tv Closing Bell CNBC November 1, 2016 3:00pm-5:01pm EDT
and presumptions are getting recalibrated. thank you very much for watching power lunch. >> "closing bell" starts right now. hi everybody. welcome to "closing bell." i'm kelly evans at the new york stock exchange. >> it's been a while. >> it has. >> wonderful to be back together again. stocks moving lower. some traders saying concerns about new presidential poll numbers and a potential trump victory is weighing on the broader market. the gang on power lunch just talking about that. if the s&p were to close lower today this would be the sixth consecutive decline for the s&p. it would be the longest losing strike this year for the major average dplmpt sw one of the bigger moves we have seen in a while.
>> eli lilly taking a hit after bernie sanders called out the insulin drug in a tweet. we will have more details on how the drug price debate could be heating up. we are following the pipeline explosion in alabama that sent the price of gasoline soaring. we have the latest on the blast. after the bell we have earnings from gileag, square, etsy and electronic arts. we will bring you results on "closing bell." let's begin with the market selloff. bob pisani is tracking all of the action today. >> s&p at the lowest since july. take a look at the vix. this is the fear indicator. i start paying attention when it is over 20. over 20 today on chances that the election are a lot closer than people thought even a week ago. what does that mean? take a look at the ten year because yields were moving up
from the last couple of weeks. the theory is that a trump victory may make a fed hike less likely. the trend has been rising rates recently. small cap stocks tend to under perform. the russell has had a terrible time. that indicates rate hike fears are definitely there. if you look at interest rate sensitive sectors like high yield market and real estate investment trust, telecom near lowest levels of the year indicates concerns about rate hikes are out there. take a look at retail down about 5% last month. down 2% again today and wasn't just l brands. bottom line here is there are some concerns that the election may be impacting the desire of people to shop. what does it all mean? it means in the next week or couple of weeks everything we do will have a political overtone and a fed commentary overtime. if you are worried about things
like earnings you will have to wait for this period to be over with. >> we can use the weather often as the excuse. now we can use the election. we can sweep it under the rug there. let's get to john harwood who has the new poll numbers that may be the reason the markets moved the way they did. >> we are just a week from the election. look at this count down, six days, eight hours. 57 minutes, six seconds. we had a notable poll today showed donald trump ahead. that is the abc "washington post" poll are a lead. that has not happened in a while. it is wise to look at averages to get the real picture of how the election is going. narrowed here, as well. real clear politics had been over six points, now 2.5. huffington post 5.6. that indicates a tightening race. it is decided in the electoral
college. let's take a look at the map. what donald trump has to go is go from 206 that mitt romney won in 2012 and take it to 270. all prospects are not created equal. you take a look at florida. he has a slight lead there. in ohio he has a slight lead. in iowa, nevada clinton is ahead by one percentage point. the problem for trump is if he wins all of those states he is only at 265 electoral votes. what are other prospects? you have here in the midwest, wisconsin and michigan you have colorado, pennsylvania, virginia, new hampshire, all of them hillary clinton has a lead outside the margin for error. so that is a tough road. he has to figure out a place to break through. there is another possibility that is daunting for him. that is that on this third screen arizona and north
carolina, those were romney states. so if donald trump loses either one of those his hill gets steeper. he has been down consistently in north carolina, 2.6 in the averages here. very slightly down in arizona. donald trump is drawing closer to hillary clinton, making this a more competitive race, helping his party in those down ballot races for the senate and the house not be as pesz ms.ic as they had been. he has a long way to go to get to 207. >> let's remember it was only a week ago that the washington post abc poll showed 12 percentage point lead for hillary. very volatile numbers here. >> it is. and most observers looking at that poll find it hard to believe that it's gone from 12 to plus one trump in that space of time. the pollster has said it is not about people changing their minds, it's about shifts in the level of enthusiasm for the two
candidates therefore changing the makeup of the likely electorate. if you are less enthusiastic about hillary clinton you get defined as less likely to turn out to vote. the reverse is true on the republican side. others haven't seen it that way. but gary languor who does the abc washington post poll is a very good pollster. other polls haven't shown the same thing. >> we will see what effect it has on turnout. we have a news alert on jeffrey gunlock. >> reuters is reporting that bond fund posted first monthly net outflow since 2014. reuters reporting that gundlach sees decline citing technical levels and that the s&p 500 producing bearish signals after two consecutive days.
the s&p 500 trading below that level at this point. back to you. >> we were watching that level on the s&p when we had the tough session on thursday. now we are about 2,104. so for whatever reason people are pulling money out. a couple of metrics have the broader attention. let's talk about apple which is helping to drag markets lower. morgan brennan is keeping an eye on things at the nasdaq. >> apple having the biggest impact. the first rumors report that delayed wireless air pods might not launch until 2017. we have gotten more favorable reviews of the microsoft surface products that were just launched versus the new mac book pros. ubs citing softening demand for iphone 7 models in china. apple stock slipping below the 5046 day moving day average.
now trading down in correction territory down about 10.5% from november highs last year. and in general we are seeing apple set to post its fifth straight day of declines. that's after those earnings last week that failed to impress investors. so taking a look at shares of apple down about 2% right now. as you can probably see behind me in general we are seeing a sea of red here at the nasdaq with the composite down about 1%. >> so apple down five straight days. s&p down six days. coincidence? >> apple was up 20% prior to that. for a stock this big to be jolted around like that. let's get to our "closing bell" exchange for a tuesday. we welcome earnesto ram os. we have steven gill foil and rick santelli at the cme in chicago. sarge, i will start with the question i usually finish with
on levels. in your morning note this morning you said 2,115 is the support level to watch on the s&p. if it broke it might be the result of an election surprise or something. that is exactly apparently what is happening today. where do we go from here? >> if we don't regain at least 2,109 by the close then i think we will meander lower. our first line of defense will probably come around 2,075 if using hand grenades. second line will be 2,040. the election is playing a role. i don't think it is so much a trump surprise. it's either trump or a hillary clinton presidency in which her ability to govern would be severely handcuffed by her situation. >> how is that effecting where you see opportunity in the market? >> in one word it is uncertainty. uncertainty has certainly leaped
up since the last friday and the last two days with the trump's numbers going up. we have uncertainty because we have uncertainty about the result and uncertainty as to what would happen if he were to become president because not a lot of detail on his policy other than the broad statement he has made. so i think the market as we all know has a lot of trouble digesting uncertainty. that is what we are getting in space today. >> rick, we are looking at the volatility index. the vix hit 20 today which as bob pisani said is usually the yellowith lonumber you hit there. you think the markets hedging now on the election or more on the fed? let's not forget they are meeting today and tomorrow but looking ahead to december. what is going on here? >> i personally think it's central banking activity. today is the first day of a two-day meeting. bank of japan was a push. they are delaying their targets for inflation.
and no new stimulus doesn't mean programs are ending. considering the recent run up and look at italian rates and spain they have been moving higher and for kind of similar issues whether the ecb running out of run way, the referendum on italy with the brexit under tone i think it is more of the same. i agree with sarge if you switch gears to the dow right around 11 minutes after 2:00 when this started impacting the treasury market that is right around the time it looked like the dow which had broke 18,000 wasn't coming back above it. it was slipping further. all of a sudden in a five-minute period treasury yields moved low. granted it's not huge. this would be an eight session low yield close if they close down here. only five session lows represented on closing yields. so there was a response in the
treasury market. i think that is significant. i think we are making this too complicated. we can talk about politics. bank of japan first day of a two-day fed meeting. i think all those things are adding to the nervousness of accounts. the dollar index started to slip friday and that the interest rate complex paid attention breaking away from higher yield closes in europe. >> where do you think are places people can hide in the market right now if they're trying not necessarily to position for higher rates but also are just uncertain about where either kaechs or sectors can ride through the crazy next couple of weeks. >> you see where gold is. gold is up about $19.60 today. people are scared and running into gold. if gold can hit $13.05. i think i move it back to 7.5%
if it hits $13.05 with momentum. >> where is your safe haven right now. >> i think technology looks pretty good in terms of earnings growth and also estimate revisions. we have seen those reports come in pretty strong. that would be the sector i would favor in this uncertain environment and given likelihood of interest rates going higher you can't hide in the traditional defense sectors like utilities. i favor technology stocks as a whole in the equity space. >> thank you. good to see y'all. thanks for joining us. appreciate it. let's get back to seema mody. >> want to point your attention to shares of brocade communication spiking on a report from reuters quoting sources that broad com is nearing a deal to buy brocade and plans to divest the ipo
networking unit after gains of 22% on the reports that the communications was in talks. we will have to see if a deal comes through. we will certainly keep you up to date. >> this as pfizer was saying they saw hesitation on deal making for the time being until we get through the election after having one of the biggest months hisry in october. 45 minutes to go here. dow down 152. vix is at about 19.5. nasdaq is down 55. pim co's chief financial officer will talk to us on the sell off. he says it is time to reduce risk. he tells us where do you put your money. gas futures spiking after a deadly explosion shut down a main supply line. we have the latest developments and talk about the longer term threat to gasoline prices.
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street. dow breaking below -- sitting right at 18,000 right now. the s&p broke below 2,115 which was identified as a support level. three components are positive. chevron, mercke and exxon mobil. >> apple as we were discussing worse performer. gasoline futures spiking after a deadly explosion. >> good afternoon. we did see about a 10% spike and at the close those gains had paired to about half after colonial pipeline provided an update that line two was reopened last night and expects to reopen line one on saturday. that was a surprise to the market. it was much sooner than expected. the ability for the company to
remedy this incident at the pipeline quickly was surprising but a positive sign, of course. remember back in september after we had a leak in alabama at line one colonial closed it for roughly ten days. that triggered delivery issues and gas shortages but price hikes as severe as 20 cents to 30 cents in some southern states. the concern this time was that two lines were down and that line two wouldn't be able to be used as a solution here. take a look at the map of line one. it runs all the way up from houston to linden, new jersey. that gives you the sense of the breadth of how important it is. it does deliver gasoline to about 50 million americans. for now it seems that the crisis has been averted. colonial does have to execute on this timeline. they just held a press conference to give a little bit of an update. we have sound for you from that. >> i think right now for planning purposes we are talking
about line one being down until later this week probably into the weekend. and that's just an estimate. this is early on. this is the second day. >> as he said, it's the second day so right now opening on saturday is an estimate at this point which means this is certainly a fluid situation. we have to keep an eye on it. will we see a jump in retail gas prices if we can execute for saturday? maybe five cents at this point. if for some reason the shut down lasts longer we could see larmger jumps and not just in the south but other areas, as well. >> just to boil it down we know gasoline prices sometimes rise this time of year. what magnitude of increase are we expecting at the pump? >> if this is just a short-term disruption maybe five cents in the south. in september we saw as much as 20 cents to 30 cents. typically this time of year we see demand drop off.
because the weather has been so nice you have more consumers out there driving which has held demand up at this point. so it is difficult to say exactly and it will depend on how many days the outage lasts for. a lot of people asked about crude oil today. it closed a little bit lower. why it wasn't correlated with gasoline. the reason for that is if we can't distribute gasoline properly certainly refiners aren't going to take more product to refine it and that won't necessarily boost demand. this is a case where these two will move in opposite directions. >> thank you very much. this happens on a day for those of us who live in new jersey when the gasoline tax went up today up 23 cents a gallon just like that. we went from second cheapest in the whole country to number six. >> not that anyone is keeping track. >> i wouldn't drive past my local station. i knew he was standing out there waiting to laugh at me. down 137. coming off the lows the dow was
down 200 points at the low about an hour ago. now the industrial average is back above 18,000. californians are gearing up to vote on a controversial proposal. we have a debate on whether the plan should pass on election day. another big round of earnings coming up. gilead, square and zillow. we will have others, as well, and deliver those numbers as soon as they are released, break them down with our team of analysts.
welcome back. dow is down 141 points just sitting on the 18,000 mark. we are watching levels on the s&p 500 as that index continued to move lower. art cashin said 2,115 that was the october 15 low. we are sitting below those levels. we'll see how we close. pfizer is lower today. the drug giant reported an earnings miss also trimmed the forecast due to continuation of lipid lowering drug that is expected to shave about 4 cents a share from its current quarter earning. a discontinuation there makes that the worst performer on the day. eli lilly lower after comments from bernie sanders about one of that company's drugs. >> a familiar story.
sanders is wielding social media and war with drug companies about pricing. today sending a series of tweets about the price of insulin. the drug industry's greed. targeting insulin makers in other tweets. lilly responded telling us while the list price is higher the net price after discounts is lower than 2009. sanders has taken on drug prices heading into the election also backing california's proposition 61 which would require state agencies to get the same discount on drugs as federal department of veterans affairs. it is shaping up to be one of the most expensive ballot initiatives with $120 million in contributions. among the biggest donors, big pharma, johnson & johnson.
the industry dpiv gives vetera special discounts. veterans groups have joined opposition to prop 61 as some warn it could have unintended consequences of raising prices. polls show sanders as well as reverend al sharpton campaigning on its behalf. >> stay right there as we bring in doctors on different sides of the prop 61 argument. why do you say this is the wrong solution to a real challenge? >> i think it is an impractical solution to a real challenge. those challenges are that more people find themselves under insured for drugs because of secular change in the nature of insurance coverage. too many aspects of our drug market place lack the kind of competition that we would expect. that is particularly true of complex generic drugs like the
epipen. what i say are single source drugs most innovative where you don't have price discrimination. you can't price drugs based on outcomes because of government rules. >> you provide only a qualified yes on this. you acknowledge this is a pretty nuanced issue. this is not just about capping drug prices. you have to figure out what those low prices are relative to v.a., veterans administration. it has to be implemented by a group of politicians. there are all kinds of problems here. so why do you think even though you acknowledge this is kind of a flawed bill why are you still supporting it? >> i think that there are two points. first on the policy perspective we do have the sky high drug prices. we don't have a lot of competition in many areas in part because the government is giving the drug companies monopolies through patents and without regulation of their prices and they are exploiting that monopoly power.
this proposal linking the state payment to the v.a. is less than optimal because it leaves off most people who are not in the state programs who are getting private insurance and the price could rise for them. but i'm qualified support because politically it is important to send the message to the drug companies that prices are unacceptable and if they spend for this over $100 million for this proposition and lose politicians will wake up that this is a very serious problem and attack it with a better solution. the last point i make is while we agree on a lot of things i do not agree that we should blame the insurance companies for the problem of high drug prices. the insurance companies are trying to protect the commons in this case and drug companies are trying to maximize their profits. when he says it is not viable to pay v.a. prices for everyone in
the country he means that might threaten his 15% profit margin which are among the highest in any industry in the country. that doesn't mean it is not viable. it means we can bring the profit margin down to 10% and they would have a big incentive to do research. >> i want to ask one thing people say is that drug companies can respond to something by raising the price for the v.a. so that the discounts basically disappear. what is to stop them from doing that? >> well, the v.a. will negotiate and negotiate hard. and they can raise the prices. i think it does get to one other issue which is worth mentioning and that is that the prices paid are totally opaque. there is the list price sdp what the drug companies say is being paid. it would be nice to have more transparency into what the actual prices are. the drug companies control that. they could publicize what is being paid. they prefer the shadow game so that they can claim the list
price is not the real price and play all of these parties off against each other. transparency would be helpful and the drug kaecompanies could that for us. >> the senate in california had a bill that they were working on on drug transparency. i don't know the particulars but they took it away and they still could pass that. being transparent on how you price a drug, would that be an answer? what is the solution from your standpoint? >> it is not one problem and not one solution. there is a problem with the growing gap between list price and real price. it is not the insurance company's price that list prices are going up but more consumers are paying the list price because they find themselves under insured for drugs. they are paying out of pocket. that list price which used to be not a real price is the real price in the market place. the net price which is the
actual price that the health plan pays is much lower. those don't necessarily flow back in the pockets of consumers. one thing we can do is change rules to allow discounts up front rather than having to provide discounts in the form of back ended rebates. that is a failure of the market place. >> that doesn't get to the fundamental problem of way too high drug prices. that is just playing around with what the drug companies -- >> there is the list price and net price in the market. the net prices are going up 4% or 5%. those list prices are not the real price in the market except if you under insured consumer. so we have to be careful what prices we are talking about. >> the net prices have been going up much higher and going up 2014. more importantly they are projected to go up.
>> it depends on if you are looking at the whole market. >> maybe this is a good weekend for transparency. >> one last question. i will give this one to dr. emanuel. looks like public opinion polls are inching in support of this in california. a couple of weeks ago it was two-thirds of people supporting this in a poll tweeted out earlier. do you think that this shows that farma spending is working here and this might get voted down? >> pharma is spending $110 million is the war chest that they created and they will spend it in the last days to try to influence people and it probably will influence people. if they fail to persuade people that will embolden many politicians who want to change the system. i think that will make a very, very volatile situation because one this comes on the agenda we don't know where it is going to end. i think the drug companies would be very well advised to come up
with a positive proposal to curtail drug prices. >> thank you all. a week to go until that critical vote. breaking news on auto sales. let's get to phil lebeau. >> you want an october surprise here is one. the pace of sales for the month of october coming in at 18.29 million vehicles, much higher than people were expecting. most expected 17.8 million. just for point of comparison october of last year the best month last year one of the best months ever for auto sales was 18.18. this october surpassed it coming in at 18.29 million vehicles. >> this doesn't include ford. they had to delay their report. >> they calculate with an estimate there. is it possible that the numbers come out and they bring it down
to 18.21 or 18.17 that is a possibility. they are pretty good -- they have been doing this for a number of years and have pretty good estimate in terms of where sales are going to be. >> see how the incentive numbers are. shocking. >> encouraging. time for news update. look who is here. it is tyler mathisen. >> here is what is happening at this hour. prime minister visiting one of the italian towns devastated by the earthquake participated in an open air mass for all saints day accompanied by his wife. he said he wanted to send a message of sharing. china showing j 20 stealth fighter for the first time. look at that. there it goes. opening biggest meeting in aircraft makers and buyers. two of those flew over dig niitaries. it was a 60-second fly by. apple will build a 20,000
square foot store on chicago's north michigan avenue. the building will include a below ground level store overlooking a river walk there. a construction permit issued by the city put the price of the project at some $62 million. nice location there. tiger woods says he will play in december's world hero challenge in the bahamas. it will bebe his first tournament in 16 months. he pulled out at the safeway open three weeks ago because he said he wasn't ready to play. the hero challenge is run by tiger's foundation. that is the cnbc news update. see you in an hour. back toyou. >> see you. heading to the close with the dow down 133 points. a leading trader will tell us what he is watching into the close during this tuesday sell off. and it's time to reduce risk. he'll tell us how to make money
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want a great way to help our children thrive? then be sure to vote yes on proposition 55. prop 55 doesn't raise taxes on anyone. instead, it simply maintains the current tax rate on the wealthiest californians to prevent education cuts that would hurt our kids. no wonder prop 55 is endorsed by the california pta, teachers and educators. because all of us want to help our children thrive. it's time to vote yes on proposition 55. welcome back. >> valeant shares soaring that
the company is in advanced talks to sell for about $10 billion coming from dow jones saying the deal would include about $8.5 billion in cash plus future royalty payments. they could reach a deal within the coming weeks. they report that another unnamed bidder is circling. the company having to sell assets as it seeks to pay down debt. a lot of folks thought it might be part of that. >> thank you very much. that's interesting. joining me on the floor of the new york stock exchange with 20 minutes left. tim anderson. you're of the opinion that this was due for a pullback anyway no matter the thing about the fed or the election. >> we have had deteriorating internals. we have had a lack of participation from the russell
2000. and we're really dealing with mediocre earnings season. >> what do you make of vix moving to 20 and treasury yields going lower right now? are they heading for the hills? >> i don't know if they are heading for the hills but you certainly had some liquidation in the bond market. rates look like they are destined to get a two even print on ten year. stocks seem to be at critical levels going into the last half hour. >> is that why we are seeing hedging going on just in case? >> sure. i think that we were maybe set up for a sell off just after the election regardless of the outcome. we might be getting an advance and it might come into a buy in the news event. six days out one thing we have learned a lot can happen in six days.
>> thank you guys. 20 minutes to go here. keeping an eye on markets off their lows but down bigger than we have seen recently. the vix is up. it is below 19. the dow is down 123. the s&p down 17 to 2,109. the nasdaq down 42. some people believe hillary clinton's election will be like four more years of the obama administration. is the market priced into the case of status quo. remember the troubled asset relief program. the office of inspector general for tarp is trying to change that, a plan that includes holding ceos responsible for wrong doing. an interview with the special inspector general on "closing bell." hey! i just wanted to thank your support team for walking me through my first options trade. we only do it for everyone gary. well, i feel pretty smart. well, we're all about educating people on options strategies. well, don't worry, i won't let this accomplishment go to my head.
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call unitedhealthcare today about an aarp medicarecomplete plan. you can even enroll right over the phone. don't wait. call unitedhealthcare or go online now. ♪ welcome back. 15 minutes left. slightly coming off the lows here still the dow back above 18,000 down 122 points. if you are market lunks like kelly and i are you are going to love this. as we move into the month of november just know that november is the fourth best month for the s&p's returns with the index averaging a 1.6% gain 75% of the
time. it doesn't get any better than that. nasdaq fairs slightly better and the dow performs nearly as well. historically the best performing sectors in november are industrials and health care. tech, materials and consumer discretionary follow closely. you're welcome america. stressing a defensive strategy in the markets. joining us now for more is officer for u.s. strategies. your specific news on november aside what are you guys doing in these markets? >> well, for the past few months we have been stressing more defensive posture. part of that is due to valuations which we think are very elevated and we perceive that the market was really
pricing in a status quo of very low volatility for a long period of time. up until recently the market was basically suggesting we would be in for a period of many quarters of below average volatility. so to us that didn't make a lot of sense and we still think it makes sense even from the perspective of an investor today to think about adopting a more defensive posture. >> are you going into -- when we were in that period when everybody seemed to be into defensive issues we were going for dividend growers and the utilities and those sectors. what are you looking at right now? >> well, certainly, if you look at equity risk and the price of equities or credit risk in the bond markets we are close to the lows in spreads and the highs in prices. so while many people may have been talking about it it didn't seem like it was priced well into the market place. so what we are suggesting is we are probably going into an environment regardless of the
election outcome where there is a lot more policy uncertainty. it means what people should be pricing in is a higher risk premium. you should look at average spreads. remember we had in the past year plus we have had very sharp spikes in volatility. we think that is very likely in the quarters ahead. so we think the right thing to do from an investor's perspective is look at average holding or neutral position and ask whether today they have a more defensive posture in place or whether they just simply have the average amount of risk they have had. >> people expecting the fed to start raising rates. i'm wondering what is in your view here in terms of when rates are going to go higher? that narrative was starting to build even again this morning and then we got trump headlines. where do you think we are headed with rates? >> we think it is most likely certainly fed doesn't muchb
rates tomorrow but december looks very likely and if it is not december it is likely they raise rates two to three times. that is partially priced in. on the other hand you mentioned inflation is headed higher. that certainly should change valuations in a broad number of sectors. the way we are positioning is to emphasize defensive themes like inflation bonds rather than nominal treasuries. and should do well in a wide range of scenarios. when we look at treasuries at the front end they are not priced for our expectation of the fed moving two to three times. you don't -- that is where you want to own most high quality credit assets. that is a way to be defensive and make a decent return. >> thanks for joining us. >> with ten minutes to go look at this, the market and dow down
a little preview now on square. we'll start with you, meg. >> we will talk about gilide. valeant soaring on reports it is close to selling unit as it is alleviating fears of how to pay down debt. over to gilead. after the bell people are looking for as always the big hepatitis c drug number. analysts looking for $3.7 billion in the quarter. they have a new drug that people will be watching closely. the hiv franchise will be watched closely as we have seen
increasing competition. listening for any commentary on the call about m&a. they have a giant pile of cash and people have been waiting for them to spend it. kala, what about square? >> square is expected to report a loss of 11 cents on $431 million in revenue. some key things that investors will be watching for first loan demand. they do merchant cash advances to customers. the past quarter was the first time they went outside square customers to lend based on data they have. how did that portfolio perform? also revenue growth and overall transaction growth. those are key metrics for the company and then guidance. the company said on an adjusted basis it expected to be profitable does the company maintain the guidance and how close is it to a profit this quarter? >> we'll see you at the top of
the hour. we have some other reports coming your way next hour. in the meantime with about six minutes left in the trading session the dow is down 105 points. one of our favorite value investors. to you like health care? gilead? >> we own gilead. we wouldn't buy it in the next eight minutes. after the dust settles we think it will be a good long term investment. it is showing 6.5 times earnings. we think over the time horizon things will be a lot better. >> what are other favorites you think are too cheap? >> in terms of health care the group has gotten beaten up. as a result you can buy good companies. raising the yield. yielding about 4.5%. zimmer had an okay number. the stock was down 15%.
>> got to go but the financials. >> we think rates are going up and making very good money. we think that will continue to play. >> good to see you. we will come back with the closing count down. e? a basketball costs $14. what's team spirit worth? (cheers) what's it worth to talk to your mom? what's the value of a walk in the woods? the value of capital is to create, not just wealth, but things that matter. morgan stanley
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less than 90 seconds here. bob pisani joins me on the floor for the closing count down. two examples of the volatility we had today. the dow is one of them. we started neutral this morning and then just slowly was moving lower and then it really took off. we are off the lows now down 201 points at one time below 18,000 now down 112. the vix is one you and i have been keeping an eye on. we hit 20. >> that's the threshold when we start paying a lot more attention. >> that is the yellow flag time for the market. we have earnings coming our way tonight as if there was nothing else going on. we had the fed meeting today. tomorrow we find out what they talked about. there is the slate of earnings coming your way. >> we looked a lifetime up and down. it means that for the next week everything, every market will be layered with some kind of political overtone and with fed. i believe the fed is an important part of what has been
moving the markets and certainly in the last week and a half. if you are worried about earnings or other things like wage growth you will have to wait. >> thanks, bob. down 105 right now. cut the decline in half for the dow. the new york city football club ringing the bell. stay tuned for earnings coming your way on the second hour of "closing bell" with kelly evans. see you tomorrow, kelly. thank you, bill. welcome to "closing bell." i'm kelly evans. it was a rough afternoon here on wall street. it looks like the dow is finishing with a drop of 104 points to close above 18,000. noticebly below that level in the afternoon. we will come back to reasons why which include the election next tuesday. the s&p dropping. that will catch the attention of more folks around here closing below certainly the levels traded out the last month or so
and hitting levels further down than that. nasdaq dropping 35 to 5153 and it will be another busy hour for earnings. meg tyrrell is standing by to bring us results from gilead. julia boorstin is watching for electronic arts. courtney reagan will have etsy's results. on our panel dennis berman. and fast money trader guy adami. he is here this time. >> come on. >> we appreciate it. >> that was a shot. it was a direct hit. >> i turn to you. walk us through what happened today. >> i was at my desk and the dow was down. the election sentiment creeps in just about a week away.
>> washington post poll comes out and shows trump with the lead. >> and the peso moved. the vix through 20. everyone is certainly on edge here. people are looking for perhaps to position themselves prior to the election. overall economic conditions haven't changed that much. >> although i see these numbers starting to cross. let me mention you can look at auto sales figures which is way better than expected. the manufacturing this morning would fit into the rising rates. >> it will give us an opportunity that we will see similar sort of reaction to brexit. that is that the market has a bit of a swoon after the election regardless of which side wins. that is a buy because nothing has fundamentally changed. i think the buy will look very good on wednesday, thursday or
friday next week. >> so no matter who wins you are saying it is going down. >> i think because of the nervousness and some of the sector rotation in particular i think the market has a little bit of a swoop. not 5% to 10%. 3% or 4% we know that is hundreds of dow points. i think we come back. >> are you calling for a trump surprise? >> i don't know if it is a surprise anymore. given the huge flip going on in the polls the surprise will be whether the popular vote is very different. >> let's not forget about certain sectors that will take a hit if clinton does get elected. >> what do you think about the market today? >> here it is. i thought the market the tell to me was you had really strong data out of china last night. surprisingly strong. three months ago that would have
had the s&p up 15 handles in the after market session and would have carried through today. the fact that it didn't carry through today we sold off rather significantly to me is interesting. you mentioned here in the states. the technical damage may be done. one level we have looked at was this 2130 level which a lot of folks are talking about, as well. i think jeffrey gundlach mentioned sets up a move. to me now the onus is on the bulls to recapture that 2130 level. i'm in dock's camp. i think regardless of the outcome on tuesday you see a sell off. i think the level i am looking for is 25 to 30 level. >> hold that thought. let's get to earnings which are out. gilead first. >> a miss on earnings for gilead. they did beat on revenue in
terms of earnings per share coming in at 2.70 versus estimates of 2.86 on revenue of 7.5 billion versus estimates of $7.45 billion. hepatitis c number coming in light versus estimates of closer to 3.7 billion. stock flat right now. digging through the release and will bring you more news. >> as mentioned just before at the end of last hour this is a company that put a lot of pressure in terms of the cash cow to do acquisitions. julian robertson weighing in last week. >> unfortunately, gilead this is not unfortunate. fortunate that they have a cure for hepatitis c. bad news is it is an expensive cure. that puts them in the cross hairs of washington, d.c. when you have that sort of thing
going on and you have a valeant flipping upside down or even pfizer, some of the biggest of the bigs are having trouble right now. it's not -- these are problems that will be behind them rather than things that take them all the way down. >> can we talk about valeant? >> 33%. >> tip of the hat. >> relevant to the stock this is different from the situation which is classic question. the own realm of financial distress. the idea that they might sell the franchise moving the stock about 33%, a lot of questions about the debt service. >> by the way, being able to offload you can see the tremendous relief that investors are breathing. which do you pick? >> valeant is its on animal.
gilead is a pretty remarkable company. they are a victim of their own success. i will say this. i don't think it is about earnings anymore. i think we sort of know what is going to happen. to me gilead needs to say exactly what they are going to do with the tremendous balance sheet they have. they are in a position to absolutely pull the trigger on something. i'm surprised you don't see activists in this name. my sense is you are getting close to levels where you start to hear from them. >> let's pivot to square. how did they do in. >> the stock is moving pretty sharply after hours on earnings that beat expectations on both top and bottom line. revenue at $439 million just about 7 million better than analysts expected. and they posted a loss of 9 cents per share. that compares to expectations of 11 cents per share. and is a much narrower loss than
the company posted a year earlier. gross payment volume which is the metric that calculates how much processed is a billion better than expected. it is the guidance for the full year 2016 they have now for two quarters in a row not only said they expect to ink an adjusted profit on full year basis but it will be better than the company originally expected. they had previously forecast adjusted revenues of 655 to $670 million. now they are saying that will be about $20 million better and that adjusted earnings per share would be higher. they are expecting an adjusted profit in the range of $31 to $33 million which is 30% better than previously expected. certainly a strong quarter but the company is expecting these tail winds to continue. that is why you can see the stock moving off of the highs after hours up about 2.5%.
>> looking for maybe a bigger response. interesting. what do you guys think? >> i'm not going to blame the fact that jack works at two companies, jack dorsey, of course. i think square is the one that is kicking butt of the two companies that he runs. but it is far more competitive than his other business which is in a hypercompetitive space because he is competing against facebook and snap chat in his other business. this one you are competing against every big bank and credit card company and so forth. so square, these numbers are impressive. they need to not be 33% higher as she just said. they need to be more like 100%. 140%. >> these really are scale businesses when you are getting a teeny penny for each transaction. they might beat this quarter. i think long term the question is does square remain
independent. or does it belong inside a bigger apparatus. >> let's get to zillow. zillow reporting earnings of 17 cents a share. quarterly revenue is exceeding the company's prior outlook and higher than the street's expectations up 35% more than 164 million average monthly unique users visited zillow group consumer brands during the third quarter of 2016. that is an increase of 16%. premiere agent revenues up 33% to 158 million and in september zillow's market share captured two thirds of the total online real estate category. >> those zillow shares up 1.5%. would you take them? >> i would think zillow has a shot to go up to $40.
can i go back to square real quick? one of the things we didn't mention was the starbucks revenue to me was very disappointing. starbucks was the feather in their cap. that revenue is probably half of what the street was looking for. something worth watching. all you need to know about square in my opinion is look at the short interest in that stock. it is tremendous which means a lot of people think that it is just becoming a product. >> they had a pretty significant head start in terms of the dragging the credit card through the thing that you put in the port that no longer exists. >> competing with major banks or is it about competing with pay? these are ultimately better ways for you to be able to scan your card. >> or apple pay or google pay.
square's strategy is the point they don't believe that is where growth is. they want to make small business loans. you know how expensive it is to reach those people and service their loans? >> market place lending. >> make a case. >> you have to credit every coffee shop they have square. it changed the way people at art fairs can receive transaction. >> this is the market. >> it's vicious. >> not where you make that big money. you need millions of drags per day, not per month, to make a company justify a valuation like square has. video gaming. electronic arts out with results. how did they do? >> well, electronic arts reporting are evnew that beats estimates by a hair of 1.1
billion. the company did raise its fiscal year 2017 revenue estimates but it is still below analyst expectations for fiscal q 3 which is the big holiday quarter. despite raising those expectations it falls short of estimates for the key holiday quarter in the full fiscal year. the company reporting a gap loss of 13 cents per share. because of accounting changes that is not a comparable number to estimates. >> thank you art shares down 1.6%. let's take a look at shares of herbal life which announced a ceo transition plan. michael johnson to become executive chair. coo to succeed him as ceo. and carl icahn saying he supports the ceo. the company releasing earnings and guidance and saying its
dilutedeps for the third quarter was 1.01 for its full year the diluted guidance in the range of 2.77 to 2.97. the shares were slightly higher. >> can bill acman claim johnson's scalp or not? i probably say the victory goes to jaupsen. >> i was thinking about bill acman with regard to the valeant news. >> and wouldn't you have loved to have been in the office when he saw that news come across because it went from a horrible day for mr. acman to a pretty down good day. >> about valeant. not about herbal life. >> the 52-week low is $17. the high is $123.
so it's still pretty sad times there. >> again, watching shares of herbal life. he supports the new ceo choice. we'll see how the market reacts. etsy earnings are now out. let's bring in courtney reagan. >> etsy posting a third quarter loss of 2 cents per share in line with analyst expectations. we'll call it relatively in line. etsy also is upping its guidance and reiterating three year guidance. its cfo is leaving at the end of march 2017. etsy will use the transition time to look for her replacement and/or successor there. and we have mobile visits continuing to account for more and more of etsy's what is going on when it comes to active buyers or sellers both of which are up. active sellers up more than 11%.
buyers up more than 20%. the gross merchandise sales up more than 19%. the revenue is up more than 33%. >> thank you, courtney. etsy shares up a little more than 1% on the news. more news on tesla and solar city. let's bring in phil lebeau. >> tesla and solar city executives out this afternoon you might call this a road show for investors to basically say this is why we believe this deal made since. a couple of headlines on the release. there will be a conference call coming up. tesla says that solar city will be adding to tesla's cash position starting in the fourth quarter and that it will be a deal that adds to the position adding more than $500 million in cash over the next three years. it says that solar city will generate at least more than $1 billion in revenue in 2017. there have been a number of
questions regarding the financing capabilities of solar city and struggles that they have gone through. tesla says solar city raised $1 billion in project financing over the last 120 days back since july 1. essentially what this report is saying and what we will hear during the conference call is elon musk along with other executives from tesla saying this deal makes sense and here is why we believe it makes sense to our bottom line. we will jump to that conference call in about 45 minutes and during fast money we have updates on comments from mr. musk. >> tesla and solar city shares both lower. guy, what do you think? >> fast and furious. phil lebeau teasing fast money that is fantastic. thank you, phil lebeau. number two, we will talk about -- i like to read through the tesla stuff. back to electronic arts. they say no more of this nongap stuff.
we are going to gap earnings. why is that interesting? because gap stands for generally accepted. why do we accept nongenerally accepted? >> we put it over there. >> they keep saying they are going to crack down. have you seen them crack down? >> they have written the letter. >> how many companies do we talk about here? >> but the fact that ea has now said it will come out and can't compare. at least they are moving. >> kudos to them. >> we would like everybody else to follow suit. >> i agree. and i'm still going to be glued to the elon musk show when he tries to explain to us yet again how this makes any sense. >> they talk about cash. what is the debt picture. you can put in a lot of cash but what are you paying in debt? >> there has been a flurry of
announcements from elon musk. is that part of the strategy to dazzle people with here is what we are going to do? >> the more you throw numbers out like this like the 500 million and the billion something in revenue the more people with sharp pens and pencils can basically measure it and put them against another company. when that happens i think solar city deal smells all the worse. >> a rambunctious way to kick things off. a ton of news. we will give you another fast money tease. adam parker will be there to explain why he thinks the s&p has farther to run this year despite the election and the fed all top of next hour. coming up here, 36 bankers have been in prison for crimes since the financial crisis. so far it has been only executives from small to mid size banks. we will hear from tarp inspector general about how she is working
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a lifesaving pill by five thousand percent. said he wished he'd raised it more. prop sixty-one targets drug company price-gouging to save lives. the drug price relief act will save californians nearly a billion dollars a year. join the california nurses association and aarp and vote yes on sixty-one. the drug giants won't like it. and he'll hate it. welcome back. after the financial crisis rocked the nation a government agency was created to investigate fraud at banks that got bailouts. that agency is known as special
inspector general for the troubled asset relief program. 62 bankers have been convicted. 36 have been sentenced to jail and none were from the big wall street banks. the head wants to change that and sent out a proposal to congress. joining us now is special inspector general for the troubled asset relief program. tarp still exists and what are you guys up to? >> absolutely. my latest proposal really comes from this idea that we have ceo whose are making millions at the largest banks. they should have a responsibility to make sure that their business is legal. i think most americans expect that but the reality is that the ceos are insulated. they are in the dark. so really the proposal that i'm making is just to have the ceos do what they should already be doing which is to make sure that there is no crime or civil fraud in the organization.
i am asking congress to make them put it in writing. >> there is an organization supervising different banks. for people who know tarp mostly from the day the market dropped six points what is the power and the authority through which you are acting today and will continue to act? >> our investigations will continue as long as the conduct and any fraud or criminal act was before tarp or during tarp. you can see there is still scandal after scandal after scandal coming within that timeframe. it doesn't matter that a bank has paid back tarp or gotten out of tarp because you can't pay to get out of tarp and stay in jail. you have to have accountability for crime. >> the cfo had to sign off on financial statements. why doesn't that take care of the problem? >> this is a little different. my proposal is different as it
requires due diligence. the due diligence has to report to the ceo. what you don't want to have is you don't want to have someone circumventing it and having due diligence pushed down. the due diligence on whether there is crime or fraud which shouldn't be protected should rise up to the person who is going to testify to congress if there is a scandal. >> and when we talk about the big banks here can you give us a sense of had your office existed would the outcome have been different in terms of people jailed for what happened during the crisis? >> our office has been unique because what ended up happening was we found crime and fraud that existed precrisis and hadn't been caught just because they ended up going into tarp. we already have 85 bankers including ceos at the small and medium sized banks indicted. we were the investigative
partner with the department of justice on residential mortgage backed securities and other fraud actions against largest banks. >> i have a basic question. is what you are proposal trully legal? >> it's more than legal. it's what should already be taking place already. i can't think of a more important job for a ceo to do than to make sure that there is no crime in their organization. so that is all it is doing is putting in writing what you should be doing already. >> it does hold some people to a standard that they may not be able to follow through. the intention might be good and accurate. it still places perhaps undue burden from legal perspective on certain people who work at companies. >> i don't believe so at all. if a company is too big that they can't certify no crime in it we have a much bigger problem than that. it is just step one if you are
presiding over a company there shouldn't be crime in it. we are not talking about rogue employees. if they get duped there is not likely criminal prosecution. what we have now is not working. we have basically a fraud scandal, ceo testifying and calls for accountable. what i'm seeing in the medium and smaller banks is the ceos are in the know. they know about the fraud but i'm seeing in the larger banks is the ceos and other senior leaders are purposefully isolated and then they can't take steps to stop it, as well. which is a big part of this. this is a proposal that would deter crime, prevent fraud because the ceo and other wall street leadership get an opportunity every year to do due diligence and to stop fraud or crime before it gets bigger. only if they don't stop it is there a path for law enforcement. >> thank you for joining us.
>> thank you very much. seema mody has an earnings alert. >> big data company reporting earnings adjusted beating expectations. revenue a bit light. revenue coming in at $206 million for the quarter deferred revenue a bit disappointing at 231 million. versus estimate of 252 million. in the press release the company says results impacted by extended sales cycles on large deals in the u.s. in addition to announcing earnings the board authorizing repurchase of up to 200 million shares. you see shares down about 14% in extended trade. i point out year to date shares down about 55%. >> thank you. real quick do you think this makes it more or less attractive? $7 cheaper now.
>> he seemed like he wants to change the company. whether that means yes or no i can't say. maybe john has a better take than i do. >> pr i think it makes somewhat more attractive but i don't know -- >> shareholders responded by telling them are you focussing on the core business. down about 6.$50 to 43 after earni earnings. one health insurer is getting back into the insurance game as major companies are withdrawing from obama care exchanges. the details and why they are buying next. and gasoline futures spiking on supply concerns after a key pipeline in alabama exploded. the latest on that incident and potential price impact coming up.
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and could save you in out-of-pocket medical costs. call now to request your free decision guide. and learn more about the kinds of plans that will be here for you now - and down the road. i have a lifetime of experience. so i know how important that is. welcome back. open enrollment for obama care begins today and major insurers unveiling. one startup is making a big bet in colorado. that is where bertha coombs is. >> bob she heand cofounders decided to start an insurance company they started colorado. folks are into health. they felt the regulatory environment would be good for them to get started quickly and
they were able to partner with a really strong health care system. what they didn't count on was that there would be so much disruption in the obama care markets. here alone you have the old company united health and humana both exiting the markets. others pulling back. that means there will be 90,000 people, nearly half of the a.c.a. enrollment looking for new plans. they will be willing perhaps to try a new startup. one thing that they are really sensitive to here is pricing. a lot of people pay on their own. 38% were unsubsidized. one thing they did focus on very carefully was pricing. >> we're really trying to offer people affordable premiums in the market place. that combined with broad coverage in our network and strong benefits we think will be real competitive angle for us.
>> the nice thing about this being a second act is they are venture backed so investors have giving a little more time for profitability. >> thank you, bertha. bertha coombs from colorado. breaking news on microsoft. let's get to josh lipton with that story. >> these headlines just dropping from reuters on microsoft. reuters reporting that microsoft is saying that a hacking group previously linked to the russian government is exploiting a windows flaw in certain cyber attacks. microsoft saying a patch for this flaw being used by the hackers will be released on november 8. the windows vulnerability was discovered and publicized by google, a move that microsoft is calling disappointing. not really clear from headlines how many people could be effected here. we have reached out to microsoft and will bring you the response if and when we get it. >> a lot of people stood and
took notice when google made that public. now microsoft doing something about it. thank you. time for a cnbc news update with tyler mathisen. >> here is what is happening at this hour. bill cosby back in a pennsylvania courtroom for pretrial hearing on sexual assault charges. his defense team trying to keep 13 accusers from testifying at the trial. it is scheduled for june. hearing is expected to last two days with another one set for december. a baltimore school bus blocks away from first stop veered into on coming commuter bus, killing six people, injuring ten more. no children were aboard the school bus. the driver was among those killed. california state water resources control board reporting that residents use 18% water in september than they did in 2013 shortly before drought emergency was declared. it is still less than 26% cut in water from september of last
year but it is a better reading than in the previous month. and the cleveland yns can win the first world series if they beat the chicago cubs in cleveland tonight. that would suit 104 indians fan just fine. she was in her mid 30s when the indians won the title way back when. she needs to remember the cubs haven't won in 108 years since before she was born. that is the cnbc news update. back to you. >> i read in the wall street journal about the 108-year-old fan of the cubs. >> she looks good. thank you. the national average for retail gas is $2.20 a gallon. because of an explosion consumers may be paying more for fuel in just a few days. wiki leaks releasing new
let's check in on some earnings movers after hours. a lot of green. square up 3.6%. gilead up about a quarter of a percent. thank yous arts down nearly 3%. gasoline prices rallying after one of colonial pipeline's main lines exploded. gas prices did retreat after colonial said the pipeline would be restarted. colonial is responsible for about a third of the gasoline that is shipped to the east coast. the explosion occurred when a crew member hit the line with a track hoe. what long term impact with this have? let's bring in senior petroleum analyst with gasbuddy.com. >> what do you expect to happen at the pump with people in the weeks ahead? >> this really could have been a crisis if we didn't hear that
news that you just reported from colonial pipeline. we were preparing to see spikes comparable to the ones that we saw the last time we had a pipeline problem in alabama and that led to 20 and 30 cents spikes in major areas. as we know the first pipeline that gasoline pipeline was shut down and the second pipeline was also shut down but it restarted late last night. the last time there was a pipeline problem they used that second pipeline to divert some of the fuel up to the northeast. but when we heard this impacting two pipelines it certainly created a great deal of concern for the supply as well as the prices, the spiking that would be inevitable. this is a very fortunate outcome what we are hearing right now because it certainly means that the price increases we should
expect between now and saturday should only be a few cents a gallon, maybe five to ten cents at the most. >> we saw in atlanta during the last colonial shut down real gasoline lines in almost a bit of a panic. as you think about the pipeline built over 50 years ago is there enough capacity in the u.s.? it seems like this is a pretty significant choke hold for a huge part of the u.s. economy. >> there are thousands of miles of pipeline. my understanding is that there is plenty of capacity right now. of course, when you have a pipeline of this size and this volume people should understand this is a 36 inch pipeline that carries 1.3 million barrels a day of gasoline from texas all the way up through the mid atlantic states and into new york harbor. so if you have to shut down a pipeline of that size trying to replace that supply and do it efficiently is virtually
impossible. you can always cobble together the sourcing from multiple areas whether long distance trucking from shipping, from fuel by rail. trying to get that fuel into the retail markets in a cost effective way is virtually impossible. you can't replicate the efficiency that a pipeline delivers. >> huge smoke and flames there. thanks for joining us. >> thank you. alphabet's executive chair and the man most closely identifying with google hatched a master plan for hillary clinton's presidential bid two years ago. it is part of the latest wiki leaks jump and we will tell you what was recommended coming up. , but they demand the best shopping experiences. they're your customers. and by blending physical with digital, cognizant is helping 8 of the 10 largest u.s. retailers meet their demands with more responsive retail models... ones that transcend channels and locations, anticipate expectations...
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you don't. you partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. morgan stanley. welcome back. wiki leaks is making more e-mails linked to hillary clinton public. it revealed another relationship between the democratic nominee and big business player. eamon javers has that report with us now. >> this one is not surprising in one sense in that we knew that eric schmidt was a big democratic supporter, close to president obama and close to hillary clinton as well. what this document tells us is the extent of eric schmidt's involvement in offering thoughts to the clinton campaign. this is an e-mail sent to cheryl
mills in 2014 with a variety of advice for how to run the 2016 presidential campaign including this. he says it is important to have a large hiring pool such as chicago or new york city from which to choose enthusiastic, smart and low paid permanent employees. another piece of advice to the clinton campaign was a separate auditing function to make sure no one is profiting unfairly from the campaign and perhaps to that end look at this piece of advice he gives on which cloud service provider to use. he says the computers will be in the cloud and most likely on amazon web services not necessarily on google's platform. he gives advice on simple pieces in terms of how you use smart phones to register individual voters, how to manage databases and organization, hiring, staffing in the field versus at headquarters. a very detailed look at how he thinks this campaign ought to be run from schmidt to cheryl
mills. no indication in this e-mail of how the clinton campaign used it but did put headquarters in new york. >> i'm curious what you think the fallout will be from maybe alphabet shareholders if anything or if it is just going to further reinforce the idea about what do we know about the candidates and their relationships? >> i read the e-mail question. it did not strike me as a huge gotcha. it was almost a dry analyst or management consultant's view. i think it does reinforce the ways in which people with power and influence they have it and use it. whether that is eric schmidt or trump's side people involved in the campaign. i think fraum public's perspective everyone is involved. we get the rare seat of getting to see it. >> i agree. i don't think there is surprise
here. i think he can and should do whatever he thinks is appropriate. doesn't mean he is speak frg all of alphabet except when he is speaking for alphabet. what he does, who he backs is his business. peter thiel same thing. >> any reaction that goes the other way at this point? >> i want to put a couple of important points out there. we reached out to both google and the clinton campaign for comment on this and they have not responded to that. the other is to bear in mind that these are stolen e-mails posted on wiki leaks. the clinton campaign has never authenticated these e-mails. they said these are stolen e-mails and they don't want them involved in the campaign conversation at all. and then in general i will tell you that campaign managers over the years have historically they have a lot of two mage memos from important donors and part of the challenge of being a campaign manager is navigating the advice you get from the
outside. it's not clear how this was received inside clinton land but schmidt was a respected figure and they would have read this thing and they did as they put their headquarters in brooklyn. >> amazonbet. >> eamon javers. he herb-a-life with the c-suite shakeup. more on those results, next. be. for partners in health, time is life. we have 18,000 people around the world. the microsoft cloud helps our entire staff stay connected and work together in real time to help those that need it. the ability to collaborate changes how we work. what we do together changes how we live. hthis bad boy is a mobile trading desk
welcome back. we've got more on the herbalife management shakeup that was just announced. scott wapner joins us. what did you find, scott? >> hi, kelly. i got off the phone with now outgoing ceo of herbalife, michael johnson, who told me the following as to the reasons why he has decided to step down as
ceo after 13 years. he told me every c has a life term, that new blood is important, he thinks they have a great ceo waiting in the wings in rich gudis, who has been the coo and has worked for michael johnson for some 12 years. he says gowdyis is the right age, the right time. i asked him what role if any, battling with bill ackman has done to maybe push him out the door. he said, very little. in fact, his departure had little to do with bill ackman. he will leave in june of next year, the reach being herbalife has to comply with regulations. and michael johnson told me it was very important for him to see those through. that he wanted to do that 100%. also asked him about sort of his tenure as ceo. and he told me there was one thing that he wished that he would have done while he was running the company. of course, he still is, and will
until 2017. he wishes that he would have put measures in place earlier to be able to better identify who their customers actually are. one of the things that came out of that ftc settlement of some months back and one of those things that herbalife will now have to do through these new regulations, johnson telling me if there was one thing, i wish i would have done something on that effect earlier. nonetheless, he's doing that now. he will see through until june, those new regulations, which go into effect in may. he also told me that he's very proud of the fact that when he took over the company, some 13 years ago, they had $1 billion in sales. today they have nearly $5 billion. and he was quite proud of that. he said as to more questions about why he decided to leave now, i've got more mountains to climb and things i want to do. and i'm going to go do them. kelly, there are going to be people who look at this, and wonder really what impact bill ackman had, if any, in helping
to maybe accelerate michael johnson and wanting to step aside. remember, it was back in july of 2014 at the now famous or infamous, depending on how want to frame it, death blow presentation bill ackman gave in new york city where he called michael johnson a predator. johnson saying bill ackman had little to do with his reasons to step aside. he will remain executive chairman. carl icahn in a statement that herbalife had filed said he was glad that michael johnson is going to stay on, that he certainly approves of rich go goucdis taking over the reins. they think he's the right guy at the right time to take herbalife into the future. this is an interesting story. not a lot of people saw this coming. certainly in light of just what's going on with the company. michael johnson in very many
ways has identified as herbalife. he is the front man, he has been there since, you know, for the last 13 years, has guided that company, really, from as i said, $1 billion in sales in '03 until just about $5 billion now. so we'll continue to watch the stock trade after hours. herbalife shares down 1.5%. kel? >> scott, thank you. i was going to mention, as well, they are moving lower. they had their earnings out. scott wapner with the latest. a slew of earnings calls beginning in just a couple minutes from square to zillow. what to listen for, when we come back. these goofy glasses.
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welcome back. gillian kohl's under way. what are you guys watching for when it comes to earnings and what investors need to digest? >> we talked about the squared, and i think dennis hit it and so did you, kel, about the idea that maybe it's time for them to start talking with somebody. maybe they already are. it's certainly -- it's not growing at a pace, i think, that it needs to. >> by the way, the s&p today just closed lower for its sixth straight day. that's the first time since august of 2015, a stretch we remember was a pretty miserable one. >> kelly, over the last few days we have seen a tremendous number of deals, $500 billion in the
month of october. are these meant to be confidence-building things or basically cost-reduction exercises. unfortunately, the answer is the latter. they're cost-reduction exercises. again, i say this every time. the economy is relatively stuck, and the earnings will probably sew that. >> we'll leave it on that hopeful note. thank you both. that does it to be "closing bell." "fast money" starts now. "fast money" starts right now. live from the nasdaq market site overlooking new york city's times square, i'm melissa lee. pete najarian, karen finerman, guy adami. shares of gilead. what does it mean for the biotech bloodbath. we've got the details. and elon musk speaking to investors right now about his planned acquisition of solarcity. phil lebeau will bring the latest. and apple taken to the wood shed on worries of the mac pro and iphone 7 sales. first, we start