tv Closing Bell CNBC September 8, 2016 3:00pm-5:01pm EDT
for gopro, specifically, the smaller that camera gets and the better packaging, the more trouble. >> i'm interested to see what happens with this twitter board meeting and whether they decide to sell them. i love twitter and i want the best for them. >> who wants them? >> i know. >> thanks for watching "power lunch," everybody. glad you could join us. "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. i want to point something out here. notice something? huh? huh? no high heels. we are about the same height after all. >> it's a long -- in reality, we are. >> i told you! i told you! anyway, where was i? >> you're going to get me in trouble. >> there we go! aren't those nice? this is going to be weeks of fallout. i have a blister. >> tmi. tmi. oil hitting its highest level in
two weeks. energy stocks are popping. as a result today, they're not taking the stock market with it. we'll tell you what's behind the move coming up momentarily. >> and bank of america ceo telling cnbc this morning, the customer looks strong in august. tell that to some of the grocery stores and food distributors like supervalu, which is getting smacked today. after the bell, the ceo of allergan will explain why he's coming out with a major stand against drug price increases. that's a cnbc exclusive with brent saunders coming up a little bit from now. and we've got the company behind the dna test that completely changed mr. griffith's life and inspired the look "the stranger in my genes." we've been talking about the book, which came out on tuesday, and we'll have more about the tests themselves in jus a moment. >> and he's going to demonstrate how you take a test. you're very anxious to take a dna test. >> uh-huh. >> i think it's a great idea. the whole evans family needs to take a dna test. >> that might be true. >> we'll talk about that and the
cost and all of that coming up. let's start with oil popping on the new inventory data. jackie deangelis with the nymex with the latest on that. >> it was a little bit more than a pop. it was a more than $2 move, more than 5%. we closed at $47.62. so what happened today? just when you thought you'd seen it all, we saw inventory drawdown for last week reported by the department of energy, up 14.5 million barrels. it's the biggest drawdown we've seen since 1999 for the week. gasoline also drew down and imports were a little bit lower. it has a lot of people questioning today whether it was a one-off experience because of the weather problems we saw last week, some port closures and and production problems, or if this is a start of a new trend that we're starting to work through the oil glut. you have your skeptics out there. tom clausus gave us three reasons why oil should and probably will go lower from here. the first is that he's not expecting an output freeze from
opec members in late september. add to that that this is a possible anomaly that we saw today, that the data isn't necessarily telling the whole story. and also that we're expecting that seasonal demand drop-off. and you could see us trade all the way back down to 42. some people are still calling for the high 30s. but right now, expect it to be volatile and expect to be in this range. went we have a 5% move up, most traders might want to fade this tomorrow. back to you. >> jackie, thanks very much. let's get to our "closing bell" exchange for this thursday. ken maureen from money matters is back with us. he's at post nine at the new york stock exchange. so's jonathan corpina and rick santelli checks in wearing sneakers as well, i'm told. >> can i thank the floor of the exchange for letting this happen here today. >> yes, you actually have to get special dispensation. >> i might get fined for this behavior. >> john kor pcorpina, oil and s are not correlated.
we get the pop in crude and once upon a time, that would have taken the stock market with it. why not now? >> i think the market is still on vacation. coming into this short week here, i think everyone is still waiting to get through a full week and to really start to get our month going. so, yes, the oil number that came out was a little unexpected. the pop in energy is unexpected. we've got some short covering there. but i think the market is just waiting and kind of lagging behind. we did see some m&a activity. we have seen a little bit of movement in the secondary market. i think that's a preview of what's to come down the road. but with a very short week, a very short economic calendar that we had this week, i think a lot of expectation getting into the full week next week, where we'll have a lot more data to trade off of. >> ken, what's your thinking on this market today? >> well, as you know, i am a very skeptic -- a big skeptic of this market. and as i look at the data that we got from august, we have industrial production down 11 months in a row.
services dropped, the fourth biggest drop ever. exports are down under 50, which shows contraction. gdp year on year is now down or is at 1%, the at last three quarters in a row, yet the market is at all-time highs. why is this all happening? my view is that it is a -- it's what i'm calling a government infusion bubble. we have the central banks just herding everybody into the stock market and you're getting this diversion and the farther out gets, the big the contraction is going to be when it finally comes back to ground. >> but to be fair, ken, you've been skeptical quite a while as the market has continued higher. you've missed a move here presumably if you're not in this market. >> being skeptical does not mean that i'm not in the market. we actually started buying back in in april, very cautiously. right now, our allocation is 60% to the stock market. so we've participated, but keep in mind, bonds are also doing very well this year. so having money in bonds has helped us. bonds have almost done as well
as stocks this year. >> rick, the european central bank did no more this morning than it could have, i guess. and where does that leave us? >> i think the entire market was dragging down by the ecb today. i do think that you have to look at the world in terms of a spread. if we're talking about tightening and they didn't throw anymore ammunition in the bazoo bazooka, and everybody has the same position, basically, not worried about rising interest rates, not worried about the drip of the medicine that's slowed down a bit, i think it goes a long way to explain the markets. whether you looked at portugal, spain, the euro curve, the u.s. curve, it's all pretty much the same. short maturities are up about three basis points. middle maturities a little more, the long end, six, seven basis points. and it's everywhere. and i really do think, we're at the top of a 5 1/2-week yield range. we know that the equity markets have been in a range. if it moves anymore, you're going to see a whole lot of ralph cramden switching sides on
this ship at the same time. and i think that may have even trumped the good news in oil, if you believe in the relationship, as bill was questioning, between higher oil prices in the equities. a rise in rates right now wouldn't be welcome and the notion that mario draghi, even though he didn't say he was going to do less or wasn't going to do more, or wasn't going to extend qe past march, the fact that he didn't say, the market always demands more. and they didn't get more. >> yeah, john, do you agree? if there was a real conviction that the fed was going to raise rates this month, do you think the stock market would be going south? >> i do. and i think that conviction is not there. and i think we've gotten so complacent that this can is going to get continually kicked down the road and we're going to use different excuses, why it's not going to happen, meaning the election coming up and then we'll get towards the end of the year and this will be a 2017 topic. i think this market just continues to yearn for something, to grab on to. but at this point right now, it's very, very small straws.
>> what about the transports, jonathan? they're up another 23 points today. they had a nice move yesterday with some of the airlines moving higher. could this be -- could there be something more to this? >> that might be a correlation tied to energy prices and oil there. and i think once again, we have nothing else to really focus on or any other bigger, major stories that are out there, that we try to get something really granular on something like that. but once oil prices come back down probably next week, that will be a different conversation to have. >> ken, you said you're 60% in the market. i'm curious, what did you buy? what do you own right now? are you defensive? investing for growth? what are you looking at? >> we're very defensive -- well, we're very diversified. we're not trying to pick a particular area, but if the federal reserve decides not to raise interest rates, i think foreign markets will benefit from that. higher interest rates will hurt them by dragging money away from those countries and into the united states. so we have an exposure to that right now as well.
>> all right. thanks, everybody. >> thanks, folks. >> thank you. >> thank you. about 50 minutes still to go in the session here. keeping an eye on market and also shares of twitter sinking today, as a critical board meeting is being held to discuss the future of the company. our own julia boorstin reported earlier and you can see the shares down nearly 6% on the news that krceo jack dorsey has only a few more months to fix things and there are no bids on the table right now. >> let's bring in kurt wagner. kurt, they're having this frank discussion today, the board is, about the company's future. but from what i understand, jack dorsey's job is not on the line. is that right? >> well, i think it could be a little soon. it has been about a year since he's took over as ceo. not a lot has happened since. the stock is down significantly since that time. but i think that ultimately, what they're here to decide is what's the next step in terms of, should we prep this company for a sale?
should we do some layoffs? should we do other cost-cutting things. and i think they're going to give him at least through the end of the year. they have the football streaming deal that's lipgt now. i think that's their last-ditch growth effort. so i don't think we'll walk away from this with jack dorsey out of a job. but i think there's pressure on them to make immediate changes now. >> mike, what do you make of these reports that there are no suitors? >> you know, it would be hard to really see if a suitor was coming, because if you're trying to buy a company, you're not really publicizing it. i do think there are some deals out there that make sense for twitter. i think google is a really logical buyer for the company, and i think that would be a pretty good outcome for twitter. right now, their major is the product is complicated enough that users are not, you know, staying with it. and the user growth has been really lackluster. and that's the thing that really needs to get turned around in order for the company to get to a higher level of value. so i think one of the things we saw on the q2 report is that they sort of took their eye off
of their product improvement ball and focused more on video. so we'll see how that plays out over the next couple of quarters. >> michael, what about going private? just go out of the public eye and try to turn things around then? >> well, you know, that's a possibility, but you do have some investors in twitter that have been there for a quite a long time and their patience is running thin and you would need to find a new pool of capital to do that and it's not clear where that could come from right now given that the fundamentals in the business are sort of headed the wrong way at the moment. >> and kurt, there is that nfl game or games that twitter is going to be streaming coming up here. how important are events like that for this company, or do they not move the needle that much? >> well, i have a tough time believing that they really are going to move the needle. i think they're very important to twitter. twitter has put a lot of time and effort into talking about these deals. so you mentioned the nfl thing. i believe it's going to be ten different games throughout the season, the first one being next thursday, so a week from today, that they're going to broadcast. and you know, they've made some
money by selling advertising against this deal. the question is, is anyone going to sign up for twitter, just to watch an nfl game, maybe on their phone? i have a tough time believing that, especially because they're offering this for free. you don't have to have a twitter account to enjoy this streaming feature. but they are, you know, they have a bunch of these streaming deals going on. they say this as the future for them, this kind of digital tv thing. i just don't know if it's going to be big enough to get them out of the hole that they're in. >> kurt, we mentioned, no suitors, but they haven't really put themselves up for sale. do you think that they would get some bidders if they did? >> i think if they certainly came out and said openly, hey, you know, we're on the market, come give us your best bid, i definitely think people would come forward. i don't think they're at that point yet. i think what they're, you know, probably trying to discuss today and looking forward to in the future is again, you know, how can we best position ourselves to be in an attractive buy? a lot of people think they're too expensive right now. so, you know, what can they do around the basically making twitter a more attractive option
for someone like a google or someone else maybe in the media world to come in and shell out, you know, 15 to $20 billion. >> feels like yahoo! and i'm sure that's not what they're looking the for. >> no, that's not it. >> kurt wagner and michael graham, thanks for joining us today. >> thank you. >> imagine if i would worn mine -- my platform speakers i used to wear in the '70s. >> i think you should adopt -- >> i don't have them anymore. >> now they're -- >> my glitter rock days. >> i didn't see those pictures in the book, by the way. glossed over that period. >> nor will you. the dow is down 41 points today and the s&p is down 4 with about 45 minutes left to go in the session. the nasdaq is down 24 and the nasdaq has been the record setter this week. up next, mixed the signals on american shoppers. the head of one of the nation's biggest banks says the consumer is in good shape. meanwhile, though, more grocery chains are cutting their profit outlooks. we'll sort things out, what's happening, coming up. and later, allergan's ceo discusses his manifesto, touting
the company's commitment to limiting drug price hikes. we'll discuss whether he thinks other companies will follow suit. by the way, tomorrow, don't miss steve liesman's exclusive with federal reserve governor, dan tarullo. that's tomorrow at 10:00 a.m. eastern time on "squawk on the street." hey, you're watching cnbc, first in business worldwide. hey, it's been crazy with school being back- so we're constantly going over our data limit. oh, well, now - all of our new plans come with no data overages. wow, no more overages? so that means... go on...say it... we'll finally be in control... and we're back... introducing new at&t plans with no data overage charges. [ala♪m beeping] ♪
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at 43 minutes left in the trading session, let's show you some movers on wall street today. tractor supply, posting one of the worst declines on the s&p. several firms, including credit suisse, downgraded the farm bureau and hardware retailer's stock after tractor supply cut its full-year profit guidance, citing key sales in agricultural regions. pier 1 tumbling, as well, with analysts at anoppenheimer and raymond james downgrading that stock. pier 1 says its ceo, alex smith, is retiring at the end of this year. kelly? >> now bank of america's ceo
speaking exclusively with our wilfred frost earlier and he had positive things to say about the state of the american consumer. wilf joins us now with more. >> he did, indeed, have positive things to say about the consumer, particularly over the summer. >> if you look at the month of august, it will be the strongest consumer growth in debd and credit cards this year. and that's backing that out. the year-to-date semester on debit and credit cards are spendispend ing 4.7% more than they did last year and the space is accelerating. the consumer is in very good shape. >> on the commercial side, he said credit quality was pretty solid, although there was some nervousness mo nesness amongst ahead of the election. when asked if he had confidence in the recent record highs, moynihan had this to say. >> it's clear that there's been low volumes, it's been a one-way trade. but the question really is,
experts sitting out tells me, where else is the money going? with dividend yields and southern yields, the money will go into the equity markets, because they're looking for returns. it's -- complacency then says people are missing something, and rve every day has a view of this market. but it's clear the money's going into the equity markets because of that lack of yield and lack of other return areas. >> he also said that a 25 basis point rate hike, if it came, would be worth roughly $1 billion to their bottom line, in in terms of net interest. >> so they are cheering the fed. >> of course. >> get busy there, right? >> of course. >> how do we reconcile what his view is of the consumer of being in pretty good shape, solid right now, in his word, but some of the data we get from the retailers themselves is not so great. >> absolutely. >> and that's really why the question was so pertinent. the lone growth figures we saw across all of the other banks was very strong, given that we've seen some of those soft other configuration that you've mentioned and gdp numbers adds well. one worries, is this a
late-cycle boost on the consumer credit card front that's not going to come through. the message, both from jpmorgan earlier in the summer and from brian moynihan is absolutely not that. it's a positive sign that the consumer is not worried about credit quality, which suggests it's a bullish thing of a pickup to come in the economy that we haven't seen yet. >> the only little wrinkle is what everybody is now saying about this funnel, this push, this leap into equities as being the only alternative. >> and i think that's something that we all have to continue to worry, when you hear it from someone like brian moynihan. he ceasees the volume we've see over the summer. and with yields so low, there's a push into various dividend stocks. >> it's hardly a dividend of stocks when you say, how else are you going to invest your money? thanks, wilf. but not always right on the consumer front, supervalu joining the list of grocery chains lowering their profit guidance. susan lee joins us now. what's going on with consumers and their food? >> let's be clear, it's not because americans are eating
less or shopping for fewer groceries. i can tell you that from my own expanding waistline. it's because food prices are on track for the longest stretch of declines, falling for nine straight months and counting, according to the bureau of labor statistics. it's because there's an oversupply of eggs, of meat, and milk. so a carton of eggs now costs 40% less in july than they did a year ago. mil is cheaper by 11%. beef prices have fallen 7% this year. and a number of grocery chains, including sprouts and supervalu have cited food deflation as a reason that they have cut their earrings guidance. combine that with a very -- an ultra competitive pricing environment thanks to big players like walmart's getting competitive, europe's aldi's entering the u.s.'s grocery market, that means everyone's undercutting on prices. it favors bigger competitors like kroger's and walmart, who can absorb these price cuts.
kroger's reports nor s tomorrow morning. the stock has been hammered so far this year and trading at their lowist since 2014. back to you. >> it's interesting this happens, even as we're reading about kmart adding some groceries and target doubling down. why is this even like a desirable space to go into? it seems like the dynamics are horrible. >> look at walmart. i think that's an example they're using. walmart really being helped by grocery aisles. in fact, foot traffic increase in walmart thanks to cheaper groceries they're offering. i guess, target to me, they're probably think, if walmart can get more people into the stores because of cheaper groceries, cheaper milk, cheaper eggs, we can do the same. maybe they'll go and buy something more expensive a few aisles down. >> the loss leaders -- >> it's all about market share, not about profitability. >> and you can go and get a haircut while you're in the store. >> it's a great story and we'll tell you about it later. >> thanks, susan. >> something about thomas paine, but it's a long story.
40 minutes left in the trading session here. i can't believe you were about to tell that story. we're down 45 points on the dow. coming up, allergan's ceo speaks with us exclusively about his bold pledge to limit drug price increases, coming up. up next, the ceo of the dna testing company that changed bill's life forever. stay with us. >> i want a piece of him. across new york state, from long island to buffalo, from rochester to the hudson valley, from albany to utica, creative business incentives, infrastructure investment, university partnerships, and the lowest taxes in decades
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welcome back. shares of nike lower down about 2.5% after piper jaffrey downgraded the stock to neutral from overweight, although it is maintaining its $58 price target. the stock's at $56 right now. the firm cited increased competition in europe, muted innovation, and consistent markdowns in that category. now, before you start researching your family history, you'd better be prepared for some unexpected results. bill, four years ago, submitted a couple of cotton swabs for dna testing, part of a family project, into ancestry, and got the shock of his life. >> if you haven't heard, i found out my father wasn't my father. and i blame this man, max blankfeld, from family tree dna is the family that processed my initial test. are you sure that test was accurate? that result? come on? >> absolutely sure. in fact, we have tested, since our inception in 2000, we have tested hundreds of thousands of
people and we are pretty convinced of the results. we have a very state of the art lab and a very professional staff. >> and i'm stunned to learn that i'm not the only person that's gotten a result like that, huh? >> yes. there is a quite relevant pes g percentage of people by doing their dna tests, they find out about not being really part of the family that they thought that they are part of. and many other people find about ancestry that they were not aware of, in terms of their identity. >> max, as the price of these kits falls and more people are doing it and more people entering this space, what is your own business strategy? and how is demand for these kinds of tests? >> i can tell you that we were the first company to start with this in 2000 and in the beginning, it was really very difficult for people to
understand where this is -- where this was going to. but in the last few years, the business has grown quite substantially. we test hundreds of thousands of people. we perform over 500,000 tests, different tests, a year. and more and more people are coming into it. the price of the test also has fallen substantially. the most common test that we are selling now goes for $79. >> and i've got to tell you, kelly here, she is so anxious to take a dna test, can you demonstrate what -- how it works when you take a dna test? you've got a kit there, don't you? >> yeah, absolutely. actually, it's very simple. and let me show it to you. it's a cheek swab that you scrape inside of your mouth, in your cheek. we don't need blood, but we need a good scraping. once this is done, you simply plunge the tip of the swab inside the kit and we send it
back to us. and we ship the kit all over the world. >> do you think if i had done the other cheek, i would have gotten a different result? >> not really. and in fact, we send everybody -- we send a couple of cheek swabs and a couple of vials so we can have enough dna to perform a good test. >> uhl tell you a funny story, very quickly. i didn't mention your company in the book. i didn't want to get anybody in trouble -- >> i know this. >> -- the fact that yours was the company that i took the test from. but i took a test from another company, so i would get a second opinion, if you will, and it was the genegraphic society, and i just found out today that you do the results for the genegraphic society, so it went to the same lab after all. how funny is that? >> well, that's not a coincidence, because actually, we are the only genetic testing, genetic genealogy company that has the lab. so we started doing tests with
"national geographic" in 2005. >> i love that. max, thank you for joining us today. appreciate it very much. >> thank you. >> no hard feelings, by the way. mom says hi, too, as a matter of fact. max blankfeld from family tree dna. >> that's interesting, that they were kind of the engine behind -- >> we were just talking about that. >> by the way, an scestrancestr ceo will join us tomorrow to close out our series on genealogy. >> by the way, it sold out of amazon. you can get it from the publisher at americanancestors.org. time for a cnbc news update with sue herrera. >> here's what's happening at this hour, everybody. vice president joe biden joining fellow democrats this morning, pressing republicans to do their job, calling for, among other things, a clean zika funding bill. >> people's health, the well-being of unborn children,
the health of the country at large is at stake. act. >> thousands of coal miners, their families, and supporters rallied at the u.s. capital to make sure congress votes to extend coverage for retired miners. the senate could vote on the miners protection act next wednesday. u.s. army commander colonel brett sylvia says that iraqi security forces have been moving faster than anticipated in their offensive against isis. speaking at a u.s./iraqi coordination facility in northern iraq, he said he was optimistic that mosul, iraq's second largest city, could be retaken before the end of the year. and a big cleanup in delaware this morning, after a truck carrying pennies overturned. witnesses say the driver lost control of the vehicle, spilling its load of unstamped pennies on to the road. no major injuries and you can't use the pennies, because they haven't been stamped yet. that's the cnbc news update this hour, you guys. back to you. >> oh, my goodness. >> tied up traffic for a long
time. >> you could make a joke about helicopter money, but this is -- >> or pennies from heaven. >> i think they should do away with the penny. it's useless. >> oh, please. >> it just weights you down in your pocket. what is the point? electronic money is the future. >> it's iconic, bill -- >> lose the penny. >> they lose money on it too, right? >> exactly. thank you, sue. >> cast your vote at -- >> thank you. >> what was that website? 30 minutes left in the trading session with the dow down 34 points. we have a leading trader joining us from the floor of the exchange to tell us what he's watching going into the close here. and hillary clinton holding her first news conference since december. we'll have highlights for you, coming up. ok team,
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and barclays says capex has dropped to an estimated 1.3 to 1.8 billion this year. it was $14.7 billion as recently as 2012. chesapeake reporting that cost per barrel had dropped to nearly half over that same period and investors are cheered. bill? >> 24 minutes left in the trading session here, with the dow down 24 points. joining me is keith grasso from stewart frankel. sideways market continues, not even an ecb meeting or a pop in oil can move this. you have a theory, or one you've heard, that there's a lot of optio options hedging going on. and does that explain why the vix has remained stubbornly low at the same time? >> i think so. people are hedged out so properly or so much so that the markets stay flat. so there's not that need for volatility, or it squashes that volatility that we're often you'd to, in the market. but that, too, might come to an end, eventually. >> by what catalyst? what are we waiting for? >> i think you have to get
somebody off sides. you have to get some type of a news event. maybe it is the fed, but i think to the point, we already know that. we already know about europe. we already know about the fed. so it has to be something that shocks the market. sort of like the ebola crisis. sort of like an unforeseeable event, which if i could tell you that and they could tell you that, it wouldn't be unforeseeable, but all of those people who say, what's going to really take us off a cliff? we know about this, this, and the other thing. you know what? then there would never be a sell-off in the market place. it's got to be something that catches us on our heels. >> very quickly, what are you doing in the meantime? hedging? >> i think you have to sit with positions that you feel comfortable, and you have to trade this market like we're seeing today. we see energy leading, but also, we see utilities leading, too. conflicting right there. search for yield, buy things that you feel like you could sleep at night and put your head down on the pillow and not worry about the risk. and those shocks, really quick,
when you see them sell off, they're only for a short duration. unless it's going to be something that changes the market direction, sit on good companies. >> all right. very good. thanks, bull. >> see you later. kelly? >> thank you, guys. it was a rare event today. hillary clinton held her first news conference since early december. john harwood joins us with the highlights. hi, john. >> hi, kelly. you know, hillary clinton used that rare press conference to tee off on donald trump's statements in last night's commander in chief forum. she went particularly after donald trump's criticism of u.s. generals who he said had been reduced to rubble under president obama, and his praise for america eeamerica'sed a adv vladimir putin. >> bizarrely, once again, he praised russia's strongman, vladimir putin. even taking the astonishing step of suggesting that he prefers the russian president to our american president. n
now, that is not just unpatriotic and insulting to the people of our country as well as to our commander in chief, it is scary. >> now, of course, donald trump says he can work with vladimir putin to combat isis, but he switched gears in his own remarks in cleveland this afternoon, citing his superior ability to create jobs. >> she said she was going to bring tremendous jobs back. it will be wonderful. just like she's saying now. she wouldn't how to bring a job back. she would haven't a clue. so, it's all talk, but nothing happens. and that's what's going to happen with our country on jobs and nobody is going to bring jobs back like donald trump. >> now, donald trump got some good news this afternoon from new swing state polls, from quinnipiac university. they show hillary clinton with diminished leads that they still exist, but smaller, in
pennsylvania, as well as north carolina, but donald trump in a dead heat with hillary clinton in the key swing states of ohio and florida, guys. we'll be watching all of those swing states in the next few weeks. >> yes, we will. let me take you to the third candidate, though. gary johnson, how much damage do you think was done when he didn't understand the aleppo question? >> well, he didn't help himself and he needs every little bit he can get to try to move from the 10% where he's been now to the 15% he needs to get on the debate stage. on the other hand, bill, al of people are mentioning gary johnson's name today. people are becoming aware that there is of candidate in the race. so, you never know exactly what the reverb is going to be from a mistake like that. it was embarrassing, but he also was fair human in acknowledging it. he went on the view and he said, no excuses, i was thinking of an acronym, not exactly what mike barnicle had been asking about. there wasn't a specific
reference to syria. so it's hard to forecast exactly what it's going to do, but certainly, it embarrassed gary johnson. we'll see whether he can make anymore headway in the polls in the next couple of weeks. >> as he tries to make it into that first debate. thank you, john. >> thanks, john. >> our john harwood in washington. about 20 minutes to go here. apple, one of the worst performers, i think, the worst performer on the dow today, down nearly 3%. the dow itself is holding up relative to that with a decline of 2/10 of a percent. there are 60 days now until election day. and former deputy treasury secretary and current hillary clinton supporter, roger altman says the race for the white house is over. he explain whys, coming up. and also, apple shares following after announcing its new iphone 7 yesterday. the company also announced today it's not going to release preorder sales numbers, because they are more a reflection of apple supply than demand. up next, we'll look at all the apple changes and discuss if this is an opportunity for
be governed by supply, not demand, and we've decided it's no locker a representative metric for investors and customers. therefore, we won't be releasing a first weekend number any longer. >> let's talk about that and other things involving apple. joining us, sean carolyn and andrew marvenick. sean, they did this last time, i think, the last model, they didn't release the figures. should we make anything of that? the initial sales figures. >> i don't think so. apple decides what they want to release and what they don't. i think it's a great device. we'll see what happens. >> what do you think about the argument that this time is different? you know, that supply somehow wasn't governing things in the past or that this metric is no longer relevant. >> look, you know, the news has been out for a day, so, we'll see, but, i mean, i think the market always decides once the device comes out, people get it in their hands, the reviewers get to really do a rundown. i think there's a lot of stuff going on, both in the phone, but
also beyond the phone, the air pods and battery cases and the watch, i think, is a lot more compelling. it's not just the phone, it's a bigger ecosystem at play here. >> andrew, what'd you think, of what you saw yesterday in the introductions? >> well, wii think the way we follow all of these things, we kind of knew ahead of time what the big features were going to be. we just wanted to see how apple was going to sell it. and i think they're doing a good job. they're selling it, you have this whole new ecosystem with the new headphones and new watch. it's a compelling device portfolio. but they always come up short. they can't make as many as people want. and that's a good problem to have, no matter what side you are. >> what do you think about android, shawn, and the galaxy note 7. it got a lot of positive reviews, before it had the incidents with those fires. >> galaxy is great device. android is a great operating system. you know, the market share
numbers are out and android is in the lead. but a lot of that is, you know, loss-expensive phones. but apple iphone is still the premium device. i'm not expecting big market share shifts because of this thing. it's pretty stable. there are a couple of viral features that are interesting. the imessage, app store is interesting, and then the kind of speaker piece -- the speakerphone mode, where the phone is supposed to replace a blue tooth speaker. that could get other people to buy, but i haven't heard that yet to see what the difference is going to be, but it's interesting. >> i was going to ask you if iphone is the premiere device on the market, shawn. because the reviews in the journals basically say, you know, you look at the iphone relative to the screen quality and width and everything that's on a samsung device now, and the reviews just don't sound like they're talking about the most exciting, innovative premiere product on the market anymore. >> you know, i think that's the difference between reviewers and consumers, is consumers will buy
what works best for them, and there's a lot of subtleties with regards to usability and the software and how easy it is to use. but the numbers speak for themselves, if you look at developers, who obviously we do a lot of business, as a venture capital firm. the developers will always fund application development for the iphone first, and then for android, because apple customers pay the most money for their apps. and use them the most. and that sort of thing. >> andrew, the buildup buzz was all about the virtual jack. now it's about the air pods. what do you think of those things. >> i think that a lot of manufacturers have been making great blue tooth headphones for a long time. apple has this seamless connection. they do all of this very well and do the same thing with apple watch, where it's easy to pair it up. but in the end, i don't think the air pods will be selling any iphones. i think in the end, that's going to detract away from the iphone, if anything. now, a lot of people are still going to buy the iphone.
but i think anybody that was kind of on the fence, their going to look at this and say, well, now i have to buy some extra wireless headphones or some different lightning wired headphones. and and if i'm going to buy different stuff and switch over, maybe i'm going to consider something else that i was already considering and that's going to be android. >> gentleman, thank you. shawn carolon, thank you. >> i'm telling you with the air pods, you should wear them that y. >> but if you switch ears, they would stay in. because they're now made to sit right in the ear, so they don't fall out and you lose a $139 pair. >> ten minutes to go. the nasdaq is down to. >> just like yesterday, art cashin stopped by and said the market to close orders is 300 to buy. when we come back, our next guest is bullish on energy and defense stocks, she'll tell us which ones, after this.
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money managers, day don't want to invest for yield, that's a crowded trade. you're not afraid to do that, are you? >> no. we run dividend funds, so if i were afraid, that would be a problem. we think there's a lot of room in dividend funds. you see some of the yields in energy, and they're still pretty good. we like bp in particular for that reason. there are other places. defense has pretty good yields, and they're returning a lot of cash to shareholders. i think right now, people are so strapped for yield, because you're looking at all of these things that are going on. the ecb, which did not extend its program today, but is pretty much expected to in the next few months, you've got negative interest rates across a wide variety of bonds, and people are just looking everywhere they can for yields. >> it's amazing, henkel and san fei bargained on five-year terms and negative rates. so even if this trend you're talking about continues, it can't be a positive development for all of this to be happening. >> no. i would think it's really a difficult period of time right now, because you're looking at a lot of places where real price discovery is hard to have,
because government bonds are being bought by central banks. and now corporate bonds are being bought by central banks. so you've got a market that doesn't have the same kind of pricing discovery that it used to have, because you've got a backstop of all of the central banks that are trying to push down interest rates in the hopes that somehow it's going to fix thing. it makes it a very difficult environment to invest in. >> give us a for instance. what do you like here? >> we like harris. it has a nice dividend yield. there's an activist investor in there now, and that's moved the stock up. but we like the big cap defense. we like raytheon and lockheed. i just mentioned bp. i think bp has enough cash to continue to pay its dividend. most of these guys are pulling back on their investment, so you've got some cash that's being saved there, which will ultimately lead to higher oil prices. when that happens is a big question, because the supply/demand balance is still a little tricky, but in the end, you can get some really nice yield out of some of these stocks. >> good to see you, sarah. sarah hunt from alpine funds joining us today.
we'll take a break with the dow down 47 points and the closing countdown in a moment. >> and after bell, we are going to speak exclusively with the ceo of allergan, brent saunders about his attempt to revolutionize pricing in the pharmaceutical industry. keep it right here for that. you are watching cnbc, first in business worldwide. remember here at ally, nothing stops us from doing right by our customers. who's with me? i'm in. i'm in. i'm in. i'm in. ♪ ♪ one, two, - wait, wait. wait - where's tina? doing the hand thing? yep! we are all in for our customers. ally. do it right.
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i'm going to focus on oil first. a pretty good pop on inventory data today. a pretty good move there. so we saw, what, a 2% -- >> it popped 2. it had already been up almost 2%. popped 2 on that news. >> finished up 4.25% at 47.43. oil stocks. they don't always correlate. as somebody said to me the other day, oil stocks will go up when oil goes up, but when oil goes down, oil stocks lately have been hanging in there. >> it's been widely remarked that exxonmobil doesn't go down much even when the markets go down. that's because exxonmobil has that huge dividend, and it's been owned by people who want dividends. and it's the piggest oil company that's out there. the biggest diversified oil company that's out there. >> looking at the ten-year yield, the ecb, the european central bank did nothing this morning, holding out tb possibility of further quantitative easing down the road, but that's pretty much what was expected here. >> and you talk about damned if you do, damned if you don't. and if they came out and said
welcome we're thinking about buying more, but they didn't do anything. which should have supported the people who said, we don't want anymore negative interest rates, dp they got criticized for not helping the markets out. so it's in the a terrible position. >> but it does make our yields that much more attrtive. and we see the ten-ye down at 1.6%. yet, we still go sideways for the equity markets. i think the important thing is, with the equities and energy markets, a lot of that drawdown, apparently, was due to the hurricane. and a lot of people were saying, we may see that come back to us next week, i don't know, but the bottom line is, the energy market is one of the market leaders along with bank stocks, which were up again today, by the way, on a generally down day for the market, the bank stocks were all on the up side. and technology stocks have been holding up. so you have market leadership in tech, in backes, and in energy today. those are the high ends of the market. and that's why the market's holding up so well. >> thanks, bob.
see you later! dow 44 points on the dow jones industrial average as we go out here. restoration hardware has earnings coming up momentarily. we'll get you that and the folks from cbs ringing the closing bell here as they introduce the new series "macgyver," a throwback show there. stay tuned now for the second hour of the "closing bell" with kelly evans and company. see you later, kel. welcome to the "closing bell," everybody. i'm kelly evans. here's how we're finishing up the session on wall street today, with the dow dropping nearly 50 points. the s&p closing down by about five to 2181. those are about a quarter of a percent declines for the dow and the s&p today. the nasdaq, about doubling that, dropping nearly half a percent or 21 points to 5259, receding from the record highs it did set earlier this week. allergan ceo brent saunders promising to limit the price of
drug hikes. on the panel today, cnbc commentator, mike santoli. cnbc contributor, ylan mui, and tim seymore. welcome, everybody. and mike, this -- i mean, the worst performer in the dow today was actually apple, although nike was in there, too. and overall it felt like we were casting for direction. >> we were churning around today. it's been the trend as we're going sideways with the broad market, that there's some other market that makes a move. and part to the u.s. stock market adjust to it. today, it was oil getting that nice pop. energy stocks leading the way. and bond stocks around the world lifting after that ecb decision on no new real news. and i think that had a lot of people saying, does this finally mean we're breaking out of the range of lower rates in the dividend trade and all of that? it didn't really have a pronounced effect, but we have seen, as we've talked about, a move into some of those big
growth stocks in the last week or so. that paused today, ads well. i really do feel that we're being held with these opposing currents right in the middle of this range. >> it looked in the middle as people were reacting to the central bank's decision not to do anything further. they're already buying $80 billion a month and meeting all of these limits about the stuff that's out there for them still to buy. but still, there was disappointment. >> yeah, i think that actually the ecb's decision to wait and see is actually a good thing. it's a sign that the disaster that was predicted to happen after brexit didn't occur. so they have a little bit of time to sort of see how things are going, assess what more stimulus, many exact measures are going to be needed. i don't think that going even more negative on interest rates is off the table. interest rates have been working and they're willing to test the limits of exactly how low they can go and that there's a little bit more room still left there to see. so i think that actually it's a good thing, that the uk economy and that the european economy
has not fallen off the table, after the decision to leave the european union. >> in fact, my favorite little nugget from today, tim, is an analyst who was saying, between the drop and the pound sterling and apple's higher price on the new iphones, it's going to contribute to britain's inflation, nearing 3%. >> yeah, and let's hope that there's that many people in the uk that need to buy it, you know? and apple will probably be pretty happy about it. i think in line with what everybody's saying. if you think about, first of all, msci world at 13-month highs, effectively. emerging markets at 52-week high. oils rallying, financials rallying, bond yields backing up. this to me is not just rotation, but it's telling you that i think there are parts of the economy that people needed to see or places that were obviously not just laggards, but there was a reason why these sectors or asset classes were avoided. it's a place where people are uncomfortable with valuations in many places, and these are places where largely you have relative value owning europe over the u.s. the currencies are very, very
cheap, so this make sense to me. but if ooum a investor who says, i can't buy defensive stocks at these levels. i need to buy places where i think there's cylicality. >> but does it continue? it seems like the powerful trend is still that the dividend is your friend. >> that is definitely the question. i think if we're going to stick with valuing stocks in general on dividend yields, then, no, that trade doesn't fall apart. but i think to tim's point, the market has been trying to tell you that that was a stale strategy for a little while now. i think the big question now has some people, at least, scratching their heads, is the u.s. stock market has held up here, even as that kind of economic surprise trend, it was really in our favor for a few weeks has rolled over. does it matter? the consumer side seems okay, investor side, not so much. and of course, everyone feels like that means, well, fine, the fed doesn't do anything for at least a few months. >> to bring up this point, though, that right now we're in this period of calm, both in economic data and the markets. the global economy, the risk we
saw earlier in the year seems to have diminished. the fed has a window right now. does that mean it's going to take it? i don't think that it will. so the question is, if this meeting passes, they don't move, could we see more volatility return before they move again in december? >> and let's talk about one tidbit before we have to move on. in the meantime, china had its biggest outflow since january in the month of august. we got the numbers. they dropped about $40 billion and they're below 2.2 trillion of foreign reserves for the first time in quite some time. people are totally shrugging this off. it's nothing like december and january when more than $100 billion was flowing out. but still, is there a risk that this comes back to the forein some way, shape, or form? >> absolutely. and i would argue, you know, last night, the if you want to close at six, spot six six, a little on mouse, but effectively, you know what's been going on with this currency. i would argue that the central bank of china has been in the
market, intervening on the currency to try to alleviate some of this weakness. remember, i don't think china's economy gets the kind of, you know, elixir or the benefit from a weaker yuan at home than people think. and i don't think that they're trying to engineer this in any meaningful way. if anything, i think they're trying to avoid more -- they won't call it this, but clumsy policy. so i think people have to be pay attention to that part of the world. i think we're talking about it, was i think people have overreacted in the past. right now, the chinese economy, if anything, we are seeing improved commodities demand out of china. the export numbers were better, even though largely that trend is down. china's largely sideways, with the exception of, there is some recovery from fiscal policy that is putting some demand on commodities. >> all right. definitely something to keep an eye on. let's get to twitter, holding its board meeting today. shares closed down 6% on a cnbc report that the company doesn't have any outside bids on the table at this point. michael packer is joining us
from wed bush securities with a neutral rating on the stock. how much is this board meeting supposed to be some sort of daily from your point of view? >> i don't think we should have expected an announcement of an acquisition at the board meeting. and i think that, you know, we probably can't expect them to confirm that nobody's looking at them. but the truth is, there's only one strategic buyer and it's facebook. and of course, there are crazy companies like microsoft that might buy them, just because they can. but i don't see this company in play. i see the poll as being slightly broken and in need of a fix, and i think you give dorsey another year and let him fix it. if he doesn't, get somebody in there who can. >> michael, you mentioned microsoft. and i'm not sure if maybe everybody thinks that buying linkedin was crazy, but one interesting thing about the microsoft linkedin deal was to me, anyway, it kind of rendered a verdict that, okay, linkedin is kind of a business tool. they talked about being a social network. it's maybe going to be integrated in some other stuff that microsoft does on the
enterprise side. what is twitter? would an acquisition or at least a contemplation of a deal try to illuminate exactly what this company or what the product is longer term? >> i mean, i think that twitter is a news source and i follow tim seymore on twitter because i get all my market knowledge there. i really do. i think it's instant news. and i think that's the one element that facebook is missing. i think facebook really wants to be a media company and that's the one aspect of media that they're really, sorely lacking. i don't see how that fit s microsoft at all. of course, there are companies with more money than sense, so google's in the mix, apple's in the mix, but i actually don't think anybody's a bidder. i don't believe the ballmer thing, and he's made plenty of bad acquisitions in his career. but i think these guys are going to be left to muddle on their own and prove out the business model. and if they ever start growing their user base, you're going to see revenues falling. >> tim? >> michael, first of all, thank
you for the compliment. my question to you is, if it's a media company -- you know, a news company, why wouldn't a media company want to own this? there's a lot of the core media companies who are in the business of news, that really don't have the presence that twitter has, even if they haven't monetized it yet. and intrinsic value seems to be very hide. shouldn't this be owned by a media company? >> the one that actually makes sense is probably news corp., but they're the ones who are still kind of committed to print. i don't see them as an acquirer of, although i think it's actually a pretty good fit. i don't see disney. they've had bad acquisitions. i don't see warner even wading into this. and again, most of media companies aren't really in the news business, except for news corp. so i don't see it as a great fit for any of them. >> michael, where does that leave twitter, finally? >> twitter has to figure out what they want to be when they grow up. and what they should want to be is the first source for news, for everybody. i mean, i actually think their
adjustable market is the 2.5 billion people on the internet who have an interest in anything. if it would make the interface easy to use, make it clear to people who don't use the service that they can get real-time information from tim seymore, as soon as he's off this show, then those people are going to choin. that's the point. everybody watching cnbc should be following all of you guys on twitter, because we get a lot more information. >> especially me. >> definitely. >> so i was going to say -- i guess we should leave it there, but i was going to joke about your comment about the 2.5 billion people on the internet are actually interested in something, michael. presuming you mean everybody online will want their news if they can get it filtered in the right way, according to what they're interested in? >> by something, i don't necessarily mean news. i mean, they're interested in entertainment. they're interested in soccer. they're interested in the olympics. they're interested in brexit. i mean, it doesn't have to be news. it's just that twitter hasn't done a very good job of getting
interesting people to post. so you actually don't see kim kardashian posting on twitter first. she posts on instagram. i don't know why, but they should incentivize her to post on twitter and people who follow her there would track her there realtime and that's more interesting. >> good point. thanks for joining us. michael pachter there. i want to draw your attention to shares of restoration hardware. earnings beating expectations, 44 cents adjusted. the estimate from wall street was 29 cents. keep in mind, this future earnings beat is being helped by shipping. the company says, because our ability to ship products earlier than anticipated, that resulted in a pull forward of revenue and earnings into the second quarter from the third quarter pch comparable revenues declining 3% compared to a 16% increase last year. that is from the second quarter. the company also saying that they are making several strategic investments and changes to their business model
in fiscal 2016 that are temporarily depressing financial results in the short-term, but they believe will help in the long-term. we're looking at the stock up 9% in extended trade. this is one of the high-end retailers that has been under a lot of pressure this year, down about 50% year-to-date, i believe. and remember, this was the company that did say sales were hurt by the volatility in the stock market back in february. so we will get on that conference call, kelly, to get you those highlights in today's session. >> seema, thank you. the restoration hardware, 52-week high was like 106, mike. >> this was a favorite revival story in retail for a while. seema mentioned that february surprise. the stock fell from about 51. so obviously we're still knocking around in the lower end of that range. and i think more than a quarter of the shares are short. still, it's kind of a dog fight. >> a 9% pop there, as it does beat on earnings from restoration hardware.
tim, we'll let you go. there's more coming up next hour on "fast money" with bob pec joining them to predict what twitter's future will look like after today's board meeting. huge drug price hikes have outraged consumers and lawmakers, but allergan is pledging to limit price increases to single-digit percentages. up next, the company's ceo, brent saunders, joins us exclusively to tell us why he made that decision and whether it's in the best interests of shareholders. plus, did tesla just solve its cash crunch by getting a big line of credit? we'll give you those answers coming up on the "closing bell." you're watching cnbc, first in business worldwide. 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.
welcome back. allergan's ceo brent saunders taking on the drug price wars by pledging to uphold a social contract with patients in this company blog post. saunders vowing to limit allergan's drug price hikes to once a year and keep those prices below 10%. let's head out to boston, where meg terrell is at the wells fargo health care conference with allergan's ceo, brent saunders. meg? >> kelly, thank you so much. brent, thanks for joining us. >> thanks for having me, meg. >> let's start off with the news of the week, your blog post,
your social post about drug prices. one of the things that was so interesting was you said how this was hard for you to write right now. have you gotten pushback from colleagues? why was this difficult to write? >> ill tactually the reverse. my colleagues can unanimously supported me and my executive team got advance notice and we all talked about it and they were fully on board. my board of directors endorsed it completely. interestingly, since we did it on tuesday, i've heard from numerous employees all over the world, even though it's a u.s. issue, i've heard from physicians, i've heard from shareholders, i've heard from peers, i've heard from smaller company ceos, all very encouraging feedback so far. >> so one of the things you've said is that you condemn these egregious or outlier pricing increases. where do you draw the line on what's an outlier, what's egregious? >> look, i don't think it's a bright line that we're going to draw here. i think it's a fact and circumstances analysis. i think if you're taking all drugs and you're building an
entire business model over price increases versus investing in innovation and looking for cures and treatments around that medical need, you're probably moving into an egregious pricing decision. you would have to look at the exact facts of the situation to determine if, in fact, that's true. but you're setting yourself up for that type of criticism. >> when you mention older on the market products, that sort of also speaks to what we saw proposed by hillary clinton, to have this sort of drug pricing panel that would observe behaviors and would have the potential to levee fines or do other measures. what do you make of her proposal? >> i think it makes for a good campaign promise and it's a populist issue and you understand and empathize why, because it's bad behavior and it's hard for the public to understand it, but this isn't something that government can solve, because it's a fact and circumstances test. so i would rather see industries like allergan is doing, we're making a very bold commitment to say, we're not going to engage
in this practice. we're going to focus on driving our business the way it should be if you're an investor in our business, on selling execution, on entering new markets around the world, on new product launches, and most importantly, on innovation, investing in r&d, and finding cures and treatments for a medical need. >> so you've drawn the line at sort of 10% or less than 10% once a year. some of our colleagues, even in what people would say are the innovative space, like an ely lilley or a pfizer. lily has taken 12 to 15% price increases for the last five years, pfizer, 9 to 15% over the last four years. should they be on notice? do they need to take a pledge like this? >> i think everybody should take a look in the mirror and examine the practices that they're taking in this arena and say, does it hold up to the social contract we have with patients? those companies all invest in r&d. so we applaud that, right? that's good. and they're all looking for cures and treatments to unmet
medical needs. we applaud that. but are they taking price increases solely to drive their business to make up for shortfalls in other areas, or are they doing it because they can justify it by looking in the mirror, understanding the value of the medicine that they're bringing to the market, and can -- with transparency, explain the immediate for that price increase. >> kelly? >> brent, hi, it's kelly. and we all remember the episode back when valeant wanted to overtake allergan. now those shares have fallen precipitously. would allergan ever look to overtake valeant here? >> no, i don't think so. our model is growth pharma. we have been inquisitive, without question. but every one of our acquisitions or deals has been growth oriented. we look to buy young products that we think we can put into our hands and do better with and really grow, or we buy r&d assets, and best i can tell, valeant just doesn't fit that bill. the other thing i can say, we're
not looking at doing transformational m&a. we've built our company. so we're looking at stepping stone deals where we can add to the therapeutic presence and look for cures and treatments for unmet need. we announced one on tuesday, gene therapy for blindness that is early, but very interesting and very exciting for people suffering from certain rare form of blindness. >> you know, your comments about drug prices are kind of an implicit critique of heather bresch at mylan who's created a firestorm over these epipen price hikes. how much of what you are now saying is a response to that? and could they just simply lower the price of the epipen here on the spot if they so chose? >> well, it wasn't meant to be a criticism of heather or any one particular company, but rather the aggregate actions of some egregious price takers. and really, the purpose of what i wanted to write when i wrote the blog was to be positive.
to talk about what allergan could do to change the conversation. what would we want to be held accountable or responsible for, how could we be transparent, and how can we provide our medicines in a more affordable way. so we didn't try to take shots at anybody else in the industry or in the distribution channel and really stay on focusing a on what i can control as ceo of allergan, which is what we do. and look, if he wanted to cut the price of the drug, they could do it. we could do it, they could do it, anybody could do it. >> understood. one final question, because a lot of this has been about the social contract, prior to apple's tax issue in dublin, the pharma industry was the one in the crosshairs of all of this, accused of being tax evaders. the government went after pfizer's team to take you guys over to get those tax benefits. do you find that inconsistent with the social contract you're promoting when it comes to drug price hikes here?
>> i don't. i think what we pay all the taxes that, in all the jurisdictions in the world where we operate, according to the law. and, you know, taxes are essentially a responsibility -- a legal responsibility, not a moral responsibility. and there's no person that doesn't take every deduction that's available to them. if you're wealthy and you take your mortgage deduction, is that unethical? so i think we all avail ourselves of r&d tax credits. we all look at maximuming our tax structure. it is simply a cost of doing business. and if jurisdictions want to be more competitive, they should lower their tax rates or create incentives for businesses to brick their employees there. >> i want to circle back on something you said earlier on m&a. you have been called the chuck norris of pharmaceutical m&a. you sold your generics business to teva, have $40 billion in proceeds sitting there, but you say you don't want to do
transformational m&a, but your nape is always on the table when something comes up, like a viagen. that's not something you would do? >> well, we're in seven therapy iic areas, we're leaders in virtually all of them. there's still so much unmet need. we could do so much more in medical dermatology, same customer. and seeing as we have a strong alzheimer's franchise and a strong franchise, we could move into parkinson's, ms, epilepsy. there's so much unmet need there, namely alzheimer's, where there's still so unmet need. so we have a tremendous opportunity to grow our business in the categories we compete, and the geographic expansion is a tremendous opportunity for us as well. >> we're just about out of time, but in the areas where you're a leader, visioncare is one you didn't name, but bausch & lomb? >> on your program yesterday, joe papa, the ceo of valeant,
which owns bausch & lomb, said it wasn't for sale. >> he said never say never. >> i know bausch & lomb well, i don't think that would be a great fit for allergan, because it's a, cob lens company and a pharmaceutical otc company, and we're really a true innovative pharmaceutical company. we're looking for things more like retrosense, where we're doing gene therapy to solve blindness. we're looking at new treatments that perhaps can change the paradigm for amd and d&e. and that's where we want to be. >> a lot more to talk about. brent, thanks for joining us. >> thanks for having me. >> meg terrell with allergan. ceo brent saunders, fascinating stuff there. tesla, meanwhile, securing a $300 million credit line for its leasing program. up next, we'll look at whether it fixes the electric car maker's cash crunch. plus, find out which icon of silicon valley is turning in his tesla for a much less expensive electric vehicle. stay tuned.
tesla hoping it can fix its cash crunch by securing a large new credit line from deutsche bank. phil lebeau joins us with more. hi, phil. >> hi, kelly this is the first of what's expected to be a very active end of the year for tesla when it comes to borrowing money so it can ease its cash crunch situation. here's the credit line the company announced. it was announced in an s.e.c. filing late yesterday. $300 million through deutsche bank. the money will be used for
tesla's leasing program. the importance here is that it frees up cash that tesla will not have to use for that leasing program. and as a result, it will not have to borrow as much when it does the big capital raise in the fourth quarter. yes, there is a big capital raise coming. a couple of weeks ago in an s.e.c. filing, the company said it would need that money. it ended the second quarter in $3.25 billion in cash. it plans to raise more in the fourth quarter. they're be down to $400 million to $500 million if they don't do that. and just last week, elon musk sent an e-mail to tesla employees saying, look, the third quarter is critical. let's show wall street that we can turn a profit and therefore we can be a successful company eventually. because once hay do that capital raise in addition to the solar city acquisition, in addition to building the gigafactory and getting production up for the model three, all of that means that tesla after that capital raise will have a huge debt-to-equity ratio and they will be further in debt.
that's the focus. by the way, keown today out with an initial report on tesla. came out and said, we put 160 price target on that share -- on shares of tesla. the stock now trading under $200 a share. it will be a very active end of the year for tesla. >> wow. phil, thank you so much. phil lebeau there. tesla, by the way, lower about 2% today. and apple cofounder steve w wozniak has been a visible owner of the model-s. now he's apparently mulling a switch to the chevy bolt, guys. pretty interesting stuff. >> it's definitely interesting. i guess i would argue that wozniak might be in the minority of tesla owners who kind of feel like they just want to own some kind of electric vehicle and they're going to go for this $37,000 model from chevy as opposed to the high-performance tesla. but, look, it's not going to -- it's going to be a crowded field more son that it is right now down the road. >> exactly. a lot of competition coming. >> yeah, i think that the $37,000 price tag, most tesla
owners aren't going to necessarily go for that chevy bolt, but the average american, certainly, $37,000 is much more affordable than a tesla. especially when there's a, i think as steve wozniak said in a recent interview, there's no place to put your sunglasses. >> you think they would have gotten that fix by now. there he is with the thumbs up next to the bolt. and for anybody who was thinking about taking the plunge, it helps to have that endorsement. let's get back to sue herrera for a cnbc update. >> here's what's happening this hour. hillary clinton campaigning in north carolina tore into donald trump's national security credentials during a rally at johnson smith university. she said trump failed a test by insulting u.s. generals, while heaping praise on russian president vladimir putin. former secretary of state colin powell is defending his personal e-mail use, while heading up the state department. in a statement to nbc news, he said he was not aware at the time of any requirement for private, unclassified exchanges to be treated as official records. a carnival cruise ship returned to port in south
carolina this morning, as the coast guard continues searching the for a new york woman who went overboard. he reportedly fell off the ship yesterday, some 27 miles southwest of the bahamabahamas. and construction workers stood astop the wilshire grand tower in downtown l.a. today to pose for an historic picture. the four men were on the top of the spire that was added over the weekend, making that building the tallest west of the mississippi river at 1,99 feet. >> oh, my gosh! >> and listen, i see the safety harnesses. i don't see them attached to anything. i don't know. >> this is one of the best pictures i've seen. i can't even get over this. >> it makes my palm sweat, actually. brave guys. >> whoo! >> i know. back to you, kell. >> wow! it reminds me of that iconic image of the new york guys eating their lunch at the top of the -- >> at the skyscrapers. >> anything over 200 feet, it kind of doesn't matter how high it is.
>> but what gets you, it's just that spire. it's not like they're on top of a building with a railing. holy moly. >> and it's small. >> yeah. >> and there's a lot of them. >> i bet the birds are going to like it. thank you, sue. >> they will. >> sue herrera, see you later. the race for the white house is getting tighter by the day. a major gaffe by libertarian candidate gary johnson, well, it could send his supporters fleeing for either hillary clinton or donald trump, perhaps. we'll find out, next. make healthcare more personal with patient-centric, digital innovations; from self-monitoring devices that can interpret personal data and enable targeted care, to cloud platforms that invite providers to collaborate with the patients they serve. that's why over 90% of the top 25 global pharmaceutical companies are turning to cognizant. our domain experts, technologists, digital and data specialists, clinicians and scientists are transforming the way clinical research sites collaborate
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welcome back. what is aleppo? it may sound like an answer on jeopardy, and it may soon be one in the category of presidential candidate bloopers. john harwood joins us from washington with an update on what could be the worst day for those looking for a viable third party candidate this year. >> kelly, every candidate fears a blooper of that kind. we all remember the rick perry moment in our cnbc debate a few years ago, when he couldn't remember the name of an agency he promised to eliminate. gary johnson had one this morning on the set of "morning joe" about an important subject, the refugee crisis in syria and the civil war in syria, and it was bad enough that it even drew a laugh from hillary clinton. let's look at both of those things. >> what would you do if you were elected about aleppo?
>> about aleppo? and what is aleppo? >> you're kidding? >> no. >> aleppo is in syria. it's the, it's the epicenter of the refugee crisis -- >> okay, got it. got it. >> okay. >> well, with regard to syria, i do think that it's a mess. >> well, you could look on the map and find aleppo. >> now, gary johnson was very human about it. in fact, he said it proves that i'm human. he went on "the view," he said he was thinking about maybe an acronym instead of syria when the question was posed. but the question is, what is that going to do about his ability to get on to that debate stage. take a look at these polling averages. when you put all of the minor party candidates, included on the ballot, these real clear politics averages show hillary clinton around 41. donald trump around 39. gary johnson at 9. he needs to be at 15 to get into the debate. jill stein, the green party
candidate is only at 3.3. little hope for her to get on. but the question for gary johnson, and he told me this when i sat down with him a couple of weeks ago, he said, the only shot i have to make a big impact in this race, possibly even win this race, although that's not going to happen either, is if i can get to 15% and get on that debate stage. this may not help him, on the other hand, as we've said before, a lot of people are talking about gary johnson today. that wasn't happening yesterday, so we'll see. >> true. john, thank you so much. john harwood in washington. the race for the white house already at a fever pitch, as you can see. and we haven't even had a debate yet. joining us now, roger altman, executive director and founder of evercorp, along with david el pass, senior economic adviser to donald trump. guys, to become you both. roger, you're saying this is already over and hillary's got it? >> that's my view. i don't see any scenario under which donald trump gets 270 electoral votes. if you stop and think about it, the states that have voted six
consecutive times for the democratic nominee, they represent 242 electoral votes. so you would need only 28 more to get to 270. they're safely in her pocket, in my view. so she has 20 different ways to get the creptal 28 votes and she happens to be currently leading in virtually every single one of the key swing states. in fact, she is leading in every single one. so, of course, an asteroid can hit the earth and we can all forget where aleppo is, all 330 million americans. but other than that, she's going to win this race. i'm sure david will contest that. it's fair to contest it, the election's not over. but i think that's how it's going to come out. >> david, what is mr. trump's path? >> right, i contest that. it's wishful thinking. there's a lot more time in this election. it's kind of like the football coach at halftime that says, we're up by seven points, so we've got it in the bag. the polls are showing that trump has gained a lot.
the cnn poll, he gained 11 points and is ahead by two over clinton. and ahead by 20 points for independents. so if we come back to gary johnson, i think trump is able to say, i've got better policies, i'm going to make the country better, and hillary clinton is saying she's going to keep the status quo trump's going to give much more economic growth. clinton is saying growth is fine as it is. trump wants to cut taxes. she wants to raise taxes. trump wants school choice. hillary clinton used to support school choice. but now she's flip-flopped. she's playing to the special interests and wants the teacher's union in. so, it's just a list of reasons why independents and many democrats will want to support trump. >> but david, it is true that the polls have tightened recently, but the election is not won through national polling. it's won through the electoral map. all hillary clinton has to do at this point is win florida, where she is leading, as roger altman
pointed out, and she's got the 270 electoral votes that she needs in order to secure the white house. meanwhile, we're seeing traditional republican states like texas now turning purple and even going into play. so, you know what i said the path? what is the electoral path that you see for donald trump in order to win this election? >> there's lots of ways to do polling. i think the electoral path is that he presents an appealing message that he's going to have a flood of new investment in the united states that causes growth, that causes more jobs, higher wages. that's appealing to lots and lots of americans. get that message out. there's still two months to do it. and florida should be, in his camp. they have lots of people who want better jobs. so that's going to be -- that's what i think the message is. >> roger? >> you know, david just talked about trump's plan leading to growth. there have been two recent independent assessments of trump's plan, and only a week
ago, citigroup came out with its. and citigroup is not chopped liver. and its plan said that trump's -- sorry, its assessment said that trump's plan would lead to an economic contraction, reduced investment, reduced trade, and so forth. which isn't surprising, because trump is calling for a 35% duty on chinese imports, a duty on many mexican imports, deporting 11 million americans, which would reduce the labor force and and so forth. but it wasn't me, it was citigroup saying that his plan would reduce the economy. >> first we have to get to that november election. thank you for joining us this afternoon. >> we need more time. >> we will. we'll bring you guys back. thank you again for joining us this afternoon. etsy has been crafting a growth are strategy after a rocky start as a public company. the ceo outlining plans how it's going to stay competitive.
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welcome back. we have some new developments on just how many employees wells fargo fired over creating unauthorized accounts. seema mody has more. seema? >> that's right, the nation's biggest bank, wells fargo has fired over 180 employees over five years and is paying a massive settlement after workers opened hundreds of debt and credit accounts for customers who had not requested them and were kept in the dark about their existence.
those secret accounts helped workers meet sales goals and increase their compensation. but some regulators arguing the bank put too much pressure on its employees. in some cases, wells forecast create t their own p.i.n.s for the accounts and made up fake e-mail addresses for enroll banking enrollments. wells says it's reimbursing $2.6 million to customers who incurred fees they don't know about. zbri did briefly look to see if this was impacting the stock earlier. it didn't seem to be. does that change, though, as more of the details come out? >> i don't know. obviously, kind of a broken sales culture, but maybe the sense that this is a fine, we're paying it wi, we fired the peop maybe will spare the stock a little bit more damage. >> something to keep an eye on, for sure. the ceo of etsy telling us what's behind his stock's big comeback over the last few months, right after this. you're making money now, are you investing? well, i've been doing some research. let me introduce you to our broker. how much does he charge? i don't know.
welcome back. etsy, the online market place connecting buyers and sellers of handmade goods have been public for just over a year now. i sat down with etsy's contracticeo, chad dickerson, to talk about their latest quarter. your last quarterly earnings was a bit of a surprise to wall street, because it showed an acceleration in a lot of your business metrics. what accounts for that acceleration? >> our results that you saw last quarter are really largely driven by a continued success this our mobile platform. we've done incredible work over the past year. everything from sign-in to search to checkout, as well as continuing to build our international business. >> a lot of people may not know that seller services is such a big part of your business. it's, i think, 55% of the revenues and it's growing quite strongly. how big is that piece of the business going to get?
>> the really exciting thing to me is we see many many seller services that we can build. half of our revenues are from only four of these seller services. when we talk to our sellers, they constantly tell me they need more help with marketing, inventory tasks, so we see a lot of opportunity there. >> handmade by amazon. now that it's been out there for a while, what impact is it having on the business, and what impact do you foresee? >> we've seen many companies come in and try to compete with etsy. so far we haven't seen any effect from those competitors, and we're really continuing to focus on building etsy. etsy buyers and sellers are everywhere in the world, every country in the world. about 30% of our sales are outside the united states. we believe that we can grow that to 50% over time. that, plus continuing to grow our seller services business. we feel like we have a lot of gre green field. >> the dollar has been a
headwind and how important is it that the dollar might be strong if the fed raises rates again, how important is that for you? >> we're really focused, for example, in the uk on building that local marketplace hand now about half of the sales in the uk happen domestically, so over time we think we can continue to build these local marketplaces on etsy that actually form this larger global marketplace, and that -- that will mitigate currency issues i think across the board. >> what about legal risks, too, just as we raise a number of the ongoing concerns about the business? counterfeiting and the counterfeiting lawsuits that are out there. they are out there, but, you know, it's hard to factor in for them at this moment it sounds like from your filings. >> we feel really comfortable with etsy's stance on counterfeit goods. we have a very robust system of people and software that are constantly scanning the marketplace. >> the scoring of your stock price is really interesting because you went public at 16. you traded up to 30 on the first
day, and then had trouble maintaining that level. sold off all the way into last year, and then as i mentioned recently have regained some traction, but you're still below that ipo price. is that a headwind when it comes to talent, when it comes to attracting people to this company? >> the stock price will do what it does, but we're always planning for the long term. we want to grow the value of the company over the long term, but the reason that people work here is because they really believe in the mission, and they really believe in the long-term nature of the mission, so it's really important to them that we stick to the mission and we think over the long term that the stock price will work itself out. >> and what about profitability, that very basic of business issues when it comes to how the stock has been trading. >> we're continuing to invest. what we've told investors is not to expect near-term profitability, but the core business mod sell absolutely well-positioned for long-term profitability, and we've already demonstrated it in our life as a public company. >> when it comes to etsy and the
definition of handmade what, is it, and how important is the concept of every person making goods one-on-one now that you've introduced manufacturing? how do you define what etsy actually is? >> what we've seen over the past 11 years is that etsy, the core of etsy is always about handmade and etsy is much larger than handmade. for example, we have jewelry makers who do digital design of their jewelry and use 3-d printers to print not only prototypes but actually the jewelry itself. we're really driving this whole explosion of creativity that's happened from connecting people over the internet and handmade is really always been the spirit of etsy, but it's so much bigger than that. >> etsy also says the best way to learn about its company is by talking to the sellers, so we did just that. >> 80% of my business is on etsy. yeah. etsy has been an amazing, amazing platform for me. >> for sellers like annie we
want to make sure their creativity and inspiration are really valued so i talk to sellers a lot about their pricing, and we really want sellers on etsy to charge a fair price and a price that recognizes their creativity so i'm planning to buy one of the wallets from annie. >> how much is something like this go for? >> that is $48. >> would you raise the price of this? >> i've considered it. i know that i can raise the price, even the more than a certain item sells, i'll raise it $1 here or $1 there because it's worth it, and it's made here in brooklyn. >> where would your business be if it weren't for etsy? >> it would be probably in a sad state. i mean, we've been wholesaling for quite some time but etsy has really taken over for us. it's now 20%, 25% of the business. it's big for us. it's important, and we want to keep gearing more and more towards the retail. >> what's your biggest challenge with etsy right now or one thing the company can do to most help you at this point? >> they are sort of good at
getting out of the way even though they set things up to make it very easy. etsy sell, it's phenomenal. i'm really able to keep track of what's selling, when it has to ship, what the orders are like this year compared to last year, day-to-day. it's really very impressive. >> and that, by the way, is why etsy would list square as a competitor as much as it would ebay and amazon. now the affordable care act is getting legs affordable as insurance companies increase their rates. what happens when there's only one option available to residents who have to sign up? that's when we come right back. ♪ across new york state, from long island to buffalo, from rochester to the hudson valley, from albany to utica, creative business incentives, infrastructure investment, 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.
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the market's hot! sync your platform on any device with thinkorswim. only at td ameritrade fed governor daniel turollo inside for every fed go. the state of our economy, a cnbc exclusive tomorrow at 10:00 a.m. eastern. major insurers pulling out of obamacare exchanges across the country have left one county in arizona with zero options for its residents until last night. bertha coombs is there with more. bertha? >> reporter: you know, kelly, it's really been sort of a microcosm of what we've been seeing across the country. blue cross blue shield of arizona said they would pull out of purnell county because they thought it would help them mitigate their losses next year. it would still be another inshire. last night they said in order to
make sure that people here had at least one option they are going to offer plans for 2017 but at a 50% rate hike. folks with subsidies shouldn't feel the full impact but for people like kyle and annie beck who run their own business, that price hike may keep that insurance out of reach because already this year they are paying $900 a month. >> we don't get any subsidies. it's making an extra mortgage payment every month just to have insurance that's not very good. >> reporter: kelly, you know, nine states next year have just one insurer. senator john mccain and others are saying if they can't afford their premiums, they should not have to pay a penalty if they opt out of insurance. it's really becoming a very, very difficult situation for a lot of folks. >> yeah. not much of a solution in arizona. at least they will have something. bertha, thank you. bertha coombs on site there. what are you guys watching for the market tomorrow? >> honestly the bond yields. haven't been able to get any
momentum behind the lift. see if it happens finally breaking out. range. >> fed governor dan turullo. that should be interesting. >> that does it for "closing bell." thank you guys for joining us this afternoon. "fast money" begins right now. "fast money" starts right now. live from the nasdaq market site overlooking new york city's times square i'm melissa lee. traders are tim seymour, brian kell and dan nathan and guy adami. twitter sinking at rumors circle its annual board meeting, but if you're hoping for a takeout one analyst says don't hold your breath. he's here to explain why and anal getting hit after its big iphone 7 launch and suddenly the company is about to get really quiet. why it has investors so worried and later a top technician has found three stocks that look like they are about to break out, and they all have fat dividends. we'll give you the names. first, we start off with a retail wreck. consumers stock getting hit across the board. macy's falling with the rest of the