys. >> after seeing some of them, i'm not sure about that. is this really a business that is fundamentally a good business? these guys should know when they see one. >> remember, alfred tall aboutman took this company private in 1983 for $37 million, brought it public again but no matter how much the art market has appreciating and these painting go for over $100 million, it has yet to be proven. that's why many say it's better
as a private company than a public company. >> mike? >> yeah. ice kind of a trophy business. actually the broad market should care a little bit about whether sothebys the stock can perform a little bit because if you look at the way this is trading. actually it's about half of its high from 2014, you've never had sotheby's stock go down and not have a bear market. it did this in 2011 though and we didn't really get a full on bear market. >> well, i hoe that this is another scare and nothing more, but, still, it's a great indicator. thank you, robert. >> thank you, kelly. >> robert frank. now there may be a problem for another big startup. first we're going to head to can d for the latest on the devastating wildfires and the impact they're having on the oil region. stay with us.
off. the electrical grid has been damaged. worries over the fire disrupting the oil sand sights seems to have reseeded a little bit as the weather has been more cooperative. we've seen cooler temperatures as well as a little bit of rain, but we may not be out of the woods just yet. remember, ft. mac is the third largest reserves of crude. some namts say the wildfires dubbed the beast now could bring economic growth to a standstill or even put it back into recession. back here at the evacuation cent center. wants to know the latest.
>> as much as you can argue something closer, it was down and there's all this concern about what was happening in saudi arabia. >> they don't know how to it was interesting. >> this really remind mess in terms of the numbers of displaced people of hurricane katrina. my family was personally affected by this. so obviously there's a high personal toll it can take but the economic effect according to estimates was really a wash. they took a hit in the two quarters around when the event actually occurred. but in the first half of the next year and in 2006 it made it back because ba us of rebuilding. obviously a major personal toll. economic impact over the long term was a loss. >> after seeing some of those pictures, it looks like there needs to be major rebuilding so it will be interesting to watch. we have a news alert now on the latest on north carolina's
bathroom controversy. mary thompson following this for us. >> at a press conference attorney general loretta lynch announcing the doj is filing a federal civil rights suit and the states didn't of safety, lynch saying that they recently passed hb 2 or so called bathroom law violates the civil rights. this action is a great deal more than about bathrooms. the laws that we as the people and as a country have enacted to protect them. indeed, to protect all of us. >> the lawsuit in response to north carolina filing a lawsuit against the doj over this law earlier today. of course, the doj say it is also reserving the right to
withhold federal funds to the three entities involved in that lawsuit and the funds could amount to over a million dollars. back over to you. >> time now for a cnbc update. if true it could be provocative and destabilizing. it said any launch with iran could be consistent with a u.n. security council resolution. this is el sunshine owe storms have wrought relief in california. it will decide whether to lift the 20% cutback in water use. mercury making a relatively rare use beginning at 7:00 a.m. on the east coast. appearing as a tiny black dot on the face of the sun zooming along at 106,000 miler per hour.
the transit which happens only 13 or 14 times a century lasted about 7 1/2 hours. >> and a 15.38 carat pink shaped diamond shown to theed my ya in geneva before auction at sothebys. that unique and very pink diamond will be auctioned off on may 17th. usually i don't like the big ones, but i like that one. >> you can tell i hate pink. i'll be watching that one as well, sue. >> it would go beautifully with your outfit. call wardrobe. >> a little bit of overkill. thank you, sue. have a good one. up next find out whether highly valued data startup has a problem on its hands with sales and holding onto top clients plus disney's "captain america" raking in neefr $200 million. we'll look at what the latest
installment means for disney's bottom line. and that in a new house, you probably don't share the same tastes as the previous owner. ♪ [ dolphin chatters ] so when you need a little house painting or a complete remodel, we'll help you get the job done right, guaranteed. get started today at angie's list, because your home is where our heart is.
street to kick off the week. the cow was lower by 34 points. the s&p 500 was up a point and a half and the nasdaq was up 14 tore. it was also a rough day in the oil patch. crude prices falling under 3% to settle under $44 a barrel on the back of that solid dollar. there was a shakeup of saudi arabia's oil ministry and indications of the wildfires in canada may not impact as much as originally feared and krispy kreme investors getting a sweet day. j & b holding acquiring the cha chain. j.a.b. acquired green mountain. krispy kreme shares up today. breaking news on lendingclub. >> the story continuing to glow.
the chairman. >> of course, he failed to disclose an interest in the fund. they invested in a fund in which lend being club was considering an investment that he had invested actually alongside laplanche. he does remain on lending cup's board, so this story continuing develop. back to you. >> let's get to those with our jac jackie deangelis. >> solarcity reporting jaufgt earnings. this was a loss that was far greater than extendations as according to thompson roitsers. ly say the guidaance also equaly disappointing. investors are not taking this
well. you can see it's impacted in the stock price right now. in terms of revenue, we did see $123 million. it was slightly higher than expectations but it's what investors are looking into. remember, this segment has had a rough time especially as crude oil prices have come down. the alternatives are not as sexy. solarcity is a stock beaten up. what's going to be key here on the conference call is what the additional guidance is. people are going to be looking for cost adjustments for this. they're going to be looking to see what their growth forecasts were. when they said they were looking for first quarter growth of 18%. it was not a positive on the stock. they're looking at 40% for the year. let's see if they change or adjust in any way. of course, crude hanging around the $45 mark is not a positive sign for this stock. back to you. >> that's true. what do you think, mike? >> a lot of excuses about temporary factors in the first quarter. it seems like this business model doesn't work.
they had to slow down their revenue growth targets because it cost so much to install these things and one of the thingsly point out here. the extension, supposedly temporary factors because it reduced a sense of urgency, so in other words they're so nip and tuck that the business model is in question. >> on that point that's one of the reasons he told us they're short saying they lose money on everything they do. >> exactly. the pay back even if they there's going to be one is for a long period of time. >> yeah. certainly taking another bite out of the valuation. the shares down about 15% after the hours. silicon valley unicorns are usually secret. it's probably the most secretive of the bunch. reportedly valued at over $20 billion it including government agencies like the fbi and cia.
buzzfeed's william got his hands on some of the documents including top tier client walkouts from coca-cola, amex, and nasdaq, losing employees. joe lons day who's no longer with the company wrote this. he said some in the media are jealous of the growing part of the teeconomy and will alden. welcome, will. >> thank you for having me. >> joe not pleased with the tone of this article, but i wanted to start with one of the -- sort of the core of what you're saying here. this is a company worth over $20 billion that booked about half a
billion in revenue last year? >> that's right. well, so the company has publicly said that they had around $1.7 billion in customer bookings, which is different than revenue. what i found out is they actually collected about $420 million in cash, which at the end of the day they're concerned about. that was a number they had not disclosed previously. >> there are a number of concerns that come up here. it seems like the implication or what you're directly saying is the company isn't delivery for clients. is that a fair way to put it? is that all this talk about it's lost some and is spending quite a bit of money? is that what it's getting at? do clients actually like using this business? >> it's obviously very hard to speak for every single client. you know, i was able to get a large number of internal
documents that represented the opinions of certain clients, so i was able to report that within the last 13 months, palantir lost at least three blue chip clients. this would be nasdaq, coca-cola, and american express. >> and what do you think about the idea that everybody's just looking to hunt unicorns now because it's fun to take them down? >> you know, that's a -- i think that's sort of revealing of how someone like joe thinks about it. i see it as just my job as a journalist to bring it to light. i don't see it as hunting unico unicorns. i see it as a hunting service. >> who do you think then is to blame here? is this a case of the company pulling the wool over investors' eyes or is this a case of investors so eager to be at the
ground level that they're not mastering the appropriate amount of skepticism? >> i would never accuse palantir of pulling the wool over investors' eyes. even with limited financial disclosure, you know, because the company is not publicly traded. so for many people the only way to get in is through secondary stock sales. so those have limited information just by their very nature. so, you know, which i think from my perspective, it makes the job of a reporter all the more important because it mice job to kind of figure out how the company's actually doing. >> yeah. will, you mentioned the company has been hot from the outset. what's the basis? obviously you had the founders who had done great things before and the cia connection. on the merits is there a way to
try to evaluate whether their technology is something new and special? >> so i'm just a reporter. i'm not a technologist, but i do think their technology does do amazing things for some clients. like, for example, i did reveal in the article that their biggest client by bookings is the oil company bp and one of the pay amazing things palantir does for bp is look at the data-rich oil wells as they're being drilled. it's very important because it can prevent potentially a catastrophic collapse of an oil well and that would be very expensive and they also do things for trading. they also help banks kind of analyze the data. so they do a lot of great things. i think the big question is can
that translate to other clients. you know, clients like coca-cola, kimberly-clark, you know, does it work for everyone or does it just work in certain cases. >> well, you certainly raised the question, will. thank you for joining us. >> thank you so much for swrg me. it was a blast. >> that's william al den. >> is tlir feed zbik enough to break records? coming up we'll recap the box office numbers and a look ahead to disney's earning. first, they're aiming to give customers more legal power against banks and credit card companies. richard cordray joins us next in a cnbc exclusive. we were born 100 years ago into a new american century. born with a hunger to fly and a passion to build something better. and what an amazing time it's been, decade after decade of innovation,
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the rest is up to you. call now, request your free decision guide and start gathering the information you need to help you keep rolling with confidence. go long™. ♪ welcome back. they're aiming to give customers the right to bring class action lawsuits against banks and financial firms. the proposed rule looks to forbid them from currently suing their banks. the new rule which doesn't need to be passed through congress could deal a huge blow to many firms across wall street and joining us now is richard cordray, director of the consumer protection financial bureau. welcome and this has caused quite a firestorm. is there anything that you think, first of all, need to set
the record straight on in terms of this intended rule and what it intends to do? >> i think most of us if we open a bank account or set up a credit card, we gettal contract. for example, if they overcharge $50, this would not allow them to go to court. that i couldn't join with other groups of consumers who have similarly been overcharged to get justice. >> one of your critics of this rule says it was a handout or snog that effect tore the trial industry and it does seem that if people know that banks, so to speak, are where the money is, they're much more likely to go after them. >> so that's not how i see it. where you're overcharged $50 or thousands of dollars, there's this goat cha clause in the contract and you're just stuck. the companies can sidestep the legal system, avoid accountability and continue to
pursue profitable practices. >> right. but i think that you'd acknowledge there's some risk, that if you open this up and people start to realize, hey, we all know it's not about the well meaning people. does it open it up for abuse in a way there's going to be a constant barrage of claims coming after the institutions and getting on with business? >> again, what i would say is where we stand nout, the consumers are forced to act alone. there's no strength in numbers and consumers should be able to pursue claims and have their day in court on those claims. if they're hurt, they should be able to take action together. >> this is a rule you guys were requiring to look at under the dodd/frank act. i wonder what other types of action you consider take jonld straightout banning claws all together and whether or not you feel there's a role for them in
industries that they do not cover? >> i think there's a significant role to business to business-disputes where they freely negotiate these clauses but in the typical consumer finance contract, it's take it or leave it. there isn't any negotiation over that. we didn't actually ban arbitration clauses. what we said is corn supers who are very often harmed on a massive scale for small amounts are not able to pursue claims. our study found that very few consumers would ever bother to pursue a $50 fee or overcharge by taking it to court. >> you know, just to follow up on what ylan was saying there, you have lots of consumer or investor kblanlts. for example the securities brokerage. that's a pretty common way of doing it. are there ways to build up a system outside of the courts within the industry or with government backing that could
mimic something like that or would there be a need for it? >> actually fin rah which gorjs certain types of securities transactions has a similar type of rule. they have banned companies in not allowing consumers to take group claims to court. they banned the cutting off of the group actions and that's exactly what we're proposing to do here. >> richard, briefly, we have to let you. the ceo's out. is there anything further you can tell us about the extent like the additional levels of dation that you think need to be regulated further? >> we're carefully looking at the market place lending. these are young industries. they're going to have hiccups. one of the things they're trying to make sure is it's important
they engage in consumer friendly practices and they're watching to make sure they're not abusing or exploiting their customers. >> richard, thank you for joining us. >> my pleasure. cfpb. a judge dismisses the case, and controlling shares of viacom. i am benedict arnold, the infamous traitor. and i know a thing or two about trading. so i trade with e*trade, where true traders trade on a trademarked trade platform that has all the...
testimony in which he said he does not want her in his life and called her derogatory expletives completely alters this case. her attorney plans to appeal, adding that herzer is suing sherri redstone for $100 million, alleging that she and the nurses manipulated and brainwashed her father. robert cliger saying, miss herzer said his difficulty communicating was the result of reinstatement in his life and fortune. redstone plans to sue herzer as well as his other former companion to recover the $150 million he gave them. kelly? >> julia, you know, the other big media story, while we have you, disney's captain america civil war, huge box office this weekend. we have disney's release coming up early tomorrow. what kind of impact are we talking here? >> civil war is the fifth biggest domestic opening of all-time. captain america grossing $182
million in the u.s. another $220 million overseas this past weekend, to bring the global box office to nearly $680 million. the fact that it has caused reviews bodes well for the frim to hold up as well as the other marvel films in the pipeline. this follows in a string of hits, including zootoppia which should drive the earnings report higher tomorrow. analysts will be focused on disney's media networks. the question is how much rising advertising revenue espn will outpace the declining subscriber numbers. analysts expect revenue to grow 6% to $13.2 billion in the quarter, while earnings per share are expected to grow 14% to $1.40. we expect analysts to ask if there's an update on the succession plan for bob iger and any insight in the impact of the shanghai park launching in june.
>> earnings tomorrow. string of hit movies. but you can't necessarily take that to the bank forever. >> that's actually the big question. julia said investors want to hear about espn. right now that's mainly what they want to hear about. the market has always been reluctant to put much of a multiple on studio earnings. they don't want to extrapolate obviously one hit into another into another. of course, disney doesn't get all the dollars at the box office. but julia said, nine marvel films in the pipeline? i think there was some sense out there maybe this franchise is being overworked. this film suggests there's still life. >> marvel. >> i've got to ask, though, how many super heroes are you going to have in one movie. the power girls will be added in yet. >> i think if this category was susceptible to overkill, we would have reached it by now. >> the falloff cliff is growing. valeant ceo joined the
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whoa. what's going on here? oh hey allison. i'm val, the orange money retirement squirrel from voya. val from voya? yeah, val from voya. quick question, what are voya retirement squirrels doing in my house? we're putting away acorns. you know, to show the importance of saving for the future. so you're sort of like a spokes person? no, i'm more like a metaphor. okay, a spokes-metaphor. no, i'm... you're a spokes-metaphor. yeah. ok. see how voya can help you get organized at voya.com. charlie munger, associated with warren buff felt, said valeant is a sewer.
why would you want to be a part of that? >> i looked at the information and said, what do the people look like? candidly, jim, many of the people that are there, 22,000 people, all dedicated to trying to improve patients' lives. i think that's a really important, noble cause. i think that's why pharmaceuticals are so important. >> that was valeant's new chief executive, joseph papa, sitting down with jim cramer, talking about why he accepted the ceo role of the company. "mad money" tonight at 6:00 p.m. as people continue to wonder if he can right the ship at valeant. >> he said drug companies try to do good things. by the way, the sort of collateral damage of valeant played out. >> and no -- the broader drug pricing environment will remain a key question. here and in washington. >> that's exactly right. they'll be looking at some of
these issues. >> it only started. so we know it will go on for years. thank you very much for joining us on "closing bell." as mentioned, much more of the interview with jim top of this 6:00 hour. that does it for us on "closing bell." "fast money" begins right now. >> "fast money" starts right now. live from the nasdaq market site overlook times square. tonight on fast, legendary investor said investors have it all wrong about the fed. he'll be here to explain in just moments. plus, forget about opec. something else is driving oil that could determine the fate of the market. later, lending club becoming just the latest company to have a ceo resign suddenly. a shakeup may not necessarily be that bad for the stock at all. but first, we start off with a familiar fear returning to the market. all the major stocks heavily tied to china. falling hard