tv Closing Bell CNBC October 19, 2017 3:00pm-5:00pm EDT
on. all right. going to talk about phil lebeau's report on consumer reports projecting the reliability of the model 3 without actually having driven it i don't know that seems a little bit bizarre to me to project the reliability of a car without actually touching the car, feeling the car, seeing if the car breaks down >> i'd like a tesla. i'd like one. >> you can test it out. >> i'll test it out. >> "closing bell" is up next hello, welcome to "the closing bell," everybody, i'm kelly evans at the new york stock exchange. >> and i'm bill griffeth in case you hadn't heard yet, today is the anniversary of black monday, a day when the dow fell by 22.6%, 30 years ago today. 3022.6% decline meant 508 points on the dow. >> on the dow. >> today a 22.6% would be a 5,000 point decline.
>> can you even imagine? >> well, it was pretty dramatic back then. back then, i was anchoring for the old financial news network, and on that day -- is that ron burgundy no look who that is that is a very young paul tutor jones. >> oh, my goodness. >> this is back when paul used to take my phone calls call me again, paul. we'd love to talk again. anyway, he was on the floor -- >> i love that 'stache. >> talked about what happened, what was going on, what he was thinking. >> did you lose the 'stache after the -- >> let's see, that was in '87. i lost the 'stache around '88 or '89 yeah wasn't long after that. >> not too late to bring it back. >> i think it is >> by the way, paul tutor jones is lauded for having kind of foreseen that drop was happening. >> let me tell you, i mean, we were friends back then he was a very -- still is -- very, very smart trader. he came up out of memphis trading cotton futures. >> wow >> and he's very savvy trader.
very, very savvy trader. i mean, no surprise that he's had the kind of success he has had. anyway, we're going to talk to three men who were on the floor here 30 years ago today about what they saw, get some of their stories. and what they think could happen now and how trading has changed, and boy has it changed in the last 30 years. >> yeah, we're looking forward to that. we have financial firms standing by. meantime, with bated breath to see who could be chosen as the next fed chair going to speak of the ce o of regional bank bbt. kelly king. >> always look forward to our chats with kelly on this historic market day, reporters standing by to bring us the latest on what's driving the markets today. there's bob pisani on the floor of the new york stock exchange bertha coombs at the nasdaq market site which didn't exist in 1987, by the way. bob, you first, what's going on? >> this is a rather remarkable afternoon. i'm waiting for the dow to go
positive two-die of the dow industrials, we were down more than 100 points this morning. i talked about this morning, one of the heads of the chinese central bank was talking about household debt rising, asset class bubble concerns, a communist party meeting going on so everything's sensitive, so the hang seng was down about 2%. look at this, right after the open we were down more than 100 points that's largely on what happened in china we've been turning around. a lot of stocks that have been down all day turned around some of the banks, jp morgan, for example, was down throughout the morning and slowly has been rising in the last -- this is a two-day chart. see it just went poz today some of the other ones, the industrial names have been rising throughout the morning. united technologies was $118 at one point this morning it's gone positive right now, standing right here right next to me. look at that that's rather remarkable to see the stock move so much from the declines earlier in the day. same with some of the other industrials.
caterpillar was down rather noticeably all this was about 9:45 and things just -- there's a two-day, again, same thing, just started lifting. it's about to go positive as well some stocks really haven't been reacting too well. visa is going to be reporting next week. it was at a historic high last friday and it's still very much on the weak side today not a lot of action there. but overall, what i consider to be very modest market volume, you just can't seem to keep the market down. not even concerns about maybe china slowing down which is the biggest engine of growth in the world right now, seems to be keeping things down. guys, back to you. >> bob, thank you, bob pisani. let's go over to bertha coombs who has more on the nasdaq's biggest movers >> apple one of the biggest ones, modestly higher than average volume for the day here today and concerns once again that maybe there's just too much weakness when it comes to those apple 8 iphone sales the carriers have been chattering worst performance today since august 10th. the stock, itself, is about 5
preside5.5% or so below its all-time high from september 1st those concerns are right now that perhaps apple may be cutting, thin fact, its supplie request. a couple reports on that that it told suppliers to cut their production by about half on the iphone 8 could mean a lot of people are waiting to see what happens with the iphone x that doesn't go on sale until november 3rd. couple suppliers getting hit today pretty hard. you can see universal display, and skyworks others kind of mixed qualcomm, in fact, turned positive on the day. we're also seeing apple really accounting for about half of the decline on the nasdaq 100. and the faang names are account bing for just about the other half of that and these are names that have been at all-time highs they've been the big momentum movers for the most part, they're up for the month. amazon, for example, is now down about 9% from its all-time high. could see some people starting to take a little cash off the table because they've had a pretty big run
also bucking the trend today, though, in big caps, adobe at an all-time high after forecasting better than expected results for its fiscal fourth quarter. microsoft having a good day as well so it's not all bad here in tech line i didn't put the chart in but did have a pretty nice ipo here today. mongo db which priced above the range and up about 25% on the day. back to you. >> i can't believe that adobe is up 12% this is one of the banner stocks of the last decade at this point. five years, at least, it's up 12% today. i mean, we talked about this yesterday, how they raised their outlook. that's an extraordinary move to the upside for one of the winners here >> yep thank you, bertha. big number there let's get to our closing bell -- i wish i had a comeback for you, i'm sorry. >> no, it's just -- i look at that twice i said -- no, that's 12% higher. with united down 10% >> after ibm had that big gain yesterday. >> that's right. it'srepricing some big legacy
tech companies here. "closing bell" exchange, by the way, the dow was down more than 100 points at one time we're down just five so a comeback today. lindsay bell from siffer research with us at post 9 sitting next to peter costa from empire executions and, yes, that is rick santelli at the cme in chicago. peter, you were here on the floor in '87. >> yes, i was. >> and you remember. >> yes, i remember that's why i went gray. or did i well, anyway, yeah, i was here >> okay. that's where he's going to take it thanks so much >> you want me to go into it i can go into a lot of it. >> one thing you mentioned i thought was interesting, you don't have to get into it too many hutch, you did think there was a difference in market functionally between the new york stock exchange and the nasdaq back then would that be true today is digital trading making that less and less relevant >> well, i think that, you know, there was a huge difference back then i don't think the difference is all that much, although, if there were problems or if there was a situation where there was a breakout or breakdown in an
individual stock, you'd want to have somebody or a broker at least have, giving you the information which you can get from the trading floor whereas nasdaq, it's just a numbers game and you just watch where the numbers are going. and then you make your decision an what you wa on what you want to do there. it's changed. things are getting closer and closer together. we still have the human element down here. that does add some, you know, some measure of, you know, security knowing that there's somebody there that you can talk to and find out what's going on. >> lindsay, i've been asking people who they were doing on this day 30 years ago. strangely, this one doesn't remember what she was doing. i'm going to guess you don't either. >> i don't either. i was 5. >> let's talk about this market right now. i mean, you know, back then, we had a market that just kept going up and up and up until it didn't and we have this market that is so resilient these days. do you mindful l fufu fuful ofo you bear that in mind at all
>> the fundamentals were very different in 1987 versus right now. inflation was 3.9% fed funds rate was over 7% the market was actually more cheaply valued at just over 11 times. things are very different now. and the market peaked two months before the big crash happened on this day in 1987 today, it's a very different story. yesterday we were hitting new highs and the dow and the s&p. >> i also -- brian reynolds who i think is so sharp on the market today said the difference between then and now is back then everyone was positioned for stock market gains and now people are still positioned for stock market declines. rick, i mean, do you think that's true even as we kind of move along with this rally, that people are still generally cautious about how much further everything can go on and maybe not even really participating in it >> you know, i think cautious is the wrong word i think traders are nervous, investors are nervous, but, you know, there's lots of history considering this is an important
day in history to look back and ponder you know, i always think about the tech wreck in 2000 you know, the nasdaq virtually doubled from 2,600 to 5,000 in, like, 5 1/2 months okay so as much as investors are cautious or nervous, they realize that when you get into this mode where equity markets have low volatility, one direction, and it's to the upside, i think they want to ride this wave they all know that there's a possibility that this wave could just dissipate and they're going to sink right into the ocean, but i think they're going to be riding it out. i think that that makes the word, apropos. i think nervous is a better word because it doesn't look like inverse esrs want to get out, ty want to ride the wave even if they're a bit nervous. >> i'm glad you made that point, rick by the way, i was struck this morning by how strong the data -- new claims for unemployment benefits in the country are at the lowest level since the 1970s. >> yes. >> i understand it's been going
on for some time >> yeah, there's going be jobless claims -- >> it yeah >> see, it's all kind of hard to put -- you know, i always thought that the fed putting so much in their strategy for the unemployment rate was just a bad idea i think the point has been proven because it's much lower than they thought it would be. three years ago, two years ago even today we still question what full employment is. but, you know, once again, we don't count people that are able bodied that aren't working and the number is huge so i don't know if it's the best gps or not, and i still don't know that i agree that all these 95 million people have no skills that are needed in the market. as a matter of fact, i totally disagree with that i think over time, i would be borne out that many of them are still employable >> all right very good. thank you, all appreciate it. happy anniversary. all that >> thank you. >> let you get back to work. see you later. so we got 49 minutes left in the trading session here and the dow is down just five points.
what do you think, do we finish positive today >> i don't know about finish we're going there at some point. that's a bold call to make. >> if i asked you at 10:30 this morning, it would have been a very bold call. just ahead, it's been 30 years since wall street's infamous black monday crash. the key question is, could it happen again we'll talk to those three wise men who were on the floor on that fateful day coming up. up next, shares of bb&t, regional bank, underperforming the market this year pretty significantly. we're going to speak to the company's ceo after the results this morning, talk about what they show about the state of the u.s. economy. we want to hear from you, reach out to the show on twitter, facebook, send us an e-mail with reminisces of 1987 you're watching cnbc, first in business worldwide
shares of blue apron down today, the company announces it's laying off 6% of employees, that's about 300 of its roughly 5,000 workers. i had no idea they had that many people working for blue apron. that's at both the corporate offices and fulfillment centers. blue apron's ceo says the layoffs were necessary as the company focuses on future growth that stock, as you can see, down 1.2% came public late june, early july, around $10 it got to a high of $10. and here it is roughly half that price right now. >> they said a lot of those layoffs at the corporate office, not in the warehouses. still, not a huge move given the size of those declines. shares of bb&t slightly higher after the regional bank reported earnings it beat the estimates. the report showed a decrease in mortgage banking loans fell 6.3% from a year ago. >> for more on what's behind that move, we are always pleased to welcome back kelly king, bb&t's chairman and ceo joining us in this cnbc exclusive.
kelly, welcome back. good to see you again. >> thanks, bill, kelly, glad to. be with you. >> talk about the quarter and this decline, which you are sort of engineering here, this decline in those loans >> yeah, we really are, bill, so we had a really good quarter and our revenue was up, profit was up our asset quality was excellent. our core loan growth was good. our expenses were down 7.8% on an annualized basis. but what you're referring to is that we're trying to do the right thing for the long term rpgs so when i say our core loans were up 3.2%, we have a couple categories we all optimizing loans, auto portfolio and mortgage portfolio we've been allowing the mortgage portfolio to run off because we frankly think we're heading into a rising rate environment. and, you know, having a lot of long-term fixed rate loans is not very smart when you think rates are rising so that's a very strategic decision that
allows those loans to run off and we're replacing them with much better priced floating type of cni loans and that's going very well. >> i'm just looking at all the branchs that you're shuttering as well, kelly, how does that fit in with what you described in terms of rising rates or what is the rationale behind shuttering so many of those branches >> so, you know, kelly, the word has really changed in the last two, three years it's been incredible and in many respects one of the post importamost impe all heard about digitalization the clients are moving really fast in terms of digitally interacting with the banks so they're interacting through the branches much less so what we're doing is shuttering some of those branches that in most cases are between two other branches so seau haay you have a seven-e mile area in the city, three branches, shut the one in the middle, move the soernlt
associates to the other two. the clients don't mind because they're dealing with the same associates we're simple sy reducing excesse capacity, redeploying that money in our digital capacity so our clients get the convenience digitally that they want but they still have what they like as well. >> are you getting into fintech at all jpmorgan chase just yesterday bought this company called we pay that does electronic payments first time they've gotten into that category in that regard do you see a future for that for you guys >> i do, bill. we -- we were one of the first, maybe the first, about a year and a half ago, we put one of our executive management members as our chief digital officer he has been looking extensively for fintech opportunities to either acquire those companies or partner with those companies that we're looking at a couple right now. we think that's a very logical thing for us to do because while there are some challenges with the fintechs, one of the real
benefits of fintechs is they created new very effective ways to interface with the clients on a much more quicker basis. and so we want to learn from that so we're definitely looking at it >> kelly, we also saw fed chair janet yellen leaving a meeting with the president not terribly long ago she's one of the finalists you mentioned that you're predicating this mortgage move on higher interest rates does that depend on who's fed chair come next spring >> well, it could to some degree, but i don't think of the candidates that are being talked about that will materially affect that. you know, i think you know i had the pleasure of serving on the federal advisevy council for four years ending this past december so i got to know chair yellen and jay powell and all those fairly well. >> but kelly -- >> i think, by the -- yep. >> i was just going to say, i think it's pretty clear that john taylor -- the taylor rule right now would have a 3% fed funds rate i don't know if he's saying he
would necessarily do that, but don't you think that he would run a vastly more hawkish fed policy than janet yellen >> well, he could, but i believe chair yellen clearly decided it's appropriate to be more hawkish, to raise rates. she's been very cautious about starting and she's that kind of lady she's brilliant, but she's very cautious but when you've seen her start, she's moving and i think she will continue to move i think she'll move in december. and i think she'll move methodically so, you know, might move faster but within a year and a half we'll get to the same place. >> all right got to go at this point. kelly, always good to see you. thank you. >> thank you. >> thanks. good to. be with you. have a blessed day >> kelly king, chairman and ceo of bb&t with us. dow lower again by about five points here the s&p is down about one point. the nasdaq down. we mentioned some of those faang
narm names are underperforming russell down. coming up next, drug maker gilead getting fda approval for a new liymphoma therapy. costs a lost we'll bring you the details straight ahead. also later verizon climbing today after reporting its third-quarter results this morning. ahead of that, we're going to talk with an analyst who says the phone -- the iphone x could provide a bigger boost to verizon's stock. 1.% ghnois up 25rit w. still more to come after this. zar: one of our investors was in his late 50s
right in the heart of the financial crisis, and saw his portfolio drop by double digits. it really scared him out of the markets. his advisor ran the numbers and showed that he wouldn't be able to retire until he was 68. the client realized, "i need to get back into the markets- i need to get back on track with my plan." the financial advisor was able to work with this client. he's now on track to retire when he's 65. having someone coach you through it is really the value of a financial advisor.
welcome back shares of tesla are under some more pressure today. consumer reports predicting the model 3 will have, quote, average reliability. nearly 500,000 people reserved a model 3 but just a few hundred on the road right now. tesla says the repredictipredico only wrong but how consumer reports is targeting the company with misleading information. the share is down 2.25%. meantime, gill lad scieneads getting fda approval for a new treatment which comes with a huge price tag meg tirrell with the details. >> reporter: that's right, bill, a whole new wave of cancer treatment. gilead getting the approvement six weeks ahead of schedule, second in the form of immua immunjotherapy known as car-t.
this one was approved for a form of nonhodgkins lymphoma where patients have already tried at least two other therapies that stopped work bing with them so really patients with few other options. gilead acquired this in its $12 billion acquisition of kite earlier this year. the price taging on today, $372. this is a one-time treatment novartis priced it at $475,000, guys there's a lot of questions about the pricing here and how insurers will reimburse. there's also a lot of companies working on therapies coming down the gilead, kite navartis, but bluebird, cell seen, many oa g gene, many others. >> for so long, investors harped on that, not doing anning a b decisi an acquisition boom they snagged one of the high fliers >> thank you very much meg tirrell. still ahead, shares of verizon down more than 7% so far
this year, one of the worst performers in the dow. >> right. >> moving higher on today's third-quarter results. though we will have a debate on whether verizon can finish the year on a high note. up next, though, we're going to speak to the three guys who were on the floor of the new york stock exchange 30 years ago on black monday. while i was 3,000 miles way in los angeles, i was all over the story as well anchoring on the financial news network and amazingly -- >> you look exactly the same. >> i do not look the same. it says here i look exactly the same i do not. >> which is true should we show kenny's pictures? >> oh, yeah, wait until you see them we'll be right back.
welcome back yes, stock market trading low, boy, have we got some fun coming up dow down four points, was down so 10 h points. a big comeback late this afternoon. any close for the s&p, nasdaq, would be all-time highs again. time for a news update with tyler mathisen tyler? >> here's what's happening at this hour. white house chief of staff john kelly addressing the gold star family controversy at today's white house briefing general kelly saying that when his son was killed in action,
president obama did not call him, adding, quote, that was not a criticism, that's not a negative thing russian president vladimir putin says he will retaliate immediately if the u.s. restricts russian news outlets in the united states and as for russian interference in the u.s. election, putin says u.s. and british media have long been influencing other countries' affairs. and a food truck explodes in portland, oregon fire officials saying the truck's operators -- look at that, my goodness -- they were fueling the generator with gasoline and the gas vapors ignited. that food truck and one other completely destroyed and look at the cars ten cars, folks, damaged luckily no serious injuries. that's the cnbc news update. bill, i love the 'stache back to you. >> yes, thank you so much, tyler. as we have mentioned, today marks the 30th anniversary of the crash of 1987.
that we referred to as black monday since it was on a monday, when the stock market fell by 22.6%. its biggest decline in history it was a 508-point decline for the dow. as i mentioned earlier if it happened today, 22.6% would be a 5,000-point decline. >> truly hard to fathom. it did happen. only a handful of the new york stock exchange brokers are still on the floor. >> there's a photo, when did you take that? >> two weeks ago. >> that was two weeks ago. the people who are on the floor today, those are the ones who were still -- who were here in 1987 it's a great picture. >> a couple of them here to tal about it art cashin kenny, cnbc contributor from o'neal securities and very special rare appearance from vice president at pershing and company 30 years ago. >> i saw that name on the guest list this morning, i said who is akil
archie where were you >> the blue room. >> yes >> one of the other floors. >> and my wife was in this room. >> doreen was here on the floor. >> you guy s have to have been the only married members -- >> at that time, yes. >> which is rare what was it like for you on that day? what was it like for you >> extremely hectic. starting at the opening, before the opening, nothing but sell orders came in in and trying to get indications of what the market would look like was impossible, couldn't tell our -- >> were you worried you were going to a lot of money, or say, there's a lot of trading and we're able to get through this >> main concern was executing the orders and executing them properly the money was going to be gone no matter what you're going to lose money but fortunately, the day after the crash, when everybody thought they were broke, the market turned around enough to restore the losses that they had
incurred >> everybody's making fun of my picture from 1987. >> i can't wait until you show mine. >> the 'stache let's see if we got one. i know we have one of you, john travolta's younger brother from "saturday night peefever. is that a mugshot? >> that's my license, actually >> are you wearing a shirt >> yes, i have a -- >> where were you on the floor >> booth "f" in the main room on the other side of where we are at the moment. i was 26 at the time so, you know, for me, it was -- it was incredible incredible, lt was for everybody. it was an experience for sure. >> you can hear the reaction on the floor as everyone's seeing these images you actually mentioned something interesting for you a lot of the drama was the day after, just as much as it was on black monday, itself. >> yeah. and just before -- just the day after, one thing we forgot to pou
point out, again, today, and that is president reagan sent a congratulatory note to the stock exchange and the members for their outstanding performance on the 19th when other people weren't picking up the phone, we kept trading. >> and, yes -- >> as to the next day, the market opened up, there was a cheer on the floor about, oh, an hour and 15 minutes later, it rolled over. and went negative. there was an audible gasp here everybody said, oh, my god after yesterday, we can't hold a rally, what's going on we then found out that what was going on is several of the major banks had solicited the lines of credit for the specialists and for the over-the-counter dealers and the -- >> liquidity was drying up. >> they were panicking they saw down 22%, they thought they might be liable they called up and said, bill griffeth, we're canceling your line of credit, can't get things done. >> famously the president of the
new york fed, gerald corrigan called the banks and said you guys open up the spigot again. >> at first they didn't want to do it. john thalen who was chairman reached out to greenspan who had been appointed to the fed. he was on a plane in texas went to corrigan, experienced enough, he got it instantly. >> he was a big guy, too, they were going to listen. >> dick grasso was there, remember the day on the phone, the red phone right down to the fed. >> it was really an incredible -- >> thalen was making the phone calls to the fed at the time it was an amaze dg ing -- >> i'm curious when you reflect on the exchange then and now, what are your thoughts about what happened during that 30 years? >> what happened -- the changes that were made were phenomenal automation come in computerization changed everything our rules have changed
and it's still -- the new york stock exchange is a private -- was a private business that took care of the public business that was our main concern now we're a public company still holding the interest of the public, the best interests at hand so there were a lot of changes but there are some things that remain the same. >> and something that i've long been struck by is the comrade that exists on the floor among those of you who trade here, no matter how long, but those of you who've been here the longest, the comrade is the strongest. >> yeah. >> clearly. >> i tell you what's amazing about that, this is like one general miller beer general. all day long, i compete with him, okay, try and outfox him, he tries to outfox me. on behalf of somebody we've never met. >> right. >> okay. to try to get things a little better then at the end of the day to keep from going completely crazy, i say to him, come on, i'll buy you a beer. >> i had a different problem
i competed with my wife. and she normally won >> happy wife. >> happy wife. >> i competed with my wife as well who was a member also. >> that's right. >> that is hilarious we were asking you folks what you were doing on this day 30 years ago. we heard from a few of you on twitter. one person, d., says she was at a quotron machine. anyone remember a quotron? watching the world fall apart on that dark monday douglas said he was watching sue herera and me. he says they were buying stock at the end of the day for mutual funds. another bill says he was in hawaii in the navy. >> wow. >> he used to get up at 4:00 in the morning when the market opened, he called his broker to sell two stocks. he didn't get his confirmation for two days. >> right. >> because the paperwork was so far behind trying to figure out what the buy and sells were doing. >> the most interesting part of that day, the tape was so delayed.
>> is yes. >> you're calling up and giving customers reports and telling them they sold them at, say, $50. they're looking at a tape, it looks as if the stock is still trading at $75 and they're screaming. >> let me briefly explain that it's not that we were slow, we trade faster than you can read a linear tape. >> correct. >> that's for sure. >> our prices were correct but had to explain to the client, look, this thing is not trading at 75, you know, that was 45 minutes ago. >> we have is to end, but if this happened today, could it happen today, first of all because we know that was one where the selling started overnight and wasn't a lot of w ways to disseminate that information quickly. would it be harder to happen today, would it actually happen more quickly what do you guys think >> we have all these supposed circuit breakers that are protected. i'm cynical. i view them as lifeboats painted on the side of a ship. they're reassuring to look at but don't necessarily work they didn't stop the flash crash. >> right. >> okay. when the vote was voted down, we dropped 700 points. >> remember that >> in august of 2015 when we had
the chinese devaluation, the market was down 1,000 points in three minutes. by 9:33 we were down had we gone to 7%, the market would have kicked in and halted trading for at least an hour, give a chance for people to take a great, what's going on. >> is nothing is as strong as a market that changes its mind. >> arthur cashin, kenny, and achille mogavero. earlier today -- we already did that let's move on, shall we? >> there we go. >> 20 minutes left in the trading session. >> dow lower by about a point. same for the s&p same for the russell down four and nasdaq down 26 today. verizon is shyer after this morning's earnings report that saw a stranubstantial increase n mobile phone subscribers. and how many planes does it take to fly a ceo somewhere? that's not a riddle. that's what ge investors are
with a huge move lower in united airlines today, it's down just about 12%. after reporting disappointing guidance now remember, we told you about the earnings when they first came out yesterday afternoon the move was not nearly anything like this. there was a tense earnings call. the airline says it expects passenger revenue per available seat mile to drop 1% to 3% in the current quarter. area where the street had expected growth. see the disappointment reflected in the share price drop today. >> not a happy phone call for oscar munoz, ceo of that company. meanwhile ge's earnings will be out tomorrow morning. today, the company finds itself in some unfamiliar headlines involving staff cuts and ceo perks. morgan brennan joins us now with more on that story morgan >> hey, bill, that's right general electric coming under scrutiny after the "wall street journal" reports the use of a second empty business jet on some of former ceo jeff immelt's business trips around the world, a plane used as a spare in case his own had mechanical problems. that did change in 2014.
it had been a ge-owned jet, a chase plane. in 2014 that changed when according to sources familiar immelt scaled back the longstanding practice to instead hire locally sourced planes kept on standby in certain areas for certain trips. to this, ge saying, quote, two planes were used on limited occasions for business-critical or security purposes." now based on some conversations on our air and also off, this wouldn't be necessarily unusual to have a local backup plane on standby depending on the circumstances, location and also some discussions with the board. but this does sound pretty sensational. the reason it's gaining traction today and that gets to the bigger dynamic that is under way at ge right now. cost cutting so new ceoflannery made it clear there are no sacred cows and doing away with company cars, potentially thousands of corporate-level jobs and doing away with that fleet of ge-owned jets so that is in focus right now. shares are down about 25% since the start of the year. and in focus, given the fact
that analysts are concerned about the dividend even though ge has called it a, quote, top priority. so more is expected on all of this flannery's big investor update ahead of that tomorrowing we got the earnings report. if you take a look at shares of ge, they are up 2% back over to you >> yeah, we'll see what kind of earnings report. that should be very, very instructive. morgan, thank you, see you later. morgan brennan. >> be sure to tune into "squawk on the street" tomorrow morning, they will be speaking exclusively with ge chairman and ceo john flannery in his first interview since becoming ceo. in the meantime, 14 minutes left in the trading session here the dow down just nine points. was down 104 we'll see if he can finish positive if the dow or the s&p or the nasdaq finished positive, would be another new all-time high again. verizon is trying to help the dow. saw big gains for its mobile phone business fios video and internet numbers were down. a bull and bear square off over what those developments mean for the ocrit tethstk ghafr is the finger lakes n
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from drexel hamilton and jonathan chaplain from newstreet research welcome to you both. you're a bull on verizon, not performed well this year and a ton of concerns about the kpet i competitive environment. why do you think it's a buy? >> i do technicals, technically you got to like verizon. well positioned, had two good quarters in a row. i think this quarter was very good i think they're going to perform very well with the new iphone. you want to put the best phone on the best network and best performance longer term with 5g, network, an extensive 5g spectrum portfolio. >> why don't with you like verizon? >> i think it's really easy not to like verizon. i think they had a really easy two quarters where the competitive environment has been really jegentle t-mobile out of the market for the last two quarters. holding advertising and promotion budget back for the big iphone launch which isthe
x. it got pushed out from sort of the big event of the year, got pushed out from 3q to 4q verizon's had a really easy time i think investors are looking at the trends of the last couple quarters thinking this is going to continue, the worst is behind us, the turn has happened. >> you're not impressed by the subscriber growth this quarter >> no, when we saw the lackluster demand for the iphone 8, we knew verizon and at&t were going to have okay trends in wireless it's really going to hit them when the iphone x comes out. >> so you basically think that the better apple's sales are of its new phone, the worse it is for the incumbent wireless companies. >> yeah. they're getting absolutely killed and have been for the last four years, both at&t and verizon. lots of customers out there making decisions on new homes, shifts in a dramatic fashion to t-mobile and sprint.
in an environment where not a lot of people are making decisions, haven't been great new phones out there, the guys, the incumbents benefit >> okay. what do you think of what -- >> i think the share of decision moves in verizon's favor when you got a $1,000 phone, $10 on your monthly rate plan is not going to matter all that much. in terms of the competitor environment, if we're about to see t-mobile and sprint merge, i thnk think that's going to take them out of the market while they wait for approval and have one large stodgy competitor similar in size to at&t and verizon. i think the market is going to be permanently a lot less competitive, more quarters like this with rising margins i tend to like verizon they get a benefit from that. >> i think that's a common view. rumors of sprint, t-mobile coming together, have been escalating, both at&t and verizon have been doing well i think the opposite is the case, though what's going to happen is t-mobile, effectively the new t-mobile is going to have a much lower cost structure which is going to allow them to be much
more aggressive. i don't think there's anything in t-mobile's behavior over the last four years that would make you think that they're going to sit back and relax to give them more ammunition. >> for -- they might be making this argument to regulators, but t-mobile and sprint would say, no, when we combine, we're going to have much lower expenses so we're going to have much more competitive offers in the marketplace so it's going to be even better for consumers with three players than with four >> that's going to be their pitch to regulators, they're going have to push that while going through the review process over the course of the next year i think that's the reality coming out of the other side of this, basically you're going to be arming t-mobile with a much lower cost structure and massive amount of capacity they're going to get access to all of that excess spectrum that's sitting over at sprint that isn't being used today. >> okay. >> you know, i think you're giving t-mobile nukes to go after the market. >> biggest concern, what would change your mind >> if the wireless industry did become irrational, as jonathan said, we've seen more rationality. i think it's going to become even more rational down the road
but if we did see irrationality in the market, that would change my mind on verizon. >> all right, gentlemen, good to see you, barry, jonathan chaplin, thanks for joining us today on verizon. come back with the "closing countdown. we'll have fun with numbers, 30-year-old numbers coming back in a moment here. >> the sign is the height of the line and the co-sign is the horizontal -- after the bell -- >> we'll explain. >> -- paypal is out with its earnings analysts expecting double-digit growth and some seeing it become the go-to payment platform ahead. you're watching cnbc, first in business worldwide. >> and this will be on the midterms driving specific sectors of out performance. where a rising middle class powers a booming auto industry. a leap into the digital era draws youthful populations to mobile banking and e-commerce. trade and travel surge between emerging markets. everyday our 1,100 investment professionals around the world search out opportunities for alpha.
(bell mnemonic) so just inside three minutes here as we head toward the close, and wondering whether the dow is going to finish positive here let me tell you a quick story. we're all thinking back on 1987 and 30 years ago and the big crash. i first came to new york city first time i saw the new york stock exchange in august of 1978, summer i turned 22 if you told me back then i would be standing here working on the floor of this historic building, i'd have told. you that you were crazy. i got to tell you, i pinch myself every single day when i come in here i am so proud to be able to work on the floor here at the new york stock exchange with these people who do such great work and it is a real pleasure to work with many of them
including mr. pisani bob, as we head to the close here, i want to have a little fun with numbers here as we look back 30 years ago today. so the dow right now is trading at 23,152. you will remember where the dow closed on october 19th, 1987 >> yeah. tough one, 17, what was it -- >> 17,038.74 right now the ten-year yield is around 233, 234? >> let me guess. i have no idea how about -- ten-year yield? >> ten-year yield. 30 years ago today. >> 11? >> nope. that month, it was averaging around 9 1/2 and hit 10% as we -- >> is a year before that was 1 11.2%. 30-year mortgage, 11.2%. >> oil, wti trading $51.31 this is going to kill you. this kills many he where was it 30 years ago today?
>> i don't know. >> $19.79. a barrel man if gasoline prices would be today if oil were at $19 a barrel >> i think elon musk would be in a little bit of trouble at this point. >> my favorite video of the day, you 30 years ago crew we you were a handsome guy with the mustache still handsome. >> obviously will ferrell was watching dollar, in this particular case against the british pound, there was no euro in 1987. i wanted to flip it around but that's okay, guys. it was trading -- around $1.31 now, $1.31 i think it is. >> yeah. >> $1.68 at the time was the exchange rates -- >> look, bill, we just went positive on the dow. we were down 105 points. >> so is the s&p >> you can't keep this market down some concerns about comments made in china, about asset bubbles over there dropped the
markets in china, hit us here and europe as you can see we're ending the day in positive territory. >> so we look back, we look forward as well. earnings coming from paypal among others coming up as we close out with records, again, for the dow, the s&p and i think for the nasdaq stay tuned for hour two of "the closing bell" cwith kelly evans and company. see you tomorrow, kell >> thank you, bill welcome to "the closing bell," everybody, i'm kelly evans all hour we've been trying it to see if the dow would finish positive eked out a gain of 8 1/2 points. which is csignificant. we were down more than 100 this morning. 23,165 is a new closing record high for the dow 30. meantime the s&p 500 adding a point on the bell, another record-closing high for the broad market as well the russell 2000s, 1,502, ten points off the closing high, down three points today. nasdaq composite down, 6,605 with big faang names weighing on
the index today. more on that in a moment. paypal earnings due out any moment we're going do have instant analysis of those results as soon as they are released. one of the best performers of late to talk joining me today, cnbc's michael santoli, stephanie link from tiaa investments welcome to you both. let's begin with some of today's market moves there's neil hennessy, too we haven't forgotten about you, neil, from hennessy funds. joining the fray today as well let's begin with the market moves. trading day began with a potential major selloff in the dow. it did lose as much as 105 points in the low. we closed there positive as you saw. today's big winner in the dow was travelers, had a nice double beat on its earnings this morning. the biggest loser was apple. we'll have more on that shortly. trading at the top on the s&p, the move i can't get over, a 12% pop in adobe biggest laggard, united airlines with a big move to the downside. what are your thoughts >> adobe separated itself from
faang, everything else >> i look back, five years ago this company was trading in the low 30s. it is now at 171 -- it's almost doubled in the past year. >> it yeah, so it's sort of like i said, it's its own story not really representative of a sector or anything else necessarily. the overall market i guess you have to say doesn't it figure the day we're commemorating the most violent action in history, the market is almost dead flat. >> can't keep it down. >> i was joking if the dow would end up down 5.08 points today,sy tenacious grinding bid in the market the baby step back from risk globally from china. and europe but not all that much to it otherwise. we're still overbought probably still should pull back but not yet. >> stephanie, we started with concerns about china there were comments about a m s minsky moment. >> felt negative from the beginning as soon as we woke up, right, china concerns, spain
concerns so kind of was a pile-on i think it also had to do with the fact that earnings last night weren't really stellar they didn't crush. american express was very good but wasn't good enough ebay was fine but their puts and takes and not enough given -- >> the united call. >> well, a different story because that should have been down maybe not that much but should been down based on that conference call. we can get into that if you like but i think the earnings last night set the stage. united rentals, good beat, raised across the board. it couldn't hold its gains we started off negative. i think people took a deep breath and said wait a second, these earnings aren't terrible by any stretch of the imagination then started to see the banks start to rally, industrials start to rally, health care being a really great sector as of late. that started to rally. i think that was this -- that's what we've been talking about, this rotation all year long. that's what happened today. >> you should mention a move in technology, though, still one of the worst performers on the session today. apple brought it down with a decline of nearly 3%, its worst
one-day drop since august 10th neil, what do you make of how poorly these names are trading even as the market did shake everything off and keep going higher >> well, kelly, you're going in and out of my earphone, but essentially just specifically on apple, right now the price to sales ratio, going to pay $4 for dollar and revenue more importantly logically speaking, how much more do we need on our phones they come out with an 8 or 9 or x. i can't figure out any of the apps on my phone anymore so to me it doesn't matter so you know the revenues are going to have to slow down >> steph, what would you add to that >> i think no one expects the 8, or the 8 plus to be anything it's just an upgrade to the 7. maybe you get some 6s upgrade to the 8s if they want to. >> crazy question, should they have skipped it all together look what happened with the 5c and 5s the 5c became a distant memory after that. >> i think the 8 plus, 8s, whatever, is going to be better than what people are thinking.
i think the 8 is probably not so much i would have been happy with them just waiting and releasing the x and 8 at the same time because now you got this timing thing. and so on the conference call, on apple's conference call, maybe they have to adjust numbers and expectations based on the timing, but the timing is coming right? the 8 is coming and it's going to -- i think it's going to be a good cycle and so that's why you want to own the parts guys the suppliers. because they will benefit from the x or the 8 kind of thing. >> some of the names did move lower. >> they did. >> not hugely. >> opened down and many of them got bid up for sure. >> yeah. i mean, i think the whole story behind apple is what is the short of natural steady state of upgrade rates? right? so in other words, outside of the big splashy new releases, what is that inherent amount of upgrades you're going to get because you have so many phones in circulation that need to be refreshed?
in terms of whether they skoortf skip the 8 -- maybe they should have skipped the 7 7 was the halfway point. >> the 6 was the toyota camry. then it did pretty well. >> right. >> maybe we are reading too much into these early reports about the 8. >> i think the issue is you have to deemphasize the every two, three year big splash yny new phone. like cars. cars have a new model year every year but not a redesign. every three, four years you might get a redesign. >> apple stock corrected 10% from the recent highs when negative reports started coming out and went from 150 to 160 like that. to give back another five from year, i think that makes kind of sense. >> two steps forward, one step back. >> i think so. >>. all right. the senate moving along to washington today, the senate is expected to vote on its budget resolution this evening. it's a key first step to getting tax reform done. meanwhile, there are reports gop tax writers are considering allowing property tax deductions while still getting rid of the
state and local tax break. neil, what do you make of the moveses o s ouout of washingtons of the impact it will have on this market? >> i really think they'll get corporate tax reform through quicker than they will individual and if it's explained correctly, if corporate tax rates come down, profit are going to go up which means the stock market is going to go up which means the middle class is going to be the beneficiary of it because the rich don't need their pension plans, they don't need their ira bs what the middle class people do, and so that's what's real willy going to help the middle class if we can get corporate taxes down. >> you think that's going to happen at this point, neil >> yes you keep breaking up, but anyway, yes, i do. i think it's very important for the economy. it's been a slow growing economy but this could really heat it up, kelly, from the standpoint that it will allow corporations to expand, yet at the same time,
bring money to the bottom line to increase earnings and if it -- their expansion plans don't work, they shut them down, bring that futures -- those earnings back in the futures earnings so it's really good for corporate america and good for the stock market good for middle america. >> all right we'll see, of course, watch this evening if that whole process can move along. meantime we had shares of united tumbling today, that stock was down 12% and it did come after some weak guidance. and a tense earnings call where ceo oscar munoz said the airline, quote, dug itself into a hole when it comes to competitors. michael, this was a rather -- i feel like a curious one foed just sort of an odd one, don't you think? >> you mean the actual stock reaction >> the whole narrative it feels like it changed so much more once we got into the call than we really talked at all going into it. >> yes, definitely did it was not the reflex reaction to the numbers, themselves look, i think that's what the market is very sensitive to,
guess what, capitalism is the same as it's always been when the market's good, everyone adds capacity and competition causes returns to go down. that's what the stock valuations of airlines are telling you because they look very cheap. >> but american said it's never going to lose money again. >> yeah, exactly that's the human being roubris them expand. not all negative better cycle that past cycles. >> it's cyclical. >> when you have gianted saying we will not see market share, that means, you know, lower returns. >> what's yaeour read on it, steph? >> it was so vague in terms of the guidance for next year. they didn't want to talk about cost trends, capacity trends, margins. and it goes against what they said at their analyst meeting, you know, back in 2016 so i kind of feel like there's -- we just don't know what the path is going to be to profitability. and it's that lack of communication that caused the derating because people were already a little bit anxious about this managementment team to begin with, given all that has happened
so maybe than can fix it if they communicate better but didn't do a good job. >> etch ven if they had come oud painted a picture for next year that was worse -- >> it wouldn't have been down this much. probably would have been down. all the airlines have seen a nice little trade higher in the last couple weeks for sure, so maybe you would have seen a playback is it lack of clarity, lack of visibility it's hard to model, hard to figure it out. i tell you, capacity is like a really bad -- you know, when people think that capacity is going higher in the airlines, that's not a good thicng not a good thing. >> united down 12% today, down 18% this year. let's talk about some of the old nemedia names, likes of disney, comcast, our parent company and viacom moved higher today. facebook lagging on the threat of a new bill proposing its ads be regulated neil, is major regulation coming for facebook >> well, i mean, if you look at facebook, you got a p/e of 40, your price of sales ratio of 15.
so you're going to pay $15 for $1 in revenue. to me, that's not value. that means you're buying growth and what growth means is you're buying into something that might or might not happen in the future so i'd rather go with something more conservative like a brinks or pvh or thor industries. something where there's really, really value there that long term you're going to make money. just not going to make it overnight and nor are you going to lose it overnight, kelly. >> for a second i thought brinks had launched a social media platform i'm following you now. michael, what do you think especially highlighting the move in old tech relative to what happened -- >> it strikes me at least today as a trading rotation. it's not the market saying, wow, this is a game changer, facebook and the rest are going to be nothing but new versions of old media. it's a matter of, well, we have to lighten up here, taking chips off the 25i7b8 table. the old stuff has gotten beaten up a little bit.
>> a lot bit. >> slolooks like one of the seew trades. >> stretchny, for investors does it have to be a case for either/or? okay we're betting on the disneys and comcasts if this environment because facebook could be weakening or do they have to get lumped together or what do you think? >> i kind of like to take a barbell strategy within technology i want some growth for sure. i don't think that facebook's growth is going to decelerate. in fact, i think it's going to be a very good quarter i own it i market weight it given the run that it's had. i appreciate that it would pull back or some people would take some money off of the faang trade. that's, by the way, some of the reason why adobe did so well had some rotation from the growth managers from some of the faangs into adobe. however, then i do like -- we talked about comcast last week thought that was so overdone on the downside i got to find another name i know this is the parent company but i think it's a wonderful story and it's gotten hit very hard. as has disney. i do think disney has more secular problems than a comcast. i think verizon's numbers today
certainly helped the old school of technology but if i want to find growth in media, i'm going to lean toward the comcast. >> let's look, paypal sort of fits into this whole discussion here their earnings are finally out aditi roy has the numbers now. aditi? >> reporter: hi, kelly those shares are surging 5.5% right now upon some strong earnings numbers. it was a beat on both the tom and bottom lines revenues coming in at $3.24 billion versus expectations of $3.17 billio $3.17 billion. it is the tenth quarter out of ten quarters that the company has beat or met expectations on eps since it became a standalone company and on revenue, it's beat expect tigs ations nine oun times since it spun off from ebay another important metric, net new active accounts, 219 million. the company saying that's up 90% from year every year part of that growth also was a
beat on expectations, by the way. part of the growth coming from mobile payments, continues to drive growth up 54% to $40 billion in the quarter also venmo added more net new active users in h this quarter than any other quarter before. speaking of venmo, the company just announced this week it would be expanding venmo to u.s. retailers, 2 million of them expect to hear more color on the call on that and we will be listening in on that call. shares, again, up about 5% kelly, back to you >> aditi, thank you very much. you know, mike, just to hammer the point, again, we talk bed about this with adobe, paypal also doubled trading basically in the mid to upper 30s around this time last year here it is popping over $70. >> right at the center of favorite kind of long-term growth story in payments it has certainly a central role in the way that payments are going in many different respect whether peer to peer, mobile, a digital wallet story expensive stock. all these stocks are, whenever it seems like a slam dunk thesis they keep redeeming it
the stock as it pops after hours here is slightly above its recent all-time high so it looks like it was an expected beat, but enough of a margin of victory there that it's worth a little bit of a reflux pop. >> neil, what do you feel about paypal >> i don't know much about it, kelly. i just know what i get paid and what comes out of my check and they get to keep the money for a week or two before they send it off. in the economy, a slow economy, but it's growing, they're going to do very well because they got a good nice little niche >> it's -- they got venmo, one of those phone apps, neil. i'm guessing you didn't download that one. >> no. i wouldn't know how to do it >> come on, your kids -- your co-workers can download it for you. this is market research, neil. i don't think we've convinced him. what about you, steph? >> these guys are in the sweet spot it they truly are. mobile growth at 54%, total payments volumes, people were
thinking 27% this was a beat, a raise and a beat by enough to have the stock go higher, so quite the opposite of what we saw last night where it just wasn't enough. >> all right there's the earnings stephanie, neil, thank you both very much for joining us here the top of the hour. >> thank you. news alert on the zeshsearcr the next fed chair eamon javers joins us. >> reporter: politico posted a report saying their reporting suggests federal reserve governor jay powell is the leading candidate now. to replace janet yellen at the federal reserve. that's according to politico i just spoke to a white house official about that report the official not confirming that report, but also not knocking it down, notably. we do know the president and janet yellen spent about a half an hour together here at the white house earlier today and we believe that that was the last of the official interviews that the president will do before making his decision. we're expecting this decision to come by november 3rd when the president leaves for a long trip to asia. they'd like to have this buttoned up by then. the interview process now
completed. at least with an initial interview with every one of the five remaining candidates. we'll wait and see now whether the president decides to call anybody else back to the oval office for another session, or if he feels he's done enough in-person chatting with these candidate and ready to make his decision that's all still to be determined so we're in a little bit of a gray area here, kelly. >> yeah, frankly, b i'm not going to believe anything until the president, himself, announces it with this white house. >> reporter: that's right. >> eamon, thank you very much. very much appreciate it. we've got some news on the personal shopping service, stitch fix jon fortt has that story jo jon? >> reporter: stitch fix was planning to go public but filed an s1, a bit more information about the company from that. planning to go public on the nasdaq symbol sfix. s-f s-f-i-x. goldman and jp morgan the lead underwriters in the s1 which gives some more details about the company, they say they have more than 2
million active clients and go quite a bit into data science, artificial intelligence as being the technology route of the business katrina lake, the ceo, founder of stitch fix, well known in silicon valley this is a big deal for this company, this company based on ai and fashion to be planning to go public and on the nasdaq, which hasn't been winning all of the ipos lately. so certainly a feather in the cap for them. >> that's true jon, thank you very much michael, just quickly, this hits all the hotspots we just spoke about. we had -- it's not a clothing company, it's an ai company. >> that's right. you have to be i mean -- clothes are yesterday and ai is tomorrow i think that's going to be -- look, this is what ipo rushes in bull markets look like which is a lot of companies following similar themes trying to seize on what's working and a lot of them get out we actually focus on each one of them because it's been so slow in the ipo -- >> that's true we'll see.
stitch fix, though, s-f-i-x certainly going to be one to watch. it was one of the darkest days in the stock market's history. 30 years ago today, the market suffered a crash that became known as black monday. the dow plunged more than 22%. could it happen again? we will get into that next plus, apple having its biggest one-day drop since august 10th on new concerns about its watch and sales of the iphone 8 find out how big of a red flag this is for apple and its supplis,omg er cinup six in the morning. she thought it was a fire. it was worse. a sinkhole opened up under our museum. eight priceless corvettes had plunged into it. chubb was there within hours. they helped make sure it was safe. we had everyone we needed to get our museum back up and running, and we opened the next day.
welcome back and today marks the anniversary of the 1987 market crash known as black monday. the market dropped more than 20% in the single session. we also remember this famous remark from financial journalist when he addressed the crash on his show "wall street week" back in 1987. listen >> just your money, not your life everybody who really loved you a week ago still loves you tonight. and that's a heck of a lot more important than the numbers on a brokerage statement. >> great sentiment, tell you how bad feelings were on that day. let's talk more about the anniversary, also about whether a crash like that could happen again. joining the conversation is ed from ned davis research.
and chris from mufg union bank guys, welcome to you both. ed, one of the interesting points that black swan guy makes is the fact that a drop of 22% should never statistically really happen in the stock market or if it does, it should certainly only happen once what do you think is going on with the functioning below the surface of the stock market today? >> well, i in thithink that's a excellent point. talking about 3,000 trading days since 1900 and this was by far the biggest drop of 22%, the second biggest was 43% less than that only been two trading days in addition to '87 crash where the market fell 10%. so this really is an outlier if you're talking about what could potentially be a driver of this portfolio insurance certainly was a catalyst back in '87. the dark pools and etfs are the things that are talked about today. you have to keep in mind just
how much of an outlier '87 re really was. >> chris, the interesting point, several drops since then, magnitude of 7%, 8% in the late '90s if you go back and look we talk about how calm and placid this market has been. not out of the ordinary going to the financial crisis, too, to see a lot of huge intraday swings right? >> yeah, i mean, you know, it's risk management to go back and look at what happened in october '87, sand see based on your models are the markets going to survive, is your company going to survive so i guess the rule of risk management is if it happened once, it means it can happen again. and, you know, the public can still panic and if anything at this point, it was, you know, back then if '87, there was no e-mail, cnbc had not merged with the financial news network that i used to go on with a lot the internet wasn't there. right now the baby boom
generation is 50 to 70 years old and a lot of their net worth is tied up in stocks. i'm just worried what would happen if the baby boom generation panicked and cashed out and i think it could happen again, certainly never say never. >> you know, ed, i've been making the point all day that, yes, it was kind of a fluky occurrence, clearly some mechanical forces that were kind of undercutting the integrity of the markets on that one day. but there had been stresses building up in the capital markets for months before that it just didn't come out of the blue into a calm market environment. right? you had bond yields surging, you had the dollar cracking. the stock market, itself, was down 9.5% the week before the crash so it seems as if if nothing else if there's a conceivable day that could be approximately what the crash was, it would probably be preceded by some nasty action as well. >> absolutely, most market declines are preceded bya
narrowing of leadership. stocks going up versus down on any given day peaked in march of '87. yesterday it was at a record high and if you look at bond yields, ten year went up 300 basis points in 1987 today, we're freaking out over 32 basis point increase in the ten year so if you were to take the '87 part out of it and just say, are we heading toward a big peak, to a major decline? the signs are few and far between at this point. >> all right gentlemen, thank you for joining us walk down memory lane. very much appreciate it. ed, chris joining us today here's what james said on twitter about black monday are we reading this? want to read this? 30 years ago james said i tried to cross montgomery street in san francisco, he said it was closed down due to so many investors trying to enter schwab. >> back when you had to actually go into the schwab austs officeo
couldn't get through on the phone. we'll take a quick break apple shares rallied more than 30% this year but down sharply today on worries of the iphone 8. up next we'll discuss whether the shine is off the apple. plus lawmakers on capitol hill spro deuintroducing a bipan bill to regulate internet ads. how it could impact companies ke facebook and google that's still to come on "the closing bell." when this bell rings... ...it starts a chain reaction... ...that's heard throughout the connected business world. at&t network security helps protect business,
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fueled by strong university partnerships, providing the world's best talent. and supported with workforce development to create even more opportunities. all across new york state, we're building the new new york. to grow your business with us in new york state, visit esd.ny.gov. welcome back it is time for a news update at this hour with tm yler mathisen.
hi again, tyler. >> tauhank you defense secretary james mattis saying today, "we do not have all the accurate information yet on that niger ambush." he says it will be released as it becomes available the u.s. still looking for answers on the attack by 50 isis affiliated fighters that killed four u.s. soldiers. former chairman of dean foods sentenced to two years in prison, tom davis pleaded guilty to giving tips to billy walters who profited millions off the insider trades the case also entangled the pro golfer phil mickelson who wasn't accused but agreed to pay back $1 million he made trading on the information. and massive protests today at the university of florida white nationalist richard spencer speaking at the university the school's president rejecting spencer's comments but feels obligated to let him speak. the hottest halloween costume this year, penny wise the clown. from the movie, "it. i thought it was i.t. all along. if you haven't gotten "it"
already, the costume, you may be too late the costume sold out in some places in which case there's always wonder woman. that's the cnbc news update at this hour. back to you all. >> that's your -- you're a wonder woman kind of guy for halloween? >> not me. no, no, no, no i'm the naughty nurse type >> okay. so long as you send pictures see you later. >> see ya. >> tyler mathisen. apple the biggest loser on the dow today down more than 2% after several reports this morning highlighted company headwinds in china cellular service for the new apple watch being abruptly shut off for new customers and cutting supplier orders by the iphone 8 and 8 plus by as much as half. joining us, ed lee from recode, along with gene munster. we appreciate you both joining us ed, how much do you think we're making -- how much do we know about what's going on with sales of the iphone 8? >> so, you know what, apple has three main factories making all their stuff. they do that on purpose.
partly because they don't want to sort of aly themselves too closely with just one, that could be a hurdle or difficulty down the line. do a channel check on any one of these factories, doesn't necessarily tell you what'sfacty i put a grain of salt on those concerns at the same time, this weekend i bought an iphone 8 for my wife. >> why did you buy that? >> hers was old, she wanted to get a new one. she didn't want the big x one that's going to come later had exactly the color, con figuation, cell service exactly we wanted. had in stock no problems. that told me i guess they have a lot of these potential positive spin on that, people are waiting for the x which is more expensive. i actually thought it would be quite the other way around looks like they want the big one. >> gene, how much of a problem is it for apple if the 8 doesn't sell that well, but if the x does >> that would be a great scenario typically in a cycle, which is the next year, about half of the
phones are the most current version. so this time it's going to be a split between the iphone 8 and x. the early work we've done in terms of u.s. people and consumers waiting to buy, it looks like almost 30% of those are going to have an interest in buying the iphone x versus about 20% for the iphone 8 obviously this gets to the biggest lever in the apple story over the next 12 months which is higher asps, so i think -- >> average selling price. >> -- don't be concerned -- yeah >> michael, here's what i'm wondering, though, what happens if the iphone x doesn't sell a blockbuster? >> honestly very hard to tell in terms of what's baked into the stock at this level. not as if the stock rushed off to new highs in the last couple months and everybody thinks it's going to be gangbusters for the upgrade cycle, expensive stock, no room for error. not the case at all. apple screens out statistically as cheap enough. to me, it's not just the next few months but as we were saying
before, what is the typical pace of sales as you go forward into this cycle i think -- >> you want them to report like the auto sector. >> i think apple would love to get to that point where it's not about is this one going to be a huge hit, is this one changing the world the way the first one did? >> also the way they're selling them, they're selling them by, like, you know, monthly installments mobile carrier charges play a factor into that as well. >> ed, gene, we'll let you both go thank you, ed lee, gene munster. >> thank you. >> breaking news on cell gene. what's happening there >> cellgene, they say they're discontinuing a phase 3 trial of a drug called ged 301 after a data monitoring committee assessed that the overall benefit risk was not worth continuing essentially they say there were no meani meaningful safety imbalances identified in the analysis they also say at this time another phase 3 trial of that same drug, i believe, will not be initiated they say they're looking to
review the full data set as they make decisions about other clinical trials here, guys celgene discoronntinuing this pe 3 trial in crohn's degree in the analysis in the middle of the stu study. we'll bring you news about what the shares do with enthat thatwn kelly. >> more significant because celgene needs new products or chron's disease? >> a big part of celgene's pipeline they say they have other diseases in in this area essentially. but this one was one that people were excited about so looking to kind of dig in a little bit further and figure out how this affects their strategy >> all right meg, thank you of course, we'll be watching at 5:00 p.m. when celgene shares re-open. they're halted on that news. paypal shares surging after reporting better than expected earnings up next, we'll debate whether you should pay up for the stock which is up nearly 70% this year. plus netflix is firing back
at nielsen for its plans to provide ratings for the amg rve'shs.ow our "fast take" on that is coming up. you start trading. >>yeah, 5 years already. 5 years, hmm. you ever call your broker for help? >>once, when volatility spiked... and? >>by the time they got me an answer, it was too late. td ameritrade's elite service team can handle your toughest questions right away- with volatility, it's all about your risk distribution. good to know. >>thanks, mike. we got your back kate. >>does he do that all the time? oh yeah, sometimes he pops out of the couch. help from real traders. only with td ameritrade.
at the lows and we closed positive mike, here you go, 5.44 points not 5.08. >> we were up, though. not down. >> oh, i'm sorry, we closed higher we were looking for black monday parallels. >> pretty close, though. >> the s&p up less than a point there. that would be records for both the dow and s&p. as you can see the nasdaq down 19 smaug cap russell down three points today. shares of paypal on the move after the company reported better than expected earnings moments ago after the bell shares up about 3% the stock has been on a tear, up 70% this year into the earnings report does paypal have more room to run or not joining us, brad burning, has a buy rating on the stock. along with luke capital's joseph vaffy who has a hold rating. welcome to you both. brad, i'll start with you. make the case for paypal after it's more than doubled in h tte of its market value over the past year. >> yeah, we recently came out with a note with an $83 price target based on 2019 and
expecting the strong net account growth you saw, record accounts oust the order would come about because of the value proposition they provide to consumers but also as well as you're seeing banks pay their customers to sign up for -- signing up for paypal accounts. and so, you know, clearly it's not about who's in your wallet, it's about who's first in the wallet the banks realize that that's helping drive the growth here lastly the customer choice that they've had cut down customer attrition so we continue to see the strong growth, it's accelerated well this quarter. evident in the numbers >> all right joseph, what's the counterpoint? >> well, paypal has clearly exploited the seam in the payments industry but i think the way we look at the name is, you know, we're focuseded on the pnl and the numbers here and if you just look at the numbers that just printed today, really strong top line growth of 22% but it's a little sobering to see that the actual transaction
expense or in essence the cost associated with the transaction growth grew 32%. so in essence, the growth is coming at lower margins versus a year ago period and to a certain degree there's at least for now a little bit a hole in the bottom of the bucket in terms of the profitability k078ing from growth. >> michael, i'm looking at the market value of american express, $81.2 billion paypal, $80.9 billion. paypal is valued more highly than american express. does that make sense >> you can make it make sense. paypal is probably addressing a bigger market if they stay at the center of the payments world. american express is really kind of fighting over zero sum in terms of who owns and uses their cards. you know, at some point maybe that equation changes when it comes to paypal. in fact, i'd be interested to ask the question, you know, maybe to brad, it's fascinating
to see mastercard, visa, paypal, first data, all these companies that are at different layers of the payments world, sometimes on top of one another, all thriving at the same time i guess it leaves the question, is there enough to go around, are they all going to maintain their position in this new world? >> yeah, no, it's a great question look, we're still in the early stages of cash and check transferring over to payments on plastic. we're still extremely early in the game of payments transferring from plastic to mobile this is just -- we're in the same stages of growth where it lifts all boats. a long ways to go on this. by our estimates there's still over $2 trillion in cash spent by consumers in the united states, alone. and we're far more developed in some other parts of the world. this is a global franchise you know, you guys are talking about whether it's expensive or not. i think if you look net of cash on this company, it trades at a. p/e actually in line with visa and mastercard despite the higher growth, despite the
stronger growth in the bottom line look, the reason why, you know, we're seeing top-line growth be stronger in the transaction margin come down, is because of the strong growth in venmo which has only begun to start to monetize going forward from here i don't see that as a sign of problems we'll see the growth in that margin rate of decline should start to improve going forward >> it granted the banks are launching their own payment system here. gentlemen, thanks for joining us appreciate it. talking paypal. >> let's send it to meg tirrell for a different earnings report. >> looking at skechers, beat for a third quarter on earnings coming in at 59 cents a share versus analyst estimates of 43 cents. also a beat on revenue coming in at $1.09 billion versus analyst average estimate of $1.07 billion. the q4 eps guidance looking maybe slightly conservative at 9 to 14 cents versus 12 cents estimate that not affecting the stock up about 22% after hours, kelly.
back to you. >> i got a lot of questions for you on skechers, meg, i want to know everything you know about this company. >> it's shoes. yeah >> thank you very much, meg. >> thank you >> huge move for skechers there. netflix taking a shot at nielsen after the ratings tracking company said it developed a system to track netflix streaming programs what the video giant has to say about that we will have next. still ahead google and facebook feeling the heat from capitol hill in the wake of russian advertising reportedly influencing last year's election what congress is looking to do and what it could mean for investors coming up. ♪ ♪ my ambition? helping people get what they want, understanding we're not in this alone, and teaching my kids that no ambition's out of reach. ambitions live everywhere. synchrony financial helps make them happen with data, insights, financing and technologies. ♪ ♪ synchrony financial. what are you working forward to?
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welcome back if is time now for our fast take today. and we begin with a clothing chain that is a huge hit with teenagers. no joke. these still exist. it's called supreme and maybe i'm just old, michael, but this is the first i'd ever heard of this chain it only has is11 stores. the "journal" said lines for its new york city location stretched three blocks sold a stake to carlisle valuing it at $1 billion it's been around since 1994. is this a flash in the pan >> first of all, no, you're not old. an alarming trend. engineering scarcity, creating status out f tof the fact you he to be in the know you have to maneuver to get ahold of stuff. >> two collections during the year, spring, fall season, they release one product a week i'm learning a lot they put is on instagram
there's a social media scarcity. >> it's obviously self-limiting, right, this company is never going to go out there and have 900 stores and go toiing to hav same-f store sales -- >> hoddly reassuring this still exists. >> normally would be a bestoke designerexclusive. this is more of a social gain. >> i have learned a lot today. next remember how we told you yesterday nielsen is coming out with netflix ratings nielsen had trial runs netflix is not impressed a spokesperson told "variety" nielsen's data is, quote, not accurate, not even close and does not reflect the viewings of the shows on netflix we on tv say, hey, netflix, join the club. >> or which we would say to netflix, okay, prove it. >> true. >> give us the real numbers. >> yes. >> i think the question for neel nielsen not do they have the perfect cap chuftuture -- >> is a little bit of information better than none >> exactly. >> if you have somebody willing to pay for whatever you might be able to green, lean, is that wot or not
>> this is a problem that the industry is going to want to crack on some level. >> i think you're right. timely today snapchat is selling an $80 dancing hot dog costume for halloween. okay this comes -- there it is -- after netflix execs wore sweatshirts with shows emblazoned on them during their earnings call yesterday. the tech editor had a snarky take saying "blue apron is laying people off, snap is resorting to hot dog costumes for revenue. great year for ipo guys. >> don't know if you want to necessarily lump this in with some kind of a company that's really in retreat like blue apron but in this world where you can get a picture that's shared virally, you might as well be promoting your brand somehow. >> maybe they're all taking a page from the supreme store that i now need to go personally -- >> if you go into halloween store and see costumes, they won't even put the official name on them. you can find a hot dog costume that's not the official snapchat premium $80 hot dog costume.
a new bipartisan internet ad regulation bill on capitol hill could have major ramifications for companies like facebook and google kayla tausche brings us the details. >> reporter: kelly, it's called the honest ads act it was rolled out today. it would extend regulation that currently covers political spending on tv and in print to social media, which requires platforms where campaigns are
spending money to disclose exactly what those ads are and who is buying them it would apply to those campaigns spending more than $500 it would be a new level of regulation for all of these social media companies the bill is sponsored by high ranking democrats in the senate on the election and intelligence committees and also john mccain who chairs the senate's armed services committee an is that t senate aide said to win more gop backing senator klobuchar says if companies sell political ads, they should be regulated >> only two companies, google and facebook, accounted for 99% of the revenue growth from digitizing in 2016 a pew poll has found that 65% of americans use the internet for election-related information in the last election, 65% of americans. and online platforms are now
dwarfing broadcast, satellite and cable providers. >> reporter: in comes amid multiple investigations into the foreign campaigns on facebook, twitter, and google that influenced the 2016 election warner and klobuchar says the companies were dismissive immediately following the election but have since admitted there were real issues and cooperated with lawmakers. the next stage in that cooperation, public testimony from the general counsels of facebook, twitter, and google on november 1st >> many wall street analysts say the biggest risk to these companies now is regulatory. kayla, thank you very much, kayla tausche in washington. after the break, why today's closing word with "woo." st ted so what else is new? how's your mother?
thank you so much. thank you! so we're a go? yes! we got a yes! what does that mean for purchasing? purchase. let's do this. got it. book the flights! hai! si! si! ya! ya! ya! what does that mean for us? we can get stuff. what's it mean for shipping? ship the goods. you're a go! you got the green light. that means go! oh, yeah. start saying yes to your company's best ideas. we're gonna hit our launch date! (scream) thank you! goodbye! let us help with money and know-how, so you can get business done. american express open. so you can get business done. i'm val. the orange money retirement squirrel from voya. i represent the money you save for the future. who's he? he's the green money you can spend now. what's up? gonna pay some bills, maybe buy a new tennis racket. he's got a killer backhand. when it's time to get organized for retirement, it's time to get voya. another day at the office. why do you put up with it? believe it or not you actually like what you do. even love it. and today, you can do things you never could before. you're working in millions of places at once with iot sensors.
analyzing social data on the cloud to create new designs. and using blockchain to help prevent fraud. so get back to it and do the best work of your life. it is time for the closing word today and the word is "woo" and here's would i. bids for amazon's second headquarters are due today cities from buffalo to phoenix are aiming to woo the tech giant to set up shop in their towns. as many as 100 cities have said
they would bid and several are keeping their bids a secret. stonecrest, georgia approved a vote to set aside land and rename it amazon, georgia. the mayor explained that decision on "power lunch" today. >> at this level, jeff bezos can be the mayor, ceo, king, whatever they want to call it. he'll be the first person to actually have a corporate city he'll be the first individual to have his own post office the biggest piece of it is they'll have an eternal brand, a brand forever with amazon, georgia. >> and there have been other creative attempts to woo amazon as well. the two michigan teams wore matching amazon, detroit stickers a development group in tucson sent a 20-foot cactus to amazon
which subsequently tweeted it wasn't able to accept gifts. this whole anything is about gifts. an iconic building in new york city turned orange last night. apart from the gags, there's also big money involved. new jersey governor chris christie says this week that a proposal for an amazon campus in newark would realize $7 billion in potential credits against amazon state and city taxes. it's easy to see why cities are going all out. amazon has pledged to invest more than $5 billion and hire 50,000 workers for the second headquarters some critics have said taxpayers in the winning city could end up paying a hefty price and real estate costs could soar as well. as the wooing comes to an end, it's time for amazon to decide where will be its home away from home >> maybe it will be a winner's course, you'll have to pay too much to get it >> yes >> but the losers will make out. everybody is getting their marketing messages together for come to our city or our area it doesn't have to be amazon >> i'm glad you say that, it's
almost like an excuse for all these cities to say, hey, look at what we have to offer i still wonder how much they're going to get out of this i thought it was interesting, the seattle person on air earlier today said good riddance there's a lot -- >> and san jose said the same. >> michael, thank you very much. that does it for "closing bell" bell "fast money" starts now. "fast money" starts right now. live from the nasdaq market site overlooking new york city's times square i'm melissa lee. tonight on "fast," the one bad apple chart. apple having its worst day in two months a top technician is here to explain how bad it could get plus from bad to worse, it is the moment of truth for general electric, the worst performing dow stock this year, down 25% ahead of earnings tomorrow morning. we'll tell you i