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

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certainly a sector out of favor from investors and coming back with the tech trade and the more higher data areas of the market. >> even as hillary clinton climbed in the polls. >> even that. >> nice to have all four of us back together. first time in about -- >> one more and we would have an olympic ring. >> thank you for watching. >> "closing bell" starts right now. hi and welcome to the "closing bell." i'm kelly evans at the new york stock exchange. >> welcome back. >> thank you. >> i'm bill griffeth. go to twitter. you can see what kelly general lou rously brought me back from iceland. you shouldn't have. no, really. you shouldn't have. >> i shouldn't have. >> while you were gone, we set some new highs. again today. the dow, s&p and nasdaq all on track to close at record highs. as this market just keeps grinding ever higher. but coming up, we'll hear from somebody who says investors should really brace themselves
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for a huge pullback. >> meanwhile, oil prices are fueling today's rally. helping the materials sector outperform the rest of the market. we'll look at how the volatile energy prices may be heading next. tesla had a rough ride lately but the stock is still up 50% over the past six months. not bad but coming up we'll hear from one investor who says tesla is, quote, the market's single biggest company stock bubble and we'll find out why he thinks tesla is the ultimate short. and twitter is reportedly trying to bring its nfl streaming rights to apple tv. we'll discuss how big a deal it could be and whether the nfl could stand in the way. by the way, as twitter eyes a $20 closing level here in the final. >> yes. it's come back here and very interesting to see how it does streaming those thursday night games this fall in the nfl. let's start with the full team coverage of the markets.
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there's the full team right there. bob pisani tracking the action here at the new york stock exchange. bertha coombs at the nasdaq market site on the tech stocks. sharon epperson at the nymex with oil's latest move higher. we are continuing the move there, as well. kick it off for us, bob. >> important thing is the new high list is dominated by two sectors, bill. tech stocks and industrial stocks. let's show you some of the big, big industrial names of new highs today. dover, new high. eaton, many cases these are historic highs we are hitting. united technologies up fractionally. and many of the aero space names hitting historic highs includes r raytheon. look helockheed martin, as well. here's illinois toolworks. we had the earnings report from them a little while ago. very good report. there's another big aero space
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name to the right there, vinny. general dynamics also sitting at essentially historic highs. the important things about these material names and industrial names, the earnings on the second half of the year have not come down as aggressively as some people thought they might. and by the way, with energy, with oil at $45, we have energy stocks moving, as well, today. back to you. >> bob, thank you. >> the dow, the s&p and the nasdaq's new highs possibly making it a trifecta. >> yeah. we're talking about the tech-heavy nasdaq 100. that's the one lagging in terms of big caps, also moving further into record territory today. without the help of what used to lead it. the fang stocks. amazon, facebook, alphabet, google higher today. today it's lower and investors rotating into the laggards like apple today at a four-month high and also coming down to beaten down tech names like go pro
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tod today. best performing index of the day. small caps at new 52-week highs. chip sector at the highest levels of october of 2000 and up nearly 20% for the year. chips are really powering this tech rally. though a lot of old line tech names like the semis still more than 40% below their year 2000 highs and top nasdaq 100 stocks, qualcomm, intel and cisco. still oppenheimer said they're bullish on the names like intel and cisco. for techs, next leg higher, and one of the bubble's biggest names is on pace for record close today. take a look at mr. softee. just about two cents below an all-time record close today, that's a 16-year 8 1/2 month
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high. all-day intraday split adjusted 59.97. guys, when microsoft takes out the all-time high, you have to think this is for real. >> who would have thought? thank you. oil hit a one-month high today. and as i mentioned friday, my gas station, local gas station guy up and down the ladder several times already. raising prices. sharon epperson buy at the nymex to prove it is like riding a bicycle. tell us about oil today. okay. she knows what she is talking about. >> sometimes it is only us that can hear it. this time it's everybody. >> we'll come back to that shortly. oil is up today. that's basically what we were trying to get across there. let's get to the closing bell exchange for this monday. ken from money matters with us. keith bliss is at post nine. next to him is chris.
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and contributor jack with us from chicago today. ken, i'm going to start with you because you have a pretty good conversation starter here for us. you think we're in a stock market bubble. why? >> you know, i feel like the parent of a 17-year-old that is telling their 17-year-old that the person they're in love with not good for them. they don't want to listen. the market is in love with the central banks. whatever the central banks say, we believe them. we think they're going to back everything and we are going to be fine and there's no problems. but think about this. the market is up 20% in the last six months. we are on an analyzed pace of 40%. and why is this? because of brexit, because of falling global profits, because of mounting debt all over the world. i don't think so. it's, again, because the central bankers have become our superheroes and if you're picturing janet yellen as wonder woman and mario draghi has
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spiderman, fine, but i'm not seeing that at all. >> make the case for the market here, jack. >> you know what? it's hard to follow that. i have to tell you. there's a lot to be said for what ken just said. look. you know, stocks turned into bonds. all of a sudden we have people chaszing yield. i call them yield hogs. bulls, bears and now people just buying stocks for yield. now, that is not the way a market should function. you know, one of the things that's really happened over the course of the last few months is even with the earnings in a recession and we have seen them year over year in a recession, we are looking at multiple expansi expansion, very counter intuitive and why people are scratching their heads about the market. but the one thing that worries me more than anything else, kelly, we are sitting on so much complacency across the board. when i look at the volatility index, it scares the living heck out of me. >> i get it based on the vix an i want to get to the other guests in a second but one of the definitions as ken would
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point out i'm sure of a bubble is everybody's convinced the market has only one direction to go. tell that to david stepper, tell it to jeff gunlach and ken himself. >> smart money -- >> tremendous optimism about this rise here, isn't there? >> smart money sells when everybody else is buying and buys when even else is selling. remember, it is one of the things they're doing and noticed what i have and worried big money. >> keith bliss, are we in a stock market bubble? >> well, you know, it depends upon the time frame. i make the case for both sides and longer term, i look at the world and the stock market and scratch my head at times, too. listen. the right here, the right now, you can't fight this tape. when you live in a world where 40% of the s&p 500 is yielding manufacture than the bond and 65% more than the 10-year note, you can't ignore that fact. money is going to go where money
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gets rewarded. that's u.s. equities and the way they're stacked up, all three despite the fact that they hit all-time highs day after day, you have the small caps with some room to go here to get back to the all-time high and if they get emotion, which they have, up 14% since brexit and they continue to go and get to the all-time highs, it will provide more fuel to this market and i think we go higher from here. >> chris, what horses are you betting on in this market? >> as a small cap investor i agree there's room to go there. we think that's the value is. they haven't lifted as much as the rest of the markets. you got to find good management teams that can manage through up and down markets. the markets aren't going to go up forever. and we do think the vix is at a low level. the global interest rates are certainly causing that higher multiple expansion. but we like technology and health care companies right now in this market. >> stand by, guys. let's get sharon epperson back
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in here again. this is another catalyst for the equity markets, this rise in oil once again. sharon's back at the nymex with a microphone that works apparently. sharon? >> yes. bill, take a look at what's happened to oil today and you will see the rise that people attribute to the fact there's talk that producers might be taking some action here to stabilize the market. russia's energy market speaking to a saudi paper saying they're working trying to do this and traders on the floor saying, look, we are talking about speculation as much as we are the reality of this happening. we don't know if this is going to happen and the speculation that it will is helping to drive prices, add to that oil above $45 a barrel and momentum to see oil perhaps to $46 a barrel and continuing to see the rise. as you mentioned earlier, we are looking at a one-month high up 10% since the start of august and other analysts say keep in mind as well there's plenty of supply out there and may be a bit overdone.
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when you look at what's happened to the gasoline market, yes, we are still paying about 10 cents less than we were a month ago at the pump and about 55 cents less than a year ago and seeing the gasoline futures rise in tandem and means higher prices at the pump still to come. back to you. >> thank you. meanwhile, jack, how much is this pop in oil contributing overall to the market moves here? >> remember, kelly, you know, when it's slow and quiet, the way it is right now, traders and market makers look for things to move the market and lately it is crude. when crude moves the way it did today, sure enough, the hfts and everybody starts to jump in and starts to build momentum up and the market didn't look good at $40 crude. it starts to look iffy and we have to re-evaluate. between now and then, we have to realize that the trend is your friend. we don't get in the way of a freight train but a quick trigger finger for a hedge and get out when the timing is
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right. >> last comment to ken. we started with you. what does it take for the 17-year-old to realize the market is -- doesn't belong here in your view? >> you know, i agree with what i just heard. you have to participate in what's going on right now. we started buying back in april despite the fact i'm very, very worried about what it is. when's going on and the answer to your question is if you can tell me when a 17-year-old falls out of love i will tell you when the market will fall out of love with the central banks and that's when we'll see this. it's confidence. when the confidence wanes and you look at the reality of the situation, why is the market setting new highs? i don't know. when the emperor has no clothes on, that's when we'll see a change in direction. >> ken, i don't want to coming in -- comment on your clothing, but i thought you were buying stocks back in april? >> it would go down 35% and get us to the 11.5.
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when the bear market starts. i said that, you know, you can't -- as they just said, if the market wants to go up, you want to be with it but a quick trigger finger. in november 2007 told our clients to sell and stay out for 2008, the market was rising into that but finally it came to the point saying it was time to sell. >> all right. got to go, guys. thank you all for your thoughts today on today's market action as we set the highs. by the way, every time i go on vacation, i gain weight. every time you go on vacation, you gain height. what shoes are you wearing? >> i almost -- i'm sore. we did the hike and my legs are killing me and thought to wear flats. >> you didn't. >> that's how it goes. 45 minutes to go in the session. and looking at more record-setting days with the dow up 78. the s&p up 8 and the nasdaq up 33. twitter rising on a possible deal with apple tv. that could change how millions of people watch nfl games.
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and we'll talk about the impact on sports rights an twitter and apple coming hirp. also, tesla is called out as quote the market's bingest stock bubble. he'll tell us why he's shorting tesla. will your business be ready when growth presents itself? american express open cards can help you take on a new job,
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a modest rally day on wall street to begin the week and it pushes all three of the major averages into record territory. write these numbers down. previous high for the dow 18,613. we are above that. kelly, i cannot believe she's writing it down.
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for the s&p 2785 and for the nasdaq 5232. we are -- any positive close for the nasdaq is another new record high here. >> how about twitter? it's jumping on a report it's in talks with apple tv to enable users to watch nfl games on the apple tv. twitter shares above $20, a level they haven't closed above since january. julia boorstin has more on this for us now. >> reporter: shares up 6.5% and they were up as much as 8% earlier today thanks to "the new york times" report that twitter's in talks to bring the app to apple tv. now, neither twitter or apple would comment but investors think that this kind of deal could lead to new users watching twitter's live streaming content, particularly the ten nfl games twitter will stream this season. the nfl had nothing to say, no comment here. this, though, would allow twitter users to stream those ten nfl games twitter's broadcasting directly to the tv
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set but twitter and apple wouldn't need that deal because apple tv already allows users to mirror on the ios device or computer to the tv set. but investors are carefully watching the potential for twitter's investment to bolster the service's struggling user numbers. this is considered the centerpiece of a strategy that could be a game changer and help it compete with facebook's own growing video presence. back over to you. >> julia, thank you very much. so the potential relationship of twitter and apple tv raises some interesting possibilities for both parties as well as for the nfl. the look at where this may lead us, we're joined today by lee burk, ceo of lhb sports entertainment and media helping sports and entertainment properties create their own networks across media platforms. thank you for joining us today.
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>> thank you. >> so what do you think? game changer or a modest experiment in what do you make of this? >> this is a game changer. across several years of time. i mean, this is a methodical approach wi tby the nfl. one game last year, ten games now on twitter and potentially expanding to apple tv and building towards an ultimate opportunity in the early 20s when the traditional tv deals expire and a potential of digital platforms like apple and twitter and bidding for packages of games such as monday night and sunday night football. >> these are savvy moves but how much of twitter are we expecting to see once they start showing the games and how much do you expect twitter to be the platform as opposed to the larger more capitalized rivals like facebook when it comes to this evolution you're talking about? >> well, you know, facebook and
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twitter bargained aggressively for this package of games this year and twitter won out. and in part that's because facebook, their facebook live component has a limited amount, a window to show something live for for 90 minutes. twitter has no limit in capacity and look. they're at a point where they're experimenting very aggressively in adding on a number of different sports contents opportunities to drive their audience, drive usage. in part that's out of a certain amount of desperation, but then again, that's a strategy that media companies have used for almost a century. >> yeah. do you think a deal like this does it cannibalize traditional broadcasts viewership of games in the nfl or does this expand the viewership do you think? >> it tends to expand the viewership. i mean, you see it with, you know, with nbc and the olympics and you see it with world cup. you see games streamed with
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ncaa, with march madness. games are streamed a number of different platforms and it overall tends to enhance overall viewership across these platforms, reaching fans not necessarily in front of a flat screen. may be driving, they may be at a sports bar, on a college campus. all those opportunities are missed but now are obtained by being able to offer up games and skewing to younger number of fans watching on a tablet or an iphone. >> leigh, i want to go back to how much it looks like twitter because i don't understand from the sports network involved in this, if you just want to get your content on apple tv, you can do that yourself. why do you need to go through twitter? what distinguishes them unless they feature their own content of somebody else becoming a dumb pipe? >> well, you know, look. twitter is obtaining and process
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of obtaining exclusive relationships and grantedly they don't have the money to take them away but the nfl tends to drive the viewership and usage of every media platform that it's involved with. so from twitter's standpoint, this is part of an overall strategy of getting involved with sports properties that drive usage, that do drive sub jipgss and so it does help them in the longer run for viability as an exclusive platform. >> exactly. why don't they just do it themselves? to stream it on apple tv, other than knowing that twitter or somebody else pays up in the near term, why not just do it themselves? >> interestingly, apple tv until very, very recently did not get involved in original video content. literally the last month, they were doing carpool karaoke. they're doing a couple of original series right now. they have not until this point
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gotten involved in offering up live streamed sports and interestingly twitter is involved with for six to eight months. this is coming from twitter potentially through apple tv. in the future, apple may find it has the skills and the chops to be able to start to bid on the properties directly. >> thank you for joining us. >> thank you, lee. >> thank you very much. all right. 36 minutes left in the trading session here. kind of coming off the highs of the session and still in record territory for the averages. tesla watcher calling the automaker stock the single biggest company bubble. he's shorting tesla and he'll explain why. how the shrinking world of retail is shaking up the mix. our courtney reagan will tell us who's moving in to fill the space.
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welcome back. little more than 30 minutes to go. looks like markets close at records again today with the dow up 67. s&p up 7 and the nasdaq up 29. check out the dow transportation average. among the gainers there today, american airlines and mavis. good enough for the index as mentioned watching overall market signals up nearly 1%
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itself today. let's check some other movers for the monday. wynn resorts is trading higher because there's a green light from the local gaming regulator to commence operations next monday transferring about 250 gaming tables from the property to this new casino and that will bring its total table games to 350. that stock up 4% today. valaent pharmaceuticals, rising, as well. raised its price target to $25 a share from $11. trading at 26 now. see if they change that. the analyst there says that her short thesis has been debunked now on valaent because there is now a lower likelihood of a stock collapse from another guidance miss. that's interesting. >> sort of a double negative there. >> something. tesla coming out this weekend and saying that the term auto pilot mistakenly removed
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from the website in china and restored. the company said it did revise some language on the site to make it clearer to drivers that it is a driver assist system and not a self-driving one. this in the wake last week of a tesla crash in china and the driver said it was full auto pilot and not driver assisted. investors believe in tesla and including ron barren on "squawk box" back in june. here's what he had to say. >> i think in the one investment, we make $6 billion or $7 billion in profits. i think i could own it for ten, 15, 20 years, one of the largest companies in the united states and the whole world. >> and while ron barren believes that he can make billions, our next guest thinks this stock is going to zero. he's short the stock and he's here with us now. mark spiegel.
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it's not a biggest fund in the world but a large short position in this. we read your statement. you could go on with 20 different reasons to short the stock but do you think it's -- elon musk is overly ambitious or is he deceiving the public by knowing that he can't achieve those ambitions and still promising that he's going to do it? >> well, i think it's both, actually. i have two sort of big picture reasons why i'm short tesla. and why i think nobody should be long tesla. and the first one is that tesla has absolutely nothing sustain bring proprietary. nothing. i mean, batteries, electric motors, auto pilot. soon charging or competing charging things will be rolling out and yet losing a massive amount of money with zero direct long-range electric car
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competition an really accelerating next year and into 2018 it is swarmed with long-range electric car competition. >> there are people that love what elon musk is and the space company and the solar company and an energy company here so they might not be that excited about the chevy volt even if it's a great vehicle. >> let's talk about the mechanics of the cars first. okay? the volt is a xafrl. it's going to have the same interior room as a tesla model s. the same range as the base model s and yet roughly half the price of the base model s. now, a lot of model s buyers traded up from priuses and other green cars because they wanted to go all electric and that was the only choice. now there's a choice at half the price. again, this's mass market. you know? there's also a 200-mile leaf supposed to be out about a year from now. >> what happens as tesla is trying to do the transition to mass market?
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their argument is amazon lost money in the early days and building a better business in the long run. >> amazon financed it through internal cash flow. all musk knows how to do is incinerate cash. to your point, referring to model 3, right? tesla lost last quarter as a gap number around $20,000 for every single car it sold with a base price of $70,000. now, in fairness, there's some expansion capital expenditure built into that. there's a high per car amount of research and development and amortizing it. however, not accounting for that, tesla and he lost thousands of dollars per car with a $70,000 base price. there is no way in the world that can build the model 3 for a base price of anything less than maybe -- for a cost of anything less than $45,000 at a high 40s. >> okay. i got to move on because we're going to run out of time here
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and curious what you think ron barren and other bulls are seeing you are not seeing. >> i think ron hasn't done the homework. >> ron barren we're talking about. >> he got on tv here and said tesla's going to rule the world and no one else is serious about electric cars. mercedes is rolling out four. jaguar, bentley, rolling out like one each on the mass market, ford is rolling out two. volkswagen is rolling out five. that's all in 20 -- like 2018, 2019. by 2021, every manufacturer will have one. tesla will go to 40 direct kem pors. >> is there a reason to doubt elon musk can transition through this to emerge on the other side of it still as -- >> sure. >> big, powerful, you know, much sought after guy. >> elon mus senior citizen the most deceptive ceo i have ever seen. compare what he says and xlams to what's happening at the
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company and then what does happen. and anybody who really study that is stuff, he should have no credibility. one credible thing he has said, he doesn't care if tesla stays in business but electrify the world of cars. i think he said -- paraphrasing. very happy if everyone is forced to build electric cars and millions of them on the world even if tesla never makes a nickel. that's nice of him. that's not a company to invest in and a company for me to be short. >> making the short case for tesla. all i can say is you must be very popular on twit'ter. >> i have a lot of fun. >> thank you. >> thank you. time now for a news update with sue. hey, sue. >> here's what's happening. gop presidential nominee donald trump speaking at a rally in youngstown, ohio, calling for a new ideological test for admission to the u.s. in the fight against terrorism.
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>> in the cold war, we had an ideological screening test. the time is overdue to develop a new screening test for the threats we face today. i call it extreme vetting. the death toll from the flooding in louisiana has risen to six. rivers in the baton rouge area are starting to recede but they remain above flood stage. there's a watch until mid afternoon. some 20,000 people have been rescued. newly released video shows just how close the navy came to losing an aircraft and maybe the crew on board. an e-2-c approaching the eisenhower in march plunging off the ship when the landing cable snapped. they per severed saving the day and themselves. the navy awarded them medals for their actions. and how's this for a nutty
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situation? paramedics finding a connecticut squirrel with its head stuck in a cup. it was flipping and flying into the air in a vain effort to dislodge itself. took two tries but they were able to free the squirrel. there he goes. run, buddy. run. run. my question -- i know. i know. >> this needs no comment. this can just run on its own. >> certainly can. >> yes. i want to know why -- i said this earlier -- >> how was your day at the office? look at the emts here. >> why was it emts and not animal control? >> right? who had the video camera ready to go when this thing -- >> i have no idea but the squirrel is fine. we saw him run off. run! be free. run. >> forever grateful. thank you, sue. >> you are more than welcome, bill. welcome back, kelly. >> thank you, sue.
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i'm trying not to tell stories about the cat because, like, he'll put her head in the paper bag and then the same kind of thing will happen. >> i've heard this. >> that's the best. the dow, the s&p and the nasdaq if you're just joining us in record territory with the modest rally. a leading trader will tell us what he's watching going into the close for this monday. also coming up, a new report showing airfares dropping this autumn. phil lebeau tells you what you need to know. ♪ okay, so you launched your bank's app. now what? how will you keep up with the new demands of today's digital economy? the fact is: some believe they won't need a traditional bank down the road, so at cognizant, we're helping banking and financial services companies think digital, be untraditional, and reimagine what the bank of the future can be. our clients can now leverage customer intelligence
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welcome back. heading into the close with tim anderson joining me on the floor, tim. another day and what keeps propelling this market higher? >> i say the market has great momentum right now. we have a triple all-time high last thursday. a rest on friday and now we're building on that. i think one encouraging thing is that the russell 2000 and the transport index which are lagging a little bit, they've got maybe twice the gains on a percentage basis that the other averages do. and clearly, if the russell gets to a new high and not since june
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of last year and the transports could get through the 8,000 level and turned back at numerous times in the last three months, that would be positive and give people a better sense of comfort that the market rally is broadening out a little bit. >> i was going to ask you about the volume down here. how much is that in the discussion? light and august. is that a reason not to trust the rally? >> i don't think it's a reason not to trust it right now because you're always going to have light volume in the middle of august. and, you know, there are maybe a couple of key economic indicators to look at as the week goes on. probably the fed minutes at 2:00 is the biggest potential market mover. the fed minutes in the beige book had market impact the last couple of months. >> i take your point. every august there's light volume and then market does something different. >> you did have high volume days late august. on the downside when the market started that sharp correction.
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doesn't welcome like we see that between now and the end of the month. >> thank you. appreciate it. bill? >> thank you. meanwhile, new data show that airfares are expected to keep falling believe it or not but what's good for consumers might not be good for airline shareholders. phil lebeau with that story for us. phil? >> reporter: taking a trip this fall and if you are and not booked a ticket somewhere, if it is not a really popular destination, you're likely to save money. latest data of hopper, they basically take in all of the data points from fares that are put out there and they say here's the best time to fly, their own analysis shows expecting 8% through october dropping down to about $213 for a domestic round trip ticket. we have seen this trend over a couple of years, domestic airfares continue to fall and because of that, because you've got more seats, excess capacity,
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you have airlines allowing themselves to lower their fares because they got lower jet fuel costs and putting further pressure on passenger revenue per available seat model and why you look at airline stocks, they haven't done anything in the last yearment compared it with the s&p 500. not a lot of comparison. s&p 500 over couple of months moved higher while airline index, what, up little over 2%, we are expecting, guys, in the third and fourth quarter, the airlines say they expect the airfares to bottom out. that they expect they'll get some traction after that. keep in mind you've still got a lot of excess seats and capacity. let's see if they can actually get airfares to move higher, what think need for the unit revenue to be higher. guys, back to you. >> phil, just quickly, i mean, talking to delta about this, they said, look, yes, that passenger revenue is down but we're trying to improve our
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earnings power regardless so fuel costs are down for these airlines. how important should their sort of profitability be relative to these passenger revenue metrics? >> well, they'll tell you that they can afford this because of lower jet fuel. makes senl. you and i both know jet fuel will be higher but capacity is still there. can you raise those airfares and at what point can you raise those so that you get that unit revenue increasing? you can't continue to have passenger revenue per available seat mile down 3%, 4%, 5%. the longer that goes on, the tougher it is for the stocks to move higher. zero confidence there with investors. >> all right. let's not forget, you have bag fees and other things to make up for it with. thank you. see you later. market flash now on jcpenney. >> shares up dramatically over 6% at last check.
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perhaps due to news that more capital management the large macro based hedge fund in new york out with a filing of a $2 million share stake sometime in the second quarter. this, of course, as of june 30th and don't know what they have done in the interim days and life to the stock perhaps where they have been down dramatically trading in the $11 range and that's roughly about a 22 million share stake and providing a bit of a boost today to the stock looking at the 13 up results across the board. >> all right. penny up more than 6%. thank you. >> i heard a commercial for jcpenney and it was brilliant. i don't know why they never got around to this after all these years. the tag line was you're getting your penny's worth. isn't that brilliant? >> yeah. emphasizes lower costs. >> right. exactly. >> nice pun. >> perfect. >> maybe that's why the shares are up. >> what took them so long? all three indexes trying to
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do the trifecta thing again. dow's up 72. s&p 7. nasdaq 71. the future of the shopping mall, we are told, is in doubt. but reits and commercial property owners have been rewriting the rules of malling to stay relevant. is that a word? >> not ma-u-l. correct. we'll have that story to come. thank you. (speaking japanese) exactly. i can understand nuance, context and idiom in seven languages to help companies all over the world with everything from retail solutions, to banking, to cyber security. (speaking japanese) enepeople want power.hallenge.
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mall owners and reits are taking action. courtney reagan has more. >> hard to believe bill was a mall rat. retailers announce store closures, investors are cheering that move. the u.s. is over stored and more than six times the square feet per person than other countries and shopping center reits are okay with the store closures, too. anchor stores of sears and jcpenney were what a mall wanted but as the sector's traffic continues to fall, department
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stores aren't the most attractive tenants anymore and the mall mix is shifting towards the things that are more amazon proof of fitness, government, food and beverage and religious tenants so food and beverage was 5% of the mall's tenant mix. now it's 30%. this is according to jll. the new guard brings in new leases and higher rents. for example, apartment store right now may be paying single digit rents per square foot but a non-department store tenant of double digits for the same space and the preference is also now for much shorter leases. you might expect that trend. jll says in shopping centers of 50,000 square feet, leases under a year surged in popularity. now making up more than 16% of all leases. those long leases half of that. all of the folks that are coming in, many of them non-retailers want shorter leases and the reits are getting more money for
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them an they're okay with that. kelly? >> more places of worship? that's interesting. >> yeah. you know, i mean, education, some churches are renting out space. things where people need to come, they need to congregate and hard tore do that online. >> congregations. that's what churches are. >> that's it. >> thank you. nine minutes to go here. keeping a eye on the markets, basically holding on to the gains we have witnessed all afternoon. >> art said the market on close orders, lately just non-events basically and today may be no different. $150 million to buy into the close here. we'll see if that has an impact with the dow up 66. don't let the market record highs fool you. tom says a decline is coming and he'll recommend some defensive issues the buy when we come back. you both have a
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we have got six minutes left in the trading session with the dow up 63. dow, s&p and the nasdaq in record territory. tom leiden is here with us. here to make the case for defensive issues. isn't that a crowded trade right now? >> not really. defensive, low volatility,
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dividend stocks are widely held as the s&p 500. however, there are only etfs specific. they're not the s&p 500 anymore and they're etfs like the dividend by pro shares. >> you don't want to short them right now? >> no, no, no. they're not overvalued. honestly. widely held numbers, as widely held as the s&p. >> that's the point. performance is incredible. >> performance is -- >> now you want to own them? >> so's the s&p 500. right? the idea is dividends kicking off. when they've had corrections like we did in brexit, they didn't give back as much as the general market, as well. yes. the's money flowing into it. the percentage compared to the general market is still just a fraction. >> so you want to go with those rather than a lot of people see the growth that the cyclical stocks of a better value right now. quickly. >> this is a bull market.
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>> that's for sure. >> the people still have money they're putting into the market. they want to know where do i go? historically high dividend in low volatility pays that dividend and not fluctuate as much kind of a nice idea. >> there you have it. tom, good to see you again. thank you for stopping by. we'll take a break with the markets in record territory. the closing countdown is coming up in a moment.
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90 second left in the
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trading session here and in the interest of time we'll put all three together that's in record territory. bob pisani joining me. this is a year to date chart. so we go back to the february 11th low and then back to the brexit low around june 24th but despite those two hiccups, we continue to march higher here, bob. >> see the nasdaq closing the gap very quickly with microsoft all having excellent earnings. >> and the debate continues. >> a market bubble or value and the bulls are still saying, look at the small caps like the russell nowhere near an all-time high. oil today moved higher up around $44 for wti here. another year to date chart and you see where we are standing today at $45.88 now. >> now energy is a market leader. up about 2%. last couple of weeks oil stabilize around 45. that's a market leader. >> thanks, bob. >> and home depot tomorrow. >> come back when you can stay
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longer. >> big story on housing fundamentals tomorrow. >> the dow, s&p and for the nasdaq today, community options ringing the closing bell here at the new york stock exchange. stay tuned now for hour number two with kelly evans and company. it's all about the green. see you tomorrow, kelly. yes, thank you, by. welcome to the "closing bell," everybody. i'm kelly evans. a triple record day here on wall street. maybe the olympics in the air. the dow up. the nasdaq rallied 29 and the s&p up 6. record highs here after setting those levels last week. so the dow closing at 18,635. the s&p 500 cloudsing at 2190. and then the nasdaq closing at
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5262. incredible stuff. by the way, the outperformer is nasdaq up half a percent. oil rallied. a couple of different contributor. all of that of course in just a moment. now, while markets are hitting a record high, apple has always been outperforming the s&p. still a buying opportunity? should you take profits of the nearly $110 level? we'll have a debate on apple also coming up. mike santoli joins me with elan moi. everybody's green. >> all green today. >> all green. kermit in here. strategist david rosenberg joins us, as well. with trader tim seymour. tim, appreciate it. mike, first of all, on the markets, the banner is just, hey, we did it again. >> did it again and quietly. the way the market is making the record highs. this is the 20th out of 20 days
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that the -- it had an upside bias and determined for a round number. i think mostly sellers take vacations in august. no selling pressure in the market. one thing to flag, obviously, speaking about the rotation into more cyclical sectors. but i do think you see the selloff in utilities down 1% today and perhaps people wonder if we get lift today. the market trying to sniff that out. >> you raise a big spector here. what do you make of the gains we are seeing in last hour with a whole debate of whether this is a bubble for the stock markets here. >> i'm watching the minutes of wednesday from the fed's latest meeting to see whether or not they flag the potential of a september rate hike. obviously, paying attention to that, but they did it back in april and remember the april minutes released, they firmly showed that june at least on the table. at that time, most participants believe a rate hike in june
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likely if the economy evolved as they expected. it didn't turn out they expected and not moving in june. so, you know, we have to see if they're willing to say, pais, this is what we're expecting to see or flag september, explicitly or not. that's what i'm looking for come wednesday. >> here's the interesting question, tim. if the fed raises rates again, when's the point of mike which is markets setting up for that whole regime. does it tighten answer? or, does it give everybody the sense that the economy is really there and rates broadly speaking can lift here? >> be careful what you wish for. the market ahead of the fed every time we get a whiff of the fed to do something and highlighting fed minutes wednesday. jackson hole next week. you have a couple of fed speaks this week. so it's been very quiet since we have had some pretty good data. the labor data. we're all saying that if what we
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want to see is reinflationary trades, that's not good. you name it, those are very expensive stocks right now, period. i don't care what we're talking about. so the market though is very interesting because, you know, oil, suddenly, it was two weeks ago people crying another bear market for oil and now 3% or 4% of a bull market off the lows. emerging markets, miners, working all year and i think there's still more room there. >> david, what do you think? inflation? can it happen here? >> well, i'm not a big fan of the inflation trade. i think that we have had the reflation of the central banks for the better part of the past seven years and did a great job reflating asset values and not reflated the real economy because they're not equipped to deal really effectively with the
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structural inpediments that stand in the way of meaningful and vigorous global economic growth. you know, let's just call it for what it is. i doubt very highly the fed raises interest rates. you have a period of time where, you know, the markets were jittery. a couple of months ago on the view that global central banks ran out of ammunition and mark carney comes out with the bank of england and does a huge program of expanded qe and including buying corporate bonds and that effect is really felt globally. the 10-year guild yield plunged 50 basis points over that time period and acted really as an anchor for global markets everywhere. so i think that's one of the basic tenets here is that the central banks are still and if you believe the fed raises interest rates, what does the bank do? so i think that is a case where you have to ask the question to
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bring up the fed raising rates, did not learn the lesson of moving in december? you can't say, well, financial conditions eased enough and the fed starts to raise interest rates when the action have allowed the financial conditions to ease as they have. >> mike, people say, wait a minute. why are you having this debate again about the fed raising rates? it's because underpinning this rally is i guess the assumption of, hey, as long as they're on the sidelines, coast is clear, there's smooth sailing, we can keep lifting but the larger question remains, look what happened september. coming into the picture, does that potential the party? >> it is important to recognize that the fed and you should weigh into this. the fed doesn't think of it as the fed coming into the picture. there's not an official statement by an official that didn't say we think we can do it once more this year. just because the market gotten the head around the idea that the fed is sidelined, the fed never bought into that scenario.
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>> yeah. john williams said last week the plan is still on and never went away and every boilerplait they say they still expect path of rate increases and even if it's slower, much slower than anticipated in september. and that's because it's come down so much to come slowly. >> much slower than usual. i mean, there's a sense it's very different this time for them to raise rates once and now seven or eight months, it's not how the cycles were playing out typically, tim. bring it home for people. do you get into the stock market now? there's plenty of people to get out in '08 and didn't get back in or looking to safer parts of the market and the very parts that themselves appear overvalued arguably. what do you do? >> face it. you know, equity investors largely and even institutional
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outside of long short hedge funds have been underweight equities and even over the last six weeks, seen more bond flows than equity flows and not like people are emphatic about this market. in fact, that's what's driving it higher and same thing with volatility. so compressed and people are so protected against in it a short term and meanwhile that is ultimately putting upward pressure on the market as we get into it and the volatility and some of those hedges come off. i think we are set up for fourth quarter and you could have a lot more volatility. i don't think you have to do a lot here. to me, there are parts of the economy with the financial sector and i don't think it's crucially predicated across a yield curve that is obviously still very flat on relative basis but on historical basis still is an environment where banks can make money and looking at some of the cyclicals and the places i think in the transports so beaten down to get back to valuation and that's where you start looking.
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>> we put the questions to david stepper, too. the billionaire hedge fund manager is quote/unquote on guard. kate kelly has more. kate? >> hey there, kelly. stepper raised -- saying that his company sold 2.7 million call options in the spdr etf and perhaps turning bearish on the markets but he's neither bullish or bearish and taking a middle ground approach to trading at the moment. tepper made headlines in 20134 when the market at 1900. the s&p that is. saying don't be too fricking long, quote/unquote nervous time. it was a surplus of leverage in the system and deflation. now the market close to 2200 telling people something similar and the picture is different. and he's adding that people shouldn't be as it were too fricking short either.
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he's recommending that investors that don't believe in further upside go to cash rather than too heavy on the short side. this is advice that various other managers including perhaps carl icahn and lost 18% year to date primarily because of positions on the short side, that's how they described it, and david einhorn and took hits leaving his greenlight capital fund about flat for the year through the end of june may find themselves agreeing with. meanwhi meanwhile, kelly, it is not clear what happened to the spdr calls. >> overall, you know, not emphatic on the markets and that echos what we were saying about the way people feel broadly, kate. thank you. >> thank you. >> kate kelly there with comments of david tepper who is one of the many big money guys kind of equivocating on the market and so anybody sitting at home not sure what to do shouldn't feel like they're not the only ones. >> there's a general experience,
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the market doesn't feel like it owes you anything right now, especially something like david tepper who was bullish in 2010 and playing on the level of house money and maybe he doesn't want to play heavily of an overshoot to the upside and feels like the market, you know, not giving you any real tangible signals to fail here. you wouldn't be looking for anything finding that evidence. >> how would you describe financial conditions? people say to you, all right, do i hold fixed income? do i buy stocks? even at these high levels. what is your best advice? >> well, i mean, the stretch for yield, you know, hasn't gone away. i think it's rotated out of, you know, utility stocks which were the poster boy for the bump in the stock market. the utilities more than the two standard deviation amount on an evaluation basis and seeing
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inflows and i think that's somebody mentioned of the movement in the cyclicals and also have pretty strong dividend growth and from an overall market standpoint i sort of agree with the view that i'm agnostic on the market myself. i think it doesn't look like near term a catalyst of a meaningful pullback and bottom line is when you have a vix at 11 and a trailing multiple of 20, history tells you that you're a flattish market for three to six months and i think less about the major averages going forward and which sectors really that you want to be in. i think the comment that was made about the cyclicals, some trading at recession-like multiples so all you have to do is not get a recession and there's upside, probably better than the safe yielders doing so well and so i think it's a very idiosyncratic rotational market and not extrapolating the gains
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into the future. i think a flattish market and i think there's gains to be made and some of the beaten down areas of the market even if the economy doesn't do great of where they're priced right now. >> tim, you would ek quo that briefly? >> yeah. sounds like what everybody is saying that the wall of worry more what we were trading on three, six months ago. it was china. overly aggressive fed. it was obviously brexit. it was european factors. really, a u.s. recession that people been calling for for nine months. may be a below trend growth market. we are 9 to 12 months from recession even if it started tomorrow and where the market is. that's where the pessimism comes from and people seeing the pain trade to the upside and remains there. >> all right. tim, thank you for joining us. david, appreciate both of you guys here with us to kick things off this hour. want a news alert on volkswagen now. phil? >> kelly, this involves volkswagen and the ongoing investigation of the department of justice into volkswagen
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rigging the emissions of nearly 600,000 vehicles. according to dow jones volkswagen and did doj are discussing a settlement that will likely include criminal as well as civil financial penalties. the interesting thing is that there are no numbers thrown out. they're working on the settlement. hope to have it by the end of the year and the interesting thing is what's the final price tag going to be? you remember and look at toyota and the unintended acceleration, the final penalty from the doj, $1.2 billion. general motors and the final penalty coming to the ignition switch crisis, about $900 million. what will it be for volkswagen working on a settlement? dow jones reporting they're working on a criminal and financial civil penalty sett settlement to the investigation of rigged admissions. apple has underperformed the
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broader market but the stock is blowing away the s&p 500. we're going to debate whether there's still an opportunity to take a bite out of the stock. and donald trump laying out his strategy to defeat isis. coming up, retired four-star general barry mccaffrey weighs in on the trump plan and how it impacts the war on terror. matters. to wd both on the track and thousands of miles away. with the help of at&t, red bull racing can share critical information about every inch of the car from virtually anywhere. brakes are getting warm. confirmed, daniel you need to cool your brakes. understood, brake bias back 2 clicks. giving them the agility to have speed & precision. because no one knows & like at&t.
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welcome back. we have a news alert on warren buffett's berkshire hathaway. >> a number of interesting movements here. the second generation after warren buffett. most interestingly perhaps apple. they have increased the size of the position by 55%. that leaves them with a little more than 15 million shares of apple. pretty major maneuver there. deere and company, pared a little bit. roughly 22 million share position by 6%. a couple of other things of note. they have taken down the exposure to suncore energy to 26% with about 22 and change million shares there. walmart stores taking down the exposure by 27% leighing them
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with little over 40 million shares and phillips 66, increased exposure with about 79 million shares. other positions remaining largely flat. >> we were going to debate that one, kate. thank you very much. kate kelly with the latest on the berkshire holdings there. apple is outperforming. the stock up more than 10%. so is there still to time to get in on apple? joining us is gene munster and rick dohman. gene, especially with this disclosure that berkshire upped the position, what do you think about prospects of further stock appreciation here? >> i think they're really good. we have 40% upside of our target. i think the reason to invest is different than what investors are all talking about. investors are talking about the iphone 7 and super cycle next
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year and long-term investor is thinking about what they could do in augment reality and automoti automotives. that's the reason why i think and gives optimism of investors this is not just a one-year trade and ground work to get in the big growth markets in the future. >> price target is 151. burt, you're a bear here still, yes? >> yes. >> and i mean, gene just plalai out reasons why people like the stock. berkshire increased its position. what don't you feel the same way? >> well, kelly, first of all, nice to be with you again. >> welcome. >> in late 2014, we saw a top in revenues and profits of apple. since that time, it's been down every quarter. so that's a year and a half. 18 months. every quarter is worse than the one before it. in fact, the deterioration is
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accelerating. iphone sales were down 15% in the last quarter. apple profits were down a huge 27%. in the last quarter. china which about a year and a half ago when i was on your program was supposed to be the big money maker for apple. while sales in the last quarter in china were down 33%. this is the kind of stock i wouldn't touch with a 10-foot pole. >> okay. >> i mean, you got to be deaf, dumb and blind to buy this. >> all right, gene? what would you say in response? >> that would be constructive if we bought stocks about things that happened in the past but i think investors tend to look at what goes in the future. 2016 apple's revenue down around 7% and difficult for them, revenue not up next year and in terms of the theme of the second derivative it will be positive and dividend up in 2017 and i think all that's true. that they have had a difficult
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period. i think it has nothing to do with the core strength of great devices and continue on the path in five years. >> gene, give me one reason why they would be a sudden big turnaround. i know everybody's talking about some mysterious new product that will come out with. you know, in the 1990s, when everybody was developing new software, we used to call that vaporware. it was just a pr ploy to get the stock up. all apple has been doing is investing their money and investing borrowed money, tens of billions of dollars, in order to pay dividends and to buy their own stock. this is not what you do with a company if you want it to make progress on the upside. this is not enno vags. it's financial engineering. >> we had an interview of tim cook, the ceo, and in it he focused on the area of services.
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apple pay, i cloud, where do you see that sector headed for them? is that a potential big money maker for the company? >> gene? >> i think it is. sir yis, 2016 about 25 billion in revenue, up about 18%. double the profitability of the overall business an layer in the app store revenue, other products around itunes, video, music. if you assume that as a standalone music and a multiple consistent with google, for example, there's 200 billion in value there and a big piece, 18% of the market cap. i think over time as that segment grows, they get a higher valuation and investors do a sum of the parts. >> do you remember when the apple watch was supposed to be the big money maker? when it was first announced, i wrote an article for "force" y saying it will be a flop and we saw sales of the apple watch
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down 55% and then the i pay will be the big money maker and there's big systems out there there are that all the big retailers are committed by contract to use. instead of i pay. and it's happened. you don't hear about apple pay anymore, all of the vaporware, the big money makers. you try predict the next year or two? >> hang on. mike? >> setting aside the longer term stuff out there, obviously the stock rebounded strongly since the last quarterly report and comfort that this iphone cycle bottomed and they have clarity how to it will go from here, perhaps. what do you think the street needs to see in terms of the next couple of quarters for the trajectory of iphone 7 sales for the stock to continue to strengthen from here? >> it's pretty simple. it's existing iphone owners come back and replace the iphone. i want to quickly get back to the question of what will cause
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this inflection point? if they can retain the iphone base and the survey work we do is consistent. 93%. what you see is a flood of people coming back to upgrade the phones. not a long-term reason to own it and to your question is that i think you will see that wave of people who have two, 3-year-old phones coming back to upgrade, that's cause to cause the inflection point. iphone turns positive in the december quarter. >> burt, i did use apple pay yesterday but, you know, that's just one data point. >> you know -- yes. kelly. >> we got to go. thank you for joining us. >> if these people go into best buy and see a galaxy, they're going to buy the galaxy. >> all right. i keep my yeos in there next time. burt, gene. alphabet is trying to take on the telecom industry's internet and tv service.
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those dreams hit with the reality of enormous costs. find out whether that's forcing alphabet to rethink the business. and athletes bringing home a huge tax bill. we'll discuss what's done to end the taxation of olympic prizes. stay tuned. tokyo-style ramen noodles.
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roadblocks. we have the details. hi adidi. >> hi there, kelly. "wall street journal" reporting thattal bah fa bet is rethinking the business and proving too costly and time consuming to launch its high-speed service with connection speeds up to 100 times faster than current basic broadband. google fiber spent hundreds of millions of dollar rs laying cables in the subscriber cities operational in six locations and trying to cut costs by leasing existing fiber, asking cities to build networks and some cases abandon cables. they have plans to expand to as many as 16 new cities and some have to wait. palo alto's chief information officer said that google told the city the efforts are delayed and in a statement to cnbc, a google spokesperson says we're continuing to work with city leaders to explore the possibility of bringing google
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fiber to many cities this means deploying the latest technologies in alignment with the product road map and understanding local korgss which takes time. the other unit drew attention after a high level of departure at the self-driving car unit just last week. back to you. >> exactly. thank you. so what does this mean? google fiber, maybe in kansas city and nashville and every else is just wi-fi? >> yeah. i think the way to be read is another example of a little more capital discipline of alphabet to make sure that the risk/reward is there and a reminder that tearing up the ground and fiber and clearance and permission is not necessarily going to pay off in the pay way that the company needs. as good as service it was meant to be and maybe the goals can be reached in a different fashion. >> to do it over the top like they were talking about
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lightposts for example in the cities, better than digging up the garden, i guess. >> reminds me of the news media. buzzfeed and finding out cost line, it is expensive. >> takes a lot of investment. time now for a cnbc news update with sue. >> here's what's happening at this hour. at least 33 people died, 28 others were injured when an overcrowded bus veered off a mountain highway in nepal. many travels home to receive their first government payments following the devastating earthquake last year. mexican authorities say armed men abducted several people. two suvs carrying an unknown number of gunmen arrived at the restaurant on the city's mail boulevard. a 5.3 magnitude earthquake in peru killed at least four on sunday. at least 40 homes were destroyed. that quake struck some 5 miles
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deep. and seven people were injured when a television camera suspended by cables fell in the olympic park outside the basketball park. one woman was treated by medics and another was carried off on a stretcher. the camera reportedly belongs to the olympic broadcast services. you are up to date, kelly. back downtown to you. >> bring back the squirrel with the cup on the head. >> i know. this was kind of a heavy news update i think. >> heavy world. >> the squirrel, there will be another animal story tomorrow. i'm sure. >> thank you, sue. >> sure. >> see you later. republican presidential nominee donald trump has been struggling in the polls. will his plan to defeat isis which he outlined help give him a much needed boost? retired four-star general joins us next. a survey shows how much parents spend on their kid's sports than retirement. is it worth it?
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♪ everything is cool when you're watching a screen ♪ ♪ everything is awesome, ♪ when you're sharing a meme ♪ ♪ a voice remote, "show me angry kings" ♪ ♪ you know what's awesome? everything! ♪ ♪ apps that please, more selfies, ♪ ♪ endless hours of the best tvs ♪ ♪ brand new apps, shows to go, ♪ ♪ awesome internet that's super whoa... ♪ ♪ everything is awesome xfinity. the future of awesome. welcome back. here's how we finished on wall street. record setting day. the dow up 59 points. 18,636. s&p up 6 to 2190. nasdaq up 29 to 5262.
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trifecta. republican candidate donald trump unveiled the plan to combat islamic terrorism today and wants to shake things up. coming to immigration, here's what he had to say. >> in the cold war, we had an ideological screening test. the time is overdue to develop a new screening test for the threats we face today. i call it extreme vetting. >> all right. joining us with reaction is general barry mccaffrey, retired four star general with 32 years of service and thank you so much, general, for joining us. so, what do you make of this policy? >> well, you know, i listened to the whole speech very closely. there were some parts of it that have political resonance. one caution to take into mind. i have worked in three administrations in and out of
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the white house. there's no teleprompter in the oval office when you present a problem to the president of the united states so we ought to be a little skeptical of these set piece speeches all tell prompters. there are also a lot of things in this speech that were just shear nonsense. i mean, the notion that we would keep the iraqi oil like some bandit nation which would have involved occupying the country and fighting every arab in the nation was just completely nonsensical. there were other things in the conversation, you know, any enemy of isis is a friend of the united states. the iranians are the most intense anti--isis country anywhere in the middle east so a lot of it didn't hang together. didn't make any sense. >> well, i was going to say the obama administration to some extent indicated iran is more of a friend than it was a couple of years back. >> i'm skeptical of that whole treaty that the administration
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made with iran over the nuclear weapons. not very sensible. but we're talking about trump. do we really want to ally ourselves with the assad regime supported by the russians? make common cause with the iranians? doesn't make sense. there's ample room of criticism for the obama administration. the intervention in libya i thought was nonsense at the time. the treaty with the iranians is ill-thought out in the long run for the security of skrael and allies of saudi arabia. but again we are talking about trump and a caution is this was off a tell prompter and even then some of it doesn't make sense. >> what about the extreme vetting? is it so extreme given the war on terror, the islamic fundamentali fundamentalists, et cetera? >> the notion to do very good veting on refugees coming out of afghanistan and syria and libya is nonsense. if you don't have a cooperative
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police force and service in the country, how can you know who you're dealing with? bo barring certain nations suspected of exporting terrorism, that's france and belgium and the uk where we might have their citizens with their passports who are isis operatives. so it's pretty simplistic. you got to have a more complex approach to these problems. >> general, you know, part of the premise of mr. trump's case on isis in general and what he would do to combat it is that isis is more powerful and worse than ever and the administration likes to point to how much damage is inflicted on isis. where do we come down on this? from a military perspective, where is isis in terms of potency relative to where it was at the peak? >> i think it has broadened its reach. the worst part of isis is
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thousands of western european and russian citizens who have gone to syria, been trained, fought in iraq or syria and now going back to their home nations. that's why france is in such a terrible dilemma. the population are unassimila unassimilated, angry muslims. we are in a different situation thank god because of the way we deal with immigrant populations but it is a concern and a comparative way, i remind people, isis is not a threat to our existence as a nation. the chinese in the south china sea are vital. russian threats to western europe, poland, baltic republics, ukraine, that is a threat to the united states of major dimensions. when it comes to isis, this is primarily a cia law enforcement and nsa protective operation and homeland security. having said that, we have made
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major military interventions throughout the middle east to combat isis with pretty good effect. i'm not quite sure that there's much to be improved in the short run dealing with isis of a military perspective. >> tide hopefully appears to be turning. thank you for joining us. >> good to be with you. >> general mccaffrey. $55,000, that's how much michael phelps could fay? taxes on the 6 olympic medals. is this fair to tax olympic athletes? that debate is next. only the elites make it to the olympics or pros but american parents are making big bets on their kid's sports instead of their retirements. fi pitch you investment opportunities. i've got a fantastic deal for you- gold! with the right pool of investors, there's a lot of money to be made. but first, investors must ask the right questions
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welcome back. we get a ton of readings on these retailers. big week for earnings of home depot, tjx reporting tomorrow and then wednesday we have target, l brands and lowe's. thursday, walmart. friday foot locker among others. what is significant here, mike? >> it goes by category. home depot and loez inwe's in ad category. mall retailers are more interesting. actually, even apart from that, target relative to walmart is an interesting trade. walmart is a laggard. a lot of same trends helping walmart should be okay for
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target. >> good read in the journal today about the fresh food business. apparently people aren't buying it to keep it fresh. >> the other effect is having issues related to that is the food services. you know, i was looking at some comments from red robin ceo saying looks like the consumer pulled a blanket over their head recently and we have talked about the global risk that the country is facing this year and not about the election risk and some companies starting to feel a little bit nervous that all this political turmoil and the rhetoric and how negative the campaign is and translating to consumer sentiment. >> and also deflation issues and suddenly the price of groceries is okay and the dairy farmers extremely not upset compensated for the dairy and cheese products way down in price and people able to load up apparently at the store relatalt to restaurants. >> that's true although you saw a crossover of meals away from
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home. >> yeah. >> exceeding meals at home. >> the trend for years now. >> yes. and so, i do think that that's one thing that's pressuring top line. but also, you know, ylan, wage costs at the red robins, the restaurants, an issue. you hear the retailers talk about that, as well. >> we talked to white castle about that. we had the guest on and said we have to increase by cents and dollars and people just not able to spend like they used to. >> right. so wage gains cut both ways. higher prices for the companies and certainly more in the pocket for consumers and do remember that the fed looks most importantly at core pce. the target for full inflation and food and energy costs and paying most attention to core inflation and does not include food and energy. >> we get the cpi this week. the consumer price index. retail sales price report was disappointing. how can it be 1.54%?
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that's where it comes back to. a broader argument of pricing power in the environment. >> can't persuade people that they're getting a tremendously more for their money than they used to on necessities. >> never. ever. as the next crop of potential athletes are training a new study finds parents choosing investing in the sports over saving for their own retirement. those details are next. ♪ ♪ for decades, investors have used a 60/40 stock and bond model, with little in alternatives. yet alternatives can tap opportunities that traditional assets can't. and even though they're called alternatives, they're actually designed to help meet very traditional goals. that's why invesco believes people should look past conventional models and make alternatives a core part of their portfolios. translation?
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goodbye 60/40, hello 50/30/20.
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the summer olympics bringing home -- bringing some of the top athletes to rio. a new study shows parents are sacrificing their own retirement to go for the gold. sharon epperson has more details. sharon? >> you know, kelly, there are many benefits to playing
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competitive sports. kids stay fit and healthy, learn valuable lessons of team work and gain self esteem and costs, as well, that can be a financial burden that usually falls on the parents. now, according to to a new survey, a majority of parents say they spend between $100 and $500 per month on the child's athletics. nearly one out of five spend $1,000 a month or more. that financial commitment can have a huge impact on budgets and savings. 60% of parents whose kids play competitive sports say they have no emergency fund to cover unexpected expenses and many parents also said that spending on sports is pushing their retirement savings to the side leans. 33% said they don't contribute regularly to an account like a 401(k) or an ira and also hitting their ability to save for their financial future of the children and 11% saying they have cut back on stocking money away for college. for parents feeling this pinch, there are some ways that you can
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get the spending under control. the easiest way to buy gently used equipment, especially just starting out in a sport and volunteering to coach and might be able to save on the participation fee not that great of a basketball and for extra training, group lessons almost always less expensive and go in to buy snacks in bulk. when it comes to fostering your kid's athletic dreams, don't sacrifice your financial future to do it. >> it's a tough one. people feel like the pot of gold is getting a scholarship and say, hey, i'll save on college that way. how often are scholarships coming out of this the. >> 67% of parents say they think they'll get a scholarship. the reality is 24% actually do. parents aren't putting away money thinking it will happen for the child and may not. >> even getting a scholarship, mike, might not be a full one. a lot of them, lacrosse,
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expensive to play, partial. >> i think parents might say they expect something like that, there's really a practical goal involved, i think it probably is a matter of peer pressure, the feeling like i'd rather spend on my child to help them be happy and participate opposed to a rational economic decision. >> this is the mag factor. the kid whining and asking please, please, please. finally you break down. i have not experienced it at all clearly. take it down a notch if that i recall over the weekend. >> many parents may want the scholarship but it's competitive just to get into the top schools and may just be a resume builder of a sport of every other kid and what they're doing for extracurriculars. let me add one more for my kid. >> go down the list and like to thank my kids for the amount they spent on lacrosse and other sports growing up. winning the gold is the dream still of these olympians. americans win medals get hit
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with a tax nightmare. congress is trying to step in to stop this. details when we come right back. ♪ mapping the oceans. where we explore. protecting biodiversity. everywhere we work. defeating malaria. improving energy efficiency. developing more clean burning natural gas. my job? my job at exxonmobil? turning algae into biofuels. reducing energy poverty in the developing world. making cars go further with less. fueling the global economy. and you thought we just made the gas. ♪
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energy lives here. but the best place to start is in the forest. kubo: i spy something beginning with..."s" beetle: snow. kubo: no. beetle: snow covered trees. monkey: nothing to do with snow. narrator: head outside to discover incredible animals and beautiful plants that come together to create an unforgettable adventure. kubo: wow! narrator: so grab your loved ones monkey: don't even. narrator: and explore a world of possibilities. kubo: come on, this way.
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narrator: visit discovertheforest.org to find the closest forest or park to you. olympic dream can be a costly one, especially if you win.
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currently when a u.s. olympian wins a medal, they receive $25,000, $15,000 or $10,000 and then the irs comes calling. not only for the prize money but for a tax on the precious medal in the medals. no joke. a bill to relieve them of the tax and the ways and means committee said they'll mark up a bill in september for the athletes for a xerpgs. with us is steven gill for the school of san diego state university. steven, i know we don't want it to be a tax exemption list but come on. you have to pay money on the olympic medal. what do you think of this? >> well, as you know, the tax code's really already too complicated. and so, to try to carve out something unique like an olympic award or an olympic medal is just making an already complicated tax code more complicated. i think that there's no doubt in
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my mind that olympic athletes deserve every dollar that they get. probably even more. the effort you put in to earning a gold medal on a world stage is unbelievable. and somehow $25,000 doesn't seem to out it and that's quite a bit of money and i certainly understand now the tax man comes and takes some of that $25,000 away from you. >> and the taxes you for the medal in the medal. like this is a broader discussion and implications if you exempt this and then like, okay, is it a -- can they claim that all the expenses they incured for the practices and different things over the years, were those -- should those be deductions because this is a -- you know what i mean? i get that we don't want to start chipping away to make it overly complicated but short of not giving them medals of this medal, it has to be paid to pay the tax bill on the medal.
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>> that's right. so, you know, in a way it's certainly feels unfair because they worked so hard to get the money that they get. and compared to a professional athlete, it's merely a pittance. it's small drop in the bucket. some athletes are professional athletes, as well. if they participate in a commercially viable sport, for example, men's basketball, women's soccer, these athletes do quite well outside of the olympics and to them the $25,000 probably doesn't mean that much. but to some of the other sports, this may be the pinnacle of their earnings potential. from all the effort they've put in as an athlete and so, i agree. $25,000 doesn't seem much and then to pay tax on both your medal and on the cash prize seems unfair. but how do you reconcile this with some of the other awards given away for humanitarian purposes or -- >> no, i know. >> intellectual purposes. >> raises a whole host of
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problems. >> yeah. there's no doubt i'm supportive of our athletes and deserve more but it's difficult to say, well, what prizes and awards should be exempt from taxation. the nobel prize is a great example. >> do you have any sense of whether the bill under consideration is any different from that that was proposed by senator rubio after the london olympics? >> they're for the most part the same. it's no surprise that it plays well in politics to say we're going to tax exempt the effort of the athletes put forward. no surprise politically that's a win. it's been a bipartisan bill, meaning we have seen rubio support it in 2012. chuck schumer and some folks supporting it this year from the democratic side and it resonates well with most of the public and does make a lot of sense. >> we have to go. thank you so much for joining us. i learned a lot.
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fascinating. extra wrinkle for people bringing home the gold or silver or bronze. >> you bet. >> that does it for us on "closing bell." thank you so much. coverage of the 2016 olympics from rio is next. welcome to cnbc's continuing coverage of the 2016 rio olympic games. we're just under way with great britain and spain in the quarterfinals in women's field hockey. mike corey alongside two time olympian a.j.mleczko. a.j. what are we in store for tonight? >> we've had incompeteredible f hockey. we've had two exciting games. this is great britain's game to lose. >> they've been outstanding throughout the tournament so

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