tv Closing Bell CNBC February 7, 2017 3:00pm-5:01pm EST
illustrated" swimsuit issue. when those magazines hit desks all men's doors shut. there she is with her daughter, alexa ray joel and christy thanked us that we do not come with an expiration. >> this show does. >> "closing bell" starts right now. yes, hi. welcome to the "closing bell." i'm kelly evans at the new york stock exchange. >> i'm stock walker in for bill griffeth. the dow and nasdaq hitting record highs. one big investor says valuations are getting, quote, perilously high. we'll debate how that should impact your investing strategy. >> president trump meeting with rex tillerson at this hour. we have an exclusive interview with ceo of royal dutch shell
and why that is the top company right now. >> as trump promises to, quote, do a number on dodd-frank, we have jeb hensarling to discuss what he thinks the new financial reform will look like and more importantly when it could all get done. >> we begin with the dow and nasdaq at all-time highs today. seth clarman has said the market has hit the, quote, perilously high valuations. he also went on to write, quote, exuberant investors have focused on the potential benefits of stimulative tax cuts while mostly ignoring the risks of tax cuts. >> so has the post election excitement led to an over valued market? joining us is casandra taroyan, steve grasso from stewart frankel. our very own rick santelli at the cme. steve grasso, go to you first. you're sitting here. do you agree with seth klarman? >> no, i don't. we're looking through a prism
where we had eight years with the same administration. things are going to change. when you factor in are valuations way out of whack? maybe if we're looking at valuations backward but we have to look at them through the prism of forward. you have to look at lower taxes. you have to look at a different regulatory environment. once you do that maybe valuations are more affordable. >> the question is how far forward does this stuff become? market has placed a lot of chips on the table thinking that the stuff is going to happen sooner rather than later. >> and also when i look at this individual investor i always have to look at it through what is his standpoint. this is not -- maybe he's never on board with a trump policy political agenda. so for me is he speaking his book or is he talking about the government or is he talking about stocks? so let me just wrap it up. >> exactly. >> one of the successful value stock -- >> taking nothing away from him but he also hasn't been a fan of
donald trump. so when you looked at it through that prism it's an investment choice but i don't think that this rally was built on valuation. i believe it was built on rotation. so if you look at it, you have money coming out of bonds, into equities, into risk assets. so they might be bloated short term but i think ultimately they'll grow into them. >> casandra, let me ask you. that's why it's so valuable to look through the valuations one by one. do you think there are values out there? is it too expensive to buy? >> absolutely. with every day we have earnings going by, with every day i feel more confident that some of the picks we've made based on donald trump's agenda are under valued just in and of themselves, not even relatively speaking. so when i look at something like acom, acm, which just reported today earlier and they are trading at 12.5 to 13 times
earnings, how can i say that a company like that is under valued when they're in the construction and engineering business? so i think -- i think steve's right, the reality is is that, you know, this particular investor was looking through his very negative lens of how he views the world according to trump as opposed to being an investor for your clients and saying, boy, there's some really good opportunities out there right now. jetblue, we like the airlines industry right now. there's deregulation that's going to be taking place across many sectors. the only two that we think make a lot of sense right now valuation wise are names like jetblue and hawaiian airlines which in and of themselves are undervalued and also from an mma perspective make a will the of sense for them to get together. not that we buy stocks just for a takeout but it's an extra reason why we would want to own those two relatively speaking to
other airlines. so, you know, it's clear that his letter had a certain viewpoint, emotional viewpoint about trump, and unfortunately we don't get to do that when we do this for a living. you have to take your own feelings out of it. >> let me just say, rick, as i ask you as, you know, a segue from what the last guest casandra just said. klarman makes a practical statement, not a political one, where he says the trump tax cuts could drive government deficits higher, it would balloon the federal deficit because interest payments on the massive outstanding government debt would skyrocket from today's artificially low levels. that's not a political comment. you're a deficit hawk. what's off sides with that comment? >> well, i think there's some political off side stuff play on that comment. first of all, he's an expert. i think investors have learned
many things from experts in the past years, think brexit. the other issue is, these aren't on the books yet, judge. they're not on the books. exactly what he's quoting? things that have been floated. in terms of valuations, really? it sounds like many have thought since december that for the most part the market has been moving sideways. i call it consolidation. consolidation that long after moves like we saw in november is certainly not the mo of markets that are exuberant in my firsthand experience with markets. >> klarman is not on an island by any sense. >> he's not on the same island as people buying the nasdaq, the s&p and dow. he's on a different island. >> maybe he wants to get off the island if the island is -- >> well, it's his prerogative to, but blaming policies that haven't even been put on the books sounds big time political to me. >> people are buying the market on policies that haven't been put into place yet. >> no, they're not. >> what's the difference? >> they're buying -- they're
buying the market on the notion that they have a good risk board here for seeing taxes and regs get lowered and maybe increasing safety on the borders and maybe having fairer trade. now if you don't agree with that politically, you can spin it any way you like. >> klarman is a registered -- >> people are buying goldman sachs because of the border wall. >> no, but maybe goldman is. >> we've been for eight years, nine years now talking about deflation, fighting deflation. the fed wants some inflation. why is that such a bad thing that we actually get some inflation back into our economy? i just -- you know, you can take what he read two different ways and personally i like to see the glass half full and think, boy, wouldn't the fed love some inflation right now. >> let me just jump in. i think what the -- what the previous guest just said, we have to be agnostic what we invest. we all agree upon that.
under president obama everyone thought health care was going to get slammed. rammed through the roof. if you were thinking through the lens of your political glasses you got killed, but when you look at his comments now when he's worried about debt and deficits, i don't remember reading a paper that he cared when president obama went from 10.5 trillion to 21 trillion when he left office. i don't remember it. that's where it's inconsistent when you look at it. >> i don't remember all of his letters, either. >> explain this in the letter, by the way. he explained for the first time his decision to say something publicly. despite my preference to stay out of the media, i've taken the view that we can be bystanders, i or up standers. >> there was stuff about a wealth gap. you don't need -- and he mentions president bush. there was a tremendous wealth gap when the s&p went from 666 all the way up to present levels under president obama. the 1 percenters got a lot richer. he didn't preference that. he went be back to president bush. we have to invest and be
agnostic when we invest. that hits everyone square in the face. >> look what andrew ross sorkin has kicked off. >> steve, rick, casandra, thank you. we have breaking news speaking of the president. he's meeting with secretary of state rex tillerson at the white house. eamon javers has the latest. >> reporter: we do believe that that meeting with rex tillerson, the secretary of state is going on at the white house right now. they are not allowing, however, the pool cameras in to see that. we won't be able to tell you anything more about it until after it happens and we can report on what exactly they're meeting about. it does come three hours before the oral arguments out on the west coast in the court of appeals on the immigration executive order so we'll wait to see what that brings as well. and then meanwhile, we just had this meeting with press secretary sean spicer who came out to brief the press. he brought up this issue of drug prices again. he was asked if the president still thinks it's important that drug companies are allowed to
negotiate or that the government is allowed to negotiate on drug prices. here's what he had to say. >> as drug prices continue to escalate, that drives up health care costs for every american, but particularly there's a huge burden on america's seniors who are so much more relying on drug prices. and in many cases you have people living on a fixed income. >> reporter: so sean spicer saying, yes, in fact, the president does believe it's important for the government to be able to negotiate down the drug prices. we saw the meeting with the pharmaceutical ceos last week. they were anxious to hear what the president had to say on things like streamlining the fda, getting drugs approved faster, tax reform that might benefit them. not so anxious to hear about lowering drug prices. >> gilead will report after the bell today among many of the names we're looking for. thanks for now, eamon. we have about 50 minutes to go into the close. dow's up that amount. right on the nose at 20,100.
nasdaq up 11 and russell down again. jeb hensarling speaks with us about his plans to roll back the dodd-frank and consumer protection act coming up next. the earnings parade picks up after the bell. disney, mondelez, yum china, and gilead. we'll break it down. keep it here. you're watching cnbc first in business worldwide. is it because so many go after it the same way? chasing after short term returns. instead if getting caught up with the crowd, the investment managers at pgim take a long term view, teaming specialized active investing with risk-management rigor, to seek out global opportunities. we manage over a trillion dollars this way, attracting many of the world's leading investors. partner with pgim. the global investment management businesses of prudential
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take a look at your dow jones industrial average. keep a close eye on the number on top, 20,097. the all-time is 20,100.91. the dow is up 44 points. >> nearly two to one advancers over decliners today. let's send it to seema mody. >> we have movement in the energy space following donald trump with the executive order on the keystone pipeline. we had the united states army corps of engineers notifying congress of its intention to grant an easement to construct that pipeline and in response
we're seeing energy transfer partners among others move sharply higher. they're up about .6 of a percent, kelly. >> we'll see what happens with the protests now. thank you, seema. president trump also promised deregulation during the campaign taking aim at dodd-frank with an executive order last week. >> dodd-frank is a disaster. we're going to be doing a big number on dodd-frank. we expect to be cutting a lot out of dodd-frank. because frankly i have so many people, friends of mine, they can't borrow money, can't get any money because the banks won't let them borrow because of rules and regulations and dodd-frank so we'll be talking about that in terms of the banking industry. >> but the white house can't do it alone. >> i was so excited to get to the interview. >> well, for more on that we're joined now by congressman jeb hensarling, republican from texas and chair of the house finances committee. welcome, sir.
>> kelly, thank you for having me. >> so it's been a very busy time for you. you are pitching your choice 2.0 act to americans and your fellow legislators. what do you think the odds are that this becomes law at this point? >> i'm not a las vegas bookie so i'm not going to give you odds, but i can tell you we stand ready to work with the trump administration using the president's phrase to do a number on dodd-frank because dodd-frank promised it would lift the economy and instead we have the slowest, weakest recovery, dodd-frank promised us that it would be too big to fail and instead it codified it into the law with the taxpayer bailout fund. it promised us it would make the economy more stable. since dodd-frank the big banks are bigger and the small banks are fewer. checking at banks has been cut in half. many auto loans cost $500 more. basically dodd-frank broke all its promises. we need a healthy economy. that's why we need the financial choice act so that we have
bankruptcy instead of bailouts, so that we have economic opportunities for all bailouts. so i plan to work on this with the administration, not unlike obamacare, much of dodd-frank was constructed with a pen and telephone so president trump can use his pen and telephone to undo much of it. i hope to do my part on capitol hill and to unclog the arteries of lending because entrepreneurship is at a generational low in america. to get jobs in big business you've got to start with small business and it's hurting in our economy. >> congressman, look, it doesn't sound like you want to use a pen and a telephone. it sounds like you want to use a sledge hammer. >> well, i mean, what obamacare is to household health care dodd-frank is to household finances. people are hurting. the economy still isn't working for working americans. they've seen their paychecks become stagnant. they've seen their savings still not recovering from the great
financial crisis. and so, you know, we just have to get the economy moving again. as the president said, too many small businesses, too many entrepreneurs can't find lending because of the sheer weight, volume, and control of dodd-frank. i mean, we now have federal bureaucrats who are trying to run the economy, a washington top down method as opposed to innovation and organic growth from main street. that's got to change. if you want the benefits of capitalism, you've got to let capital flow. dodd-frank clogs the arteries of capitalism in our system, it hurts working people, it hurts consumers, it needs to go. >> commercial and inbe dus streel loans, congressman, were up 6% at citi in 2016. obviously far outpacing the economy. they were up nicely at jpmorgan and jamie dimon himself has talked about the availability of lend being. do the facts mesh with the
rhetoric that loans are not available, that they are more available? >> sure. go talk to any small business person in the fifth district of texas, talk to any small business person across america. they're still having trouble accessing credit lines. listen, the economy is already improving i think under president trump and under just the promise of many of his policies, but what you can't deny is that we have 1.6 economic growth gdp growth in the last year. that's roughly half of our potential. economic statistic that matters the most is our gdp growth and dodd-frank is harming gdp growth. >> congressman, while we have you, i want to ask you about a parallel initiative that might be at play here. it has to do with the consumer financial protection bureau. are there moves afoot to replace its head? is a three-person committee the kind of leadership we should expect going forward? >> i would certainly encourage the president to say to mr.
cordray, you're fired. you're terminated. the or wellian name consumer financial protection bureau has hurt consumers. free checking at banks cut in half. many bank fees up. many people can't find mortgages. in fact, when they're qualified mortgage rule is fully instituted. fully 1/4 of all people qualified for a mortgage in 2010 cou couldn't find it now. this place has been a disaster. most importantly now, it's been held unconstitutional. it is a rogue agency that is a legislature, it is a cop on the beat, it is judge, jury, and often recipient all rolled into one. we don't need a national consumer finance tyrant and i'm not trying to personalize this to mr. cordray but, again, it's an unconstitutional agency and it must go. >> so let me ask you then about the time line for a lot of these initiatives. when you're talking about
replacing dodd-frank with your choice act, reforming the cfpb is the word i was looking for and also tax reform. after the president spoke this weekend it sounded like maybe the time line for a lot of things not just obamacare is starting to drift into next year. >> well, i don't really know the answer to your question. i know in conversations i've had with the president, conversations i've had with the vice president and the speaker it is still a this year priority. because the president, the vice president, the speaker all know that you can't get a healthy economy as long as you have dodd-frank on the books. as long as the consumer financial protection bureau is actually hurting the consumers it was purported to help because there's no greater consumer protection than competitive, innovative markets. so i'm under the impression it remains a this year priority. it's a dynamic environment, it's not a static environment. we just need to get the job done and get the job done as soon as possible because the american
people, they need a healthy economy. they need to go back to work. people have part-time jobs, want full-time jobs. people who want full-time jobs want good career paths to improve their lives and dream big dreams for them and their children. >> congressman, i just want to make 100% certain that we're clear. you -- are you looking for a tweak to dodd-frank or a complete overhaul? and i ask you the question in the context of, look, even some of the president's most ardent supporters like the billionaire investor carl icahn has said repealing dodd-frank is certainly not the answer pointing out that a lot of the problems that led to the financial crisis, this is a quote from him, were the result of not having some of our investment bankers regulated and they were selling products that they shouldn't have been -- that shouldn't have been sold. how do you respond to that? >> well, the truth is a lot of wall street has grown accustomed to dodd-frank. in fact, their trade association has come out against the financial choice act which is
our act to help regulate the banking industry, the finance industry and to get the american economy moving again. it's also no secret that about t 95% of wall street contributions went to hillary clinton instead of donald trump. this bill is not being written for wall street, but when you say tweaked, no. we have a republican alternative. it's on the books. we introduced it in the last congress, we're getting ready to reintroduce it this congress. again, it's called the financial choice act which is about creating hope and opportunity for investors and consumers and entrepreneurs and it basically, again, replaces bailouts, taxpayer bailouts with bankruptcy. it makes sure that we put private capital in front of taxpayer capital. it essentially tells banks if you will put forth 10% -- a 10% simple leverage ratio equity finance, that is loss absorbing capital. if you will do that, we can release you from a lot of this
washington micromanagement that may be hurting your bank and may be -- and hurting our economy as well. and so it's a -- it's a completely different paradigm. it is a completely different model, but we hold washington accountable, we hold wall street accountable, we grow the economy. i look forward to reintroducing it. i've had a couple of great conversations with our president about it and i think he supports most of what's in the choice act and i'm not saying every comma and every semicolon, but he certainly supports the goals. i look forward to working with the administration on it. >> congressman, thank you for your time and for joining us. >> thank you. >> that is representative jeb hensarling. >> 35 minutes to go. the dow jones industrial average not far away from the all time high. we are at 20,081 and change. coming up, the ceo of one of the largest oil companies royal dutch shell speaks to us about the potential impact on his company's profits.
>> i'd like to think i never needed to be humbled, but we all probably get over our skis from time to time and it's good to have your wings clipped a little bit. the lessons learned to the things that we could have done are they're not easy. >> mr. plank also discussed the potential impact of president trump's proposed border tax. >> the border tax would have an absolutely very, very difficult effect on all companies in the consumer space, particularly retailers, brands like ourselves. i think the intent on what the president wants to accomplish is very important. i think there has to be the pragmatic approach of how do we work with companies to actually get this across the line. >> since that's where sort of we ended with kevin plank, steve sata who used to run saks kaltd called the border tax an existential threat. >> we have enough existential
challenges already. >> exactly. also in many ways under armour is a victim of its own success. they had 26 consecutive quarters of 20% sales growth. >> nobody likes to see going from 30 perfection percent sales growth to something more human. >> it was still well into the double digits, it just wasn't 20% to continue the streak which kevin plank said he didn't think would ever be topped by anybody else. >> when he said to you that he was not only humbled by what happened, these problems didn't sound like they have easy fixes, what do you think that means? >> look, i think the environment is tough. when he looks around and he sees some of their competitors cutting prices and discounting, kevin plank thinks he's selling a premium product and he's not willing to go to the lengths that some people and forces are dictating to some. he's steadfast in his belief. we're going to keep doing what we do and keep selling premium product and we're just fine. we're going to continue investing in our product because
we think we're going to get to a certain destination. >> he decided to take on nike, he would, he has. i wonder if it's be careful of what you wish for. >> you try to get to the top of the mountain, there are always bumps along the road. >> that was a great interview. >> thank you. time now for a cnbc news update. >> here's what's happening at this hour. too many adults are not getting vaccinated according to immunization experts. data shows only 44% of adults had a flu shot. 20% had a tdap vaccine which protects against tetanus, diptheria and pertussis. they point to racial and ethnic disparities and those without health insurance. >> joe biden is heading back to washington. he's been named the benjamin franklin professor at penn state. the statute of robert e. lee will be moved out of
charlottesville where it has stood in the park since 1924. this after the city council voted to remove the statue and also rename the park. virgin group founder richard branson inviting former president barack obama and his wife michelle to his private island for some sun and the fun. the two set up a challenge. could mr. obama learn to kite surf before branson learned to foil board surf? well, the winner, the former president, barack obama. you're up to date. that's the news update this hour. back to you guys. >> all right, sue. thanks so much. i'm on the floor with katie bulcara of o'neill securities. so, look, the topic du jur is whether they have faced too forward of a bet on the president. >> that's taabsolutely true. they took it there, they're waiting, they're waiting, they're waiting.
the fact that we have a growth suggests that it's still going to happen. yet, if we start to see it fail, the first 100 days, if we don't see anything happen, then there's going to be a reason for investors to reassess. that's the part that's concerning. that's still a little ways out. >> we've extended these record highs. we're a stone's throw away from yet a new closing high on the dow. >> which leads me to believe that investors think he is going to get some action. listen, i don't think anyone believes he's going to get it all. i think they believe he's going to get enough to create tax reform, economic reform, deregulation. >> talk to me next time i say hi. >> kenny polcari. >> thank you. a little less than that into the close. dow's hanging on to a gain of 32. s&p's now turned negative on the session. transports are down 23 points. up next, royal dutch shell ceo speaks with us exclusively about the energy giant's transition to natural gas. stay with us. over 100 years ago as a benchmark for average.
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investments in nat gas. >> we've been focusing towards natural gas. we feel that natural gas is a longer running road ahead of it. there is an energy transition going on. part of that is focusing on more gas away from coal and we see gas also as the perfect compendium fuel for a more renewable energy fuel. >> it's getting more competitive and crowded. >> absolutely. >> yet the price partly because of that is stuck at a rather low point. is that frustrating? >> well, you know, most of the energy is still priced of international crude oil. some of it has changed. it will mix a little bit. in that sense gas very much follows oil pricing as well. >> what is your forecast or anticipation for where the oil price is going, where that puts natural gas price and what that means for profitability. >> the strategy we have is not a strategy that is reliant.
we have to be competitive at every oil price level and that means if we have to continue to work on reducing our break-even price of the company, making sure that we have a competitive sense of projects with a low break-even price per project so that every point in the price cycle we are competitive. >> you have a lot of debt. in fact, i think one of the highest net debt levels may be save petrogras in brazil. it's important you can pay down that debt also while paying out the dividend. are more divestitures ahead? more asset sales at the pace that we've seen in order for you to keep this transition process happening? >> divestiture is an important lever that we can pull along with a few other levers. capital costs reductions, starting products, $10 billion in cash. just on account of more projects. then, indeed, divestments play a key role as well. in terms of debt paydown, covering dividends, two
important priorities. debt number one, dividend number two. if you look at the last two quarters, we have for two consecutive quarters generating a free cash flow that can pay the cash dividend. in the last quarter started to make headway on debt reduction. $4.5 billion is a start but it's in the right direction. >> when you say dividend is number two, does that mean that could change the level going forward if you have to make sure you're paying off that debt first? >> well, it is an important thing to get right. of course, many of our investors still want us to maintain the high payout ratio that we have and, therefore, we have not changed. what it has been for many years, which is basically to grow the dividends in line with underlying earnings and dollar terms. >> you say your goal is to be number one again. explain that. >> for nine decades our company was the number one industry in the '90s. we lost it when the consolidation and industry
started. for two decades we have been struggling but we're getting back to that point. >> in the meantime, the world is changing. president trump here, we mentioned coal to natural gas. maybe he does more to try to change the incentives there. have you been in talks? have you been engaged with the administration? >> no, we have not been in detailed engagements with the administration, but the united states is clearly our number one country. we have 20,000 people here. it is probably the single largest cash flow we get out of any country and at the moment it's our single largest investment destination as well. projects in all parts of the value chain. it is a very attractive country to invest in. if i just look at what the president is trying to do business a businessman himself trying to improve the investment climate, i think, you know, we would be very much in favor of that. >> so you look at the risk/reward, i imagine some of
the risks might be on immigration policy, border changes, strong dollar. rewards being lower corporate taxes, investments. how do you figure out whether it is becoming a better investment environment? >> we will have to see how reform of tax system, potentially border tax, how it all plays out. we are on both sides of the border. >> have you changed any investments? has anything become relatively more or less attractive? in other words, would a dollar you were going to invest in the u.s. going to go somewhere else? or a dollar that would go to europe come here? is anything like that happening? >> no, not at this stage. i don't expect that to happen any time soon either. you have to take a long-term view and look at cycles. price cycles, regulatory cycles and tech cycles. you have to believe in the fundamental cycles. >> rex tillerson, our secretary of state led exxon mobil while it got so big and successful. do you know him personally? >> yes, i used to meet rex a few
times a year. >> what do you think of his capacity to serve in this role? where does that leave your competitor? >> i respected him for the businessman he was and person he is. i'm sure he will be an asset to the administration. but, you know, he used to be businessman, he's now diplomat, not a businessman. he will have to chart his own path in that sense. >> and make sure to stick around in the next hour. you can hear more of that conversation and it's regarding the impact of iran sanctions. again, that will all continue our discussion with the shell ceo. >> i look forward to that. about 20 minutes to go before we close it up for the day on wall street. still trying to get back to that closing high on the dow. right now we're sitting at 20,081. 20 points under the closing high level. >> $12 billion in profits in north america and 10 million vehicles sold worldwide for gm, but the stock is down today and we'll tell you why right after this.
2016. when you look at fourth quarter numbers from general motors, pretty impressive. they beat on the top line and bottom line. strong profits in both the united states and in china. driving the strong fourth quarter. what's the problem? this wall here summarizes it very neatly. look at general motors relative to other automakers. it is the number one importer of vehicles made in mexico and sold in the united states. in fact, 14% of the vehicles it sells here in the u.s. are made in mexico. it's not just that they make a lot down there, it's the type of vehicles that are made down there. 42% of the sierras and silverado pickup trucks, those are high profit vehicles. they're made down there in mexico. that question came up today on the conference call. gm ceo mary barra was asked to speculate about a border tax. she would not speculate. she said it's too soon to say what might happen. so far they're not changing their plans, guys. that's why when you take a look at shares of general motors, i've had this question all day
long. why is the stock down given the fact that they're forecasting stronger profits in 2017. it's the unknown. it's the unknown of a what might happen with their production in mexico. it's not that they don't make small vehicles down there. they're making very high profit, high content vehicles down there and that's what worries wall street right now. >> yeah, whole bunch of stuff in flux, phil. thanks so much. phil lebeau with the general motors story up in chicago for us. do have about 15 minutes to go before the bell rings. dow's hanging on to that same sort of range. 20,078 is where it currently sits. s&p right now is for the most part flat. nasdaq is up about 6 points. >> continues to buck the trend. >> yeah. >> setting a new record high earlier today. >> that's true. china's foreign currency reserves. all of this happened after they dipped to the lowest levels in six years. we'll discuss what that could mean for global markets when we come right back.
julia? >> hey, kelly. the health of espn and the tv bundle are the key topics to watch in bob iger's commentary. they're expected to be up a hair by $15.3 billion. earnings are expected to decline more than 8% to 1.$1.49 a share. i'll be back with the numbers and then we'll have an exclusive interview with ceo bob iger in "fast money." back to you. just minutes to go before the "closing bell." here is what is moving the markets today. the dow and nasdaq touching record highs at the open. oil slipping with gasoline and brent crude hitting lows. china's foreign currency reserves falling below $3 trillion. that is the lowest level. >> the chief economist at chase along with omar aguilar. thank you both for being here. anthony, it's amazing.
if china's reserves can drop below 3 trillion after being over 4, it looked like the market reaction would be enormous. now it seems like nobody cares. why? >> the reason they don't care is because now they are instituting capital controls. now instead of the 50,000 that people can take out and do whatever they want, people in china now have to sign a pledge and say they're not going to use it to make overseas investments to settle current account transactions. so they have a plan in place. they are hopeful that over the next couple of months this will stabilize. >> so, omar, as someone deciding sort of the best investment strategies, how do you take this into account? and also the possibility that you have a president who could just full on call china out altogether as a currency manipulator? >> yeah, well, it's interesting to look at what has happened over the last five years because the results of today is just a function of what happened last year with the currency.
the deep of the yuan was the worst in the last 20 years. what we've seen today is what we've observed when a currency was deeply over valued for a long time which is what the people's bank of china has meant to do. >> anthony, this brings up an interesting issue around china. how are we supposed to describe it? is it appreciating, depreciating. talk to us about that and also the impact on whether they're able to keep some control on this. >> as you know, kelly, they used to target that against the u.s. dollar. now it's basically traded against a wide basket. recently they broadened the basket even more. all of this talk that the chinese are devaluing their currency. over the last 6 to 9 months what they've been doing is intervening like craze si, strengthening, not to weaken it. they're doing the complete opposite of what you hear out there with regard to currency manipulation. by the way, if you look at the criteria that the treasury department has for so-called
currency manipulator, they don't meet the criteria either. >> they may not meet the technical or traditional definition, but if the president comes out and calls them currency manipulators, what's going to happen to the market? >> right now calling them a currency manipulator is nothing in itself. >> with the president of the united states does it it means more than some lower level person doing it. >> it has to be followed by action. if you call a country a currency manipulator and there's no action after that in your negotiations, the financial markets are not going to panic. if you remember right now you're hearing that term with regard to many currencies. you're hearing it about the euro, that somehow the germans are doing something to weaken the euro when in fact the germans have nothing to do with the euro. it's the european central bank. the truth of the matter is, scott, when you have monetary policy, you're going to get a side effect. expansion and monetary policy tends to weaken. we did it right after the financial crisis.
other countries are doing it. >> omar, briefly, on this issue, if the chinese foreign reserves are dwindling, albeit at a slower pace, how much longer will they be able to prop up the currency? >> they have two. they have a pretty big sized economy. they have any control. if it's any relief, the numbers that we see today are better than what we saw the previous two months. so there is a trend that it's slowing down. they do have the capital to be able to control. they seem to have a better handle. i do have to say that this just puts more pressure on the currency. therefore, the need for the people's bank of china to do more efforts to control it which in a way it's deflationary for the rest of the world, and in particularly europe which is one of the main trade -- transactions with china is the one that is going to suffer the most. >> no one wants that pressure right now. guys, thank you both for joining us. anthony chan and omar aguilar. up next, we are back with the closing countdown. after the bell harvard alumn steve crimson after the esteemed
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the nasdaq set new highs earlier on today came off that a bit, 20,100 is the all-time closing high for the dow. jones industrial average doesn't look like it's going to get there. needs 20 points or so. interesting stock stories for certain. michael kors is one of them. stock down double digits. earnings missed. weak sales. like a number of other retailers, particularly in the apparel space, just struggling so much lately. hope you caught some of our exclusive interview with under armour's ceo with kevin plank. talk about a stock that has really come back to earth over the last year. down 50%. kevin plank coming on today to give us an update on where his company is in terms of its growth trajectory. that was a decent interview. certainly from earlier on today. >> big under armour fan. even though the stock's come off the high. if you walk into one of those stores, the feel of those clothes, the people going in there, i bought a whole bunch for christmas. >> it's wildly popular. people love the company.
people like kevin plank. people haven't liked the valuation of the stock and that's the main story. >> when you were talking about the stock decline, you pressed him on it. he kept emphasized the way the company is changing, people they're a being traing. i think he handled it very well given the price decline. >> disney is after the bell. going to be an interesting one to follow and certainly after the bell and then into tomorrow. >> who's better managed than disney. knocking it out of the park. some of the problems today. oil is a big problem. obvio exxon is acting terribly. 81, $82 today. oil dropped below $52. that was a problem. chevron was poor. then we had merck and pfizer. buying interest. drifted lower throughout the day. that's a big problem for the dow. you saw the ten year yields going down. bank stocks, jpmorgan and goldman down.
it wasn't one thing. >> quickly through the catalyst to take you to another level. doesn't seem to be there. >> still need more information on the trump agenda overall. when he said pushing it further out, that's a problem. >> bob pasani on the floor. the first hour of the closing belle. here's kelly right now. disney stocks on tap. thank you, scott. welcome to the "closing bell", everybody. i'm kelly evans. finishing up another record day. the nasdaq closing at an all-time high. the other average, the bond market fairly positive. the s&p gaining less than a point on the bell, 2292 is the level there. dow and nasdaq both up .2 of a percent. that is good enough to put the nasdaq on a record high. 5674. 5666 was the prior closing high. dow needed to close above
20,100. we fell 12 points shy of that. still that index was positive. the russell 2000 continues a streak of under performance dropping about .4 of a percent to 1361. and now brace yourselves because we've got some big earnings that are going to be hitting the tape any moment now. all of our reporters are standing by. julia boorstin on disney, meg terrell on gilead, susan li on panera, yum china, josh on twillio and one on zullilo. joining us is michael santoli. rob cox checks in from reuters breaking news and sarah malek managing director at tiaa investments which is an affiliate of nubine. mike, before we get into the craziness with earnings. dollar was up half a point. what do you think of the action? >> really not going to persuade anybody bullish or bearish. we bumped up against 2300 mark.
i don't know if that means it's a very sturdy ceiling or we're just softening up that level. weaker at the surface but as long as treasury yields come down, the stock market has had a hard time summoning up much strength. >> meanwhile, rob, we're watching all of this happen as oil price hasn't been so much in focus. we're saying, look, it dropped below 52. it's a line in the sand for the stock market. held above those levels but it seems like there are a lot of pressure points in stocks here. >> that's another example of people looking for signs of growth, right? if you see oil going down, that suggested growth may be off. today is the three-month anniversary of the day before the election as well. it's quite interesting. i was looking at it before. we're up 7.5 or something percent on the s&p. obviously had the big trump rally. over the last month it's pretty much flat. you're seeing as you have been reporting today as well, lots of these sort of smarty pants in the market are started to go
rethink all of their views about growth and about all of the promises that we thought we were going to get as part of the trump victory. so i think, you know, it sort of seems to be one of these things where people are waiting for some sort of sign from god or whatever it is that actually they are going to get some of these goodies that they were expecting. >> i think you're referring to seth harmon here. we have smarty pants sarah malek. how are you investing in this environment? >> we think you're seeing typical market consolidation. february is a weak month for equities. we think strong economic data and earnings growth can drive the market from here and you have the tail wind here. we see this as a buying opportunity. >> for stocks broadly you're not worried about the valuation? that is what the founder was saying in his letter to investors recently, sarah. >> well, in terms of valuations, we think the breather that the market is taking is getting valuations a chance to compress while earnings catch up. s&p earnings could grow high single digits.
that could support valuations from here. >> meanwhile, mike, i'm glad we're getting some of these earnings. it's a reminder of the bread and butter. you pick through it. look at general motors today. hard to describe that stock as over valued. >> that's right. >> those growth still lingers. >> that's always the question with every name, every sector. >> how much was gaining. is this as good as it's going to get for a few quarters. for some policy-related stuff with gm, i think in general aggregate earnings have been okay to kind of ratify the ideas, on the rebound. they have not given you an excuse to say, wow, they're really accelerating from what you expected and we're going to chase the market higher. you often get these stalled out zones where sector moves happen but not so much the broad market. >> rob, when we look at bond yields which are often the tell about how excited about growth, it's looking less excited these days. it's old news but the jolt support, job openings, labor turnover that was what he can it came out today from six weeks or
so. job openings fell a little bit. so, you know, i guess the bar is so high right now to show the economy has or is gaining momentum. even though the ism number is good, this one threw a wet blanket on things. >> investors need to see some tangible evidence that some of the things that we were talking about here, positive for the market, positive for earnings are actually going to come to fruition. instead what we've seen is a lot of noise, a lot of political back and forth. we've seen questions about governance. really without a firm handle on governance, it will be really hard to get the kinds of things we talked about like corporate tax reforms through and to make everybody happy out there. if you are sitting there with your earnings -- s&p is at, what, 20 something times earnings. it's not a bad time to take a breather. >> mike, meanwhile, you know, we're looking sector by sector at some of the opportunities. the rotation play, is that part of what's going on here? >> it's kind of been
interesting. we've been talking about this very kind of cliche, trump trade, reflation, that's not really been the story for over a month, maybe two months. year to date it's big growth stocks. it's internet stocks. medical technology. media stocks, disney among them has also been leaders. the market's finding things to buy but it's not the stuff that's policy dependent or dependent on an accelerating global economy. >> through the nasdaq closing at record highs today. let's get to the disney earnings. julia boorstin has the results. julia? >> hey, that's right. disney beating on the top. on the bottom line reporting earnings of $1.55 a share. expectations were for $1.49 a share. revenue coming in lighter than expected. stocks down 2.5%. revenue coming in at $14.78 billion. analysts had been expecting $15.26 billion. looking at the different divisions that were driving those results, in terms of
revenues, the division that was really responsible for the lower than expected results this quarter was consumer products and interactive media. that division showed a 23% decline in revenue and also a 25% decline in operating income. looking at the other divisions, media networks, the company's largest division showed a 2% decline in revenue to $6.23 billion. parks and resorts showed a 6% increase in revenue to $4.55 billion. and so we saw pretty much in line or better than expected results with the exception of the consumer products division. now in terms of operating income to look at what drove the better than expected results, media networks did better than expected in terms of operating income as did parks and resorts and it was really that consumer products division that showed a bigger decline than expected. since there's so much focus on media networks, disney's biggest network and home to espn, cable network revenues decreased 2% in
the quarter while operating incomes decreased 11%. that was due to a decrease at espn due to higher programming costs and lower advertising revenue. that was partially offset by affiliate revenue growth. so there's certainly a lot of attention to whether or not disney is going to be growing subscriber numbers. i'm sure we'll hear more about that from ceo bob iger on the call. >> looking through the divisions here, studio numbers pretty much in line. consumer and active, mike, a bigger miss. media and networks, little bit of a miss. parks and resort, barely a miss. >> they were attributing it at least in the relief to advertising. so that's something that's not necessarily getting at affiliate fees and subscriber growth. that caller on the call is what people fixate on. i think a lot of people did think disney typically beats on earnings. this was a very mixed beat, if you want to call it that. that's why i think the stock's backing off. >> stock is down -- >> middle guidance. there always is play.
>> julia boorstin will be speaking with disney ceo bob iger after he speaks with analysts. still a lot to answer for on the call and obviously the chance to follow up with him on that. sarah, do you guys look at these disney results or the company itself, we of course saw "the wall street journal" reporting that bob iger is perhaps going to be sticking around now and not stepping down in the next year and a half or so. what do you think about how disney is doing here? >> we think the bulls are going to win out with disney because of the strength of their movie business, parks business which has great intellectual property built around it. plus, one of the best ceos in the business. we think that will offset what people are worried about on the espn side of it. you saw relative stability on the espn side. we tend to think disney can continue to do well from here. >> rob, would you echo that? >> i think longer term, you know, you've got a challenge. it's a little bit like what we saw with newspapers and other businesses where you have potentially a secular decline in the number of people watching
espn and willing to pay for it, yet the costs of the programming don't seem to be going down. i don't know exactly how -- we saw this is not in this quarter, in the current quarter, not the one they just reported but we had a decline. the super bowl was okay, 111 million people saw it. it was the fourth least -- worst in the last four years. so, you know, bob iger has a longer term challenge, maybe one of the reasons that the board is so happy to have him stick around. but, you know, as an investor you have to be would be rid because it's a huge chunk of the operating income. >> stocks down 1%. let's pause and get to the earnings from gilead which are out. meg tirrell. >> earnings coming in at 2.70 versus $2.60. revenue of 7.32 billion versus estimates of $7.15 billion. of course, with gilead we always look at the hepatitis b worldwide number. that came in ahead at $3.2 billion versus expectations of
$3.1 billion. the company increasing first quarter dividends by 10%. however, you're seeing the stock down more than 3% on the 2017 outlook most likely. the company saying it expects hepatitis c product sales to be 7.5 to $9 billion. mark with evercore saying some were expecting $12 billion in hepatitis c revenue. that may be why you're seeing the shares weak. back to you. >> gilead down 3.5% after hours. you know, many of their major drugs are "the help" b drugs. they have truvada. that's a big revenue maker. the challenges have been known for some time. >> the company can't get out of its own way. if you look at how the stock is valued, it's almost not comparable to anything else in big cap fapharma, big cap bio. what's next? there isn't anything next.
except m&a and cash repatriation. it's tough to know where the bottom will be. >> under a lot of pressure. do an acquisition, see if that picks up. >> sara eisen. >> this is light for mondelez. fourth quarter earnings per share, 47 cents. looking for around 48 cents. it was the sales number that missed the mark though, 6.77 billion versus an expectation around 6.8 to $6.9 billion. in terms of what drove it, well, i just had a chance to talk to irene roseenfeld, the ceo. the quarter was tougher than expected. why? a lot of the reasons are short had ever term issues, her words, including the india demon tieization. a shift in consumer behavior took a lot off of the sales that this company does in india. exposed to emerging markets.
heavy promotional spending in the market. so that also drove lower sales. a lot of the top line impact was that india demonitization which should be short lived. the u.s., i asked her if she was seeing a spike and we're not seeing it play through in consumer behavior at this point. in terms of what else was driving the third quarter profit, blaming competitors on slashing costs. one person discounts or gives you a promo two for one, one company does that and all the other snack companies have to follow. i did ask her about her expectations on some of the new policies from the administration. i said, what's the future of, say, a mo 234 deleze which operates in so many different companies, consumers and demand in a trump administration, she says they're in a wait and see
mode. it's important to create an environment supportive of global business. remember during the campaign then president trump, now president trump used to call out mondelez about a plant in mexico. she says there's been no contact with the new administration. she's continuing to run, quote, our biz. no movement on plans of continuing to go planned. the company forecasting 1% organic revenue. you'll see new innovation and new product in 2017. focused around well-being product category. better for you. cleaner ingreed yechbdientingre. a big shift. mondelez and irene rosenfeld wants to show this is where it's going to lie. on what she calls a prudent outlook for sales for 2017. back to you. >> great detail about the company and also about the consumer environment which we're
hearing from a couple of different places, sara. thank you. let's get to zillow. diana olick. >> nice beat in q4. earnings came in at 14 cents a share compared to estimates of 11 cents per share. that's on revenue of 227.6 million. the street was looking for 222. so that's higher than guidance also. it was up 34% year over year. traffic was up a among all of zillow brands. 140 million average monthly unique users, that's up 13% year over year. they saw a big increase in revenue from other column that includes rental. for the full year zillow set annual records. 846.6 million. up 31% from 2015. again, above guidance. and zillow group says it expects
to continue to grow revenue in 2017 and surpass $1 billion for the first time. now you can expect to see a lot of demand in this spring housing market. we're already seeing it and it's early february. that will mean a lot of traffic and a lot of clicks. doesn't matter if it turns into sales as long as they're getting the strong traffic which we continue to expect. >> that's the point. plus, it's fun to look around. thank you, diana. pretty much everybody is moving lower. twillio is out. let's see if they can break the street. josh lipton has the story. >> looking for a loss of 5 cents. they're break even. revenue, versus expectations of 74 million. there are 25,000 accounts as of a year ago period.
q1 guide between 82 to 84 million. that is better than expected. remember heading into this print that stock had come down hard. you can see it basically even in the after hours. bulls will argue that, listen, this is a software that gives a lot of the apps you use the power of voice, messaging, chat, critical to a lot of services from uber to airbnb to netflix. that conference call starts at 5:00 p.m. eastern, kelly, and we'll be on it, back to you. >> thank you, josh. twilio shares down. what's going through your mind? >> it's an orphaned ipo. it's about revenue momentum. early stage. 30% expected this year. the rest of it, it's been a noisy quarter. it's been a noisier quarter than the market would have led you to believe. disney up and you have to deal with exactly what each of these
divisions is doing in currency. i think that's another overlay to a lot of these global companies. >> great point. sara, what did you think about the currency? that's one of the reasons they came up shorter? >> we think india demon tieization is a slight issue. it's not as dependent on exports. they have a lot of things going into place. we think india is on the right track short and long term and it shouldn't be an issue going forward. >> rob, final comment to you here. same question. there's been a lot to pick through, but, i mean, for me it's interesting to look at mondeleze and under armor and wonder, you know, if there's too much optimism about what's happening there? >> you got me thinking about american made oreos and i haven't had lunch so there's that. no, mondelez, we had a view and it was a prediction they would
be gobbled up by 3g, kraft hines. there's going to be a floor on a stock like that. someone will be willing to buy that that they will be part of a grand hoovering, slow growth. so like you say, it's noise and you have to pick through it to find the story you like. >> yeah, that's true. by the way mondelez investors -- >> flat for a year and a half. very stable stock. >> to the point -- >> i think to rob's point. >> putting in kind of a floor there. rob and sarah, thank you for joining us. appreciate it, guys. disney shares meantime also falling after reporting earnings. we'll discuss whether it's a buying opportunity. or if investors should be concerned. later, the former ceo of a major drug maker says why he thinks president trump's executive order may be doing irreparable harm to the nation's bio industry. you're watching cnbc, first in
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along with him is brian bolin. welcome. robert, to you. you're a shareholder. at what point do these concerns about the direction it's going, you know, cause you to rethink that? >> well, you know, kelly, last time i was on here when they reported last quarter, the numbers were pretty dismal. i thought a lot of the bad news had been priced into the stock trading at 91. we had a 20% run up quarter over quarter. when you look at valuations today, it's not as compelling as it was obviously a quarter ago. trading at 16 and a half times forward earnings. i think the stock being down 2% is more indicative of the run it's had than anything specific out of the earnings report. when you look at the consumer division, that's really where they fell apart at. last year their interactive division, part of consumer products, they took $150 million of their writeoff of infinity games division. that's completely out of those numbers. the park in florida was closed down for a couple of days because of the hurricane. the big thing, media networks,
film, studios, those are pretty much doing as expected, but i think, you know, it's going to be things like bob iger coming on in an hour on your show and talking about the future for disney, what's going on with him and his tenure there. i think those are the things that could get some up side to the stock. we're pretty much equal weight. we trimmed our position a few days ago after the big runup we had. >> sound like an analyst there, not a shareholder. let me ask brian what you think about the quarter. >> yeah. when i look at the quarter obviously the consumer products segment was a big surprise although we have seen a lot of retail names report very poorly over the last quarter. you know, the thing that i saw, too, a lot of analysts were expecting the parks segment to grow even more. i never really expected to hear that the parks segment would drive the beat and raise the quarter. the thing to look forward to is the stock going to be a beauty or a beast. beauty and the beast coming march 17th, st. patrick's day.
the box office has been weak for disney lately. down 44% year over year from january so as we look forward though we do have "beauty and the beast," we have "pirates of the caribbean" and "cars." all three of them have installed the fan base in there. there are some good things to look forward to. >> yeah, it's interesting because if the market decides it warrants wants to focus on the visibility when you talk about the forward calendar for marvell, "star wars" films and all the rest, they can find something to be happy about. i do think there's a lot of visibility there. if it decides to stress about the future of the cable bundle, do you have an answer for mobile espn, i think it's going to be a different story. >> i was going to ask robert then we have to go. what's the thing bob iger could say when he's on "fast money" about the future of espn that says, that's it. that's what they need to be doing in terms of the shift in consumer habits here?
>> that's a great question, kelly. i think they had the acquisition at the bam tech. the idea is spinning off some type of stand alone option, subscription agreement for espn. i'd like to hear a little bit about that. what's going on. is there any traction there? i think the number is coming in over 6 billion look pretty good to me. i know some analysts were expecting a little more. it seems like the tide has stemmed quite a bit. i'd like to hear his ideas about what they're going to do to drive revenue. hopefully something with bam interactive. >> thank you again for joining us talking disney. buffalo wild wings earnings also out at this hour. our susan li has those results. >> kelly, we just hit peak wing season during the super bowl on sunday. but the report card is telling us that it wasn't a good quarter for buffalo wild wings. so let's start with earnings missing estimates here. 87 cents is what we got. 1.27 is what the mark$1.27 is w looking for. now as for revenue also a miss here. buff know wild wings putting in
$494 million. analysts were forecasting 514 million. same store sales were down 4% and company owned restaurants, that's more than two times what the market was looking for. looking for declines of 1.7% in the quarter. and they are forecasting, though, get this, positive comps. growth in 2017 of 1 to 2%. very weak eps. the outlook is pretty weak for the fiscal year. more comments here from buffalo wild wings. the focus of the year is to gain momentum on sales, improve cost structure and grow internationally. but if you look at the stock is down 6% on some pretty good volume. i have to throw in panera bread. panera bread is going the opposite direction. the earnings beat, panera put in 2.05. looking for $2 flat. revenue's missing estimates by a touch. 27 million, the market is looking for 728 million. the reason why the stock is up,
50.17. >> back to you. panera to the rescue, mike? >> rescue the whole group. it's a little bit reassuring. buffalo wild wings. the company suffered a busted growth stock. it has a premium valuation and 1 to 2% comps is not going to fulfill the valuation. there's an activist. there's a lot of back and forth to structure the business. >> would you have anything more in the weakness? >> if we talk football ratings. food deflation, everyone is talking about the same thing. president trump's pick for education secretary was confirmed by the senate today. labor secretary nominee and hasn't had a hearing yet. now admits to hiring undocumented workers. find out if that could throw his
nomination into jeopardy. plus, more than 150 current biotech leaders say the biotech plan could put that at risk. we'll hear from teva pharmaceuticals on why he is urging the president to reconsider. fees? what did you have in mind? i don't know. $6.95 per trade? uhhh- and i was wondering if your brokerage offers some sort of guarantee? guarantee? where we can get our fees and commissions back if we're not happy. so can you offer me what schwab is offering? what's with all the questions? ask your broker if they're offering $6.95 online equity trades and a satisfaction guarantee. if you don't like their answer, ask again at schwab. ♪ some things are simply impossible to ignore. the strikingly designed lexus nx turbo and hybrid. the suv that dares to go beyond utility. experience amazing. what's critical thinking like?
story. >> reporter: take a look at the set backs. last night he was forced to admit he had hired an undocumented worker to work as a house cleaner at his home. he's also not been able to file the ethical disclosures that are traditionally required or filled out the questionnaire that senators require them to fill out. his confirmation hearing has been delayed several times. here's the statement that the former ceo of cke put out yesterday when he was talking about the undocumented immigrant. my wife and i employed a housekeeper for a few years during which i was unaware that she was not legally permitted to work in the u.s. when i learned of her status, we immediately ended her employment and offered her assistance in getting legal status. we have fully paid back taxes to the irs and the state of california and submitted all required paperwork regarding her employment. kelly, remember, wilbur ross had a similar problem that he was forced to admit earlier this year. that wasn't a problem for him.
for secretary of labor though especially when there are other distractions, this might be more of a political problem. mitch mcconnell was asked about this today. he said he's enthusiastically supporting mr. puzner. harvard university received a record $1.2 billion in donations last year. the only problem is that was more than erased by a $2 billion loss by the endowment fund. we have the eye popping details up next. umm..she's doing good. she needs more care though. she wants to stay in her house. i don't know even where to start with that. first, let's take a look at your financial plan and see what we can do. ok, so we've got... we'll listen. we'll talk. we'll plan. baird.
welcome back. we've had a ton of earnings after hours. we're checking on all of them. walt disney down 2%. mondelez slightly lower. buffalo wild wings down 6% and gilead 3%. cnbc exclusive interview with disney's ceo bob iger. yum china reporting its results. susan li has the results. >> i'll get through this quickly. we have an earnings beat for yum china. revenues missing slightly. yum china has announced the
appointment of a new chief operating officer, c.o.o. joey watts has been elevated to president and they are announcing a $300 million stock buy back. now comp sales is very important. pizza hut, disappointing in the quarter. back to you. >> thank you. those shares up 1.5%. harvard university received a record $1.2 billion in donations last year. but when it comes to spending or investing that money, they get a failing grade. leslie picker. welcome. has the details for us. >> that's right, kelly. when it comes to raking in donations harvard is still on top. that's based on a new study out for the council for aid to education which tracks university giving. the amount coming in the door was over shadowed by the $2 billion in losses the endowment reported last year. this is just the latest financial pain that they have entoured lately.
its $36 billion endowment showed a loss of 2% on its investments for the year through june. harvard blamed the losses on the exposure to natural resources and equities. those came 56 several years of trailing peers. harvard is taking steps to try to turn the losses around, however. it brought in a new manager at the end of the year who has already started shaking things up. norv tends to cut the staff in half, outsource much of the investment, dismantle the internal hedge funds and spin off the real estate investing team. now the big question, will the news of the bleeding discourage donors from giving to harvard in the future? kelly, back to you. >> that's a question. leslie, stay there. mike, if you rewind a decade ago, harvard and yale had the most amazing returns for their endowments. even though they got there slightly different ways, harvard outsourced those rolls. it's been a dramatically different decade. >> it has. a lot of other investors caught
up with the idea. if you shifted more of your money into less liquid investments, much more global exposure, you did better. harvard didn't do it purely the way yale did. it seems like they have the ability to ride these out, right? that's the whole point of having a permanent endowment that you only spend a sliver of. most of that is covered by donations. it's not as if they're in distress over the financial position. they would love to get the market returns up beyond what they've been. they haven't figured out a formula. internally tons of criticism, the amount they spend and the amount they pay the investment professionals who run it. >> it makes an argument for them needing to raise more. >> that's the question. of course obviously given the example from today harvard has the largest endowment. it was number one in terms of bringing in donations but its performance, not so much. yale on the other hand, of course, they were up 3.4% because of what mike mentioned
earlier about private investments, however, it was nowhere near the top in terms of the amount of donations that came in the door in 2016. so i think a lot of that has to do with the fact that people who are giving the donations look at this as more of a long term thing and not necessarily something that is pegged to returns. >> and i still wonder whether they're all, you know, going to have to go to a more plain vanilla equities and bonds mix having the pendulum having come so far this way. leslie, thank you. great to have you here. >> thank you. >> that's leslie picker. up next, more from my interview with royal dutch shell ceo. we'll see what he says about the impact of iran sanctions on his business. and i never get tired of it. are you entirely prepared to retire? plan your never tiring retiring retired tires retirement with e*trade. i'm in vests and as a vested investor in vests i invest with e*trade, where investors can investigate and invest in vests...
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are the ones who can't wait to get out in it. ♪ welcome back. a $52 line for crude. we have a market line. seema mody has details. >> api data showing a build of 14.2 million barrels in the last week. kelly, this is much higher than what the street was expecting. in fact, by around five times more. that is why we are seeing oil prices move lower in the extended session by around 2.5% or down about 1.3 bucks. kelly, back to you. >> all right. we'll see how that shakes through these markets tomorrow. earlier i spoke with royal dutch shell ceo and i asked him along with other topics that we discussed about the company's relationship with iran and about possible investments there. take a listen.
>> they left some products and we sell some products into the company which is a transient transactional type of relationship and, of course, if there would be opportunity to invest and if the political climate as well as the legal climate would allow us to do so, then of course if behooves us as business people to look at it. clearly we are going to comply with all legislation that is applicable. >> i see here you had signed an agreement at the end of last year to develop oil and gas fields in iran. is that what you're referring to? >> yes. we have been in discussion with the iranian ministry of oil and gas so we are looking and we are studying a number of options in terms of oil and gas but that's a long way off from an investment decision, of course. >> so a lot at stake obviously for companies trying to figure out if there's a huge opportunity or in light of the last week or so to turn the other way. >> in a world when the majors have a hard time replacing reserves. you can't sort of write off
potential source of new projects just because it has obviously this political static. >> we have one of the biggest inventory oil builds and the price is dropping. when i asked him what the impact was for them obviously where they see the oil price going, he said, we try to build a business independent of the swings. that's the wish. this might not be the reality. >> i think both in the oil business and among investors it's been in this very comfortable zone. this idea that it's doubled but it has not shot higher. has kept that range. the declines right now look like they're threatening perhaps to break down the bottom range. >> perhaps the scariest thought for a lot of people in the oil market is it may look like the natural gas space. there's a lot of investment. the prices have dropped. it has continued to stay low because there's so much investment, because there's been so much innovation. >> has capped the price. that is the fear. >> so there's the crude price for you down 2.5% this afternoon. quick correction on "power lunch" we stated glen view
capital management's performance saying the hedge fund run by larry robbins posted a loss for 13%. it posted a return of better than 5% last month. we do apologize for that error. biotech ceos now expressing deep concerns and opposition over president trump's travel ban. we'll speak with the former ceo of teva pharmaceuticals, jerry levin. later on "fast money" they'll talk about disney's earnings with the company's ceo bob iger in an exclusive interview you don't want to miss. businesses count on communication, and communication counts on centurylink. ♪ to err is human. to anticipate is lexus. experience the lexus rx with advanced safety standard.
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say his policy will hurt their bottom lines. kayla taushi joins us with more from washington, dc. >> reporter: 16 states attorney general filed a brief on the travel ban. the brief included two states that president trump won in the election. there's already been an economic impact at the state level that will only worsen. here's what they said. among the costs, higher fees for university employees and students. lower tax income for individuals and businesses. fewer incentives for companies to move offices or build them in the u.s. tech companies you know by now have said much of the same. the justice department is urging the appeals court hearing the case tonight to reinstate the ban due to national security risk. thus pitting two of the trump administration's top priorities, stricter immigration policy and economic expansion against each other. press secretary sean spicer said today the president's jurisdiction over national
security is crystal clear regardless of what the ninth circuit decides. >> tonight is about the restraining order. it has nothing to do with the merits of the case and that's why i think we feel confident. the question is does the restraining order get lifted or not? the president has the authority to do nor do we know how far tech companies will be willing to push their cases. they're just friends of the court right now. we'll see whether they file their own lawsuits in the coming days. >> all right. the lawsuits are flying. biotech speaking out against the travel ban. in a letter opposing the executive order, leaders expressed their contempt saying it will harm an industry dominated by smaller companies and start-ups. the very kind of industry the administration said it wants to support. it will slow the fight against many diseases that affect us as well as carrying negative economic consequences for the
united states. >> thank you so much. >> it's a pleasure being here. >> you've written this letter to the editor, along with 160 colleagues, ceos of smaller companies and some big ones. why did you feel you needed to write this letter about the effect on the immigration and biotech? >> take my background. i'm basically an immigrant, 30 years a proud american. i've seen wars. i'm a refugee twice. in all of that time, the most remarkable thing is the strength of america. the vibrancy of what goes on here in our intellectual powerhouse that is delivered so many medicines. what is also clear, completely clear, is that without the immigration, without the fear that has currently been engendered by many people who are looking at this order and saying we don't want to come here. without that fear that 30 years
that have preceded this, we've seen the most unprecedented rise of terrific medicines and innovation. now, if we look to the future, we need medicine, great scientists, the best of the best of the best. and for that reason i felt it terribly important, and so did my colleagues, 165 leaders, who have developed new cancer medicine, new medicine against voirology, and have been hearing from their companies, they need to have freedom of ideas, freedom of flow, of great scientists from all over the world. and although only seven nations were in this order, it has left a profound feeling of fear. and as one who has faced terrorism, i've been under fire in factories, in israel, by
hamas, by terrorists, i am not afraid of them. i don't believe our nation is afraid of them. and i know the people in biotech are deeply, deeply committed to helping build medicines. >> jeremy -- if i may, let me ask you. i understand the sort of landscape that you're painting here. what are some specific examples of how this will create a health crisis in this country? >> all of our investors, the whole wonderful economic system we've built up depends on having the best scientists in the world. these flow in because of the investments that have been made and the nih, have been made in the capital markets, and by the leadership that we've demonstrated to the world in our training of people in universities and in the companies. by instilling fear, uncertainty, we no longer have the luxury of
knowing the best of the best will come to america, as they should. and the consequences of that, the new drugs in immune oncology, the discover business could break open the entire field of alzheimer's, will be slowed down, could be lost. >> jeremy, it's meg again. this is a really important issue. we would love to keep you on and talk to you all day. we want to ask but the experience you had in israel. the ceo of teva is leaving. reuters calls it a company in crisis. as a former executive and a shareholder, what do you want to see now? >> love the company. this is a great company. saul who has taken over the shareholder as a, my apologies. i'm the shareholder. he's the chairman. he is a terrific executive. he is a man who is able to mold
that board. reshape the management, and i think i have a lot of confidence in the future of that company. in addition, the generics market is not going away. this is large estrogen eric company in the world. as a consequence, we in america depend on its success in many ways and i think we should look to the future with some optimism with this change that has occurred. >> all right. jeremy levin, meg, thank you both for joining us. >> thank you. >> up next, another check on how disney shares are reacting.
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let's get a check on some of these earnings movers. a slew have headed our way. disney is down about 1.5%. mondelez has turned slightly positive. >> apparently bob eyeing iger h he was asked to stay on. he would be willing to stay if the company thought that was the best thing but nothing to announce right now. i really feel the effort by the
company is to focus investors on these studio franchises and all these brands that they feel like have the staying power, as opposed to the business model with espn is the big question. and they want to be on whatever platforms emerge but it is not a one for one replacement on revenue side. >> of course, his first line, or second, parks and resorts delivering excellent results. studio 3, rogue one, a star wars story. and irene rosenfeld said hit a big quarter. she said the heavy promotional spend. the quarter was tougher than they expected. she talked about profit pressures and seeing it in a competitive environment. not the kind of pictures you were saying earlier that gives you a ton of confidence. >> the supermarket is a tough place to compete. it is brand new and premium and they're feeling like they have to play defense.
the stock, taking in it stride. it has been a pretty stable performer. >> a lot of speculation there about its future. >> i think the multinationals with all the tentacles somewhere else. >> we'll see if we hear it from anyone else. that does it for us. "fast money" begins right now. live from the nasdaq markets overlooking times square, tonight "fast," disney is falling. the man himself bob iger will be joining us for an exclusive interview to talk about everything from espn to his blockbuster magic and he'll be in the sweet seat later on. plus the white house taking aim at a drug stock with a few simple words. and