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tv   Closing Bell  CNBC  June 15, 2017 3:00pm-5:01pm EDT

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why am i yelling because i'm from chicago hate to seeit. >> presumably made money with the power ball >> thank you for watching "power lunch. and "closing bell" starts right now. ♪ hi, everybody, i'm kelly evans. >> i'm wilb urg r frost in for bill griffeth. >> welcome >> great to be here. >> dragging down the dow, 19 points lower, what's behind the dip there. >> anthem dropped out of the exchanges in ohio earlier this year, and the ceo is joining us in an exclusive interview to discuss the strategy to the other 13 states where they still offer plans. >> the return of insight in the
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insights, and we can't resist this graphic >> the title wilf's world was to offset bank stories from me? >> i don't know. we're rivet by what you may have for us >> you wait. you really will be big stories. anyway, we begin with snap falling to the initial public offering price, $17. bob is at snap's close here on the floor of the new york stock exchange hello, bob take a look here we bounced two hours ago >> snap hit $17, right now, 17.20. public offering was covered, i was here for that at $17 march 2nd, high as $29 the next day, but started dropping, and when we got its first as a public company own may 10th, disappointing user metrics, disappoints growth metrics, stog stocks down here why is that important? waiting for the tech unicorns to go public, and when you got one
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of these that is at 17 at its price, that's not a good sign. that's a value conscious right nowing and with high price tech ipos waiting to go public, that's a problem now, we've had them go before their ipo price before, and you know what happened with facebook back in 2012 went public, and quickly dropped below the ipo price. it did recover, but it had a dampening effect on the ipo market for quite a while when it did that this stuff does matter more ipos in the next week or so, and we'll watch that guys, back to you. >> bob, thank you so much for that not just snap, but broader tech sector hit today, and for more, closing bell exchange with ke n kevin, and rick santelli is at the cme in chicago kevin, starting with you earlier in the week, we thought the tech side extenned losses, but, again, reigniting today. is that a significant concern for you for the sector >> no, it's not.
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it's not a significant concern for me because when you look at what tech has done this year versus the s&p, it's outperformed the s&p by almost 9% so having a pullback like you're seeing today is only very minor. you know, tech represents almost 23% of thes&p 500, so i think right now what you're seeing is just people taking some profits. overall, tech is not that expensive, but, you know, you have the big five names out there that have, you know, gotten a little bit ahead of themselves >> kevin, if you had $17 and ha to pick a share of snap or twitter, what would you pick >> i would like to pass on both of them, but, you know, we don't pick individual stocks, so i would probably pass in answering that question, but, you know -
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>> all right >> we usually use a broad basket of teches. >> going over to john there, yeah, what would you say about both of the two, the tech sector broadly, and the impact on the market >> absolutely. tech sector, looking at the fang names, they are household names, people are familiar with them, in the headlines every day the tech sector up 14-15% as of now, that's attracted interest in the sector, and probably pulled up additional interest backsectors, money waiting to come into the market that's slowly participating. at this point, look at the participation we've seen in the market, s&p, dow, up about 8.5, 9% for the yearment investors have a reason to pause at this point right now. we talk about the fed. we talk about north korea. we talk about investigations into the trump presidency and election process investors are not fully scared away from that, but it gives them a reason to take a step back, possibly take the summer
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off until there's a big catalyst coming in at the end of the year >> rick, we talk about threats to the market, of course, we got a rate hike yesterday, and are investors asleep as to what we heard yesterday? not just pricing in the rate hike this year, but we heard from the fed yesterday we could have three hikes next year >> yeah. you know, listen, i'm not saying that the fed can't do three hikes next year. i'm not saying that the fed can't do one more or two more this year. the real issue in my opinion is balance sheet issues, frankly, and all adds to about how the flatness to the yield curve affects the financial secsector. last i looked, especially after the crisis, a lot of the loans or benchmarks against an index whether it's libor or a short rate, and add a lot of basis points to whatever the rate is so what we have left is that our
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government, our treasury and fed specifically go from buyers of securities and holders of securities to sellers of securities it's important i think that is an issue, maybe the market ought to pay more attention to, but maybe it is, will, because this seller, we're going to see it turn seller, is also going to have a very large buyer. the ecb might be witddling down the amount, but it's still substantial. bank of japan will be buy erbuyo that relationship makes answering the question difficult. the fed is ultimately going to do both. there's rate hikes and i think they will be balance sheet reductions because they want to hurry up and get caught up on the insurance premiums should anything unforeseen occur in the future >> you know, also, looking at the impact that the president's having on this market, last week, it seemed like the
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rotation from tech might have been going back into some of the trump trades, and, today, we see the financial flow where there's more headlines about obstruction of justice how do you think the market reads from coming from the administration >> there's a concern we had the conversation last week, and it was the week before and the week before and will have this moving forward i think that up certainty is going to add pressure somewhat to the overall market or give investors fear as to what their next move should be. i don't think we had a presidency where our market tech watched headlines come out of washington so much, and the headlines that have come from washington have been so gray and uncertain. as we get to the end of the month here, the end of the quarter, investors are going to feel a pause in the market, a republican to move away. >> kevin, the political situation on the flipside is improving in europe, but are you putting money to work there? >> yes so we have been putting money to work in europe for some time now, given the fact that you gotten a lot of the political
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landscape now moved out because you're not going to have, you're not going to have snap elections in italy begin the five-star movement was not able to make it to the second round, the local elections, you have macron winning the first round of the parliamentary elections there in france, so that means his group is going to have more power, and he's going to be able to consolidate his leadership, and then you have, also, in the u.k. with theresa may losing support in her conservative party, and we're now not going to have a hard brexit, but a soft brexit it really makes it more appealing for us to invest in europe and gives opportunity for the landscape to really be cleared for the next few months at least >> all right gentlemen, thank you appreciate your time today, kevin, john, and rick santelli
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now let's go over to president trump's latest comments into the probe of possible obstruction of justice. eamon? >> reporter: we got a surprise from sarah huk bee sanders, briefing reporters off camera today at the white house she said that robert mueller, now the special counsel, was here at the white house interviewing for a job, presumably the job for fbi director the day before he was appointed as special counsel that's an interesting wri ining. meanwhile, nbc news airing out reporting of the washington post last night that. there, mr. mueller is looking at president trump in terms of potential obstruction of justice. this is what we know as of right now, that mueller is investigating a possible obstruction of justice by the president, requested interviews with the director of national intelligence, the nsa director, mike rogers, questions about the conversation, and mueller wants
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to interview former deputy director regarding memos he wrote on roger's conversation with the president they all agreed to be interviewed. meanwhile, reaction from the president's attorney last night. his spokesperson putting out this statement saying, "the fbi leak of information regarding the president is outrageous, inexcusable, and illegal." that despite the fact it's not clear from the reporting that the initial information here came from the fbi at all or that it would have been illegal for a number of the people involved in the investigation who would be aware of it to have spoken about it to a reporter kelly, so, for now, though, the white house buttoned up on the issue of russia. president is not commenting in any way on any of this >> no. >> what's the time frame ahead with the investigation, specifically president trump being investigated or not, either way, when do we expect answers from mueller and the
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investigation? >> reporter: a great question. nobody knows probably not even mueller at this point these things take months, sometimes years in the past. we imagine he's going to want to go through and interview all the senior top officials who would have any knowledge of any type of obstruction of justice efforts by the white house, you'd imagine he's also going to need at some point talk to top white house officials inside the west wing as well, and once he does that, he'll start to mike his decisions about where he's going, but we're looking at months here probably at the earlie earliest >> thank you for now at the white house. stocks opened lower, and we have been moving up throughout the session today. heading into the close with 45 minutes to go, dow is down >> meanwhile, anthem ceo speaks exclusively with us next to discuss the plans to exit the ohio obamacare market and health care reform under president
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trump. >> announcing a new company alignment today that turns down its work force details on the changes afoot coming up. you're watching cnbcfit sissorlddersin the power of a low volatility investing approach. the power of smart beta. power your client's portfolio with powershares. before investing, consider the fund's investment objectives, risks, charges and expenses. call 800-983-0903 for the prospectus containing this information. read it carefully. distributed by invesco distributors inc.
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welcome back here are the markets for you, dow down 15 points n in fact, moving up throughout the day here, nike weighing on the dow, talking more about that in a moment. the s&p down five points, best performance in descending order there. nasdaq down half a percent there, and russell shedding two-thirds of 1% home builders lower, dropping two points this morning to 57 for june, and last month's rating revised by a appointment. any reading above 50 is considered positive by the survey, and the sentiment dr dropped since the election of president trump. >> that is true, though, whether it's data or slow reaction to the rate hike, dollar stronger today. >> glad you mentioned, else yens the yen. >> up a percent, but half percent move against other
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currencies, similar kind of going tightening, perha perhaps. >> indeed. anthem, dating back to 2001, pulling out of the health insurance exchanges in ohio next year >> joining us now in an interview with ceo joseph swedish, there live at the heartland healthcare summit. >> thank you so much, thank you for being here >> great to be with you. >> the recent news for you guys is making the decision to pull out of the ohio exchanges. what went into the decision? >> well, you know, it's a complicated decision, quite frapg frankly, because there's so many issues attached with it. at the core, we said repeatedly now for well over a year, carefully evaluating the sustainability of the market place under the affordable care act and said, if possible, without the right kinds of changes with respect to funding levels and other regulations
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associated with the affordable care act, we may have to exit certain markets because the markets are not sustainable. i used the term repeatedly that i call it surgical extraction. but the reality is we're going to be very thoughtful in our approach it's a a very complicated issue with respect to our company serving so many families and individuals. to expect ourselves is based on serious consideration and based on the fact that we simply don't want to do that unless it's absolutely essential in terms of making a prudent decision to protect the issues, not only the company, but also individuals that cannot get affordable products or get accepted the health care based on a flawed business model >> how much decision was based on the existing affordable care act, what's in it now, and conversations based in washington about support in future years
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>> well, really is it is about affordable care act, how it was built and evolved over the last many years since it was passed maybe seven years ago. there's been generally speaking, very few changes, very few adjustments. as a result, the business mold model, the operating model decreased dramatically there's not been a settlement on the issue of premium support, on issues of a standing or, excuse me, putting the insurance in a moratorium state those two issues alone translate to as much as a 25% increase in premium costs to our membership. that is not a sustainable model, and so it's literally a business model or operating model with respect to the affordable care act as it was passed, getting to today, adjustments that had not occurred and certain decisions have not been made to strengthen
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and stabilize the market place net-net we've come to a fork in the road in terms of our inability to serve our community. >> kelly, do you have a question >> thank you on that point, mr. swedish, thank you, again, for joining us interesting to read that in colorado the governor said that he may block you from state health insurance contracts if you leave their affordable care act exchange medicaid there sounds like it's a particular issue so what is your response to this tactic with the governor upping the game there, if you do have to pull out? >> well, kelly, that's a great question first, let me level check. we are in 14 states, and so we take very seriously the long standing relationship that we have had with government in every state, the fact that we've been providing support to the individual market place for 75 years, so this is not a casual
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decision on our part we followed filing requirements by the states. we disclose our decision, that's a decision by the state in terms of when disclosure occurs. in that regard, we worked very closely with the state officials, whether it's legislative or regulatory in terms of a decision that has to be made. with respect to the governor's statement, that's a declaration that i think is still a work in process as we understand it. again, we work very close partnership with all of our states, and my sense is that as our decisions are made, filings are placed, then we will continue to work and progress shift in a way that manages the risk and the exposure to our membership as best possible. >> let me ask just one follow-up investors think through as well as the public.
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if it's important to you to maintain medicaid presence, will you stay in the up profitable exchange for that state or any other? >> well, kelly, if i understand the question, right now, we've got two sides of the story here. one is the individual book or membership and urn the affordable care act, the stainability of that market place, and i view medicaid as a separate issue we are very substantially engaged in 20 states in the medicaid program, and we have brought great value to those states in terms of converting to a managed care environment for medicaid beneficiaries we have brought tremendous value to the space i think that the comingle attitude is problematic. we are happiful dialogue with our state leadership that, you know, the decisions we made will continue to sustain a managed
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care market place, but fixing the individual market and fixing a new model of delivery for the individual marketplace will evolve so that stainability is created. net-net we believe right solutions are imminent and hopeful the disruption we're talking about right here will be deriffed, and we won't be exposed to that kind of decision there's still a lot of policy decisions that have to be made still have to process a lot of engagement with the state and, again, we're optimistic all this works out over time. >> we have to talk about health performance. i want to talk, quickly, one last question for you, partnership with express scrips. it's a topic for them thinking you would be the biggest customer can you tell us if you made a different decision about that? they offered you a billion dollars. what do you say to that?
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>> well, you know, i don't want to get into the details of the ongoing negotiations and the litigation process that we're involved in regarding our contract with express scripts. my sense is that we've made it very clear to the investor community that we will make an announcement in the fourth quarter that the decision we will make regarding a vendor relationship going forward at the end of 2019. come 2020, there's a new contract in place with a vendor, and we've not excluded anybody we're going through an rfp process now. we've made it very clear, i have to underscore, that a fourth quarter decision will be announ announced. >> stay tuned for that >> absolutely. >> joe, thank you for being with us >> thank you thank you, anthem's ceo, joseph swedish >> 37 minutes before the close,
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well off the lows of the day, dow is fractionally below flat at the moment, and the nasdaq, laggard, down best part of a personality now a few hours ago, and the outperformers very much tech still near the baht testimony. >> one of the nation's biggest supermarket chains tumbling to a low. what the company's cfo says about it >> details in a scandal brewing at wells fargo that and other banking stories to come. [vo] when it comes to investing, looking from a fresh perspective can make all the difference. it can provide what we call an unlock: a realization that
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...i don't like it. gru, villainy is in your blood. [ evil laughter ] [ minions shouting ] look at us, two brothers pulling a heist. [ upbeat music ] [ gasps ] i'm gonna be empaled! [ chuckles ] i'm okay. [ exhales ] despicable me 3. rated pg. welcome back, market movers today, how about matel at a 52-week low. a new buy today, cutting mattel's price target there to 24 bucks from thirty they lack specifics how to execute a plan discussing yesterday's investor event cutting dividends, and shares down 7%. kroger at a 52-week low, downgraded the stock to neutral from buy trimming the target, and yesterday, the supermarket giant cut full year earnings
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guidance, and the ceo explained what led to the cut on "squawk box" earlier today >> well, i look at my grocery category, which is 45% of the sales, and ended the quarter just about flat. it was bouncy in the quarter, so looks like there's a little bit of inflation creeping back in there. produce was getting inflationary during the quarter, protein is deinflationary so there is pressure on it >> kroger shares down 18% in the session today. 24 and change. look at the effect across the rest of the grocery screen sprouts farmers down, whole foods down, and walmart down as well extraordinary. >> absolutely extraordinary. they hit the earnings number, but the guidance was the miss, despite the cfo saying we are seeing price inflation coming back, so a big surprise on the guidance relative to the earnings, and his phrase there,
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deflation on top of inflation as the top quarter results feels like this price war continues stateside in food retail much longer than europe who turned the corner years ago >> did it really it was brutal. >> it was. >> looking what's happening here, i wonder if feels to me like a moment, kroger was the best stock for years before last quarter when this all started. this now requires a much bigger probably strategic rethinking and response than just a difficult day. >> yeah. it's not just the likes of aldi coming in in materials of a low end grocer rival, but you have, of course, amazon really entering the market, and, therefore, walmart fighting back in the area as well. it does feel a bit like european foods years ago. you can't see the light yet, but perhaps they'll get it right ticking back into the next quarter. >> cheapness there is undercutting the restaurant space too. no winners but the consumer in
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this environment now, we have a news alert from the white house. what's happening there >> reporter: news crossing the wires from reuters on the president's plan on cuba we know the president's going to mize tomorrow to make an announcement about cuba policy while he's in town what reuters is reporting now that the president's planning on making changes to the travel arrangements that were set up under president obama. the president, they say, plans to tighten rules on americans traveling to cuba and restrict u.s. business dealings with cuban enterprises that are tied to the military. that, they say, is according to a u.s. official who has seen a draft presidential men rmorandum there's a briefing at 4:30 this afternoon east coast time to update us on the president's plans. we should have more information throughout the course of the amp in terms of what the president's going to announce specifically in miami tomorrow. the big question has been will this be a full rollback of the obama-cuba reform or something a
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little bit more moderate and targeted it looks like as of right now what we see is moderate and targeted rollbacks, but we'll see what the briefing has to say. >> yeah. as we saw, sorenson already upset. thank you. >> reporter: you bet >> time for a cnbc news update here's what's happening right now, president trump has filed an executive order designed to withstand creditship to find people jobs. double funding grants of $200 million by allotting for existing job training programs >> we're empowering these companies, these unions, industry groups, federal agencies to go out and create new apprenticeships for millions of our citizens. apprenticeships place students into great jobs. >> power ball and megamillions is planning to drop illinois from participating in the lottery due to the state's budget crisis. drop the state at the end of the
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month with no budget agreement and would affect millions much dollars in sales stunt woman is conquering niagra falls by the skin of her teeth, quite literally successfully hung by her teeth on a hoop suspended from a helicopter high above the falls. so, clearly, she doesn't have dentures, right? i mean, imagine the branding, the sponsorships that could come if that was done with dentures that's the update at this hour back to you. >> thank you very much for that. let's have a little dip back into the markets, matt joining me from virtue financial matt, you say you buy the dips, so what sectors? >> well, that's what it is sector rotations we see, out of tech, into financials. that's been the strongest one. yesterday, that was the rally. we saw financials rally strong >> why, though we know there's a pullback in march, plateauing since then, but there's stress tests coming
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up, earnings >> we got through it in the past, and, you know, i anticipate a lot of the deregulation going on is beneficial to them it's also the sector with the most upside potential. why not if you're smart money, take money off the table, put it in something to be rewarded. >> in terms of buying the dips, talking about kroger, massive dip there, buying that >> not yet that's taking time to weed through. there's more out there you want to buy going into that get clarity. that's what the market likes, clarity. we're not seeing it today. the fed was confusing on the back end with the comments, and that's why the markets are off fractionally >> oil price dip, buy that >> buying it soon. you know, that's the second half play you know, and why not? again, there's value there's upside potential there >> matt, pleasure as always. >> all right >> kelly, back to you. >> thank you both. less than half hour to go here, dow down 14, s&p down 5. ands transports positived by 17 dollar half a point from yesterday's fed decision likely to do more tightening. the nasdaq down half a percent
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russell down two-thirds of 1%, and coming up, why bank stocks head for stress next week. also, in greek mythology, kes e dds of victory, but not everyone sharing the feeling today. your insurance company
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welcome back significant shakeup at nike today with shares down 3%. we are here -- what is this? >> yeah, wilfred was here, i have to join the party the headline here, foreign nike, cutting 1400 positions that's 2% of the global work force. laying out a new strategy with the focus on selling faster and more directly to consumers think of it as digital apps, own stores, rather than department stores, for instance, which have been painful for nike. that includes trimming down the number of product lines for the company by 25% and focusing on 12 cities like new york, london, mexico city, shanghai where more than 80% of sales growth is set to come from wall street, as mentioned, not
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impressed. it's a confirmation growth slowed down, and in slowing at nike, nike is not fast and adept of keeping up with consumer changes, styles, and habits. certainly, a toughest competitor, adidas, nike is down, but they are up 50% in the same period. >> specific or not the changes how well the likes of adidas - >> we're in america. >> you're a paying company -- >> look, they would never acknowledge that, but nike is fiercely competitive and by all accounts has been licing market share in north america with the biggest market it is still by far the market leader, but an acknowledgement two weeks to the today ahead of earnings, by the way, where some expect a rebound in business that things need to move faster, connect with the consumer more look, you guys talk about the retail pain all the time out there, and in malls, where they have foot lockers and department stores, heavy promotions,
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traffic declines, and that impacts nike it's been doing this for a while moving more to direct to consumer, but told not to pay attention to the future orders numbers which deteriorate a lot lately, but this is a new added step in that when it comes to just right sizing the business and focusing more on the growth spot >> we have to go, but to be cool again? so associated with big - they are, by the way, tiger woods, not only to the high profile athletes had troubles of their own, but the team -- look at the track world, seen as the nemesis of the sport trying to clean itself up. does -- what can they do now in order to reestablish that excitement with the next generation >> they have to innovate and be fast ere faster they got the trend and partnered with key celebrities like kanye west and style icons versus traditional athletes that nike dominated so far it has to get back in the conversation does have a few releases,
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jordans coming up, the vapor maxes, but they are a big company. can they move the needle on that especially as there are indications that retro trend is peaking out. there was a note saying there's promotions on the sneakers it could be nike's opportunity, but i'd have to convince skeptical wall street as shares underperformed >> you know your stuff so well so well. 18 months. >> not a single pair of sneakers >> oh, sneakers. >> because i cover sneakers. this is a selfish model. >> going to stump you with the yep, but that's tomorrow >> big move in that today as well as ever, a pleasure. over to morgan with a quick market update. >> shares of harley davidson, revving higher on reports that sales in june picked up meaningfully due to weather and
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inventories are in good shape. that's according to the dealers. take a look, shares are up 3% right now. this would be welcomed news because sales of motorcycle slumped in recent quarters, the reason the stock's down 6% so far this year. guys >> thank you >> thank you, morgan 20 minutes until the close, dow down, tipped over a little bit, and s&p down 7, nasdaq shedding nearly two-thirds of a appointment, russell down three quarters of a percent, but, first, are you worthy? it's financial party time next going to wilf's world, and it will be excellent. ray's always been different. last year, he said he was going to dig a hole to china.
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what's critical thinking like? a basketball costs $14. what's team spirit worth? (cheers) what's it worth to talk to your mom? what's the value of a walk in the woods? the value of capital is to create, not just wealth, but things that matter. morgan stanley
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welcome back time for another edition of "wilf's world" top stories in financial sector take us away >> i will, indeed. another possible scandal for wells fargo, a class action lawsuit, accusing the company of putting unauthorized changes on home loans to help those in bankruptcy they extended borrow erborrower without approval, and in a
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statement, though, wells fargo denies claims in the lawsuit saying in no event will would finalize modification without receiving signed documents with the customer and where required, approval from the bankruptcy court. >> where did this charge come from, then >> well, listen, it is a class action suit. it's in there. i mean, i spoke to a couple analysts who think this is a ground breaking change like the sales scandal of last year feels like people are trying to jump on the wagon, but - >> of course they try to jump on, but if it starts to be sub stanuated, that changes the story from he said, she said - >> of course played a half percent or so of price movement today, and we'll wait and see s >> all right they can't comment too much more than they have already next up, bank investors are most focused on upcoming stress tests results. it comes out thursday. this has no direct possible fail or success results, but which banks are at risk on failing to
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pay on expectations. wednesday is the results of a constant and qualitative assessment and find out specifically if banks' capital return plans have been approved or not >> that's why this is complicated. two-part release seems like the following wednesday is much more important piece of this, right the people, okay, so citi's positioned to benefit from this most, and find out if they are right about that or not. >> yes first of next week, the stress test, there's an outlier, but most banks will probably be in a range so it won't move sectors broadly. as you see, what most people are focused on, interestingly coming into this, most analysts expect the banks to pass, not so much because deregulations taken hold from the trump administration, but banks are better prepared this year than in past years they could not be related to the wells fargo story discussed, but
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the question is the quantitative part of the test they could fail because of issues over the last years >> and the annual stress test, making deregulatory push for real >> treasury report said animal comments are very, very positive in tone, but do we expect it to be delivered soon? therefore, 2018, probably the banks should prepare for the same name they have this year. final story, the final ceo duped by u.k. prankster. this time pretended to be chancellor director, and sent him a rambling story about fresh caught salmon stolen by stray dogs in a family fishing trip and implications that had for risk management. to which goldman responded, excellent, great personal story to make a critical point despite the personal embarrassment, he
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revealed no controversial information. this is his fifth high profile scalp. all very amusing >> i imagine if you're a ceo, you're going to be so incredibly careful about anybody you respond to by the way, we should give them credit there are no cases in actual important information revealed, just they happen to respond. >> daly the furthest in tough times, but nobody reveals. i did e-mail jamie dimon this afternoon to say, hey, have you attempted to be sought out >> thinking, well, this is a prank in. >> never responded maybe i'm a prankster always maybe he's next on the list. be careful >> everyone should be careful now, and that graphic, by the way, with the boom box and the glasses -- >> i love it >> your world, i'm just living it in. there it is again, dow down 29 now, s&p down 7, russells down
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10 now, and nasdaq with another tough day here as well with the drop of 37 >> with that big selloff in the nasdaq and tech sector, which tech stock in particular should you buy on the dip two stock experts battle out with their picks after the break. think again. this is the new new york. we are building new airports all across the state. new roads and bridges. new mass transit. new business friendly environment. new lower taxes. and new university partnerships to grow the businesses of tomorrow today. learn more at esd.ny.gov
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big tech with a rough day, big names across the board with quite the week, facebook, apple, alphabet, amson down 3% or more with apple having the worst loss, down some 7% for this week alphabet, amazon down 5% th beginning of a selloff or breather let's ask jay from griffin securities and gene munster from luke ventures. jay, starting with you i mean, in terms of if there is a buying opportunity, which name do you buy, and do you think it is that buying opportunity >> we would. we've been recommending microsoft now as the preferred megacap name in software for five years for reasons that i think remain valid with addit n additional reasons that are increasingly compelling, not the least of which is the success in the cloud businesses services, but if you think defensively, one thing you should start
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focusing on is cash flow this is a company that's shown particularly strong results in that respect, and right now, particularly after the selloff, particularly good free cash flow yields, so we focus on that. >> is there a case to be said the windows business is coming back what percentage is their rolls earnings today >> yes the toe call windows business, just pc fails, is about a tenth of the business, and it is recovering we're not counting on much growth, but it is certainly doing better than it has been. it's enormously profitable i point out the office product business too is showing similar signs of stability and improvement. >> gene, your picks are different here, surprised at tesla being one of them. >> yeah. tesla is, obviously, super controversial, but the company is going to change the world, and the the reason is their mission statement is accelerating the globe's adoption of renewable energy this is not about making a great car, but going after large energy companies and changing
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how we consume electricity and so i think tesla is going to have a great model, i think the stock goes up on that, but importantly, as they pursue bigger opportunity over the next few years, i think the stock's going to continue to rise. >> jay, when we talk about the car names, why microsoft over amazon >> well, i've been asked the question before on pieces like this, and it's quite simply because of the broad base. amazon's done fantastically well we know that but we have seen signs of microsoft's continued strong growth there and improving profit the and broad base of what they offer and they continue to invest in the business, so we prefer a broadly based business, and, in fact, for the company as a whole that they are are broadly based is very compelling. >> do you think this is a stock you hold for five years? >> yes >> wow gene, what about you stock for the next five years? >> tesla's clearly at the top of the list, especially tesla given what a secular shift we'll have. think about cars today, that's a
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horse and buggy out there, and, only, tesla's leading that transition another great one is app ale what tim cook said this week was brilliant to try to just incentivize investors to stay with the story, about the opportunity of cars. one quick factoid, if they get 5% market share of the autos, if apple does, as a licensing deal, this is not for an apple branded car, $5,000 licensing deal, that increases operating income by 41%. that's a huge market to go after and something to propel the stock higher in years to come. >> all right thank you, both. gene and jay, thank you for joining us as we head into the close. >> thank you >> thank you up next, coming back with the closing countdown. >> after the bell, mobile phone wars reaching new highs or lows depending on how you look at it, and pricing, certainly, offering you as low as it can go. help new subscriberings? we'll take a look. this is cnbc, first in business worldwi worldwide. [vo] when it comes to investing,
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having been done the better part of a percent earlier let's look at nike because that's down sharply over 3% issue and, yet, again, the story to the rest of the dow is not down too much, just below flat finally, just briefly touch on dollar-yen because delay eed reaction to the fed hike yesterday saw dollar strengths, but particularly, 1.2% this afternoon, bank of japan decides tonight, but what's the story today? >> important thing is tech stocks rebounding. apple, other faang stocks are half the decline they had at the open i think that's important decline to find the bottom, and oil is not helping at all, 52-week lows in oil names. devon and hess, no help at all think there's a bounce we can't help it we wait for snap, snap is $17 hit today, ipo price, look at that, right on we'll see if it closes below the
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ir ipo price, and would be a negative for future ipos, particularly unicorns. >> banks helped the rebound, and weighing on the dow, the dow jones there, holding ringing the bell at the ic here, and nasdaq by boeing foundation, and that's all for the first hour of closing bell kelly's got the second hour. welcome, everybody, i'm kelly evans, finishing up on wall street, the dow finishing 16 points on the the bell there. nike one of the worst performers, but overall, blue chips higher than the other averages, leading the index at 21.3, and dropping five points, and nasdaq down half a percent, and the rustle down about the same amount, small cap sensitive nasdaq, lowest close in five sessions came, in fact, after the broad market and s&p 500 more on what's going on here in
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just a moment, but, also, highly anticipated matchup between boxing champ floyd mayweather and connor mcgregor has app official date, august 26th, coming up, talking to the ufc president, dana white, about the fight, the cost, the purge, the odds what it means for the organization in a first on cnbc interview. joining me today is senior cnbc commenta commentator, and you are here from the west coast, and cnbc contributor from ciaa investments. great to have everybody on board. michael, it was a weird day. i mean, in a way we started with a tone about the trump administration and concerns about obstruction of justice investigations, and yet there was also this kind of tech press happening. how do you pry it together >> i think the day was very much in character for this market, which is there was definitely money coming out of the hottest areas, with the large cap teches, the snaps, the teslas,
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the areas even bitcoin crushed essentially, the stuff that's about the brand new hope, it's -- moderating a little bit. nothing falls apart entirely the market as a whole firmed up over the course of the day, even though negative day tr, it's noa wash it's reluck tonight to go too far from the highs unless something changes. >> i like the analogy feels more and more like a market is a big airliner, i don't know if that hole holds exactly - >> systems say, a bump over here, check to see if anything else is off, neg anything to wy about or normal turbulence >> big cap names down 8% in a week do you like that or performance trip you occupy? >> not at all. you mentioned the comment tech rats, they were a real rat apple at 144, you call that a --
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>> i don't like the phrase, yet i used it. >> yeah, well, you know -- >> nothing to say, though. >> the way the market is now, though, any time it doesn't go up, it's a rack, right so do i think it's time to get into these names i think probably start getting into the names there's a lot of buying pressure there. that's why you see the markets sort of stabilizing when they selloff. people still want to get into the names. >> stefanie, anything changed fundamentally? look at names in the semiconductor and big cap, if not, is it just a different trading environment that's going on for whatever reason >> interesting thing about technology is the fundamentals are improving. the move in technology is more taxable. i guess it they are up a lot, overowned, but many of the fundamentals in a.i., in the semis markets are still strong, so earnings will be good. pick the right spot where you want to buy or add to them >> the other interesting thing
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is to look at the financials because it felt like last friday with the awful day, you know, that real tech wreck day, all right, you know, financials were doing well and the trump trades were too, but today feels different, and i don't -- i mean, i don't know if that's because yesterday the fed rate hike was in the mix, but what do you say about the financials in energy, the laggards >> the financials have outperformed you have to have higher rate, and yesterday was a little confu confusing, hawkish tone from the fed. rates go higher. the yield curve is flattening. so now what gets the financials to go, again, there's going to be earnings, all these companies have been at conferences rece recently giving bad guidance on the trading side of things, which is as expected, so i think they are going to be good on the cost side so financials can get another run. energy is a different story. it's a real hard buy here until you see oil prices stabilize i think looking closer to the point, you have to have a lot --
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>> oil below $45, went this yesterday, data not going its way. by the way, amazing to step back and think about what's happening in the u.s i know we've come back at this, but we're going to be a major producer of crude oil, not even to get into all natural gas side of things, and we're one of the few producers who do not need a higher price we benefit that it's, you know, so as much as we lament what is happening with the trades,funda, this is a good environment >> a good environment and part of a stringle news that the consumer is making out on the deal, right? it's not just about the price at the pump it's about a general sense of capacity's being there and deployed to the services and consumers. we're going to talk later about sprint giving you a year of freda that, kroger, all the rest of it. i don't necessarily think that means it's a wonderful boom time economy, but it is all kicking
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out to the net benefit of consumers. >> going back to things we talked about low inflation numbers and idea that tech is the new macro. there was the ma crow data this morning, and it all squares with the import price index weaker, and production was mixed, jobless claims better. empire index for whatever the score, better, and builder sentiment pretty good. you have a nice growth story the story in which prices come down and put pressure on companies. who do you think is most attracted here in terms of general opportunity in the market >> well, i do think financials financials are under pressure, obviously, interest rates are low. financials are going to benefit eventually from higher interest rates. rates just can't keep going down if you think about where rates were at the beginning of the year where they are now, it's a massive drop in rates, a negative for the financial services sector, and, again, i think you are selective in tech comps, and gene said earlier
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today, if they are doing anything in the autospace, it' huge, huge benefit to them >> i guess >> from the income stand point >> i don't know about apple, they are in a device world, and we're in a cloud - >> why >> we're walled off, we don't share security >> that's true >> talking to each other, aggregating, talking, and look what sfr was there, the big five for the day i play, that's microsoft, facebook, and ibm apple's not in that e equation apple doesn't have that many people working in the a.i. field right now. >> you can't say it's not part of the cloud i mean, everything apple is doing is moving towards the icloud functionality >> but icloud is different it's a way of offering personal, you know, access to data and building things on top of that that's different than providing -- look at siri and the challenges it has trying to get voice software up to the standards amson set. >> if you say apple is device
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company, you missed the boat in my view. >> apple gets 100% of the smart phone profits that the world earns. a.i., is that a product? how are you going to price a.i.? i'm not saying it's not the future i'm just saying -- of course you want to maneuver for it, but bird in the hand value is greater with apple than the cloud. look at the services their services divisions alone are going to be a huge company gives back half the gains of the year >> continues to be as lucrative, all right, not spending time on apple, but there is new word on dupont morgan, what's happening >> that's right. news in the chemicals sector dow and dupont received appty trust clearance from the u.s. department of justice for long awaited and several times the wait, $70 billion plus merger on the approval that the two companies sell certain crop
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protection and material sciences assets keep in mind, sales already underway as companies have gone through the regulatory process dow and dupont reaffirmed options to close the merger in august of this year with the intended spinoff remember, they are looking to combine the entity and spin off into three independent publicly traded companies, that those spinoffs set to occur within 18 months of the closing. shares of dow and dupont lower on the day, but, again, antitrust clearance from the u.s. department of justice for the $70 billion plus merger everybody's been watching since 2015 back to you. >> morgan, thank you >> i actually own dow, one of my largest material positions because of this very special situation. waiting for forever for the deal to close looks to be happening. they talk about splitting up once they merge, split up in
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three, but i think it's going to be five, six, or seven pieces. many pieces to split into. i think ed green running the company has shown that he is a deal maker and a shareholder -- he's providing value, and i think he's going to do that here as well. materials have been tough to own this year. they are, obviously, a lot of data this is one of the special situations that i like a lot >> a little bit different special situation, what about ge i don't know if i had the chance to ask about that yet. do you see the same kind of, you know, ultimate kind of spinoff play underway here or no >> it's going to take a lot of time, first, you have to get the ceo in the seat, if you will, and then they got to see what they can do. the fact they reiterated guidance this year, okay, i think next year's numbers come down first before they figure out what they want to spin and sell and that sort of thing. the way i'm pointing to ge is the joint venture that's going to be a a really interesting, unique asset going forward
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>> yeah. meanwhile, take a quick look at snap today on the close, i think it got just about to the $17 ipo price. defending all things tech here that we pair down. >> kelly, you are the queen of generalization today >> that's my job >> you want me defend snap, that's what you asked? >> curious if you like it here, now that it's back at the offering price, does that make it attractive at all >> i don't think it has anything to do with offering price. with snap, two things. can they grow the user base and monetize their user base without alienating their current user base i think it's debatabldebatable, work in progress permly, i think that snap is a name that's speculative. it's not investble name. >> twitter only because they are interestingly enough both trading at $17 today >> yeah. >> yes, you like >> no. no, no >> oh, okay. >> same exact thing. same exact thing
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monetize the user base twitter has humans, but they have to make money >> snap, everyone's anticipating the lockup expiration this summer, that involved in the shorts, more supply to cover, it's a crowded short the ipo price matters, if only that's where contempt bought in. strategic bid. that's not a bid, but a price paid by a real buyer or part of the asset. >> 17, it's much more attractive than at 27 >> sure. >> and if you do see the weakness, i think if you want to own a package of these, like a bundle of them, a little twitter, a little snap, put in facebook, the other names because this is where tech is at and where growth is going to be. whether or not snap monetizes, that's a question mark i get that but $17, pulled back already so much, it's a better value here, not buy iing it, but the better value here as a bundle, i think that's a great idea. >> so last question, michael, and we'll stop torturing you, but if amazon was reported today they look add slacks, for
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example, is that an asset for apple to look at in if you like twitter, if you did, for example, or think it was an attractive platform, is that an asset apple should look at or nothing to do with the core business and steer clear of that >> no. the core business is expanding, so any product or any service they can get to get the users talking to each other really creates stickiness for the platform, so are they going to did out and buy it no, i don't know that. i don't understand completely why amazon is buying it, but it's like how the linkedin trade with apple and microsoft, about combining two different types of technology companies to get users intertwined. >> looking at slack in the pass, all reported, i don't know this amazon will do it. we'll see. anyway, it's been fun. thank you for joining us to kick this off today >> up until recently the hottest stock, but the sharings of the chip maker are down 6% in the last week. discussing whether it's a bigger
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tell for the tech sector than the "fang" names, and they eye a deal to reservice at $9 billion. looking at whether it makes since for amazon coming up, plus, dana white joining us to discuss the highly anticipated fight in august. you're watching cnbc, first in business worldwide [ mooing sound ] [ laughing ]
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welcome back shares of nvidia, a bell weather over the last several sessions, closing higher, but the semistock is in a pullback, down 9% from the highs last friday, one the hottest stocks leading the tech sector, of course, more than tripling over the past year names down in the tech rotation, bringing in roman celebrating on the company, and flushing this out as well. just beginning with you. how long have you had the sell rating >> since february. >> okay. >> so for a couple months now. >> so what do you think about the way in which the stock moved up aggressively and recently started to sell off? >> yeah. it's a momentum stock. they reported in early may and
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since then the stock's up 50%. yeah, i thought the report was actually quite mixed, but it's a momentum name, recently, you had a couple analysts that raised targets for, you know, for reasons that people are selling, so i argue that the stock really never deserved to be at 160. >> how are you looking at this >> well, i mean, action in friday's report is what it speaks for the whole market in that it's not all the sudden large asset managers, but selling simultaneously, apple, amazon, facebook, computers do that one point of the monday march 27th, 2000 high for the best sector, and number one performing stock, one, two, tree, five years, pivots, reverses, and the sector goes? refuse to do that. >> and there was also, we had, citroen come out >> sure. >> with a short call >> short calls along the way >> absolutely.
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>> what is it that causes that keep of reaction that's so aggressively spilling over to other markets, and names that have nothing to do with nvidia that's the tell about the whole thing. >> in addition to the other landmark levels for the sector, the bull case, of course, is, you know, is essentially, you know, the strongest sub sec sore of the strongest sector of tech, and everyone was on board with that it was approaching also $100 billion valuation, which i think for a lot of people is pretty stunning so what do you think the market or at least your, you know, the bulls out there believe that you're countering aside from the valuation? >> in the valuations a good point. to put in context, nvidia's valuation is roughly 60% of intel on 60% of the revenue. the bulls argue a new form of computing on the horizon and little to do with intel, but nvidia and their graphics
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processors >> yeah. there's a lot of data fundamentally about, you know, the landscape in the next couple years. carter, let's go back to where this leads us. nvidia ran up hugely because of the great fundamental story. now we hit a trip wire what do you watch in terms how deep it goes, next move, and how significant it is. >> sure, in the context of semis, the stock index itself, it's now 11 months without real meaning reversion, and that's the second strongest stretch in record it's not necessarily bad if you are bullish, you want that if you are bearish, you think it's the beginning of workforce. either way, you want some sort of -- nvidia is friday, so telling, to flair up high, close on the low, volume 92 million shares, and that's an outside day, reversal day, and it's not constructive >> thank you, carter talking nvidia >> yes meantime, the wireless wars heat up. sprint hoping to give customers
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all to jump ship with a year of free service how that shakes up the industry. first, shares of kroger closing down 19% on weaker same store sales, can the supermarket chain keep up with increasing competition? that's next. ♪ approaching medicare eligibility? you may think you can put off checking out your medicare options until you're sixty-five, but now is a good time to get the ball rolling.
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like that with a move down like that 19%, affecting other stocks like whole foods too >> misvalued, and what's more strange is how high it was a year and a half ago trading at 19 times forward earnings. >> doing it all well, taking on whole foods and groceries. >> in the sweet spot, gaining share in the hot areas, and i do think now,ing though, 13 times forward earnings, i mean, look, always a growthstory, operatin at one and a half times profit marginsings right snow now it's valued closer to where perhaps it would have been all along >> i used to run cross country, so this is near and dear to me >> improvement when it came? >> dramatic. >> oh, okay, good. next, bitcoin spiking over $3,000 per bitcoin, i guess you say, on sunday, plunging below 2200 today maybe pit bull is smart to stay on the sidelines >> could have bought in the
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hundreds, or something like that, but this is confounded a lot of people both on the way up and down, and it's almost the end of the speculative juices it seems right now in the short term what i mean is when they got potential to rise, it's accelerating more upside when you're pulling back a little bit, it's going to feel the turbulence i don't know there's no correct or incorrect price. >> goldman sachs and stanley with reports on block chain, just name stream >> bitcoin, not so sure. up next, toys "r" us calling "star wars" sales soft in the first quarter after mattel was down today what's going on in toyland >> the anniversary, the fact of the big release a year, year and a half ago, i don't read into it other than there's traditional toys are losing share among
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kids, and mattel has been cutting dividends in half. >> paying out 166% of the earnings last year >> saying that's taking it in stride, but i think all they have to rethink, and hasbro is close because it's all about intellectual property. >> absolutely. sony is backtracking we told you hout habout clean v movies, but now they are not doing such thing do we need clean version i think we do. i don't know with all the platforms for kids. >> makes tv sense for them to do it without a doubt i think the objection among the directors, perhaps, they were automatically going to give the clean version it anybody who downloaded or bought the original version so, essentially, they want to preserve artistic control as directors, maybe not a big deal, case by case, they can do it, but the move of getting family friendly >> daughters can watch pg-13 >> it's okay, but not r.
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sony release this weekend, might apply to, "rough night" -- >> oh, god, i know i saw -- >> that's r, for sure. >> should be higher. amazon buying a messaging service for $9 billion does the deal make sense that's next. next, the fight between boxer floyd mayweather and connor mcgregor on august 26th, and ufc president dana white previews what could be the fight of the century later on what do you want to know from dana about the fight contact us
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welcome back let's check how we close today, dow down 15 points, moving up a little bit at the session. the s&p 500 down five points today, and nasdaq shed 30, russell down 7, and time now for a cnbc news update >> kelly, here's what's happening now. turkey's president slammed the u.s. decision to arrest a dozen of its security guards who are accused of taking part on a violent attack in protesters in
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a visit to washington. last month, security guards attacked a small group of demonstrators outside the turkish ambassador's residence they approved a bill targets russia and iran. that bill sanctions key sectors of the russian economy and people involved in tehran's ballistic missile program as well as anyone doing business with them. fans celebrate the team's second nba championship in three years with a victory parade in oakland. thousands cheered curry, greene, and playoff mvp kevin durant look at that the bat signal shines over los angeles tonight in tribute to the actor playing batman in the 1950st television series it will be lit at 9:00 p.m. local time west died friday at the age of 88 that's the cnbc news update at this hour. kelly, back to you a great tribute with the bat signal in the sky. >> i do too.
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that's fantastic >> i wonder if the current batman will see it >> that's true he's supposed to be protecting the city, michael. >> that's true >> thank you in the middle of raising half a billion dollars to place the company at a $5 billion valuation. that's according to rico, coming as reports surface ed amazon may take it over $9 billion. we talked with the cofounder in october, and he said selling is not on the radar >> we are smart, and we work hard, but we also have impeccable timing and a lot of lucky breaks, and it's been an incredible business. i'm 43, and i'll never have this opportunity again. my preference is definitely not to be acquired, but to just go the distance for long. >> for more, let's bring in managing editor and cnbc critter ed lee such a cool story. >> yeah. >> to think about amazon is
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interested, microsoft looked at slack and launched its own thing. >> after slack said no >> right and the valuation of slack hitting $9 billion now so does it feel like this is a moment where amazon can come in and snap it up or facebook trying to get snapchat years back >> it is a good moment actually. it's a nonbilling price tag is right and what they look at in terms of numbers, some contracts, it wouldn't be the biggest pulled off, but the service is a caveat there. same time, slack tips to the number, there's investors, if not, jeff stewart made the decision, you know, they ultimately want an exit of some sort, might push for the deal, but amazon is a good company, a good place for a tech company to be a part of, right. he only wants to grow and expand thing, a believer in investing in the things he buys. not like he would buy and tinker with it but put money into it. >> i doubt it's the biggest acquisition as percentage of
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amaz amazon's market value. talking 2% of the market value right now. bigger picture, ed, i'm curious why messaging apps are - >> why, okay we have to think of it as a workplace app. it's not just messaging. there's all as pecks to the way slack works that help offices operate. you know, just beyond clinging your coworker, aws, their real cash cow and growth business, they are running up against competition with google and microsoft in that their cloud services don't have as many apps or software offerings in addition to the cloud server space. >> they make slack exclusive somehow? >> i think they would lose in the long run if they did, but it's a nice bundle into aws in addition to other things, it's better services and better to compete against newcomers coming in right now >> if not for amazon, what creates value in slack it's a free service right now, correct?
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>> well, no, there is an enterprise level service you pay for as companies, and they are working on getting compliance measures built into it so banks, for example, wall street traders can use it, and i think that's incredibly valuable. beyond that, they are inkrormting tools like document usage and storage and kind of tracking as well, which is a lot of companies need to some degree, and i think that's why -- the fact, what the messaging part is just the tip of it. >> just a clean slate or, i guess, a more custom built version of e-mail? displacing in the workplace things like e-mail or no >> e-mail will never fully go away people use it, and it has its uses, but i think it's overwhelming moving towards messaging, right because business moves fast, right? you need to get a response >> true at cnbc, i avoid it mostly dragged to a new messaging platform, but those who use it, e-mailing dropped dramatically
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if you use outlook less, it's better to have a platform ewe use more for amazon, different story. >> different story, but understand what the context is amazon, jeff bezos builds a portfol portfolio, not just retail, but building as many things as he can. this is part of it, bolstering aws potentially, but this workplace productivity is another avenue to get into >> now it's on the table, so to speak, if this is when slack goes, do you think there's other bidders? >> well, yes if i'm google, like, oh, my god, i have to look at it now google cloud is another growth business, something they invested more in, and they think, you know, they -- they are a late comer to that, but they have a lot of great technology, and they are running themselves, so they need more services as well for their cloud offering, and i think if i'm them, i'm looking at slack too >> other ones, too, right? not just slack microsoft launched teams, but
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others in the space, if people start to, you know, have it as bolt on feature, only one gets slack. >> well, there's others. i think i would caution that what meakes messages valuable i connectivity if not workplaces use it, it loses value. will it replace e-mail right now, you only communicate with fellow coworkers, if i want to talk to another company, slack doesn't do that want once they open up between companies, it is changing the game, and i think they win for the network effect any other messaging service out there will be that much further behind needing to catch up >> ed lee, thank you >> any time. mayweather versus mcgregor in august. coming up, ufc president, dana white, joins us to discuss the business behind the fight, but, first, sprint is offering free service for a year for new subscribers. will it be enough to win customers over that's coming up after this. you're watching cnbc, first in business worldwide
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welcome back get this sprint is now offering up limited data for a year for free the latest move in the telecom wars they compete for market share and sounds good for consumers, but what should investors be thinking joining us is the managing partner add news street research this, i mean, i'm shock. a year of free -- are there any
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loopholes, asterisks, and reasons why it's not a complete give away? >> there's caveats you need to think about. up front, i tell you, sprint is the new cheap. fantastic for consumers. it looks like a great deal the thing that's best and most concerned about is what does this mean for a potential merger with t-mobile, and the answer is that it means anything at all. this is a marketing experiment >> why do they have to do this at all if it's so clear, you look at the two companies, kind of eventually running into each other, why does sprint need to do this? >> because they still need a run a business as if it's an independent business the deal is going to face a tough road with regulators, if it does get agreed to, and there's a chance it breaks so you probably got a yearlong approval process at the end of the that, could be a no, and they have to be prepared for that.
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this is actually an interesting strategy if they end up in that situation, so there's a little company in france that did something like this. they do no marketing everything happens online. no stores. no advertising whatsoever. they put that in context, that, for sprint, is $4.5 billion in cost >> that they'd save. >> that they'd save. >> pointing out how expensive it is to acquire a customer in normal means essentially, if you're not making money on a customer for a year, this is a way to hook them >> exactly 4.5 billion of cost, you can lower your price significantly, and still be at the same point in terms of profit, and that lower price speaks for itself. >> fascinating is it the case that sprint has to spend a lot more because it's the weakest link out there verizon, at&t, and t-mobile, if this puts pressure on them to respond and they try to, does
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that affect them negatively? >> it would be -- it would take a huge shift in dna for them to do this. it's almost impossible for them to replicate this strategy they are wedded to doing business the way they are, which creates opportunity for the smaller, more disruptive, more innovative guys to do something. >> if they pull this off, they've gone from the ones adding subscribers, ones who maybe could now be the acquirer for sprint, and for at&t and verizon as well-documented, they have challenges, why not do this or will they at some point be forced to? how important is it to maintain the subscriber base? >> 75% of the market today, and the market' free cash flow the last thing, what they are most worried about is rocking the boat they have established relationships with customers those kus mothers are used to doing business in a certain way, used to stores, the brand presence, all the are rest of it very difficult for them to change
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the biggest noose around the neck is paying dividends that limits ability to be innovative, degrees of freedom sprint is in a completely different position they are sort of still in the process of reestablishing their bra brand, explaining who they are, not generating free cash flow, they don't have nearly as much as stake, so they can afford to experiment, be innovative, and try new things >> this goes away as soon as there's a sprint-t-mobile deal or no? >> not necessarily it's an experiment testing a digital channel. if there's a low price out there, it's entirely online, no hands attached to it, does it resinate with customers or customers in the u.s. different from those in france they need the store, communicate with a human being we'll see. the vast majority of marketing experiments go nowhere and end up on the cutting floor. this might, too, but if it
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works, they could be really interesting. >> thank you very much >> of course >> explaining more about this big move, and coming up, ufc president, dana white, talks about what could be the fight of the vempcentury, as we are callg it, century, and coming up on "fast money," a technician diving into the tech wreck with two names he says are moust-own stocks what are you working on? let me show you. okay. our thinkorswim trading platform aggregates all the options data you need in one place and lets you visualize that information for any options series. okay, cool. hang on a second. you can even see the anticipated range of a stock expecting earnings. impressive... what's up, tim. see options data like never before. with thinkorswim only at td ameritrade. won't replace the full value of your totaled new car. the guy says you picked the wrong insurance plan.
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welcome back, a news alert, morgan, what's happening >> that's right. check out shares of allen hamilton, plunging in afterhours after the contractor, which is a big government contractor
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providing services to a number of different agencies within the government, says it was informed that the u.s. department of justice is conducting a civil and criminal investigation relating to certain elements of the company's cost accountings and indirect cost charging practices with the u.s. government now, company saying, quote, to date, our internal and external audit processes have not identified significant deficiencies or weaknesses or erroneous cost charging. they are cooperating with the government in these matters, but shares rooight now are down more than 8% in after hours kelly, back to you >> yikes morgan, thank you. continue to follow the story stadiums, meantime, are smart, seating more people for live events. julia has the details how one california arena goes high-tech, julia? >> reporter: well, kelly, i'm here at the stubhub center with a brand new jumbotron was installed and state of the art
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led ribbons being tested now to prepare for the upcoming nfl season when l.a.'s new team, the chargers, take the field some stadiums are more high-tech. sacramento has roving security robots, apps to adjust the temperature, and they drive data analysis to maximize ticketing and minimize lines and traffic the stadium is equipped to stream games via virtual reality to bring the experience home now, i watched one of the games, the nba finals, virtually on the platform, partnered with the nba as well as live nation on concerts to give live streaming access without the cost or hassle of being there. >> vr has done, i think, an exquisitely good job of that, giving fans incredible access, seats you can't buy, under the scorer's table, under the
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basket, the locker room with the coaches giving the sense you're actually there >> reporter: as the at-home experience gets better, this raises the bar for stadiums like this one guys, back over to you >> wow, that's for sure. they cost a pretty penny too, julia,sure they cost a pretty penney, julia, thank you it's the fight fans are esening for, up next, you fc pridt dana white weighs in on the fight nearly five years in the making.
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>> welcome back, it's official, what some are calling the biggest fight ever has been confirm on august 26th in las vegas. undefeated boxer floyd mayweather and ufc world champ conor mcgregor will meet a ton of money is at play here ticket sales are expected to bring in 600 million. a 71st on cnbc we are joined be i the ufc president dana white welcome, da that. >> thank you for having me
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>> the first question a lot of people have, i've seen some reports that conor won at least $25 million. is that what they will be paid or is that figure actually much higher >> it's actually higher, yeah. >> did conor get as much as floyd? >> no, floyd will make more than conor will, but the deal actually came out very fair. everybody involved was very happy with the way it went. >> we want to know, i'm trying to count up all the digits, nine digits did he get 100 million bucks >> did what? >> did conor get 100 million. >> conor could make 100 million for this fight definitely. >> wow, when you say could, does that mean on it depends on how much people subscribe to the pay per view >> absolutely. for both guys involved, it depends on pay per view.
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every time there is a fight, it's all depending on pay per view >> by the way, i appreciate you talking about the purse. look, this business of this fight and the money involved is perhaps the most interesting thing about it, aside from we'll talk about this, all the different tactics and who can win. if conor is getting 100 does that mean floyd mayweather will get 200 million? could this be the biggest fight ever >> no doubt, it's the biggest fight paid of all time, the biggest fight ever, not just globally, everybody cares about this fight conor mcgregor is huge throughout europe, australia, do unin brazil. floyd mayweather obviously is a legend in the boxing business. the most intriguing thing is this thing was built pretty much by the fans and the media. that's how this fight got built. >> the fans, especially, have a lot of questions, too, i'll
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bring if michael, $250 million for floyd? 300? how big is the number? >> nobody is talking about the number you know, the deal is confidential everybody who's involved in this deal is happy with the way that it went down >> all right. >> dana, i'm wondering how you think about the branding opportunities and risks for ufc right here okay, the odds makers are essentially saying floyd has a tremendous advantage in this, he's never lost a boxing match and conor's never bought one i do wonder how it could shake out, if people are disappointed in the result or how the fight looks or they've paid money for something that doesn't reflect great on ufc >> absolutely, listen, this isn't a fight we went out and pursued and tried to make. in the min i beginning, i was against it and thought things couldn't happen. things started to pick up steam. at the end of the day, my job is to put on events people want to see.
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this is an event people want to see. it's like the super bowl, there is no guarantee the super bowl is the greatest game you have ever seen or the world series greatest baseball. i can tell you this, i can't tell you who will win, i know conor mcgregor will go after floyd mayweather and knock him out. whether that makes for a great stylistic fight, i don't know, we'll see. >> let me ask you a couple questions from twitter, dana, the first thing is do you think, they referred to his notorious mma has a chance it sounds like they do and would you put money on him >> well, here's the thing, if you look at floyd mayweather, he's 40-years-old. he hasn't fought in over two years. conor mcgregor is 28-years-old, a southpaw, floyd, traditionally, if there is a kink in the armour anywhere, he a trouble with southpaws, the question is, can conor mcgregor
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hit floyd ma iweather? >> i was one of the people that paid for that pacqio fight last year, it was like, eh, one of the boys said how do you keep it from being a pacqio fight? what's the response? >> much like you guys, i'm a fan, too, unfortunately, i bought ten tickets to that fight so i'm with you. there is no way you can. it's up to conor will have to get in there, floyd is absolutely going to run from him. conor is going to have to cut off the ring and he's going to have to get inside, try to rough him up on the ropes and try to hit him. that's the way the fight is going to have to go. the thing is, the reason that conor mcgregor is such a huge star and why people love him, is that he's a guy that will fight anybody, anywhere, any time. he goes in, he goes for the kim. he tries to knock you out and most of the time he does zblmp now, dana, are you guys going to keep this fight under $100 bucks on pay per view
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>> yes >> 75? 50 how low can you go >> i don't know. we don't know the number exactly right now, because, first of all, we got the deal done between all the parties, now we need to start doing the business him tickets on sale, how much the pay per view will be, the list goes on and on. we will be working on that over the next several days >> all right also, by the way, just because of the experience now, on the theater side, there is a city kind of thing going on, people are trying to get there. are you supposed to be in the living room, you don't know how many people are watching it. stats why it's important to keep this affordable. let me ask you, while are you here, i want to ask you briefly about president trump. i know you have been a supporter of his he is off to a kind of a rocky start. do you have anything to say on that front >> no, listen, i'm a trump supporter. i have been before the election and i am today so, you know, i don't know if
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there are any presidents who come in right off the bat and hit home runs, you know, and it's been great. we'll have to watch his entire term and see how this thing plays out, judge him accordingly. >> i don't know if that's the fight or what will happen in august thank you for joining us. >> dana white for ufc. >> that does it for "closing bell." "fast money" start right now. fast money starts right now overlooking new york city's time's square, i'm mellissa lee, we have tim seymour, steve grass as to, guy adami tonight, it's a snap disaster, shares tanking back to the ipo price of $17 bucks per share so did any of our traders buy the stiff? we are putting the surface pro up to the new ipad pro to determine once and for all which one is a better tablet later, biotech stocks take a mid-day dive, potential ne

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