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tv   Closing Bell  CNBC  June 16, 2017 3:00pm-5:01pm EDT

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software company and in both cases be lauded. >> i joked amazon has to rebrand itself as whole life because whole foods is going to stay whole foods, but amazon's just taking over everything >> it is >> let's see what regulators have to say. thanks for watching. check, please starts next. hi, everybody, welcome to the closing bell on this crazy friday i'm kelly evans. >> i'm mike santolli in for bill griffeth, who is sorry to miss today. amazon, of course, shaking up the grocery space with a purchase of whole foods, look at implications of the deal, what it means for investors and customers. >> note never been longer this morning. >> so many angles. >> back to what they were saying, never has a deal like this had so many ramifications
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getting through as many as we can. it's a jam-packed two hours. why niles shorts amazon on the back of the deal, and former walmart ceo, bill simon, why walmart has more to worry about other than amazon. bill miller, a bull on the stock, and talking to him about valeant, and alexander accosta reacting to president trump's comments on cuban policy >> let's get to it we have details of the amazon's deal to buy whole foods and what it means for rivals. >> mike, this is a little bit of what it means because ramifications have many, many ripple effects, but the deal to buy whole foods makes it amazon's biggest acquisition to date, and one that's royaling grocery and retail stocks. amazon says it will maintain the whole foods brand with the ceo
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and cofounder somedaying at the helm, for now. the overlapping is high already, and the stores are are located close to many amazon distribution centers, which is an interesting point the partnership certainly arms whole foods with logistics and data expertise, and amazon gets 460 stores and know how and fresh grocery. so much, amazon's locations are experiments, and analysts estimate amazon fresh is small what's it mean for other grocery retail players when amazon airs a category whether it's books, video, streaming, or cloud computing, it plays to win meaning it pushes prices lower. whole foods is working to shed the whole paycheck nickname as they expand offerings at lower prices amazon gives it the financial power to get there faster, threatening other players like kroger and walmart running thin grocery margins and likely ups
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the possibility for other consolidation in the industry. walmart is the world's largest retailer and grocer saying the customers look for shopping experiences that's providing everyday low pricing and a mix of channels to meet their needs. we feel great about the position with more than 4500 stores around the country and fast growing e-commerce and online grocery businesses the bigger concern from analysts is if amazon begins to use the whole foods stores as distribution or pickup points, lowering the cost of the last mile giving shoppers, again, another option to get their packages faster or in a way that may be more convenient for some of them, say, driving on the way home from work kelly? >> yeah, absolutely, stay right there. a deeper dive into the deal today, and, in fact, went into whole foods a little bit away from here in manhattan to see what customers think about the deal here's some of what they had to say. >> hopefully it -- prices can be a little bit more competitive.
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>> you're on amazon prime and get groceries delivered. >> i will switch over. i love whole foods, it's better than fresh, and the stock went up they absorbed it for nothing looked like a great deal >> i have three very young kids, so logistically it's tricky to shop with all of them, so i hope it makes things better, yeah >> do you like coming to the store with your mom? amazon this morning announced they bought whole foods. >> bolt. >> what's that mean? >> that means they know nothing about organic food they will give us horrible quality. there's no reason for them to buy this terrific establishment. >> yeah. he was not happy about it. more - >> he was in the minority. i feel as if they are on board with the deal. >> he said he'd shop in another market post nine is here.
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welcome to you all, and, john, let me begin with you making the point that in the u.k., they have three times the online grocery penetration than we have here, so, you know, is the u.s. going to catch up to that quickly? >> well, the u.s. could catch up to it, but for amazon, we've been saying for 18 months that grocery is the biggest user path to greater revenue growth. the largest retail market in the u.s. and globally. in the u.s. it's a trillion-three market. this deal makes amazon the number five grocer in the u.s. we think they are number three by 2022, and it really, you know, accelerates pretty quickly their footprint in grocery, so, you know, we are bullish on the deal >> tom, from an invester's point of view, if there's some complexity involved, obviously, in running this business it's a lot more of a physical real world moving stuff around amson's already in there, but it's going to bring head count up by 25%. are you concerned? is it a good return on capital
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a gambit by amazon >> jeff bezos is a a great capital allocator, one where this supersedes intention. we talk about the story of the death of brick and mortar, but now we have to change the story, right? they are doing reverse, going back into brick and mortar, one area they couldn't do it alone online >> if that's the case, you'd think all the grocery names respond positively because, wait, there's so much value in the businesses, but now everybody's dumping everybody else what's that tell you >> when they move into your neighborhood, you're in trouble. they attack margins. they will get price competitive. don't think grocery stores is where they end think of the things they make. >> brick and mortar owned by amazon is bullish, and not owned is bearish >> in the short term, yes. amazon has new distribution now, and for the existing plays, it's competition. >> kelly, i think this speaks tots whole idea that you have to
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have both. we've been talking about this for some time. i don't want to use the word omnichannel anymore. it doesn't matter. you have to have both. consumers want the option to buy online, pick up in store or buy online and have it delivered, or i don't want to bother online, i want to pick meat for myself and put it in my own trunk you have to over everything. there was a good point that he thinks this actually might have been a result of amsazon what walmart did with and thought, oh, they have a physical presence, going after an innovative digital retailer maybe we need to do the opposite >> superreceivering the customer is right, something they prized, and bezos pushed for with the company. this is more of a distribution play an a retail play. they are getting into the grocery business, of course, but longer term or near term, real play here is all the real estate
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locations, the ability, then, to same-day deliver amazon goods on top of groceries, and that's what they are going after and building out and flying into here more than the groceries >> he also better hope he's able to improve the store and store performance, some of the most expensive real estate you can find in fact, whole foods is known as having very high end locations, not particular about how much they pay in rent >> there's the whole foods reit, right, investors see where they pop up it's good in terms of where hot household residents are, the first to sign up for amazon prime, by the way, now, of course, lowering that for lower income customers out there, so amazon goes high and seeps into the mid to lower tier customer that's really smart. i don't -- i foresee them doing similar things with whole foods locations as well. again, it's not necessarily like amazon stores, but store fronts, distribution centers, a way to deliver things faster to you >> here's the performance we're talking about for the
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supermarkets this week kroger is down 30%, sprouts down 15%, and weis down 10%. target's down 10%. this all in one week so, tom, just going back to the issue, scout mentioned this this morning on air, saying, you just gave amazon entry into the weltiest households and centers in the world this is a frightening day for every retailer that's not amazon and in the future this is seen as the beginning of the end of traditional retail do you defend traditional retail further here >> we would. we see the death of so many things amson got into retail, walmart still exists, right? now they get into grocery. you're going to be -- you're going to have high end, low end, middle is going to be squeezed, and, as you said, this is amazon getting into a business they were already in, and they realized we need the bricks and mortars. >> kelly, i argue with my old
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professor and say actually you don't necessarily gain the shoppers because i really believe based on data i have seen that you already have a big overlap, meaning if you're a whole foods shopper, high probability you're an amazon and more than likely than that an amazon prime shopper >> that was true, mike, with the people we spoke to in the store. i asked them, are you a prime member it was at least three quarters were >> sure. if nothing else, they have more data about them, which whole foods didn't john, bigger picture with the dominant tech companies. it seems as if maybe the look at grocery as a tremendous end market that amazon feels it has to attack or other companies looking at transportation, mobility, it seems like what's left for the enormous companies is human stuff, but hard stuff down the road, is that going to be an issue for the stocks >> i didn't really get the question, but one thing i would like to add is for prime prime is the driver of amazon's
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business, and they could do things like they are in their bookstores, offering discounts for members, 460 locations there's about 52 million prime households in the u.s. you know, this is a good opportunity to further that penetration of prime, and prime, you know, members buy, you know, with the most frequency and across the most verticals, and last thing on grocery, househ d households in the u.s. buy groceries five times a month >> at least. >> this increases amazon, which is a huge factor >> i feel like it's five times a week john, showing this on the screen here, that s&p put amazon on watch negative unhappy with the fact this is financed with debt, saying it's leverage approaches one and a half times is that something you're concerned about here >> i don't think it's a big concern at all the companies are positive so, yeah not a big deal at all. it's not like they are buying whole foods as cash flow
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negative so i think it's fine it's totally fine. >> jeff knows how to work the market, always has i don't see that an issue necessarily either >> these days, aa-minus is still good >> especially in retail. >> yeah, exactly might be the top of the list right there. thanks, everybody. >> thank you amazon is one of the largest position in legendary bill miller's opportunity fund. his take, and in honor of father's day this weekend, his son is going to weigh in as well we have bill miller iii and iv you see the dow, almost exactly flat too, s&p similar. you do have the nasdaq and the small cap russell under performing again >> yeah. 6153 nasdaq well off the record highs, dow and s&p below that as well closely watched hedge fund
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manager dan niles why he's shorting ams shorting amazon next also ahead, what snap's decline to the ipo price this week could mean for the ipo market you're watching cnbc, first in business, worldwide. the power of 100 of the world's top companies. the power of a proven 15-year track record. the power of an etf. the power of qqq. the thinking we put in, clients get out. power your client's portfolio at
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deployment across whole foods locations, michael, pushing shares up today. >> one of the few positive ripple effects in the deal >> that's true shares of whole foods itself surging after amazon said they'll buy the grocer for nearly $14 billion whole foods, in fact, above the offer price of $42 a share >> worth noting. traders don't think it's the end of the story, but let's bring in tech fund manager dan niles on the phone. he says after the deal today, he's shorting amazon, long walmart. dan, what's the thesis here? >> caller: yeah, i mean, i think this is a great deal for amazon. look at the history. amazon got into grocery back in 2007 it took them six years to open the next amazon fresh in los angeles in 2013, and this deal shows groceries are hard you need physical locations. so if amazon was up and walmart was up and grocers were up, say, hey, there is value to the
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physical location, i would have no problems with it, or if all the stocks were down including amazon because this is a low margin, hard to do business, then no problems with it, but, to me, look at walmart, i go, amazon bought 461 locations. walmart's got 4500 areas for distribution in food, and they got 11,700 stores globally i'm looking at this saying, well, walmart grew e-commerce 63% last quarter they believe that is accelerating amazon's actually responding to walmart. if you remember, walmart dropped prices on january 31st from $4 the 9 to 5 it's not a coincidence that amazon weeks later dropped free shipping to 45 this is the first time you have seen walmart being able to draw any blood against amazon, and it's a good move for amazon.
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i think they have to do this, but, you know, investing's about risk-reward. it makes zero sense that amazon gets in retail, good for them. no value to the guy with the most retail distribution on the planet >> dan, i understand your case for walmart, but why the short on amazon? you know, what kind of price are you looking at a short for a couple bucks, or is this something you hang on to thinking it's a couple hundred dollars overpriced >> caller: yeah, i mean, amazon, again, it's not an isolation it's tied in with walmart. to some extent, depends how the stocks move together thought about it differently, you know, amazon's expected to grow their top nine this year at 22%. the stock's already up 32% for the year, so unlike other name, and we'll talk about facebook later, you know, this stock's already up more this year than expected revenue growth for all the years, so it's get r more expensive as we go
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now, and that's where i have a problem with this. this is going to get more competitive. we have not talked about the fact that some other companies like aldi is coming into the u.s., so this space will be more competitive, not less, and, you know, jeff, obviously got amazing distribution, incredible what he's built, but at this valuation and increase in the stock price doesn't make sense to me relative to walmart. >> dan, you mentioned facebook out there. of course, amazon is lumped in with facebook, with google, you know, essentially all of these kinds of big virtual software based companies. seems to me am ason is a little different in terms of just the nature of its business and just -- it's not just code, right? this business is all about kind of messy stuff like warehouses and pushing stuff around is that part of the thesis why amso amazon is looking rich here
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>> caller: 100% right. this gets them into the the physical ownership of retail space stores, et cetera. it's -- this business is ugly. it's hard. there's a reason why the, you know, the -- these companies before today were all getting murdered, because it's not a good business, more competitive, especially as you have a little bit of product inflation, you know, squeezing margins, and, you know, for amsazon, if you look at this saying, hey, it's great, we're not dealing with the physical location stuff, it's all with the internet, that just changed for you today i'm surprised its stock is out of whack with the rest of the space because it's good for the guys or it's bad >> dan, yeah, can i ask you again about, you know, the kind of short you're doing here again, because to short a company like amazon is a bold move i'm curious, talking short term
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or longer term or talk about where you think the price is going and where you would exit the trade? >> caller: yeah. i mean, i guess i'd be a fool if i told you i know where the price is going you also think about it in terms of, well, what's the market doing, right a lot of these stocks have gone up on the fact that it's going up, so there's been a lot of momentum what you see starting last friday is a lot of the names are rolling over as well, so, for me, it's a portfolio, and that's the way i think about it, so to answer your question, i'm looking at more of these prices starting to converge, and don't forget, this is not in isolation. we're long facebook. we love facebook unlike amazon, where you got revenue growth of 22% and stock's up 32%, with facebook, revenues are expected to be up 3 the39% this year and stock's up 30%. you argue it's cheaper as we go unlike amazon. we're also long google these are part of portfolio
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stocks we say we'd rather own facebook and google, and in this case with amazon getting into physical retail, which is really messy, we don't like it at this level relative to the other two, and in which case, i can go to sleep tonight and go, i don't care if the market goes down 5% tomorrow because my view is that those two stocks will hang out against walmart, aldi, kroger, and it's a mess. >> to play devil's advocate, it's inflation armageddon, and walmart is the company to fight the war right now. >> caller: completely correct. that's how the market's taking it, but why? if it was so easy to do, they launched their first entry into this in 2007 with amazon fresh in seattle took six years to open a second store in 2013.
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now they got major markets, but this is difficult to do. maybe he gets through this with no issues, but i think -- i think this space has been sold off for a reason over the last year, and this puts them right into the thick of it you know, if anybody innovates, he's shown he can over the years, and we'll see i don't think it's a great margin business any time soon. gets you into an $800 billion category, which they needed to figure out at some point, and i think they finally bit the bullet saying, you know what, we have to buy the retail locations, but, to me, there's value to retail locations, and if you can use it properly and walmart's growing, and, you know, e-kmecommerce by lev rami the food distribution and, you know, 12,000 globally almost, there's value to that. that's all this is it's not -- i love amazon. you need to see our house, so many boxes come every day from them, and it's going to go one with the purchase of whole foods
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because we shop there now, but, again, it's valuation versus reward >> yeah. we got to go, dan, but 950, 900, 850? what, you know >> caller: you tell me where the s&p's going to be, and i'll tell you where the stock goes that's - >> all right, if the s&p's at 2500 and amazon's at, you know, amson's going along with it, do you stop the short >> caller: well, i'll put you this way amazon under performs regardless what s&p does. that's how i see it and facebook should outperform. maybe that answers the question differently, but that's what we are looking for. >> all right dan, thanks very much. by the way, walmart trading up $1.80 from the lows of the day people think it's coming in for value plays there. we'll see. >> thank you, dan. dan niles there. amaz amaz bill miller coming up, and his portfolio manager son is going to weigh in as well.
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also ahead, snap's drop to the ipo price this week scaring otr companies hoping to go public that's coming up next. ♪ dynamic performance, so you can own the road. track-tuned handling, so you can conquer corners. aggressive-styling, so you can break away from everyone else. experience the exhilaration of the bold lexus is. experience amazing. steve, other than making me move stuff, i'm here at the td ameritrade trader offices. what are you working on? let me show you. okay. our thinkorswim trading platform
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welcome back, closing at the ipo price, and today, bob, bouncing up a bit. >> people talked it up earlier >> enough to quell the concerns? >> no. what we know about the ipo investors in the last year, is they become hypersensitive to
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valuations they are not going to pay inf t inflated numbers everyone wants. they are not doing it. when you drift down the ipo price, they say, oh, see, this is a concern, maybe we're paying too much for that. you got a problem there's not a lot of companies going right now. the energy companies with oil at 45, they are not going public. >> no. >> we have an issue of them floating out there all this stuff going on with uber, that is not helping uber's valuation. it's a company specific story, but, no, it affects everything >> it's interesting. it's in people's heads about disrupted tech are they disrupting themselves as much as anything else, right? maybe valuations come down privately, what's that mean for ipo valuations >> yes we had a company today that price terms, enterprise storage company going public in a couple weeks, 8.7 million trends, about half the valuation of a couple years ago. people said, oh, you see, they are giving you a hard time about
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the valuations, so we have 100 unicorns out there, and everybody says where are they going to come? look at these issues and say, uh-oh, we either are going to be forced to go public and take a haircut like others have done, or just stay private as long as we can it creates a lot more issues by the way, june has been quiet overall. you know, we had a great start to the year, and june so far is quiet. i think some of it is these valuation issues >> well, one more look at that 17.59. bob, thank you p very much by the way, snapchat's biggest users, ms. kim kardashian west speaks with us in the next hour of the show how social media helped her build her empire, michael. >> yes, we had a chat, kim and i, that's later. right now, though, sue has a news update. >> here's what's happening at
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this hour, everyone. form german chancellor died in his home, known for reuniting germany after the cold war he's the longest serving chancellor holding the post from 1 1982-1998. he was 87 years old. a special meeting underway at the united nations in new york aiming to ban nuclear weapons. today, the mayor of hiroshima voiced hopes for a-bomb victims to see an end to these arms. two escaped accused of killing two guards are now in court. they were both captured last night following a car chase with police just south of nashville and mcdonalds and the international olympic committee ended the long running sponsorship deal three years early. they want to focus on different business opportunities and priorities the partnership began 41 years ago in 1976.
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next year's winter's olympics is the final set of games for mcdonalds. that is the news update this hour back downtown to you >> that was all the talk in london they had a huge mcdonalds -- >> yes >> i remember that >> massive never got in there, but the lines were crazy >> yeah, yeah, sure. >> exactly you wonder whether or not this is going to be a good move for them or not, but - >> i know. >> it is part of the entire repositioning of the brand, although, that's a huge platform, olympics, though, i don't know we'll see. >> the biggest all right, thank you, sue. >> you got it. coming up, investing legend, bill miller reacting to the s n,er, d eangith hiso too, stay with us swing. lked intoy huh? don't you mean dad kind of ruined our hawaii fund? i thud go to the thothpital. there goes the airfair. i don't think health insurance will cover all... of that. buth my fathe!
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welcome back, president trump in miami today rolling back some of president obama's opening of relations with cuba michelle caruso-cabrera is in the little havana section of cuba with the latest michelle >> reporter: we're here because that's where he made the speech, kelly, full of anti-castro rhetoric, promising a largely cuban-american audience his policy to cuba would be very
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different than president obama's. >> we will very strongly restrict american dollars flowing to the military, security, and intelligence services that are the core of the castro regime. they will be restricted. >> reporter: treasury released details how they hope to achieve that american companies, businesses, individuals prohibited from doing business with military owned companies in cuba. well, in cuba, that's nearly everything, hotels, restaurants, all kinds of stuff, so future deals likely will be squashed unless companies do them with individuals. however, at the same time, treasury also said anybody already doing business in cuba was essentially grandfathered in, so the cruise lines, airlines, marriott managers of hotels there, we presume all those businesses can continue their operations another change, it's going to be a little tougher for individuals
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to go. under president obama, individuals were allowed to self-certify they were going on a people-to-people or culture exchange to cuba, get on the plane, and go. that's not the case anymore. they have do travel with a travel company that has license to do people-to-people tours back to you guys >> all right michelle caruso-cabrera in miami, thank you very much for more on what this means for u.s. business, let's bring in eduardo, member of the nonpart sapp not for profit organization the cuba study group. thank you for being here thank you, mike. >> will the move impact business or on travel, and is it a good idea >> well, first of all, in terms of impact on business or travel, tha that's unknown the implication as far as i can tell is left to regulations to be adopted by treasury, and the restrictions reimposed are actually in one sense modest
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is it a good idea? no it's a terrible idea for all kinds of reasons, not the least of how does this advance u.s. interests, and, secondly, how's it help the c cuban people for 55 years, there were crazy policies that absolutely did nothing to help the cuban people and to go back in that direction is not going to help >> you came here from cuba at age 11, is that right? >> yes i left cuba at age 11. i was sent to school in the u.s. my parents moved to argentina, but in effect, in the u.s. 1960. >> the policy similar to what we did with russia or north korea, when they oppress their people, we don't do business with them although it's not helped the cuban people, but in a way, that's the point, to show by saying this is the reality of the regime that you're living under, why is it a bad idea to leave that in place to make the point that the regime is oppressing its own people? >> because it will not help the people it's as simple as that
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it's not in the past currently, it will not help the people in fact, it will hurt the people when you are are standing in line and limit resources, people who are hurt are those in the back of the line, not the front of the line, so to compare the sanctions that we have against north korea and russia that have everything to do with international threats and international stability, that has nothing to do with the cuba of today it's about internal issues and the policy that many cubans favor is one of engagement and opening up, really the best way to encourage change and help the cuban people >> where do we go from here? is there a path towards potentially going back to what the obama administration attempted to do, or are we just kind of status quo waiting regime change there or something else >> well, not to get too detailed or boring, but he's only done three things that i can tell first of all, he's said at the u.n. we're going to continue to oppose any measures that --
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against the embargo, so that's continuing rhetoric at the u.n.meu.n. me secondly, prohibiting people-to-people exchanges that just means you can't travel individually, check the box that says i'm going to interact with people you have to go in a group. people say, that's worse because a lot of the groups are organized by the cuban government or at least taken around by the cuban government what good does that do the third and most let's see what it means, he's prohibited national transactions with government entities, but language says that this proportionally benefits the government at the expense of the cuban people or private enterprise or disproportionally at the expense -- what's that mean >> yeah. >> can you stay at a hotel 49% owned by the government? i have no idea we'll see. enforcing these provisions, good luck that means someone wants to go into a restaurant that's owned
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by the cuban government and all the sudden, you violated cuban law? you have to keep records for five years imagine you go to cuba, take all the receipt, put them in the drawer so somebody can say, show me the records makes absolutely no sense. at least the good news is that the things that were rolled back were fairly modest the rhetoric is not helpful, and the whole thing is just a step in the wrong direction other than that, i don't have a strong opinion >> other than that, it's fine. >> eduardo, thank you very much for weighing in. >> my pleasure the only son of cuban immigrants, al ander accosta >> that's in the next hour of the show amazon's proposed purchase adds fuel to the fire that it's time to look at potential anti-trust issues when it comes to big tech and big deals. much more on this next uh huh. i switched to t-mobile, kept my phone everything on it oh, they even paid it off!
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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 whole foods and amazon popping on news amazon buys whole foods for nearly $14 billion. is that signal the tech giant and others like it are too powerful tech editor is here, kim, good to see you you know, interesting, part of the sub text of the deal, and
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the markets reaction to the deal is that a company like amazon is so powerful, so rich it just does what it wants and go into various industries and disrupt them in an instant way do you think this is going to be something that hangs over big tech for a while or just, you know, look, this is not app anti-trust question right now? >> both, to be honest. you're seeing a lot of the biggest tech companies, talking amazon, google, apple, facebook, and microsoft to a certain extent are seen as having a ton of power in the market their stocks are soaring they have an enormous amount of wealth they are moving into a lot of areas of commerce. with amazon, in particular, you know, it started a long time ago dabbling in the e-book market. a market now dominated 70% of the market and slowly moved into other areas of retail, but it's recently started to really focus on the grocery market, and that has been what it's doing now
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with the purchase of whole foods. this is going to allow it to move into not only the brick and mortar space, but also really deepen his ability to break into the grocery market that it's working on, and that is where the anti-trust and competition enforcers out there are starting to just take notice and say, well, these companies are so big, they do have a lot of money. they do have a lot of power. a lot of consumer loyalty, to be honest, that they are able to use that margket leverage to moe into areas, and is that concerning for consumers and competition in markets where there is some concern they will disrupt it just like amazon did for the e-book market, for example. >> yeah. it's quite clear that for right now, amazon's share in the grocery business is small. combining amazon and whole foods, you're talking less than 2% of the whole market grocery is 5% online now, kim, but it feels like it's the deal that gives people in washington fuel, and we know how the president feels about amazon and
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jeff, and i don't know if that's just campaign rhetoric here, but the e.u., meantime, launched antitrust fines against google, and microsoft beat pac-man with its a.i. there is a sense that, you know, big tech is kind of taking over. at what point is there real pushback in the u.s. >> well, i think to your point about the eu's action. they have been tougher on the companies, not only google, but facebook has come under heightened scrutiny from eu regulators for how they use their consumers' data, and if they use their dominance in one market to impede competition in another market, for example, and so alawyers i talked to said tha people are starting to take notice in the u.s. of the eu's increased scrutiny of the regulators, and when you have someone like donald trump in the white house who does have some more popular leaning concerns
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about huge companies and the impact that can have on industries and jobs specifically, it may have an impact there's more conversation about this that a year ago we were not seeing >> michael, good to emphasize how good it is for the consumer at the same time >> it is ironic most anti-trust law protects the consumer, yet companies give it away for free or make it cheaper, kim, and now it's maybe going to be too powerful we'll see where it goes, kim hart, tech editor, thank you very much. >> thank you coming up, bill miller and his son are going to both weigh in on the amazon whole foods deal stay tuned for that shortly. we have 12 minutes before the bell you see the dow just turned green briefly. rest of the market just about flats for the week as well >> retail, no surprise, weighing on the market, and by the way, auto names too, more on that in a bit. ordinary, common place, routine, these are words that are
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less than ten minutes until the bell sorry, i stepped on you there. david and his acronym about the market what do you think? >> well, our friend janet yellen, the chair of the fed, basically emphasized steady as she goes in the wednesday afternoon remarks. >> sure. >> normalizing policy, beginning gradually, ever so gradually raise interest rates, and think about reducing the size of the portfolio, mortgage backed securities and treasury backed securities so in the normalization, o is oil and opec it's been sloppy at $44.75 right now. down 17% on the year libya and nigeria have been overproducing, so inventories continue to climb, and those shale drillers in the united states have gone from 1.4 million barrels a day production on their way to 8.6 million
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barrels a day. a million, michael, and kelly, going out of the country, and, n-o-r, r is recovery, one of the pillars in the country right now. recove recovery, low interest rates, and the lack of excessive bullishness other than the technology space only 32% bulls in the latest american association of individual investors poll. n-o-r-m -- macron on the move. there's 577 seats in the french parliament there's the second round of voting sunday. he's got a majority. we hope he'll be a ronald reagan for france, and, therefore, for europe n-o-r-m-a -- asia, steady. china had a fixed as set investment retail sales and industrial production, basically
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steady, not up, not down, good for china. the l is low interest rate as, low inflation, and low dollars, which does help profits and helps exports big day to watch is tuesday, morgan stanley capital international makes a decision whether to include china and shanghai a shares in the emerging market index. >> now, this has been spot on, but what about the elephant in the room here, this amazon deal for whole foods. what -- just your knee jerk reaction, thoughts on it >> i want to say to everybody, happy father's day, go out and shop, go out and shop in the whole foods and bring home some bouquet of flowers for your spouse and your children even though you're the dad, go do that. on the serious note, i think you see private label batteries, private label diapers sold amazon, so in this big great country called america, when
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people get too big, there's also a reaction i would be very careful as what the popular reaction to this is going to be. we are competing with the chinese version of this as well. and so we don't want to vissuate or weaken our great global champions here, and so we hope it goes out well i've spent -- a nickname for whole foods was whole paycheck, and i've spent my whole paycheck there many a time on the breakfast bars happy father's day >> david, thank you very much. happy father's day >> to you as well. >> we'll be back with the closing countdown in a minute. >> yes, and then after the bell, long time amazon shareholder bill miller and his son will be here to discuss the giant and the healthy chain, whole foods
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with e*trade you see things your way. ♪ ♪ you have access to the right information at the right moment. ♪ ♪ and when you filter out the noise, it's easy to turn your vision into action. ♪ ♪ it's your trade. e*trade. start trading today at before the bell, dow up 19, bob is here with me, the story today, amazon buying whole foods, they continue to trade above the 42 bid, at least there's a chance traders think somebody else comes in for a
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higher bid, but tons of collateral damage. >> new lows in retailers, target a new low, dollar tree, dollar general at new lows, krogers at a 52-week low now, and observation earlier, paying $14 billion for the company, of course, for whole foods, and yet their market cap was 16 billion. did they get it for free well, you know - >> what they want to have. >> do the math on it new highs on a number of financials, even though the yield curve is flat. they still want to buy banks they are still in traveler's, and insurance, and bank of new york, and all at new highs obviously, nothing that's bullish on the banks have really come through >> sure. >> they want banks higher. >> thinking they would point out industrials close to a new high, quietly a strong group as well, bob, thank you very much >> remember, a lot of volume
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>> exactly floating off the close thank you very much. good weekend, bob. >> thank you ringing the bell here at the big board is a new ipo, and nasdaq, winners of the entrepreneurship startup challenge. here's kelly for the eksecond hu of the "closing bell." >> thank you, michael. welcome to "closing bell," i'm kelly evans, the dow about at a record close here, a gain of 22 points, turning positive in the final minutes here huge volume we expect on the close. there's a lot of options explorations among other things going on good enough again for about a tenth percent gain in the dow for a record of 21382, eight points above the closing high from earlier this week s&p 500 added less than a point. watching that, of course, as everything shakes out here, but
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looks like 2433, which is below the 2440 high water mark the nasdaq still 150 points below the all-time high close from june 8th, and it dropped a quarter percent today as well as the russell, which closed at 1406 and still about 20 points off the high mark forget small caps there the biggest story of the day is amazon buying whole foods. coming up, long time amazon investor bill miller is here with his son to discuss whether jeff bezos made the right move here and what he reads into it, and joining me today to talk about all this is cnbc's market commentator, michael santolli. jessica is here checking in from the information. great to have everybody with us. michael, what whudo you think >> obviously, the huge story is the amazon and whole foods, but the way markets reacted was, again, in character. it seems like a net negative for anybody that touches grocery and
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retail the market treated it that way, but then it didn't fall apart all together you had the rest of the market hulled in there as usual i think the market's feeling a little bit of a tough congestion period after the fed raised rates and changed its posture, but in regigeneral, it's flat, sideways rotational action is the rule >> carol, what about this deal >> i love this deal. phenomenal deal. i remember when amazon was public, i loved it then, love it now. we owned it for many years i work with clients with over $100 million, and we like to choose long term multigenerational plays. this is a stock that you can put in your grandchildren's trust, they will thank you, and you will pay for college >> a guest told us he was short amazon because of the valuation. look, it's an incredible runup why are you confident it's value for the long tierm? >> they understand where the consumers are going, online purposing, a combination of high touch and quick delivery, and
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everybody else is scrambling to catch up they have the footprint. they have the customer service they have prime service. they are fantastic >> dennis, i'm not sure the deal is, let's not let ink dry. first of all, amazon said it's buying whole foods, but they are trading above the price. by the way, we remind everybody we talked -- see if we have the sound about other bidders not long ago let's go back and briefly remember that. >> jab, they are supposedly expressing interest in whole foods. >> explaining why -- >> this appointment, and i think it makes sense to think about whole foods as having a backstop >> yeah. >> in the takeover, not just from that essential buyer. >> dennis, the panera's ceo on the board of whole foods, now that they sold to jab, another suitor to look at here what do you think here about how this may all play out? >> oh, i do not expect panera -- jab, a well-capitalized company, but nowhere near the market fire
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power of amazon. they can pay cash, stock, whatever they want, so either they have to raise the bid a dollar, just doesn't matter to amazon given its financial resources. >> michael, yeah, i was going to say, raise it $10? whole foods trades nowhere near the highs it hit on the stock years ago. >> right well, and it is not performing in the way it was years ago either again, let's remember, whole foods agreed to the price. now the shareholders hold out for something else the people we spoke to quoted in the "wall street journal" hope for more, but whether it's a $5, $10, the big scheme of things, it does not matter >> all right i want everybody to take a quick listen i went to whole foods nearby in man hat p today to ask customers about thoughts on the deal this is what they had to say >> this morning, amson said it's buying whole foods >> oh, really? >> oh, cool. >> oh, my gosh >> why would they? >> two-day delivery for free
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>> that's great. you get to leave with your groceries and check out, like, with amazon prime rather than at the cash recommendation steer. >> i love whole foods, always will >> i have kids, so they like to go to the store, and i make sure i pick out exactly what they want >> see, if you don't have to go to the store, that's easier, order online >> i don't know. i'm old school >> we don't want them. it's a terrible day for america. it's a terrible day for me family we're crying that the quality will go down, that that -- it will never be the same >> the quality >> i like amazon, but what do they know about fresh fruit? >> so, jessica, bringing you in on this. in a way, there are a lot of skeptical users of amazon pantry and is this not the best way to kind of say, look, you can trust us, and you should go online right now, place your grocery order. it's going to show up. you'll be happy with it. >> you know, amazon's been
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trying to get in a big wedge in the online grocery delivery business, and in my estimation, this catapulted them giving them distribution centers, inventory, and that's a big battle right now in the internet sector between amazon, google, a whole host of startups, so from that perspective, i think it's very strategic to the extent that whether people like going into a store now, reality is they are going to be going less in the future online is just easier. amson's a big, big player instantly. >> jessica, let me ask you, too, does this now make google, who has a little bit of a delivery option, i think, in uber, doing delivery, who are the other players who now think about emulating this model and looking at beaten down grocery names >> so the race between the big guys, basically boiled down to google and amazon already, and i think this gives amazon a big leg up because, again, it's about distribution you need stores and relay points
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to actually deliver things quickly. there are a host of startups, instacart, postmates this deal is bad news for them now amazon has inventory and the distribution >> carol, anyone else you pick up on the back of this deal? who are your favorites broadly speaking in the space? >> well, i e don't really love the space. i don't like grocery space because the margins are small and they are all struggling. stay with this deal, frankly there's no other combination that's the winner this will be i like to buy the winners. this is a winner >> clearly the market's conclusion we talked yesterday about all these companies with this strongest strategies, and the greatest sponsorship by the market are essentially crushing prices and making it good for consumers. >> right >> you have a deflation boom going on right now, and it's hard to see what gets in the way. interestingly in cvs, walgreens,
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people say if that's amazon's gain, they're not going to buy the guys, but disrupt them >> change the model. >> correct >> convenience stores on the back end >> dennis, where does that leave the shakeout that feels it has to continue across traditional retail space >> i love the shoe leather reporting there, kelly, so cool, but the emotional response of people there, emotional connection, largely positive in the piece, some negative, but amazon makes a difference for people, and they feel a response to it, and i just don't think we're -- people feel the same way about macy's feel the same way about cvs. it's not a stretch to think the world wee see and step out into today in 2017 will be drastically different. >> before we have to move on, dennis, it was suggested earlier by scott of nyu that kroger, other grocers should be in board meetings tonight to decide whether to mount a counter offer for whole foods or come up with a strategic response
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what's your thinking on that >> they could go after it, but know amazon has the wonderful ability of being a sniper from the outside of the industry. okay, take whole foods find we'll buy cvs or walgreens in some ways, it doesn't matter. they made the philosophical commitment and exercise it in many ways. >> all right that's perhaps the biggest statement of all thank you for being here, dennis, carol, and jessica really appreciate it >> more reporting from you, kelly, i loved it. >> no, i do too, actually. thank you for saying that. everyone was so nice, too, that was great. walmart and target are hit hard today on the back of the deal. let's bring in former walmart u.s. ceo bill simon in a first on cnbc interview, bill, thank you for joining us >> hi, kelly, how are you? >> i just want to begin by asking you what do you think this means for walmart >> how are you doing well, i think this is a big, bold, dangerous move by typical
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bezos. he took a great brand and brought it in. it's not going to be easy. he picked a segment of retail that's maybe the most difficult, grocery, fresh, and premium. you have to be really, really good, and whole foods was in trouble to start with, so they've got work to do i think it really demonstrates his commitment to get in brick and mortar retail and food in particular, and that can't be good for anybody selling food right now. >> bill, if ammazon's going to grocery in a big way, do others go online in a bigger way like the retail deals announced >> they have been active in the space, will continue to be, but they have been more incremental than transformational. this was a transformational move by amazon in the space walmart has to watch their flank, a big deal in retail, leidl, opening first ten stores
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in the southeastern part of the u.s., and that's already a very, very aggressive food market, and low end, you know, walmart's got to watch for that too. work is cut out for them >> bill, one way to read amazon's move with whole foods is it stays in line with the idea that amson has a focus on the higher end premium part of the market that kind of shopper now, it's unknown whether amazon thinks they can just broaden out the whole foods brand beyond that, but do you think that leaves that much more room with walmart with the tremendous footprint all over the country that essentially is big enough for all of them? >> i think you're right. walmart's very strong, and, you know, very national in their footprint and following, particularly in the middle and low eer end of the economy, ver, very strong, and not a direct competitor with whole foods. this move won't have a big a move on walmart as costco, you
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know, publics, those guys feel this particular move the commitment, if this is an indication of amazon's commitment to get into grocery and into fresh in a big way, that'll make everybody stand up and take notice. for the near term and medium term, walmart listen just fine giving them time to figure it out. >> bill, if we're moving in especially the millennial cohort moves into more online grocery delivery, walmart is piloting an initiative to allow employees to drop groceries off on doorsteps on the way home. should they be doing more of that does that require a lot more hiring is that expensive? how does that impact ability to offer low prices >> well, that's an interesting development that i agree with you. i'm not sure that's going to scale. it might be an efficient way where sort of schedules aligned to deliver the last mile, but i don't think it'll be big enough to scale to make a meaningful difference
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>> is there anything else they can do to make a bigger difference then? >> well, i think so. i think they are working on it you know, the efficiency and never under estimate two things, amazon's innovative capability and walmart's logistics and product capability walmart moves boxes better and faster than anybody on the planet, and once you got that moving in your favor, there's an opportunity to always take pennies and basis points out of your model and get it to the customer in a much more efficient and faster, capable way, and i think this test with employees is just another sort of a probe point in that, but their supply chain capability is world class. >> yeah. it's about to be tested in a big way on the world stage bill, thank you so much for joining us on such a a fascinating day. that's bill simon, the former u.s. - >> that it is, thank you, glad to be here >> former ceo of walmart bill miller and his portfolio
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manager son take on the internet giant's purchase of whole foods and president trump scaled back relations with cuba today adding restrictions to travel and business dealings. coming up, discuss the potential fallout for companies doing business in china with the labor secretary, alexander a costa >> we want to hear from you. you're watching bc, rsincnfit business worldwide e ] i used to be one of the world's most feared hackers. my friends call me "hack daddy." [ evil laugh ] but then cdw orchestrated a network transformation using cisco digital network architecture. allowing scalability and providing fast, comprehensive security from intruders like me. luckily i found a new calling. faster. security transformation by cisco. just run. run like you know how to run. it orchestration by cdw. ♪
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here's amazon, up 2.5%, still below the $1,000 mark pushed through a few weeks back, but higher on news the e-commerce giant is buying grocer, whole foods, but according to tech investor dan niles, this move may not be good for amazon and what he told us in the last hour of the show why he shorted the stock >> caller: this is part of a portfolio of stocks, and we'd rather own facebook, own a google, and in this case with amazon in physical retail, which is really messy, we don't like it at this level relative to the other two. those two stocks will hang much better than amazon that now is
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going head to head against walmart and aldi, et cetera. >> amazon is one of the largest positions in mr. bill miller's opportunity fund talk about restoration hardware, by the way, and joining us now is bill miller and his son, bill miller iv. not a lot of people with a fourth, by the way, that's unique >> unique, i have a son who is the fifth, and we just call him five >> how long are you going to keep this going? >> up to him >> i wanted to name his younger brother the fifth, but my wife wouldn't let me do that. i wanted the george forman thing going. >> exactly >> anyway, you are here at post nine exclusive ahead of father's day weekend. great to have you here, especially today, bill, you pounded the table on amazon and jeff's leadership for so long. what does the whole foods deal say to you >> well, i think the markets got this right in the sense of amazon put about maybe 3% of the shareholder value at risk, 3-4%, and the market marked up last i
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checked at 3%, so the market thinks it's a good deal, value creating, and indicates amazon is serious with the business they have been experimenting with a wide variety of things, but this means they are in it for the long haul. it's a huge category fits what amazon's strength are, the low margin business, so, you know, technology makes a huge difference, efficiency makes a difference, whole foods has a high margins grocery business, and the other thing you know, jeff is one of the world's great capital allocators, and what this means is he knows he's highly confident they earn above capital on this one. >> interesting you describe that business as matching low margin business that he traditionally does well in giving everyone a sigh of relief any other industry they have not penetrated yet, this is a wakeup call, and furniture, they are starting to get into, financial services they dabbled with lending on the platform, health, if they look into that in a bigger way, anywhere they can't go
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>> well, i think, you know, his strategy is to be wherever they think they can -- they have a competitive advantage. they earn above the cost of capital, and he loves giant markets and big profit pools in terms of the aggregate profit pool and loves above all high margins they can disrupt like cloud computing to be a big leader >> right >> i wonder, though, if you're incrementally getting to the harder stuff, not just low margin, but complexity of obviously 3% of the market value is not a big deal financially speaking, but just the idea of its a big physical footprint, it's a different business. overtime, does that become an issue for you? >> i don't think so. i mean, you know, again, they are highly experimental, and i know when they were first introducing the grocery stuff out in seattle and the guy who was then running it wanted to expand it, i think, to l.a. or san francisco, and jeff didn't want to do it because he said, we have not provenhere
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once we prove we make money, we'll expand it. now they are convinced they are an important force in the business >> you are a fascinating portfolio. some years it feels your portfolio is everywhere you want to be and then the next year, it's income plays. there's synergy there. when you look at the income opportunity now, this is the -- fed raised rates, but traditional plays are less attractive in this environment >> well, back to the rate question, kelly, i think that was a really interesting and unfortunate decision actually. i think neil cash car is the only one who got that right this week >> right >> and larry summers >> larry summers, he's not on the fed, but, yeah, one of the most ironic things about the decision, janet said don't overreact to one data point, talking about inflation over the expectation rate, right, but the
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fed over reacted there's been one measure preferred measure inflation hit the target, one of the of 60 readings they hiked rates aggressively and told people not to overreact. they are well served to step on the brakes and see what happens here >> where does that leave you in terms of positioning >> for the income strategy, we are pro-sicyclely positioned it's unique strategy we're positioned for improving economy, improving environment which should correlate with rising rates, hopefully at a slower pace. >> yeah. >> people have been comparing that exact posture of yellen saying we're not going to forego this idea of normalizing rates just because inflation remains below the target to what greenspan indicated in the late '90s, not standing in the way of productivity evolution is that not applicable here in
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the nonrevolutionary world where we can't sit and wait for inflation. >> the risk is a-symmetric to the extent they hike too fast and sent things downward, economy gets worse, it's way bigger risk to go in a deflation environment than it is to let the economy run hot, see real wage gains, and see things improve. >> flipside is what amazon's doing. talking to sprint offering a year of free wireless, and the fed, economists call the latest readings too, mike put it if we see this massive technology deflation, does that mean it's a different kind of a worry or less a worry than, you know, it would be if this was 2008 and 2009 and prices fell substantially? >> worry in terms of what? >> for the fed >> for the fed you know, i think i agree with bill and larry summers that the fed seems to have a normalization feddish. it's not clear what normalization means in this environment when you got the
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ten-year at 2.15 >> yeah. >> so i do think the restoration effort, and i think the fed, you know, again, i can't see any risk to the fed letting wages run too high they know how to stop this it's difficult with the zero lower bounds to figure out what to do unless you do what japan does and buy stocks in the open market to do so. >> talk about other names you have this year valeant, bitcoin, okay how good a year it's been? do you have the latest numbers >> well, opportunity funds up 13%. bill's fund up 10%, i think, and junk index up 4. hedge fund up over 30% bitcoin was the largest holding, not because we made it, but because it went up so much >> selling out of that now or, i mean - >> nope. we think long term in this what was the number you told me? >> the total stock of currency outs in the entire world, 31 trillion >> okay. >> okay. bitcoin's market cap is 37
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billion. so bitcoin could still go up ten times from current level and only be 1% of the currency in the world. >> this is just a speculative play, though, basically saying we think a lot more people buy and use -- i guess if you use it, it's legitimate, but sounds like a case of we expect more adoption of this opposed to value in it, or maybe there is >> well, you are seeing increasing adoption, but that argument has been made when bitcoin was at $10, $1,000, $500, so who knows >> yeah. >> that and the other crypto currencies have been a speculative blowoff here with the initial coin offerings like the ipos and stuff like that, but it is that whole area that's a true potential disrupter and true innovation in money we have not seen that in thousands of years >> yeah. >> and the other thing is that bitcoin is not a threat to the
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yen or to the dollar it's very much a threat to the venezuelan, argentina, all the countries that use currency to inflate their ways out of problems or seize people's assets this is a way that provides reli relief to people in that environment. when japan, i think it was beginning of april, made it a currency, that set off that last move, but russia said they're going to consider doing the same thing in the next year or so, and i think that's the kind of thing you get broader adoption, it's going to be -- you can't help but help it >> a couple more quick things before we go valeant had a nice rebound how much more value to you see in a name like valeant >> yeah, i think we first talked about valeant a year ago on the show in the 30s at the time, and that was clearly wrong >> it's 12.5% here >> yeah. interesting thing is in the last year since joe papa came on board, they did everything they
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were going to do, so the asset sales, a billion dollar sale last week, maybe 3.8 billion they want to be at 5 billion by february of next yearment they hit the numbers, quarterly numbers, set guidances, you know, guidances, commitments, and we believe they start to grow next year, and i think when that happens, the stock, you know, from here, ought to be up 50% in 12 months >> sticking with it? >> oh, yeah. i don't have a different view on it than a year ago which was over three to five years, it's a $60 stock. >> apple, quickly, call options performed well this year what now for apple as far as you're concerned >> apple trades now close to a market multiple on this year's numbers, highest it's traded at in a long time, not net of cash, just gross that seems to be, to me, a fair value for apple in the near term you know, i think, you know, warren buffett's right that it's a popular way to think about it as a consumer product with a very high loyalty among
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consumers, and, you know, there are not many apple iphone users who want to waits for the new android to come out and rid the iphone it's priced above amazon's offerings but higher quality >> you like it here? >> yeah, we own it, yeah >> final question, restoration hardware i didn't realize you had that. explain that one >> we bought that right. give colleague, samantha, credit for that she saw that stock was $100 two years ago, and then $30 when we went out there, and that's when we started buying it after that because it was very clear that all of what they were doing, the -- almost all the problems would be done at the end of this year, and then they would have a clean slate, and, again, they are going from 7,000 to 8,000 square foot stores to 40,000 square foot stores, and those are going to be humanly -- >> not going to get amazoned
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>> no, in fact, gary friedman said out there that actually the berkshire tried to buy them before they came public. >> no way. >> yeah. so they own nebraska furniture mart and know how these huge stores are profitable. worked out well. >> how are you celebrating father's day >> good question >> yeah, how >> because is this going to be consistent with your market calls too? you still have time to think about that guys, thank you, both, always a pleasure love being able to talk. >> thanks for having us. >> the bill millers, really appreciate it. president trump announced changes to president obama's cuba policy. the changes now imposed and potential impact on companies looking to do business in cuba when we speak to alexander acst ayituscoa.
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well wait. what did you think about her?morrow. it's definitely a new idea, but there's no business track record. well, have you seen her work? no. is it good? good? at cognizant, we're helping today's leading banks make better lending decisions with new sources of data- so, multiply that by her followers, speaking engagements, work experience... credit history. that more accurately assess a business' chances of success. this is a good investment. she's a good investment. get ready, because we're helping leading companies lead with digital. this is a story about mail and packages. and it's also a story about people. people who rely on us every day to deliver their dreams
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they're handing us more than mail they're handing us their business and while we make more e-commerce deliveries to homes than anyone else in the country, we never forget... that your business is our business the united states postal service. priority: you ♪ welcome back, president trump in miami today announcing his administration's policy on cuba in effort to maintain diplomatic relations but restrict travel from the u.s >> now that i'm your president, america will expose the crimes of the castro regime and stand with the cuban people in their struggle for freedom we do not want u.s. dollars to prop up a military monopoly that exploits and abuses the citizens of cuba. >> joining us more to talk about how the policy changes impact
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the u.s. relationship with chub is alexander acosta. welcome, and thank you for being here >> good afternoon, kelly >> the first question we have here is how do you think the policy changes will affect regime change or improvement of conditions on the ground in cuba >> well, today was the start of regime change in cuba. the president made it clear that he and america stands with the cuban people these policies are designed to change cash flows away from the regi regime, away from the military, and send them directly to the cuban people, and that is important so that we can empower the cuban people to begin the process of change from within. >> we had a guest last hour who said, and he's a cuban immigrant himself, said he opposes this because when conditions get tough in cuba as a result, the people in the back of the line suffer the most. why is this the right thing for the u.s. to do >> well, it is the right thing,
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and president trump carefully calibrated his new policy. he rejected the previous administration's policy, which opened up cash flows to the military and got nothing in return, and said you can go ahead and interact with cuba, but you have to do so directly with the cuban people, and cuba wants our money. they need to allow their people to open businesses, allow their people to have freedom, allow their people to run those businesses so u.s. dollars can go directly to the benefit of the cuban people that's how you begin regime change >> and, mr. secretary, turning attention back home while you've been in miami announcing this, amazon made a bid for whole foods. i don't know if you looked at it yet, but do you have concerns about the job impact this could have in this country >> well, you know, if you look at jobs in this country, we're at a really historic point
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our up employment rate is 4.3%, the lowest it's been in 16 years. at the same time, though, we have more jobopenings than we've ever had since we've been keeping track of the job opening data we have 6 million open jobs in the united states, and so our problem here domestically isn't do we have enough open jobs. it's do we have a match between the skills that workers have and the skills that are demanded by those open jobs. that mismatch between skills available and skills required is why just this week the president announced a new program to focus on work force skills development. it's called the apprenticeship model. >> right >> the president's directive will focus federal efforts on bringing apprenticeship model out of the building trades where it's been very successful and expanding that to all industries >> yeah. you know, is there anything that the federal government can do
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for uber drivers, for example, one rapidly expanding labor pool, where they would appreciate some benefits can you encourage, you know, people like that to maybe streamline the way they record tax income or have some advantage when it comes to acquiring health benefits that puts them on even foot with employees in the private sector? >> you know, that's a very important issue. if you look back at 1995, there was a survey, and only 10% of the work force was using alternative employment methods 2005, only 10% today, it's more than 15% use alternative employment methods, we have not updated labor laws labor laws still assume the old employment model, and so it's something that we really need to lock at and work with congress because more and more individuals are using different types of employment models >> yeah. time question, you guys able to focus on priorities with the russian investigation going on >> absolutely. you know, just this week we
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announced new focus on apprenticeship the president's here in miami to announce the new cuba policy we are focused, and we are getting a lot done >> all right we appreciate your joining us today as well. >> thank you >> labor secretary alexander acosta tough road for snap just above the ipo price, and one of the biggest users, kim kardashian, why she thinks highly of the social media company although investors have been fleeing apple takes another step to develop original content at the expense of a potential rival all the details for you next
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time now for a cnbc news update with sue. >> hello, kelly. this is what's happening this hour, everyone an update on the condition of majority whip, lead surgeon saying he's in the hospital for a considerable period of time and require more operations on his hip. he says the prognosis for an excellent recovery is a good possibility. congressman scalise was injured in wednesday's shooting rampage app a baseball game protocol
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a jury finding minnesota police officer innocent of manslaughter he killed a black motorist last year at a traffic stop over a to the. he said he had a gun and that's when the officer shot him. the girlfriend streamed the shooting's aftermath live on to be bill cosby's lawyers want a mistrial as the sexual assault case enters the fifth day. yesterday, the jury told the judge they were deadlocked, but the judge said try again los angeles city hall lighting the bat signal in honor of the late actor adam west. he's best known for role as batman in the 1960s tv series. the signal at that point was used by gotham city to summon the superhero. that's the news update back to you. i met adam west once >> you are a lucky lady. >> i know, i know. it's just -- his voice was exactly the same as batman, and i -- it was -- it was weird seeing him in, like, street
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clothes and not the bat getup, but he was a very nice guy >> may he live on in that space, thank you very much. >> you too have a good weekend. nestle sold the candy portfolio so someone will soon own the bar. they are doubling down on healthy, making it one of the few brands higher today. >> doubling down on healthy, and overseas, they keep kitkat overseas there's a lot of nostalgia involved and it's local, does not travel borders >> others swept by the amazon story. >> could be valuable >> apple hired two executives from sony to build out the tv programming business maybe they are going to go it alone here as much as we talked about big deals today. >> or participate in some way. these two guys are going from the entertainment division of the consumer products company to the entertainment division
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it's not that different. also, you're not behind if you just start now every single year, you create new content. you are just equal with everyone else like netflix. >> always want the next hot thing. >> exactly >> apple's chance. u.s. open is underway in wisconsin. f ar from the original owner o the course and about his quest to host the elite golf tournament when we come back the? i hired some help. he really knows his wine. this is the new guy? hello, my name is watson. you know wine, huh? i know that you should check vineyard block 12. block 12? my analysis of satellite imagery shows it would benefit from decreased irrigation. i was wondering about that. easy boy. nice doggy. what do you think? not bad. will you be ready when the moment turns romantic? cialis for daily use treats ed and the urinary symptoms of bph. tell your doctor about your medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain,
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or adempas® for pulmonary hypertension, as this may cause an unsafe drop in blood pressure. do not drink alcohol in excess. to avoid long-term injury, get medical help right away for an erection lasting more than four hours. if you have a sudden decrease or loss of hearing or vision, or an allergic reaction, stop taking cialis and get medical help right away. ask your doctor about cialis. and get medical help right away. ♪ to err is human. to anticipate is lexus. experience the lexus rx with advanced safety standard.
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u.s. open is jurpunderway i wisconsin. the original owner bought the land in 2001 and dumped $26 million into it with a dream of hosting the open fast forward to 2009, the owner sold it at a loss before hosting the tournament as its owner. we are in wisconsin covering the open and is there with aaron hills founder. dom? >> reporter: all right, kelly, a great setup piece for what happens here, and we are with bob lang to talk about what the story is behind erin hills bob, a lot is made about your investments in the properties at erin hills tell us what it was like to put the deal together and what it was like to see that kind of move away from you >> well, the deal together is, i think, you have to go -- it's not the deal itself in the end, but it goes back to the beginning when i decided that i was going to build a golf course for the u.s. open, which goes back as far as 2000, and then
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the deal of it was my own in which i bought the option on the parcel for 432 acres, the same one designed a routing plan on, and it was not until i discovered within a couple months that the 14th -- present 14th and 15th hole were not a part of the property that's when i went on this journey to, number one, meet a neighbor, talk her into selling me four acres. found another neighbor, bought 14 acres, so now we have the current 18 holes,but took thre parcels to put it together >> what was the thinking of putting that money and land together what was the thinking behind it? what was the ultimate goal there? >> well, when i started doing that was in 1999 i just wanted to biuild a great golf course. it was not until 2000 at pebble beach that the idea hilt me about the u.s. open, and that's when it all started. i had the 14 and 15, i had the other 16 holes, on 432 acres,
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then i went on the journey, i looked up the other land where the houses were, and i didn't want to see houses next to a golf course, and i'm a builder i was a builder. >> reporter: as you talk about hosting a a championship like the u.s. open, how much pressure did you feel or how much pressure was there around that a lot is made about whether or not the usga had a hand in the way things developed >> again, that's one of the things people talk about here. usga, and mainly with davis, he did not put any pressure he did not ask me to do anything he didn't over encourage me to do anything. as a matter of fact, the first time we met is when he came out -- well, we first met for two minutes, but when he came here on the 10th of august, we walk around, of course, for a little over four hours i thought we were going to do jeep rides bob, i want to walk. well, when it was over, walked back to the jeep, and during the course of the conversation, ron
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whiten and i started picking up, you know, they like this so when we're standing back by the jeep, and i felt positivie i, i said, mike, i want to build a u.s. open golf course. caught him off guard, but he said, you know, bob, this is one of the best pieces of land i've seen for a golf course we at the usga are more conservative he said, we'd have to see it first. i said, i totally understand i don't expect anything from you. >> reporter: this is interesting, again, so much to the story here we'll talk more about this in the future as well, but right now, kelly, with the u.s. open the way it is, i can tell you from being at the course all day, a spectacular property, and, of course, bob lang put it together, and, of course, now, hosting the u.s. open. guys, back to you. >> applaud his effort in so much he went through for that dom, thank you for bringing that to us, and nine miles of walking, that's a huge course, that's what the guys are doing
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out there. it'll test fitness for sure. thank you, guys, again, appreciate it. coming up, kim kardashian says why she's bullish on snap's future although investors bet ait it wel right back. online u.s. equity trades...
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. >> it's been a rough week for snap, a little bit of a rebound today. but up next, social media queen kim kardashian weighs in on why e sticking with snap. stay with us
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>>. snap trading right at its ipo price of $17 as we draw concerns about the future of the social media company, but michael caught up with an avid snap chat user kim kardashian west she was telling a different story. >> a somewhat different story.
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i asked her about the different platforms as she sees it twitter, instagram, all the rest when it came to branding, here's what she had to say. >> accumulation of every social media platform is super important and i think you just, it is time consuming, but if you really want to build your brand, you should use different platforms. i mean like click through, it shows that facebook is really prominent. snapchat shows i think a little more of your deeper life, so if you are creating product and you want to show people behind the scenes and in the factories and picking out colors and formulas and stuff like that, snapchat is really good for. that i think instagram is really good to show is progress show the product show the physical product, key things announce things. twitter i think is great to have a conversation with people to really engage and listen to people which is really important to hear what people want and have that conversation back i love those four platforms. those are the four that i use,
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it's just like proven to me have been the most beneficial in brild i building a brand and listening is so important. i can't stress that enough. >> and on snap chat, you mentioned that that seems valuable for showing some of the process behind the scenes. is that a platform you think will have momentum right now there's a lot of questions at least here on wall street as to whether in fact there will be continued engagement with users? >> i still love it and use it and i, you know, it took me a minute to get on it, but once i did, i was completely hooked and i do see now there is instagram stories, so that is one platform you can go to and share both i just started using instagram stories him but i am a big snapchat fan i do love the app. i do use it all the time i love the filters i love just -- i love even using that as my camera. so i am a big snapchat fan and i hope that people still stay
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engaged. >> now i'm sure it's early in the game before you have to make decisions like this, but i'm asking this maybe from my own personal use what do you think you are going to use as guidelines for your own children when they begin to become engaged on social media do you have any sense of that at this point >> i literally think of this all the time i talk about it with my sister i think the most important thing is having boundaries and setting boundaries when i was growing umm, i know it's like i'm dating myself, there wasn't cell phones, but i couldn't have my pageer or we couldn't be on the home phone past a certain hour. so i think whatever works for your family, boundaries are definitely important because i personally don't think that kids should be sleeping with their phone i don't do it. when i come home, i like to be super engaged with my kid. i know they're way too young for social media, but i want to start a routine at a young age that social media is amazing, it's fun, it's great but it cannot, you know, you do have to have boundaries.
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>> okay. first of all, that was fanttastic second of all, i hat a light bulb moment over the last couple days here on cnbc. she said there is a big force social media company and cal lum yesterday was saying he wanted to use those and make the process easier maybe cramer is right, maybe he or she need to pick up the phone and synchronize what you are doing across all four. >> that's right. i was fascinated how much of a science she has it down to she clearly thought about it what each is good for, how it can benefit her. i asked her, too, could she give somebody a playbook and say this is how you do it, this is how you become a social media brand? she was saying, i could do that you have to be authentic she has an advantage of a tremendous amount of recognition that she enjoys. >> you are so personal the kardashians, the images we were showing. i think this is a light bulb moment for me. before the brand, ultraperfect.
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>> boundaries,als, however ironic you feel it is for her to say it the idea is not giving into it altogether. >> listen, you guy versus to figure it out every day. as long as they can watch "closing bell. >> i can now. >> thank you so much >> that does it for "closing bell." "fast money" starts right now. that's right, kelly, thank you live from the new york time's square, i am brian sullivan in for mellissa lee welcome to this furious lat "money tim, kyren nothing feinerman and gorgeous guy adami i'm new. tess lab has been on fire the tech anything that correctly called the brakeout now says, "get out!" apple taking a big step to beef up its tv business s. this netflix's worst nightmare? gene munster says so he is here to tell you how tight


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