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tv   Closing Bell  CNBC  May 27, 2016 3:00pm-5:01pm EDT

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question seen. i see light, my friend. >> i like that. >> finally hour of trading is going to get under way shortly. >> thanks for watching "power lunch," everybody. >> "closing bell" starts right now. i almost wore my sunglasses but i thought it would be overkill. working for the weekend. >> it would have worked for me. >> welcome to the "closing bell." i'm kelly evans. >> and i'm bill griffeth. we still have one more hour of trade to go. we'll talk about what fed chair janet yellen did. some markets definitely moved on her comments. >> and verizon reading a deep with the labor unions. what it could mean. the jobs number next week. >> plus, why the long tsa lines
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could make this the summer of the road trip. and what happens if gasoline prices start to go up again? we have a recap of that coming up here. >> but let's start with today's top story. that speech from janet yellen, steve liesman, where she did. >> she thinks it's headed toward a 2% goal with the oil prices up and dollar stabilizing. she said in a conversation at harvard she expects the economy to strengthen and rates to rise. >> it's appropriate and i've said this in the past. i think for the fed to gradually and cautiously increase our overnight interest rate over time and probably in the coming months such a move would be appropriate. >> that's in line with what other fed officials have said in the last several weeks. ultimately the data is going to
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determine whether there's a fed hike in june. there's a lot of it with consumer spending on tuesday. vehicle sales very important right there. now, just note, folks, adp which normally comes out on a wednesday because it's a holiday week comes out on thursday. that's ahead of the jobs report on friday. the dow lost about 30 points after yellen made her comment but it's recovered about half of it. that's going to be the real test is how comfortable the bond and stockmarket are with a chance of a hike though. >> yes, indeed. that's about as close as we're going to get to janet yellen saying we're raising rates next month. right there. thanks, steve. >> you too. >> have a good long weekend. joining our "closing bell" skparj we have courtly radcliff gibson, peter costa from empire executions joining us from post nine, and rick santelli at the cme. i'm going to start with you,
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rick. it was the treasury markets and currency markets where we saw a response to janet yellen's comment. the pop of yield happened as well. >> the case isn't to be made whether we traded higher than 92 basis points on 2s or whether we traded closer to 190. the issue is after yesterday's final seven-day note auction, the words seemed to be i hey, maybe those minutes were speeding a little bit and we don't have to worry as much. then you add in the holiday. some markets closed early. and a lot of traders who had the right decision on, they were too thin. but you're exactly right. it was like, boom, we went back to the way we looked earlier in the week. flattening curve on a quick move. 36 to 39 on fives.
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the 30s hardly moved. the dollar strengthened as well. it isn't how much stocks recover, how much they gave up. they got half back because they've got one fifth the traders trading it. the new news continues to come in. patty rights wonderful articles on cnbc.com. they seem to be bringing the numbers down. the whisper numbers now even less than that and moving lower, so that really makes for an interests setup. how it all pans out. some say maybe you could drive a truck through that, but i say, i don't know. i think they're getting ready to tighten. and as data dependent and as wonderful a phrase it is, there are a whole lot of forces that will try to propel them above and beyond pure data-dependent. >> on that note as well, jpmorgan said its model rose
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after the corporate profits report. so where are you guys putting money to work? >> well, you know, it's interesting. we're putting money to work or i should say our clients are putting money to work everywhere. let's be honest. you have to have a diversified portfolio. if you haven't priced in a rate hike, whether it's june, whether it's july, we're looking at the data, looking at what's going on and looking at the global economy. >> maybe because it's before memorial day, you don't have many traders. do you suspect they're going to raise rates at either the june or july meeting after the brexit vote? what do you think the stockmarket is going to do about that?
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>> i think what you'll see is next week you're going to see a lot of activity. i think you're going to see people more and more involved. and you have to look at it and just assume that it's going to happen. i think traders are going to start positioning themselves probably more on the financials. i think that's where a lot of the money will end up going which, you know n the long term is actually good for the market. i do think you're going to see a lot of movement into the financials and you'll wait until the jobs market. that will be the key indicator. >> the flip side is what happened to the gold and gold miners. the miners are or a four-week skid down about 14% for this month. rick, you know, going back to the dollar, i guess, we're sitting here at almost 96 on a dollar index. do you think it could keep moving higher? >> listen. the dollar index -- if the fed is going to raise rates, the dollar index is going to go higher. that's like financial physics. but it all depends if we
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actually see an appropriate turn and if they're going to do it. and when they to do it, it's going to keep going up. there are mitigating factor. the one area we haven't discussed that's the biggest area, i don't think interest rates are going to have ram bunk us moves. i think you have to watch the credit spreads. all that corporate issuance out there. banks don't have any corporate inventory. you know, we've had so many guests say, it's pretty good because the status quo is pretty good. but my contention is we have the most fragile status quo ever in certain market areas and how they'll react when they're stress tested, you know, is anybody's guess. >> hey, peter, the traders and to computers are watching these indy sees very carefully. maybe 18,000 are waiting on the dow or the s&p. what numbers are you watching for here? >> i would be looking at 2100 on the s&p. 2100 top.
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the down side is -- i don't think we have a lot of room on the downside. it's narrow range and i think we're going to be there probably till the end of the summer. >> kourtney, what areas are you telling people to stay away from? >> i will tell you -- you guys were talking earlier about the issues around drugs and antibiotics and not working. zika is real. really pay attention to the stocks affected by travel. aside from tsa and what we've seen there, the airline stocks and other consumer stocks, i think we're going to see a lot of issues around travel and folks avoiding zika as it's real threat. particularly u.s. and european travelers will not go to areas they otherwise might during the summertime. >> you can read that into the rio olympics. >> absolutely. >> have a good weekend. >> you too. have a good weekend.
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>> you too. david faber has new details and joins us now. >> thank, kelly. you know what? your intro alone says it all between viacom and sumner redstone. he's the controlling shareholder of the very company we're talking about. earlier today or actually on tuesday i report thad the directors of the company were increasingly in the event that mr. redstone might replace all of his board as soon as this friday. today as we we reported on that likelihood. sources reported that, yes, they're bracing for that opportunity. later today, about an hour or so ago, a spokesman on behalf of mr. redstone put out the following statement with regard to questions about the viacom board and its ceo. saying sumner redstone will make everybody deliberation with the same deliberation as he removed
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philippe dauhman. replaced earlier this week by chad jankowski and joe cruddic. these seen more in line with cherie redstone, mr. redstone's daughter. npz in their belief they believe he's under the influence of cherie redstone, his daughter, who's trying to man it late her father to achieve her goals. those goals to take control of viacom and change its management. it might no be the worst thing. we'll see if anything occurs
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today. later in the day, of course, the friday before memorial day weekend, or who or not the board for now gets a reprieve. but, guys, this has been a tumultuous week to say the least in which the lawsuits have gone back and forth, the statements have gone back and forth. setting up this bizarre situation where you had a chairman and ceo combatting it would seem the desires of the controlling shareholder of that same company. the question, of course, comes down to competency, that of mr. redstone again, 93 today. >> that question comes up as mr. dauman and he have filed suits. they've asked the judge to speed that up. >> their trustee seats. >> exactly. trying to get that trial under way as early as september. they're waiting to see if that will happen. >> exactly. these massachusetts courts, i'm told, moore very slowly, bill. meanwhile they may be faced with its entire board of directors
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having been ousted. now, as i have been reporting since tuesday, the board would immediately go to delaware and see seek relief there saying they had been removed incorrect incorrectly, but this is setting up a very difficult situation for viacom's management which is trying to sell a minority stake in paramount. you might understand if you're on the other side of that negotiating to buy a minority stake, you may be stepping back and saying, how do i know you're going to be around when i sign this deal. >> the trustee may be irrevocable but the trustee board seats may not. >> yes. >> thank you. >> thank you. the s&p is outperforming the nasdaq. it's up half a percent adding about 24 points. now, consumer borrowing is hitting the highest level. coming up we'll discuss whether that's a major warning sign for this market and the economy. plus, low gasoline prices
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and long waits at airports are teaming up to make this maybe the summer of the road trip according to our next guest. find out just how many americans will be on the road again, he said, straight ahead. >> and again. ♪ [crowd cheering] i could get used to this. now you can. when you lease the 2016 es 350 for $329 a month for 36 months. see your lexus dealer. because you can't beat zero heartburn! i take prilosec otc each morning for my frequent heartburn ahhh the sweet taste of victory! prilosec otc. one pill each morning. 24 hours. zero heartburn.
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finthey found out who's beens who? cking into our network. 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.
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all right. let's talk travel. they're high, outperforming the broader markets as we officially kick off the travel season, speaking of, kelly evans. >> while many will be traveling by air our next guest said this will be the summer of car travel. more than 34 million will be hitting the road alone. >> and they'll probably be paddle boarding when they get there. how much traffic can we expect? our old friend vera gibbons. how are you? >> i'm not paddleboarding yet. not this weekend. too much traffic for me. >> it's the first time gasoline is lower. >> can you believe it?
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well below the ten-year average of $3.15 and we're headed for the lower summer prices of 205. we have a lot of people saying, let's hit the road. it's the summer of the road trip. >> on the one hand people are saying oil is going back over 50. that's an encouraging sign. every dollar increase is like a 2.5 cent increase? >> something like that. it pushes the price pump about two pennies. but that's not stopping people. yes, the price has been spiking up. we're about 5 cents from last week, 16 cents from a month ago, but generally speaking, these are great, great prices at the pump. you've got people throwing their kids in the car. couple that with the fact of the airport. >> the stories of long lines, whether they happen or not, are going to keep people from going there anyway. >> just seeing the headlines, two hours, three hours, hidened terror levels. so families are thinking we don't want to go to paris or
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europe or brussels. one guy told me travel to europe is down 13%. people are too nervous to do that. >> who's going to benefit? the theme park operator? if people are going to travel more than 400 miles, which is what i'm just learning. >> but, yeah, the hot spots and tourist spots are going to do very well. the national parks are going to go 'do extremely well. they're celebrating their 100th anniversary. lots of activities for the kids. they're going to be jammed. i think the state parks, too, will be pretty packed. the national parks are selling out. the people are probably going to say, let's try a state park instead. >> you know what i'm amazed at? recently i drove from l.a. to seattle, so maybe part of an early wave of people who are hitting the road in a big way, but renting a car to me seems incredibly expensive. how does that kind of factor
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into the decision here? >> renting a car still very expensive as are the hotel costs. i saw something come out from orbitz. among the hot spots, to hotel costs are at double digits. >> you may have to look at airbnb. >> or one of those hotel apps. gas prices are extremely attractive. we're seeing a big demand for rv rentals. those are attractively priced. a thousand or $1,200 for the week for families go to the park. >> that's what you should have done. >> i think you're right. watching the rvs take the curves is one thing but how long will it take to get bill out of the city? >> i don't want to think about it. good luck getting out of the city yourself. vera gibbons from gasbuddy.com.
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so nice to see you. it could be nearing the end. mary thompson has the details for us. what are you hearing, mary? >> the largest strike since 2011 could be coming to a close. verizon and almost 40,000 workers have reached an agreement in principle on a four-year contract. in statement he said he expects the workers will be back on the job next week. verizon declined comment. a statement from one of the unions involved said striking c wca members -- the contract is in the process of being written and then be ratified. they've been working without a contract since august. the workers go on strike as the two sides remain at odds as they talk issues of job center calls.
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the labor department stepped in in the middle of may. the mace jobs report reflects a loss of 35,000 jobs links to the workers who haven't been receiving any pay since they went on strike and when they reported their second quarter results in july, this strike is expected to impact its bottom line. >> a lot of people are trying to figure out what impact it will have. you have these people striking, but on the other hand the company did have to possibly hire a bunch of temps, right? >> actually they had people already coming in and help -- working during the strike to basically make up for the striking workers as well. that was part of it. but, again, the estimate, kelly, is for about 35,000 jobs lost will be reflected or it will, i should say, impact. we're still expecting an increase in jobs for the month of may, but what you want to do is add 35,000 to that number. >> so we'll have that number in
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our back pocket just in case we need it there. thanks, mary. >> see you late jeer it's been a strong week although the last couple of days have been quiet. i think 2% gains. nasdaq up 3% maybe. transport is up. and that nasdaq is up nearly half a percent today. the likely republican presidential nominee donald trump laid out his energy agenda in north dakota this week. when we come back, we'll look at that plan and do some fact check of his claim, such as whether the u.s. has more oil reserves than all of opec. and later we'll hear from somebody about google saying it could end up killing the local television station business. stay tuned. there's a place for vacationers who seek more
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this place is made for those who do more than just vacation. ♪ whoa go with me now it's made for those who vacation like they mean it. universal orlando resort. welcome back. the whoop whoops you're hearing are already started. the stocks are moving higher. lendingclub is a big winner. a report citigroup is in talks with buying loans. those shares are up 10.5% but they're town 40%. just over the past month there are concerns about the industry. all right. here's a question. does the u.s. really have more proven oil reserves than all of opec. that's what donald trump claimed in that energy speech he made
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yesterday in north dakota. is it true. eamon javers joins us now with an energy fact check. eamon? >> that's right. donald trump is not a candidate for president who's built his campaign around specific policy proposals, but yesterday in north dakota, he made this keynote energy speech which is why we're dialing into some of what he said. let's take a look at some of the claims here. first one that donald trump made yesterday, he said, america has 1.5 times as much oil as the combined proven resources of all opec countries. we looked that up on the eia website and according to the energy administration here, the u.s. has 39.9 billion barrels of reserve. saudi arabia alone has much more, 268 billion barrels. here's another donald trump claim. he says the u.s. has more natural gas than russia, iran, qatar, and saudi arabia combined, but when we checked that on the u.s. government
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website, they say u.s. has 388.8 trillion cubic feet of natural gas reserves but russia alone has 1,688 trillion cubic feet. so russia has much more natural gas reserves than the united states. and that's just russia alone there. so those are two that don't stand up to scrutiny and were also flagged by the "washington post" this morning. and what about this claim made by donald trump this morning. take a listen to the sound byte. >> the department of just cities filed a lawsuit against seven north dakota oil companies for the deaths of 28 birds while the administration fast track wind projects that kill more than a million birds a year. far more than a million, i have to tell you. far more. >> now, that lawsuit about the bird deaths, that's actually true. that's something that mitt romney also cited on the campaign trail back in the 2012
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campaign. ultimately, though, the judge threw out the charges in that case, but it's within that's been cited by republicans campaigning for office, especially when they're campaigning up in oil country, guys. >> all right. eamon, thank you very much. eamon javers having a look at some of the claims. time now for a cnbc news update with sue herera. >> here's what's happening in this house. convoys in the balkans arrived in the czech republic today. a train strike paralyzed large parts of the belgian rail for a second day in a row and there are fears of more labor unrests to come. fears would have them working more hours. democratic presidential hopeful hillary clinton campaigning in oakland, making an unscheduled stop at a chicken and waffles restaurant.
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she listened to a range of conversations. this is a very special day because it was 25 years ago this week that a relatively young -- actually i should say very young brash swashbuckling earl flynn type of guy descended on cnbc. >> you're going to get yours, herre herrera. >> i know i am. bill griffith, 1991. cnbc has never been the same. congratulations, bill. >> thank you very much. >> we were both actually brunettes at that time. >> we were. and i had hair that i could color at the time. i don't anymore. >> thank you. >> i remember. we would start, kelly, every morning because bill and i anchored together like for the whole day. we were it. we both started blow drying our hair and moved up to the stage and spent the whole day together. >> yes, we did. >> i wouldn't have made it in those days, that's for sure.
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sue, thank you so much. and congratulations. >> thank you so much. >> you're not done. >> i'm so glad sue brought up this very important story because we did a little more digging. remember the moustache? a few of the great bill griffeth moments on cnbc over the past 25 years. >> i'm bill griffeth. you know since cnbc premiered in 189, the world of business has certainly change dramatically. welcome back to the e3 conference. >> the top of the rock. >> you didn't look like you could have played another hole. >> it would have been hard, really hard. but you know what? i didn't have to. i got whacked. >> 150 inches? >> no way. >> tony bennett joins us live from reno, nevada. mr. bennett. >> do you ever get sick of
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singing that song? >> do you ever get sick of making love? >> can we talk later maybe? >> her we go. we've arrived. >> now thaz tt the dow has pass the mark, now down about 500 points. by all accounts, i this i we can agree we're perhaps in recession now. you can consider lehman the loser, filed chapter 11. it would be more news if dham on and said, no, i think we're going much lower. the new york stock exchange will officially open. this is like opening up a bunch of i pos all at once. >> an early start to the weekend with your favorite beverage of choice. >> my favorite watering hole and the management going here. holy cow. >> speaking of opportunities,
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kelly bought this tie online. >> i just noticed the vix is down. >> i have to look up to you. >> i'm getting used to that these days. >> it's going to fix the hook and give you more high. >> i understand that. now i've got to do it though. >> i'm just going to hug you. this is nice. >> top mexican sue. >> i'm floating on the cloud. >> no, you've got the wrong map. here. yeah. >> we have cheerleaders here. >> you know what i think of them. i'm going to come back because they have no natural enemy. >> i think you ought to do that. >> here's your cake. there we have the most iconic image. >> that is unbelievable, that cake. well, thank you, guys.
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i know who's responsible for a lot of this. >> emit so glad we did that. i do have to say i still misch the moustache. i still miss the moustache. but you're the one who introduced me to manhattans. >> she misses the moustache. >> oh, yes, i no. actually i do too. but i know what color it would be if i tried to grow it again. >> we can fix that, trust me. i do it every three week snas so i hear. thank you, sue. >> congratulations, bill, love you. >> why don't we stay right here for the next five seconds. hang on. here we go. [ cheers and applause ] [ booing ] >> all right. where were we now? >> i love this job.
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i work with this guy. at the feet of the master. >> you are the best. you have prolonged my career, young lady. that's all i can say. thank you, guys, very much. that's very nice. wasn't necessary. >> happy 25th. >> thank you very much. >> you're a model for us all. >> 30 minutes. i don't know. there's some time left. the dow is up 26 points as we head toward the close. >> and a top trade ler o join us next to see if we can see wild trading ahead of a long weekend. >> that is good cake. we don't know if peter thiel is going to back it. but coming up we'll hear from an investment fund that does place big bets on big lawsuits coming up. at td ameritrade, they work hard. wow, that was random.
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as bill would say, where are we. by the way, the equipment maker
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terex, one of the biggest losers today after abandoned a takeover off. shares down 15%, bill. >> all right. we have less than a half hour to go. lots of cake to be eaten before the trade and joining me on the floor of the new york stock exchange is jeff cheslock. what's your read? >> i this i if you look at it, going to get a rate increase. as usual everybody's going to wait until the jobs number. >> next friday. >> yes. i would be more inclined to look if i was a trader to see what opec's going to do. there were sounds. rather than a rate hike in the middle of june.
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you're not a bull. >> no, i'm not. >> i know you're not. >> they found places to put it. because it's so slow in an environment like this, you expect a bigger move. we didn't get much reaction. so i think take a pause and we're going to look toward the end of the week with opec and the employment number. >> all right. very good. thank you. >> congratulations to you. >> thank you very much. and the summer of wardrobe has begun on the floor of the new york stock exchange. >> we skipped spring so we're starting right into summer. >> that's it. again it's on track. the dow up 3%. we are charges up a storm again
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according to "the wall street journal." no one seems to care that our debt levels are rising. we'll talk about that next. also video may have killed the radio star but now one industry watcher may be on the verge of killing not only the tv star but wiping out the local broadcast televisions. that story ahead. there's a lot of places you never want to see "$7.95." [ beep ]
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eat your cake, gordon. the dow's up 33 points. we're trying to regain control of the situation here with 17 minutes left in the trading session as we head toward the memorial day weekend. >> this week we learned the u.s. household debt in the year has surpassed $12 trillion outstanding. global debt is now 24.2% of gdp. these are huge numbers, but does anyone seem to care? >> we know that debt continues to grow, but the benchmark we compare it to now is before the financial crisis. >> right. >> and it's not as high as their household debt as it was back then, right? >> but it's only 3.3% away.
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>> i know. >> it's getting there. what's different now is interest rates are still low, but around the world, payments -- when you have to pay off your debt, is so much lower. that's a source of -- gives you a little chance to relax. >> but that's the interesting thing. it goes back to japan and like you were saying, their debt service costs are so low and that seems to go hand in hand until it totally blows up, right? >> people lending money to the japanese government at almost no interest rate, right? and the japanese government can't repay this debt. it's 400% of gdp. but their debt service cost annually is only 2% of gdp. it's one of the lowest in the world. so this could kind of go on forever. >> it almost makes you feel like there's something self-sustaining about these kinds of situations and maybe in a bad way. sure, maybe you can borough lro this and it's not the dooms day
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you expected. >> it pushes off problems. if you take advantage of the time, that's okay. not a lot of people have done that. so what you end up doing is kicking the problems down the road. now, at the same time because rates are so low and people are borrowing. they're spending money now that they would spend later, so that hurts growth in the future. it's not like a financial crisis but it'sweight weight on the e >> we've front loaded the economy here. >> right, right. >> and the growth. but when they start raising rates, now you do have a bigger problem, right? >> you do. so normally raising rates slows the economy. if all this spending has moved forward, it's less. it's going to slow more. >> right. >> extracting ourselves globally from the low rates is going to be very, very difficult and the debt load on top of it is going to make it more difficult. >> if you get to the fiscal side
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of this, people say it needs to happen in japan. improving the supply side, whatever. if it works and the interest rates move higher, does the success spell failure for the delicate balance we're talking about? >> yeah. inflation is good if you owe money, right, because you pay back in cheaper dollars. that's one way to look at it. you're right. if rates go higher, it just weighs on it because there's so much debt outstanding. the payment cost gets so big. you can see it in china and brazil where the rates are very high because rates are higher. that's going to weigh on the economy even more. >> i know early in the recovery process, there was talk -- you know, we're in much better shape than we were before the crisis. >> right. >> because debt has been paid down. balance sheets are improved. >> yes. >> are we getting to the point where that has moved off?
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we've regressed to the mean? >> the u.s. is in good shape. people are not defaulting. the debt is held by high calty borrows. debt to gdp is down a lot. household payments are down a lot. we're in much better shape. but this debt is going have to be repaid or at minimum it's going to weigh on future consumption. in europe and asia, it's much worse than here. because, look. the quality of borrowers in china, some estimate it's 20% of bank balance sheets. that's a lot. >> wow. >> meanwhile in brazil -- where is it? in rio they had defaulted. there's a lot of problems at the local level too. we were talking about some of the corporate debt problems. when you look at a lot of these companies, they say, hey, they've extended their maturities, refinanced, so forth. again, are we always putting off the crisis? it doesn't always happen because we're pushing three years, five years, ten years off?
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>> think about it. it's good to avoid a crisis. we saw that with lehman. crisis is very painful. pushing it off is good. you let the economy pick up, they turn up, sell off assets. that's all goochld but if none of that happens and you make the reform without fixing the problems, you have to deal with them again later. >> good to see you, ken. >> good to see you. >> something to think about. >> yes. over the weekend. >> and have a piece of cake as well. >> ken brown of "the wall street journal." heading to the close. the dow sis up 37 points. i guess art cashin is off. up next, david darst is here. he's got a weekly ak crow name. i'm told it's a surprise this week but it's a word we use on the show every day. think about that. we'll be right back. prepared to retire? plan your never tiring retiring retired tires retirement
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about eight and half minutes left on the trading floor. joining us is david darst who by the way would make a pretty good pastry chef as well. you were out there cutting cake and passing it around.
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>> slicing and dicing. >> thank you. >> queen elizabeth ii was coronated in 1962. she celebrated her silver in 1977 and her golden in 2002. your jubilee is here today. we're going to be with you in 2014. 25 years, all of us are going to be here and you're going to look as good as you look today. i think today's theme has to be the word bill. okay? broadening leadership -- listen to me -- in housing, in retailing, okay, and in producing. >> yes. "i" is inching up interest rates and inflation. notice all three are "i"s. "l" is lackluster, growth, china, january, europe, and jobs. and finally the last "l" is leadership for the markets. it's like 53% neutral in the
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latest poll. they're like blackbirds setting on an electrical wire and they're going to be somehow shocked to the upside or downside. usually when they sit this long, this neutral is to the upside. >> yeah. >> and the last thing is profits and the currency. the dollar. and janet yellen knows the dollar cannot be too strong. >> i was going to say my oldest friends callmy billy. you could have added a line and added yellen. >> next week, thes. consumer confidence, construction. consumer credit and crude oil. those are the five cs you want to watch at the end of each month. and the jobs numbers on friday. i mean there's so many cross hairs going there. the impact of the verizon strike which has been settled will have on that. are we going see the housing numbers, will that increase jobs in the construction industry which we badly need right now?
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>> if it weren't for you and kelly, bremain. not brexit. but bremain. >> it means british leaving the european zone in june. when we say brexit -- >> bremain. it looks like bremain is leading right now. many people don't realize this but when the european union was put together, they ask ee eed g britain and great britain said no. right now it looks like they're going to be in. >> there l this be on the final, by the way? i just wonder. >> bill, happy verse. >> happy an i versery and we look forward to celebrating with you
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in another 25. >> thank you. we're coming back for the closing countdown. >> yes. you're right. in this final hour of "closing bell," we're going to take a look at the state of tech ipos. it's summertime and you're watching cnbc, first in business worldwide.
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. coming up on the two-minute mark as we close things out this week before the memorial day holiday, let's see how we did over the last five days. pretty good week for equities overall. the dow jones industrial average over that five-day period gaining 2%, and we've been hearing about the russell. you need to see the small caps catch up with russell. they had a very good day. maybe that will bode well down the road. oil bumped $50 a barrel a couple of times this week, mary thompson. >> it turns up today and that was reflected in the weakness in energy. >> it hasn't closed. maybe next week. >> that's right. the dow and s&p up over 2%. >> there you are. ten-year yield especially today moving higher after comments by fed chair janet yellen. >> and that in turn helping the financials this week which benefits. >> their specialty in that area. what did not have a good week was gold. that continues go lower.
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as kelly was mentioning earlier, it's now eight straight down days for the precious metal and you see it's staying just above $1,200 an ounce right now. >> which is typical historically with this type of week or this week. next week, of course, we look ahead to the jobs report. >> right. >> which is critical. and we have a lot of other data coming up as well. but, again, the focus for the markets, i think, for the next couple of weeks will be what the fed does in june. if not june, july. it will continue. >> having done this long enough, you know, i worry when i feel like we figure things out that easily, right? it probably won't be june because they're worried about the brexit vote, so they'll do it in july. >> verizon looks like it has worked with the union is the
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best performer. happy 25th. >> thank you very much. and thanks to everybody out there for your good wishes on that as well. crawford & company ringing the bell at the new york stock exchange. ringing in at the nasdaq. stay tuned for the second hour of the "closing bell" with kelly evans and company. >> thank you, bill. welcome to the "closing bell." dow going out with gain of 22 points adding 1.25%. the nasdaq was up 31 points at the closer. so actually 67 shy of the thousand mark. the broad index, the s&p adding nearly 2098. just about a point closing from 2100. the markets moving aggressingly in the green on the bell. coming up google is getting into the tv business.
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that may spell the end of local tv according to an oscar nominated producer and he'll joiv us co join us coming up. welcome, everybody. michael, a couple of days of quieter activity but actually a strong week for the markets. >> quite strong. we closed the s&p 2050 last friday. we added about almost 50 points to that. again, trudge back up to this 2100 level. i think a lot of people are basically looking at this saying we've been about here for the upper end of our rage. does this mean it's an easy selling opportunity? i don't know if it's quite as simple as that. i think people are easy fro jekt new highs but i don't think -- if i'm looking at the positives, it's the credit market and the fact that this last little leg
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of upside has occurred when we're getting comfortable. >> pretty strong moving the financials today relative to the others. >> yeah. you know, we've discussed before, kelly, that the market's not going to go up unless the financials go up and the financials are not going to go up unless the fed raises rates. i think what was good about this is the market was getting used to the idea that the fed was going to raise rates. i would have to say it's a pretty high probability. i rated a higher probability than the markets probably do. interestingly the long end hasn't really moved at all, and i think that's going to be the next shoe to drop forecast you will. if the long end of the bond yield curve doesn't go up, then they think they make a mistake. i think. >> it might not be the mutual
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admiration but she pretty much did comment on the direction of policy. >> she did comment on the direction of policy and i didn't expect her to be dovish. it's not the style of the federal reserve. >> do you think the's what's going to happen here? >> that's exactly what's going to happen. i feel very differently. there's not going to be an increasing june. it won't be july. by the time the stock would be appreciating, the global conditions will worsen. and when you come to that, it's leekds time. it has to do a lot with whether she'll be reee lektsed. >> let's back up a second. you think that's what ieng going to precipitate across global markets?
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>> that's a major factor. the chinese currency has been weakening for the last eight or nine days and it's at the weakest level in several months now, and if the fed finds it and they tell us they're going to do it, you can see a lot more of a weakening and they'll have to de valle you as well. >> guy, this is an important point. people looking at "the wall street journal" for this week for signs say, wait a minute. are they going to let the thing float or presumably be floating lower or keep it pegged lightly? >> i'm going to answer all these questions. first, i've got to tell you something. what a class act. he is cnbc royalty, and you, two, together in that three to four hour, absolutely fantastic. so congratulations, bill. congratulations, kelly, have a great weekend. >> he's the best. wi us going to tell you what bertha coombs said. he put it perfectly. he's like our fred astaire. he takes great partners and
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makes them look much better with his grace. you know what i'm saying. i'm lucky to work with him. that package is fantastic. >> i'm sure he would say the exact same thing about with you. no disrespect over anybody who worked with him over the past years. with that said, i think the chinese currency is paramount. i'm in evans kambu probably for different reasons. i think the evans camp has to do something. i think they need runway if they have to lower again in the back end of the year. so, again, remember the market went from 1900 in the fall on the s&p up to 2100 in december when they hiked, and then obviously took a nosedive as well. so the markets rallying into their perceived notion that maybe they're bluffing again. so history has a tendency to repeat itself. again, aisle sake say it one more time. >> you think -- >> no, go ahead. >> you're saying they would
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raise and lower. >> i think they're rehn sano sa. my conversation is we have to give ourselves a runway god forbid we have to do something at the back ejd of the year. that's just my opinion. having said that, talking about the back end being stubbornly low, i think it's harbinger of something. i'm not an economist. i don't know what it means. but i will tell you 0.2 is inherently not bullish. >> the yields on paper that's 10 and 30 years out would be higher. >> it is true, but it's not an urgently flashing warning sign when it's at this level. especially when it's at 2s and 10s. so it's not as if we're at 6.2%
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and 7%. that's a little scarier than we are now. on the other end, i think what they're saying is even if we get the hikes, it's not going to be many, it's not going to be steep, it's not going to be fast. also, with regard to the other macro factors, obviously they matter. obviously if if the global markets have another tantrum before we get to june or july, it would give pause to the fed. the pattern is the market gets scared the first time. then it freaks out. the fed may react and then it accumulates later. >> it's the reason we keep the dollar index. just bringing up energy, oil prices did close above 50 for the first time yesterday. what do you do with that? >> when i was buying it last year, i'm looking at at least two or three years. i'm not -- i know i'm not going get the absolute bottom and i'm just betting on -- that the global recovery has legs, that
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normalization has legs and kind of last summer we started the process. if you agree with what guy was saying and sri was commenting on, you don't believe that. once the oil goes higher, it's going to go down. >> i'm very much in evan's camp on thachlt i think the dollar being stronger will once again cause the oil to weaken. you have two influences. one is what hatches to the oil and supply demand situation and we've had supply disruption in nigeria which is major and venezuela which is more reserves than saudi arabia, is in very serious political turmoil. that is doing it too, kelly. but on top of that, if it stabilizes, and we don't know if it will hor orr not and there's
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a possible fed rate hike, oil prices are down. >> hold those thoughts for just a moment. that could be about to change. we' deirdre bosa joins us. >> hey, kelly. that's right. twilio is going to test the waters. it could encourage others to take the plunge. after last year was weak for it, other unicorns are prepared to stay private for longer. they're loading up rather than dealing with the scrutiny and volatility or public markets. so twilio could be a good barometer. the company is quickly growing, but it is unprofitable like so many unicorns. they're going to be curious to see how many closely value twilio to its private market
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billion dollar price tag. don't expect household names like uber and snapchat will judge p in. their business models are too different. instead it's probably more relevant like slack and others that have similar models. so it would make the second half of the year a lot more interesting if some of those names did less but the bar is not high for that. back over to you. >> deirdra, thank you. we're starting to see a couple of companies listening after we were off to the slowest start in the market since 2009. do you think that's about to change? >> it's been highly selective. if you look at the deals that have happened, the ones where they need an exit of some kind. also very mature companies. u.s. food service. that's an infavor sector and you had a building products company. so it's not really this kind of wide open sense that people are watching. >> guy, what about twilio itself here? >> it's an interesting story. i'll give you stock to play.
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if you look at the performance of the stock, look at what nasdaq's done over the last four or five years, ndaq. we're within a whisper of an all-time high. people have thrown away the exchanges as being dinosaurs from the past. meanwhile these stocks have been doing well. >> i.c.e., too, has been near an all-time high. >> and if the ipo market shows any semblance of warming up, you can imagine the tailwinds the names are going to get. if you want to play, do it with the names i just mentioned. >> thank you so much. guy, thank you for joining us. >> have a great weekend. >> you're not done yet, though, guy. he's coming up with the rest of the "fast money" crew at 5:00 talking with the godfather of biotech. he'll be weighing in on what valiant is really worth. 12 mi 2 million, that's how cars are being walled.
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we'll bring you the latest on that fight. you're watching cnbc. first in business worldwide.
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welcome back. some break news on donald trump. eamon javers has more. eamon? >> hi, kelly. awe those people who were looking forward to a donald trump versus bernie sanders debate are going to be disappointed. donald trump putting out a statement just a few minutes ago that he's not going take part in that proposed debate. here's what trump said. based on the fact that democratic nominating process is totally regioned and crooked hillary clinton and debby wassermann schultz will not allow bernie sanders to win and now that i'm the presumptive republican nominee, it seems inappropriate that i would debate the second place finisher. as much as i would want to and it would be an easy payday.
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'll wait. probably crooked hillary clinton or whoever it may be. there you have it from donald trump. he's not going to participate in the debate. bernie sanders had suggest thad he was up for it and earlier this week donald trump made some signals that he might be willing to participate in that debate as well. you would think it would box in hillary clinton because she's not been able to clinch that nomination. nonetheless trump deciding he's not going to go forward with the sanders debate, guys? >> do you think he would do it in private? if he were to -- listen. we know you can get on a platform somewhere. if the two of them could go somewhere -- this was brought up in playbook, sure, i'll do it. do you think that would be totally offer the table as well? >> it looks like he's turning it down. it looks like he and his advisers have hulled up and for whatever reason this isn't in their best interest.
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yeah, you can see it from pay-per-view. look. there's been a lot of scrutiny on facebook. you can see facebook posting something like this and generating some real attention for themselves out of it. but almost any media platform out there would be willing to host this debate, you would assume. the question is whether the participants want to do it. and donald trump saying he doesn't want to do it. >> eamon, thank you. >> you bet. >> a disappointment for some. takata issuing a recall for 12 million vehicles in the u.s. phil? >> the numbers are staggering. just to put this in perspective, the 12 million vehicles recalled today are part of a larger recall, of 69 million vehicle, all of them with defective airbag deflators. again, you've got 12 million recalling from eight automakers, the key being they have
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defective airbag deflators. too numerous. you're talking six years and older where the active inflater breaks down, especially in high-humidity areas so the gulf states were the first recalls take place. as you take a look at shares of takata under pressure today. remember, they have hired bankers to help them with possible restructures, which is easy to understand, kelly. this is a company that's now down to a half a billion in cash and understandably burning through it very quickly. >> i understand what it's genuine options are especially since there's not a lot of competition in this space. >> exactly. some kind of financial restructuring and find maybe a partner. i don't know if that's in the c cards or not. this is constantly that constant drip. >> phil, what do you think about that? >> i don't think it's going to end any time soon. you can expect more recalls. next week we'll probably have another wave of automakers
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announcing another 15 million to 17 million vehicles that are part of this previously announced recall. and here's the thing, kelly. they have not found the root cause of the defect in those inflaters yet. so in a sense, they're not entirely sure that they've got the entire problem totally contained. >> phil, by the way, you are standing there with what looks like a pretty busy airport, o'hare out in chicago as people are getting ready for travel this week. and how are lines looking? >> everyone's looking pretty well. we're beginning the afternoon wave of flights some of the lines which dive down in the middle of the day and dive down a minute, two minutes, it's now back up to 10, 15 minutes. if you look behind me, most of these people are moving along at a pretty good clip. earlier this morning is where we saw the long lines. most people in the morning were waiting maybe 30, 35 minutes buchl they got through it generally pretty quick and when you look at how many people will be flying this summer, first of
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all, 2.6 million this weekend in the u.s. 231 million, a record flying this summer. what you're going to see here are more people taking the skies because you've got lower airfares, stronger economy, record travel levels and the airlines not deciding to change their bag fees. i know this question has come up, we've talked about it. whether they'll do it. that's not going to happen. >> record number of people in the skies. we talked about the record numb beryl of people hitting the roads. what are you doing? >> aly built of a road trip. but not till tomorrow. >> do you think it's going help avoid the traffic? >> i'm doing the late tonight strategy. >> are you driving? >> yeah. i'm sure it will end poorly. i'm sure half a million people in new york city are doing the same. >> even if we've got complaints about the lines, it's got to be good for the airlines. >> you see the airline stocks are pretty strong right now. i think the airline industry right now is all about consumer
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deficit. it's basically their gain, your pain. it's the opposite of a lot of the tech industries. for now, anyway, i think the airlines are enjoying it. it's a good economy. >> yeah. i think the economy's not terrible. i mean it's not gangbusters like previous recoveries, but i think -- i don't know if you saw some of the wage numbers. there's more strength that people -- at least the bond market believes. >> well, good point. phil, last word to you. what are you observing out there in. >> i think when you look at the people who are flying, almost everybody says the same thing. fares are pretty cheap. that's the reason they're taking to the skies right now. especially on those shorter haul flights. if you're going an hour to three hours, the fares are ridiculously compared to where they were in the past. >> thanks, phil, who probably knows o'hare pretty well by now. that's our phil lebeau. they're using the knowledge
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to treat genetic abnormalities. google is getting into the tv business but it has to do with television what it did to newspapers and destroy it? that's next. tement... make sure it's an intelligent one. ♪ the all-new audi a4, with available virtual cockpit. ♪ 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. fidelity -- where smarter investors will always be.
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technology moves faster than ever. the all-new audi a4, with apple carplay integration. welcome back. google is getting ready to take on the tv local advertising business. they're working on a set-top box. this would allow google to
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control advertising for tv viewers potentially looking like this mockup. if it does, our next guest says it will destroy the local tv market by creating the competition for the advertising. thank you for joining us. and thank you for helping illustrate is something this debate has been quite complicated and difficult at times to follow what's playing out at the fcc. so your argument is if google became the interface, you know, my set-top box, so to speak. that banner ad at the top would become the platform for local advertising and people wouldn't have to do it on their local tv station anymore? >> well, if i'm a local auto dealer, which is the kind of advertising that funds local news and everything like that, why would i possibly advertise on channel 11, a 30-second spot,
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when i could have a tailored interactive spot on the front screen. in other words, people that google already knows are in the market for a car. so it would be so much more efficient that i don't think that the local tv station could compete at all in the local ad market. and so it would essentially destroy the local spot ad market, which is what funds your local news, funds any local programming on your local broadcaster. >> you don't think that there would remain some kind demand for that kind of interstitial advertising, something that's inside of a show that somebody has chosen to watch? >> well, one of the things that google has been exploring with the fcc is the ability for them to overlay ads from their set-top box over their local broadcasting app. i mean because i teach at the
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school for journalism and communications, i've seen the local newspaper ad go from about $70 billion a year to today $17 billion a year. and i would say that's pretty much because google is completely cannibalizing the ad market. >> jonathan, it's evan. i should first disclose my wife is an ad expectation at google. >> is she working right now? >> i don't know. if you look at this. local news and a lot of local programming is geared toward older people. i'm going to make a generalization like that. is this a generational shift that's happening here or do the generations have nothing to do with it? >> look. i'm not trying to argue that the set-top box could be improved
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ratticly, i'm just saying that google has consistently imposed itself into adjacent businesses and pretty much destroyed them, and so i do believe whether it's young people or old people there's a role for not only local stories but national stories. if we want to eliminate 400 or 500 local tv stations, that's a whole other decision but i don't think there's any reason that the fcc should make that day come alive faster. >> that's interesting. whether it's kind of these super local newspapers or blogs or even tv stations which have, you know, managed to kind of keep their heads above water here, so this goes back to the fcc's decision to open up the set-top box. is this something they say would
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promote competition, it's long overdue and is this true? i don't know if it takes you outside where you're comfortable speaking but is this where the market needs to be fixed? >> look. quite frankly, apple, amazon, roku have sold millions of these over-the-top tv set-top boxes that a lot of us use. none of them are run on an advertising model. what google is trying to do is assert one more media system inside the home. and, of course, once they collect all your data on what your tv watching is, it will use that to advertise to you on all their other platforms too. and it's just one more way that this monopoly which today control s 89% of the business could control the tv advertising business. >> it's fascinating what could happen in the future. jonathan, thank you for joining
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us. >> my pleasure. time now for a cnbc news update. any surprises this time, sue herera? >> i don't think so, not of the kind we had last hour anyway. here's what happens. scores have taken to the streets to protest a u.s. drone strike on pakistani soil. this follows the drone strike which killed a leader last week. the pakistani government strongly condemned that attack. russian president vladimir putin missing with the president of greece. the two oversaw energy and transport agreements between the two countries. donald trump adding his voice to a growing chorus of republicans encouraging senator marco rubio to run for the senate. he's now urging him to run saying he's the best chance of keeping his senate seat in gop hands. rubio said he's unlikely to reconsider his plans to retire
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from the senate. the real winner from the national spelling by, the dab. they were dabbing after their answers, whether it was from the stage or in the crown. the actual winners, congratulations to them. was it like this? >> a little dab. >> i was wondering what my son was doing. i had to watch this segment. >> cam newton popularized it, i suppose? >> you do that after spelling a complicate word. >> he's going to spell int interstitial for us. >> i did pick up on that. >> is that right? that's a big word. >> i did zone out for a few
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minutes. interstitial, wow. >> our guests knew exactly what he was talking about. >> thank you, sue. news that peter thiel bank rolled in the lawsuit against gawker, but will he be designed to turn a profit on a case. we're going to look at whether investing funding pays off when we come right back. i order b14. i get b14. no surprises. buying business internet, on the other hand, can be a roller coaster white knuckle thrill ride. you're promised one speed. but do you consistently get it? you do with comcast business. it's reliable. just like kung pao fish. thank you, ping. reliably fast internet starts at $59.95 a month. comcast business. built for business.
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will your business be ready when growth presents itself? our new cocktail bitters were doing well, but after one tradeshow, we took off. all i could think about was our deadlines racing towards us. a loan would take too long. we needed money, now. my amex card helped me buy the ingredients to fill the orders. opportunities don't wait around, so you have to be ready for them. find out how american express cards and services can help prepare you for growth at open.com.
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man 1: i came as fast as iress man 2: this isn't public yet. man 1: what isn't? man 2: we've been attacked. man 1: the network? man 2: shhhh. man 1: when did this happen? man 2: over the last six months. man 1: how did we miss it? man 2: we caught it, just not in time. man 1: who? how? man 2: not sure, probably off-shore, foreign, pros. man 1: what did they get? man 2: what didn't they get. man 1: i need to call mike... man 2: don't use your phone. it's not just security, it's defense. bae systems.
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let's take look at how the dow finished. the nasdaq was up 3%, closing at 4933. now in the latest installment of the thiel/gawker saga, nick writing an open letter to billionaire peter thiel who's been funding hulk hogan's trial. he had this to say about thiel. >> i think it would be a great idea for him to set up a legal defense fund for people who really consider themselves to be victims of media coverage. >> well, in fact, joining us to discuss the trend of third-party backing of legal suits is
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travis. >> thank you. >> what you do is an aversion to thiel and gawker, right? >> they're quite similar. at bottom we look at legal claims as an sault and finance companies underwriting it as we see it. it's interesting the sound bite you led with there. essentially what peter thiel did is create a defense fund. it it's not clear that he -- >> is what you guys are doing a legal defense fund in kind of a -- sort of the well healed sense, in other words? are you able to take these pools of money and begin litigation against companies in the pursuit of getting those monetary rewards? >> i draw a couple of distinctions. one, we're drawing on behalf of
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them. we finance individual claims and companies, so it's much more of a corporate finance tool to unlock the value of a legal claim sometimes to help. but in 75% of our investments, it's companies and firms using the value of litigation to generate cash for other corporate purposes. so it's only in about a quarter of our work that we're providing the means to prosecute a claim. >> in other words are you trying to make sure they don't have the resources that you're able to basically get them to these companies? >> that's right. it rises in two situations. it's a small or mid-size company that doesn't have the litigation to stay the fight against a larger better capitalized defendant. sometimes and increasingly it's lard company or a large law firm. we work with fortune 500 companies and gather the largest lawmakers in the u.s. to basically act as a risk management. it's a budget management idea. they have the cash but they'd
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like to finance the cause instead. >> it's an asset fund. using this as a way. maybe getting some uncorrelated assets. >> sure. it makes a lot of sense on paper in that regard. i do wonder. one of the things that's popped up with the thiel case, obviously the fact that it doesn't have to be disclosed, right? the idea that there's a financial backer for this case does not have to be brought. is that something that might change over time or is there some -- is there any way that can be used in court to say, hey, so-and-so is actually backed by a third party? >> in our view that's generally vel vanlt. if we had known from the very beginning that peter thiel were funding this litigation, i don't think that fact would have been seen as relevant. it certainly wouldn't have made it be ever the jury, and so at the end of the day, you'd likely have the same verdict and dollar size and whether it should stand will be judged on appeal. in general the view in our space is all litigation is funded in some way and jurors and judges
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generally don't know if the lawmaker is on a contingent fee, if the company has taken out a general recourse loan in today meet the only gages for paying for counsel. it's a different financial tool. >> do you think it leads to a shakedown? >> it's weird. it's like a super sophisticated ambulance chasing. it's like getting a bunch of ambulance chairses but giving them a different set of financial tools and backing to make the lawsuit work. i guess where the only issue that i kind of have an issue with is not around who pays for it or anything like that. it really has to do with the size of judgments and the tendency in our legal system where you get these huge judgments and i don't really understand whether i can quote/unquote trust juries or judges to come up with something that's equitable. that's where i see the potential for it. >> last word, travis? >> our website is going to say
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super sophisticated, dot, dot, dot. i'm certainly not here to defend a $140 million case against "gawker." at the end of the day, companies are battling the fact that litigation and veiling themselves of legal process is increasingly expensive. the legal market was very expensive. lots of folks need help meeting that demand. >> travis lentner joining us. coming up, a dna abnormality used to mean your fate was sealed. but now skrienls science is working to change that. a behind-the-scenes cutting-edge look at that. you're watching cnbc, first in business worldwide. you'll get a free checked bag,
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as the human genome reveals more and more scientists are working on abnormalities that cause genetic diseases and meg tirrell has more on this now. meg? >> hi, kelly. there are a couple of ways scientists and companies are working. they're really transforming the way we think about medicine. now, one of the nearest to market of these technologies is called gene therapy. to make up for one that's defective or completely missing that's causing disease. spark therapeutics is working in this space. we talked to two kids who are
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siblin siblings. caroline and cole parker. they have a rare inherited form of blindness that after time they'll be blind. after the clinic, their vision isn't perfect but caroline told us after this procedure she could see snowflakes for the first time. that's pretty amazing. another is called crisper. it's excited scientists. we talked to one of the scientists of this technology at uc berkeley about its potential. >> it's very exciting to think about the potential for this technology to, i think, eventually cure human genetic disease. we have a technology to repair the mutations, we hope, to give patients a normal life. >> many companies are working on it and moving as quickly as they can to move into human trials. you can learn more about these and more on cnbc.com.
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kelly, back to you. >> meg, you mentioned a couple of companies that are working on this space, but, you know, what inning are we kind of in here? is this the first inning or are they letting a lot of trials go out? like you talked about the kids who can see snowflakes, are these really working? >> yeah. this is one of the most advanced things we've done. spark has started to file for approval of this gene therapy, so it's been through phase three testing and could be successful and be on the market as early as next year. glaxosmithkline got approval for something. they're finally getting close to the finish line. >> i wonder if this is a phrasing issue. gene therapy sounds good. gene editing raises some concerns. >> very true. right now it's so fascinating to me how it all now is coming down to big data, krupp. ing the numbers, getting right
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instrumentation, getting right techniques. it's not stumbling upon a molecule. it seems like for that reason it moves faster or at least at a steady progression. >> would you agree, meg? >> i would absolutely agree. sequencing the genome was the first step in understanding what drives these diseases. we have a lot more to do to harness that knowledge and develop medicines out of it. >> that's still amazing. that sequencing is like 20 years ago. it's like it happened yesterday and all of this is following from it. thank you, meg. >> thanks. a venture capitalist is putting money in a system but his investment may surprise you. also, beach season unofficially kicks off this week and while summer bodies may be made in winter, a fitness public could go public any time. he lays out his plans for the future when "closing bell" comes right back.
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my next guest is calling it an $86 million opportunity investors need to pay attention to. we're talking i.t. security from cryber to home. mark seagal joins us in our latest edition of "the spark" to explain this one. hi, mark. >> hi. how are you. >> are you shooting drones out of the sky here? >> not yet. the key thing is detecting them. that's the first order of business. >> how is that go into what you're working on now? >> it's kind of broadly it. t. security and we've made investments in the past.
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it came as a big surprise. we've been dabbling in the drone space for the kind of applications that most of us have been inspection services. but it turns out that drones are being used for a lot of malicious purposes, and they're being flown next to office buildings to get on people's wi-fi networks to steal pat words and data, sometimes posing as printers, and flown into prisons to deliver drugs and weapons. into stadiums. >> wow. >> there's probably an incident a week now with major airports with airplanes. >> i didn't know that was what was going on here. what are you, and what are the companies out there that you identify that are now trying to respond to this? >> the company we invested in is d-drone. they've got a product that's
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probably about two feet in diameter. it looks like a cross, or an x. it gets installed at airports and prisons. these are usually the first customers. big stadiums. it uses optical, sound, rf, to detect an incoming drone to track it. and predict its trajectory, and also where it came from. and then depending on the use case, how you decide to respond to that may differ. it turns out in a prison you may want to let it land and see what it picks up, and arrest the person who's flying it. if it's coming in at a crowded stadium, you may want to shoot it down before asking any questions. >> sounds fit for private purposes, or law enforcement. >> when is the federal government, or the state government going to get involved here? it seems to me if you have all these people running around with their own drones, their own security drones, it's just going to be a mess. what is going on on the
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regulatory front that will make sense of this, or make it a bigger mess? >> faa regulation is a huge hurdle for companies that are trying to do good services with drones. and so it is regulated. in fact, the air space around airports, its "illegal to fly anything. these are people who are clearly violating the law. the question is, how do you respond to it. so there's actually a lot of regulation. in fact, i think that it's going to be a little bit of a interesting thing to navigate to see how the faa will allow autonomous drone delivery, and how safe they're going to be, and how soon the regulations will sort of ease up for companies that are doing things perfectly legally. and trying to deliver services. >> and this is only one aspect of the portfolio here, mark. i'm looking at your investments. uber, and parker and betterment and other things here, when are
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these going to get better and go public? >> for a number of them, i hope soon. there's a real log jam right now in the ipo market. a lot of companies have raised a lot of money and, frankly, don't need to go public anytime soon. >> do you guys need to go public? >> ultimately, the way we return dollars to our investors is when companies go public and we've got a tradeable stock, or when they get acquired by a public company. we're patient. as long as the companies are continuing to create value, it's okay with us if they stay private. eventually we do need some some of liquidity. >> let us know when they're moving, okay? >> yeah. >> thank you for joining us. have a great weekend. >> you, too. thank you. >> i'm still thinking about the drone posing as printers and stealing. >> there was an amazing "south park" episode about a drone. they were way ahead of you on
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this one. >> speaking of ipos, will beach bodies work out follow suit?
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people may be trying to get their last-minute workouts in at the gym. diana olick has more. >> kelly, the big business of on-demand streaming fitness. beach body launched its offering just over a year ago and has over a million subscribers already. thanks to the p90x workout in part. companies have to get more creative. precisely why beach body's ceo said after 18 years and more than $1 billion in sales, still not public. >> if we had been public when we were developing, the hardest workout program ever created, that would cost $120 called p90x. in 2005, the market would have
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just destroyed us. because it would look ridiculous when you can go to barnes & noble and buy a dvd for $2.95. it took two years to make something for p90x. but we kept testing, doing market testing, getting success stories in from our early adopters. all of a sudden it grew to this billion-dollar brand they were talking about in the white house. >> and he says that's why he's sticking to his core dvds, which he says are still selling at twice the rate of on-demand subscriptions. he says he will change what he sees is ready but he's not answering to anyone else. >> the dvds are still selling? >> these physical dvds are still selling twice the rate of on-demand. but he said the people ordering the dvds want the streaming on demand, too. >> by the way, diana, home studio, very impressed with this. >> on a holiday weekend? not stupid.
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>> our diana olick. should they go public? >> if he doesn't need to or want to, i think not. i think he's probably right about how the market would not be forgiving. this is the hot workout now, what have you got next. people get tired of it. totally the opposite of soul cycle. >> would you get in the soul cycle ipo? >> no. >> because you've never done the workout? >> i'm always suspicious of any of these hot companies. all your -- you know, the next thing you'll be trying to do is sell me more go pro cameras. >> there are classes now, trampoli trampolining -- >> throwing boxes around the back yarld and you don't need any of this stuff. >> i want to stay away from the beach body stuff. when you get middle age, the beach body theme you want to steer away from. >> do you have something to watch next week? >> the jobs number.
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>> and the bond market. i think it's going to be what happened overseas in the bond market. >> guys, thank you so much for joining us. that does it for "closing bell." "fast money" begins right now. "fast money" does start right now. i'm melissa. your traders are tim, steve, brian and guy. tonight on fast, stocks just finished their best week in three months. but if you missed the move, relax. we've got the one sector that could soon catch up to the market. plus, valeant shares, a takeover bid? what's the stock really worth? the godfather of biotech, the chairman of biogen will be here to tell you. there's a fast food bundle, and it could bring hefty returns to your portfolio. but first, we start with the words that could have big implications for your money. take a

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