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tv   Closing Bell  CNBC  August 16, 2016 3:00pm-5:01pm EDT

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are they going to do about the fact not enough people are signing up that are healthy enough? >> yeah. it feels like it's unraveling. >> yes. >> got to say. >> shh. >> i don't know. thanks for watching "power lunch," everybody. "closing bell" starts right now. hi, everybody. welcome to the "closing bell." i'm kelly evans at the new york stock exchange. >> and i'm bill griffeth. backing off of yesterday's record closing high amid hawkish comments or so they seem from fed officials and could be a rate hike as early as next month coming up. we'll talk about how a move by the fed could affect what has been this quiet, unloved bull market we have had here. >> the trifecta yesterday again. record closes across the major averages. shares of hain celestial down
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today. an accounting issues. we'll have the latest details and what it means for the future coming up. also, etna following united's lead and announcing plans to pull out of most of the obamacare exchanges this it's involved in next year. and will that lead to big price increases now that there's less price competition at those exchanges? we'll hear from the ceo of a major insurer who's doing pretty well in obamacare. that's coming up here. and financials have really missed out on the recent record rally but is now the time to bet on the banks? with more hints the fed may raise rates again. oh, by the way, a big move by an investor into one of the banks. we'll hear from both sides of the debate coming up. >> a lot to get to. let's begin with the markets pulling back from yesterday's trifectas. we put it. closing the "closing bell" exchange today, michael robinson of money, ben willis of princeton securities and rick santelli, if it's tuesday ric t
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rickster is back again. hey, ben, so bill dudley seems to suggest -- he says a rate increase in september is possible. >> always like that guy. >> does the market believe that? or, does the fed have enough credibility that the market believe that is or not right now do you think? >> i don't think the fed has any credibility. you have to lean on people like dudley and commentary lock hart, non-voting member. the u.s. economy may not be performing to the standards that most people grew up with watching, greatest recession of all time and recovering nonetheless. there's inflationary pressure and anybody that's paid a health care premium recently understands the idea of inflation in the pocketbook and the inability to pay the obamacare bill. so that being said, the u.s. economy is doing just fine and it should let rates naturalize. it's not a tightening. it is just naturalizing. >> interesting thing, rick, i
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want to go to you next, is what's happening with the u.s. dollar today below 95. what is going on here? >> you know, i think that many of the issues that are moving currencies like the yen are counter intuitive and look for them to continue and of course, creates a very strange dynamic that a country so heavily laden in debt with a homogenous society and a demographic time bomb and malaise they basically have an export issue with that strong currency and continue to monitor that. the chinese currency also has been moving relatively aggressive against the dollar. part of that's self inflicted. but i only mention it because i think there's also a correlation there with some of the money market reforms that will be hitting on october 14. and how it affects libor and core lated with the dollar scenario. i think all of these things in foreign exchange you focused on are integral to the whole
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correlation and corollary of central banks are doing and the readjustments to occur with the wild fx movements filtering into the interest rate and strips and stops and financial structures isn't going to easily be reversed. the fed's waited too long and much of the perm feint damage of renormalizing the abnormal is here to stay. >> michael, we all agree that this stock market is dividend crazy. just loves dividend yields these days. what would happen to this market if the fed, in fact, did start to raise rates again in september? what do you think would happen? >> i think it won't have that big of an impact. they went go from here to 5% tomorrow. i think the market is priced that there n there and i do think dividends for yield and a safety play at a top market. by the way, i think the market is basically healthy. i like the fact that it's only up 1% over the last 30 days and not looking at an exhaustion top.
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dividends are good but i would have the flip side, i would be looking for stocks with massive earnings growth way, way over what the u.s. economy is doing right now. >> like? >> if only we knew what those were, right? >> do you have examples? >> i have an example. invidia. earnings up 56% this quarter over a year ago. this is a consistent earnings gainer, a massive growth. they are the go-to firm for graphics processing chips and integral to artificial intelligence. deep learning. virtual reality. they have a new headquarters on a vr headset and a play on autos and like a high-tech etf in a graphics processing company. >> okay. >> ben, let me go back to what you were saying a moment ago with the comments of bill dudley getting the fed minutes tomorrow and one of the bond shops saying how could they be more hawkish than dudley? i guess that's why rates are moving up here but the behavior of the dollars seems peculiar to me.
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can you help us make sense of what is going on? >> i will try and asking all day and quite frankly i believe the dollar effect right now is purely based on the sterling move with the idea once again the unexpected inflationary pressure in the united kingdom prevents the brexit from lowering the rates the way they wanted to which, again, i go back to the last time i was on talking about how the normalization of rates is happening defacto as the other current sys around the world under pressure and the central banks are lowering standards. it's effectively allowing the u.s. to raise the rates and something that the federal reserve is looking at. our rates no, ma'minally higher. i would look at what happened with the currency and sterling overnight. i think single biggest factor and trying to understand this tape i'll give you a stock. worst loss in their history and they cut the dividend 77%. >> bhp. >> the stock up today. >> wow. >> that should explain wall street to you. >> found a bid somewhere.
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hey, before we go, do you think treasury yields hit bottom for a time being? >> i think they may be go lower. rates are up today. we haven't closed above 1.59 yield since the brexit vote. they have been compressed. my feeling is usually when a market like fixed income compresses the way it does, i wouldn't go against the trend. we all know which direction that is. >> all right. very good, guys. good stuff. thank you for joining us today with your thoughts on the markets. now to one of the biggest losers of the day and it is not bhp. we have established that. hain celestial after releasing a delay in the earnings report. susan? >> delaying the release owing to accounting issues and looking into their internal audit controls which has investors thinking what other problems will be found? what are these accounting issues? stem from concessions to certain
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u.s. distributors they use and whether you count the revenue when products are shipped to you or when the distributors sell the goods on to customers and the maker of earth's best organic baby food and juice now has until september 13th to file the report. separately, also said that its fourth quarter sales and profit missed the guidance and also weighing on the shares today and should be noted that earnings and accounting are two separate issues here. a number of brokerages this morning downgrading the stock except jp morgan reiterating its outperform call and speaking to the ceo simon and he said that earnings may or may not have to be restated. and confident that the accounting issue will prove to be isolated and something else to keep in mind, by the way, hain said the total amount of revenue ultimately recognized should not be impact add enthe market calling for $2.9 billion in the year. back to you. >> the argument shifting from one period to another, though. susan, seems by the reaction in
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the stock that investors were caught quite off guard and alarmed about the developments even if the analyst you mentioned isn't yet. >> yeah. they were. it's two-pronged event, right? you have a fourth quarter miss coming to earnings and the accounting issues and people are thinking how many more quarters will have to be restated. i wbt to highlight something that the ceo simon mentioned to jp morgan because they asked him, people thinking you're stuffing the channels here. he said it's very hard to ship beyond end user demand because of the automatic systems in place. you want baby food, cold pressed juice and do that on the internet, there are checks and balances to account for these on whatever app for whatever program you're ordering it on so he says it's very difficult in 2016 to do that. >> especially given the perishable nature of the product. >> that, too. >> thank you, susan. see you later. all right. keeping an eye on those shares. heading into the close and pressure across the markets, of course, off record setting days for all three mayor averages and
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the weak dollar not doing much to stop the you from dropping. s&p down 8 and nasdaq down 24. etna dealing another blow to obamacare. the latest developments and reaction from the head of a nonprofit health insurer that's staying with the obamacare exchanges. doing okay. we'll talk about what they're doing that the profitable are -- for-profit companies are not doing right now. two big banks and differing opinions. a vote of confidence and facing a downgrade. we'll discuss the plight of these banks and whether now is the good time to put them on your buy list.
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welcome back. shares of tjx down about 5.5% today on disappointing profit estimates for the current quarter. the owner of the tj maxx and marshal's chains blames wage increases and a strong dollar which eats into profits outside the united states. tjx runs stores in canada, as well as the uk and australia. the company did report better than expected comparable same-store sales for the quarter
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that ended last month. etna announced today it's pulling out of nearly 70% of the counties of health insurance of the affordable care act or obamacare and far from alone. united health group and humana pulling out leaving blue cross and anthem on most exchanges. >> joining us is a company sticking with the aca and patrick is the chairman and ceo of florida blue and guidewell. the fact you're a nonprofit, is that one of the big reasons or is it the big reason you're able to stay with aca where some of the big for-profit insurers are not? >> certainly one of the dimensions. we don't have to solve for wall street and in this health care business, we look to produce about a 2% to 3% bottom line as a not for profit so it's certainly a factor. >> yeah. >> what do you think is going on with the big insurers pulling out of aca, patrick? >> i think one of the things that's interesting is relativity.
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first of all, united had about 500,000 members across the country. etna had somewhere around 800,000 members. we in florida blue have 700,000 me believes all in florida. so we're very concentrated. we understand our market intimately well. we created 20 retail centers across the state to really be very much based in the community and understand the needs of each of those communities. so i think the big nationals aren't quite as in touch with the local markets and makes a difference. >> a problem for them is that at this point those who are in the so-called risk pool who would be eligible to buy into these exchanges are either sicker than had been feared so their costs will go up for the insurers and they're also more price sensitive when they buy the insurance. should we be surprised by that? >> you know, we were not surprised by either of those things.
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we put together a very thorough strategic plan. we've been working at this for the last number of years. and we think we have executed that plan. so, we anticipated that people were going to be more sick because they hadn't health care in the past. one of the reasons we built 20 retail centers across the state is that when people come in and they actually sign up for coverage, we have care managers, nurses right there who can do a health risk assessment of those members and web start to take care of them right away. we thought that was an important aspect to what we're doing. we also created partnerships with hospitals, with doctors, so we have a lot of collaboration going on in our state. and i think that really is showing that we have produced better results than most players around the country. >> does that mean that you're not having to raise premiums as much as others in a lot of these counties are asking states for? they say that a lot of times
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people are just signing up for the exchange when they need an expensive procedure done and then dropping out again. all of those types of things to keep prices low. what are you experiencing with premiums? are you having to raise them a lot and competition, who's left on there? >> from's still plenty of competition in our marketplace. last year we had a single-digit increase. and so our rates are way below most players in terms of the size of the increase. i attribute that to the fact that we really are all over the state. i mean, in our total business, i cover more than 5 million people in the state of florida. 700,000 of them in the affordable care act so we really understand our communities. we've got enough size to have leverage in our negotiations. with the provider community and we have good, strong relationships there. so do we find that there are people who have risks? that are stronger or larger than
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other players? absolutely. >> right. >> we found that but we have been able to manage that. we have been able to stay in front of it. >> i got two questions but i've only got time for you to answer one and ask them both and you can decide how to do this. if you were running etna, not asking you to second guess any of those guys but the for-profit guys, what would you do different to stay in the exchanges and what should the government do to try to fix the problem for those guys or should they? >> i'll answer the second question first. how's that? i happen to think that the government has a role for keeping people engaged in the marketplace. my broader issue would be, we're not at a place to be trying to take the aca and get rid of it. i think we have 20 million people who are covered. our job now collectively should be how do we improve it? there are opportunities to improve it. there are taxes that have been delayed. i think those ought to be eliminated.
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we ought to look at how do we provide more affordable options so there's some changes to the aca that could be put in place that would be better for the consumer. my company's mission is to help people and communities achieve better health and as we focus on that, we no that we need to provide affordable options for as many people in florida as we possibly can. >> all right. patrick geharty of florida blue, thank you for joining us. >> thank you. >> you bet. 40 minutes left in the trading session here. a down day. haven't seen minus signs in a little while here. dow's down 60. s&p right now down 8 and the nasdaq seen consecutive gains in record territory down 25 points today. coming up, move over facetime and skype. google's new app could leave the apps in the dust. jon fortt will be here to explain and weigh in. but up next, there he is. actor steve guttenberg in the
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house and stops by to promote the new syfy movie. let's see. it's a sequel. we'll discuss that and other projects in the works coming up right over here, steve. come over here. over here. coming up after this.
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"lavalantula." welcome back. we're keeping an eyes on shares of dick's sporting goods. up nearly 8% on better than expected earnings.
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sporting goods retail said it was pleased with the quarter's performance in light of the activity, remember, by bankrupt sports authority and raising the outlook above consensus estimates. actor steve guttenberg known for role in the police academy movies -- >> among many other things. >> la la"lavalantula" is now he back. on syfy. >> who came up with the tight snl. >> bill gross. >> wonderful name. >> steve guttenberg, the quiet, shy, steve guttenberg. >> reserved. >> very, very reserved. >> how does it work? i have a ton of money in some sort of retirement. i have no idea. i'm a teacher. i have all this list of american funds and i have got leg mason. what's really going on? what's going on? >> we'll ask the questions here, steve. >> okay great. >> we'll do it that way. are you empin the market?
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>> of course. of course. i love -- i go in and out and try to create as much wealth as i can by playing it. you know? >> what was your best move? >> i love wynn. i think it's a great stock and i think that the upside is huge on that -- he's a really smart guy. but, you know, i think there's, you know, there's lots of guys doing great jobs out there. i love leg mason and cohen steers. >> worst investment you made? >> oh, it would be frank sinatra spaghetti sauce. a good buddy of mine, a fellow said, you have to invest in this. the stock is going to go through the roof. you know? you know? paul newman through the roof. i spent i guess about half a million into it. >> did you ever meet frank? >> no. i met the stock. i met the stock. >> it was you? >> he's gone. he's again. >> did you get any sauce of the deal? >> a lot of sauce. >> still have some in the garage somewhere? trying to get rid of there. >> i did great on that one.
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>> to lava to la vant la. >> a huge giant hit of last year. had to make a sequel. it's a true story about giant spiders attacking l.a. and now attacking florida. you read about it? it was in the journal. >> we heard about it. >> sequels, not working at the box office this year. >> what's -- pardon me? >> sequels aren't really working. aren't doing it at the box office. >> i think what happens with sequels is audience owns the movie. when you have a big hit, it is not yours anymore. it is yours. the mistake is to get too cute with it. it is like a rock n roll legend go up and plays hits and you can hardly recognize them because they're jazz. no, no. i want you to play them like i saw -- listened to them on the radio. same thing with the movie. people want to see the same movie and a little different and basically see the same movie and when you fool around it, that's when you get if trouble. >> that's why the "police academy" movies did so well?
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>> i think so. basically you wanted to give the same feeling. it is not the same movie but you want the audience to have the same feeling. like bill clinton -- >> bill clinton loved them. >> at the democratic convention. >> he sat and watched all of them consecutively? >> yes. no food or water. nothing. strapped down there and watched it. but, you know, it was really great and he said that becauseau have to relax. even the most important job on the planet, relax and give your brain some time off. "police academy." >> any sense of hillary clinton or donald trump, "police academy" high on the list? >> donald trump is watching "devil's advocate." hillary's, "pride & prejudice" i think she said. they have to have relaxation. i made my living that way so but actually i'm a fan of donald trump and hillary. they have terrific parts of the agenda and part that is don't
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work so -- >> is there anybody that steve guttenberg doesn't like? anybody -- >> the spaghetti sauce. terrible. terrible. >> i remember that. will there be a "lavalantula" number three? >> you mean "lavalantula"? >> live? >> no. >> that's what i meant. >> we did so terrible, the syfy channel put us on the first night of the olympics. great idea. so it's the first night of the olympics and we did terrible. and, you know, we died. so i think it's going to be one and two. so i can't -- i was going to buy a little stock and it's -- i got to -- buy groceries for the children or buying stocks. >> i think you are wise. a thrill to meet you. thank you for stopping by. >> thank you so much. >> thank you. >> catch him today on "2 lara 2 lantula." you have two different satellites running there. >> same country.
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>> on syfy. you can leave the mike there. we're going to go to commercial first. >> going to commercial? >> or something. first a news update with sue. >> hi, guys. here's what's happening at this hour. louisiana officials have increased the death toll to ten from the unprecedented flooding in the state. 40,000 homes suffered water damage. governor edwards holding a news conference earlier today. >> i want to remind everybody, this is a historic flooding event. and when you have a storm that is unnamed, it's not -- wasn't a tropical storm or a hurricane. a lot of times people underestimate the impact that it would have. a serious tip overhazard prompted the recall of 8,000 chest of drawers sold exclusively atwal the recall involves four-drawer wooden chests under the storybook brand no. injuries thankfully have been reported. a speedboat collided with a
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tourist vessel off the greek island killing four people and injuring five more. the greek coast guard says 20 people including the injured rescued from the waters. on a lighter note, a cuban motorcyclist broke a world record this past week for driving a motorcycle while blinded. and blindfolded, too. why you say? well, he dedicated the feat to the 90th birthday of fidel castro and rode it blinfolded under five miles and took imabout 15 minutes. reminds me of the squirrel in the cup yesterday. >> kind of like -- >> which also couldn't see. there you go. >> exactly. there's correlation right there. >> any excuse to play that footage over and over again. >> thank you very much, sue. >> you are welcome. is there a nicer guy on the planet than steve guttenberg? >> i know. >> what a great guy. that was a lot of fun. 30 minutes left here on the
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trading session can w the dow down 52. a leading tralder will tell us what he's watching into the close here. google debuting the duo video chat app and jon fortt tells us whether it can knock out rivals. people want power. and power plants account for more than a third of energy-related carbon emissions. the challenge is to capture the emissions before they're released into the atmosphere. exxonmobil is a leader in carbon capture. our team is working to make this technology better, more affordable so it can reduce emissions around the world. that's what we're working on right now. ♪ energy lives here.
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less than 30 minutes left in the trading session. steve guttenberg is holding court behind here on new york stock exchange. he is hilarious. we have mark newton of newton advis advisers. we were talking about the decline of the dollar recently and i want you view of how much more there is to the downside. >> i think it's the most technical development today and more than the u.s. indices and looking at the dollar, we have gotten down under the last monthly lows which should go under the 94 and about 60%er have vus the euro and the euro right now breaking out of the dxy and against the yen and the euro and against a lot of may jrs and emerging currencies and i think it's important and if anything prove to be a benefit to commodities, obviously, the value stocks over growth.
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crude oil had a very big move in recent weeks and continue and a bit overdone and declining dollar should be very good and look at really the longer trend here and we test this and the fact we have pulled back as much as we have and gotten underneath the prior holds and moves that the move gives way and good for the metals and energy going forward. >> interesting. you see that dollar continuing lower. thanks, mark. >> thank you. >> mark newton joining us here. >> that will be interesting. financials a sector that's sitting out the rally. the banks up marginally so far this year and the s&p up nearly 7% now. but one big activist hedge fund making a bet on morgan stanley. announcing the firm of a 2% stake in the bank saying the firm liked what it's seen from the ceo. research today from bernstein sending a different message about the banks downgrading jp morgan saying they see less upside over the next year. who has it, right?
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let's bring in larry and chris. guys, welcome. so, larry, i assume you like morgan here, is that right? >> you know, it is really an interesting day and look at the activist event. look. it is challenging to find value in this market. there's no question. and that's why for investors, they need to embrace the idea of a portfolio makeover strategy and any good portfolio makeover starts with a really ugly asset and nothing uglier than the financial sector. lagging almost all in return. and that's why there's an opportunity here. finally, you have a catalyst. you have the fed talking about higher interest rates. finally you have activists stepping into the picture. value act today. we have had 100 activists events last year in the financial sector and more to come. that's how we unlock value in the sector in the years to come in an otherwise very expensive market. >> you know, chris, it makes --
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it remains to be seen whether ubben made a prudent move here and people trying to pick a bottom in the financial bottom. you feel like it's too early now to try to pick that bottom here. is that the idea? >> well, look. wear bond rating agency, bill. we like the credits. these are companies that have very, you know, stable operations. there's nothing wrong with them. there's no alpha. >> right, right. >> the problem of activist is i can't do a tender offer for a bank. i got to get permission from the fed so the activists don't have a stick to really use to make management change and, frankly, you know, when you're talking about large cap banks, they're not in any position to change right now. they near a box. >> but, chris -- >> mid caps, smaller banks, this's the value in the industry right now. >> actually -- >> hang on a second. this is important. it is not value "x" jumping in with an eye to shake things up.
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it's an endorsement of what he's doing and just saying -- >> okay. >> if the banks treat you like a utilities, people like a utility right now and potential -- >> that's what they are. that's right. >> from that point of view, on those fundamentals and given the price of morgan, what is wrong with that argument? >> nothing wrong with it i.'s always good to let management know what you think. i just think we have to understand that these banks are becoming very passive. there's not a whole lot of viger on the upside of earnings and coming from cost cutting. the banks chased out of a lot of businesses because they just can't stay. jp morgan will stop clearing treasuries at the end of the year. nobody's trading cash now. we have this -- >> look. let me just -- >> let me add to the question. >> all right. larry, go ahead. >> look. no, regulation is a critical part of this conversation. look, the regulatory burden has never been greater and leading the market. regulation doesn't have to be an excuse for financials not perform in this environment.
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the best performing -- >> well, yeah, but -- >> whoa! wait, wait, wait. i agree with chris. the smaller banks, smaller intungss, nonbanks may be a better opportunity here. >> but, larry -- >> brutal in the financial sector. >> this is an important point. the utilities they love low interest rates. banks hate low interest rates. >> bill, what happens! >> no, listen. >> what happens when rates go up? >> punished unnecessarily. it's like the spanish inquisition. we're just punishing people. >> i don't disagree with that at all. >> it's very different from the utilities. i think it's a very -- >> let me add one more point. what happens if interest rates actually go up? dudley's talking about the possibility of rates -- where in your portfolio do you make money in a rising interest rate environment? right now the perceived relationship is that financials will do better in a rising interest rate environment. utilities won't and bonds won't.
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>> spreads instead of benchmarks. watch the spreads. right now spreads are slowing capital market activities and hurting the big banks and how they make money. >> larry, if you -- if you can tell us when rates start to rise i think we will start to see people move in in earnest into the financials. don't you think so? >> don't hold your breath. >> my crystal ball is as hazy as everybody's. so i get that. i think it's an enexpensive hedge. it's at a discount. 20-year valuation of a yield higher than 20-year valuation. it's a cheap opportunity. in a very expensive market. it's a hated sector. there's a lot of election pressure on financials. after the election that pressure may dissipate. >> always good to have an optimistic voice but i have to tell you for me these are solid credits. we view the whole sector as solid on a credit basis but in terms of revenue growth, no.
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it is just not there. >> fun. very informative, as well. thank you for joining us. appreciate it. >> 20 minutes to go in the session here. dow's down -- is that a 6 or an 8? >> 6. >> 61 right now. s&p down 8 and the nasdaq is down 25. it's being called not just a killer app but potentially an iphone killer app. by google android. it's called duo and it connects to all phones. we'll see how it stacks up next. meantime "time, inc." a stand alone print and digital publisher may be in the cross hairs and we'll discuss if "time" is up for long-time magazine company after this. you both have a
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welcome back. android fans call google's chat app an iphone clearer. >> but we have asked our objective colleague jon fortt to come up and size up google's new app duo and how it could alter the mobile phone battle right now. jon? >> i'll say it's not an iphone killer. the idea here is for duo available on both ios and android so there's no need to switch in order just to use it. the question, though, at this
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point is how do you measure the success? duo stands a good chance of doing okay just because of how many ways google has to promote it. the google app, ios, gmail, present lots of opportunities and incentives to install it and installs and usage are two totally different things. every smartphone can do sms text messaging and people sent three times more messenger or what's app and here's the hill duo has to climb. more than 1 billion apple devices in use around the world. and most of them have the ability to do a facetime video call. sn snapchat is popular with the kids. facebook messenger has a billion users and probably the most obvious way to do casual chat across platforms and then of course there's skype which is still a pretty popular video chat platform in its own right. the gamble is making an app video only, no text, no voice
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only in duo, it is able to do better at video than rivals but we'll see, kelly. >> stay right there, jon. we're bringing in max wolf, as well. max, i just want to download another app. >> yeah. i mean, almost no one does and which is part of the reason that we see this, actually. so google's releasing duo and aloe messenger at the same time. and we kind of think that the video and the text messaging apps are operating systems of the future and doneloading fewer apps, app fatigue, hard to discover and find apps with 1.5 million out there and google's making sure they're not left behind by a world dominated of apples and basically major competitor. >> jon, who does google think would want to download duo? >> i think die-hard google users who will download this. question is, when's that conversation going to go like back and forth between, you know, somebody when's got an
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android phone trying to get them to do this? i downloaded facebook messenger. just chat on that. or we used to do this over skype. let's do it over skype. there is that hill to climb and people don't want to download something else if they don't have to because they don't have space on the roam screen, don't want to learn to use a different app. all kinds of reasons. google has to do really well execution-wise adding the right kinds of features and simplicity for this to duo to have real legs. >> max, we have mentioned impact here of the iphone and maybe the story is more about just messaging in general. jon brought up facebook, for example. how many people do you think are using video features in facebook messenger to communicate or if duo is successful, who is it most likely to cannibalize? >> we think it's dangerous to count out google even an ios where you get the free version and the apple version. people love google apps and
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among the most used every year despite the fact that apple gives them no love and doesn't promote them often in the apple store. so i mean, i think there are some real value to something better in a low bandwidth environment and trying to do is make life more difficult for skype, make people less interested in what's app and never leave the google ecosystem because it makes sense and remember, too, with 75-plus percent market share and 85-plus percent market share in the developing market where new users are coming on they have a pretty good chance of being the first app you use for a couple of tens of millions of people in the next six months and that will be the real test if they can have legs and run with this. >> i mean, my first question is, i realize there's more than one competitor, it doesn't have to be a zero sum game, max. i mean, if google doesn't mean it has to cannibalize. you could add new users, couldn't you? >> absolutely. it's super easy with one master log-in.
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fits perfectly with gmail. you have google on the system because you're using it for a call dkalicalendar and search ar sign-in. between the 70% market share of android and the fact that everybody already has a relationship with google with one master log-in, i don't think it's a leap to add them to or knock someone else out of the box. >> yeah, but that's why google hang-out should have done better. duo has an added feature to sign up with the phone number and don't have to sign up for a google account and goes to show how tough this can be. >> i guess it's not available for the blackberry, is it? i'll have to wait. >> hasn't popped up yet? >> yeah. thanks, guys. max wolf and jon fortt. appreciate it. market's under pressure a day after setting the record highs. dollar is down almost a point today and again that's not helping to bail out stocks much.
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the transports are higher interestingly. we're keeping an eye on those. vix higher today and interest rates are creeping up. after days of record highs, we're going to get mark freeman, the cio of westwood holdings group to get his take on today's selloff and sees the markets going next coming up. 'd you got here? this bad boy is a mobile trading desk so that i can take my trading platform wherever i go. you know that thinkorswim seamlessly syncs across all your devices, right? oh, so my custom studies will go with me? anywhere you want to go! the market's hot! sync your platform on any device with thinkorswim. only at td ameritrade announcer: when they test you, stand firm and move only when you hear the seatbelt click that says they're buckled in for the drive. never give up till they buckle up.
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about 8:30 left in the trading session here with the dow down 66 points. joining us here on the floor of new york stock exchange mark freeman, chief investment officer at westwood holding groups. such a diversity of opinion here near highs for the market. it's either overvalued and time for a pullback or still value in the market, especially if you want to buy some of these dividend-yielding companies here. where do you stand? >> a little bit of both. i think there's parts of the market to make a case for that have run far and fast and still opportunities within the market where i think on an absolute basis, not a relative basis, but an absolute basis to make the case that that's an attractive investment. >> cvs? >> that's one. bds. looking at all three, what they have, earnings growth, they have the ability to go to the
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dividend and trade at an attractive valuation. that's what i mean. we're seeing too many investors saying this is attractive but on a relative basis. relative to this. or relative to that. >> right. >> the trick now is for investors to stick to the absolutes. >>. thei.n.a. trade. >> absolutely right. >> do you believe the hawkish talk of the last 24 hours? do you think they could raise rates next month? >> certainly could. i think a question of -- would you change your investments if they think that? >> not at all. i think if you were to see the follow through on that, it would move investor sentiment back toward the absolute focused investing as opposed to relative investing and where the fed has the ability to change the narrative if you will changing the relative case for that. >> have you looked at the banks of stanley and making a similar argument to what you're saying? >> well, we have looked at it. as well as all the other banks. i think the key issue there, there's from a valuation
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standpoint one of the cheaper parts out market. what can they deliver going forward? that is to be determined from there. >> oil, energy. i mean, is that a place you want to go, as well? it's starting to perk up again here. >> well, you know, look. on the energy front -- >> some of them pay hefty dividends, too, you know. >> can they continue to pay them and for how long? i mean, look. in the energy part, especially with crude oil and where it's trading it is still a commodity play and so to the extent of one comfortable with that, making that call, so be it. on a longer term fundamental basis, factors come into play for that area. >> you're tough to please. i can tell. good to see you. >> you, too, bill. >> thank you so much. take a break. the dow down 66 points. we have the closing countdown coming your way. after the bell, black island, it is known as an east coast play land for boaters and beach goers but soon may be known for wind energy. that story just ahead.
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we are having fun. with the dow moving down. there are two reasons lately why stocks should have gone higher today. here's one of them. crude oil. wti, for example, continued moving higher today up another
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almost 2%. $46.50. the other, yields went up. so they sold bonds and often when they sell the bonds, the money has to go somewhere and put it into stocks. yield on the 10-year up to 1.57 today. but it didn't happen. here's all three of the major averages and just yesterday hit all-time highs. today, moving lower. >> well, it did happen if you look at the sectors, though. put up the market leaders here. we have energy stocks on the upside. >> yes. >> because of what happened there. bank stocks upmost of the day and turned negative here on the higher rates. they would have done better. other than the initial part of the earnings season, jp morgan reporting, they moved up and sort of haven't been and market leadership and steel stocks fairly well recently and what's not doing well is telecom and utilities and again today they were laggards. >> as interest rates went up.
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>> still seeing a continuation of a trend. that is, tech stocks still market leaders. energy are trying to be market leaders as oil is over 45 and the defensive names particularly dividend payers of utilities and telecom lagging. so even though the markets aren't doing anything, we're still seeing the continuation of the sector trends. >> higher the vix today. >> yes. the vix, people ask me about the vix and bottomed at 11 a few days ago. folks, i don't think we see 11 for a while. that's because we're going into september. the vix prices out volatility 30 days. in september, the volatility picks up. look at the futures for september. 11 or 12. they're anticipating the vix will be 15, 16 and 17 in september, october and november. so my bet and i don't normally go out on a limb is 11 is not seen far while on the vix. >> all right. we have that on videotape and i'm going to get you to sign that, as well. there you go. >> happy to put my name on it.
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>> you got it. thank you. we go out for the day. and the s&p and the nasdaq also lower. life story here at the new york stock exchange with limelight networks ringing it at the nasdaq. stay tuned now for hour number two of the "closing bell" with kelly evans and company. i'll see you tomorrow, kelly. thank you, bill. welcome to the "closing bell," everybody. i'm kelly evans. after record highs yesterday, stocks taking a breather today. the dow down 82 points on the bell. the s&p down 11. nasdaq down about 35. that gave up two thirds of a percent for that index there. keeping an eye on the dollar today, as well. a big decline and getting to more on why that might be happening in a moment. down below 95 and helped crude oil stay in the green adding nearly 2% closing at settling earlier about $46. so it's made a comeback and one
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thing that's supportive of the markets. cnbc's senior markets commentary mark santli here on the set and senior fellow susan ox. welcome. bob dole and fast money trader david seeberg with us this hour. welcome to both of you. mike, first, though, we have a lot of movement today, nlg, small and absolute basis and potentially significant. >> on the macro side, seems like a shake-up than evident in the major stock indexes. market is unable to have any downside momentum more than one day. right? we have had this pattern last several weeks and not built upon the dips and i think today's action is an occasion to assess the fact that a lot of things went radight to get us here. it's losing a tail wind of everybody negative. yields are going up and affects the relative dividend trade and
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make you wonder how much fuel is left in the tank for this phase of the move? >> the fact that stock markets been at an all-time high in august is a good sign of a landslide election come november and at this point the polls would point to hillary clinton but, you know, there are a lot of people even who will look at the markets saying when they start to sell off, you see trump coming back in the polls. i mean, there's so much more at stake than usual. it feels like with what is happening across all of these markets. >> i think that's exactly right. think about this is kind of a landslide sort of feeling election. right? feels like an earthquake already and we still have three months to go and people talk about the fed and interest rates, there's no way six weeks before the election and could have dramatic shifts in government, not just in the presidential election but the house and the senate, the senate looks likely to flip and a possibility the house might flip, it could be huge shifts and what happens in d.c. and what we see coming out in terms of fiscal policy and no way the
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fed moves in september. there's a chance of december and september not a chance. >> do you agree with that, bob? >> i do. i think we don't have enough evidence that the fed is looking for that it's time to go. they keep preparing us and cold feet. december is earliest in my view. >> going once a year. i mean, that's extraordinary from a historical point of view, right in when's that do for rates and the sort of assumptions built into the market? >> well, let's just hope they're able to go more than once a year. that would absent that means the deflationary force that doesn't want to go away is with us. i'm hoping to get to the point it doesn't take four years to raise rates by 100 basis points and i think nominal gdp, real gdp, job growth, wage gains, all support a move more than 25 basis points a year and hopefully starting next year.
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>> hope springs eternal. david, what are you buying in the meantime? >> first of all, i agree. how much gas is left in the tank? mike made the point earlier and we're at a point of stocks look overvalued. i believe the yieldy names and people chased up here are too far too fast and i said that over past several weeks. you can look at the nuggets saying when things change, rates go higher. look at the banks. i think we have talked about it on the show. i believe the banks set up, you know, for a zhe cent bounce. you have to look at the quality names in the bank sector. >> you must be -- >> yeah. >> on the banks. getting into morgan stanley, david? >> absolutely. we talked about jp morgan, even mang of america and the stock at 14 bucks, 13.50 bucks as a play to benefit from this apgs of a rate move. you know? and toward the end of the year. they won't move. no way they move.
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before the election. >> all right. >> so i think you can -- you've got time to put that trade on, if you will. >> fair home 2 upping the position of 50%. people are starting to look at these and say, hey, you know, there's an argument to be made for the valuation, for the earnings potential and might not be great but relative to where they are now. >> this is the business we have. if we have a hope in a decent year of getting 6%, 7% return? n it's an un-exciting bull case and where you're left if you're an investor looking for kind of large cap value stocks right here is you don't want to make a big macro call and seems like they're sitting there for you. >> if you look at where -- how we have got on the the point, almost a decade, nine, eight years since the financial crisis. the economy's still expanding although it's incredibly slowly and i don't know what that means for the way that people
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expecting rotations in the stock market but it feels you have to throw the assumptions out the window. >> it is starting to feel like that and see people the san francisco fed are saying maybe inflation works differently and rethink assumptions. i would say on the financial sector that's right overall and you have to be a little bit careful of exposures and hearing about subprime auto loans. deter yags in credit quality in that sector and other places and be careful and the way i know we have hit a peak in the subprime auto loans, jon oliver did a 17-minute segment, an eternity in television, a 17-minute segment on subprime auto loans and 2.5 million hits on youtube. >> wow. >> crossed into the mainstream and tumble quick. >> i'm interested of advance auto parts but they were under pressure this morning. >> smaller -- consumer finance companies with the exposure terrible stocks. i do think there's a larger question of have we had no real boom in the financial sector?
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and yet now we have kind of used up the credit cycle. >> which is odd, bob, going to home depot and reported earnings this morning, their read on the consumer is healthy. granted a subsection of the whole economy but how do you account for kind of a bifurcation we are seeing here? >> the consumer is bifurcated, as well. we have the smart consumer as people say. not buying everything. they're buying some things. they're buying homes, remodeling their homes. buying cars at reasonable rates this far in economic expansion. because more of us are working, wage rates are beginning to move up. i think the consumer is a good place to be. and home depot and lowe's are good examples of places that will continue to grow. >> all right. let's get to some news here out of china in the meantime. foreign investors finally on the verge of access to china's tech heavy and volatile stock market. seema mody has more. >> that's right.
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foreign investors given the green light of stocks directly on the composite, the world's seven largest stock market with a lot of fast-growing tech names in china. a link adds stocks to the already available to international investors through the shanghai link. it will also allow chinese investors to more easily buy offshore and diversify their portfolio. long-awaited approval of the shenzhen trading is -- this move also signals that the leadership is focused on liberalizing the financial markets and analysts say it raises an index tracker of accepting and did reject earlier this year. but keep in mind, the lack of success in the already running shanghai interlink suggesting investors are not in a rush to get exposure as the country continues to struggle with turning around the economy and
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tackling the credit problems. of course, kelly, the big question is whether that's different for this link with a glimpls into the high growth tech names. >> exactly. thank you. david, i'm just wondering whether you think -- china is rallying here quietly. this opens up new investors and listen. it also means there's focus in terms of how transparent and trustworthy that market is. >> no question. i worry about that market. i look at a casino in my opinion. but the endorsement is huge. you know? we talked about it here. when they got the rejection, once that gets through, i think that's almost an endorsement on that market from the standpoint of security, standards, reliability and trust factor and going to open the gates to a lot more investors jumping on board. that in my opinion is the lynch pinto wait for, kelly. >> bob, what would you tell people about china now? it's a place that people piling in have specifically avoided with the trouble we saw over the
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past year. you know, does that mean that it's an opportunity? a cautious one or what do you think? >> yeah. casino's a good word in my view. when you get a market's pretty detached from the economy it is really hard to call it. i would rather play other emerging markets where china is important to them to serve that are marching to their own drum beats related to their economies. china i still would be a question mark for me. >> mike? >> yeah. i completely agree. you point out that investors have explicitly kind of carved out the china equity market. i think that's not going to change. this link is a big help to integrating it and people given themselves permission to not really participate or see it as a bellweather of what's going on in the chinese economy and when the markets are nervous about anything, china is always there as a handy worry. in other words, doesn't have to be something new and wrong with china. it is just there. >> comes back to the fore. we haven't mentioned it. worthy of a quick mention.
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the japanese yen keeps getting stronger against the u.s. dollar. and one of those things you want to talk about risk appetite and markets? suzanne, usually not a great sign and fed and meeting here a little while and see the dollar trying to make sense of this, rates are creeping -- it's peculiar time. >> it is. mike an i were just joking part of it feels like '80s and redux and trade wars, you know, a lot of sort of weird redux kind of feeling going on and i think it is a little bit hard for people to make sense of this. >> on that note, the markets taking a pause today after a record setting day yesterday. bob and david, we'll let you go. thank you for joining us. >> thank you. >> really appreciate it. want to show you live video of wildfires, more wildfires in california. this in devore, california. east of los angeles. look at the size of that. officials estimate it touched more than 1,000 acreser and concerned to continue to spread through to winds and low humidity levels. it's already shut down
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interstate 15 in both directions. there were no immediate reports of injuries, however. man, i mean, one after the other after -- you know, 1,000. how many homes destroyed here? now just -- >> it's annually. in august we get it. just a matter of how bad it will be. looks like a rough one. >> devore, california. we have a news alert on tudor investments at headquarters. kate, what is happening? >> kelly, i'm here in 30 rock in the city and tudor investment corp. known for macro investing, laying off scores of workers since friday. at least 60 people have so far affected by the layoffs from what i'm told by multiple sources. one of the people told me they could reach 100 employees out of a total of just over 400. that the company employs according to an s.e.c. filing dated in march. this comes when performance suffered. according to a recent hedge fund
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report through early august, the flagship fund down about 2.5% so a couple of different issues here. as you may recall, kelly, earlier this year they trimmed the investor fees and weathered redemptions. difficult times in hedge fund land and a case in point today. >> kate, what would you say is the main problem here? is it, you know, macro moves that didn't quite work out? more process oriented? >> you know, from what i'm told, general performance concerns and some people had pointed out to me 400 people for a company like this is on the large side. now, then again, they manage many billions of dollars and depends on the structure and what you are doing. in terms of investment issues, i don't have a ton of color on that of today's news and paul jones himself said it's incredibly difficult to trade in these markets. particularly in his world, right? as you know, macro could be everything from stocks to currencies to commodities.
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jones himself has a commodities background and when the central banks stimulate the economy or try to, in unexpected ways on a tuesday or thursday, very hard to hedge for that. i think it's a hedge wind and you have seen really middling returns. i mean, tieu dorr in the black for two years and looking at this. low single digits, though. this year, they've been under water for much of it. >> kate, thank you. again, reiterating, been a tough environment for a lot of hedge funds. >> it's -- >> i just think it's ironic that we're in an age where central banks are doing everything they can to communicate more with markets, to signal their moves, i mean, they could not be more transparent than they ever been and still having these probables. >> transparency potentially around for strategies since the '80s or before, they used to be able to sniff things out and used to be able to get ahead of markets and predict what the central banks were going to do and now transparent, we are just going on the announcement, on the statement. i'm not saying that's what
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happened with tieu dorr but they had big youdowns, periods and things not working and came back. i don't know if it's a matter of investors keeping them on a shorter leash, fazing out. i don't know. >> waiting for a snapback. etna announcing plans to exit the majority of the obamacare exchanges next year and what it means for the future of obamacare and whether prices could soar with fewer competi r competitors in the marketplace. a 38% drop in shipments of q2 s. that an opportunity or a red flag for apple in the chinese market? that's later. ♪ ♪ 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.
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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? goodbye 60/40, hello 50/30/20.
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welcome back. had some earnings here after hours. let's send it over to smee ma mody. >> shares of urban outfitters are moving after hours. improved merchandising margins, earnings coming in 10 cents higher than consensus at 66 cents. revenue, too, topping street expectations at $890 million. the ceo said urban outfitters and group brands delivered lower merchandise markdowns compared
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to the prior year and the stock up about 8% in extended trade, kelly. >> thank you. it is interesting. a counter trend move here. i don't know what's going on with the retailers. they have been unloved enough? >> many of them unloved enough and 1% comps is magic. >> 8%. >> at home depot and tjx today and good parts of retail who reported pretty good numbers and not enough to keep the stocks up. >> tjx especially. it's god to see urban saying that they feel okay. etna becoming the latest large health insurer for an exit of most obamacare markets. bertha coombs has the latest. >> it's still committed to the exchanges but the company just can't sustain hundreds of millions of dollars in losses. so they're pulling back by 70% nationally next year. they're going to be just in four states. that's down from 15. those states will be delaware,
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iowa, nebraska and virginia. but etna's not alone. this follows moves of humana and aetna trying to merge with and united health announcing the departure over losses last spring. united health is going to be in just three states in 2017. that's down from 34. aetna in four down from 15. humana in 15, do1 down from 15. anthem in 14. this is time when insurers trying to finalize the plans. caroline pearson says this now is going to throw in flux insurers already staying on the exchanges because they have to figure out what it's going to mean for them if you have thousands of people losing their carriers suddenly looking for new plans. are they going to have to raise their rates? hhs says there's still plenty of
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competition. they note that in georgia, for example, even with the departure of united and aetna there's five carriers but again some of them have to rethink what their rates are. the kaiser family foundation says with aetna's departure you see one in four counties nationally of one insurer choice. and the biggest impact is going to be in the rural counties which always had the hardest trouble attracting more carriers and more competition. some 460 counties will have just 1 choice. that's up from about 225 last year. of course, longer term is the issue. how much longer will these insurers stay in? a lot of times it's the non-profit blue cross blue shield that is the major player in these counties that have just one insurer but they, too, are suffering from losses in many
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cases and analyst for the industry says, you know, how much longer can they hold in there? as the big guys continue to depart. >> yeah. susan, we talked to a guest last hour in florida saying he didn't think they were locally enough focused and the execution wasn't there? >> could be part of it and another part of the story is aetna pulled off exchange. they used to offer individual plans in new york and canceled those starting the year and i'm an independent contractor and i was insured by aetn and nothing to do with the exchanges and something going on in the individual insurance market for health care i think the economics are really tough right now, even at the high end plans. >> it feels, mike, like the health insurance space has become more uncertain. >> the aca had so many kind of compromises, complexity and state based and not obviously anything as radical and
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overhauled the overall system and using the existing insurers and seems like the misplaced incentives and the economics are not really working out for everybody. you know, medical cost inflation, health cost insurance premiums of measured inflation. >> president obama saying in one of the medical journals effectively saying public option is probably next. bertha, thank you. bertha coombs with the latest update. xiaomi has often been called the china apple. that's next. and the nation's first offshore wind farm will start producing power this fall. coming up, a look at how big this market could be and which companies may be the big winners from wind.
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university partnerships, and the lowest taxes in decades are creating a stronger economy and the right environment in new york state for business to thrive. let us help grow your company's tomorrow- today at chinese phone maker xiaomi is still selling an out of phones and sales shrinking. meanwhile, apple ceo tim cook promising to boost investment in china. is there room for everyone in the china smartphone market? let's ask our own jon fortt. xiaomi was a success story and seems to have flipped almost overnight. >> well, kelly, it's the danger in zero margin hardware and in effect what xiaomi is doing. they're selling the apps and the ecosystem around it. no, i don't think there is room for everybody. i think the smartphone market on a lot of levels is shaping up to be a lot like the pc market
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before it. in china, as well as in a lot of other areas, we are seeing pcs come mott diazed and turning to marketing, to celebrities, to endorse their phones, that's an area of spending that xiaomi didn't have in the past and doing more of now and apple had a steep sales drop, 31.7% compared to xiaomi's 38%. though apple pointed out in the earnings call, they reduced inventory during the quarter so that number looks worse than it actually is. and then, also, keep in mind, apple's margins are great. so to the extent that apple's still selling phones, making money on the phones over there. operating in a different reality than a lot of these other phone makers. >> the question, guys, is if xiaomi's market share 12% and can apple reverse that or is this it? is the struggles of xiaomi necessarily good news for apple? >> just exactly can apple expand
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or i guess engage in that segment of the market that seems to be not all about, you know, kind of lowest common denominator pricing? probably expandable. i think apple's relatively new of being all in there and not something to kind of gobble up lots of market share and maintain the margins that they have. >> jon, it's apple's own numbers in the period weren't much better. >> yes, but they sold through fewer -- sold in fewer phones because they had an inventory of iphones already that they kind of sold through if that makes sen. selling what was in stock and didn't ship as many into china and the numbers looked rough and i would also say apple works in a different sort of market growing with the middle class in china and along with the expansion of lte faster wireless in china to open up the demand for iphones so they're not really in a market share battle. they're more in an ecosystem battle and too early to say that apple is faring poorly based on the type of customer it's going
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after. >> the shares of rebounded nicely of late and still just under the $110 mark and how much do you think they're getting credit for doing well in china or have people written it off at this point or an important part of what's built into the shares? >> still important and you hear tim cook more and more pointing to india as a market with a lot of growth potential and now instead of just talking about china, he talks about china and india and you have apple having expanded to 41 retail locations, now in china. they're a significant employer there, building out that ecosystem. they have this investment now in dd that has the what was a rival to uber until they baugt it out and making investments in the market and room for them to continue to grow. they got a lot of credit for it in the past. i think they're getting less credit now probably than they deserve given the infrastructure that they have in that market and the potential that they still have to grow. >> yeah. so competitive as you said. all right. thank you, jon.
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appreciate it. making jon work overtime for us here on "closing bell.." time new for a news es updae with sue. the fbi has turned over a number of documents related to the probe into hillary clinton's use of a private e-mail server while he was secretary of state. the staff is reviewing the information which is classified as secret. a fast-moving wildfire that we showed you earlier charred more than 1,000 acres in devore, california. it started this morning. it shut down interstate 15 in both directions. so far, no reports of injuries. brazil's suspended president dilma rousseff said the impeachment would be a coup deat the and calls for early elections. she is widely expected to be impeached and removed from office permanently late they are month. johnny depp and amber heard
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settled their contentious divorce a day before a restraining order hearing scheduled to begin. heard withdrew the allegations depp is physically abusive toward her. nothing like a deadline to get things done on that front. kelly, back the you. >> exactly. thank you so much. "time" shares down today despite an activist taking a stock in the publisher. the stock is down and is it a value play? we'll ask next. are bitters lining up to get gawker's assets? we'll look at who could buy the company and why they might want it later.
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[ clock titime. ] you only have so much.
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that's why we want to make sure you won't have to wait on hold. and you won't have to guess when we'll turn up. because after all we should fit into your life. not the other way around. welcome back. a look at how we finished on wall street today. we saw the s&p drop 12. the dow down 84. nasdaq down 35 after yesterday's record setting day. now, gawker media on the auction block today after filing for bankruptcy due to a $140 million judgment in the privacy lawsuit of hulk hogan. julia boorstin joins us now. julia, with who might be interested in buying the digital media group. >> reporter: kelly, there are two bidders in the running.
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ziff davis and univision. we should hear the results of the auction any time between now and midnight eastern. ziff davis had an opening bid setting the floor for the auction. the publisher agreed to assume some liabilities and not the $140 million in damages awarded to hogan as well as peter tiel. it would fit into the portfolio of tech and men's lifestyle magazines. ziff davis agreed to keep gawker founder on as a consultant if it does win the auction. now, univision had been in talks with gawker about a potential investment in the company before the trial with hogan began. they have been ramping up the online portfolio. in january, it bought a stake in unyn and then buy out fusion of disney and co-founded with disney in 2013. gawker would fit in with those and univision's other sites
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including the root. now, we'll have to see if univision paying more than the $90 million that ziff davis is whether it will want denton to stick around to help with the other brands. back over to you. >> yeah. i mean, univision? all right. julia, thank you. shares of an older media property lowered today, time, inc. it's taken less than a 5% stake in the company. as it's seen the market cap diminish with changing ways of traditional media, what does any activist firm think to accomplish with this company? let's bring in ken squire. thanks for joining us. is there any synergy of the "time" and gawker stories today? >> i don't think there's any synergy there. but certainly, "time" is -- could be a potential takeover target. >> and is that the idea in terms of why they might be interested? >> i don't think it's the main
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idea. they like to have multiple ways to win so, you know, they see an undervalued company. management's already starting to do the right things, starting to transition to digital and cut costs and if that -- that unfortunately, hasn't created shareholder value as the stock is down 40% from the spinoff two years ago and creates value for the company, great. if not, we have to put consolidation on the table. >> ken, basically, it's likely potential sale of "time" or maybe it works under the current strategy, in other words, not really enough corporate structuring maneuver that they could do out there? wouldn't seem given the mix of businesses at "time" that janet might advocate? >> could be but, you know, we remember when this was spun off two years ago, right before that, meredith corp. publicly detailed reports of them wanting to buy this business. and the business was worth a lot more then than it is now and at least the price of the business. meredith's stock up 20% on the
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news that they might buy it. they ended up not buying it. you could still definitely see them interested now. >> ken, we just had up on the screen before all the titles that are part of the "time" universe, "sports illustrated," there's good, popular, strong brands here. is there a possibility to think about maybe spinning out some of those brands to other buyers individually? >> possibly. in the initial meredith interest three years ago, they weren't going to take all the brands and some of the really -- the best brands kept with "time." i think anybody that comes in wants to take all the brands. >> yeah. goes back somewhat to what verizon's been doing and others which are, you know, are they looking for digital properties that might be attractive to kind of, you know, roll-up as it were? or, is this more about the opposite which is just trying to pick the winners and most attractive names across a platform these days?
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>> well, you know, there's not been a lot of consolidation in the magazine industry like there was in the newspaper industry and when -- headwinds of the industries have gotten sometime this is's really the best option. there could be a ton of synergies between a strategic investor and time, inc. and with the 20% free cash flow yield, private equity would be interested, as well. >> that's a point. thank you for now. >> thanks for having me. >> ken squire. we have a news alert on barnes & noble. when's happening, seema? >> board of directors announced the departure of the chief executive officer saying here in the press release that the board of directors determined that he was not a good fit for the organization and that it was in the best interest of all parties for him to leave the company. the company's executive chairman who was scheduled to retire at the end of the company's annual meeting on september 14th will postpone his retirement until a later date. however, the company will
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immediately begin an executive search for a new ceo. shares are down just i guess 1% after hours but big picture here, this is a stock that is up about 50% year to date as the company tries to turn around its focus and, of course, this retailer that continues to face competition of amazon and other online players, kelly. >> exactly. but, i mean, i'm personally rooting for him. >> store by store basis, think seem to actually have pretty good economics but going into a barnes & noble, it's less an less books. >> yeah. finally got a kindle. i buckled. i love it. >> personally your fault. >> totally. >> not even a nook. >> exactly. not even a nook. >> pretty short turnaround, though. came in november 2015. that's a pretty quick turnaround for him to decide this is the wrong guy. >> probably little bit of a tough mix. >> not a great fit. all right. wind could be the future of
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u.s. energy. up next, a look at the first wind farm here in the u.s. offshore and powering a northeast island. later, vying for the gold. how they're courting athletes in the quest for olympic glory. you're watching cnbc. pass pass
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welcome back. wind energy is already huge in europe but it's just starting to get fired up here in the u.s.
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the first offshore wind farm is set to get started this fall. our jackie deangelis is in block island, rhode island, with a look at how big the wind market could be. jackie? >> reporter: good afternoon to you, kelly. that's right. you know, in some ways this is a small step for alternative energy because the wind block only generates 30 mega watts of power, relatively small, but very impactful because it's the first one of its kind in the united states. now, deep water wind, the company behind the construction of this five tough bian $300 million project says that now that the blueprint is done, it coproceed forward with other projects. in fact, planning the next project now. an offshore wind farm between block island and martha's vineyard to generate 1,000 mega watts of power for long island. wind energy is expected to see tremendous growth over a decade. the department of energy says nearly 16,000 mega watts of offshore wind projects in various stages of development
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now and also seen some opposition. they face heavy regulatory approvals and communities sometimes don't embrace them. a project on martha's vineyard shut down when well think homeowners didn't want in it their backyard. now, here on block island, opinions are split on this subject but the project has moved forward and as i said it really is a massive step forward in some ways for the alternative energy industry, not just for wind. but, you know, competing with solar and investment opportunities that lie ahead, kelly. >> thank you. she mentioned how controversial some of these projects have been. people say, you know, i want the electricity of renewable source and not see these things off my coast. >> yeah. that's obviously always dogged these projects. aenlg, you know, talking to jackie about this earlier, seems to me when they put up telephone poles and electric lines they're not pretty. >> did they kill birds? >> or did the people who were going to complain not have the money and influence to do that?
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honestly, did the economics of it work? >> that's the larger question for wind energy this country, susan. >> i think so. it feels like a fixable problem. the telephone poles and other things and paint them blue to blend in more. safety issue. but i think the economics is the big driver. and, you know, as we have seen with oil prices so low and fracking so plentiful right now, i think it is a harder position for alternative fuels right now. i think as oil prices start to rise, fracking is maybe slowing down a little bit, we could see more interest in wind pick up again. >> by the way, a reason and coming back to new york city, the crazy of a heat wave, been able to keep the power going by evening out its distribution, an area of wind and solar could become huge. able to just jump in there and feed the grid if you were. but they're often supplemental and rarely stand alone. >> for sure. big, big picture, does it hurt
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to have this extra source out there? passively taking it in and storing energy or transmitting it? no, probably not. >> i don't know what the case in these days but it was so successful in germany they kept the lights on all night to use the power generated by the wind farm. >> great problem to have. >> see if block island has the same thing. sometimes it takes a lifetime of hard work and dead kigs and now some nations circumventing that system. those details are next. mornings.♪ (peyton) you know with directv nfl sunday ticket you can watch your favorite team no matter where you live. like broncos or colts. (cashier) cool. (peyton) ah...18. the old number. ooh. i have got a coupon for that one. (vo) get nfl sunday ticket - only on directv. and watch live games anywhere.
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you know what, guys? there's a lot of tree branches and dry brush over here. we should probably move the bonfire over there. [smokey whistling a tune] i'm guessing smokey liked that idea.
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welcome back. oil countries are going for the gold by wooing athletes of other nations with big incentives. eric is here with more.
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>> that's right. if you noticed sunday and monday, a couple of athletes from bahrain got olympic medals in track &field events and that's rare for bahrain. monday's winner in the deal?
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>> there are a lot of rule that is relate to the home country, if they want to veto you, you have to wait three years rather than one year. you have to be a citizen of the country you compete for. they're renouncing the citizenship and then becoming citizens of bahrain and getting contracts, financial stipulations, lifetime guarantees, plus more money if they win certain events and you have a lot of interesting stories because a lot of them change their names and one guy said at a lower level running for qatar, bent down and did the sign of the cross and they said you can't do the sign and had an arabic name and he didn't know and couldn't find the name on the board and forgotten what his qatar name was. he only knew the kenyan name and so there are a lot of games going on here. but if you -- >> i'm surprised that it happens, just so -- maybe this
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is just one country but the fact that -- >> bahrain, qatar, turkey, uae. across the middle east. bahrain did the best job of it in this olympics but qua far started doing this about 10, 15 years ago and bought an entire bulgarian weightlifting team. one of them won a bronze medal in the olympics and his name was originally angel popov own won it as assad as a member of the qatar weightlifting team. >> you want it flow freely across borders? they can only do it in the smaller events one would assume, right? if bahrain decided to buy the women's gymnastics gold medal, they couldn't do this. >> it works in situations like nigeria and ethiopia or kenya and hard to make them because only three people per country and depth of talent and the countries are poor so you can grab people who are just as good and they can make your olympic team. qatar had a handball team f. you
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look at the rosters, the names of who's on the team. fernandez, for example. pretty sure he is not from qatar. you can do this in a lot of sports. probably not basketball in gymnastics but track & field, for sure, so many events to round up medals. >> on some level, think about the athletes and don't get the big sponsorships and contracts and not funded in terms of training s. this such a bad thing? >> it is perfectly fine if you're the athlete and be careful because you're an employee and one athlete from bahrain ran a marathon in israel and said some nice things about israel. the people in the top brass didn't like that and renounced his citizenship and he had to beg kenya to let him be a citizen again. tough play by the company rules. >> yeah. yeah. paying closer attention -- >> careful about the medal tables. >> i remember the world baseball classic, major leaguers sort of one distant relative of another
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country. >> greece with the american guys. >> eric, thank you. let's send it to over to see seema mody. >> a couple of stocks under pressure. cree, 19 cents versus estimate of 20 cents so a miss on the bottom line. revenue at $388 million. did, though, top street consensus. the stock, though, you can see down about 6% in after hours trade. it was focused on nat gas, southern company, announcing a secondary offering underwritten of 32.5 million shares of the common stock which through this expects to raise gross proceeds of $1.6 billion and we're looking at shares down about 1.6% in extended trade, kelly. >> yeah. seema, thank you. it's interesting to see them taking that in stride. >> for southern company. >> for southern. >> a discount but not too much. the utility managements seeing the stock prices are trading an saying it's really not a big
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obligation of dividend payout on the shares relative to what they can borrow at. makes sense for the companies and for now the market's accepting it. >> southern trading at all-time highs day after day after day. markets are finishing lower today after record highs yesterday. will the losses push into tomorrow? what to watch for, next. it's a question we get from some of our largest banking clients. the face of their business was tellers. then atm's. today it's their mobile app running on the ibm cloud. across every transaction, the hybrid cloud helps their data move quickly and securely. our clients are building out features and pushing updates faster, on five continents. with the ibm cloud, they can move at the speed of any start-up. with the ibm cloud, this car is traveling over 200 miles per hour. to win, every millisecond matters. both on the track and thousands of miles away. with the help of at&t, red bull racing can share critical information about every
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welcome back. keeping an eye on earnings which continue this week especially for the retailers. urban outfitters reported this hour and the stock doing better after the 1% comp increase outpaced expectations. what are you focused on? >> broader mainstream retailers, actually, probably something this people are going to seize on. not really just to get a gauge of the con surmer and see if it's a group to sort of take the fore now that we have the yield sectors backing off. >> also the fed minutes coming up. as an analyst said this morning, hard to see how they're more hawkish than dudley was and seemed to indicate full steam ahead, really. at least with one more interest rate hike. >> he said it's possible. you have to interpret it through fed speak. we have jackson hole, next friday. janet yellen is making -- giving remarks. again, i'm not looking for a raise in september but i think
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what she says about their expectations for a second half gdp will be important and specifically about inflation and what she is thinking about in terms of wages and other things and the tea leaves to read. >> worth mentioning the consumer price index this morning coming in subdued relative to expectations, the core still up 2.2% on the year. not the main gauge but -- >> it is not but actually the cleveland fed maintains the median cpi and basically the median of all the product categories and also at a new high, more than 2.6 so it's basically the trend is heading in that direction. not getting there fast and about how the fed chooses to interpret that. >> third quarter atlanta fed tracking figures look pretty good. 3.5% or something. so you put a couple of those pieces together, you look at the a stock market at all-tile highs and probably a few officials -- >> i think that's what dudley was saying. they don't want the markets too, too comfortable with the fact they're out of the game. >> a lot to look forward to. that does it for us for now. thank you so much for joining us that the hour.
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again, markets taking a pause today after all three major averages set record highs yesterday. we'll see what happens come tomorrow. that does it for "closing bell." coverage of the 2016 olympics from rio is next. ♪ hello, welcome to the olympic velodrome in the heart of olympic park. we are awaiting the final race of women's


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