tv Closing Bell CNBC August 2, 2017 3:00pm-5:00pm EDT
guilt. >> white house spokesperson had to deny that this comment ever happened tomorrow, tune in, make it in america what's the hardest industry to make and sell in the united states probably coats, right? you can get them anywhere. making clothes right here in america, it's not american apparel, they don't exist anymore. >> going to be a good one. thanks for watching power. >> closing bell starts right now. we've got some ideas >> what? >> about how we might fix up the white house. >> well, the kennedy's did that. >> and great effect. maybe this one needs more structural -- don't change it -- >> you don't need to add on wings, there's already an east and a west wing. welcome to the "closing bell," i'm kelly evans. >> and i'm bill griffin. you've missed nothing. >> speaking of the white house -- >> scaramucci out, apple
earnings, just to name a couple of the main things >> meantime, just tuning in, with the dow is trying to close above 22,000 after crossing that threshold first thing this morning. courtesy of apple. the blue chip average also trying to extend it's win streak to a seventh straight day. we're just there, we're 22,900 >> and it is apple single handedly helping the dow stay in positive territory apple is now up 40% just about this year. we are going to discuss how much further it can rally shortly >> and as you've heard, tesla heading up another huge hour of earnings instant analysis of all the numbers as they are released plus a debate coming on whether you should buy or sell tesla >> yeah, a lot coming at us this afternoon. aig among others let's begin with the market where the dow crossed above 22,000 for the first time today. bob right in the middle of the action, bob. >> and guys, there is one new high in the s&p 500 today.
one, that's it, and that's apple. but it's a big mover it's up eight points now eight points translates into almost 60 points in the dow jones industrial average, and that is the stock that's gotten us over 22,000 wasn't a big help in the last few days there've been a number of other ones you won't see this often, just in the last four days, the dow is up 253 points wait a minute, s&p 500 is down 1.5 points you won't see that often a very small number of stocks brought us over to 22,000. one was apple, another one standing here right at the post for it this is boeing, huge performer down label the yesterday in the prior three, four days, it was up almost $10 that's another 70 points that you add on to the dow jones industrial average other stocks that have helped recently, 3m has been a nice mover since the earnings report came out little while ago. it was down label the and rallying we also seen some other stocks that have been doing well in the group here here's where the future lies
some of the hope we have oil now hovering at $50. the hope is the third quarter. where are we going to get the stuff that's going to move us to 23,000 chevron's been a good performer since earnings came out, with oil, if they can get over $50. that's going to be the big hope to get energy stocks that's been a heartbreaker and a lot of money lost on that deal the other big hope for the trade is maybe more talk on regulation, reduction of regulation, maybe we'll see financials moving up another group that's been an underperforming this year, but again, a lot depends on what happens in washington, guys, back to you. >> all i know is a growth industry would have to be the hat guy. this is the third millennial number we've crossed this year, and this guy's making a mint and i just, i just noticed on the back who it is so congratulations to that trader whose put those -- >> quick work by the way >> yeah. i wonder how long he's had those waiting to go. so okay, shares of apple surging after the earnings beat last night company seeing it's best revenue growth in seven quarters, it had
a major goal with the app store driving it's services division to a record high which now makes it the size of a fortunae 100 company. can it continue? >>let bring in william blair and david trainer, the ceo, bull, bear debate, and you're our bull on apple so tell us a little bit about how much bigger this services piece of the business and the overall thing can get from here. >> so, thanks a lot for having me this afternoon. you know, people are focussed on many moving parts. i think there are a couple of key takeaways from yesterday that led me to being completely positive longer term you guys talked about the services revenue 16% of revenue and their ability to maintain their gross margin targets of 40%, and most importantly, when you look at the market, the competitive landscape is next to nothing.
the only other competitor samsung is having structural issues so when i look at the business model, i think investors over time will attribute this business modelling to less of a volatile, hardware company, but more of a sustainable, profitable, and stable recurring business model that would result in some form of multiple expansion which you're seeing and the software revenue is going to be a driver. >> okay. sorry. >> let me get to david and get his side of the story here yesterday before the earnings came out, i understood the skepticism, maybe there would be a lull in iphone sales as people wait for the next generation ipad sales have been stagnant. on and on. didn't any of that -- wasn't any of that skepticism for you after the earnings came out last night? >> i think a little bit is a lay, but i don't think a quarter or two is enough to make a trend. we saw double digit declines and all hardware units last year, and that's why tim cook is shifting the focus to services
but the services world is a completely different world we're talking about competing against google and spotify and amazon, not blackberry and nokia anymore. and the margins are far, far lower in services. so i don't think -- apple's been a great company in the past. titanic, biggest market company in the world i don't think they're going to be produce another titanic which means wie at peak profits and the stock isn't going to be what it once was. >> and yesterday the hardware was a big part of the beat ipad shipments looking good in a couple of years. and, and pc or max as well, even though overall pc sales have been kind of slumping. so, this is a company that's still needs to innovate on the hardware front too david brought up a good point. let's focus a little bit when we talk about a block buster product or the next big wave and all of that stuff. you know, when we look at apple,
what it is trying to do is keeping it's innovation and lead on thehardware platform. and what do i mean by that the processer. the memory, the camera, and battery life and effectively what has happened is that the democratization of innovation in the software space now david pointed out that google and all these guys are going to be leading. see one very important thing -- google had launched android, what happened to android the problem is once you get into mobility power constraint environments, the integration of hardware and software becomes a lot more important, and apple created that when people say there's no innovation there the only innovation they have to do is make sure that the hardware platform becomes an anger point to talk about augmented reality kits that's the kind of stuff these guys have to do. at the end of the day, it's a single digit grow on the top line, 10% grow on the eps, it's not going to be a hyper grow company. but you can have a 10 to 15%
return on annual basis >> okay. david, before we go quickly, anything that would change your mind >> not really. i don't think we're going to see the incremental growth that we've seen in the past i think the expectations for growth are a little too high and we're not talking about the past apple, we're talking about the future apple i don't think see anything that's going to be nearly as bright as the past >> and here we are up 5.4% today on the trading day good to see you both, neil, david, thanks for joining us >> thank you >> appreciate it very much let's talk about the overall market today with the dow above 22,000 right now, and just barely with that 41 point gain eric ross, chief investment strategist at cassen securities. we have danielle booth, the president of the money strong and post nine with us today. and jack and the chief economist and co-founder of ucx at the cme in chicago eric, so here we are 22k -- >> here we are.
>> strong earnings, low interest rates, the trump bump, is that what's going on right now? what are you seeing out there? >> we think the economy's humming worldwide. we're seeing our measurements, container shipping and finished goods is going up. we see chemicals are stronger, steel is stronger. factory tools are being sold into consumer products we see a lot of activity and continues to increase off of last year. >> jack, at the same time, some of the data's been a little soft, just even looking at private sector jobs number this morning, you know, the core inflation number yesterday, so how do you think that feeds into this whole environment >> you know, kelly, something's happening here underneath the surface. we're all patting ourselves on the back, 22,000, you know, but there is a big disconnect. not only between the price wave at dow jones which the president talks about, and the s&p, which all the money managers talk about, but also between the bond market and the stock market. there is an -- feeling
underneath all of this that the market is getting top heavy. the entire index is going up because of it, but we're not getting the solid legislative print that people want for this market to see a prolonged rally. remember, the dollar's gone down 10% while the market's going up 10%. unless you think the dow is going to down another 10% or see apple go up another 40% over the course of the year, then stay long, but i don't see those things happening it feels as if it's time to start lightening up. >> and clearly daniel, the tent poles has been those low interest rates that the fed put in place but, you know, they've begun the process of normalizing those rates, do you sense that they're going to want to pick up the pace at all? or is it just still steady as she goes here and does that help the stock market do you think? >> i don't think janet yellen would be using the term autopilot if she wasn't scared stiff about what it's going to look like if she decides to pull the trigger and really start
extremely methodically shrinking that balance sheet in september. there are two more big payroll reports coming out before the feds next meeting, and they will be extremely data-dependent giving the softening in au autosales, rolling over, we're seeing a lot of other metrics peek i'm beginning to pay attention to weekly jobless claims because they appear to have finally bottomed out and are starting to tick up. i think janet yellen's fed right now is extremely data dependent and they're going to be very, very careful moving forward. >> danielle, let me ask you about some of the comments president trump had about janet yel than we saw in the full transcripts in the recent interview with him he said, he spoke well of her, i have a lot of respect for her, i like her, it's early to make the decision i would say yes, she's in the running to stay. she's done a good job. i'd like to see rates stay low she's been a low rate person believer and we've heard this from him a couple of times now. what does this all say to you? >> you know, there was a put,
the yellen put, this is the trump put, this is trump's ultimate insurance policy to try and safeguard his rally that he is attached his name to and the best way that this debt man by his own definition can do that is to keep rates low and you do that by keeping janet yellen in office as opposed to having her leave come the end of january. >> hey, before we go, so early in the year, technology was leading the way and getting the dow down 21,000, lately though, it's been the industrial companies, the brand names, the boeings, the mcdonald's, the united health. what's going to get us to 23 what are you investing in right now? >> we're looking at a chemicals we think are still growing year over year we're seeing good prints we think they're going to continue through the rest of the year we're looking at steel companies, they're improving in a dramatically low, and i think the automakers, even though we're seeing numbers come down we're getting close to the
bottom this is a good risk return over the next couple of months. i think over the next year, you're going to be happy you own ford and gm. >> all right we'll see what happens eric, danielle, jack, good to see you all, thanks for joining us today >> i like that trump put >> the trump put yes. we had a bernanke put for years and years, now there's a trump put. let's see, we've got 47 minutes left in the trading session here and at least for the moment, we're above 22,000 on the dow, the s&p is lower, the nasdaq now up a point and the russell down 13 >> and shares over 13% we're going to debate whether you should buy this beat up stock which is still up heftily year to date, but earnings report is due out after the bell top white house official suggesting changes could be coming to deductions for 401k contributions. ceo rod martin tells us what that would mean for your retirement and bottom line we love to hear from you reach out tote show send us an
all right. they're going to tease us. the dow is back below 22,000 as we head to the close we've got 43 minutes left. s&p, nasdaq's negative again, russell down 14 points so we're going to watch this as we head to the close see if we can close above that millennial figure today. despite reporting an earnings miss for the second quarter, earlier this week, voya financial is up more than 60% in the past year, and playing a big part in voya's growth is the company's retirement services. >> now lawmakers in d.c. are
debating whether to keep the deduction for 401k contributions. all of this the push for tax reform how would this impact customers going forward? joining us in an exclusive is the ceo, rod martin. welcome back >> thank you, good to be back. >> this feels like a huge deal it must feel like that to you given how big a business retirement is. how likely are the changes do you think? what is your expectation of what's going to happen in washington >> our expectation is there's still a lot of geography in the discussion around tax reform, and tax reform is the retirement what we know for certain is that americans need to save more for retirement certainly tax reform is in the line of sight, need to remind people that it's really a tax deduction, not -- >> but if people need to save more for retirement and d.c. is aware of that and wants that to happen, why would they take away the deduction for contributing to your 401k >> in our view, they shouldn't
we should find additional ways to incent americans to save more we know americans are undersaving for that outcome certainly it's a large pot of money that the population is looking for, and it's natural for -- at this point in the discussion for that to be in school what we really think is a bipartisan discussion should occur over a period of time and rational thinking for all americans kind of i merge as a solution >> but what you said a moment ago is something i've been thinking about even with the deduction, the whole point of the deduction for retirement plans was to encourage people to save more for retirement but we're still not saving enough, for various reasons. even if you take it away, will it change that much of the equation, do you think >> let me clarify, it's a tax deferral and not deduction >> i get that. >> even with that, it is not enough one of the things we found in the research and we found in our experience and our business is growing nicely at this point is americans need more education, more support, and more encouragement to save money.
and it's in all of our interests that this happens. >> just to clarify, you don't -- do you think we'll see an appreciable decline in retirement savings should they end the deferral at this point >> without knowing what the other solution would be, if that happens, i think that could be the outcome. and so, i think good ideas need or it presented and it needs to be a balanced bipartisan conversation >> so you think this is all just part of, you know, we're looking for the pots of money and here are a couple that, you know, allow us to craft and plan like we like, but they wouldn't touch it >> i think it's a natural part of the stage of the discussion at this point in time. whether that becomes the outcome, it's way too early to predict and understand both from the white house and from congress it's just unclear at this point. >> before we let you go, and here we see it down 22,000 talking about how people are not saving enough for retirement, and we keep hearing how people are underinvested at the same
time, are they >> they are. and we've continued to ever since we've been a public company which is now, since 2013, grow in and encourage people to save even with that, our company and all other companies that are in our business, it's still occurring. there needs to be a continued education, continued information, and all of the appropriate incentives, balancing all the discussions that are occurring that are needed to help americans save more to be prepared for retirement >> and real quickly, how much better would your earnings look, performance, et cetera, if we had higher interest rates. >> interest rates we talked about this the last time interest rates matter for americans for voya and companies like ours. so certainly, a increase in interest rate over a period of time would really make a difference >> to say the least. rod, good to see you again >> good to be with both of you >> joining us here at post nine.
>> we have less than 40 minutes to go. dow sitting at 22,000 today. we haven't closed above that level, although now of course we've hit it intraday. the averages are slightly lower, the russ sl down 1% today as the dollar is below 93 on that dollar index auto nation shares or one of the companies under pressure major changes in that industry we'll have the details in a moment plus president trump reportedly set to take trade action against china we'll find out if that could spark a trade war and hurt our economy. that's still to come on closing bell that yacht life, life, life ♪ ♪ top speed fifty knots life on the caribbean seas ♪ ♪ it's a champagne and models potpourri ♪ ♪ on my yacht made of cuban mahogany, ♪ ♪ gany, gany, gany, gany ♪ watch this don't get mad
welcome back with apple helping the dow to gain 38 points today, different story on the russell, bill, it's down 1%. >> yeah. i'm just watching that dow we'll see. >> 22,001 right now. >> hold on to your hat's everybody. autonation is getting hit hard today after that earnings and revenue miss this morning. company reported a 21% decline in quarterly profit due to lower new vehicle sales. ceo mike jackson spoke about that decline in new car sales this morning on squawk box >> it's really a shift towards nearly new vehicles away from brand new vehicles because of all the lease programs started three, four, five years ago, we now have three and a half, four million, four and a half million vehicles that are nearly new, coming back to marketplace
three to five years old. and so, much higher than the normal return rate and consumers are looking at this and saying, well, that's a great value. >> right >> so if you've thought of the marketplace as a combination of nearly new and new i don't think it's changed that much but there is definitely a shift. >> you know, it's an interesting point because if you look at the total level -- we talk about the level of new car sales, which is, you know, 16, 17 million a month. that's well over 50 million. i guess his point is, overall car sales are just fine, it's just that the new share of that is shrinking. >> well yeah, we talked about this yesterday while you were gone the amount of time that new cars are spending on the lot right now is about 100 days. which is about triple what it normally is. little less than triple. and a lot of that is because of the number of used cars that are out there or nearly new as mike jackson put it >> gently --
>> the euphemisms for used these days whether this is just a cyclical downturn that happens all the time or whether there's something different going on right now. and i sense that there's something different going on right now. >> with the shift to electric. >> the shift away from internal kbux, waiting for better electric car and all of these other things going on. i think that, you know, we're seeing a definite shift in the automotive industry right now. >> and i should just be clear, that monthly sfig an annual run rate whether it's 60 or 50 million total. even if if you shifted to fleets of shelf driving cars, you'd see a reasonable number of car sales, i would think, but who knows what that's going to look like >> and the number of millennials who don't drive. >> that's too. you've got your phone. who needs the freedom of a car time now for a cnbc news update with sue herrara. >> here's what's happening that the hour, president trump announcing his support for legislation that would cut in half the number of immigrants allowed into america while shifting to a merit-based system of entry
the bill would scrap the lottery system and instead institute a point's based system for earning a green card >> as a candidate, i campaigned on creating a merit-based immigration system that protects u.s. workers and tax payers, and that is why we are here today. merit-based. >> vice president pence attending the charter summit of westernball kin nations. pence completing a three country tour designed to reassure eastern europe of washington's commitment to it's security. brazilian soccer star told barcelona he plans to leave the club with a block buster move to paris and it's imminent apparently, barcelona responding by saying, his $262 million release clause must be paid in full that's the news update this hour and that is a lot of money, guys back to you.
>> yes, it is. thank you, sue very much. we're heading into the final half hour of trade with the dow sitting right at 22,000. joining me on the floor of the new york stock exchange is mr. steven grasso. you want to tell me what you just said. >> which part? which part >> don't do that >> okay. >> so this is our third millennial level we have gone through this year. >> right >> we started the year in 19,000, now we're at 22,000 and show nothing signs of giving up. >> it's the dow domino effect. you keep knocking down these resistance levels. path of least resistance remains higher when you look at passive investing, what do people do now? invest indexes, atfs, single stocks they still do it, but they wind up saying, i want to buy tech, i want to buy xlk. >> does that trouble you at all? is that a problem? >> i think it could be a problem because it forces a lot of purchases and sales in the underlying constituents of that index, but i think as the market
as a whole, bears have been hurt, bulls have been rewarded >> let me ask you one sector you've been watching carefully, we all have, the transports -- >> sure. >> they've suffered mightily recently, but you're seeing a little sign -- >> today they bounced off the 200 day moving arch, same in may and proceeded to rally quickly about 7.5% and ultimately 11% off that low where they bounced. today they bounced again does it mean the overall market goes high kper not sure if it breaks again tomorrow or if rallies again tomorrow, better indications, but still, palt of least resistance, higher >> okay, very good >> you want to tell them what you said before? are you sure >> not going to do it. look in that camera and tell them >> thank you so much for joining us >> thank you >> kelly got us all wondering, guys, thank you. 30 minutes to go dow is hanging on to a gain bolstered by apple 39 points higher sitting right at 22,000, s&p, nasdaq, russell
lower. president trump reportedly set to get tough on china' trade practices. up next, the latest from the white house and discuss the potential fallout from a trade war with china after the bell, tesla highlights another big day for earnings we'll have instant reactions of all the results you can see including cheesecake factory, and debate on to buy or sell shares of tesla. stay with us who's the new guy? they call him the whisperer. the whisperer? why do they call him the whisperer? he talks to planes. he talks to planes. watch this. hey watson, what's avionics telling you? maintenance records and performance data suggest replacing capacitor c4. not bad. what's with the coffee maker?
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welcome back with the dow now, there you go, bill, back below 22,000 >> they're going to take it right down to the wire >> 34 point gain while the s&p is down four russell's down 14. >> we've been hearing that president trump may be on the verge oftaking action against china over his trade policies. kayla is at the white house with the details. >> reporter: bill the escalation of the north korea threat has deepened the president's frustration with china, but this
investigation into china's trade practices have been going on for months and could come to a head as early as this week. with an exercise of section 301 by the u.s. trade representative that would essentially put duties on any companies that the administration finds to be stealing intellectual property the fear of the administration here is that the operating structure that china is requiring u.s. companies to operate over there, joint ventures, data sharing agreements, the requirement to have data centers in china means that there are indeed some of their proprietary research and their intellectual property ends up in the hands of chinese, as their ambitions in innovation and technology are growing it remains to be seen exactly how far the administration's willing to go with this or how far it can go without running afoul of wto rules if it does overstep it's bounds or seen as an overture too
forward to the chinese with whom they've been trying to cooperate on trade since april, here's some of the ways that experts say china could retaliate. they could institute tit for tat trademark or ip disputes they could impose restrictions on the imports of u.s. soybeans or aircraft manufacturing. finally, they could sell treasuries of which they hold quite a large amount, causing a major sell-off in that market over here. it remains to be seen exactly what this policy will look like other whether the announcement simply will be the opening of an inquiry that will itself even take longer, but it is clear the president still has china squarely in it's sights on trade with the commerce department also studying separately anti-dumping measures on steel and those could come in a matter of weeks as well, guys, back to you. >> all right, kayla, thank you very much. joining us right now to talk more about this. eric altback from the stone bridge group served as deputy
trade rep for china affairs under president george w. bush eric, thanks for joining us today. >> thanks for having me. >> how unusual is this for the u.s. to be investigating possible trade violations if you want to call it that, when we're both members of the wto? does that con train them does that violate the spirit of wto or what do you make of that? >> the section 301 provides for the u.s. government to investigate trade practices among ourself trading partners that discriminate or harm u.s. interests. so, the issue here is, what do you do when you get to the end of the investigation so, the administration will announce the particular policies of concern with respect to ipr, force technology transfer and other kinds of issues, but after the investigation, the decision has to be made we'll initiate negotiations with china to resolve the issues that have been identified, but will they
take unilateral action to impose tariffs? impose other market restrictions on chinese access here in the united states or do other things that might violate the wto that's the key question. >> so, eric, let me ask you this, how do we go from this kind of investigation into the trade war rhetoric that is being thrown around? >> well, i think, you know, the broader context for this investigation that's about to be announced is that the honeymoon period and u.s./china relations at the beginning of the trump administration is certainly over the disappointment on cooperation on north korea and increasing frustration about the lack of progress on the trade agenda is clearly causing the trump administration to identify new tools, new mechanisms to push china harder. and this 301 investigation i think reflects that growing frustration together with the 232 investigations of steel and alum numb imports and --
>> right >> and the investigations into chinese avoid dance of our an i did-dumping rulings against them >> mr. trump has said that if the chinese will help on north korea, they get a better trade deal is that part of this this kind of saber rattling going on with this investigation trying to encourage them to toe the line or north korea and do you think it would help? >> it's an interesting question. i don't think it would help. in the past, administrations both republican and democratic have tried to really separate out national security issues like north korea and our very challenging trade agenda with china. the trump administration has explicitly linked those things with president trump saying, if china cooperates on north korea, we will give them a better deal on trade i think that's a very dangerous strategy north korea issue is incredibly complicated and difficult, and the decisions that china will
make on north korea will be based on it's assessment of it's national security interests. china will not be bullied on trade issues to take action on north korea that it does not believe are in it's interests. so i think it undermines the credibility of our dialogue on trade to link it with north korea. i don't think it will be effective and i think it just creates challenges in our negotiations, either on trade or on national security issues. >> all right eric, thanks for joining us today. >> thanks, eric. we'll see what comes of the investigation and any steps that follow >> 20 minutes left here. the dow is at 21,999 we'll see what happens president trump earlier today endorsing a new senate bill aimed at slashing legal immigration and it became a hot button topic just moments ago during the white house press briefing and last is not a position goldman sachs usually finds itself in, but that's the case
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pulling back now oh, we're in a hole. >> not today, then we've got tomorrow and the next day and the next -- >> i'm not going to be here. we'll see. five points away >> come on, somebody buy >> let's just get this done. meantime, some fireworks tied to immigration at today's white house press briefing john harwood with the story here, what happened, john? >> didn't get as much attention as his attacks on illegal immigration during the campaign, president trump last year said he was for reducing legal immigration and today he was behind a bill to reduce levels of legal immigration both is a challenge for the u.s. economy which needs workers and also a challenge to traditional u.s. policy. and that produced very sharp exchange between white house aid steven miller and cnn correspondent jim acosta at the white house briefing >> jim, have you honestly never met an immigrant from another country who speaks english
outside of great britain and australia? is that your personal experience but that's not what you said and it shows your cosmopolitan bias >> it sounds like you're trying to engineer racial and ethnic flow of -- >> that is one of the most outrageous, insulting, ignorant, and foolish thins. and for you that's still a really -- the notion that you think that this is a racist bill is so wrong and so insulting >> not unusual that you have sharp words at a white house briefing under the trump administration, those were especially stharp, that's the kind of exchange that president trump probably liked to have members of his base here on the other hand, republicans in the senate have expressed objections to this bill and it's not likely to become law, guys. >> yeah, i mean, wow that'll reverberate. john harwood, thank you. beyond the theater of the press briefing, it would cut legal levels and have a big impact
steve leishman has more. >> economists in general don't give high marks to this bill which would cut immigration in half and make the system more skills-based let's listen to what the president said about the raise act. reforming american immigration for a strong economy >> the r.a.i.s.e. act ends chain migration and replaces our low scale system with a new, points-based system for receiving a green card this competitive application process will favor applicants who can speak english, financially support themselves and their families, and demonstrate skills that will contribute to our economy. >> economist are most concerned about the decline in immigration. that would reduce the labor force growth and overall economic growth. group of 1400 republican and democratic economists in a statement in april said quote, the benefits that immigration brings to society far outweigh their cost and smart immigration
policy could better maximize the benefits of immigration while reducing the cost. here's a positive, it could be an increase in the skills of immigrants, that would be a positive for productivity, positive for growth. several economists say the economic impact of a half a million fewer immigrants which is called for and would overwhelm those benefits immigrants make up a huge part of total labor force growth now. that's going to increase in coming years, kelly. >> yeah, it's projected to but now we'll see how this all effects if it all comes do bear. >> thanks, steve heading into the close, 13 minutes to go. dow's up 38, so right above 22k. s&p now lower by just down, rustle down about 15 and there's more fun after the close. we're less than half hour away from tesla's earnings a bull and a bear weigh in on whether or not the electric car maker belongs in your portfolio. coming up.
reported second quarter deliver raies which were below expectations is it a buying opportunity >> you're kind of our bull here. i just like calls you that because it's a fun name. and it's the name of your firm so for tesla's shares which have had an incredible run, but pull back lately. what's your bull case for that >> ting really hinges on the pace the innovation, pace of advancement in the electric autonomous opportunity and they are just unrivalled, there's a lot of competitors now, but nobody is really making progress to shrink that lead there's about a trillion dollars of equity value in the automotive space, and they have about 5% of that right now and i think you can go higher. >> jeff, you're our bear, i mean, we hear a lot of
trepidation from people about the future of tesla and their earnings capabilities, but what specifically are you looking at? >> yeah, no, they certainly took an early leadership position with the model s at the high end. we have reservations about the amount of capital they're going to need. the ramp up certainly going to be a challenge valuation of general is just stretched as well. multiple concerns, but a lot more questions than answered that have to be answered over the next couple of quarters. >> andrew, i'm wondering, one of the top stories on our website today is about how tesla workers say factory safety is worse than saw mills and slaughter houses as they enter this season of production, is there a risk here that they can actually meet the demand in this market? >> i mean, the short answer is absolutely that is a risk, there are other risks, no two ways about it. execution as much as it has been critiqued has actually been pretty darn impressive over the
long haul here so, i think if there are some issues in terms of safeties a suspected will be ironed out and they'll continue to advance quality capability, functionality, faster than everybody else >> and, what about that jeff we keep hearing that demand for the model's s and x have peaked, but is it possible the model 3 which has perhaps a much greater possible audience of consumers that could save the company here >> yeah, certainly model 3 is a mass market, we're of the view as well you are starting to hit saturation which is where the bulk of the profit is. the i think they get a get out of jail free card so to speak through the self-admitted trip through held that he's about to go under i think owning a stack is a bit of a challenging time,
especially announcing 10 to $15 billion of capital means >> is there a time when tesla has never been through hell? >> they just keep on going >> that's the norm for them. gentlemen, thank you both. jeff osbourne and andrew cups. thanks for joining us here art just told me that the market on close orders show a biassed on the buy side of about $400 million we'll see whether that is matched or not, but the dow is up 40pin thes, just into the 22,000 territory we'll see if it can stay there closing countdown coming away in just a moment. then after the bell, the earnings parade continues, fitbit, square, iac, and cheesecake factory >> you're watching cnbc, first in buseswodwe.ins rlid when this bell rings... ...it starts a chain reaction... ...that's heard throughout the connected business world. at&t network security helps protect business,
♪ and let me play (bell ring) all right. head into the close here with the dow at 22,500. we'll see. but let's back up a little bit, go to the open this morning and give credit where credit is due. after the earnings from apple last night popped and it was enough this morning with that 6% gain in apple that it pushed the dow above 22,000 this morning. and apple, pretty much held on to those gains today after that better than expected report.
the dow itself got above 22,000 initially and it's been flirting with that number all day today so we've been going kind of sideways here and we're going to wait until the very last second here to see if we can stay above that number here let's back it up to the beginning of the year. let's remember that we began the year below the 20,000 level. we've been through three min yal numbers this year. we started at 19,000, then in february got about 20,000 pretty much to stay it peeked above 21 in march, but then for real got above the 21,000 number in the latter part of may, and now here we are at 22,000 where's jeremy seagull we need another forecast one more market to show you here, wti crude today, a little bit of a pop today on word of record gasoline demand which is fine, but we've been hearing about all the supply coming to market and oil, but it
was enough that it pushed the market still not above $50 though, and now bob, here comes some more earnings after the close tonight, highlighted of course by tesla, but you're got aig, metlife, among others here. >> and over 11% earnings for the second quarter 5% revenue growth. that's why the market keeps holding up so well global economy expanding and doing well in the earnings front. couple things, the last four days, the dow's up over 250 points the s&p is down. s&p has gone nowhere in four days particularly apple and bowing that are sort of moving down, pushing the dow along, the overall market has really been flat in the last four days one other thing, we were talking about the white house considering a china trade crackdown, this has been effecting all of the china names, including alibaba today, signing down on those kinds of concerns generally the chinese market has
held up reasonably well this year >> well that's an issue going forward. >> all right looks like they're wearing the 22,000 hat here on the new york stock exchange, and looks like we will close above that number for the first time in history. you've got that plus a lot of earnings coming your way on the second hour of the closing bell with kelly evans and company, see you later, kell. >> thank you, bill, and welcome to the closing bell, everybody, i'm kelly evans. and a strange day on wall street, but it's a day that's going to push the dow over 22,000 at the close as bill mentioned. we didn't have to wait long for that to happen quarter percent game i should say that's about a 50 point gain on the bill in large part due to apple which is up 5% after strong earnings last night mcdonald's also contributing there with the move higher s&p 500 turns positive by less than a point it is shy of the record high
level. the s&p is i should say the nasdaq still negative, the russell 2000, it's closing high for those small paths. that's a different role at the wall street journal. so many places anyway, the dow as i mentioned, crossing 22k let's get straight over to bob on the floor with the rundown, bob. >> the thing is the dow made it over 22,000, the unfortunate thing is the leadership is rather narrow. let's show you what happened just today to get it over, and it was, you heard, basically apple, but a couple of others contributed nicely so for example, 3m, mcdonald's
were contributors, but a good 70 points on the upside was doing with apple there in the middle of the day almost up nine points at the height of the day here dow 21 to 22,000 again good news, dow's on fire, bad news, it's narrow move we've seen up. boeing about 386 mcdonald's, united health, also contributing, apple, contributor, and all the other 25, or 26 others really was only 136 of the 1,000 points. that's what i mean when i say concentrated overall we've had another strange thing happen the s&p has gone nowhere and the dow has been on fire s&p's down and the dow's been up in the last four days. this is what i mean when i say small groups of high-priced stocks can move around where are we going to go in the future what's the dow, 23,000 hopes pinned on. i've been talking about it all day. i hear hopes that we could get bank stocks moving which have been largely flat to slightly up on the year.
on hopes of perhaps higher interest rates it's been up since earnings report been a lot of broken hearts over buying local stocks throughout the year and finally, other groups are disappointing throughout the year suddenly started moving telecom stocks like verizon and at&t on better than expected earnings reports also started moving up. the bomb line here is guys this rotation story continues, we'll see if that happens, and makes the dow go to 23,000 some time in the third quarter, guys, back to you >> that's the next milestone, thank you. >> michael, i'm not impressed. nothing to get excited about >> well, nothing to get excited about, but also nothing to get too negative about at least in the immediate term you know, i've been joking that this move from 21,000 to 22,000
is at least as important as every other 4.8% gain that the dow has had in this bull market, but, we're talking about the kind of variance between what the dow is doing and the s&p on a unite today basis, they're kind of neck and neck. yes on a short term basis they can diverge for a little while the story is the s&p 500 for the past 1100 days, every day has closed within a seven point range. it's been hovering there as earnings have come in, it's nothing wrong with staying near all time highs it's tantalizing the bears and making people wonder if maybe finally, it's going to get a little heavier and have a dip. >> and i mentioned, felt like it happened quickly that was only once, it's been 154 days since we hit 22 prior to that, 35 days to cross that, that was in march and prior to that 64 it has take an little bit -- >> it's a few months we've been mostly going sideways but with an upside bias >> let's bring in ralph who has more now when we look at that dow mark he's director of technical research at altera joining us on the news line.
what does that milestone say to you? >> well, i, i think there's more to come. and in december of last year when i put my annual broadcast together, my hail mary pass, if you will, best i could do is 229. o sooim very glad we got here. i agree with everyone that it's, it's not a total broad-based rally, but the leadership is good and i say go with the flow. don't fight the trend. >> so does that mean stocks look good for the longer run, ralph, even after the length of this bull market and it's size? >> well, you have to find longer terms. if you're talking -- >> how do you define it? >> yeah, well, longer term for me is measured in years. and i think the market that started in and like a lot of
people, i'm looking at some point for maybe the presidential cycle kicked in, the honmy moon period gets in and we get a pull back starting later this year going into next year are you talking about the higher stocks here? the offensive groups, how are you breaking that down >> well, i know, earlier this year, the financials fell out of favor far while. and you need financials to be part of the leadership so the rotation that is going on, i think it's healthy stocks like chevron, i think a lot of commodity related stocks starting to act a, little bit better so maybe we get a little bit pulled back and some of the
recent leaders like health care, i don't see any major downsides in i of those groups of stocks so i say, let's, let's hear it from rotation. >> so, ralph, real quickly then, because i don't to want see headline on a website that ralph says we're in the eighth inning out of nine. you're saying for this move but for the long run, you like the stock market >> absolutely. it's not over by any means we're just talking about the atlanta we're in right now let me get back to the honeymoon period, every president usually has some kind of a honeymoon, president trump's honeymoon has done very, very well, and historically at some point, the honeymoon ends, usually some time in the latter part of the first year and it has some kind of a force. that's all item saying >> all right ralph, great to get your point
of view this afternoon thank you for phoning. >> thank you >> again, 52 point gain on the dow today puts us at 22,016. the other major averages basically didn't participate the s&p just turned positive on the bell there dennis, what would you say about the moves that we've seen here >> well, i mean, at the journal we keep joking around, we have to right dow 22,000 story and had to write a dow 22,000 story. go check that out. to me, here's the real question, can this stock market sustain the possibility of no tax deal in 2017, perhaps through mid2018? are the earnings strong enough to make people as excited about owning stocks as they have been since the election day so for me, i again, i hang my hat on the tax question, a lot of the positive momentum seems to be there. the aca reform blew up >> but let me bat that over to
john augustine, what do you think about that >> well, what we think is if the economic numbers begin to pick up august, september, that's going to support the earnings story going into 2018, we're going to go through the earnings exercise again in october, right? and we still have an 11% number for an eps growth estimate for 2018 for the s&p 500 and the key to us without a tax deal is, will the economic numbers perk up to be able to hit that? that's what we're going to watch. they've been mixed >> yeah, speaking of that, let's get to some of these earnings. we have stocks moving after hours. we'll begin with square. on adjusted rev coming at $552 million versus 536 which was
expected, also beating the streets expectations and terms of unadjusted eps. a loss of four sets versus a loss of five cents which was expected also a small race in it's full year of revenue outlook and expecting a smaller loss in it's full year earnings keep in mind that shares have nearly doubled so far this year. investors have been very optimistic about growth suspects, it's ability to upsell to existing customers. and sign on larger businesses, kelly. >> thank you, looks like the best quarterly earnings that squares had, and it's fun to show that stock, we'll come back let's get to fitbit first. looks like another company moving higher. >> it sure is, kelly the stock right now afterhours is up 8% on decent volume. it's also a beat on the top and bottom lines let's go over to the numbers revenues came in at 353.3
million beating estimates of 341 and .6 million eps, it was a loss of eight cents versus expectations of a loss of 15 cents and another important metric shipments. the company shipped 3.4 million devices versus 3.7 which were the analyst estimates. basically in line just a touch lower there. we're looking, going to be digger deeper and looking for the guidance as well as gross margins. but just reading from the press release label the of color here. they said the consumer demand in the second quarter was better than anticipated enabling the company to reduce channel inventory and generate better sales at inventory was something they mentioned last kwaertd. they also mentioned that they're smart watch is on track for delivery ahead of the holiday. again, kelly, the stock up now about 9%, back to you. >> all right thank you. by the way, this morning, gar min called out it's fitness products moving higher on it's beat, michael. let's go back to square for just a moment
it is interesting to look at square relative to tesla the share performance has been quite divergent, the company's fundamental -- >> you mean twitter? >> what did i say? >> tesla >> that's interesting too. the other. >> the other company that formerly had a ceo with two jobs that what you had in mind. >> nas true too. >> it is very interesting, and the momentum for square is obviously remarkable, but also, this response to the great numbers blow out numbers is a really good measure of how good the results have to be to impress this market after hours with a pop like 3 or 4%. they were great. >> i forgot that square went public at $9 a share. >> oh yeah >> and a tremendous amount of skepticism surrounding square when it came out too it still seems like a crowded field. >> blue apron would be an alias in terms of the overall public perception right now >> nap too right now john, just bringing you in here, when itcomes to square and fitbit, buyers here, are you
investors of these companies >> little bit smaller we would go, but what we find interesting, what you've been talking about, kelly, we have a better than expected and a not as bad as expected and the markets still taking both of those in stride. taking them up fits with our equity team was talking about this morning, stick with the winners and look at the turn arounds. those are two themes they have going. those two earnings reports just did that >> yeah, and watching though to see if square can hang on to these gains here, dennis it spiked higher in fact, it spikes higher by about 5%, now it's hanging on to a gain of about 1% it could have been the guidance, could have been something else in the numbers, but you know, look, we've all focussed on jack dossy running twitter, and meanwhile this is a company that's done quite nicely >> companies in this industry, kelly, great quarter, am medical examiner has some of it's own issues, but, you know, there was a great story we ran recently about visa's war on cash
and the war on cash is real. it is happening. and just the secular change. they take out your phone take out your credit card, it is changing there is the secular growth story for all of those companies including paypal. >> yeah, i love that story they're paying 50 grand for companies to stop using cash and start using their systems. john, just to want go back to you for a second you're mentioning, kind of talk about the big picture, you said stick with the winners here. does that hold for the back half of the year? >> yeah, we think so so so far, that's where the earnings momentum is. to the walmarts to apple recently, but stick with the winners, stick with -- and look at some turn around, it's the middle of the road that our equity team that's really examining when you stay there. >> okay. interactive court is just out with it's earnings let's flip over for those results, julia
>> that's right, beating on both the top and bottom lines estimates at 74 cents adjusted per share. that's ten cents more than wall street analysts have been expecting. revenues beating estimates with 76 million in revenues versus estimates. 758 million. looking at the different home advisors, higher than expected publishing division also had a higher than expected revenue and i believe video had a higher than expected revenues as well showing growth at various divisions there and the stock appears to be unchanged. back over to you >> we'll see if it breaks out tinder talks about those results. that's the biggie. phil, it's out, how does it look let's see how the stock's moving >> right now, kelly, we have tesla earnings for the second quarter coming in with a smaller than expected loss of a $1.33 per share, revenues better than expected at 2.79 million street was expecting revenue at 2.5 billion and a wider loss of
1.82 a share the margins for the second quarter, gross margins at 27.9%. we're going through the investor letter right now couple of things that stand out. the company sitting on $3 billion in cash at the end of the second quarter the cash burden is going to be crucial and certainly there will be some questions for ceo elon musk later on today during the analyst call, but again, tesla, coming in with a smaller than expected loss of 1.33 per share, that's better than what the streak was expecting at a loss of 1.28. kelly, we'll bring it to you, back to you. >> michael, shares are up 4.5% >> and well below highs. better than expected or at least certainly better than feared although, i will say, the expectations for how big that los was going to be here, really widened out in the last few months it's a lot better than the most recent estimates, not as good as you thought five months ago. nonetheless, youhad people bracing for the possibility that there was going to be another
execution issue. they are, everyone investors are on alert for what capital raising is down down the road. of course what the real orders are for the new vehicle. i mean that seems to be -- that's going to determine the next leg in the stock. >> sounds like more clarity needed john, you guys buyers of tesla >> what we heard from the report is, they've been very volatile the last three or four quarters on earnings, 27% margin caught our attention and now we're going to see as michael was talking about with the order flow, see if it matches to the upside as well >> dennis, last word to you here, you know, obviously always wait to hear more from elon musk, but $30 billion cash on hand is pretty good. >> sounds like a lot, but as phil mentioned, the cash growth in the company is substantial. as it ready the model three mass production experiment is going to be using a lot of that money. and michael mentioned, fundraising is going to be a crucial part of that so showing the revenue beat and the margins they did, i think
probably helps them on what is perhaps the main task ahead, yes, selling model three is important, but raising the money to be able to build it at scale is just as important >> yeah. that's a great point and the revenues by the way, doubled from a year ago. dennis and john, thank you both. dennis and john. >> thank you we are just powering up to closing bell up next, we have tesla which is higher by 4% we're going to drill down on the numbers with the bull and the bear on the company. president trump doubling down on coal we're going to talk to the ceo about the state of coal in america and his company's new deal to export the mineral to the ukraine. and we want to hear from you, always, reach out to the show, twitter, facebook, or send us an e-mail sissorreatincn fstn bune wldwide hout) ♪ ♪ ♪ ♪ ♪ ♪
at no extra cost. [ laughing ] so all you pay for is data. see how much you can save. choose by the gig or unlimited. call or go to xfinitymobile.com introducing xfinity mobile. a new kind of network designed to save you money. welcome back there's the dow closing above 22,000 for the first time today. 22,016 it's been about 160 days since we closed at 21,000. still a good punching up through 218, 219, and 22,000 today a big part of that, the other arches were lower. earnings for the cheesecake factory are out there afternoon.
kate rogers has the results. >> hey there kelly, the stock is up by more than 1.5% right now and decent report, cheesecake factory reporting adjusted eps of 78 cents. they've been looking for 76 cents. on revenues, $570 million. the company also reported comp store sales declining by half a percent for the quarter. they have projected last quarter this is going to be down by about 1% not as bad as expected the board approved a 21% dimpbd increase for the quarter stock is rising once geb, we'll keep an eye on it and bring you relevant news. back over to you >> trying to stay positive, kate, thank you. >> meantime, aig's earnings are out. let's get back to morgan brennan with those numbers, morgan >> let's look at the numbers american international, scroll down, the i have the numbers right up here to look at reported adjusted earnings of 1.53 per diluted share
this was a big beat versus the analyst estimates. and lower than invested casty losses this is behind the beat. 1.26 billion versus expectations and 975 million. but commercial is what disappointed pretax income, there was only 716 million commercial insurance net premiums written, also dropping by 9% on a constant dollar basis, divestitures and closely watched metric, that came in at 73.8 for commercial. with some of that increase related the company says to second half 2016 loss estimates that are tied largely to the u.s. casualty business now in the release, ceo and president brian saying, quote, we will build on aig's strong franchise by maximizing the value of our international footprint which distinguishes us
from many of our competitors while market conditions remain challenging, we are committed to disciplined underwriting and are focussed on investing in profitable growth. kelly, more from him tomorrow morning, 9:00 a.m. eastern conference call, that will be his first since taking the helm. in may, shares are currently up after hours, 1.6%, back over to you. >> all right morgan, thank you very much. interesting with, mike, to hear him emphasize the international ambitions this company has once again. >> it's true it's really returning back to that story it's almost like they're the citigroup of insurance where they were the ones most in the penalty box for so long, they traded the biggest book value and now kind of finding their roots in a slim down manner and return to that franchise. >> stronger back to back and you can see the shares moving higher there'll be much more on that call tomorrow morning. there's brian. meantime shares of tesla are moving higher. it's still hanging on to a gain of about 2.5%. let's get more on what's behind
the revenue beat in particular, joining us, our jamie albertine. all right guys, welcome to you both jamie, let's just start with you. i mean, there's a lot to unpackage here with the quarter specifically, we have everything from the cash level to the gross margins to pretty nice revenue beat to talk about. what do you think is most significant? >> yeah, well thanks for having me look, i think the gross margin's probably the first area we're going to focus on. 25.0 on an excludeing credit basis, i think it's the right number to focus on the street. i want to say was 253, the fact that that number is intact is maybe the first point. secondly, you know, when we look at the broader automotive environment and we had a lot of notes out today on july sales, it's a really difficult environment, even in the luxury segment and they're seeing significant double digit growth even for the model s and x they're hanging in there with vehicles that are, you know, continuing to age along their
product cycles we think from a 2q perspective, the third point would be as well, the cash burden. what you might expect ahead of the model 3. you know, harder to say where the street was on that figure, but i think taking together the core business hanging in, regulartive to the industry, and the cash burn, you know, for the model 3, not unexpected. >> really quickly before i move over to you, jamie, when you are looking at their profitability, excludeing zev, why is that? >> well, i think on some level, every manufacturer that provides an electric vehicle does receive credits along the zero mission vehicle guide lionels as well as the greenhouse gas guidelines. we'd like to separate those. and we've noticed that there's sort of divides verss, people think that there are margins are maybe overly amplified by these credits. you know, we like to say that they're not when you exclude them and 25% is right in the range of where we thought they would be
so getting away from the discussion around sort of credits, we think their core business is performing very well >> and what about you? what are you sort of most focusened on now the stock still up nearly 3% after hours, but it's off 10% in the past month. >> well, you know, the numbers came off surprisingly good compared to the consensus. we already knew that the deliveries would be on the low end of the guidance the fact they came in with better than expected revenue, margins, those are all positives. one of the things that in the brief look i got at the release, is that the cash is up to $3 billion, but part of that was because they're less than the company guidance as well as less than a consensus for free flow burn and that suggests as we previously indicated that this year they won't need another cash raise, but if they're going to need $2 billion to finish the next level of the production of
the next 69 months versus a $3 billion burn next year which could be diluted >> jamie, we keep focussing whenever anyone's debating the outlook for tesla on whether they can deliver production in numbers that they've promised, can we be sure about the demand? especially when we're talking about the model three, especially when we're talking about a new segment of the market that they're trying to attack the company is not really endorsed this overall order numbers just yet it seems that elon musk had put out there a while back >> yeah. look, it's a great question. he did mention last week with the delivery of their first 30 model 3s to employees, they have over 500,000 standing reservations for the model 3 they said in the release, again, went through it very quickly, hopefully i ghot right, 1800 reservations per day but long story short -- >> week -- >> i apologize then. i read through it very quickly
>> i'm not sure. >> nevertheless, what we see in the new vehicle side of the business is certified preowned sales are cannibalizing to some degree that's a function of where new vehicles are in the technology cycle. to have 500,000 let's say standing reservations tells you this people think of this as a next big break through technology that's something that a lot of other manufacturers, i think, are working toward but don't have yet so i do tend to think that based on what we see in the new vehicle side, people say the 2015 model's just as good as the 2018, so i'll wait but with model 3, they're, you know, growing numbers of reservations it's not happening in the same way which leads me to believe they're more real than not >> i'm sorry, you were correct, it's 1800 net new reservations per day. that is what they're claiming right now. >> on that point, jeffrey tweeted in that he expected tesla's stock to drop after what happened with gm and ford saying he doesn't think electric or gas matters. i was going to does you kind of
that same question about the dynamic playing out across the industry right now, is tesla somehow sealing share or simply able to kep growing because it's coming off a low base. is it electric that is the attraction is it going to be able to sidestep the psych that will everybody else is experiencing >> i think it's the latter part. i think that tesla is it's own beast. you know, they're beyond the industry, they're starting from a low base they're coming out with this exciting new product which is the large extent going to be a mass market product. you look at it good news they'll have 500,000 most likely orders which is up from the 373,000 that previously been given, the mix, may be more of a challenge to people with $49,000 vehicles which is not so much mass market compared to 35,000 so that's something that could weigh on the demand for the vehicle when people who ordered a $35,000 vehicle see what it actually is, they may back off. >> yeah. >> but that would be good for their margin so, you know, it's a dynamic company, you know, our story
about being negative in the stock is really on valuation clearly elon musk is changing the industry driving it forward he's the one that's driving the fact that people to want buy electric vehicles. all electric vehicle or at least a hybrid vehicle she's changing the industry for the better one way or the other. >> all right thank you guys for joining us with your reactions to those earnings the share still hanging on to a slight gain. and it's time for a cnbc news update with sue herrara, hi again, sue >> hello again, kelly. here's what's happening again that the hour. pentagon spokesman says the suicide bombing attack on a nato convoy in southern afghanistan killed two american service members. this comes despite repeated refusals by the military in afghanistan to say whether there were any deaths in the assault claimed by the taliban israeli man in his 40s was seriously wounded when a teenaged palestinian attacker stabbed him multiple times a at supermarket. the 19-year-old suspect was arrested after trying to flee the scene. the victim is in critical
condition in a local hospital. britain's prince phillip completed his last official public engagement after 65 years of public service. he met a group of royal marines at buckingham palace it was his 22,219th public engagement and a new study suggests that the amount of salt a typical adult consumes each day may be enough to damage the heart muscle and make it harder to pump blood. those who consume more than 3.7 gram was sodium a day, which is two teaspoons of salt are more likely to have enlargement in the left chamber of the heart. responsible for pumping blood into the body. so watch the salt. that's the news update this hour back to you guys >> i eat a lot of salt how can i be like prince phillip if i'm eating all of that salt i have to worry about the left chamber. >> worry about that left chamber. put the salt shaker down >> i can't, you'll never take it away from me thank you, sue
>> i will not pry it out of your hands, i promise >> sue herrara goldman sachs missed the 22,000 ride. it's stock was down today. goldman was looking for a big comeback banking expert to weigh in on goldman's last place finish in trading in q2 and what it means to do to bounce back, right after this she's nationally recognized
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quarter. the firm lagging when it comes to trading revenue at $3.1 billion. plus fixed income net revenue falling 40% from a year earlier. our next guest is optimistic on the stock. interesting that it comes on a day like this too. big banner day, dow 22,000 we're not ringing the bell for financials here, what about goldman. >> well, i was at a dinner last night with some smart people they were telling many me when they go on the road, everyone hates the stock. that always gets me interested clearly a quarter doesn't make anything there's no doubt that the trading business on wall street is abysmal more people are using machines, commissions are down, volumes are down, i mean, from, you know, the nonmachine traded. and so it's a tough business and clearly their numbers were worse than everybody else's, but it was a quarter i'm still optimistic that there's more of the rules that may be positive if they remove a few of the things. and, you know, volatility will return some day. clearly when that volatility
returns, i think that, you know, again they still will capture a good share of the market so i'm not negative on them. what i did after their quarter earnings, i wrote on goldman as a way to enter the stock the lower price. >> traded through goldman just to make sure wouldn't be able to do that. >> that's true >> i actually, look, one of the reasons people hate the stock, they're questioning the franchise. they're questioning goldman's role in this new world and whether that trading franchise they've always had is going to be durable how do you make that evaluation? >> i think it's hard to do it over the quarter clearly the trend's over a longer time period don't look great from a market perspective. but i still think there's plenty to go around there's no sterns, lehman, european banks are capital constraints. i think we need a volume pick-up. and clearly fixed income at some point is going to have, you know, a big moment whether it's a central banks moving liquidity and causing a big move as long as they don't have the inventory wrong, there's a chance for volume to pick up
dramatically >> morgan stanley's just taken a different takele together. it looks good right now. is there any reason why you think that is going to be the right way to go for the long-term. >> it's a less volatile business model. what they've done with their advisors is, you know, they've improved margins, they've, you know, really done a nice job of taking that old, you know, city franchise and combining it with what they had. i give them a lot of credit for it it's a less volatile model for sure, but, you know, if you get a rock and roll period again, i think goldman can put up strong numbers. i think it's been overly beaten. i love when that happens >> there you go, you're buying when everyone else is skeptical. thanks very much all right. president trump has been pushing for return to coal in this country. up next, we'll talk to the ceo of coal about the return of coal jobs and new opportunities in exports that coal abroad stay with us hey gary, what'd you got here?
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>> and the important thing is it was largely apple, minor contributions elsewhere, we had 3m for example, mcdonald's also pushing us over the top. mostly apple was the key driver. bad news, it's narrow from 21 to 22,000 i mean, boeing was just a monster, almost 40% of the 1,000 point gain was boeing in the last six months. mcdonald's, united health helped, apple, i hope you're all listening earlier talk about what could move things forward in the financials because a lot of traders believe that what's going on here is bank of america, maybe jpmorgan could be a big help in the third quarter if we get regulation talk from the trump administration, and we get some other moves up in that area finally i know that you're talking about about the kohl's people here. great quarter so far look at that guys, back to you. >> perfect set-up, bob you're the man, bob at the floor here
it's ex-coal energy and resources winning a contract to supply thermal coal to one of the largest in the ukraine that highlights a push by the trump administration to revive the domestic coal industry and ernie thrasher who has the best name in the business he's the ceo of ex-coal, also the here at post nine. there is some real movements first of all, we've heard a couple people today saying one of the places perking up in commodities and maybe even coal there, what are you guys seeing. >> we're seeing a strong change in the pricing environment, kelly. strong demand out of china and sustained demand out of our normal customer base prices are up dramatically in the last six weeks >> wow you wouldn't -- so if people look at that and say okay, is that a trump effect? you're saying it's more of a straight up supply -- must have come way down given the bankruptcies and stuff over the last few years, right? >> obviously capital at industry and supply came down, demand was resilient and the industry's
responding to that demand, but it's kept a strong floor under pricing today. >> and what's -- the main determinant of that down the road, natural gas prices in the long-term, in the short term is it just about, you know, economic growth. what really are the factors that are here >> first of all, i think there's two types of coal you have to look at. there's coal that's really drivenby economic growth and the steel industry, and then thermal coal which is affected by the cost of alternative forms of energy. >> so, here's the question, can the president bring coal jobs back to the country? does he need to if things are on upturn anyway and just simply having a change of regime in the white house feels like there's not going to be more regulation on your industry, you're going to be able -- are you guys hiring right now expanding. >> i think he's already brought jobs back to the industry. coal exports are up 60% this year a lot of the burdensome regulations which hindered the industry from producing coal during the past eight years have
been relieved, without any effect on the environment, and the industry's responding to than we're seeing capital flowing back into the industry, capital markets open up to support this growth. >> and geopolitical impacts as well as we mention the effort to get to the coal to the ukraine thank you for joining us here. >> thank you for having me >> ernie thrasher of ex-coal meantime as we look at the dow closing above 22k for the first time today, you think you'd have tons of ipos. they weren't ready to cite market conditions and while the second quarter ipo market was relatively healthy it's seen disappointing showings from blue apron and snap that's next.
welcome back the s&p 500 is officially barring companies that issue multiple classes of shares from being included in the index. the move impacts recently publiced traded snap inc. because of it's decision with no voting rights. for more liz myers, she's managing director and capital markets business, joining us here at post nine, also is our leslie picker who's all over this space it's great to have both of you with us. liz, just for starters, it does highlight the decision you have the dow over 22,000, you think everyone's excited to go public, and yet, what's happening? >> well, the ipo market this year has been a big and positive change from last year.
we've seen almost triple the volumes, most companies are achieving their targeted ranges or above and aftermarket returns have been double digit on average. it's been a positive first half of the year. >> maybe leslie, despite the headlines, the companies that we mentioned, it's still stronger under the surface. >> exactly the high profile ipos like blue apron and snap have gotten a lot of attention i'm curious how that's impacted the clients you speak with their decision-making, when they look at how the stocks have performed lately that have tried to go public and maybe underwater >> there's always a range of outcomes in the ipo market i think each situation is so company-specific that usually companies looking at ipo market are thinking of their own situation, their own fundamentals, more so than they're observing every single ipo that goes ahead of them. >> what about on the clients on the buy side of things, is there appetite for the new potential growth ideas or is everybody playing defense and, you know, going towards index?
>> i think it's offense on the part of fundamental investors. active investors if you look at what's been most frequent in terms of the ipo calendar sector wise, it's been technology, health care, so these are high growth companies, scaleable, manyscaleable capital like companies that have pretty good viz bability on the ability to grow and expand rapidly. >> so how big a deal is it that the s&p is cracking down and saying you can't do this we're going to be grandfathered? what's it mean for companies to go public now? >> about 85% will be grandfathered? it's the companies in the ipo calendar each year that have pursued to a class it is a consideration as companies think down the road about being included in an index which provides incremental buying demand and governance has a different level of priorities.
>> air bnb and uriber. can you have discussion that doesn't evolve around them becoming public. >> if you look at the length of time at which companies have started getting funding compared with the time they've gone public, it's getting longer and longer and longer over time. and you know, jay clayton, who took the post at chhas made goi and ipo is one of his big platforms and priorities now, the question remains would any change in regulation encourage it to go public. >> it may be a different piece of this, as you have spotify, it's going to do a direct listing. you have other companies which say i'm fine being a privately held company, so it seems like and the sec saying well, we want to make it easier, we're going to let you file confidently, no matter what size you are what kind of impact do you think that's going to have >> firstly, the access to
private capital continues to improve every yee. but the increase in public companies this year has been greater in terms of the private company market i think companies will still want to pursue private capital for certain periods. perhaps when their growth isn't linear and comfortable for them to be out in the public eye yet. that makes for a good rational for being in the private market, but for companies to come public gives the idea for liquidity, investors, employees for an acquisition currency and also importantly, to raise capital at less die luted levels i can't speak for their edition making process, but certainly, the ipo market will continue to be receptive to all sorts of issuers in the fall and years to come >> all right, so good to talk to you. leslie, always a pleasure. thank you both >> thank you take two interactive is
popping out earnings we'll have the numbers as we remind ourselves 2216, that was rsdaclose for the dow toy. fit time, we'll be right back. noth 's wrong with the elevator. right. but you want to fix it. right. so who sent you? new guy. what new guy? watson. my analysis of sensor and maintenance data indicates elevator 3 will malfunction in 2 days. there you go. you still need a pass. there you go. on mi came across this housentry with water dripping from the ceiling. you never know when something like this will happen. so let the geico insurance agency help you with homeowners insurance and protect yourself from things like fire, theft, or in this case, water damage. cannonball! now if i had to guess, i'd say somewhere upstairs there's a broken pipe.
welcome back we have an earnings alert on take two interactive julia? >> that's right, it is certainly popping. those shares soaring on better than expected results. the stock now up about 13% in afterhours trading now, earnings of 56 cents per share belowing past estimates of 19 cents per share while revenues of $348 million far
exceeded projects of $281 million. the growth has come from games including nba and ww werks. the company raised its full year guidance saying a robust development pipeline and are in a better position than ever for long-term growth and margin expansion. over to you. >> thank you now, it's an historic day. the dow closing above 22,000 for the first time what to expect tomorrow. that's next. we're just a few minutes away from calls for fit bit and tesla. tesla up 5% after earnings square slightly higher we'll tell you the key metrics to listen for. stay with us world ugly and messy. they are the natural born enemy of the way things are. yes, ideas are scary, and messy and fragile. but under the proper care,
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painful. >> at least a tease. >> now, i almost feel like no cares. >> 2500 on the s&p that could be an interesting story. >> that's not going to get headlines either we're going to be like, that's amazing. >> i think a bigger landmark zpl how about 5% pop in tesla. >> interesting i think a relief bounce. lot of potential buying. >> call starts in half an hour "fast money" starts right now. "fast money" starts right now. live from the nasdaq market side overlooking new york city's times square i'm melissa lee. your trader rs pete, tim, karen and dan. tonight on fast, stocks at record highs again the dow breaking through 22,000 catapulted by apple surging to an all time high, but there's one stock that's been left out of the party that could be setting up for a major comeback. plus, are movie theatres going away as the department store amc with a massive warning but the chairwoman says under the rare way to cash in