tv Closing Bell CNBC March 3, 2017 3:00pm-5:01pm EST
overall, this could spark a lot more ipos. >> certainly. congratulations to a high school out in california for making it big. i think that's a fantastic story. >> i hope they can make it through another tough mountainview summer. >> thanks for watching us. >> have a great weekend. snapchat away. "closing bell" starts right now. welcome to the closing bell, everybody. i'm kelly evans at the new york stock exchange. >> that would make me bill griff fets. after the 44% gain yesterday shares of snapchat, the parent -- the parent snap, soaring again today, up 12%. we have more on what's behind the move and which investors are buying the stock right now. >> airlines are popping on reports that the department of transportation is suspending obama air regulations that would have required more transparency over fees. see gains in the range of one to two, nearly 3% for united.
we will have more details. >> everybody seems to be cutting prices. wireless carriers, on-line brokerages, but costco is going the other direction and raising its membership fee. investors not exactly happy about that. stock is down 4% right now. we have both signs of whether today's drop is a buying opportunity for investors. that's all coming up here. >> and making work cool again. mike row, the former host of "dirty jobs" testified to congress about the importance of blue collar ones. he will join us live to discuss closing that gap. >> i always liked mike. very nice man. start with our interview with wilbur ross on "squawk." hope you saw it. kayla tausche has highlights for us. >> it was a wide-ranging conversation, but much of it focused on trade because secretary ross said that the president has trade top of mind for what ross will be doing over the next four years. getting rid of both tariff and what he calls non-tariff barriers to trade. they sort of took a trip around
the globe and explored the case-by-case basis that the administration is finding in each country. china if they have an overt trade policy that hurts china expect there could be a counter punch. po on germany they're part of the eurozone but the export engine germany has become is because of the low euro and took a tone on mexico saying that in order to level the playing field they might intervene to help mexico's currency instead of the america first hurt mexico. a change of tone for secretary ross. he acknowledged that currency policy normally falls to the treasury department but said that he, treasury secretary ma new chan and economic adviser gary cohn have lunch every week to get on the same page. bringing back manufacturing jobs, hurt by some of those trade deals. secretary ross this morning said a heavy regulatory environment is just as big a culprit. >> what are the regulations that are holding back manufacturing.
i believe that we will find that it's way into the tens of billions of dollars and possibly approaching hundred odd billions of dollars that we can deal with. many of these were put in by executive orders and by agency rules and those wouldn't require acts of congress. so we are up to our eyeballs in trying to make sure we identify all the problems. >> reporter: the administration has, obviously, already tried to identify some of these problems with an executive order last week that ordered agencies to review some regulations, but kelly and bill, obviously the administration has a very long to-do list and much of the highest priority items will fall to that man that you just heard from. >> they will. kayla, thank you. kayla tausche in washington. now to steve liesman for the latest fed speak this afternoon at an economic conference here in new york. and maybe a momentous moment here, is that redundant, steve?
>> yeah, i think kelly, that's the way to put it. a momentous speech by the fed chair and a remarkable market reaction. the fed chair saying pretty much there's going to be a rate hike in march and i'm at the boost school university of chicago monetary policy and people don't remember that kind of explicit talk from a fed chair. the fed chair did say if the fed evaluates that, the economy is going along the way, they think and they do think that. she affirmed her belief in three rate hikes this year and here's what she said at a speech earlier today. >> at our meeting later this month, the committee will evaluate whether employment and inflation are continuing to evolve in line with our expectations, in which case, a further adjustment of the federal funds rate would likely be appropriate. >> reporter: there it is. further adjustment means rate hike. look at how the market reacted. the probability of a rate hike
already high at 74%, jumped up to around 83, 84, i even saw it as high as 85%. there it is, 80% now. came down just a little bit. and then you look at what happened to december. they did price in the december fed fund futures starting to price in the third hike, about halfway to pricing in a third hike this year, but the two-year note and the market didn't react at all. honestly, kelly, i didn't think i would get to this or we would ever get to this place where a fed chair could announce a hike in a couple weeks, three rate hikes this year and the market would say that's cool, bring it on. kelly. >> yes. >> exactly right. must have just been pretty much priced in here steve or there's still some doubt in investors' minds about it, but we'll see what happens come march 15th. >> right. >> something we can ask rick santelli about in a moment here. thanks, steve. see you later. good stuff. speaking of which, let's get to our "closing bell" exchange for this friday. james bianco of bianco research, mark lehman from jmp securities
in san francisco, jonathan corepina of meridian equity partners at post nine and we will talk with rick santelli -- let's start with you, rick. what did you think of the market response to the fed chair? the yield on the 10-year has been hovering around 250, went to 251, now back to 2.49. what did you think of how the market responded to what she said? >> well, i think every observation steve made is right. i just think that he's given kudos to the wrong entity. yes, the 2s, 10s, 30s, the stock market, no, it's not a ba zillion points but it's been hovering and it's been hovering near unchanged. steve's right, but listen, janet yellen, i give them an a a-plus, they took off the glasses and see the reality of the world behind them. they don't talk to us -- you need a decoder ring and they acknowledge what the market acknowledged months ago. we've seen the stock market going with turbo thrusters.
have you seen rates go at turbo thrusters. no, you haven't. have you seen the dollar going thermo nuclear, you haven't. listen, you could say janet yellen threaded the needle but i say they were disrupted, disrupted by markets, by voters, by brexit, by trump, by the senate, and you know what, it's a good thing. i'm going to move on. it doesn't really matter anymore, i think the fed is doing the right thing and, of course, the economy can handle it. i think the economy could have handled it for a while. we're moving in a good direction and the markets are cooperating. there's bad rates going up, good rates going up and good stock going up. i think at this point, we're looking golden. >> well, speaking of stock, jonathan, i was going to ask you, around this time for the last many trading sessions, we start to see stocks moving demun strably higher. we turned a little positive, but down a point. what do you think accounts for this? is it etf lows? they've been huge into this market the first couple months
of the year, possibly the biggest on record. why does it seem like we keep, you know, opening the session week, building up, and then in the final hour, kind of seeing a very different tone? >> right. so a perfect example is today. we come into today's session after snapchat yesterday and a small pullback yesterday, but today's session was all about what are we going to get from the fed and miss yellen. we were in the patiently waiting and seeing the information we were going to get. clearly we didn't get anything that was really going to move or shake this market or derail it. i think investors take time to digest that information and then as we get towards the end of the day and especially a day like today, a friday, investors are thinking about next week, how do they position themselves accordingly for next week. and i think we're going to continue to see this market move higher. a lot of economic data next week. we have the jobs number coming at the end next friday, and i think investors want to start to get ahead of it. in a session like today, yes, we started off low, moved a little bit, and as we're getting towards the end of the day we will move high sore investors
feel that they're positioned accordingly. >> jim, okay, the fed looks like they're going to raise rates. how do you think the market will respond when they actually see this rate increase announced in a couple weeks? >> i think all things being equal, they're going to respond with an unchanged. because as of today and as of this week, the rate hike has been priced into the market. now what we have to do is deliver it next week. the only thing that would upset that is if there was a severe stock market correction next week or a very bad payroll number a week from today, neither of which i expect, it's going to be all systems go for rate hike along the lines of what rick said and real quickly about what steve said too, this is about the most forceful we've seen the fed talk in many, many years about a rate hike, if not 20 years. this is not just they set a rate hike. they set it with big exclamation points in terms of fed speak. >> does that mean a bigger hike or something? you're saying that's -- there's something else to read into
that? >> i think there's something else to read into that, is not a bigger hike, not 50 basis points but an intense desire by the fed to start raising rates. in 2016 they were worried to raise rates if the market wasn't cooperating with them. what they seem to be saying in the last week to tep days is, we're going to plow right ahead and we're going to do this and that's something they haven't done in 20 years, to say we're going to raise rates and we don't care if the market prices it in and the market kind of followed them instead them following the market. it's a change. >> mark lehman, turn to the stock of the week or year so far, with snap, the ipo, your company j and p securities was one of the co-managers of the ipo. what do you say to the skeptics who look at it? i think of the skeptics when facebook came out, when google came out, when twitter came out, and now they're out again saying valuations are way too high. you've seen sell recommendations from wall street. what do you make of all that? >> yeah. it was a great launch,
obviously, for snap, and more like you said, critics than people who think the price is supported by fundamentals. there's not many ways to play the kind of explosive growth and on-line ads and not many ways to play that demographic. snap is one of them. i think you're seeing participation in the equity there we haven't seen in a while. the exposures to equities for the millennials and some of the people who have been out of the stock market. this was a harbinger of why the stock market is where you have to be exposed and i get it that there are valuations that seem very, very inflated but a way for people to be exposed. morgan stanley did great job allocating the deal. we were thrilled to be a part of it. this is a company that has a chance to really garner like facebook and google already has, the advertising market in the infancy that will continue for the next five or ten years. >> all right. gentlemen, thank you. quite a week. thanks for joining us with your thoughts on today's market action. >> and it's not over. send it over to seema mody for a market flash. >> the reits, they are under
pressure here as rate hike forecasts move forward following janet yellen's latest commentary at that executive club in chicago. we're looking at the fourth day of losses for the vnq, the vanguard reit index fund. take a look at some of the real estate investment trusts that are under pressure, equity presidential, udr, avalon bay and essex property. the s&p real estate sector the worst performing sector in today's trade. kelly? >> again, the tough debut for the newest sector of the s&p 500 last year. >> we need something to pair up with it. 11 sectors now. we need a 12th. i like symmetry. >> mike suggested commercial staples. we were talking about maybe cisco or something. >> sure. >> he's on to something there. thank you. >> 45 minutes to go. dow down 4 points. we will watch this hour to see how the price action looks. the nasdaq turned positive, s&p 500 down a point and a half and the russell down five. >> snap, the biggest ipo since
alibaba and shares are adding to yesterday's 44% gain. we're going to talk about the instant messaging act has surged too far too fast. there's the skepticism. >> trump economics could fuel the increase in airline stocks today. the details with the sector up 2 to 3%. you're watching cnbc, first in business worldwide. is happening before our eyes. shift in human history sixty to seventy million people are moving to cities every year. at pgim we help investors see the implications of long term megatrends like the prime time of urban expansion, pinpointing opportunities to capture alpha in real estate, infrastructure and emerging markets. partner with pgim the global investment management businesses of prudential.
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welcome back. we can call it trump economics. driving gains in airline stocks today. united up 3%. phil lebeau, what is happening? >> this is due to a report, actually that came out yesterday, that the trump administration is reconsidering a couple rules, regulations that are in the proposal stage. in other words, they were pre posed by the previous administration back in october, essentially looking at airfare regulations. the d.o.t. has suspended the comment period for those proposed regulations and we're talking about two right now. one would effect how airfares are marketed on competing websites. airlines have said for some time, look, this is going to be a logistical nightmare, it will drive up costs in terms of making sure that all of the airfares and data matches from
all of the different websites, and also, the disclosure of ancillary fees ahead of ticketing. your baggage fees, change reservation fees, all of that would have to be disclosed in addition to saying look want to fly here to there, it's $198. take a look at shares of the airline index, the thing to keep in mind here there's just a few weeks ago i was at the white house when the airline ceos were there and they made it clear, they want less regulation. that's what they're likely seeing the beginning of here with the d.o.t. and this suspension of the comment period regarding these two proposed rules. >> all right. so let's just be clear, this is a very nuanced story. these are the regulations proposed -- put in place by the obama administration, but they have yet to be implemented. >> correct. >> we haven't seen these as consumers as travelers, and all the trump administration is doing is just ending the comment period. >> correct. >> they haven't eliminated the ruling -- the rules -- >> they haven't eliminated the
proposal. but be clear here, bill, the airlines do not like the proposals. >> sure. >> connect the dots here. we know what's going on. i wouldn't be surprised at some point the d.o.t. says we had a chance to look at tis further and we don't think this is a good move. i wouldn't be surprised if that happens. >> oh, yeah. i think that -- you don't end the comment if you're not expecting to get rid of it. >> we're talking about regulations, the fuel economy standards, we've talked about this some time, which is -- >> biggy. >> the automakers have to get up to 54.5 miles per gallon by 2025 there are reports coming out within the last few minutes out of washington that next week, the trump administration might say, let's reevaluate whether or not we want to change those rules in terms of 2022 to 2025. so it is all -- all the stuff we talked about as far as changing those regulations that drive up costs for businesses and this is one that has had had a huge impact on the auto industry. >> this could be such a fill up for the auto industry almost makes all of the attacks on
where they're making cars seem worth it, right. they are making small cars to comply with the rule that nobody wants to buy. wouldn't this do great if it allows them to focus on the business of making automobiles that the public wants to buy? >> that's sort of a misnomer in terms of yes, way back, during the recession, when there was a huge drop in large automobile sales and large suv sales because of high gas prices, there was not enough small cars being made. what you're going to see here, is the automakers saying, okay, let's bring down those regulations. the problem is they've invested in a lot of technology, both in terms of the standard engine making it more fuel efficient and a lot of that technology is scheduled to come in over the next few years. do you cap it at 48 miles per hour, throwing out a hypothetical, instead of 54.5. it's not going to change the vehicles being made. we are a big car country. >> indeed. thanks, phil. see you later.
>> you bet. >> 40 minutes left in the trading session here. pretty volatile week without saying but going out on a quiet note. the dow up just 2 points. >> but it's up. >> yes. >> you can see the intraday chart we were weaker earlier in the session and it's up even after janet yellen is basically saying we're going to hike rates again. snap is rising again in the wake of 44% gains yesterday. we'll discuss how high the instant messaging stock app could go next and making blue collar jobs cool again. mike row, he will tell us why it's important to close the skills gap, coming up.
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vice president mike pence made comments about the bill to replace obama care that's been controversy on capitol hill. kayla tausche what do you say? >> he's making the rounds in jamesville, wisconsin, asked specifically about the timing of a fourthcoming health care bill and here's what the vice president said. >> when can we expect to see the bills? >> coming soon. >> by the end of the month? >> i just i have to tell you, i'm very grateful to speaker ryan and leader mcconnell for the hard work that dr. price is doing in his new role and we expect in a matter of days, you're going to begin to see a very brisk pace of legislative activity. we're going to repeal and replace obama care at the same time and as i said today here in jamesville we're going to
replace obama care with the kind of solutions that will lower the cost of health insurance for every american, that will be an orderly transition to a new and better health care program, and we're going to ensure that we don't leave anyone behind and that we give states the resources and the flexibility to meet the needs of the most vulnerable. we're working in collaboration with speaker ryan, leader mcconnell, members of the house and senate and the american people will see. president trump said this week, congress is responding and we look forward to ending obama care, but ushering in at the same time, a health care system that will serve the needs of the american people in the long term. >> reporter: that was vice president mike pence in jamesville, wisconsin, the hometown of speaker of the house paul ryan, flanking the vice president with congress out of session today. guys, we were on the hill yesterday and spoke to some republicans coming out of a house conference meeting, a closed-door meeting, and they said the plan is to introduce the bill early next week, submit
it for mark up around wednesday, the committees will have their way with the bill and we'll see what happens from there. we'll see we get it on time next week and we will see exactly whether the republicans can overcome some of the resistance in the party over some of the very specific details, the ways and means committee is working through the weekend to see if they can reach a compromise there. >> yeah. a lot of work still to be done. >> good stuff, thank you. talk to you later. we have other breaking news this afternoon. this about a potential another potential scandal regarding uber. >> "the new york times" reporting uber has utilized a program for several years to deceive law enforcement officials and cities with the ride sharing service was outlawed. uber sent cnbc this statement that says this program denies ride requests to fraudulent users who are violating our terms of service, whether that's people looking to physically harm drivers, disrupt our operations or opponents who collude with officials on
secret -- mike from the "new york times" welcome, certain. >> thanks for having me. >> so let's back up for a second so people know what we're talking about. this is a program called gray ball, which in the description that you have in the story here, makes it so that if i'm a cop in a city where uber is not allowed in portland is your example here i believe and i tried to hail uber, as of a couple years ago, i would be gray balled because they knew i was a cop and get ghost cars on my app that weren't real ones, is that right? >> yeah. so essentially they set up the program in 2014/2015, when a lot of the cities that now uber is legal in, didn't really have a framework for uber, the low-cost programs. so code enforcement officers and in some cases law enforcement officers would set up a sting operations in order to catch drivers operating the city would
say illegally, uber would contend that they were operating within the bounds of the law, and essentially tag them or gray ball them and be able to evade them afterwards. whether that was sending them a fake version of the app or blocking them entirely. >> right. >> or just yeah, it was -- it was pretty crafty. >> let's revisit the comment the statement from uber where they say, they admit that they were trying to avoid officials be who collude meant to entrap drivers. they admit this is what this is all about. it comes down to the issue of whether they're operating illegally in cities where they have been prohibited from operating, right? >> yeah. i think uber's point here is that they used these tactics for a number of different purposes and my sources, you know, confirm this too. there are countries in which they operate now in which
drivers are under attack from taxicab companies or other people who don't want uber there, and so uber would use some of these tools to ob vi skate their location and keep the driver safe. that's fair. what i found is that the other sort of branch of how they used gray balling, was to evade, code law enforcement, and that was something they did systemically and printed up a playbook and distributed it to general managers in dozens of cities all over the world. >> so this was not just an incident isolated to portland and a handful of officers they were aware of. you're saying if i was a cop or code enforcer and one of many cities, maybe las vegas, where uber wasn't allowed, most likely if i tried to use this, is it the case maybe even personally, would the app basically not work for me? >> so, if you -- if they ended up gray balling you, the thing is, they didn't want to outright ban code enforcement officers or police officers because they
didn't learn anything else if they banned you from using the service. so, keeping you in, seeing how many times you opened the app and what devices you were using to access the app, actually helped uber learn more about code enforcement officers' tactics or lyft and their competitors' tactics or taxicab companies and their tactics. they learned more from keeping you on the app. >> all right. so let's take it to the next step then, mike. what next? are we likely to hear from prosecutors in various cities willing to prosecute them for the use of this app? this device? >> yeah. it's really hard to tell, just because this happened two years ago. they still say that they're using it mostly outside of the country to protect drivers' safety, but i talked to a lawyer when i was reporting this out and there are questions of whether they were obstructing justice in order to sort of escape code enforcement officers
or not. or if they were breaking any other potential laws, federal laws, versus state laws. so it's really a matter of whether prosecutors in these states or at a federal level want to pursue it. >> well, it has been a difficult week for uber already. >> to say the least. >> mike from "the new york times" thank you for joining us. >> thanks, mike. >> thanks for having me. coming up next hour, we will hear from uber board member arianna huffington and her reaction to the story and all that's plaguing uber at the moment. >> oh, boy. lot of stuff going on there. >> time for a cnbc news update now. out to sue herera. >> hi. here's what's happening at this hour. libya's coast guard rescuing a boat carrying 115 migrants near tripoli. the migrants said there had originally been 140 people on board. the survivors were taken to the tripoli naval base for medical care. a north korea man suspected to be involved in the assassination of kim jong-nam, the half brother of north korea's ruler, has been released
from malaysian custody and brought to beijing. he is black listed from entering malaysia according to officials. arnold schwarzenegger is quitting nbc's "celebrity apprentice." the former california governor blaming the show's poor ratings on president trump's continual involvement in the show, which he says is turning people off. and 3d printing abscess core, printing out a 400 square foot home, in just 24 hours. it's located in russia. the house only cost about $10,000 to complete. it includes a hallway, a bathroom, living room, and a kitchen. that's really cool. that's it for me. i will see you next hour. >> but sue, who do you think -- i'm thinking mark cuban. >> maybe. >> the new -- >> maybe. >> yeah. >> that's a really good guess. although, you know, i don't know. >> i don't know. >> the president seems to be -- the president i think will continue to be involved. >> yes. >> in this own way with that
show, so it will be very interesting to see the dynamic with whoever the new host is. >> i wanted to watch the 3d printer make the house more. >> it's so cool, right. >> you got it. >> see you later on the business report. they keep inviting me back. >> i know. >> back tonight. >> together again. i'm thrilled. i will see you on nbr in a little bit. >> 30 minutes left here. we're going out with a gain right now. the dow is up 8.5 points, the s&p up a fraction and the nasdaq up 4. that russell, that's spoiling the party right now. >> i know. he's always like that. bringing the cool factor into dirty jobs. mike row tells us why he thinks this is a necessary condition in order for the president to make america great again, coming up. guys, what's happening here? hey nicole, this is my new alert system for whenever anything happens in the market. kid's a natural. but thinkorswim already lets you create custom alerts for all the things that are important to you. shhh.
welcome back. snap is surging again after a 44% jump on its market debut here yesterday. it's up about 11%, up 20% this morning. >> right. >> bob has. tracking the action all day. >> the important thing is another new high today. we're off of that at 27. went public at 27 but we went up to 29 earlier in the day. it's come off of that. look at the volume here, 150
million shares, it's been titanic the last few days. nbc universal, our parent company announced an investment of $500 million in snap as part of the ipo. take a look here. the important thing is they sold 200 million shares to the public, shares locked up one year, the company said 50 million. nbc universal is a part of that. a good part of the shares that were sold to the public aren't trading because they've essentially been locked up. there's only a smaller number of shares, about 150 million out there, to trade. so big volume here. look what happened. they slowed at 200 million shares. yesterday 217 million floated. the important thing any time you trade the whole float that's a big, big number. today we might get close. we're doing 150 million right now. the bottom line here, guys, is there's only a relatively small number of shares out there that's trading here. remember, bill, johnny carson used to say, there's only six fruitcakes in the world we keep passing around. only a few million shares of snap and everyone keeps passing it around.
>> keep changing hands. that's for sure. thank you. our next guest says if we want to make america great again we have to make dirty jobs cool again and this is something he's very familiar with. >> mike rowe, testified before congress earlier this week, about the bias against millions of skilled jobs in america and the economic impact of those unfilled positions and joining us now is mike rowe, the host of the popular reality tv series "dirty jobs." welcome. >> welcome back, michael. >> how are you guys? good to see you. >> so what is the point you most wanted to emphasize in your point before congress here? >> same point i wanted to emphasize in 2011 and 2013, when they invite med there to testify in front of various committees. the basic point was brought home last week when the president met with the ceos of manufacturing companies and we heard the same thing we've been hearing, which is, you know, a real emphasis on bringing jobs back and creating new opportunities which, of course, is great, but when it comes to the skills gap, we get
a kind of disconnect and i was kind of relieved, personally, to see some of those ceos say to the president, look, it's great, to create more opportunity, but the truth is, there are 5.6 million jobs right now that exist, many of which fall under our pursview and we canne't fin the skilled workers to fill them. >> right. the president during his speech to congress on tuesday night talked about this merit-based immigration plan they would like to implement, something like what they do in canada and australia, where they only allow for the most part, highly skilled, highly educated immigrants into the country who can easily assimilate into that country by making contributions, presumably with these high-skilled jobs. what do you think about that? >> probably a bit beyond my pay grade but the more fundamental conversation is, do we or don't we, as a country, aspire to the
opportunities that currently exist. now if we don't aspire to those opportunities, if parents and guidance counselors and big business aren't uniformally committed to uplifting the status and confronting the stigmas and stereotypes that keep people out of those jobs, we're just talking past each other. if the solution is some sort of immigration plan that you're talking about, okay. but -- >> i think you're under selling yourself. i mean what you're talking about are a lot of times the jobs that people don't want and, you know, the critics of immigration often say, that people coming into the country are unskilled and they're taking up the jobs that some of our young people would want, whether it's in fast food or aggri culture or whatever it is, you could argue that point or the dirty jobs you've done on television for years, and these people often cost us money because they have no health care and it's an expensive
proposition. you bring in the highly skilled workers and they pay their own way because they are already highly educated and highly skilled. you're talking about two constituencies here. letting the unskilled workers in to try to find their way in this country, doing those open jobs you're talking about, or the highly skilled workers only, to do these jobs in silicon valley behind you there or whatever. what do you think? >> i'm actually suggesting, with respect, bill, it's a false choice. there's a third choice that's real. my foundation has probably trained 300 welders. i would say 30% of them now are making north of six figures. is welding a highly skilled job or is it a nonskilled job? is it a good job or bad job? clean job or dirty job? this is the bait we always take. we always wind up talking about higher education versus alternative education. the truth is, there's a huge
misunderstanding about the opportunities themselves that exist in those 5.6 million existing jobs right now. it's the reason the jobs exist in the first place that, to me, is the foundation for the conversation that we ought to be having. why aren't more people excited about a six-figure job that can result from getting yourself a welding certification. >> quickly, mike, on that point, so the biggest problem for the labor market right now is the people who aren't in the labor force and if a lot of them appear to be young men, for example, is what you're talking about is that going to get them back in? >> who knows. but pr matters, right, and the way we celebrate work or the way we demean certain opportunities, it's critical. we get to decide in 2017 the definition of a good job. of all the things we can't control, one of the things we can, is the kind of work we promote. the skills gap isn't a mystery. it's a reflection of what we value.
so, too, is 1.3 trillion dollars of student loans. if we insist on lending money we don't have to kids who can't pay it back to train for jobs that don't exist anymore, we're going to stay where we are right now. >> all right. >> rather have the welders. >> yep. thanks, mike. the man with the greatest set of pipes in broadcasting. >> if only i had something to say, bill. >> mike, thanks. as always. >> thank you. >> any time, guys. thanks. >> about 18 minutes to go into the close. dow up 10 points. s&p up 1.5, the nasdaq up 7, russell down about 1.5. >> costco stock down after a disappointing earnings and news it increased its membership fees. time to get out of the big box or in? a bull/bear debate on costco coming up.
welcome back. shares of costco are lower today, down 4%, after the company announced it will hike membership fees in june. >> let's talk about whether this pullback in the stock is a buying opportunity or not. a bull and bear, our bull is -- you're -- are you the bull or bear. >> bull. >> i thought so. from oppenheimer. >> liz dunn is our bear. brian, i've heard costco is an unusual situation being a club
membership. three quarters of their operating income comes from their membership fees. those are going up. isn't that a good thing? >> it's a huge positive in my eye. when i look at the costco pnl, the fact like you said, bill, almost three quarters of the profit basically an annuity, i think that's a positive in the investment story. >> so liz, why are you skeptical and people have been selling shares off today as well and had earnings a miss on the bottom line. >> there was an earnings miss, the quarter was sloppy and most people called it out as being such. on the membership fee increase, that was largely expected. they do this every five or six years and it was already in the stock. what do we have walking into today? we had an event that was expected, which happened, but there are going to be reinvesting that in price and in other, you know, services to solve that last mile. >> doesn't that insulate them from the troubles that are plaguing retail otherwise today? >> they have a better business model than many other retailers, i don't agree with the assertion this is an amazon-proof model.
you see it at the margin begin and a lot of price competition in grocery and a lot of price competition in terms of how to solve that last mile for your omni channel business and there are ways they're having to compete with amazon despite the fact that maybe they have more insulation than others. >> brian, is there space for two membership clubs? >> absolutely. you know, look, i agree with liz. there's nothing out there that's amazon-proof. i think it's all a game of relativity. i think costco, given the merchandising, given the power they have with consumers are much more insulated from amazon than others. nothing is amazon-proof. >> buying the dip? >> absolutely. >> and how much lower does the price have to go for you to be interested then? sthi don't have a price target and -- but i would say a 10% pullback versus the 4% might be more interesting. >> how high do you think it could go? >> mid 20s multiple and look a few years out, dealing with 7 or $8 of earnings.
higher from here. >> brian, thank you for joining us. >> thank you. >> we have 12 minutes to go. dow is lower, down 8 points. transports up 36, held by the airlines today. dollar interestingly is weaker by almost a point. >> how much? >> when they were talking about fed rate. >> and the possibility of three this year. >> i got it all right there. we will have the buy and sell, the market on close orders in a moment. gold having its worst week since november, but our next guest likes the shiny metal as an investment opportunity. we will talk about that when we come back. switch to directv and lock in your price for 2 years. new offers starting at $25/mo when you have the new at&t unlimited plus plan. won't replace the full value of your totaled new car. the guy says you picked the wrong insurance plan. no, i picked the wrong insurance company. with liberty mutual new car replacement™, you won't have to worry about replacing your car because you'll get the full value back including depreciation. and if you have more than one liberty mutual policy,
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maybe you heard him off camera when we were talking about costco a while ago. art cashin pointing out the market on close orders showing an imbalance to the sell side of $500 million. taking a little edge off here, putting us back in negative territory back below 21,000 on the dow. >> that's true. >> joining us now, david, president of tice capital out of dallas, and the chief market strategist at ab is with us from 30 rock. vadeem, you think markets over -- is overvalued, very expensive, does that mean you're not buying, would you sell at this point? >> it depends on which market. u.s. market still has room to run through the middle of the year. i think as you look toward the end of the year, there's going
to be a war between the multiple compression and earnings growth and i think market could end below where it is today as we get to the end of the year. >> david, meantime people have looked at bitcoin above gold in terms of valuation and looks like you kind of would be a buyer of both here. >> yes, i am. really a big believer in gold, silver and especially gold and silver stocks. i really think they represent a gift here. we had such a big decline from 2011. at lot of the stocks lost 80 to 90% of the value and we had a nice rally in 2016 and the first half, a sell-off in the second half, now for '17, we think gold stocks are going to be up a lot and also the bullion and silver. >> but, david, here's a scenario that the bears are going to point to on gold, if rates are going to rise, the fed talking about raising rates at the end of the month, that presumably pushes rates up, the dollar up, it lessens inflationary implications, and that should
depress gold prices even further. what do you say to them? >> all right. so there's three or four factors here, bill. one, the fed raised rates in february of last year and gold still took off at the first half. inflation rates are picking up in january, both europe, china and the u.s. three, the dollar can still be relatively strong and gold and bitcoin can both beat it. dollar could be number two or number three. and actually, tlarts has a constituency against overvaluation. trump has already talked about he doesn't want the dollar to be that much stronger. gold does not have a constituency that cares when gold goes up. so gold can still do very well, even with a relatively strong dollar. >> let me ask you whether rate hikes are good for the market? >> well, if you look at history, when you're coming off a low level of interest rates, rate hikes have generally been associated with rising markets. what makes the current environment a little trickier,
is you already are starting with a point where you're fairly late in the cycle. so as you approach the latest stages in the cycle, generally rate hikes are not particularly positive. which is why i think as you move toward the middle of the year, the more attractive trade would be to move outside of u.s. into europe and actually start to scale back u.s. exposure. >> all right. i got to go, but david, i'm curious, what is the catalyst that moves gold higher if it's not the inflationary implications of generous monetary policy in the past? >> one, you have europe falling apart, the prospect of china falling apart and people getting money out of china. those are a couple factors right there and then the paper versus physical dilemma that is too long to talk about that will cause gold to go up. >> all right. david, and vadeem, thank you. appreciate it very much. >> the dow down 2 points. the closing countdown to wrap the week you.
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closing out a momentous week for the dow and for the stock market overall. we had the end of the streak where we had 12 consecutive up days for the dow end on tuesday, then wednesday after the president's speech it just took off, and we're finishing the week, the day flat but positive for the week overall. 10-year yield this is now the time where the markets are realizing the fed is likely, very much so, to raise rates when they meet on march 14th and march 15th so the yields are getting back to levels we saw at the beginning of the year. we're back to a high of around february 15th. wti, volatile week, but guess what, kids, we're still stuck in a trading range as they try to figure out the buy and sell, the supply and demand equation, between opec and u.s. producers. we're going out at $53 and change. one of the worst weeks for gold in quite a while as we talk about and david just with us saying this is a time he would be buying the precious metal right now, he thinks these levels are a gift for investors
in metals like gold and even silver too. >> markets will go higher, even gold investors know gold isn't the place to be necessarily. i think this is a remarkable day and janet yellen, we're in a new phase for fed policy. here's the sentence that everybody went whoa. the economy has essentially met the employment portion over mandate and inflation is moving closer to our 2% objective. in other words, she's saying, we've done it, folks. we met our goals. >> right. >> how -- i've never heard her make that statement before. >> they will be more aggressive this year raising rates than in the last couple years. >> three she said. >> how ironic the markets take it in stride. >> they've prepped the markets for months, particularly after her congressional testimony, everybody got a lot more aggressive and the markets did not react and i think -- remember this would have happened a year ago anything close to this, the dow would have been down 200 points immediately. it's a remarkable turnaround. she can thank the global reflation that's occurred and the trump rally helping her out. we have fiscal stimulus.
the president has essentially an alley of hers, no friend, but definitely helping out her case at this point. >> thanks very much. we're going out with minus signs not terrible. the s&p is positive as we finish this trading week. pretty volatile as well. stay stay tuned for the second hour of "closing bell" with kelly evan and company. have a good weekend, kelly. thank you bill. welcome to the "closing bell." i'm kelly evans. here's how we're finishing up on wall street. the dow going out not with a gain but almost there. slight drop of a point. see if that changes as things settle out. leaves us with 20,100 just by about that point. now the s&p 500, managed to gain a little bit less than a point on the close, the nasdaq was slightly more positive up 0.1%, to 5870 the russell 2,000 no remember near it, 1393. a mixed session overall to close
out what has been a banner week when the dow did close above 21,000 for the first time we had the 300-point rally on wednesday. commerce secretary wilbur ross joining "squawk box" for his first interview since officially joining the administration. he tackles everything from nafta to the peso and export/import bank. larry kudlow weigh this is on what the secretary had to say and how trade is shaping up so far under the president. now joining me on the panel today we have cnbc's senior markets commentator and pro columnist michael santoli, resident bob dillon of newmark and cnbc fast money trader guy adomi. great to have everybody on board here. mike, maybe people don't want to be short going into the weekend? >> it could be that. i mean there was a little bit of a gravitational pull all day look at the s&p 500 at 2380. why does it matter? if it matters. that is where we opened on wednesday. basically kind of soared into the opening on wednesday after the speech tuesday night and after the fed expectations and then you ran further up during the day. that's been left behind. those gains are set aside.
i think the market is regrouping, figuring out exactly you have buyers at this level, the tape is stretched, everyone kind of knows that, but it was a mild test for the dip buyers. people have been saying they love to buy, basically about a 1% down. >> i feel like i want to rewind 48 hours and see what you would have thought when we were up 300 points over 21,000 in the tied for the shortest period of time we've climbed from one round number to the in ex. almost feels like it happened before we had a chance to realize it. >> yeah. i'm sorry i wasn't here to watch you go with another record close. but, you know, what's going on right now, i think is a couple dynamics. i don't know if there's a lot of technical background. this is like a feel-good market. one is, a lot of active money managers and hedge fund people are going it's the beginning of march and i'm 200 basis points behind where i need to be to get a bonus this year. >> yeah. >> and how did i screw it up
this year already. and i better be in this market because if it goes higher and i'm behind another year without a bonus. >> you mentioned this. the narrative in part has been, oh, look at the retail money, the etf fund flows but you're saying in some ways like a chance by the -- chase by the pros here. >> the element of the retail investors i'm sure, you know, they watch you, they watch something like the snap ipo, and they're like, you know, it's coming up to when their 401(k) money has to be in the ira money has to be put in and they're like, you know, if not now, when, if not me, who. if not whatever. but i think there's generally a feel-good thing right now and i think trump's speech was part of the feel-good element. and the one thing i would point out again, is that the bond market doesn't buy it. the bond -- the bond market is what we -- very flat right now. >> yeah. >> and -- >> let's show if we can the ii -- maybe the 10-year and 30-year. >> if it's flat it means the people buying the long end of
the bond market don't believe in 3 plus percent growth. >> but it's there. it's still -- it has flattened. the 2 year is a seven-year high. the 30-year over 3%. >> but it's since the trump election, it's basically been right around here. it hasn't really moved up or down very much from this level. i think if you start -- if you start seeing the 30-year at around 3.25, 3.50 you go oh, yeah, the market, the bond market, beliefs in the reflation trade. until that happens, though, the bond market is not buying it. >> because you think guy. >> hi. >> if there's a risk -- >> wait a second. before you even ask me anything, i haven't been around in a while. why is evan bob dillon, does he mumble in incoherent sentences? >> that's part of it. guy, we can't do this on the screen right now other than i shared a video with kelly which was me performing live at some bar. >> come on. >> yeah. that's true. >> i got to put that on the
snapchat, man, get that out there. >> it will not be on any form of social media. >> it's very good. i think he should invite everybody, guy, you included, to the next recital. >> i'm in. >> i was going to ask you about what's happening in the bonds, because there's some worries we could have some kind of stagflation thing going on, growth isn't there but inflation is. yet, like to evan's point, that's not what the 30-year is telling us, it seems more concerned we're not going to get the growth, period. >> think about it. when yields, this is going back a ways, over the summer when yields were getting crushed and i thought the yields were trying to tell you something in terms of what would happen in the equity market, turns out they weren't telling you anything. the equity market was full speed ahead and still seems but for yesterday, still seems to be full speed ahead. my concern would be, i'm not an economist, but will the fed, can they hike us into a more flattening yield curve? could they sort of mess this thing up on their own? clearly they're behind the curve. we'll see if there's a move in
the back end to what evan was just talking about. that would be my concern. the other kidnapper nobody seems to be -- the other concern nobody seems to be talking about the debt ceiling coming up on the 15th or 16th of march which, again, it's going to -- it's going to be here before you know it, and nobody seems to be doing it any lip service whatsoever. so with that said, think about it. even with the market getting banged up yesterday, the vix didn't move. as a matter of fact, i think the vix went lower yesterday. so there seems to be a lack of concern about the health and the age of this bull market. >> as a matter of fact, as things shook out here on the close, the dow did turn positive by a couple points there. it is another close higher. >> you did actually, to guy's point about the vix going lower, goldman had a big note, everyone circulated it today, saying big institutional money is as unhedged as it's been in almost two years. is that surprising when you get to the highs but the demand for
downside protection has not been that strong. >> can i just echo something real quick. >> hate to jump but it's -- we've been saying for a while, think about it this way. everybody's been trying to be smart for the last couple years to buy downside protection for a market they thought was going to sell off. you want to buy insurance, want to buy assurance. it's the right thing to do. i'm not questioning it. as months go by and this insurance policies continue to expire worthless, which by the way, you should want, i think people are now saying, why am i spending this money when all the market does is go higher, which i think is the essence of goldman's note, which by the way, is actually a pretty scary thing. >> all right. let's pause for a moment and send it over to seema mody who has a market flash for us. >> deutsch bank, the german banking -- bank excuse me looking at a potential capital increase of 8 billion euros or $8.5 billion. the bank coming several strategic measures including retaining its post-bank unit and
integrating it with other german retail business as well as a sale of a minority stake in its asset management business through an initial public offering. all subject to market conditions. we should point out, shares did close at session lows, down around 4%. but this is a stock that has come back a lot since september of last year, actually doubled its market value, kelly. >> thank you. you know, it's got to do something to kind of shore things up, deutsch. this would suggest this is somewhat priced in, but what do you make of it. >> >> somewhat priced in after the move to the upside as seema mentioned. >> the move to the downside before that, really put them on the -- >> back then it was a matter of wow, is it going to be 15 billion euros. very big numbers being floated around when it was about the kind of u.s. settlement they were going to have to sign on to. >> let's bring in our steve liesman here. speaking about the fed, fed chair janet yellen saying be prepared for a possible rate hike later this month. steve has more for us now.
>> yeah. kelly, thanks very much. a pretty extraordinary speech by the fed chair laying out very x exitly there will -- explicitly there will be a rate hike in march if things go as she thinks they will. here's what got the market's attention. >> at our meeting later this month, the committee will evaluate whether employment and inflation are continuing to evolve in line with our expectations, in which case a further adjustment of the federal funds rate would likely be appropriate. >> here's what else she said. she said there are three rate hixz coming this year, again if all things go as planned, the fed is nearing its employment inflation goals. the global economy is helping now rather than hurting as it has the past several years and stuck to her guns making no comment on trump policies throughout. take a look at what happened to the fed funds probability chart. started around the 73, 74% range
and now it's running around bumped up to 85, now around 80%. all but a done deal, guys, depending on what happens with that jobs report next friday which would have to be extraordinarily weak. and i am at the school u.s. monetary policy conference which is kind of like the jackson hole except it's in march and there's not mountains behind me but a big long lobby and everybody here, kelly, was talking about just how explicit the fed chair was and how the market seemed to take it all in stride. you had a little bit of bump up in the dow at the end of the day after oscillating around the 0 line. the 10-year was down a few basis points. the dollar sold off just a touch. you would expect opposite reactions in years past if a fed chair came out and made hawkish comments like that. a lot of talk here, kelly, about how the -- how explicit the fed chair was and how equally the market took it all. >> it's an excellent point but it has nothing on the mountains. thank you for joining us. steve liesman. jim is joining the fray from
hansman group. what do you think about the fact that the dollar was so much weaker today? >> well, i just want to talk about janet yellen for a second because she's exactly like my grandmother. if i put on five pounds she notices and tells me right away. the most controversial thing i've said about yellen is you can actually listen to her and she says what she means. we're outside of the world where we would monitor sort of the size of alan greenspan's briefcase to figure out if the fed would raise rates. because she's tell graphing this so strongly to the market it allows the market to react and the dollar has reacted over the course of the last few days, strengthening. today it sold off a little bit. but ultimately interest rate gaps between the u.s., europe, japan are widening and we should expect a stronger dollar on a go forward basis. >> do you agree with that? the other thing going on here sound likes all of a sudden the border adjustment tax might be going forward. we spoke with people this morning and if the idea is maybe it's phased in over a long period of time so the revenue doesn't come right away but the increase to the deficit examines right away for the corporate tax, maybe that weakens the
dollar. i don't know if that's part of what we're seeing here. >> what we heard is something we need on paper to find a way to pretend there's going to be a trillion dollars coming. if the market believes it's happening the dollar goes up i think. >> the interesting thing is, going to be over the next few months, the tug of war between steve ma new chin, gary cohn and donald trump, who don't give one hoot about the size of the deficit, who would happily issue 50 or 100 year bonds -- >> wilbur ross seemed to. >> but the republicans in congress who are not keen to do that. >> they're much more -- >> that's the tug of war in terms of trump policy making and i think that is what will have an effect on the fed within six or nine months time. >> so this is rich's point this morning, the regan, you know, republicans who were deficit hawks that rhetoric is gone. >> the reagan republicans were not deficit hawks. they were never deficit hawks.
>> the point is if that's certainly not the case today, whatever it was back in the 1980s, what does that mean? so like, as jim was telling us, he thinks fed raises rates dollar goes up. this would suggest the dollar goes down. what's it going to be? >> i think it depends on who ends up steering the policy. my guess if gary and steve have their way, they will issue a lot of bonds, longer end of the curve, and stimulate the economy because trump's even actual re-election or a trump economy needs growth. if you don't get the growth that's the one -- the one way he fails as president is without economic growth. >> the other point when it comes to the market -- >> there's a catch 2 2. >> hang on one second. >> i was just going to say the market having priced in march, is now moving based on what after march. the market has not said march is happening, therefore we're getting three this year and three more next year. they've said march is happening, preserves flexibility for the rest of the year. if the market starts to believe
it's going to be 3 and we have to catch up as opposed to, you know, take our time, then maybe the dollar and bonds move more. >> and jim, what were you going to say? >> yeah. i was saying that yellen and the trump administration are not on the same side of the table. if the trump administration tries to stimulate the economy she will stop that with higher rates because she's afraid of getting behind the curve. you don't say we're not behind if you're not afraid of being behind. if he does get a stimulus, sort of issue these long bonds to stimulate the economy she's going to counter act that stimulus with higher interest rates to avoid inflation. because fed governors don't want to be known as the one who let the lid off inflation and doesn't want to have that legacy. she's handled the economy well so far and she will do everything she can to make sure inflation is controlled. i would say you got to look at that balance. >> final word to me, right. now that's where you're going. we have to wrap this block up. we are hershavy as can be. you're talking about a president that is now publically talking about wanting a weaker dollar.
i think his comment was, a stronger u.s. dollar is killing us, i'm paraphrasing. he's going back on 25, 30 years of a strong dollar policy. whether he realizes it or not frankly, i'm not sure that he does, number one, number two, he has taken doing victory laps for the epic move in the stock market and good for him, but if we do see a sell-off, wouldn't it be so easy for him to potentially blame a federal reserve? can't you see a tweet saying, you know what, they waited all this time until i finally was elected to raise rates. look at the crooked federal reserve, what they did to the stock market. it's their fault not mine. and off we go. >> reading jim's tweets? he was sort of channeling the president saying exactly this playing out. you are all on the same wave length. look him up if you haven't seen it. >> i'm looking him up right now on the twitter machine. >> thank you, guys. very good to have you with us. catch guy with the "fast money" crew with the technician who called the gold run, carter
worth, telling the traders where prices are going next after the metals were weak since november. snap shares surging for a second straight day after its red hot ipo. we'll discuss whether snap could be the stock that finally lures millennials into the market next. commerce secretary wilbur ross discussing the border tax and renegotiating nafta during his first interview since being confirmed. we'll have larry kudlow weigh in on the impact. a report that says uber used technology to evade authorities in cities where it is band. board member arianna huffington reacting to that charge later on the "closing bell." you're watching cnbc first in business world wide.
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another big game for snap after going public yesterday. but will this company that's so popular with millennials bring the generation into the stock market? julia boorstin has that for us now. julia? >> kelly, millennials are addicted to snapchat. users 24 and under spending an average of 30 minutes a day on the app. many are checking out the stock. robin hood, a stock trading out particular with millennials reports to "the apprentice"that
43% who traded yesterday bought snap stock. the day before snap's ipo there were 54% more sales of facebook stock than the day before that on the app. it's not just robin hood seeing a surge here. stockpile, a company that offers gift cards for stock purchases targeting teenagers and younger investors says transactions on stockpile yesterday were ten times their daily average and all because of snapchat. >> when we see something ipo like snapchat, that is certain lay way that millennials will be incentivized to start investing because it's something they know and use and understand so they may be more comfortable doing a little bit of individual stock picking that way. >> we talked to one millennial who said he bought the stock because unlike twitter and facebook, snapchat keeps people's eyes glued to the screen. back over to you. >> stay with us. my favorite was that she mentioned 43% of people using robin hood yesterday, in trading, were buying is snap shares. >> terrifying. it's ter fiing. >> listen, so take the worse
case scenario, you're 21, put $1,000. >> snap it goes to 0. isn't it still -- >> in a weird way, that's probably the best thing that could happen to somebody who's interested in stock to lose money on your first big trade. so in a weird way, it's not a bad -- >> tea trader or great investor it's part of what happens how you learn about -- >> it is kind of -- you don't love it when people are taking flyers on a stock the value this way. >> people most likely using the robin hood app been in beta forever and trade for free are not trading every day. it's not like i trade every day and 43% did. they decided to trade because there was the stock -- >> big millennial crowd which is why it's -- >> young millennials i point out, now turning 36 years old. >> very old and creeky. >> but i think it's one of the things that has to build into a wave for us to really generalize as to what the effect is going to be. >> yeah. and that -- this by the way, our
worse case scenario assuming it's going to zero. >> i don't -- it's, you know, peter lynch is -- peter lynch at fidelity his thing is buy things you know and all that but we're in such a different universe with the stocks. the stocks -- >> he was saying did you read the journal interview, he was misquoted. >> always skewed. >> thank you, julia. wilbur ross speaking out since being confirmed as commerce secretary and did it on cnbc. we will get larry kudlow's reaction to what ross had to say about trump's trade agenda and the ceo of imax will join us to talk about his company's push into the world of vr. we're back in a moment. i work with people everywhere onea, on land, and in the air. inspecting towers way up high avoiding turbulence in the sky. personalizing treatments with dna and recommending who should play. a dress that thinks, which crops to grow, tax prep to help keep paymen low.
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talk to yo doctor about opioid-induced constipation. if youan afford your medication, astrazeneca may beble to help. commerce secretary wilbur ross on "squawk box" talking trump's trade agenda and the future of nafta. >> as you know the first on our agenda is nafta, because we think it makes sense to solidify your own neighborhood first. i think the peso has fallen a lot, mainly because of the fear of what will happen with nafta. i believe that if we and the mexicans make a sensible trade agreement the mexican peso will recover quite a lot. >> and, in fact, the peso responding positively to the comments. joining us is larry kudlow. so, there's what he said about nafta, also which we were already getting into, but he kind of brought up the deficit a
lot. >> the trade deficit. >> yeah. >> maybe it was the trade deficit. my understanding it was the deficit and how we would pay for corporate tax reform too. >> you're right on both counts. what he said on nafta and the mexican peso i think is quite sensible and agree 100%. before i voice my disagreement with him on trade, i just want to say that wilbur ross and hillary are dear personal friends and i love them both. >> talking about hillary ross? >> hillary, but she's a great woman, threw a great book party, can't say enough good about them. we disagree on trade. and what i will say at the top is this, you can fix nafta, that's a good one-on-one thing but i am strongly opposed to the border equalization tax and we've talked about that and there's no news there. i was glad to see that secretary ross said that president trump has not made a decision on that. glad to see that. i can also -- >> he did seem warmer to it. >> i can report that inside the
white house, the weight of the argument is very much in favor of the border adjustable tax, so far as i can tell, only mr. cohn and mnuchin, steve mnuchin and gary cohn are against it, and everybody else i call them the protectionist wing is for it. the president has not come out for it. i have heard in the last 24 hours, that there's some talk instead of a 20% tax on imports it might go to a 10% tax. you can't just be a little pregnant here. it's a terrible idea. look, just one funny thing that they talk about. exports, all right. i don't want an export driven economy. that's industrial policy. i want a market driven economy. it's odd no one notices it. if you raise the bat or create a bat which raises the dollar by 20 or 25%, the feldstein argument, well, guys -- >> exports too. >> traditional theory that's going to kill the expores you're trying to help. i don't want do any of it, but i'm just pointing out another
contradiction in the story. i don't think we need it. last point, the trillion dollars, the so-called pay, you tax imports like this, whatever, 20%, whatever, you are going to be taxing consumers, raising consumer prices, you are going to be weakening the economy and therefore, if you tax something more, you're going to get less of it and you'll never see that so-called trillion dollars. that's another contradiction here. and paul ryan, who is a supply sider, knows all about the curve, but just in case he's watching this afternoon, i want to remind him, if you tax something, you get less of it. and if you tax imports an consumers, you're going to get less growth and fewer revenues and you're not going to pay for anything. so just don't do it! pass the business tax reform. pass it and get rid of the other thing. >> you're preaching to the converted here. most people that we speak with feel the same way as you do but say, we also want corporate tax reform. >> so just do it. in fact, do corporate tax
reform, right away, in the first reconciliation package. by the way, another on this, obama care is a tax. remember, judge roberts, that's how they got it through. 2012. very big decision. it is a tax. therefore, it fits into reconciliation and, therefore, if you repeal obama care, you're cutting taxes. if you get the tax reform, the business tax reform message in the same reconciliation, it passes muster. you can do this. just do it. stop worrying about bean counting and start growing the economy at 4% per year for heaven sakes. >> larry, look, it seems like anybody who felt as if corporate tax reform was the most important thing to get accomplished, would completely agree with you. but congress doesn't seem to is sort its own priorities that way and it's kind of backed itself into a corner in terms of how it's able to push things through, right. obama care first, that's where the promises are, that's what they see as the first hurdle. >> if it's not going to happen
where does it leave -- this what is i wonder where does it leave the market. >> if corporate tax reform slid away from 2017 i don't think hearts are broken in most of the house of representatives. >> is the rally broken? >> hearts are broken in the stock market. you're stock guys. i'm not. i'm saying you know there's a whole tax cut discount in there for future profits and so forth and so on. if you wait until the end of this year they're saying august, when i hear august i say, december, january, february. >> but so -- >> i've been through the process. that will break the heart of a lot of investors. >> what's interesting, is the dynamic because trump and some of his people have come out and said look at the stock market rally. >> right. >> when you start doing that you're setting yourself up for something. >> live by the sword you die by the sword. >> but take your win today and if you lose tomorrow blame somebody else. >> larry, thank you. >> it's not going to work that way. >> you make your case, it seems so easy, maybe they'll get it done. larry kudlow, thank you for being here. >> it may not. this bat may not happen and tax reform, they've have a piece in the journal, very good, i have
him on radio, we can still do this tax reform. >> everybody should tune in to that. >> thank you. larry kudlow at post nine. >> secretary ross weighing in on the future of the export/import bank, speaking of trade, known for guaranteeing loans to huge companies. it's also playing a larger role in financing for smaller businesses. kate rogers explores that for us. >> hey there, kelly. while the white house's formal position on the bank is unclear secretary ross did express the importance of having a form of aid to finance exports in the cnbc exclusive this morning. >> finance is clearly one of the mechanisms for international competition, so maybe there are some things that could be fixed, maybe a different mechanism is needed, but we need something to deal with that. what i hope, whatever comes out of it will do, is to help small businesses more. >> right now, the bank lacks the board seats needed to approve larger loans so small companies are actually getting a bigger percentage of its funding.
now in 2015, the bank authorized $12.3 billion to support $17 billion ins u.s. exports, about a quarter of that or $3 billion went to small businesses. now, if you compare that to 2016, when the bank authorized $5 billion in deals to support $8 billion in u.s. exports, a much lower financing amount but more than half of that, $2.67 billion went to smaller companies. while the bank has often come under fire for making and guaranteeing loans and providing insurance to corporate giants like ge and boeing it helps small businesses assume less risk when doing business overseas. concerns over payment is one of the biggest barriers to entry for smaller exporters. why does that matter? in 2015 about 98% of the nearly 293,000 businesses that exported goods from the u.s. were small companies, kelly, with fewer than 500 employees. back over to you. >> i had no idea. kate, great reporting. thank you for telling us about it, cate rogers with the impact on small business. >> news alert on chipotle.
what's happening? >> shares of chipotle lower here in extended trade. as chipotle files for a secondary offering. the potential offering of 2.9 million shares by selling shareholders and it seems to me pershing square according to the latest filing looking at chipotle shares down about 1%. again, pershing square the seller here. back to you. >> all right. not a huge move on an expensive move. thank you. time for a cnbc news update. over to sue herera. >> hi, kelly. here's what's happening this hour, everyone. the trump administration is reportedly considering separating women and children crossing together illegally into the u.s. that's a new proposal being considered by the department of homeland security. according to government officials. this is partly to discourage mothers from migrating with their children. former haitian president rene pureval has died, the only democratically elect the president in the country's history to win, serve a full term and peacefully hand over
power to a successor. he was 74 years old. a soy nut butter is being recalled after linked to an e. coli outbreak. the product believed to be the source of the outbreak is called i am healthy brands soy nut butter. a dozen people, mostly children, have been affected so far and six people have been hospitalized. a campaign in france gaining some steam urging former u.s. president barack obama to join the french presidential race. an on-line petition already has 45,000 signatures. with hopes of reaching 1 million by the end of march. the former president, however, as we know, is not french so he would not be able to take part in the race. >> i don't know, i would like to see the birth certificate. >> let's not bring that all up again. >> have a great weekend, kelly. >> you too. thank you. >> creepy masks. >> yes. >> let's get back to seema mody with more details on the chipotle secondary we told you about. >> yeah. we have this update on that move
in chipotle, that filing. it seems like again, the seller here is pershing square, and it has filed to sell its entire stake, kelly, and this is pershing square and bill ackman against shares now down half a percent. not as much as we saw initially after hours. back to you. >> thank you, seema. i admit this is a head scratcher. >> unless it's just kind of an abortive turnaround that wasn't going to happen. >> yeah. that's a capitulation. >> that's quick. >> valiant hasn't worked out, herbalife, they have redemptions. meet redemptions you have to do something. >> or just you had some voice on the board, maybe their strategy doesn't seem like it's going to go the way you want. >> chipotle shares are not moving hugely which surprises me more on that. >> yeah. >> they've been kind of bouncing around the floor. >> yeah. all right. we'll continue to follow the story. that's for pershing the secondary. >> uber board member arianna
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uber under fire again today with word it utilized a program to deceive law enforcement officials, creating rides where none may have actually existed. all this on the heels of a form female engineer's allegations of sexual harassment last month. uber board member arianna huffington was at the ride sharing headquarters this week to monitor the harassment investigation. we spoke with her and joins us with the details. >> hey, kelly. that's right. since she actually flew down to san francisco to be part of an all hands meeting that ceo held, the crises have continued to pile up for the ride sharing company. you mentioned one of them, mike isaac's article in "the new york times" talking about this gray balling tactic that uber used to sort of evade some of the authorities or track some of the authorities. there's also the dash cam reporting where travis call la nick was seen having a rude interaction with a driver the head of engineering leaving. so i asked ariana huffington after all these events if travis
kalanick's leadership is being questioned within the board as some investors we've talked to have said that it should be. here's what she said. >> he definitely has my confidence, he has the board's confidence, and i have talked to dozens of employees, one on one, and they see from the actions that have already taken, that it's exactly what you said. this is not about apologies. this is not about words. this is about changes in the company which are happening every day. >> now i also asked her if she had spoken to susan fowler, the former uber engineer who published that explosive blog post about harassment and sexism within the company in the year she worked there. she says she's been e-mailing back and forth with her and that, yes, the lawyers are looking into every one of those claims she detailed in that blogs post.
huffington said uber has grown quickly and when a start-up grows that fast there can be mistakes but she said she is fully confident that travis kalanick understands his mistakes and is the right person to lead the company and he will make it bigger and stronger in the future. also asked her if more employees, particularly at the executive level, might have to two. she said that would be uncovered by the current investigation that she's helping out with, that's being led by the former attorney general eric holder. she said that if more mistakes were uncovered by employees, regardless of how they performed, they would be let go. here's what she said. >> my promise was that as i put it, no brilliant jerks would be allowed in the company because as you know this is one of the problems when top performers and great executives are shielded because they are top performers and there has to be zero tolerance. and travis didn't just promise that. he demonstrated it. >> now kelly, as for mike
isaac's article in "the new york times" she had not have a chance to see that because she's been in back-to-back interviews here but she did reiterate yes mistakes have been made and they are cleaning them up now and she's fully confident that's going to happen. >> she should trademark brilliant jerks if that isn't already part of the lingo when it comes to talking about a lot of silicon valley culture. good stuff. speaking with arianna on the board of uber. the possibility of france leaving the eu is gaining traction as marine le pen makes a bid for the presidency. what that could mean for markets is next and imax has been struggling with profits in china. richard gelfond joins us with what that means for the company's bottom line and any future plans in china. you're watching cnbc, first in business worldwide.
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bueller? bueller? stream all your entertainment. introducing at&t's new unlimited data plans. plus, get the amazing new iphone 7 on us. welcome back. the first round of voting in france's presidential election is next month and it's been a contentious race when the national front leader marine le pen stoking concerns france could leave the european union. to michele who has the latest on the poll numbers. >> she has driven a lot of fear in the markets but today investors seem to be breathing a sigh of relief after a month of high-end worries that french candidate marine le pen might win the presidential election. the volatile french election has taken yet another surprising turn. former frontrunner francois fillon's campaign is in crisis because he's under indictment for allegedly giving his wife a
no show job costing french taxpayers nearly $1 million over the last decade. he's staking his campaign on what he hopes will be a big rally on sunday. he says that the crowds don't show up he will drop out. election watchers were worried that fillon's crisis could pave the way for le pen to move into the lead. she represents an existential threat to the euro currency because she hates it. >> i don't want to accept the euro which is no longer a currency in the spirit of the european union but a weapon it sticks in our sides to force us to go where they please. the euro is a failure. it's an economic failure. it's a social failure. >> there is a new poll out today however that suggests her threat may be receding. independent centrist emanuel melancon has pulled ahead of both and investors who had been selling french bonds and seeking safety in german bonds seem to be moving back into french bonds
the spread between france and germany has gotten tighter and that means that people are more relaxed. the euro hit a four-week high against the dollar today and the cac was up 0.8%ous performing all of the other european indexes. if we've learned one thing about this election, it's very similar to the u.s. election. it's crazy every day and things could change. >> the polls which show, you know, not that big of a gap between these two candidates if they're understating the support like it did in brexit and for trump and she wins that possibility is at least out there. are you surprised markets have held up as well as they have? >> i absolutely am. you're suggesting if she wins the euro could potentially be destroyed because she would want it to end, want to remove france. if that were to happen, what would happen to financial markets? the u.s. market seemed very, very relaxed, maybe they think it's not possible that she's going to win. the other possibility is, maybe they're coming to grips with it. we've been talking about this possibility, god, since 2010.
maybe they are thinking it's not going to be that big of a deal. i don't know. >> that's the crazy thing when you read the stories here's how she would bring back the frank and everybody else, in the "wall street journal" you start to think, are people too blasé we will see how the rally goes and vote goes. thank you. michele caruso cabrera. talk about chipotle shall we. back to seema mody. >> hi, kelly. pershing square has a filing which has more information about chipotle. there are no current plans to sell chipotle shares. the agreement as stated in the filing allows chipotle to sell pershing's shares from, quote, time to time in the future. but again, no sale right now. back to you. >> seemed like an oddly quick turnaround and the shares weren't down that much. listen, we don't know exactly what is behind all of this. >> i think maybe if you get to a 10% holding, there might be something formally that you have to register if you intend to sell at some point. i don't know if that's true.
it seems a mechanical kind of legalistic thing. >> chipotle shares down less than 1% on all of this. don't want to shell out $500 for an oculus headset. imax has the solution to give you a vr experience without the haeftsy price tag and the company's ceo will tell us about it right after this. hey gary. oh. what's with the dog-sized horse? i'm crazy stressed trying to figure out this complex trade so i brought in my comfort pony, warren, to help me deal. isn't that right warren? well, you could get support from thinkorswim's in-app chat. it lets you chat and share your screen directly with a live person right from the app, so you don't need a comfort pony. oh, so what about my motivational meerkat? in-app chat on thinkorswim. only at td ameritrade. it'that can make a worldces, of difference. expedia, everything in one place, so you can travel the world better.
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phone in one of these head sets or one of these specifying companies, or there's playstation doing something. what is imax bringing to the table here? >> so most of the virtual reality is folksed in the home. so u-hdc or oculus or the various home products. we feel that it will take a while to reach adoption in the home. and the reason is because the head sets are expensive. and the content is expensive. so maybe it costs $1,500 at the high end. if you could go to centers and get the best vr possible and spend $10 to see it instead of $1,500 to see it and it is the best available under the imax brand, that's a really good proposition for consumers. >> and i read that you've had 7,000 customers. is this a better way to try it
as opposed to setting it up for yourselves? >> i think it is. i have inner ear issues. whenever i do one of these things at home or anything, i get whacked out. >> so you want medical attention on the premises? >> vertigo or something. if i only spend $10, it's not an investment. >> it seems we have a lot of staff. if you start crashing into a wall, we can hold you up. >> so is it a menu with various experiences? or do you have release dates of a new group, a bit of content or events or something like that? >> by the way, it is both. so it looks like a movie board. it shows what you the times are. and you can buy one ten-minute experience. you can buy three of them and
group them but it will be a large platform. so when we do vr experiences with movies, for example, transformers has a companion vr piece. it will say coming soon of so think of the movie business. you have the first window, theaters and then last one, mobile. eventually we think the same thing will happen. so the first one will be the imax location vr center and then it will go over other platforms into the home. >> so are these more profitable than your typical theaters? should we expect to see more? >> this is a test. we'll open six of them over the next few months. the ones in l.a. but some in the u.s., in japan, china, england and the middle east. and we'll experiment and see what the through put is, what the a. price is, what it costs. and then at the end of the year
we'll make a decision whether to spend a lot of money or a little money. we're not making a big bet right now. we think it is a bet where there's a lot more upside than down side. so we'll bet a little. if it works, we think we could work out hundreds or thousands of these. >> let me ask you about a big bet, china. even as the numbers are looking better, are you finding it is tougher going? >> last year the slate was tough. this year so far it is looking good. as a matter of fact, yesterday, logan opened in china. we did 1.6 million in one day which is a decent part of box office. i think mostly based on content. so it was some tough sledding and now it seems better. >> richard, thank you for joining us. we'll get tickets to the vr experience. >> i'm curious.
>> we'll hold you up. don't worry about it. >> the ceo imax. a couple seconds left. i want to circle back to what's left. yellen talking about a rate like that's coming of next week we get the jobs numbers on friday. and the labor force. >> not the waning growth? >> it depends on the competition. if it is weaker because people are coming in, fine. if it's not, no bueno. >> i think the wage growth was the most important thing. when you have a number throwing, when you have a president throwing numbers around like 93 million which is literally any adult who is holding a job or wanting one. if that will be a policy goal, is there really a ready work force? >> look at the long end. the longer end. it is hard to see financial stocks going up.
>> pensions, insurance. is that it relevant? >> it is relevant. the banks who make the money on the spread between the long and the short. that's where they make the money. >> i understand. >> evan and michael, thank you. pleasure as always. have a great weekend. that does it. "fast money" begins now. >> it sure does. "fast money" starts right now from the market site overlooking "new york times" square. our traders on the desk. tim seymour, guy adami. hi. >> hi. tonight on "fast," snap surging for the second straight day after its ipo debut. the company now worth more than twitter, american airlines and chipotle. despite the hefty valuation, the company could actually be cheap. we'll explain. plus, gold just p