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tv   Closing Bell  CNBC  June 30, 2017 3:00pm-5:01pm EDT

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they are going the start normal aying policy 2.3, it's not a lot on the ten-year but we are bumping up against some of the levels we've seen before. >> it is an extraordinary move in yields in five days that's key to remember four of five major central banks are getting hawkish. thanks for watching. >> closing bell starts right now. ♪ ♪ >> finally a song that we know that i start with. >> we'll make it, i swear. >> there you go. did you see u 2 was in town last night performing >> everyone has been talking about it. >> everyone i know was at the concert. >> except us >> exactly >> this talks about living on a prayer. >> yes. >> we can pick up that theme a little bit for our exchange here welcome to closing bell, everybody i'm kelly evans at the new york stock exchange. >> i'm bill griffin. we are halfway through 2017.
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we have second half strategies coming up for you. vertex, activism, blizzard, and within resorts are among the winners in the stock market today. good gains that's just showing you today's gains there. foot locker, devon energy, and kroger are some of the bigger losers we always try to discern larger trends from looking at the individual stocks. >> the kroger story we know well. >> for sure. >> what's old is new again we'll get you details on a firm's turn around plan. >> you may have heard berkshire hathaway is now the largest share holder in bank of america. but that's not the only company where warren buffet is the top shareholder. i love that story, he bought the preferred. they raised the dividend he converted and now he made $12 billion in the process. >> you have to hand it to hill
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when everyone was panicking, he stepped in and made so many deals. >> buy low that's how that works. let's get to the market. so far the nasdaq is up more than 14% while both the dow and the s&p are up roughlile%. but that's starting to show signs of changing here let's get to the closing bell he can change for strategies for the second half of the year. chris care daro is next to peter costa from empire executions and rick santelli checks in from the cme in chicago peter, you famously exited the market before the beginning of this year. i don't think you have gotten back in. you have been shorting this market >> i'm going to tell you i'm almost thinking about doubling down because i really think we are getting to a point where you have valuations -- you know what everyone is saying the earnings have gotten better and better. they really haven't gotten all that much better and i think that, you know what,
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you have had this move, it's been non-stop that there is going to be some point, an inflection point i think it's coming up fairl soon you have a -- you have washington, d.c. as far as i am concerned is a big mores of problems i don't think people are looking at what's going on there as that's going to trickle down, but i think it is. >> chris, what about you i see you have picks here. how do you think the mark is setting up for the back half >> there are values out there. rts pa of the market like the fangs that i think are definitely too richly valued but i like oils, i like financials and you know we've been moving more of our assets into foreign vem investments. that's where we are seeing the best values. >> funny you should mention, oil and energy -- energy and financials i'm trying to say, are two of the worst performing sectors the first half of this
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year i guess you are looking at the bottom of the list hoping they play catch up the rest of the year is that the idea >> financials came back this week after the stress test. >> yes. >> i think they have got a lot of room to go. as interest rates start to increase, a lot of the strategies that these banks employ will start making a lot more money and i think the market's really discounting that. >> chris, quickly, on the energy piece of this, granted wti's bounced back a little bit, crude benchmarks over $46 a barrel what if it slips again ble $40 what does that do to your picks? >> kinner morgan where the price of oil or gas doesn't matter that much. we are just talking about how much is going through the pipelines. the demand for oil and gas hasn't decreased that much the toll roads got hit this year i think they are great opportunities. >> rick, here we are, 2:30, as michele pointed out, the ends of last hour on the ten-year, when
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we began this year there were plenty of pundits who yet again began the year saying maybe the bull market was finally over fortress reese yet yields are now lower than they were earlier in the year. but they are showing signs of moving higher here. >> absolutely. i think the latter actually is the i go bigger story. bill, you are kplooit completely right, started the year at 2.44, the high is 2763 that 2.63 is technically significant. it's impossible to test 3% in 2017 but i've seen wild markets. i wouldn't lay a heavy odds bet on that but i wouldn't rule it out. i continue the say the most important issue if you are monitoring interest rates is a yesterday i thought it had an effect on equities, and it did b, you have to really discern what the motivation is, what's the gun's hot aspect why rates are going up, not only here but up 21 basis points in the boone on the week? what is going on
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i think the fact it's hard to correlate with economic fundamentals personal consumption expenditures, anything with inflation, should be a big driver of long rates they moderated today as we hit 230. university of michigan was good. that's not the issue the issue is there is more than fundamentals going on. it's not easy enough to say the long end is looking at growth, it isn't that great. if you look at the gdp for the last six years, it really isn't huge movements year the year to year a little below 2%, a little above 2% if you take our current 1.2 and the 2.7 that atlanta moved to today you could argue that really hasn't changed. so why all the volatility in interest rates it's because there is a lot going on with central banks. i continue to think if that is overlooked other combed over and put into a fundamental economic argument only there is going to be big missing pieces to that type of trading strategy for the rest of the year
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>> all right, chris, let me circle back to you you mentioned sitti is one of your picks there exposed to those rates, total being an energy play. you also have apple, already up 25% this year. are you nerve u.s. that all the hype about the new product cycle will be a risk >> that is the risk for apple. if you look at apple and strip out the cash it's selling at a 15 multiple, i think that's a tremendous bargain for such a bran like apple that just can mint revenue i mean this is a cash machine. and when you are buying it at a 15 pe and you have got the possibility to repay treeiate some of that foreign cash back to the u.s. i think it is a tremendous buy. >> peter i'm going to finish up with you we shoe remind everybody, you are note new to this game. you have been here at the new york stock exchange -- >> since they built the building. >> yes, more than 30 years
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almost 35 years here. >> right. >> you have seen your run of bull and bear markets here i admire your persistence to stick the our guns on this position how long do you think you can hold out >> i think there will be a point where i'm going to have to throw in the towel and admit on national tv i was 100% long, but i'm italian so really the chances of that actually happening, pretty slim no, i think that if we see, you know, start with third quarter, you start seeing the second quarter earnings coming in and they are getting better and better, i think i'm going to have to bite the bullet and say you know what, this is the third or fourth leg of this bull market and all right, i missed the 12 or 15% move on the upside. you know what, earnings are growing and the economy hopefully will continue to grow and start -- the gdp will start picking up at some point the only thing there is a concern about the fed raising rates, but i -- you know, i don't know if that's really going to slow anything down. so we'll wait to see at the end of the center and see what
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happens there. by that time i'll eithering broke or i'll be right there is no middle ground. >> try to enjoy your fourth of july weekend nonetheless. >> thanks guys, see you all later. appreciate it. have a good weekend. >> the dow is up 108 points today. the s&p is up 10 the vix is still over 10 the brussels up 3, the nasdaq rebounding as well. >> e trade's board now wants the company's ceo to reinvigorate profits. >> have you seen the ads, fly me to the moon with tony ben skpet theity idiot on the yacht? they are funny splashy ads. like the e trade of old, irrefuse vent. the journal reporting they want their ceo to boost account rates and increase client assets they are targeting those who trade 30 times or more a month but there is stiff competition from firms like interactive brokers out there. will this strategy work?
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can you make money on trading and commissions these days commissions is a tough market. there is price wars out there. schwab and fidelity charge $4.95. e trade has 6$6.950 e trade also doesn't have as many diverse revenue sorlss as does a rival like schwab they have a bank, they can invest the cash available. they do well on that but they don't have a significant little of independent advisors buying etfs, mutual funds, and they can charge for services that they don't have very maul mutual fund offerings compared to competitors. that's another offering. if it doesn't work they say they will put themselves up for sale? who would buy them eight ameritrade and schwab and
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maybe capital one would be interested who knows at this point. what i know for sure guys is that fees are the way a lot of these guys are doing well right now. >> the board said to him had, figure out what this company's strategy is going to be, what it's going to stand for. when it comes the point where they have to make that kind of declaration they have lost their way. >> setting targets of 2 or 3% sound modest, easy to do but if you want to do that over a period of many months and many years this is competent competitive. i think it's going to be tough to obtain over long periods of time sounds like they are setting the company to go up for sale. >> periods of low volatility people are not trading etfs are the way to go these days people are not trading it's tough. >> record inflows into etfs we reported 16 straight months. >> i could be flippant and say maybe they need to think about producing tv shows >> i'm also thinking if they don't come out and slice
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commissions or do something -- >> how much lower can they go. >> zero, they could go to zero and tie other methodology of making money for example, just making money off of selling client services. it is a tough game, though. >> it is >> a tough game. >> very, very tough. thanks bob see you at the close. warren buffett now the largest shareholder of yet another bank let's get todom chu with more on this story and other places where he is a major shareholder. >> kelly, bill, first of thul bank of america has one of the biggest brokerages out there in merrill lynch. a nice segue about the exercise of options warrants factoring in the wake of the financial crisis berkshire gave an investment to bank of make with the understanding if they got to a certain financial point down the line they would be able to convert that stake into common shares that happened and all of a sudden we've got 700 million
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shares that berkshire hagt away under warren buffett owns. that makes them the largest shareholder in b of a and has a value of $17 billion it's interesting because you have $12 billion paper write-off profit right off the bat it's not of course the only company that buffett has a massive stake in berkshire is a major share holder in a number of different companies. kraft hines, over a quarter of that company is berkshire hathaway american express he is a big investor that 17% stake they have makes them the biggers shareholder in american express wells fargo, the most high-profile bank company he has owned, 9.6% stake. coca-cola, 9.4% stake. united 9.3%. dealt a, ibm, and others aren't up there
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these are many companies that warren buffett had a say in investing in and in many cases a personal hand in investing these days it's not just about warren buffett he has top lieutenants helping him pick these stocks. still though it's amazing when you become the biggest share holder in this many iconic american companies out there, b of a the latest, guys. >> look at that wall there, a who's who, a hall of fame of american iconic brands. >> >> we wouldn't have enough real estate to put all his stocks up here. >> our wall is not that big. heading into the clouse the dow is up 94 points at the moment rebounding somewhat from yesterday'ses los. the s&p is up nine up next, trying to win back the cord cutters a major cable company is testing
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a new streaming service aimed at providing customers with a cheaper alternative to good old-fashioned tv we will discuss the game changing potential on this next move coming up. as wall street buttons up the first half of the year, two mainstream investors tell us how bullish or bearish they are for the ckalba hf. you are watching cnbc, first in business worldwide (baby crying) ♪ minutes old. ♪ a baby's skin is never more delicate. ♪ what do hospitals use to wash and protect it? ♪ johnson's® the number 1 choices in hospitals.
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update today to close out the first half of the year here. let's see, the best performer, the dow. look at that, of the major averages today, up almost half a percent. that's not the high of the session. we were up 117 or thereabouts at the peek to this point, up 97. >> not much of a bounceback for the nakd. >> check out this year's three lagging s&p sectors. energy, telecom, and real estate telecom and -- let's see and energy especially. of the 11 s&p sectors this year, so far only two are negative the others are all positive here. >> and it's those.
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>> those two right there yeah, exactly. >> charter is testing a new service. it's called spectrum stream, an alternative to the traditional cable bundle they will be able to watch select tv content and it can be streamed on mobile devices and doesn't require a set top box. >> is charter changing tv service? good to see you both amy, they have the do something to keep growing this business as consumers consume media in different ways different channels what do you make of this new strategy >> that's right. i think they are really trying to win back customers and also try to probably address millennials who have been going to alternative ways to consume media, including obviously netflix. then this quarter you are seeing the launch of hulu and google's
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you tube video i think they are trying to at least establish a relationship with customers it comes at a time where it's two q seasonal week, and one q, you saw cord cutting accelerating. >> i think i am one of these spectrum users that's the old time warner whatever we are going to call it mike is the idea here that i would be able to keep my internet that i'm already paying for, layer this on too much it, and the bill would be much cheaper than paying for cable right now. >> we have got a good deal right now, basic cable, and it's like $80 a months. >> connect this offer probably would be cheaper. it's currently -- the test from charter is currently priced at $20 a month. you know, that may or may not be cheaper than what you are paying now. >> on top? >> it's really to have a smaller bundle of channels, importantly,
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espn has been removed from the bundle of channels so it's a much smaller offering. >> to lower the cost is that why? >> right, to lower the cost. the removal of espn from this makes the offer much cheaper >> let me ask you, you mentioned a $25 price but that is layered on the broadband piece of this how much do you think that's effectively going for these days. >> the price of broadband has been relatively stable throughout the past couple of years. the problem is that so much more tv viewing has been move onto the internet you can continue to pay $50 a month or whatever it is for broadband but you are still able to get a lot of video content. and you can get it from companies that are not charter that's a major drive for charter's offer is that this is a service that you can stream over the internet, you can view it on mobile devices probably it's much more cheaper than traditional cable bundles.
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>> amy, will we ever get to total single channels a la cart as they call it? i'm a boomer i would watch -- >> i could guess your three channels golf channel, tcm, for sure, and cnbc. >> exactly what i was going to say. you know, there is no skinny bundle that just includes those. i have to go with a much larger bundle. >> i think skinny bundles are probably the first move that you would see, and probably a la cart is ultimately what consumers want i think consumers really do just want to pay for what they watch. the question how do you search and discover new content i think cable companies are still trying to push that. >> mike just to circle back to your point again, we have very skripd down basic cable type service let's call it paying $80 a month, you would tell me i'm
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paying $25 plus the broadband. is this going to be enough of a savings that it's going to attract customers? >> right the way that charter is offering this is as a test. it's only being offered to select charter customers right now. it is fair to say that this is definitely a test bay charter to see what kind of pricing options really make sense in the market and whether or not they will be able to get some of the customers that only subscribe to broadband to sign up for a pay tv package as well i think this is not necessarily targeted at the customers who are paying $80 or $100 for internet and tv. when it's really being targeted at is the customers who only pay for broadband, who only wand broadband and who don't want an expensive cable package. i think what we are talking about is a specific target market that they are offering this to and that they are worried about losing permanently from the pay tv industry >> yeah. mike i'll ask you the same
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question i asked amy do you ever see total a la cart viewing possibilities? >> i mean it's certainly a possibility. but i think you know we are already starting to see some cable tv channels go direct to consumer i know just yesterday outdoor tv offers -- now has launched a new service that, you know, it's $5 a month and it's outdoor tv programs and is he you can buy that individually. the problem is that, you know, you budged four of those and you are already paying $20 a nt month. i'll not sure that the al la cart is something that's going to takeoff we've seen amazon attempt this strategy with a program they are calling amazon channels. you can sign up for amazon prime and also add svod services from the likes of hbo and stars and showtime but i still think that there is -- you know, there's a reason that these aggregated channels make sense
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i'm not sure anna la cart scenario is going to be the one that wins the day. >> eke. >> but it's certainly going to drive costs lower overall. >> yeah. that's for sure. amy i don't think, mike danault, thank you for joining us today >> i think we should brand your -- >> that is so funny. you nailed that. anyway -- i don't think they can hear us anymore. we are going to a la cart. 35 minutes left in the trading session here the dow is up 105 points as we close out the furs half of this year. >> take a look at nike today it's living up to its logo of just doing it. outpacing all of its peers on the dow industrials. helping it outperform the s&p. we'll discuss what's powering that boost next. >> plus, did you see the tweet tesla ceo elon musk promising to ekd. an announce men this ween we'll get you up to speed on what that might be all about coming up. what are you working on?
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shares of nike soaring today. the company reported earnings which beat expectations and confirmed that deal we had all been talking about with amazon where they will sell directly. this cited this direct to consumer business on sales growth they will sell a limited assortment of inventory directly on the e-commerce join's website. remember the footwear maker has avoided worksing with the company in the past. but the announcement came with the positive earnings and that's good for a 10% pop for nike stock. >> you know, the journalh a story a couple days ago that was fascinating. it talked about how nike made the decision years ago not to go on amazon. it didn't think it could handle good brands well enough. it tried in 2014 a partnership with the fuel band and it thought the results were unsatisfactory when you searched for it on amazon it showed up with a bunch of monetized fuel band looking
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things so they partnered with apple and here we are years later. it tells you about amazon and where it has come. >> amazon has now evolved enough nike could open their own store, go the their website, or go to a department store where everybody is shopping anyway. >> i got on amazon not long ago trying to get nike work out gear i assumed i could get it direct. >> there you are, it worked. we want to hear from you get in touch with us any number of ways, twitter, facebook, you can e-mail us. we will be reading some of your comments in the next hour of the shower rumor has it i'm sticking around today for that second half today. >> stuck here. >> i choose to be here. >> it is a summer, fourth of july friday. >> it is. >> yeah, you are a good man. time now for a news update with sue herera. >> here's what's happening at this hour.
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a san antonio police officer died today of wounds suffered when he and his partner were shot by a man they intended to question about a vehicle break in officer miguel moreno was shot in the head in the uncounter on thursday his partner is expected the recover testimony gunman died in the shootout. iraqi troops raising the iraqi flag over the side of a destroyed mosque in mosul. iraq captured the mosque yesterday causing the iraqi prime minister to declare the group's self styled sal fate over. the chinese president sang on stage at the end of a gala show in hong kong to celebrate the 20th anniversary of the handover from british to chinese rule hong kong is under chinese control via the one country, two systems principle. and here at home, justin bieber tossing his sneakers into the crowd during his concert actually it was in germany last week now the right sneaker has landed on e-bay, starting bid, $5700.
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meantime, the left sneaker garnered new found fame onnin instagram with more than 9,000 followers. you are up to day. that's the news update, guys bill, i'll send it back downtown to you. >> what do i say after that? thank you so much. and thank your producer for making that the lead in to me. i know he did that on purpose. thank you, sue. mark newton of newton advisors joins me here at the wall to talk about -- we know to this point this year technology has been the leading sector. but it's start to show signs of wear and tear here isn't it? >> increasing signs of wobbling here in the sector the number one in the seggor in the s&p by weight, 22% almost an entire quarter of the s&p. it's important the see how tech does it's tough to think that the other part of the market can hold up if tech truly starts to fall. >> this is a one year chart. >> this goes back to august of last year. if you look at this area of concern -- i think we lost
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our -- anyway, this is what a lot of people refer to as a potential head and shoulders a high, a higher high, and then a lesser high. now we are flirting with a level that could be important. the uptrend thus far is intact that's the important thing we have not seen true deterioration in this sector the make you think it's imminent however you have to really keep your eye on it going into q 3. historically it's not a great time for technology. if industrials, health care, financials can't carry the load and tech starts to turn down then that's what investors need to create on. >> y-- need to concentrate on. >> semiconductors? >> similar to how the broader tech space looks, the stocks have been in a decent uptrend. we peaked off middle part of june, sold off, right now it is
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an important uptrend of it's going to be tough to think that tech can hold up if the stocks move down. micron is up 4%. markets doing fine, yet the stocks is still negatisox is still negative. tech is where investors need to concentrate. it got well over bought. a lot of the fang stocks are starting to come back to earth it's a healthy rotation. >> thanks mark a always, have a good weekend. >> 25 minutes to go until the close. the dow is leading the way with a 97 point gain paced in part by a nike 10% gain. the s&p 500 up nine. nasdaq up only ten points. the russell 2,000 is up three. up next, two retail investors tell us how their portfolios made out in the first half of the year and why they are cautious about the rest of 2017.
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welcome back it is now day five of the securities and wire fraud trial of martin shkreli. today you saw one of the best known names in the pharmaceutical world in wall
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street take the stand. we are live in brooklyn with the latest. >> kelly, we didn't expect hum to be testifying but fred hassan is now on the stand in the trial. we should mention that hassan is a cnbc contributor et cetera the former ceo of sharing plow and a influential and well-known guy within the industry it was his daughter sarah who was the first witness in the trial yesterday. she was an investor in shkreli's hedge fund, msnbc nbc capital. what came out yesterday was the government and sarah hassan trying to establish that shkreli kept involving fred hassan using his name on promotional or tax materials around his company, retro fin. what is coming out now is braffman, shkreli's defense attorney is trying to trying to establish that hassan had a relationship with shkreli was involved here but hassan continue ally satisfying he doesn't remember that's interactions going back a few
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years here that's what's going on here. earlier today, martin shkreli walked into a room full of reporters during a recess of the trial, criticized their coverage, criticized the prosecution, complained that the whole world wants to blame him for everything the drama continuing here. the cross-examination of fred hassan going on now. we will bring you more news from the trial but that's the latest from u.s. versus martin shkreli today. >> meg when she is in the courtroom is able to live tweet the trial. you are doing a terrific job you feel like you are sitting in therelistening to the testimony. thank you. you can getback to live tweeting her handle is meg terrell. >> today marks the last day of the month meantime, certainly for trading. time to check in how mainstream investors are making their portfolios and how they are expecting them to perform the second half of the year.
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jackie, we'll begin with you first of all, how did the first half of the year go for you? >> it was great. we are ending the first half of the year at about 8% most of my stocks have performed even better than that. it's been a thrill to watch this marked and see how it's done beginning of the year and you know to see how some of thigh stocks have really done so well. >> what's your biggest holding >> i'm -- >> what's your biggest holding jackie what got you there >> apple was one of the biggest witnesses. also things like united technologies 3m is a pretty big holding mcdonald's is pretty big several of the larger cap companies that performed really well in the first half of the year. >> okay. >> thomas, what about you? again starting with the same question, how was the first half for you? >> i tend to be more of a value investor growth definitely outperformed
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value. i did have apple, thankfully that was doing well. j.p. morgan up 35% from last october even though it lagged a little bit this year, the stress test results i think are good catalysts, and i'm hoping the bank are going to outperform in the second half of the year. dow chemical is up there, i think with the split up that's going to unlock a lot of value and it is a going the outperform the market in the next couple of years. >> you are one of those that's waiting for the proverbial correction you want to see five to ten percent taken out of this market has that affected how you invest this first part of the year as you wait for that to happen. >> i traded less there was a blip in may, one day when it went down 2% i added verizon and chevron, some value pieces. but yeah i haven't gotten the drop that i expected i still think we will get a drop at some point. just hasn't happened yet i am sitting patient i like what i'm holing long term i think my holdings are good.
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>> jackie, you mentioned also some concern about the second half of the year is that just because we have already had -- almost like we should just end the year here? >> it's true i loved through 2008 we know that the market can't continue to go up forever. i have taken a little off the top on some of my really strongholdings right now i probably have a liblt more cash on the side than i normally do because i feel like there is probably going to be a pullback before tend of the year i want some cash where i can actually buy up more stocks that i'm interested in getting or adding. >> you have chosen walmart over amazon why? >> well, okay, so starting where i'm starting today, amazon is almost at an all-time high so it's not a good time to buy it i have owned it in the past. for walmart, i feel like they have weathered a lot of storms you know, they went up against target and just a lot of other challenges that management performed very, very well. and they acquired and
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they are doing things to actually be a worthy competitor of amazon. competition is great for the consumer i believe that there is enough room for both of them. >> okay. and thomas, before we go, we just reported e trade is trying to kind of find itself again what move would they have to make for you to make that your primary trading platform >> it couldn't happen. i'm with merrill edge. if you have over $50,000, you get 30 free trades a month they can't go to zero. i'm not going to do better than zero what's nice about that is any time i on the with a to invest small amounts of money, i don't have to worry about commission costs. i'm staying there. >> there we have it. guys thank you both. >> see if e trade is watching and learn from that. thanks guys, appreciate it. >> jossie koss kyi, as we head into the second half. we are heading into the final moments of today's trading day. the dow is up 113. it's continuing to add
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pretty much at or near sessions highs. russel up 3.5. the mystery behind tesla's model 3 launch may come to a head this monday we will tell you what the company is about to announce mek. >> we think. rkngitthsts'h e ars" maet (baby crying) ♪ fly ♪ me to the moon (elegant music) ♪ and let me play (bell rings) that's a good thing, but it doesn't cover everything. only about 80% of your part b
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by the way, that's not david darst. they are celebrating as part of the closing bell here the 20th anniversary of the establishment of the hong kong special administrative region. so they are -- the group from the hong kong economic and trade office are here to ripping the closing fwoel celebrate that 20th anniversary. >> i'm wary of any unrest tomorrow we know there is going to be protests as they mark that hand over tomorrow. 20 years, as you said. meantime there has been a tweet that got a lot of attention for sunday elon musk tweeting there will be news what kind of nice news might this be. >> it will be about the model 3. his tweet saying news on sunday is in response to a question sent over twitter to him saying
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give us production whether or not you are going to begin production for the model 3 in july as the company has made very clear over the last couple of months the model 3 is its entry into the mass market it's supposed to be priced somewhere in the $35,000 range, roughly speaking a product target by ten of this year, 5,000 per week we bring up the product target because production will be the focus of other news coming from tesla over the next several days at the beginning of every quarter they announce the previous quarter's sales, deliveries when we get that news, whether it's sunday, monday, could even be tomorrow, the expectation is that it's going to put the annual production at close to 50,000 vehicles. that's how many they delivered last year. the 7 #,000. they have yet to give guidance for full year deliveries for this year. the second half of this year is going to be huge for tesla and for elon musk. here are the things to keep focused on as you look at what's coming up for him. first of all you have the model 3 production rampup starting in july and really accelerating
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into the end of the year will they announce a production plant in china there is indication that that could be coming as soon as within the next couple of weeks. and finally, is he lumbar shingles installation of those, the new ones, that will begin in the second half. another critical piece of the business for tesla look at shares of tesla. we show you a one-year chart i think if you said to someone a year ago, tesla is going to be trading at well over $360, i think a few people might have said that's a possibility but i think a lot of people are surprised how far the stock has come over the last year. >> for sure. thank you. i don't think it's the first time he has also put news out on a holiday weekend either i hope you still get to the barbecue, phil. >> thanks phil >> you bet. >> i want to mention this now. it's important the market on close orders going into the closing bell show an imbalance to the buy side of $1.1 million that's why we are setting highs right now.
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we are up 133 points on the dow as we head towards the close here with our friend, the investment -- independent investment consultant david darst. your acronym this week is placid, p-l-a-c-i-d. i want to start out by wishing the i had. >> a 241st happy birthday. 241 is a prime number. placid profits, we have had oil come back off its lows. that's important for profitability for the second half interest rates, raise of ten basis points on the ten-year over the past week that helps the bank. the big happen for the banks is this capital return through dividends and stock buy backs which helped all the big banks this week.
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the l is lofty valuations. people are beginning to talk about the schiller it is very hichl it's just now touched 30 it's only been here twice before, 1999 and 1929. the highest it has ever been was 44, in 1999. and lowest was 4, right after world war i. it goes back to 1871, that average is 16.7. it's about 30 now. >> your acronym is going to be pla. >> a is asset pricing. it used to be jobs then inflation now it's are asset prices too high that's what has led all over the world. the i, i'm combining it. interest and currencies. p-l-a-c-i, interest euro, the pound have all risen all over the world as people have been
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taking elevated interest prices into account and the d is the delayed health care legislation that basically keeps putting taxes into the future which brings us back full circle to the p, which is profits. for that market to move higher you need to see some progress on inflation front. next week, a week from today, the seventh and eighth of july, you have a jobs record on the 7th. and the 7th and 8th is the 12th g-20 meeting donald trump will be there in hamburg, germany you could see some market moving commentary out of that important meeting. you have also the construction spending you've got a full week of news next week. but earnings are going to set the tone for the second half coming back to the profit thing. >> very good, david. >> happy birthday u.s.a. >> happy birthday. a dapper look, as hauls. >> rhett, white and blue for you
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guys. >> happy 241 where are we going here? ordinarily we would be going to the closing countdown but we are not doing that right now we have the dow up 120 points right now. it's now just off the highs as we head toward the break here. >> up next we will head uptown to the nasdaq exchange to see the sector was seeing on a down day on the tech-heavy exchange and we'll count down to the closing bell. >> eventually. >> yeah.
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(baby crying) ♪ fly ♪ me to the moon (elegant music) ♪ and let me play
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(bell rings) welcome back let's go down to the nasdaq with a look at how tech stocks are wrapping up the first half of the year >> kelly, best first half start for the nasdaq in 14 years if you judge it by the gains, up 14% and counting, just over the first six months of this year. meantime we've seen 38 record closes, the most since is the 86 today gains from malaysia up over 1% lifting the benchmark. there are reports we might be seeing a major eorganization announced next week that will better align microsoft with its
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cloud business apple responsible for half of the nasdaq 100's gain. comcast and intel the other two big contritors on the day. on the downside, amazon, despite nike announcing a plan to sell on the marketplace, amston well. and google down as well, dragging down the benchmark. and earlier piper jaffray, rejenneron was down. and micron technology the biggest drag on the nasdaq today reporting better than expected quarterly results yesterday after the bell but investors were selling on the news and there were concerns maybe the chinese might be disrupting the semiconductor market chip stocks have underperformed over the past monday look at the first half names like micron rallied so far in 2017, up over 37% in the first six months of the year for micron back to you. >> all right thank you, susan.
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over to you, bill. >> thank you very much, kelly. going toward the last two minutes of the first half of this year. we could look at many different trends this first half of the year but let's just do some of the highlights in the two minutes we have railing nasdaq outperformed the s&p in the first half of the year but it is showing signs of wear and tear here after peaking a couple of weeks ago you remember the tech wreck. it has been struggling since that time. does that mean we will see it struggle the rest of the year? that remains to be seen. two investments that haven't performed as answticipated. oil, wti was thought it was going to go to $60 as opec cut production, but it continued lower as u.s. production continued higher we are into $46 a barrel today, not nearly close to that $60 hoped for price by some. the ten-year yield also, everybody at the beginning of the year, feds is going to be
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raising rates, yields will be going up hasn't happened. we'vesy seen a flattening of the yield curve and the yield on that ten-year is now at 2.30%. bob we know that technology was the best performer among the sector in the s&p. here's the all 11 of the sectors and how they performed for this year technology leading the way and of the 11 sectors, only two were negative, telecom and energy. >> the question is will we start seeing some flow into other sectors? banks are showing that, early signs. i think the rest of it is murky. energy not retail not -- i want to point out today very good numbers we got from nike we have had two dozen companies report second quarter earnings we will talk about second quarter earnings next week the numbers have been good more importantly, bill, not just nike but oracle had good numbers, micron, 90% of the two dozen companies reported had
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revenues well above expectations we haven't seen that in a long time finally starting to see revenue growth i think this is going to be the story for the next few weeks. >> thank you bob we have now come well off the highs as we head toward the close. we will try to make sense of the first half of this year and look to europe as well. mr. wonderful joins us on the second hour of the closing bell. yes, welcome to the closing bill i'm kelly. bill will join me in just a moment here's how we are finishing out the day, the week, the first half of the year, the dow with a gain of 64 points. a sharp selloff on the bell that was enough to push the nasdaq negative on the day, the russel negative on the day. the dow only a 64 point gain, the s&p up about 3, nearly 4 points given we are closing things out here there was huge volume on
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the chose. we will see how much that might have pushed things around. new european regulations aimed at banning free research have analysts leaving firms like barclays we will talk to a former analyst coming up. now as i mentioned joining me for more on the market action along with what is in store for the second half of the year, kevin o'leary. and fred lane checks in as well. and bill griffith who has kindly stayed around for all the fun we are going to have. >> why wouldn't i? >> kevin let's start with you. are you now loving the banks because they are squarely in your wheel house >> >> dividends now. >> i'm very, very selective. i've got two issues. i don't own any regionals. i sold into the rally on regionals. i am picking up some of the money centers. i have one concern it's this, these record announcements of stock buy backs that happened this week are concerning to me as an investor in the overall markets
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basically what the banks are saying is in the regulatory environment they are in they have no better ideas but to buy their own stock. >> i don't think that's fair. >> it's very fair. >> capital levels are so high they are basically in order to draw that back down to be more economical for the investors longer term they can either do it as a dividend or a buy back and the buy back is more tax efficient. >> i would prefer the banks actually redeploy their capital. but the restrictions they have on their capital and the amount of leverage raj they are allowed to put on it pales to what it was 20 years ago and they are the infrastructure of the entire economy and they are not doing their job. they are basically government regulated utilities. i'm not favorable in the way they are being treated i would like to see them unshackled so they can put more capital at work. >> buy backs have been coming down here, the announced number of buy backs from the peak they had hit the last years. >> banks are unique.
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because they are the financial infrastructure for the whole economy. i'm troubled that they are not being given the kablt at to go -- you know, i'm blaming our sub3% gdp growth on two things, regulation and constraints on the banks. i am blaming the government for that and i want it fixed. >> okay. fred, what do you think we are going to be talking about the second half of this year what trends are you looking for? >> first, it's wonderful to be with mr. wonderful i want tocomment on that and secondly, i agree with him on the banks i think that industryis so different from what i grew up in back in the '70s and the '80s and the '90s it is an entirely different industry i agree with kevin i think as an investor i try to steer clear, we try to steer clear of regulated strisz. the banks are heavily regulated. they still are i think it's discouraging there is not economic growth where they have more demand for loans which hopely is a better return
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on investment than buying back their own stock. we continue to focus on secular growth we think technology is in for a pause. we think it will rebound i think health care is going to come back strongly i think the consumer is going to continue to be strong. but i want to avoid anything that isn't driven bisek lumbar growth tail winds because there is no sense in fighting -- we have a lot of capacity across the economy globally, we have too much retail capacity we have a lot of manufacturing capacity and i want -- i want to focus on technology, internet, mobility, things with a strong secular growth. >> let me focus on what's on the screen height right here kevin we talk an awful lot about the big cap tech names and the run they have had. we just showed the dow winners year to date boeing is leading 27, 28%, mcdonald's up is a quarter then apple, visa is up 20% that feels like a broad rally, not one that's all about techs.
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>> it also indicates to me there is a good sound underpinning in the economy across all of these sectors, boeing and defense, and consumer and mcdonald's. the next stage for me is i am going to look at the small cap mid cap. that struggled to keep pace. if it's true that the economy is doing better as indicating with the ten year with the 2, 3 angle that is a small for me to move into mid caps and i'm doing exactly that using a ftse russel index. >> dow with a 8% gain. nasdaq much more than that, 14% gain essentially the first half. bob has a recap of the first six months. >> it's really about tech and health care. it's amazing health care has held up even though there has been a bit of a selloff in biotech year the date, tech is up 17%. i want to flag the fact that tech is almost 25% of the s&p 500 right now. that's an amazing move to the
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upside consumer discretionaries had a good run banks never went anywhere. better this month. energy has made no evident to rally despite a move he willier in the year. as far as the dow leaders, i want to show you the nice diversity weed in the dow leadership boeing in the classic industrials. mcdonald's, apple, visa, 3m, an industrial space, apple in the tech space nice diversity on the upside the laggers are created in the oil patch. chevron is down, exxon is down the banks, goldman is down old school tech. industrials are generally up, verizon also down, of course, the telecom hasn't been doing well at all. what about the second half of the year i think the important thing is that we are seeing some pushback against the leadership group, particularly tech. semiconductors are down this month. utilities are down obviously the rate increases are
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not helping them at all. the problem is there is not a lot of new leadership coming forward. we are a very murky period for example, everybody is cheerleading the. >> about rates are higher, they are returning money in the form of dividend hikes and buy backs that's what everyone is championing. there is a little movement here. other beaten up groups like retail and energy, there is a lot of people cheerleading for energy but no one is actually doing it because everyone has been burned. we need to find new leadership for the second half of the year. i think tech at 25% of the s&p, that's a little bit scary and a little bit high. rather see something else move the forein the second half back to you. >> bob, thank you. back here with kevin o'leary and fred lane, we found an area that you disagree on, that would be investing in europe right now. you like it. fred doesn't make your case. >> my case is this i look at these large cap european caps now, nestle, for example, or an higheser busch or
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roech, 50% of their sales are domestic. >> that kills me when i hear an sizer busch referred to as a european company. >> certainly it is, i own it, i own it because we drink it here. bottom line cash flow are good but i'm paying a significant discount on the multiples. i also think europe has good growth metrics going for the rest of the revenue this those growth companies and there are many trading at discounts to their equivalents in the s&p 500 so far that thesis has held through. 50% of the time on an annualis aboutis europe beats our domestic s&p why wouldn't you want to have 20% europe i rest my case, your honor. >> fred what do you say of course i have a long term orientation. i have a hard time trading in and out of sectors and in and out of stocks. it's just not how i behave when i look at europe i see
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declining popelations, i see very poor demographics, higher levels of entitlements than we have here in the united states i think lower levels of protect productivity so i'm discouraged by europe i do agree with kevin of cours that the valuations are lower. and as a sector rotation move, it could be attractive it just happens to be not the way i see the world because i don't like to move in and out of sectors. i basically belief in investing what i know with deep understanding and folk the us on those secular areas. to me europe flyings in the face of that. there are some great multinationals, kevin mentioned a number of those, those are valid investments. again, i don't like to deal with foreign currency issues either i would rather be u.s. centric. >> there arent plaintiff etfs that claim they can take that out for you. they were talking about the laggards, the sectors that are lower so far are energy and telecom in terms of year to date
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performance and fnlts are only up 6%. that's why a lot of people are piling in there. do you think that's wise >> i'm going the stick with what's been working. tech is taking a pause growth metrics are amazing in a company like facebook. i watched the advertising dollars in every sector under that platform. i think it will come back. my thesis domestically is that if the economy is there i'm going to add more to mid cap small cap for the secondtime and the other theme is more international. everything exu.s., everything exu.s., i'm using e, the fs because i can hedge out the currency as you said earlier and it goes across countries and gets you derisked. ontl is new. it is a smart beta product from ftse russel. that's the way it's working. look at the amount of cash flow into etfs. >> smart beta hasn't been getting the inflows. you think of being the new buzzy
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thing. bob was talking about this earlier, perhaps i am -- i don't know, it hasn't been off to a -- >> my concern is i will not go into a mark cap weighted product. you look at qqq, you basically only own five stocks in there. i want to be at least protected with more diversification. >> fred, as a doj alumnus who has been on the streets for a while i'm curious your take on the etf phenomenon that kicked in here especially this year what do you think, good thing? bad thing? >> it isa good thing for investors. frankly, a mutual -- i'd rather own an etf than a mutual fun just based o'on fee friction i think it is a good thing the issue of active versus passive is a different issue all together i think one of the problems with -- as an investor you have to make a decision are you going to try to outperform the indexes? if you are going to do that, you have to be created and be
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idiosyncratic. what kevin is talking about, is tremendously sensible for most investors but there are investors who i think seek active management and seek alpha. in order to do that you have to be concentrated and idiosyncratic. >> kevin a followon question comes from a you videoer says when do you buy europe versus international >> there is a difference, what happens is ontl actually owns global that includes canada, mexico and asian markets. oeur is focused on basically england, germany, france and italy. there is a difference. >> all the os are o'learys. >> ftse russel i'm one of the people that licenses them and i'm proud to do it. they are designed with me at ftse russel. >> is the international one europe heavy does it have a lot of the dominating names. >> no. it has all the those names but it's more diversified globally
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it's brand-new. we spent two years on that i am not talking about going in and out of europe. i'm staying in europe forever with 20% of the portfolio. i'll staying international forever with 20% because i just looked and realized i can never get over the next 40 years when to be in and out off the asian markets. i have over 1,000 stocks now outside the united states. first time in my life i have ever had that. >> fred? >> when you own a thousand stocks you certainly own the market i'm not interested in owning the market i'm interested in concentrated positions i own typically in a growth -- our growth portfolio we own 15 stocks that's what we own >> let's see how we do we'll meet up again 12 months from now and compare notes i'm excited. >> we don't need to wait 12. let's do it in six months, end of the year. >> you got it. >> kevin i look forward to that and i would love to sit down with you off camera. i can't talk about my performance as a matter of firm
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policy, unfortunately. >> that means it must be pretty good i'll give you that. >> it's quite good i like it very much. i am a little surprised. i have to say. >> i'm obviously pounding the table for etfs i'm using them now in a way i have never done before because i'm able to design my own. i am excited because the fees are less, transpaurntsy is great, liquidity is terrific and the tax efficiency is better than anything i have used before, yes i am talking my book, guilty. >> this evolved into an active versus passive segment kevin, fred, thank you both. have a great weekend president trump is reportedly intent on imposing import tariffs on steel and possibly on other imports. up election, larry kudlow is going the weigh in on whether that will result in a global trade war and how that could impact the economy and consume erls
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it may surprise you. >> it surprised me but it shouldn't have. up next, illinois just became a fiscal mess it's on the verge of becoming the first state with a junk band status it's mailbag friday. get your thoughts in via twitter, facebook or send us an e-mail closing bell at nbc
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over whether to impose tariffs as high as 20% on imports of steel. now white house spokeswoman sarah huckabee sanders said this afternoon that no decisions had been made but he willier today president trump did -- but earlier today president trump did restate his commitment of reducing the u.s. trade deficit. >> this is really a statement that i make about all trade, for many many years the united states has suffered through a massive trade deficit. that's why we have $20 trillion in debt. >> the debate over steel tariffs is related to a commerce department investigation into whether imports are a threat to national security. two sources tell me that the administration is very likely to find that they are but it's unclear what the white house will do next there is plenty of pushback from other industries u.s. automakers are saying any tariff could drive up cost even the whoet industry is against it they are worried they will be the ones that get hit if other countries retaliate against the
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u.s. also worth mentioning, president bush made a similar push in 2002 he lifted the tariffs as europe threatened to retaliate and the wto found that the steel tariffs were illegal >> thank you very much my let's bring in our friend larry kudlow, the senior contributor here at cnbc i should have known. this is one area where you entry with the president you are one of my mentors on economics, the ultimate free trader. >> i am a free market guy. >> you are against all tariffs, for the most part. >> yeah, unless you can really prove a case that a foreign country is not playing by the rules or is clearly sub si dies i am -- subsidizing. i am a free trader frump and i disagreed on it during the campaign. >> what happens? >> we move on to another subject. >> she is asking what is the
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strategy when there is a unfair balance >> oh. >> in that -- that industry is being subsidized and lowering the price artificially how do you combat that. >> if you can prove that by law you can impose temporary targeted tariffs many presidents have done that as was reported, w. did it, not for a long time. reagan did it a couple of times for short times. i believe obama also did it. in that case, where you can prove, yes, i'm in favor of temporary tariffs and then you work it out between the two countries. that's what you do in this case he also seems to be invoking national security, which is unusual and doesn't happen that frequently. >> very inforecastly it was a law put in in the early '60s it's only been used a couple of times. what is interesting here is how poor the case is the defense department,
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secretary of defense, james mattis it is reported -- it's reported, opposes tariffs for national security reasons. he is already hearing it from nato countries, you will get more of that from the g 20 meeting custom is coming up. a study -- in truth -- i want to be fair on this. a study done in the early 2000s by d.o.d. came up with nothing on this, that we were not hurt by imports at all. only 3% of our steel is targeted or earmarked for defense-related stuff. and by the by, the d.o.d. already prefers -- they have a preference for domestic production they don't really use imports. so you are okay on that. you are not okay, though, when you look at other parts of the story, the steel business, g got -- god bless them, some of it has improved but they raise their price as lot we protected them a lot. there is 150 duty orders out most of them in the steel business, one form or another. they are still raising prices
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faster than any other country in the world. furthermore, the global problem is you have got a big huge glut. you just do. and that's not doing to be solved by, you know, either quotas or tariffs. >> the title of this segment was, are we heading toward a trade war? let me ask you that. we haven't gotten to the point yet where we've fired some shots to speak of but what do you think the response will be from our trading partners >> first of all, i think president trump will in this, as he has had other areas such as to or nafta -- the bark is bigger than the bite right? and i think that's been very good policy. he establishes a u.s. preference himself, but will work with other people i'm hoping that's going to happen, particularly with the g 20 meeting coming up you have got two choices here on the dark side. you can go to tariffs, across the board tariffs or whatever, or you can go to quotas. all right? what i gather, secondhand information, is that they would look at quotas first. >> we are not talking about
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steel anymore? or we are. just steel. >> this is just for steel. is it going to broaden out at all? >> we don't know. >> that's what i'm asking about. >> oh, well sorry. >> no -- >> they are looking at aluminum also, beyond that i haven't heard. iron ore, aluminum, stooem steel i think. i think all of this is high risk, not so much for a global trade war. i don't think that's going to happen i don't think the stock market is going to like this at all it will suggest a trade war. people will make a bigger deal about it than it should. but look what about the consumers? this is always the issue you want to help your producers. again, if there is clearly proven unfair laws on the other side in the other countries fine we have to enact that. >> oddly, this seems to be something that appeals to a lot of trump voters. and the population of those are larger than the population of people involved in the steel
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industry why isn't it registering more from the consumer harm point of view or is it more after the fact. >> i think the information flow and information from all sides is yet to come in other words if the president takes action as far as i know, he can do it him. that's the point of 232, he can just do it if he takes the action then you will see the commentaries and the discussions and it will bring it more to a grassroots level. look, you want to help the steel people working it is a stricken businessings but you want to help them. just like you want to help the coal business. i get that i have thoughts. the biggest burden on steel in my opinion is regulations. let's wipe out -- trump has been great on regulations let's wipe out the regs. it's make it tax hospitable and allow immediate write-off for taxes purpose. let's do the homegrown stuff
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trade wars, they are not going to go any place. once people realize that housing prices go up, automobile car prices go up, construction prices go occupy, infrastructure pricing go up, public spending goes up. once that circulates into the information stream you are going to get a pushback on that. >> great point. >> hopefully, that will slow the train down i can i just say i know this is new information from me, let's lower the tax rates on businesses and let's not let congress go home in august unless and until they have done that. and then these problems -- >> i think you should stage a sit in you should go to congress and say i'm not leaving. >> i'm working as much as you will have me i'm here to make that case. >> i hear mcconnell's office is kind full right now. >> if you do that you are going to help steel, every industry, help tech, everybody will be helped geez it's so simple. why make it hard. >> four and a half minutes
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before he mentioned a corporate tax cut. >> i was restrained. >> you were. thank you to you. our wall street an -- are wall street analysts an endangered species coming up, we'll ask one former bank analyst whether he thinks big job losses to be on the horizon for wall street. >> a record number of americans are expected to hit the road for this july 4th holiday. new pain at the pump when we come back. (baby crying)
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time now for a cnbc news update with sue herera. >> a still developing story in new york city. police say at least five people have been shot at bronx lebanon hospital in new york in addition to the five victims, police say the shooter is dead he is a former employee of the hospital, identified as henry michael bellow, aged 45. it appears to be a workplace incident shlg not related to terrorism. oklahoma's attorney general is suing more than a dozen makers of opioid pain medications accusing the pharmaceutical companies of defective marketing campaigns. he says thousands of people have died and taxpayers have spent millions of dollars on unnecessary opioid prescriptions. paul mccartney has reached a confidential settlement against sony atv publishing in which he sought to retain copyright to
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songs of the booettles. on a lighter and happier note, indicate olea has selected five names from 90,000 submissions for its new blue crayon the choices are, dreams come blue, blue-tiful, blue moon bliss, reach for the stars, and star spangled blue people can vote for their choice starting tomorrow and the crayon will debut later this year that is the news update at this hour, guys >> here's my thing you can't fit some of these names on the crayon. it's bigger than the crayon itself. >> it would have to go all the way around spiraling i have a funny dealing given the fact this is going on over the fourth of july weekend. >> you see where this is going. >> star spangled blue is an easy in. >> bring it on. >> i agree thank you, sue. >> you got it. time for our fast take today. we begin with the sec expanding.
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do you think this will spark a rush to go public? >> two things, it was created to help small companies eliminate some of the red tape and everything it also helps them without divulging state secrets to their competitors. to expand this to large companies, will this mean a rush to ipos we have seen a decline in ipos in the last 15 years i don't think it had anything to do with divulging secrets. market conditions are not might. it is bad timing they can find the financing elsewhere. >> groupan complained about this first big move under the sec chair. don't get whiplash from gas prices just as they have dipped below $2 in some places they are going to have gasoline taxes that will send that back up in seven states starting tomorrow, just as people are hitting the road for
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july 4th. >> the easiest tax to impose is the syntax alcohol and cigarettes the second easiest tax to impose is a gasoline tax. you are seeing that in many states in new jersey, they imposed a 23 cent a gallon. we went from the lowest gas in the country to nearly the highest simply because of that one fell swoop to help infrastructure spending. >> you are welcome to fill up here in new york, especially in manhattan. >> infrastructure spending is expected to go up. next, sony is bringing i disney to make its spiterman coming home movie. sony will keep the box office profits, and disney will keep the merchandise sales profits. >> disney knows what they are doing. it is an interesting arrangement. as we see merchandising as we know has been very, very strong for them through the years
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i can't imagine they would enter a deal without thinking they are going to make a big killing. >> i think they know they have leverage because they have done so well with super to move cease east. >> germany passed a law that would fine companies who don't block or remove hate speech from their platforms within 24 hours. it would seem if the legal system turns against these platforms they will have to come up with better controls. >> you have to do something. i think twitter is doing what they can right now just anecdotally speaking, trolling has gone down. >> oh, yeah? >> i think not that it's going the bring you back. >> maybe it will. >> but you have got to do something. add punitive measures. i was reading they want to impose in germany very steep fines for, you know, hate language and other things on twitter. and i think it's about time. >> it's not just going to be twitter. by the way, we want to hear what you think, or -- we do >> of course we do
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you may do this. >> weigh in on any of these fast take topics by contacting the show on twitter or facebook or send us an e-mail. now it's deadline day in illinois if a budget deal is not reached tonight the state could be forced to stop critical services, to layoff workers, and it will have dire circumstance force the state's credit rating. >> very big story there. plus, beef prices have been beefing up since memorial day. coming up we'll look at how much more your july 4th barbecue is going to cost you. and why prices could still meet up from here of creative writing in the iss loofunou th ia t f we'll be right back.
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welcome back here's a look at how we finished today on wall street all of a sudden the dow's gains were cut nearly in half on the close there. >> just at the close. >> nkds down four. its first down month i think since last october now and the russel down about a point. >> look at the s&p winners so far in 2017. vert, x. act vision blizzard, align and within resorts
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technology and health care the losers, transocean, macy's, anadarko, and sig net. >> consumer discretionary positive as a sector because i'm pretty sure that's because amazon is in there illinois has been operating two years with no budget the deadline for lawmakers is tonight. leslie picker is out in chicago are how the land of lincoln is dealing with the budget battle and how it's affecting residents. >> it's going to take a lot of lincoln pennies to get ill i will out of this mess. today the illinois house has made some progress, passing a $37 billion spending plan but it's sorting out the hard part, how they are going the pay for it time is running out as springfield is less than nine hours away from a deadline to produce a budget for 2018. blowing through midnight could be a big problem
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s&p said it would likely downgrade illinois's debt to junk the first state to reach that level and the house speaking madigan would ask them to delay any changes to their ratings but it's clear patience in the state are running thin illinois announced it would shut down road construction projects because it can't pay road construction workers without a budget and the illinois lottery doesn't have the funding to pay its winners so power ball sales have already stopped and mega millions is due to stop today. bills keep stacking up it's currently at $15 billion, that's money owed to everything from hospitals to non-profits. there has been plenty of finger-pointing. here's chicago's mayor blaming the governor for the mess. >> i think the governor's, under his tenure, unpaid bills have gone from $3 billion to $15 billion. it is a failed state under his
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leadership >> now, he did not agree to our multiple interview requests but it's clear that both parties are fed up with the political brinksmanship. >> you know, i know they are going the blame the governor but i'm sure he was elected a couple of years ago to fix this mismesmismesess, this is an old story in terms of the problems there in illinois it's not clear -- he has thrown everything into it it's not clear if anything is going to come of it. it's not clear where that leaves the state. >> a lot of people point to a tax increase that expired after the governor took office which led to a huge decline in revenue for the state. and no one has been able to agree on how exactly to make up for that revenue loss. no one wants to raise taxes. illinois has by comparison high taxes relative to other states and the population is leaving as a result >> and the biggest problem -- i mean not problem, but quandary, if you will, is that they can't
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touch the pensions this is why this is so important for everybody else because everybody else who has underfunded pensions right now and thinks it's going to be fine and you don't have to deal with it, see what's happening here. >> good thing they can't touch the pensions >> exactly exactly. i mean, you look. there are 11 states that are reaching the deadline today. they can't agree on a budget deadline a lot is because of the underfunded pension deadlines. how to fund them whose responsibility is it, who can take a cut these are important questions. as you mentioned the markets have been going up and up and what is going to happen when there is a correction to these pensions >> that's a big question a lot of the states are grappling with. >> what is that warren buffett said, tell legislators in any state that they don't get paid until the budget is balanced >> that's a good one. >> would it get it going there. >> i don't know how it would resolve this one at this point thank you leslie. >> thank you >> see you later.
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>> thank you. meat eaters may soon be asking where's the beef as supply pressures mount details on that. first, analystsare fleeing big firms. does this mark the death of stock market research. their leadership is instinctive. they're experts in things you haven't heard of. researchers of technologies that one day you will. some call them the best of the best. some call them veterans. we call them our team. it's been over 100 years since the first stock index was created, as a benchmark for average. yet a lot of people still build portfolios with strategies that just track the benchmarks.
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but investing isn't about achieving average. it's about achieving goals. and invesco believes doing that today requires the art and expertise of high-conviction investing. translation? why invest in average?
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new european regulations which are set to kick in next year reportedly have caused three research analysts at bark clay's to leave and start their own firm these new rules would ban free research and instead aim to eliminate conflicts of interest by requiring asset managers to separate trading commission from investment research fees
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now many investment managers pay for research when trades are made through the sell side firms. >> now they would have to pay much more directly will these new regulations lead to the death of wall street research paul, thank you for joining us how big of a seismic change for the industry is this >> it's going to be a big change we are talking about soft dollars. we are paid on soft dollars for the last 20 to 30 years. and now they want to get rid of that and actually have the research being paid for. so you have to distinguish what you are paying for in that research platform. and it's going to be very different. is it going to mean layoffs? it's going to be different i don't know if it's going to be layoffs but i definitely think you are seeing pressure even before this on salaries across the border on sell side research i think it's going to continue the put pressure on the downside how is it going to change it we'll have to wait and see. >> what spurred this
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>> i think it's coming from overseas inwhat the regulators want is independent research that's very difficult for anybody to put it out there on these investment firms you know n the back when i started back in the late '90s we were just an extension of the banking arm more than anything else i mean, i think at fbr we were abling to very independent but there was a lot of regulators thought a lot of this research was not independent, especially during the tech boom in the 2000 >> right and you were -- >> yep >> you were likely to have analysts issuing a sell recommendation on a stock that their firm had a big inventory of wasn't that a problem for a lot of wall street >> it wasn't really a big inventory. it was tied to the banking side. if there was a ipo and you were tied to the bank it was tough to put in a sell side in the crisis it accelerated with the regulations
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i think there is a place for sell side research i think it's -- i mean, i think that we need it out there for the stock markets but the independency has always been questioned. i've even questioned some of the stuff that i've done saying that, i think regulators always go a little bit too far i think this is too far. >> paul, because you are right, this is a european rule that's going to go into fact. because companies have such global operation as lot of them have to respond the same way and affect the u.s. product. >> yes. >> here's a uk guy, commentator, so he's not going to fall under this umbrella bee you said the independents are original thinkers but you fear they might lack the access to information that the big banks have. is that still the value added for research on the sell side? there is this idea they are close to the company and that you are willing to pay for it. >> it comes down to are you getting paid what seat you are sitting at or for being
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independent? i think what's going to happen is you have to be independent and be an outside the box thinker to get paid. but at the same token sometimes being an outside the box thinker you are there because you have a lot of access to management. i had a lot of access but not the access that a goalman analyst or bank of america analyst had. that put me in the box saying that, you are exactly right. leaving some of these bulge bracket firms you are cutting off your access, once you duty off your access you you have to prove yourself it's going to be interesting whether some that leave the ball bracket firms can get paid it's going to be very interesting to see how that plays out. >> i shouldn't be bringing this up this late in the interview. i'm curious. we live in a world where indexes are popular. etfs are ruling the day. does that mean there is less
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demand for sell side analysis anyway because for the most part investors aren't picking individual stocks. >> rule iing the day. nobody's picking macro trends, so the stock itself is being you know, the level of worth is going way down and that's why you see a lot of us right now not, we're not, it's swrus hard the to get paid today being a micro analyst in anything. >> that's exactly what i was going to ask to that point if there's some european banks who are going to say okay, we'll charge you 180,000 euros a year or 450,000 if you want direct access,ity charge to have a saly like you once had on wall street >> i think it's going to be difficult to get paid going forward. it was going to be difficult without this, but with the new regulation, it's going to be you
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know, you see a lot of guys hanging the shingle out. it's what can they get paid for. that's the big question. >> thapgs, paul eric appreciate it hang in there. >> paul merrill. >> the fourth of july is just four days away, but it kind of feels like it's already here because we're heading into the weekend. monday is a short trading sessions barbecue fan, you'll be paying more for the burgers >> the "fast money" traders will give you their catch up trades mi uatheco hf t yr congp t top of the hour
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succeeding in the second half the sectors to watch biggest day for american barbecue is approach, but it may cost more than it did over the memorial day weekend adidi roy has the story for us >> that's right. nothing says july fourth like a good old burger on the grill or in your hand, but this could cost more now than it did over memorial day weekend experts tell me typically, u.s. beef prices pique towards the end of may they're not seeing that this year because the weak dollar
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sparked an uptick in exports going to other countries and they say there's been a reduction in imports coming into the u.s. for beef for the same reason there's also been a lot of talk that opening up beef exports to china for the first time in 14 year, which by the way, started today, would also lead to an uptick in u.s. wholesale beef prices, but angtists say they'ro going to get that just yet because there's so many resfrixs it's not just ground beef. the it's also steaks i talked to the owner of bobby van's and he tells me a slab of beef this month cost 30% more than it did last month so he's just eating the cost by the way, to add insult to energy, if you want bacon, prices are also unseasonably high, which means i better just bite into this before it gets more expensive >> a little birdie told us you wouldn't bite into it.
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you'd have a knife and fork. >> you would >> you heard that. i'm actually cringing holding this because it's greasy >> don't wear a krns logo while you know -- >> you're done >> give all of us a bad name >> looks delicious >> thanks, guys, have a great fourth i'm going to bite into it now. bye. >> there -- >> i had to see that >> back to you graceful way to do this. >> you can tell the camera that. doesn't mean it's going away >> we promise it's done now. imagine how she'd do eating barbecue beans, for example. >> by the way, mr. barbecue bean, look at these. i was saying earlier, i didn't know they came out of something other than a can >> make them absolutely and a friend of ours has a daily
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news digest called nonpolitical news and they asked me to write a column about barbecue for the today and i put in my barbecue bean recipe and another recipe of side dishes as well >> how long do those take? >> that? well, preparation is ration is maybe 15, 20 minutes, but simmering for at least an hour >> not bad >> and make them the day before, too, by the wii. they're better the next day. >> throughout the show, we've been asking dwrou contact us share your thoughts about the program. here are some of those very comments >> okay. alex tweets about nike's partnership with amazon saying amazon is a killer of jobs and retail big mistake to sell on amazon. people have said the same thing about walmart for years. >> if amazon is now going to get that scrutiny, good luck to them >> i understand what he's saying, but success is success >> by the way, i'd rather know i was buying direct from nike than from a third party retarial.
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>> on the flip side, we got this from my stock life said closing bell, we love you guys, let's go nike just do it >> we love you, too. >> nike followers there. so from bill coleman, he tweets to me, bill thinks it's a good thing the outlandish pensions that are strangling the state in this case, illinois, cannot be touched. turn it around think of the number of states who have had budget deficits through the years and what do they do to solve that? take money from the pension funds and solve their budget problem then suddenly, they have f a pension deficit problem. that builds over the years as they kick that can down the road that is stealing from those pension obligations from the people promised that match up. if you're going to solve it with pension, freeze the pension. ups did this the other day freeze it in a number of years then that's not an obligation down the road. >> i think pennsylvania just made some changes alopg those lines. scott writes in an e-mail weighing in on germany's social
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media story, he said banks and financial services have been forced to spend billions to find money laundering relating to sanctions, terrorism, et cetera. social media tech companies have been exception and i agree with him. tech is the nwall street. >> absolutely. >> about our decision on cable bundles -- he went from paying $164 a month to 45 90 channels. no contract, no brainer. >> i know you're supposed to live in the present not the past, but i just miss the days when you walked over and turned on the television and had 13 channels to choose tr. >> pam e-mails us of course i will pay that. meaning how much the service cost, but not for one that i have to cook >> come on, pam. cooking is fun it's restful >> and anytime you want me to come over and eat what you've worked so hard on, i -- >> you and mr. evans are welcome
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to come over anytime >> there's blue apron trading down about 6% today. its ipo price was $10 yesterday. thank you so much. >> my pleasure this was too fun have a great weekend i'll see you monday at 12:00 have a great weekend and "fast money" begins right now. "fast money" starts now. live from the nasdaq market side, your traderens on the desk -- >> elon musk tweeting a hint about big news coming this weekend that's got wall street on edge. we'll tell you what it is and what it could mean for the stock, plus, when they call it the worst chart ever, but now, there's a beaten down name he says is a screaming by and the fang stocks getting crushed. if you flost must be, don't forry. we've got a a wa


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