tv Closing Bell CNBC August 30, 2016 3:00pm-5:01pm EDT
it a 17 in rio, i think. >> not the east german. >> thanks so much for watching "power lunch." >> "closing bell" starts right now. we pay all the taxes we owe every single dollar. we not only comply with the laws, but we comply with the spirit of the laws. we don't depend on tax gimmicks. we don't move sintellectual products offshore. we don't stash money on a caribbean island. we don't move our money from our foreign subsidiaries to fund the u.s. business to skirt the repatriation tax. >> that was apple ceo tim cook back in 2013 testifying before congress about the company's tax practices. today a new page in the tech
giant's tax story. welcome to "closing bell," everybody. i'm kelly evans at the new york stock exchange. >> i'm mike santoli in for bill griffe griffeth. the european union says apple must pay ireland $14.5 billion in taxes. ireland doesn't want the money. we have got the latest developments and someone that says it threatens uncertainty of businesses in europe. >> apple shares down nearly 1% on the developments. boeing, meanwhile, deciding not to raise jetliner prices for the first time since the financial crisis. see fed officials shaking their heads. we'll have what it means about the broader economy. gold prices slowing down after a big rally year to date. is the gold run over? we'll debate it coming up. after the bell, sean combs will join us live here on set at new york stock exchange after ringing the closing bell to talk about the latest business ventures and the music industry. stay tuned for that next hour. let's start, though, with apple's tax bill in europe.
jon fortt with the latest developments. he joins us with josh lipton looking at apple's recent battles of big government everywhere. jon, start things off. >> all right. well, eu regulators says apple owes ireland $14.5 billion and ireland says, no, they don't. eu regulators claim apple paid a tax rate on 10 million euros on $16 billion in profit. they say that's based on 2011 figures. apple in a call with journalists refuted that. cfo called it a completely made up number pointing out apple paid $400 million in ireland in taxes in 2014. 40 times the number regulators used and the profit number he said was too big. so what it comes down to is this. when is a country entitled to corporate taxes? where it's designed or sold?
apple argues that it's been based on where it's designed, the value added and that's in the u.s. and earmarked the overseas cash to return to the u.s. of course, apple's critics in the u.s. love to see it repatriate the cash. apple said they won't at 40%. but everybody wants their hands on the money, mike. >> absolutely. except for ireland. jon, stay right there. let's send it over to josh lipton for a look at big battles against governments around the world. >> when you're the world's biggest company by market cap, you have a big target on your back. and it's not just the eu, of course, earlier this year, cook went head to head with the fbi when he refused to help the government unlock the phone used by the san bernardino terrorists. remember, cook said that would have threatened the security of his customers. also, he argued that building a version of ios that bypassed security would have created a back door. and then there's china and apple is also facing challenges with
the government. apple's top lawyer bruce sewell told congress they've been asked in the past to hand over the source code but the tech giant has refused that request. separately, regulators suspended the company's online books and movies businesses. we know that cook takes stands he believes are principled and right and not willing to back down and finds himself at odds with regulators and lawmakers all over the world. those are fights that cook is clearly willing to have, though. guys, back to you. >> guys, stay right there as we bring in a professor of law at georgetown university. thank you for joining us. and with regards to the case in ireland, do you think the eu or the ec is overstepping here, professor? >> well, i think fundamentally these investigations are both unjust and threaten tremendous uncertainty. both for businesses around the world and also for eu governments and for the united
states. the issue isn't whether apple is going to pay more taxes in europe. it will. as will other businesses. but the problem here is the retro activity. the fundamental issue is that this kind of action that the european commission is taking is unprecedented, novel and was totally impossible to anticipate. they're using a part of eu law in a totally new way and then going back ten years and asking apple to repay an amount that it never would have accumulated in ireland had it thought that this particular rule would apply. so, there's a fundamental problem with rule of law in the retroactivity and then the other thing to consider is that because of the way the u.s. tax system works, where we provide credits for taxes paid abroad,
effectively this money suspect out of apple's pockets but u.s. taxpayers so the situation that we face is this is basically a $14.5 billion transfer or maybe up to $14.5 billion transfer of u.s. taxpayers to the european union member states. the commission says acted illegally. the claim is not that apple did anything wrong. the claim is that ireland did something wrong. and yet, the remedy, the remedy for ireland doing something wrong is to take money from apple. all of which is at best unseemly. >> perhaps that one wrinkle is why the u.s. treasury is actually voiced its opposition to move, as well. jon, though, it seems to be a huge pool of profits on this planet at very low bottom line effective tax rate. how do we square that with the fact they say they pay the taxes they need to pay exactly?
shouldn't we we expect jurisdictions around the world to target this pool? >> that's the issue with a pile of cash, that big, more than $200 billion, eventually people notice. and technically, i think what apple is saying that we have this pile of cash, a portion of it earmarked to return to the u.s. but they're not required to do that at any particular time and the u.s. set a press department with tax holidays and certain periods. a discounted rate to repatriate cash at 40%. why would they want to do that? especially with talk about a break on repatriating cash and the tax rate would be. there's a pile of cash that a lot of different countries are trying to get at it with different justifications. apple says we are following the letter of the law here. tim cook argues even the spirit of the law and ready to pay the tax. just work with us here. >> briefly, professor, what would you recommend to apple let's say for example if they feel that they can not trust the
regime but need a european base. is it important enough to go to britain and get under the boot of the eu? just swallow this? what do you think happens from here? >> well, i mean, you know, i think that apple will engage in restructuring as it sees appropriate. from the perspective of the united states, the important thing to understand is apple's position is basically we didn't get a sweetheart deal in the sense of a special deal. ireland might have given them to everyone but we got the normal deal and the deal they got was not at the time of apple one of the largest companies on earth. it was a period of time when they were actually struggling and a mid-sized company. so the reality is this is a deal that everyone could get which means that from the u.s. policymaking perspective, this is a precedent that's relevant to all u.s. companies. if the commission can do this to apple, they can do this to all the u.s. multi-nationals and the
entire amount of corporate income that is offshore because of our ab rant tax rules and totally broken is at stake. >> josh, that was why i was going to say to you, must be sending a chill not just for apple up their spine but silicon valley, too. >> yeah. i'm not so sure, kelly. i mean, to me this looked pretty targeted. going after apple. it's also retro ast active. i talked to others who not only cover apple but the coverage universe, amazon and goog. google. they say it looks targeted. for apple, listen, not a lot of worry. look at the stock move there. i think they realize the math. 14.5 billion. ryan white saying apple can do that in cash every 76 days. and also, just the time line. i mean, potentially talking about years from now a lot of work for a lot of lawyers on
both sides of the atlantic. i think investors, apple investors, probably more focused on when's happening next week at apple's big event here in san francisco. >> fascinating. josh, jon, professor, thank you for joining us here. incredible story. again, apple paying $14.5 billion perhaps and the share's down 1% on the news. >> and weighing on the dow. turning to the broader markets, joining the droebl exchange today, mark matson, keith liss and rick santelli. keith, is there anything to read in terms of the market accommodation of this updated deal of the fed in a couple of weeks or a few months? >> i think the market is reacting precisely the way the fed wants it to react. that is when janet yellen floated the trial balloons last friday she was giving salve to anybody thinking that the market
will go down. anybody claiming we're overvalued, we have a misallocation of capital not used in the right way i think they're sadly mistaken as long as you have the sweet, soothing tones of janet yellen and her lieutenants and generals. if you look at apple and google and amazon they're all off, you know, half a percent to 1%. that's the reaction here. i think that the market has a paf loavian response to anything that comes out from the fed or bad news and as long as you have that underpinning there, we get tired of talking about it but with the underpinning here, the green lights are for an upward move. >> mark, where do you see opportunity? >> well, i always see -- so great to be at the floor of the new york stock exchange. this is the heart and engine of where capitalism runs and this is where investors want to be focused and not just for the next 20 minutes. a hardest part of the job is to get investors saying we have to be disciplined in equities.
equities, equities, equities. long term and when they go down, don't panic. buy more of them. >> that might be a great posture, at least on paper. do you feel as if we're due, though, for a period to produce one of the buying opportunities you're waiting for? >> the market -- i'm an efficient market guy. they're random and unpredictable. all the knowable information is in there. it's the unknowable and unpredictable information that can change it. a manager doesn't have to try to time the next 20%. nobody knows with accuracy where it is. we can say the next 100%, the arrow is green and it's up for long-term investors. don't try to time it. own it. >> meanwhile, rick, everyone's scratching their heads about interest rates and the dollar showing strength up half a point. what do you think is going on here? >> well, i think the dollar is showing some strength. i think interest rates contrary to what mark just said really see the game for what it is.
there is wealth creation on the floor of that exchange. but the wealth creation is for very few and it's part of the policy issue. and the policy issue is a big story today. whether it's june 23rd brexit or mr. cook. and his comments and what apple has been drawn into. it's all part of the same story. when anybody looks around and doesn't see growth, these are the stories. these are the reasons why. okay? the free money ends up being a stock buyback. i can get why now. why would you seed anything? you know, i think that our channel's done a great job but here's my big question. everybody can see that this retroactive issue is michael noonan said ireland makes laws. he gives an interpretation. not special favors and apply it without fear or favor. how can you not see that jack
lew does is same thing? he doesn't legislate, not a congressman or a senator. we're splitting tomato and tomato here and this is the core of the problem. >> rick, what are you saying about the position of the irish relative to the u.s. lawmakers? >> is that the irish and michael noonan in particular is a patriot. he's doing his job. he's not saying he makes the laws. he interpret the laws. and he applies them without fear or favor. think about fear or favor. think about the fmoc committee some point in the future deciding what corporate securities to buy. you think a little fear or favor might be in there? if you're a company on the outs of the government, would you be on the list? if the government wants something from you? this isn't the way it's supposed to be. i think our treasury does much of the same thing. they just do it a little better. >> hmm. >> keith, before we wrap up here, you know, you did say that the market feels as if there's a
soothing tones of janet yellen. financials up, dollar up as kelly said. are we now getting to a point to flinch for the next fed rate hike? >> i don't think so. everybody believes, everybody i talk to, both clients and traders alike, 25 basis points won't eviscerate what's happening inside of this market. back to something that rick said real quickly, i think he's got it right, right on the head. the negative feedback loop, they're forced to act. didn't get help from the governments and they're floating extraordinary policies. you see it with things like the eu going after ireland over apple's tax bill. this is policy run amuck and until the policy side of this market gets straightened out and i don't see it, you will have the central banks doing what they need to do and they have a third mandate an enthat's keeping the asset markets propped up and precisely what we're looking at here. >> we can argue if their heart
is in the right place and congress and voters would have a chance every other november to sweep it out. but they don't. we have given the politicians an excuse and the excuse, unfortunately, was bad policy. >> policy run amuck. that's the phrase of the day. thank you. we'll leave it there. >> pleasure. news alert on google. josh lipton, when's happening? >> looks, kelly, like google is taken on uber more directly. this is according to dow jones. these headlines just breaking that google is going to be expanding this ride sharing service in san francisco allowing commuters to car pool. remember, google earlier this year began this program around the california headquarters enabling workers to use that ways app to connect other commuters. looks like they'll expand that program. interesting relationship, of course, between google and uber. google invested in uber and now looks like they could be coming into more direct competition.
of course, uber with resources of its own. start-up valued at almost $70 billion. back to you. >> uber has a lot of resources but alphabet has more. we'll see how that really plays out. it is definitely interesting. maybe they'll call it goober. >> we don't know where it's going. what is google's ride sharing business at the moment? >> presumably, a local serving the employees. i think a lot of talk that they had lots of plans on the actual self driving car area. maybe down the road that's where it's headed. >> looking for maybe further launch outside of where they're running things. thank you, josh. the markets down 66 on the dow today. the s&p down 6. the transports are bucking the trend. the nasdaq's down 18 today. up next, boeing skipping airline price hikes for the first time since the financial crisis. what it means for the industry and the economy coming up. later, rap star turned
business mogul sean combs will ring the closing bell here at the stock exchange. ♪ 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. ♪ energy lives here.
shares of potash rising and agrium. the producers would have a combined market cap of $28 billion. they're battling for crop prices amid a glut of supply. >> big moves there. let's check out other movers today. abercrombie & fitch plans to close as many as 60 u.s. stores as the leases expire this fiscal year. they say flagship and tourist locations continue to account for the majority of its sales decline. those shares are down just over 20% and dsw falling today. down more than 10% despite quarterly revenue. comp sales fell 1.2% less than expected and that's the first back to back quarterly sales
decline since 2009. analysts say cash reserves at the shoe retailer practically cut in half over the past year and investors clearly upset there. >> absolutely. boeing today, the industrial giant skipped raising airline prices for the first time in seven years. phil lebeau has the story. hello, phil. >> reporter: mike, if you're in the market for a commercial airline, now's the time to buy. ordering one right now, you would be waiting a long time to take delivery. here's what's happening for boeing. not raising the price for commercial airplanes. they're saying at the list price. same prices of 2015. this is the first time since 2009 that boeing has not increased prices for its airplanes. by the way, keep in mind that the final prices that are paid and paid when the planes are delivered, negotiated down and routine in this business. boeing or airbus or any airplane manufactur manufacturer.
this year, boeing hoping to reach i think 760 the total last year and this far into the year, it is looking like it's struggling to meet that. by the way, the backlog at boeing, record high and a reason why the company is not raising prices. you have a strong backlog, most airlines have already placed their orders whether it's with boeing or with airbus. looking at shares of them both underperforming relative to market and low jet fuel prices, there is not a lot of pressure to say i need to go out and get new airplanes. most of the airlines around the world have placed their orders and realize for the most popular planes, probably not taking delivery until well past 2020, likely 2022, 2023 range. >> what's the tactical calculation aside of what you said for boeing and make sure to keep costs in line. is this a little bit of a gambit to keep the costs down with labor and suppliers? >> reporter: probably. that's one of the factors that's there. and also, boeing just doesn't
want to get into the habit of saying, okay, we are going up another 1.5%, 2%. it takes a pause. they did this in 2001 and in 2009. not surprisingly both of those years you were talking about a recession here in the united states. and the market for orders was slowing down. so boeing is doing the same thing. but the important thing to keep in mind is delivery schedule and the final prices that are paid. >> i just again imagine these fed policymakers shaking their heads. more signs of deflation. thank you, phil. >> reporter: you bet. cnbc is also gearing up for the delivery alpha conference in two weeks. treasury secretary tim geithner will be there and want to hear about apple's taxes in ireland, some of the u.s.'s own tax moves or lack thereof lately. >> maybe a little something about bank regulation?
who knows? we have about 35 minutes before the bell. the dow down about 65 points. actually all the major indexes down about one third of a percent right now. stick around for the bull/bear debate on where the precious metal is going from here. twitter trying to get creators to post on the platf m platform. we'll look at whether the moves are too little too late. what powers the digital world. communication.
welcome back. gold comex shown up here and over the past month, a different story falling around 3%. >> heading into september, which historically is a rough month for the market, is gold's run over? let's bring in stanley and tom mcclellan. george, you have the fed perhaps closer to a rate increase. the u.s. dollar kind of firmed up lately and seems a couple of forces driving this pretty good bull market in gold for several years may be on the wane. >> i think it's important to say perhaps. i don't think anyone has a great confidence in the fed including the fed. i don't think they know what they're up to. they're talking about being data driven. i think that's important. and i hope that they'll stick to that. i don't think that we can get guarantee any kind of a rate increase at all.
the dollar, yes, been little stronger in last few days in i think in response to the hawkish talk of the fed. but they seem to be dovish one day and hawkish the next day rather than seeing a straight course like alan greenspan and nobody knew what he was saying when he said anything. i think we have excess transparency around the fed. >> you think gold can move higher in this environment. >> yeah. i don't think i've seen it go up a lot. it's gone up from 30% or more from the lows of last december. i think it's already done pretty since then. but, you know, i wouldn't be surprised to see prices have another try at the 1375 or $1400 area later in the year and weaker for markets and stronger time for gold because gold is actually pretty good counter cyclical. >> you think the gold moves lower later into the year. is that right?
>> i do see a move downward into an important cycle low that's due in october. i have one objective from the chart analysis that's down to 1,280. but i think it should go lower than that. importantly, though, as we go into 2017, i'm hugely bullish on gold and not yet. we have an important eight-year cycle to finish up at the end of the year sometimes. perhaps that cycle aligns itself with the low in october or we could see overthrow into early next year. but 2017 and '18 should be a hugely bullish time for gold. >> you say that there's an eight-year cycle in play, tom. since gold is traded freely in dollars, it is only about 40 years, right? essentially we have seen, what, five of these cycles since then? >> that's true. it was not evident at first. what the natural rhythm was going to be. it is like a heart patient shocked in the chest and doesn't
settle down for a few beats and now that we have 40 years under the belt since gold was freely traded first in 1975, we have seen how this goes and three years up and five years down and we are working on the five years down from 2011 to '12 and that's where the big gains are found and not there yet and the inflection point. gold still trending down and importantly the smart money traders, commercial traders, they're net short to the biggest degree that they have been since 2012 and that says there's more downside work for the gold to do. >> george, even if investors think about following the performance or diversification of gold or a hedge towards fiat money, you don't sound that bullish saying the upside is kind of limited. what would it take for a breakout? >> i think you would have to have things worse with the dollar and worse with the g
geopolitical circumstances of the country. i don't think we're there yet. we have seen good, healthy gains this year. i hope other people made profits out of it. i think seeing what are we? 30% gain as i say since the lows of last year is a healthy response and liable to be muted for the remainder of the year. when i say muted, we could see $70 on the upside. >> if the fed hikes rates next month, what reaction will there be for gold? >> similar to last december raising railt raising rates and the dollar fell. and gold went up and started this run that is taking it up 30 basis points. sorry, 30% from that interim low. >> could be good for it. let's say the hike in september, december signaled that's kind of it, that maybe after, you know, the smoke clears, the gold goes on another run? >> i think it is quite possible.
yeah. i'm looking forward to seeing the next hike to get a reputation of what we saw in december through january. >> we haven't discussed infligs and used to be the story. so many other things going on. thank you very much, george and tom. time now for a news update with courtney reagan. >> here's when's happening at this hour. isis says the long-term spokesman in syria has been killed in aleppo, syria. considered the group's number two man in the country. no word on how he was killed. fire consuming a 28-story skyscraper under con trux in abu dhabi. almost completed commercial building. civil defense personnel helping guests at an adjacent hotel to evacuate. mike pence in the atlanta restaurant at the varsity ordering chili dogs, onion rings and drinks.
dash cam video shows a pile-up on a new york highway. one of the cars bursting into flames. one bystander jumped into action to rescue the driver. no one was killed in the ten-vehicle crash. good news. that's the cnbc news update at this hour. back to you. >> we were talking about the accidents are up on the year. >> unbelievable. >> drive safe, everybody. >> always when we drive more. we have 25 minutes left before the bell. the dow trading just slightly off the lows for the afternoon. down 64. thanks in the lead and we have a third of a percent down. a leading trader tells us what he's watching into the close. sean combs stops by post 9 to talk about the business projects among other things. stay tuned.
it's usually not a, you know, 100% accurate but today is definitely in effect. >> we have the financials leading today so it seems like the equity markets trying to get warm to the idea that the fed might move. the bond market's not doing anything, though. >> you know, we were perplexed yesterday. the bond market, the equity market. where's the disconnect? i think the xlf i'm personally long and see that trade last a little bit longer in the tooth going in to that fed meeting in september. yellen kept everyone on their heels and friday's going to be a big directionality trade for the jobs number. if she gets a cover, you can see that, you know, decrease on the odds of raise. if not, you will see the xlf perform up until the meeting. >> maybe they have catch up to do. thank you. >> sure. little more than 20 minutes into the bell here. the dow coming off the lows down 54 points. s&p down about 5. nasdaq down 13 nearly.
twitter keeps trying to turn around the fortunes. the one-time social media darling of wall street has a new video plan it hopes to rival youtube and facebook. we'll tell you about it next. and apple not feeling the luck of the irish with the whopping new tax bill for the operations in ireland. but the decision by the european union could have tax implications that some think may backfire. that's ahead on the "closing bell." what's it like to be in good hands? like finding new ways to be taken care of. home, car, life insurance obviously, ohhh... but with added touches you can't get everywhere else, like claim free rewards... or safe driving bonus checks. even a claim satisfaction guaranteeeeeeeeeee! in means protection plus unique extras only from an expert allstate agent. it's good to be in, good hands.
welcome back. twitter trying the lure over video creators to publish on its platform. >> julia boorstin joins us with a look at the news. hey, julia. >> reporter: twitter's hoping top content draws more users and why it's giving con tent creators an easy way to earn money from the videos. twitter is allowing creators once they're approved for pre-roll ads before the videos. a source tells me that they get 70% of the twitter ad revenue and better than youtube and facebook but both give about half to creators. twitter said it's targeting the
content creators part of niche, the start-up it bought last year. but twitter's also going after the star content creators on youtube that have millions of devoted fans. many of whom now posting on facebook and paying 140 influencers over $50 million in total to experiment on its live video platform launching this year. now, twitter's appeal comes amid concerns about disappointing revenue guidance and stagnating user growth and harassment on the service. we have the see if the move today helps the company draw users and ad dollars. back over to you. >> julia, so there's no sense of exclusivity? there's a creator, posting on facebook or youtube, you can simply post something similar or same on twitter and try to get incremental revenue in. >> reporter: yes. that's right. tw twitter's announcement to post other places and here and opt to
have ads run before those videos. it is interesting because both facebook and youtube are focused on getting exclusive content for their platforms. youtube is working on it for a while and you have a lot of youtube stars going on facebook, sometimes facebook live to then drive those people back to youtube. but twitter hasn't been as much of a force in this content war over different stars. twitter owns vine which has tens and tens of thousands of stars with lots of fans and not a player in the same way so i think today's move to get people real incentive to put the content on twitter, as well. >> i see where you're going, mike. fine, twitter, pay me for the same content, i'll do that, too. i wonder what the rates will be. any idea what they get for this? >> reporter: twitter advertising depends on how many see it and the brands to advertise. i think it's very variable for a lack of a better way of putting it. but remember that twitter has
about 300 million active -- monthly active users a ensnapchat with 150 million and seems like the snapchat users much more engaged and facebook has about 1.65 billion monthly active users so the sale is so different, the piece of the pie that twitter's playing for is smaller and the video ad dollars, this is about competing with television. that's why video advertising is one of the most compelling parts of the advertising market. >> all right. julia, thanks very much. i think it's a twitter gambit to get kelly evans back on the platform. maybe not enough. >> i don't know. i'm trying to think. we could tape -- >> got to be a number an it makes it worth your while. >> no. trying to just keep it all at arm's length. >> understood. we have 15 minutes left before the bell. modest losses for the major indexes there. slightly off the lows and not too much. for those that wish it's friday, you get your wish kind
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welcome back. joining us on a tuesday is independent investment consultant david darst. david, your key word is seasonally appropriate, lay before. >> michael, kelly, libor is tightening. you have been following the story, keep an eye on that to see if that causes any slippage or breakage in the economy. 300 million instruments connected to -- >> there's of course driven by regulatory change and the rates are still going up. >> they're still clicking in there and 25 basis points of fed tightening and maybe another 25 after october 14th when the regulations go into effect. asia's meeting, president obama heads out to asia on friday for the g20 meeting. it's a summit meeting. what you want to see there is the china has an opportunity to really stand out if they can send a message that they're going to do more for their middle class. 20 years ago, 6% of the population middle class. today 40% of china middle class
and also for the environment. so let's hope we something good out of there. >> is "b" for bad boy? there's sean combs making the way to ring the closing bell and join us. >> good to see him here giving spark and sparkle. kelly, "b" is for better gdp. the atlanta fed's calling for, maybe better profits. especially when you take out energy which is up but when you take that out, it's improving. okay? the "l" -- "o" is oil. you have a big meeting coming up and iraq said they'll participate. a good thing. we hope iran and russia will be there as an observer and not an opec member. okay? and "r" is recalibrating the whole fed dialogue with the markets. and they're basically the bedrock assumptions we're using right now are the four noes.
no recession. no financial skeleton in the closet causing a lehman-style meltdown. there's no real euphoria with the exception of a couple of social media internet stocks and no extreme valuations. so that can allow the market to lift further from here. although bonds are where internet stocks were and where japanese stocks were at their peak. they're wie too high. they can go higher. that is the thing to watch out for. >> are you willing to use the "b" word there? bond bubble? certainly was for dotcom stocks. >> we are at internet valuations of 1999. the dotcom mania in bonds with the negative yields and the ultra low yields and people have got to watch out and sit near the exit. >> art cashin said 200 million to buy on the bell. not a huge event but the dow's
come off the lows, down 57 points, david. does that make the case for stocks? your cautionary comments and by the way, goes back to what libor and art talking about it which is in a way rates are tightening again and in the overnight markets. >> see them tightening because the economy is doing well. you just saw the personal consumption numbers. 77 weeks with jobless claims below 300,000. the economy is doing better. though one part of the engine that's not firing is business investment. they're hiring but they're not building. and what you -- if you can see that, that may not happen until after the election with the infrastructure that's prevalent now. >> eight years into zero rates is hard to have the fed thinking keeping them is getting business invest. the friday jobs number i guess takes on all that much more importance if that's not been a missing point and some number out there to seal the deal for
september. >> we came out with the dud of a report and might have kept the fed from raising rates with a window. >> would be very nice. i believe we're so close to the election, number one, the fed may not want to meddle. it is likely a december or a november than september. also, the rest of the world is moving interest rates down and adding monetary stimulus at a rate of 200 billion per font quantitative easing. people's bank of china. european central bank. basically for the fed to get out of sync with that, the other final major reason to keep it easy is rhee lated to currency. currency's the responsibility of the u.s. treasury and not the fed. the fed knows that the dollar needs to be a touch to the weak side and it has been up which is what's causing these interest rate and talking about it all afternoon. the utilities, tell come. the real estate investment trust to come under pressure and
helping the bank stocks and investment bank stocks. >> all right. we'll tune in for friday, for sure. we see sean combs heading up to the podium. >> that was water? >> even though he's here to promote the vodka. >> don't have too much fun. >> happy labor day, everybody. >> you, as well. we'll be right back. and talking designer turned actor and sean combs about the very business interest. you're watching cnbc. before taking his team to state for the first time...
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welcome back. we have the dow down about 60. hovering in the range for at least a half hour now. bob pisani, financials leading across the board. s&p and the dow. you know, the market, the stock market wants to price in some action on rates it looks like. >> since friday, really, they have been up 3%, 4%, 5%. bank of america on an intraday basis, that stock's trading 110 million shares today. normally about 70 million. so we're talking 50% volume on a below average normal trading day and breakouts and hits 16, a lot of interest suddenly came in. >> a round number trade in bank of america. i guess it works. >> it does. >> not just them. >> breaking out across the board. look at this quarter, morgan stanley up 23%. bank of america.
zions and the regional banks up 20%. only two months of them and that lot of outperformance has happened just in the last three or four days so this rotation we keep talk about, banks have been laggards and people to be thinking and we are not seeing big moves in the treasury -- >> bond yields. >> exactly. you would think we see moves on the upside and not happening and moving independently believing something is happening. >> at least eventually. >> down the red. >> not a three or four-week call abe the other thing you've been talking about is cleavage, the reits coming out of the s&p financial sector. does that matter right now? >> they split off effectively tomorrow but the actual creation of the 11th index doesn't happen until the middle of september. september 19th. they have a rebalancing and that will happen. i think it's time. the reits 3% of the s&p 500. same at the materials, telecom,
utilities. you might say it's not much. we talk about them all the time and they're a different vehicle than financials. >> exactly. not the same category. >> they move on different forces. higher rates, good for banks arguably not as good for reits necessarily in terms of demand for those stocks. >> it is a completely different yield component. that reit index by itself, almost a 4% yield just by itself and the biggest vanguard reit with a 4% yield and attracts yield hungry investors and more attention to the sector and i'm fine with that. as the old real estate reporter of 20 years ago, i think it deserves a separate sector. >> month end tomorrow. amazingly quiet month. i don't know if anybody expects anything to spark before friday and should see a churn. >> last year, the surprise -- that created volatility. september, the important thing is going into the election and
there's something for volatility. looking at the vix futures, they're pricing in more volatility. october and november. >> bob, thanks. ringing the closing bell is sean diddy combs and next hour's all yours, kelly. there is definitely an art to ringing that closing bell. and if you do it more than once, you know, might be bad karma down here. we'll talk to mr. combs wbt that in a moment. welcome to the "closing bell," everybody. i'm kelly evans. markets going out lower today. the s&p down about 4 points and the nasdaq giving up 9 points. so now we have the dow and s&p lower for four out of the last five sessions and still some key reports on the economy coming up this week. coming up on the show today sean
diddy combs rang the closing bell and joining me for the latest ventures in and out of the music business. stay tuned for that. we have senior markets commentator and columnist mike santoli through the maze on the floor to post 9 and rob cox. welcome back. for more on the market action, "fast money" trader guy adami. working double for not being around on the vacation. welcome back. mike, let's start with the thoughts on the fourth down session out of five. >> gently so, obviously. the market doesn't seem to be really taking a lot of energy from any particular direction. it seems like yesterday was this low volume drift higher. down to the bottom range. overall trend isn't disturbed here. it seems like below the surface continue to have financials and the more cyclical geared stocks show they're in more demand.
the yield play's not and a weird disconnect of the treasury yields and not rushing to price in a move. the two-year note or other ones and not clear if they disagree. bank stocks outperforming relative to what you expect given the yield curve. >> that's so interesting. >> yeah. >> is this a value act morgan stanley effect, rob? here's a major value player saying we don't need rates to go up to like the investment and maybe people are listening up? >> i think you do need to see the economy growing and second order effect with banks. only way bank stocks go up is a gdp growth in the u.s. and without that and the absence of that you don't see it. if you think you hear things like, you know, fischer from the fed talking a little bit about -- i mean, making sort of, you know, noises about wanting to basically raise rates because you see growth in the economy, then you would think that the bank stocks get a pull from this. >> it's like the bank stocks listening to the hawks and the
fixed income markets to dwarf them they beat them in a boxing match and don't seem to be as convinced. >> i think people -- where's the value? people searching for value and looking at the banks valuation-wise, i think folks saying the worst is behind them. this is the sense, at least. the worst is behind them. maybe another couple of rate hike cycles over the next year. maybe the environment lends itself to being in these banks and i think people trying to get ahead of the curve. you hear about people saying the market is a discounting mechanism and a lot of way this is's what you have going on here. are they ahead of the curve too much and pushed too far too fast? my inclination is probably yes and i think the landscape for the baches going forward is challenging at best. but with that said, i think that's what you have going on. the other really good thing i thought today was the performance of the airlines, obviously, some things going on with united airlines, a raymond james upgrade and a sector under pressure for quite sometime.
you saw relief rally today. if that can refollow through, tn the broader s&p to my opinion is still intact regardless of whether i think it should be or not. >> those are the brighter spots in the market today. transports were up 49 points and the small caps were, you know, they looked like they stayed positive. >> outperformed most of the day and, again, quiet days. you don't necessarily feel like a full quorum deciding the price should be and just the trend seems to be in that direction. and i'm with guy in terms of the banks seeming like they have lagged enough. cheap enough and sooner however you define sooner or later get the help of a fed rate increase. also, if the yield curve is not helping them out, many financials are helped out if the fed funds rate goes up. anybody with big customer account balances to short-term
rate helps them. >> you have so many of the morgan stanley trade is a great example of banks trading below the book value. i mean, unless you think the economy's going in the toilet, those look like value plays and may spend a lot of time waiting for them. >> we have had head fakes in this direction. >> yeah. >> palo alto networks shares, the earnings quieted down this week and we have big reports, i think sales force we're expecting tomorrow. palo alto, that's a struggle for the name and a buyback with the earnings and supporting the shares moving higher to the tune of more than 1% this hour. guy, getting tactical on the market, what do you think does well here, especially in stocks and people who might have heard david darst's comments last hour thinking what part of the equity market isn't overvalued? >> well, i would push back and say, look, s&p 500 earnings on a gap basis probably north of 25
times. you can say in a zero interest rate environment that's relatively inexpensive and we could agree to disagree on that. but in terms of the market, i think that's why people -- to answer your question, that's why people flooding towards the banks because valuation-wise looking at the landscape, those are the cheapest stocks throughout and if you can talk yourself into the fact that, again, maybe the worst is behind them and maybe the environment lends itself to freeing up revenue growth and earnings growth going forward for the guys, it makes sense to be ahead of the curve and i think people rushing into banks, premature and in terms of the broader market, i hate to say it. i think the market continues to grind higher here. regardless of whether or not i think it should. the path of least resistance is upside. >> it's very hard to get overly concerned short term and the corporate bond market is as firm as it is. high yield prices rallying again today. even as you had the treasury selling off modestly.
that's been a fixture of this recent rally and you have the vix at 13. it basically bumps around here it's telling you that nothing too scary's being sniffed out. friday's job report can up-end the whole story and hard to see the market giving you clues willing to fail here. >> that was the other major story of the day. the european union ordering ireland to recover more than $14 billion and back taxes owed by apple. ireland says apple doesn't owe them any taxes and what this is what irish finance minister told cnbc earlier today. >> we think the commission is getting involved and what is the competence of sovereign governments in europe. the european treaties say individual countries are responsible for taxation policy and this is an approach through the back door to try to influence tax policy through competition law and we don't agree with that.
>> yeah. we spent a lot of time today talking about the implications for apple but what about business in the european union? michelle joins us now. you could imagine people feeling pretty frustrated. >> there's been a lot of criticism. the european union under a lot of fire in the u.s. today, kelly, not just from apple and the u.s. treasury and also critics arguing that the decision is a retroactive tax hike and the eu is changing the rules 23 s in the middle of the. a. >> as a matter of principle, when it comes to eu rule, if you want legal certainty, you need a commission decision. that collie yates legal certainty. no rules have been changed. not one rule have changed. this is a question of paying unpaid taxes. that's the thing. >> to repeat what the commissioner said, quote, if you
want legal certainty, then you need a commission decision. the irish government's legal ruling that permitted this tax struck which are for apple was made in 1991. that was 25 years ago. two implications here. how certain can any business be if the eu can undo a decision by a sovereign country 25 years ago? this is quite literally an eu bureaucrat undoing a decision by a sovereign government. guys? >> it's hard to just kind of wrap your heads and it. looking at the ireland saying we don't want this money and it's a huge chunk of money. i guess the next move by ireland is to appeal this. and you have to wonder if this makes people think about their own sovereignty and whether they want to be part of the eu. >> right, exactly. obviously the idea here from the eu's perspective is within the union you can't have people promoting this kind of tax
arbitrage but the mechanism that the european commission is using to get at this and owing taxes something to see a general opposition to and not just the interested parties. >> how do you say brexit in gaelic? it comes -- if you wont to access to the single market, you have to play by certain rules. it is odd it feels retroactive of breaks given to apple, you know, over the last 30 years and one is one and done and one not completely. this is the question the irish ask, whether they think it's just some, i don't know, you know, taking away the right they had at the end of the day the problem with tax policy everywhere, not really an apple story. it is going to be a -- it's a story for everyone. the oecd is trying to figure it out and nothing like herding
cats to get around the world to harmonize the taxes instead of a lowest common denominator rush to the bottom. this is a small plain of very big -- >> highlight, kelly, the words that rob just used which is when everybody's talking about higher taxes, they use the word harmonization. but when they're talking about tax competition and taxes going lower, it's seen as a race to the bottom. right? the words imply what the bureaucrats would have you want to believe is a better outcome. correct? >> yeah. well, i mean, look. there's only so much tax companies are going to pay around the world. everyone wants their fair share of it. they're all fighting to see who can get it or in ireland the competitiveness. they want everyone to base their companies there and a fair amount of pokery in the documents. some point you have to level it
out. or companies, i don't know what you do. >> statesspractice competition here. we have states competing all the time. it's part of the states, scott cohn every year. they compete. >> that's on state taxes, though. on federal taxes they don't. if nova scotia said that you, apple, base your i.p. ann the kind of stuff over here in halifax and don't pay u.s. taxes, it wouldn't fly. >> thank you guys. i have to leave it there for the time being. thank you, guy, too. >> pleasure! >> guy adami, much more next hour. sitting down with mohammed el erian. he'll tell us what the risk is in the marketplace top of the hour. coming up here hillary clinton blazing across the campaign trail a fen you think she's busy running for the presidency, you should see the calendar as secretary of state. first you know him as buff daddy or diddy. sean combs fresh off ringing the
get up to $5,000 customer cash on select 2016 models. ends september 5th. see your lexus dealer. keeping the power lines clear,my job to protect public safety, while also protecting the environment. the natural world is a beautiful thing, the work that we do helps us protect it. public education is definitely a big part of our job, to teach our customers about the best type of trees to plant around the power lines. we want to keep the power on for our customers. we want to keep our community safe. this is our community, this is where we live. we need to make sure that we have a beautiful place
hip hop mogul moozic producer, grammy award winner, the list goes on and on. sean combs is tapping into branding and marketing with a new campaign called let's get it. designed for his signature vodka. sean combs joins me now at post 9 fresh off ringing the closing bell. >> yes. thank you. >> did you rinn it three times? >> a couple of times. >> just to make sure? >> just to make sure. >> you've been here before. >> i have. >> this is not your first rodeo. >> i rang the opening bell. it was a blessing to ring the closing bell. >> this is a business share 50-50? >> something like that. but yeah. it's a great partnership and they're great partners. i started with ciroc. and that's just due to a different style of marketing. and just really, really being digital first. and, you know, overall our
marketing social by design and really having a brand that representing the new culture. >> you know, this kind of remind me of something i'm wondering about. mtv vmas were just on and the ratings down. they had it on 11 channels. they used to be such a cultural event. that was everything. >> yes. >> what's changed? where is that culture happening? >> to be honest, i think it's consumed differently. people stream it. the amount of eyeballs probably more eyeballs see it than ever but as far as sitting down for the event, you know, a lot of the new generation, new generation of content consumers they like to have it on their time. so, you know, i think that digitally it enables more people to see it. but it just takes time to add up all of the eyeballs. >> yeah. it's all these social media platforms to get in the game. twitter said we'll do video publishing to give people a cut.
i mean, how attractive is that? trying to increase ciroc sales further, how do you promote them? >> to be honest, this is the greatest time to have to promote a market or brand and a brand of the millennial culture because i'm able the go into different platforms and not the traditional platforms and so, you know, the sky's the limit on where things are going and twitter doing is extremely smart because you have to give the power to the people.% and let them create the content they want to create and cutting them in on a part of it is the way it should be. >> what are the best ones? where's the go-to? >> snapchat, twitter, facebook. also being disruptive and compelling as you can be with the content. all content doesn't mean it's valuable. it is the content to stick with you. our new campaign, you know, that's how we designed the content to make sure that it's
visually compelling and a 15-second form, 30-second, minute form. you need to know how to really surf all of the different platforms and ciroc does it the best from snapchat to twitter and facebook. people don't speak about facebook but that's the strongest platform. >> in terms of -- >> everything. >> okay. i'm thinking about the music industry, too, with all of the streaming services and feels like we were talk about the best and worst of times maybe. what kind of royalties do you get these days? how do you launch? looking for exclusivity? does the music quality matter? almost overwhelming. >> yes. >> almost seemed easier in the old days to just sell it on itunes, right? so what does this look like now? >> it is just a different time and you have the adjust to the times and right now artists have the ability to have more people hear their music than ever and i
think that's the reason we make music. most people to hear it. i think that the streaming wars going on between apple and tidal and spotify, they're really great for the artists because the artists are now becoming more of the focal point back again on who has the power so artists now can drop an album an make an exclusive deal with apple like frank ocean did or kanye with tidal and really have some sort of new groundbreaking type of launch but at the end of the day, you know, two weeks later after the exclusives are over, people can really download the music and stream the music however they want and it just makes it easier and makes the music more accessible. i think the business has to catch up with the technology. >> and you've got a lot of things going on. not just ciroc and music but charter schools. right now in our culture, if
there's n issue, let's say it's your son, he's playing a sport, he is watching a game, playing a sport on the sideliness doesn't stand for the national anthem. how do you respond to that? >> i don't really -- you know, i have heard something about it but i don't really know the whole story. you know, i think in this country everybody has their own beliefs and own freedoms and you have to stand by your beliefs. but to be honest, you know, my son, you know, if he did that and that's what was his beliefs were, everybody's entitled to their beliefs. you know, i stand for the national anthem. that's my belief. i can't speak for somebody that doesn't. most important thing i have o o going on right now is the charter school which is my school in harlem that we just opened up. i'm from harlem. to be able to go back to the community and to be standing here this week and closing the bell and releasing a new campaign for ciroc and starting
a tour, starting a tour in chicago, this thursday. and playing madison square garden. you know on sunday. the culmination of this, to go back home to harlem and open up a charter school and just see the looks on these kids' faces that means more to methane anything else we talk about today. >> they realize where they came from, what you've done and i don't think this is the last time to see you down here. please come back. >> i'll be back. >> we look forward to seeing what else you're up to. >> thank you. >> sean combs, appreciate you joining me. >> thank yoo so much. back to seema? >> earnings in line with expectations at 50 cents adjusted. revenue topping expectations at $401 million. perhaps more important is billings in fiscal year 2016 growing 56% year over year to $1.9 billion. -pstrong fiscal 2017 earnings guidance. the ompany announcing a $500 million share buybacc and
looking at the stock in extended trade up almost 2%. back to you. >> thank you. from a ribbon cutting ceremony in the shower to refusing to take a snow day, hillary clinton was very busy in the day of secretary of state. we'll take a look at the day in her life and the billionaires that visited in her enure. virginia and florida and california across the country with spaceports. colorado is looking to join that list. the impact of bringing the space industry to the centennial state is coming up. audi pilotless vehicles have cquered highways, mountains, and retracks. and is fou in the audi a4. advancedechnology wi one notable differenc.. ♪ e highly advanced audi a4, th available affic jam sist.
welcome back. not easy to find down time running for president or a snow day when you're secretary of state, apparently. eamon javers has read more than 3,000 pages of the state department schedule of 2009 through 2011. what did you find? >> look. a lot of minute by minute detail and reading that many pages of the daily life of a secretary of state, you know, sometimes it is the little stuff that stands out to you. for example, somebody who's in the news today, huma abedin, a key aide to hillary clinton and pou see how important she is to hillary clinton's day-to-day life, meeting with secretary of state hillary clinton all the time. the seating assignments for the motorcade and hillary clinton and huma abedin right together in the limo, other staffers in
staff car number one or two and huma is really with hillary minute by minute on the road trips around the world that she took and then little things like snow ma ged don. it impacted hillary clinton's life. she was in new york trying to get to d.c. and the subtles canceled. flying back and forth on the shuttle at that point in 2010. so at 9:00 a.m. she set out by car to get back to washington, d.c. through the snowstorm. drove 6 1/2 hours to get here. but the record shows, you know, all of the calls made to officials all the way down the road and it is really that level of detail that we're talking about here on the calendars. >> wow. what were the sort oo broader takeaways from your point of view? i mean, what do we learn especially because this is the person with a 50% shot of being president come november? >> well, you definitely learn she knows the power players everywhere around the world. pretty much i should say without
exaggerating. somebody who talked to foreign ministers and heads of states in almost all the major countries, trips to asia and europe and elsewhere. back and forth to the middle east. you also see some of the access she has to high-level players in the society. billionaires coming by to visit. warren buffett visits. bill gates comes by to visit. we get a sense of who was in the room when hillary clinton met with george soros and talked about issues important to george soros. all of that, you know, becomes sort of plain in the entries and you have to read them to find out what it is. >> yeah. well, we are glad you did, eamon. shoe leather kind of stuff. >> right. >> whatever the sitting equivalent is. >> right. let's not go there. >> i'm -- eamon, thank you, sir. much more to read online, as well. let's get back to courtney reagan. >> hi there, good afternoon. here's what's happening at this hour. the white house says president obama has shortened the prison sentences of 111 convicts in the second round of grants of
clemency this month and granted a total of 673 commutations in the presidency. isis says its long term spokesman in syria was martyred in aleppo, syria. he is considered the number two man in the country. no word on how he was killed. hewlett-packard ceo with an event for hillary clinton in denver. whitman, a finance co-chairman explained why she's supporting the democratic nominee. >> my view is that hillary would make the far better president..o for two reasons. temperament, stability, leadership experience. and then frankly i think the economy is so important to the united states, i think she will be better for business, for job creation and small business. so they're related but i think she would make a much better president. researchers in hungary say there's evidence that dogs can understand humans. the study using of an mri
scanner said they processed words with the left hemisphere. just like humans do and the dogs registered praised if the words were positive. meaningless or meaningful words in a neutral tone with no effect. i hope the same thing is true for cats. i want mine to understand how much i love him every day. we have to wait for this study. >> this is a little ridiculous. >> i want to believe that's true. >> we know it's the intonation and stuff that matters. no one thinks that processing the parts of speech -- >> i think they know food, treat. i don't know. i think -- >> walk. want to go for -- my dogs would go crazy starting to say the word walk. >> yeah. >> i think they know what's up. i don't think there's any question. i believe it. >> there's buddy. i was going to try not to bring him up. >> i had a buddy. i had a cat named bud, black. yours is very cute.
>> he pretends like he understand me. >> we're both cat ladies. ours should get together. >> don't always get along. >> that's true. >> thank you, courtney. etna is the latest large insurer to back out of exchanges and it is staying in i with and while it's staying with others, iowans will see major price hikes next year. up next, we'll talk to the insurance commissioner of the g hawkeye state about whether the aca is in the icu. 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? tuing algae into bels. recing energy poverty in the deloping world. maki cars gourther with less. fuing thglobal ecomy. and you ♪hought we just made the gas.
welcome back. here's a look at how we finished on the dow. dow down nearly 50. s&p about 4 and the nasdaq dropped 9. it will be sign-up time for insurance coverage under the affordable care act known as obamacare. iowa is faced a dilemma. iowa premiums going up as much as 42% for some plans. joining us is the insurance iowa.ssioner for the state of welcome. >> thank you for having me. >> good to have you with us because you're such a tough position. you're approving 422 rate hikes
and hurts consumers and would you say you have no choice? >> well, you know, it's a tough decision and we have to look at all the facts before us. the carriers have had sustainable and large losses and the position is we have the look at the rates for adequacy for the carrier and affordability for the consumer, as well. i hate to increase rates by 42.6% but it had to happen for the market to be sustainable. >> i'm also wondering, you know, in your case, we have listed four different companies participating. why do you think iowa still has at least some competition where as we now know 31% of counties in the country look like just 1 provider? >> well, we have about 23 or 24 counties with only 1 provider and we aren't immune to that but you know, companies have been . here for a long time like aetna a listening time and so they wanted to stay in our market. >> commissioner, i mean, it seems as if this is a pretty
broad determination that the market for individual policies is somehow broken. wwatever mix of incentives and, you know, the groups that were encouraged to be created by the aca, somehow it's smallen short. what measures should we look at to try to fix certain elements of this? >> well, you know, first a ffderal issue. not a lot to do at the state level unfortunately. i wish there's more to do. but we have the look at the aca and the entirety. you know, the risk mitigation tools, three "rs" didn't work very well and they need predictability in the pricing and needs a lot of work. >> commissioner, do you have to basically force everybody the sign up to create a risk pool to actually work for the aca or whatever you want to call it in aca's son of? >> well, yeah. you need a bigger risk pool. in the state of iowa about 7% buying their coverage individually. the employer market's
functioning quite well and the individual market having so many challenges. >> right. but the question is, how do you fix that? because in a way, there's a concern that the fact it's not working will make the case as president obama has already kind of hinted at that single payer's the only way to fix this mess. >> well, it's a challenge. you need more people in. you need healthier folks in. young people are not buying product. too expensive. it's adverse election. those people are buying and more sick than the carrier priced in and it's a real troubling market right now. >> right. but the whole point of obamacare is to try to fix it through incentives and regulations preventing people from opting out, forcing carriers and make sure there's enough of young, healthy people in it. are there any private sector fixes at this point ways of addressing the system we have and does it whole thing have to be dismantled? how do you make the case that going totally private is taking
what's now a smaller step of being totally public. >> we need to look at the arrangements. where the providers are actually at some risk for the wellness of the whole patient. we need to have a focus really on costs. we looked at the payment mechanism, ie insurance and didn't address the cost of elt health care. i can't imagine a product spending more time looking to buy a refrigerator than a heart procedure. that's nuts. >> thank you for joining us. good luck this year. >> thank you very much. >> iowa commissioner, mentioned it's a tough one to swallow for a lot of consumers. let's get an earnings alert. >> we have our eye on h&r block. a loss of 55 cents, expectations if a loss of 50 cents. keep in mind this is a report that covers may, june and july. which is a seasonally slow
quarter for the tax preparation company and nonetheless earnings missed expectations. you can see the stock reacting down about 5.8%. h&r block says it continues to cut expenses to improve the financial results. kel sfli. >> thank you. that's a definite disappoint for h h&r. >> we had intuit last week report and h&r always pointed out that basically you had a kind of fixed percentage of people look for help and i don't know if there's slippage in that and an initiative of prepaid debit card and get it in the amount of your refund. and a lot of these initiatives seem to get traction in the street and at least right now and again not a very important quarter for them and the stock's been out of favor for a little while. >> true. the shares down 6% on the news. doubts of data nothing new. there are now questions about the personal consumption data. maybe it's greater than we think. we look behind the numbers coming up.
new mexico is also making a big play. now other areas are looking to enter the fray and we find our phil lebeau on location at what may be the next great spaceport. where are you, phil? >> reporter: kelly, we are not far from denver international airport. this is an area that is applying to become a spaceport. there are ten in the country. this is one of the areas that would like to join the list as more and more places around the u.s. are saying, hey, why can't a spaceship land here? >> and liftoff of the united launch alliance. >> reporter: forget rocket launches and spacecraft landings. get ready for spaceports where spacecraft take off perhaps even horizontally and then land just like airplanes at a regular airport. >> what we are looking at is activities to be safely conducted and at the same time are responsive to what the needs of the users will be. >> reporter: the faa approved
ten spaceports in the u.s., most near coasts and away from cities where rocket launches are safer. still the folks at front range airport believe they have a perfect place for a spaceport. >> we can provide a way to space for those companies that are operating in the colorado area. that's a real plus, not only for the state of colorado and also for the country. >> reporter: spaceport launches are still fairly infrequent but the head of the faa sees that changing. >> i think it's very exciting. our highest priority is to ensure that it can be done safely but we're very close to seeing exactly what you are talking about. this becoming a much more routine and not every day but certainly not infrequent occurrence around the country. >> reporter: we will see in the months ahead whether or not the front range airport here just to the southwest or southeast i should say of denver international airport whether it
becomes a designated spaceport in the future. kelly, the most interesting thing about this, there are concrete plans that are being laid out by a number of companies for horizontal launches of spaceships in the future. this is not pie in the sky dreaming. this is reality for those who are working on it. >> no. it is great. i wonder, phil, is this a case much like trying to encourage other types of economic development they're getting tax breaks to do it or all organic and all these companies and entrepreneurs on their own? >> reporter: no. there's no tax breaks at this point. this is the application process for spaceport colorado. in the future if they have to add facilities and there's none of that going on right now, that may change. but as of right now, it's in the application process with the faa. >> yeah. so it sounds like, again, i wonder if there's a differe differentiation looking at florida and california what gets people there working on this all of this? >> i guess you would have to
have the volume pick-up to a certain degree to have that fight really take off. what's interesting is if it does follow -- talking yesterday about the path of aviation in the early days, when an airport was probably kind of a whacky thing to propose to put in your area. of course, the joke was always, they put it far from the city and then the suburbs spread out up to the airport and people complained. maybe they're complaining of spaceships in the backyard. >> you can imagine -- you know, get the calls on 311. kind of noisy. a lot of pollutions and danger. i'm sure you -- if you've flown into denver, it feels like you've flown out to somewhere on mars. i mean, you can't imagine this thing in your beloved state of new jersey or connecticut or new york or anywhere with lots of people live. >> the first place the aliens look to land. >> roswell already has one, right? new mexico. >> phil, all the issues to be explored. thank you for joining us. phil lebeau out there in
colorado. well, it's consumption data telling you the full story? we'll tell you where the economy may be stronger than you think. in case you're wondering with facebook founder mark zuckerberg does at home? we have information on how he's making his house the smartest on in t the block, maybe the world. that's ahead.
about econ stats? >> you have to worry about the economy if you want the buy a bank. >> what got you tipped off to the idea that personal expenditures could be understated? >> we started with, you know, w '53. there were 20 million people producing goods in the united states oond 6 million people working on the farm. wasn't that difficult. today, there are still only 20 million people prugs goods in the united states even though it's about 65 years later and 2 million people on the farm. where we've gone as an economy is we now design goods, we send them somewhere else to be made. and then we bring them back here to distribute them and we basically distribute the wealth that comes from the production and sale of these products, so now, you return into a problem because how do you determine you know, what the revenues from
netflix is doing to consumer, you know, production. how do you take a look at world of warcraft. how do you take a look at a whole bunch of others. >> which all of these kind of nebulous digital thing, but don't you take the amount of money people are spending on that? isn't that reflected in gdp? you would hope, but if you xwo to the senn. >> seth: bureau, they don't have the census techniques to affect the way the economy is operating today. if you go to the commerce department and say do you have the technology to handle new information to handle, they don't have that down yet either. in the commerce department, they're still operating on techniques that will put in place in 1999, so few asked them outright, do you think you're getting the numbers correctly. it will tell you you're doing the best they can, improving their system dramatically, but don't think they're capturing everything, so the net effect is that it means that consumption,
expenditures are not reflecting what's happen ng the economy and if that's true, then basically, the economy is stronger than what the gdp figuring are showing. when jamie dimon says i don't think these number rs as good as they're set up u to be, there's a lot of basis for making that stam. >> what are the implications of perhaps understating the growth in the economy? does it get to this that people are now talking about where productivity is up perhaps understated or has been lagging what we expect? >> yeah, it does. in other words, your revenues are higher than being reported, it's easy to calculate the cost. i mean, you can get the figure frg the labor department about what the wages are and how many people are working. but if your revenue number, determining what productivity is is a relatively difficult thing
to do. these people do really great work. they work extremely hard. they're not politicized as all. but it's a really tough job. it's a huge economy and the nature of the economy has chaenged so dramatically that it's doipg to take a while. if you brought one on, you would find they'd agree. >> hasn't this always been the case? technology being ahead of the data crunchers and analysts. you mentioned eisenhower. how is is it having all sorts of technology logical enter destructions in late t.o. numbers or is this just why is this happening now or why do you think it would be happening now? >> back when eisenhower was president, people were making stuff and they were producing stuff and it's easy to calculate
stuff. it's not easy to calculate what's going into the air rooifs. than if you figure out how many cars and bales of wheat were produced. >> if inflation starts picking up and people can't figure out why, hey, maybe the dpli is stronger, but for now, maybe it does make the bans finished. thanks for joining us. is there trouble in the house of zuckerberg? facebook found e and his wife have had a major disagreement and the domestic robot is the reason. this robot. who knew. we'll have the details next and there's a new episode tonight on cnbc of the profit. marcus will help a floundering los angeles based clothing
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mark zuckerberg has a robot butler in the works. he spoke about the ai home system. says he's getting ready to show it off. >> making progress and i hope to have a demo hopefully next month, but i got it to this point where now, it can, i can control the lights. the gates. i can control the temperature. much to the chagrin of my wife who cannot control the temperature because it is now programmed to only listen to my voice, which is one of the perks of being an engineer. you can do that. >> so devious and listen, the temperature, he's got to be careful, man. it's going to cause some real problems in the household. >> trust me, true. i'm imagining his house has multiple zones. they can probably separate and be comfortable, but to me, the question is what kind of artificial intelligence is it?
shouldn't it just learn? there's a lot more work. >> does over time work out your, the way you operate. >> i should hook it up to my alexa. the amazon eco. i'm hoping i can make it just respond to me because my kids will change the music. but it is, will recognize certain members of the family. the guy's probably -- >> starts to let you know. >> they're all fighting over it and zuckerberg, facebook, they a are, that ios nonsense internet of thipgs is kind of real.
ai is the key application for it. i think spousal pranks will be the key. >> parents are trying to figure it out. >> that does it for us and "fast money" begins now. >> "fast money" starts now. overlooking new york city's time square -- tonight on fast b, the s&p is near all time highs, but wall street legend says investors are overlook iing a major risk to the marketplace. he'll be here to tell us what that is in just moments. plus, the short seller says there's an unlikely stock that is a great buy right now. and later, ratings continue to plumet for mtv's awards show, but a major bright spot in the race the gain viewers. but first, what could be the