tv Closing Bell CNBC October 23, 2017 3:00pm-5:00pm EDT
stock story of the year. ge is down 29% today we had an upgrade. a downgrade. and a downgrade to hold. we had an -- analysts don't know, investors don't know it's a huge story. >> certainly s >> yep. >> thanks for whiatching "power lunch. >> "closing bell" starts right now. welcome, everybody, to kt the closing bell," i'm sara eisen here for kelly evans at the new york stock exchange. >> welcome back. >> you're wearing the wrong tie. >> i know, it's my fault. >> we're so -- >> we'll collect that tomorrow i'm bill griffeth. what a difference a day makes after a stellar comeback on friday as they were just mentioning on "power lunch" general electric selling off on the back of an analyst downgrade. we have the -- in fact, there was also that upgrade. markets ignoring that. they're going with the downgrade. we have details. >> dividend worries are there. >> a list of stocks that are
coming the new bellwethers it could be argued that ge has not been a bellwether for a very long time. meantime tesla shares also under pressure today over under certainty around whether the electric vehicle maker will be opening a new factory in china we're going to separate fact from fiction on this one. and after the bell, soon you'll be able to order takeout directly from the amazon app the head of amazon payments will be joining us exculusively to talk about the e-commerce giant's latest announcement. everybody's getting into the payment system business right now apple pay, amazon pay. >> international, too. alibaba pay, ali pay. >> absolutely. let's get to the top story out of washington. that would be tax reform and a major change being floated by republican lawmakers that could have a huge impact on your retirement savings cnbc's ylan mui is in washington with that story. ylan >> reporter: bill, a capitol hill source told me they were looking at lowering the limit on how much you can contribute to your 401(k) without paying taxes
right away now right now, that cap is $18,000 but republicans are considering moving that down to just $2,400. and that would allow them to shift all that deferred tax revenue from the future into the present and help them pay for big tax cuts but notice, i said they were considering that idea. it faces a lot of opposition from democrats the aarp and the financial industry, and the fear is it could discourage people for saving for retirement. also president trump may have put the nail in the coffin for this one this morning when he tweeted, "there will be no change to your 401(k). so you can't real will i get much clearer than that one proposal, however, the president does support, a fourth tax rate on high-income households the plan that was outlined by the white house and gop leadership has just three rates, 12, 25, and 35 axios is reporting that a fourth could be added on millionaires now, there are only about 440,000 taxpayers with at least
$1 million in taxable income they pay around 18% of the nation's taxes, and their average federal income tax bill, guys, about $921,000 so, a big number there, but, perhaps, could change in the future back to you. >> yeah, i'm just wondering how much these pay fors actually raise. i mean, first we were talking art border adjustments, then we were talking about state and local income tack taxes and clearly the republicans have to find a way to sort of balance all the cuts. >> get the right solution -- formula there. yes. >> how does the math add up? what is themost effective use of pay fors? >> reporter: they're hitting all the usual suspects here, so it's no surprise that these ideas are coming up. on the 401(k) contribution, the thinking is if there's about half a trillion dollars in deferred tax revenue through the year 2020, so it is another potential biggie if they can tap that piggybank, but if you start putting limits own caps and whatnot on it, it's unclear how much they would actually raise
>> ylan mui, thank you very much. >> thanks. >> it yep. going to have to wait for scoring. once we start to get actual details. for more on what the millionaire tax credit is a good idea, let's bring in maddie, and baranik from the mercada center. good afternoon to both of you. thank you for joining us maddie, i think you see this as a good idea. how much money do you think it could raise? >> well, let me be very clear, i'm all for getting marginal tax rates as low as they can go. i want comprehensive tax reform that is as smart as it can possibly be so to your point earlier, how much money does it raise, need to look at the scores, i think the estimates are $300 million tobillion to $o for keeping the tax rate where it is. this suspect a new tisn't a newe 9.6 for earners make over $1
million. that could be something that raises enough revenue to really plow it into something else that's more pro-growth in the plan rate reductions are a very important part of comprehensive tax reform but of course the way we treat capital, income at dig different levels than business income, those are important as well. >> paul ryan has pretty much guaranteed the millionaire tax will get through all this. you don't think that's a very good idea, why >> i understand the need for compromise, i understand the need for finding moneys to actually focus on the most pro-growth aspect of the tax reform which, by the way, is on the corporate side but i think this may not be the most productive way to do it and in fact, it could in the long term be counterproductive. and the reason i'm saying this, even though i actually don't think we're going to get as much growth at all by reducing this
top marginal rate is the fact that we have to remember, high-income earnings are the most responsive to higher tax rates than -- of all the taxpayers. and while it may not matter if the rate is staying this, at this level, if it goes up down the road, that's when you're going to start seeing brain surgeon, you're going to start seeing very productive members of society either retiring earlier or shifting their businesses or -- >> okay. >> -- worse, future generation brain surgeon deciding that it's just not worth it. so it's just -- there are other things we can do, we want revenue. how about going after the most outrageous benefiting the most high-income earners like the state and local deduction or better yet, the tax exemption for municipal bonds which really benefit really high-income earners. that would be more productive, bring revenue, would bring some
fairness and not lead us down, i think, a more risky political situation. >> i mean, mattie, i would think that the appeal here for republicans beyond being able to have some pay fors in terms of revenue is that they can say, look, we're not raising -- we're not cutting taxes on the highest earners, this is not a wealthy tax cut. in fact, we are focusing on the middle class but -- >> sure. >> -- i think that fall apart when you have the passthroughs, you know, when you cap the passthrough rates at a lower level. isn't that beneficial to the highest earners? h what about the estate tax? why don't they go after things like that if they really want to communicate that narrative and perhaps get democrats onboard 12. >> well, the lower rate for the passthroughs is important because it belies some of the things vero was talking about which is taxing high-income ea n earners who have a potential to create -- that's why the unified framework calls for a different
tax rate for that business income so putting aside the millionaires' personal income for a second, we're looking at people who actually have businesses that employ over 50% of the private workforce in this country so it is important that day have a lower tax rate and they're able to compete in this global economy i think that keeping the tax rate high helps republicans to make that argument that this is a tax plan that benefits middle income earners, certainly tons of other things in this plan that make that point as well >> all right ladies, thank you. i know we're making progress, but it still feels very early in this whole situation. >> we're getting there we're getting there. >> thank you for joining us. thank you. >> mattie and veronique. the dow, now it's negative as we go into the final hour of trading. let's talk about it as we get ready for this busy week of earnings david is with us at post 9, sitting next to peter costa who's president of empire executions, and rick santelli is
at the cme in chicago. david, you know, there's this whole debate about president getting ready to name whoever the next fed chair is going to be, a lo the of people on wall street we surveyed say it doesn't matter who they choose you think it does matter, though. >> we think it matters pretty significantly. if they were to choose powell or keep yellen on, then it will be a fed very much like the one we're used to, but if they choose 20 to go with a rad aical choice, two things will change the sense they'll give forward policy, let us know what's going to happen, that's important for the confidence of investors but also the possibility that worsh would, in fact, not give that policy guidance and give increased volatility to the market by saying we have to raise rates and attack, you know, inflation more directly. so i do think this is a very stark choice in they go with one of the more radical choices, rates can go higher, volatility can go higher and the markets can be disrupted at least for a time. >> rick, not sure any of the candidates that are being mentioned are radical, but
certainly they do have different policy positions do you agree that it's a threat to the markets here? that he might choose someone a little more hawkish? >> you zeroed in exactly on what i was going to say none of these choices are radical. what's radical are the choices previous fed chairmen have made truly. there's nothing radical i see in the horizon. no matter who gets in. listen, jay powell, mr. taylor, none of them are going to do anything that is horribly aggressiv aggressive in my opinion, the real issue at stake here is for the next time the market goes into a recession, or the next time we have a global hiccup that, to me, is the most important issue. because if we go right back into the tools that we should stop using, and abe and kuroda in japan are probably not going to, we continue to over time resemble more and more of japan, a celebrated stock move.
still 18,000 below their all-time high? >> yeah. before i get to peter, you want to respond >> yeah, i mean, i think what we're talking about is whether or not we're going to get forward guidance and you can't look at the fed policy post-2009 and say that it's been flawed. in a sense that it has, in fact, phone what it was supposed to do, reinvigorate the economy, create stabilities, low rates -- >> was it supposed to take ten years? >> well, the fact -- >> you think if they had known ten years we'd still have 2% growth they wouldn't have done it. >> who it was supposed to or not, the bottom line with unemployment rates at 4.3% with more people at work and stock markets in the united states at all-time high, it's very hard to make the japanese comparison, have any real weight to it >> they have very, very low unemployment as well very low unemployment. generationally low unemployment. >> stock market is 40% below where ours is. any case, what i would say -- >> they were -- 20 years ago. >> having -- right having forward guidance the way we do now and knowing what the fed is going to do, having an indication is very important to the confidence of the market that's our belief.
>> how are you, peter? >> for this fed, forward guidance would be like a cub fan telling you 2020's final results, but anyway, let's continue. >> yankee fine, i think the forward guidance -- >> that will be important. >> i agree with you. >> this is going to be our busiest week for earnings this week what are your expectations here for the market >> so far we haven't been disappointed i think the market is reacting well to what they've seen 37 and i think that you're going to continue to see a lot of these companies meet the expectations. my concern is about not so much the next three months, but the next six months. if they have the guidance where they're ramping it down a little bit, i think that's probably the best way to go i'm just being a little more cautious but six months ago they were giving pretty good guidance going into where we are now, and they're meeting it, so i think that, you know, corporate america has done a pretty damn good job of -- >> really? i feel like they always lowball guidance and the analysts always take down numbers and the companies always beat.
>> you know what it is, where they were six months ago, they've still brought it down but they didn't bring it down all that much. so they're beating these ek peckatio blank blank expectati expectations they've always given you guidance lower and beat it they look like heroes. they've actually been fairly, you know, aggressive in their guidance going forward which is very surprising. >> there have been a few exceptions ge -- >> well, g, e. you know, ge i think is a different case. >> yes, it is. >> i think that ge is -- there's a lot of management upheaval there, a lot of management problems i think once that gates straightened out, i mean, that is a core foundation holding of the cost of family fortune, by the way. i'm just going to let you know. >> if you look ahead -- if eps growth is 6% or 7% in 2018, we're going to look back at this moment in the market and think this was a good time to hold, our securities all through next year and earnings will drive the market even higher than it is
today. >> the fundmentals we keep hearing. thank you, david, peter, rick. we're heading to the close 47 minutes left in the trading session here minus signs pretty much across the board for the major averages right now. >> absolutely. the only sector positive right now in the s&p is health care. coming up, tesla reportedly making a big bet to set up shop in the world's largest electric car market that would be china. just ahead, we'll bring you the details of tesla's plan to build that manufacturing plant there. plus, we will bring you highlights from cnbc's exclusive interview with saudi arabia's prince, why he thinks bitcoin, hinis words, will go the way of enron. ( ♪ ) whoo! ( ♪ ) woman: class, let's turn to page 136, recessive traits skip generations.
fetesla reportedly reached agreement to build a manufacturing plant in shanghai. phil lebeau as the details how big of a zedeal is this, phl >> sara, when it's finally announced it will be a big deal but not a surprise tesla has said for some time china is the largest awe tore market in the world, want to manufacture there. according to the "wall street ge journal" the agreement would be
structured so tesla has a wholly owned factory in china according to the "wall street journal," there will be no chinese partner here that means vehicles made in china would still be subject, those tesla vehicles, would still be subject to a 25% tariff we talked about this for some time china is not largest auto market overall, it's the world's largest electric vehicle market and will be for the foreseeable feature this is the estimate for ev sales this year, they're more than double what they'll see in the united states here, that's for the entire industry, not just for tesla by the way, these plans come at the same time that prince alwaleed bin talal talking to andrew ross sorkin in odd rain ya was asked a question, look, would you buy into tesla at this point? so far he's saying it's not really on my radar >> i'd rather not comment on that because maybe some people
believe the value is right, it's not for me to enter that price it's too exuberant for me right now, obviously. >> too exuberant i want to show you guys this chart here this is shares of tesla versus crude oil going back three years. back three years ago you were to say, boy, who do i buy into more do i buy into tesla or buy into the idea oil prices are going to rise and it's a better investment no comparison at all, tesla has been hands down the better investment over the last three years. >> i love that word, though, exuberant, knthough, right? >> i was listening to the conversation earlier, phil he made the point, the prince did, that tesla was first in electric vehicles and perhaps that's why it's been so beloved. he said everybody is doing it now, ge, or gm, and bmw, he went nationally, internationally and the question is -- >> you're right about that, sara. >> if they catch up, do they get those kind of valuations >> you're right about everybody else joining into the race
i've heard that argument for two, three years it ain't going to be long until bwm catches up to tesla. that may happen some day it's becoming a worn out argument, hey, it's happening, they're going to catch up. talking 5 years, 10 years, 20 years from now that argument has been out there for some time. >> yeah, tesla, they're exuberant but also pretty nimble with all their strategies and enforcement there. all right, phil, thank you very much see you later. >> you bet. 40 minutes to go until the closing bell we're looking at stocks pulling back from record highs we set new intraday records on the dow, s&p and nasdaq this morning. it's really the nasdaq, though, that's been lagging all day down .50%. >> netflix taking the nasdaq lower. ge taking the dow lower. up next, jamie dimon and saudi arabia's prince alwaleed have at least one thing in common, they're both not big fans of bitcoin.
ahead, why alwaleed called the currency, quote, enron in the making. plus as i just mentioned, gi was once considered the ultimate bellwether of the u.s. economy not so much anymore. on the heels of the company's big selloff, today we'll tell you which stocks are the new bell wethers of this stock markt coming up. this is not a cloud. this is a tomato tracked from farm to table on a blockchain, helping keep shoppers safe. this is a financial transaction secure from hacks and threats others can't see. this is a skyscraper whose elevators use iot data
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on "squawk box," saudi billionaire prince alwaleed bin talal gave a very blunt answer when asked his opinion of the digital currency listen. >> i just don't believe this bitcoin thing, i think this is going to implode one day i think this is enron in the making >> really? enron in the making. >> i don't believe bitcoin. >> because >> doesn't make sense. not regulated, not under control, not under the supervision of any -- any federal -- any -- like united states federal reserve or any other central bank so i just don't believe in this whole thing at all i think it's going to implode. i'm in agreement with jp morgan head, dimon. >> that got him going, he was talking pretty fast there. he said at the end that he is in agreement with jp morgan's jamie dimon when it come to bitcoin. in recent statements, of course, mr. dimon called bitcoin a novelty and said it's, quote, worth nothing. so some smart people on both sides. of this trade.
i -- and i won't pretend that i'm burdened with a great deal of information about the minutia solve how bitcoin works but there's just a little something in the back of my head that says this might just be here for a while. you know the currency but i get the whole notion of it being a tulip bulb, you know it's a mania in the making here. >> where else should you look to find a more than fivefold increase in an asset if you want to call it an asset price this year >> talk about kpubs ranexuberane >> in sis is the point i've been trying to make all day, the underlying technology that backs bitcoin is, of course, the blockchain, ledger of transactions, takes out a middle maen man is, something all banks are working on, including jf morgan which illustrates the point i'm trying to make jame mn diie dimon says it's a the bitcoin, itself, maybe it's not an alternative currency, its
regulators are going to step in here, but this whole idea, jp morgan is launching a whole new pam processing network working with other bank to try to make payments faster that would cut down payments to hours instead of weeks and also cut down the cost of payments and that is something that gets people excited. >> let me just be clear, i think there's a future for digital currency maybe even an unsovereign digital currency but i'm not sure bitcoin is that is it, you know? h i think something else will come along >> well, there's certainly a lot of demand nr for it, look at th one-year chart. >> we're in the land rush period for this thing as they try to figure out what it's all about anyway, more comments from smart investors out there. 34 minutes left in the trading session. the dow was higher now lower. so at least right now, nobody's going to be setting any record highs at the moment zblchl. coming up, mcdonald's gearing up to report third-quarter earnings tomorrow before the bell but before this bell tonight, we got a debate on the stock with one analyst who says mcdonald's financials are
just one giant mirage. >> hmm one of the favorite restaurants stocks out there. >> i know it is, yeah. plus we'll bring you more from cnbc's coverage in saudi arabia including an update on the timing for the world's la e largest ever ipo saudi aramco stick around more "closing bell" after this today, a focus on innovation in the southern tier is helping build the new new york. starting with advanced manufacturing that brings big ideas to life. and cutting-edge transportation development to connect those ideas to the world. along with urban redevelopment projects worthy of the world's top talent. 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.
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shares of etsy on the move, moving south today on the back of amazon's launch of amazon handmade gift shop, which is a selection of personalized jewelry and gifts. amazon launching this gift shop in time for the holidays and etsy not responding well, down 3%. that's what happens, bill, when amazon plays on your turf. >> amazon impacts again. there it is. thank you, sara. we got about 30 minutes left in the trading session with the dow down 23 points. with me on the floor of the new york stock exchange is matt from virtue financials. moment ago, you just glanced at the board, what were you looking for? >> looking at the down volume versus the up volume today 3-1 to the downside. the market is not indicating that, at least not the dow the nasdaq has been by far t the -- >> s&p's down pretty healthy amount >> now it is i'm hoping the half hour comes pretty quickly here and we close because if we close, continue to
close this week, ominous for tomorrow >> because of all the earnings coming out >> yeah, you know, i think people are starting to show signs of being tired of this rally. we had a perfect week last week where the s&p and the dow closed up record highs all five days. that hasn't happened in a long time >>, ge on friday down sharply then it finished positive. some people saw that as positive today it's down 6% >> where were all those downgrades on friday >> they're never timely, right >> the question is, what happens going forward? it's the forecast for all these earnings the big day is thursday. we got a lot of earnings between now and then thursday, you got all the huge technology companies reporting all at the same time on the close on thursday. >> little bit scary today, some of the action today. i'm not going to work out to thursday, there's too much time in between one earnings report sends a whole sector crashing. i'm not saying a crash is happeni happening.
thi they tried to take it higher, some of the things are starting to turn. just be careful. >> all right got sweaty palms here. thanks see you later. sara time for a cnbc news update with morgan brennan. >> hey, sara, whhere's what's happening at this hour new york attorney general eric schneiderman launching a civil rights probe into the weinstein company in response to the sexual harassment allegations against hollywood producer harvey weinstein fired on october 8th by the company he co-founded. cambridge university's website crashing after it put steven hawking's doctoral thesis online for three downloads his thesis "properties of expanding universes" was completed in 1966 when he was just 24 years old. in texas crews cleaning up oil and tar on corpus christi area beaches after a fuel barge caught fire on friday. local authorities estimate 2,000 barrels of oil leaked from the barge. and production is under way at the louisville slugger
baseball bat factory they're making the official bats for tomorrow's world series game each player on the astros and dodgers gets two bats built to their specifications most of them are requesting ones made of maple which are known for their durability and density, and guys, by the way, also the wood of choice for most professional basketball courts there you have it. that's the cnbc news update at this hour. >> really? >> who knew? >> they make basketball courts, too? i had no idea. that's interesting. >> it's a very strong, hard wood >> yes, it is. >> apparently. >> morgan, thank you see you later. >> sure. so -- so -- as -- i'm going to move on saudi arabia's oil company aramco is scheduled to go public in the second half of next year in a wide-ranging interview on cnbc aramco's ceo, amin nassar, addressed investor concerns about a state-owned entity offering shares to the public. listen >> publicly traded companies, if
you look at our governments, we have independent board members, everything that is being done in the company similar to any international oil company in terms of the way we do business. the only exception is that our shares owned by only one entity which is the government. >> joining us now, kent moore, executive chair of energy capital research group neil dingman, managing director and energy analyst at suntrust robinson humphrey. gentlemen, thank you for joining us ken, you say the aramco ips is shaping up to be one of the most important changes in international flow patterns in some time. what do you mean, what's the impact on the markets? >> i think it will be fundamental, sara, in several directions to begin with, this 5% floating of aramco shares is going to generate a major new investment fund that prince bin saltan will
be using for the purpose of diversifying the saudi economy the way in which they're going to primarily do this is by investing in and acquiring nonoil, nonenergy assets abroad, not by diversifying the economy at home. this tends to expand the number of market options and market plays and we're already seeing some significant development of fund interest in europe, even though we're more than one year out from the actual ipo. >> right neil, you're our oil guy on this panel. does this ipo give the saudis their mojo back? what does that do to the oil market, do you think >> yeah, bill, agree with ken, i think it's positive. i think, you know, bill, even in the shorter term and say, you know, it just adds another positive data point on there i mean, right now, saudi obviously has been the largest voluntary cutter of production, you know, total right now between opec and non-opec, 1.8 million. tells me if you got the largest ipo coming around the corner, they want prices comfortably in the 50s in order to do that,
they're going to have to keep cutting at least until this ipo comes. >> what do we know about the transpare parenparency factor, s actually in the company? i mean, we'll find out more we they file i guess in jrns1, kent do question knwe know whether i investment beyond the sheer size of this thing? >> i think the sheer size is enough to generate the interests which are quite correct, sara, we've had no official statistics from aramco since. 1979, so the actual extractable reserves they may have, the conditions of their fields, conditions of their infrastructure is still something that the market is waiting to see but remember this, this ipo more importantly deals with where the proceeds will be used once they're generated. th than in the actual overall generation of them, themselves this will guarantee -- >> i'm sorry, what about the notion -- >> yes, bill >> -- the concerns about the
amount of stock the saudis will own, that the saudi government will own does that concern you at all >> well, they will continue to own 95% of it. it's no different, for example, than when the russians ran ipos on rossneft. the difference here, expect to see secondary placement offerings down the road. so it starts at 5% it's not going to stay there >> neil, what if we don't see oil go into the mid 50s? i mean, what happens to this ipo? are you saying it won't go as successfully as it would have otherwise? >> that's right. i mean, bill, given the size of this estimate, anywhere from $1 trillion to $2 trillion, that kind of size every dollar is going to be very impactful for them so, i mean, but, again, they really are controlling their faith the more they cut voluntarily leading into this, but i agree with what ken's saying, i mean, again, we're
also going to say saudi and russia by far and away the two largest producers out here once we start having to see their public data and they have to file, we're going to see what they're really producing and how and what that means for worldwide supply and demand. very quickly, which we haven't seen, as ken said, since 1979. >> yeah. very quickly, then, if i'm an oil guy here in the united states, and i know that the saudis need higher prices, i'm just going to keep pumping away here i'm going to make that much more money. what do you think? >> you know, a lot of them are most of my companies here in houston right now it's full steam ahead and most of them seem to be adding another rig or two as they exit the year. so you're spot on there, bill. >> all right very good. kent, neil, good to see you both. >> thank you. >> thanks, bill. >> sure we'll be talking a lot about this before we get to next year. >> oh, yes. 22 minutes to go here before the closing bell take a look at the markets losing some steam here into the close. the s&p is now down .4%. the nasdaq is down almost .75%
the dow pulling back there are some winners, though, walmart, for instance, is shining today. it was once considered a good gauge of the u.s. economy now general electric may be replaced by new bellwethers. we'll tell you who's in and who's out, next. meantime, mcdonald's gearing up for its earnings report tomorrow morning will the company's new digital initiatives like kiosks prove to be beneficial for this quarter we'll debate the stock coming up on "closing bell." cnbc sector sort is sponsored by sector spyder etfs. is the monolithic view of emerging markets obsolete? at pgim, we see alpa in the trends, 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.
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all right. let's get a quick check on some of the other movers in the market today shares of vf corp higher after the company beat earnings and revenue estimates for the quarter. the parent company of timberland and wrangler also raised its full-year guidance and increased its quarterly dividend by 10%. that stock today up almost 5%. but then there's hasbro, down almost 9% today after its
earnings report showed quarterly revenue and operating profits were hurt by the prups of tbank toys "r" us, one of its key retailers. hasbro said it disnot impact the company's overall look but may introduce more uncertainty with future shipments hasbro eegsceo will be on "mad money" tonight at 6:00 p.m. eastern time and should point out mattel has been suffering today in sympathy with hasbro. >> 9% of its total inventory for toys "r" us stores the bankruptcy is going to hurt despite the fact my little pony has been doing very well. shares of ge getting hit hard today on the back of a morgan stanley downgrade the stock was once thought of as a good indicator of the overall u.s. market and economy but given the stock's multi-year slip, that may not be the case number dom chu has been taking a look at new bellwethers in this market dom? >> sara, bill, everybody's got an opinion or view on what stocks could be indicators of trend going forward for the u.s.
market and/or economy. we asked four of the experts on wall street that we speak to on a regular basis about what they think and here's what they said and perhaps maybe no surprise, a lot of folks out there look at this one company as being the bellwether in the overall market we're talking about apple. this is good reason why. this is michael rock over at jones trading. he's their chief market strategist he says apple is definitely a bellwether rock because it's the biggest influence on the s&p 500, nasdaq composite and nasdaq 12 100 as well. apple a big case to be made there. speaking of the consumer, check out what's happening with jim mckonld m mcdonald he thinks walmart should be a good bellwether, because it is a good indicator of the overall consumer spending picture. that's important because two-thirds or more of the u.s. economy is driven by consumer spending, walmart a key there.
talking to art hogan, he says transportation companies are key, specifically fedex. he says simply put, it's really hard to hide any kind of economic activity from these transportation companies, so fedex one of those big bellwethers as well. then we're going to end on a conglomerate not general electric but this is john augustine at huntington private bank, their chief investment officer he says look at berkshire hathaway warren buffett has a cross section of services, industrial, consumer goods, all of those make it a nice microcosm of the american economy so as we talk about bellwethers, they are indicative of the overall market but maybe ge, not as much right now, it may be in the future, but these are some of the stocks that investors could look to, sa sara, guys, for just a look at what the overall economy might be looking like for the u.s. markets here >> you know, realistically, ge hasn't been a bellwether for a long, long time. i mean, as everybody probably figured out, i own a couple shares in my 401(k) since ge used to own cnbc years ago and being a ge shareholder has been a lot like being a cubs fan over
the years but we all know what the cubs did for them so that was a good possibility you have to believe that john flannery is not going to take this lying down. he's coming out swinging -- >> yeah. >> exactly everything is on the table and we will see. there's a new sheriff in town. >> they're trying to right size everything, right? we're going to find out next month what he's going to do, what all the strategic options are, everything's on the table we're going to find out middle of next month whether or not john flannery as the strategic plan. >> depends how you define bellwether we're still a consumer economy in this country, 70% of it made up by consumer spending. so, you know, you got the procter & gambles and the walmarts they're all going through big changes in their industry. >> i know we -- >> that's the bellwether. >> we don't want to -- our economy shifted more toward the consumption than it was in production ge very much the producer and that -- it was a bellwether for the production -- >> manufacturing is about 12%. >> you know, there was a time -- >> a lot of that has gone
overseas. >> a time in my wall street career earlier on in my life, i looked at texas instruments as a bellwether, they make computer ch chips. the more chips they made, sold, put in a product out there, that was a good indicator of whether or not the economy across the board was doing okay i mean, there are a lot of cases to be made for a lot of these companies out there. >> got it. thank you. see you later. 13 minutes to go before the closing bell let's show you where we are on the major averages pulling back now off of the session lows. the nasdaq looks to close about half a percent lower the dow is down 30 points. the biggest percentage loser is ge as we've been discussing. s&p down eight points for its part. so are the golden arches are good play right now? we have a debate on whether you should be veing instin mcdonald's ahead of tomorrow's earnings report coming up. your brain is an amazing thing. but as you get older, it naturally begins to change,
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ceo dave moseley saying in the earnings release his company is in a strong position to grow its business as the demand for storage continues to grow. big winner on the nasdaq up 12.5%, bill. meantime, shares of mcdonald's slipping a bit today as investors await the fast food company's earnings report that will be out tomorrow morning before the bell rings. a turnaround has been under way for a while. we're wondering if investors should be buying this stock at this point >> joining us now, we've got a bull/bear debate onning many donald's peter, managing director eric, chairman, founder, ceo at the patriarch organization peter, this has been one of the hottest stocks of the year again up 34% over the past 12 months the sales recovery has been notable. has it been priced in, though? ahead of earnings tomorrow >> you know, i think it's had a great run. it potentially could give a little bit back tomorrow given the 35% increase so far this year but i'll tell you that i think there's a lot more left in this
stock and in this company. especially if you look at where they are digitally they're basically nowhere yet, but they're building that out. they're rolling out mobile order and pay. they're rolling out digital kiosks in their stores we believe those are not only going to drive top-line sales. i think they'll be able to reinvest that. that's where you going to see a turn in the same-store sales for this company >> eric, this stock bottomed in 2003 it looks like on this long-term chart i have and it hasn't looked back so it's been 14 years that, you know, this stock has been growing here you don't like it. is it because it's too expensi e expensive, is that what you think? >> too expensive, bill you're talking about 25 times consensus earnings versus its historics over a six-year period since 2010 being around 18. so this is too high. i agree with peter, i think you're going to see a pullback i just don't see the same
bullishness as it relates to the digital side they've had digital to some extent this whole thing about delivery with uber eats, you could get mcdonald's with postmates. you don't need uber eats that hasn't helped the company i see revenue that has gone down since 2012 by 15%. i see net income that's gone down since the same time period by 8%. it's -- i'm not -- i just don't buy it i don't think it's a good stock for the future i think all of the value is priced in. >> is well, peter, we want you to respond to that, also mention this is a leadership story here. this is a story of a new ceo, steve easterbrook taking over and turning the company around and all the initiatives that you mentioned. i mean, don't you give him credit >> absolutely, i think this is a turnd ya turnaround been about three years now with steve easterbrook at the helm pushing hard i think there's a lot more to come i think you're underestimating
the power of digital and it's not about necessarily delivery, but more about the kiosks and the mobile order and pay and how much that can actually reduce their front of the house labor at least 200 to 300 basis points we think of labor savings. again, we thaink that's going t be reinvested back into value where you saw them lose a lot of share between 2012 and 2015 is on the value side. they lost about 500 million transactions on the value side of the equation. we think when they reinvest back in the value with the labor savings they're going to have from the digital transactions, we think a they're going to regain that and generate multiple years of same-year sales growth. >> thank you both for your thoughts on mcdonald's we get those earnings out tomorrow morning before the opening bell thanks for joining us both. >> thank you. and with the dow down 41 -- 45 now the market on close orders showed an imbalance to the sell side not a big number we'll have the closing countdown in just a moment
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negative territory the big gainer today for the dow inside the dow was walmart that last i saw was up about 1.3% and then, of course, the big decliner was general electric. we'll talk more about that coming up. the other thing we're going to talk about is the nikkei, marching to new highs as well. that thing since early september has been on a tear and it closed overnight into record territory as the nikkei has been going higher, the yen has been going lower. we're back to levels, the yen is, against the dollar we last saw in early july and that's a big move there that's got sara talking nonstop during commercial breaks and we'll talk more about that coming up. then bob pisani, we have whirlpool, just one stock we can rest up tonight, because boy, do we have a slate of earnings coming this week here. >> i want to hear what they had to say about hurricanes, because here's a company, talk about replacing lost value of property, appliances going to be one of them. by the way, did you see the yen
there. >> down sharply. >> yeah, well yen, it's going the other way. moving to the upside the important thing is the yen's been weak recently, during the close here, just saw the yen change, reverse course a little bit. i think that's important because it reflects what happened here today. what happened was not a lot of anything if you want to say, gee, why were we down the market just ran out of steam. art cashin and i were marveling earlier, sixth straight week of gains, when was it going to end? if you look at what's down here today, virtually financial tech, energy, industrials, everything is down about .5%. yes, ge was certainly -- you start questioning the dividend, ge, it's going to take another leg down that some of the issues around today. the important thing is we ran out of steam and some days you got to leave it at that. >> they're questioning the rally now. starting to wear out this could be a bearish week --
>> 30% -- >> if the president decides to announce who his choice is for the next federal reserve -- >> that's the biggest short-term threat to the market if he announces somebody on the hawkish side, i there will be some problems. >> we have a lot to talk about that's coming up on the second hour of "the closing bell" including the earnings coming from whirlpool in just a few minutes. welcome to "the closing bell," i'm sara eisen in today for kelly evans. here's how we're finishing up the day on wall street weak start for the week coming off those record highs stocks lost their earlier gains. we hit intraday records for the dow, s&p and nasdaq this morning. gave them up throughout the session. and a selloff into the close the nasdaq closing the lowest of the big three down .6. saw real weakness in social media and faang stocks russell 2000 index, small caps
closing down the money 2020 conference is under way in las vegas coming up you'll hear from the vice president of amazon pay he'll reveal where the service is expanding and how the company plans to take a bite out of apple's pay market share joining us now to talk markets, dennis burman from "wall street journal," jim khan from wealth enhancement group. stocks closing near session lows as mentioned, this after the dow, s&p and nasdaq all hit new highs. today's big winner in the dow is walmart. while the biggest loser was ge trading on the top of the s&p was seagate and biggest laggard was arconic. so, jim, a few stock-specific company stories there with the individual movers, but overall, little bit of softness after a very strong week what stood out to you? >> let's talk about general electric, there are a lot of people that have ge in their portfolio, been a really steady dividend stock people feel like if something is
going go wrong with ge, something is going wrong with the country. people feel safe with it we look at the earnings, really not that bad made a big bet in the energy space and that bet basically went south because the energy market went south. if you look at where the real ills in the business were were in the power business. a small part of their overall business it's a very poorly managed a management team in there that basically overbuilt, oversupplied and, frankly, they've got that cleaned up. they brought in a new management team i'm not all that worried about ge i think in will be speculation about a dividend cut i probably would say away from the stock at this time that said, i think walmart's doing all the right things on the dotcom side, i think their partnership with lord taylor is interesting. these big box retailers have to find a way to use their physical locations as an advantage. if thatey do, i think amazon is going to get a run for their money. >> news on walmart, jet.com is going into private label to go up against amazon already in private label. >> all positioning themselves. dennis, how does ge not cut the dividend i mean, fir st of all, john
flannery is going to do what all new ceos typically do, cut costs across the board his earnings report was the classic kitchen sink earnings report, throw everything in to make it look as bad as possible. the dif dwevidend is going to ho be cut, don't you think? >> the fact he did not say it would not be cut, certainly is a sign to the market that it probably wroil ill be cut the market view sponding down 7% today. that's a big number for a stock like ge. i did a little math, okay? right now it's paying 96 cre 6 dividend cut that to 1.9%, that takes you to 40 cents. they can't pay that. around 66 cents, 3% dividend yield, that gets you about a $22 stock where it is today. so in my mind, the messages are clear, the dividend cut is coming and your previous guest seems sort of undisturbed. if i'm a ge shareholder, i am kind of disturbing right now, must say. >> i'm disturbed i'm disturbed the grke --
>> this is jim looking concer concerned. >> there's a business that will continue to generate growth and build products people want in the market. >> haven't we been saying that for 16 years, though >> in its current 230rform. >> we value the faang stocks so highly here's a business we're upset because it's not making quite as much as we expected yet we have companies that have incredible valuations that lose billions and billions year after year that we love it doesn't quite make sense. that said, i think in the end, ge builds products people like and the stocks people are buying. >> we're going to go to the faang stocks hold on a second we introduce the topic. >> faang stocks lower for a fifth day in a row facebook, amazon, netflix, alphabet, down 1%. social media stock, twitter and snap also lower for the day. there's walmart which was higher we'll get some earnings, a lot of the big ones coming out on thursday dennis burman, has the tide
turned here, are we expecting another blockbuster quarter especially from the facebooks and amazons and googles of the world? which tend to be blowouts even in a period where there's some political pressure. >> i know. dow down 1.8% or so, i don't view that as that meaningful facebook started the year around $130, now it's $170, somewhere around there those stocks have done incredibly well this year. i don't think the back tracking in the last day is that significant. right now the market is anticipating large earnings increases from these companies and i see no reason to expect otherwise. the only thing that does weigh on it, barons touched on it, are the companies under antitrust or government regulatory risk that's not something that's going to affect earnings this quarter or earnings next year. a macro picture that's a five or ten-year process i wouldn't let that affect the current earnings picture. >> okay. you already dinged the f.a.n.g.
stocks that's the future, isn't it is. >> i'm not a huge believer in the future i want the future now. >> no hope. >> google was a late entrant into the search engine business. second, third, fourth entrant. there are very few companies that make it through that j-curve. when you see businesses like a twitter, especially like a tesla, granted those aren't f.a.n.g. stocks. >> somebody's going to overtake apple, somebody's going to overtake netflix, google. >> talk about netflix, netflix at $15 billion of promised content over the next ten years. difficult to see where they get the return on the capital that's been invested. might end up being profitable. think you're going to see a lot of malinvestment, value invested in the businesses destroyed over the next decade or so. it's very hard. >> as my former colleague, the late great john mclaughlin used to say, next topic zblur under armor hitting session lows after it was revealed the ceo's
first partner is taking a sabbatical as first reported by the "wall street journal." in addition, under armour exploring exiting the tennis and outdoor categories cnbc reached out to the company, and under armour said it's in a quiet period and could not comment. should we be worried about under armour >> earnings they produce over a given year, it's incredible, to the previous point about being able to compete against incumbents underar underarmour has done an incredible job against nike, adidas somewhere in the mix. i don't view that as significant. getting out of a few businesses is a point where i do. people are not buying shoes for the uses that they used to it's much more fashion item. and fashions come and go and that should put more volatility into all these stocks. they're really fashion stocks at this point. >> to be clear, he's not the
founder. the foupt erfounder is kevin pl. going to have to start hearing from him soon. can't only speak when times are good which is something under armour has done. string of bad news for under armour taking a sabbatical without any explanation. >> the company said after somebody's been there ten years, they can qualify for a sabbatical, he's chouz chooosino take it right now. >> unclear >> just telling you. >> remember a few months ago this is a company that hired the former ceo of aldo, the shoe maker, to be second in command and there are questions about whether that's happening and whether there's a little more discipline and maturity in a company that's grown so fast and so tremendously -- >> that's the problem when a company grows as fast as under armour and see their core business starting to slow down or the rate of grout isn't what it's been, they decide to go into other lines of business that they don't know as well and those lines of business dilute the overall return on capital so what they're realizing is they
need to cut back, sort of drop some of these lines of business that are actually aren't generating profits so they can focus on the core business and make money for their investors >> they don't work it out, to be clear, we don't know how big that tennis business is -- >> not super profitable if they're going to get rid of it. >> the company has not been the same since sports authority went out of business, right >> that was the start of sort of the downturn then they started using market share to adidas which took over the u.s. in a very aggressive way. nike's investor day is on wednesday. that's been sort of a questionable one as well, battleground stock we'll find out what they've got in store. got to mention the nikkei. japanese stock market closing at a record for the 15th day in a row. thought u.s. stocks were hot this after shinzo abe's resounding victory yesterday i love, dennis, he was able to do what prime minister theresa may was not, call a snap election and get the two-thirds majority and cement it. >> i know, it's incredible.
>> for investors, what does that mean >> well, keep in mind that the intervention in the japanese markets from the japanese central bank is -- we talk about without precedent, certainly without precedent there. a continuation of those policies is certainly a helpful referendum for those who want to buy stocks there we cannot forget the big demographic picture inside japan. that i think by 2050, 2050, there are going to be about 25% fewer japanese alive than there are today. and so that has to weigh on this economy as we go forward, 2020, 2025 but right now, hey, it's easy money. let's keep it going. let's try to get that yen down as much as we can. >> you can't talk demographics in the face of an ever-weaker japanese yen, right? >> as an exporter, it's a big help sorry, go on. >> abe's done a great job for japan. i mean, he's brought sort of a sense that japan can grow again, be a great power on the world same the issue is with the two-third majority in the lower house of parliament, they're going to change the constitution, they're
going to rearm the question is what does it mean to have a more militaristia i think you might see an escalation of geopolitical tension, something investors need to be wary about. the election is a pretext to the potential escalation in tensions. >> all right pencils down, everybody. we're all done jim khan, have hope. thank you for being with us. dennis burman -- >> going to buy jim some ge stock, see how he likes it. >> there you go. he won't sleep nights. >> we don't pick individual stocks we like to be diversified. >> there you are, you got the disclaimer in there. so the dow has soared 18% this year and a lot of that has to do with anticipation over tax reform but now one of the world's richest investors is warning about what could happen to the market if tax reform does not get done we have that story coming up. plus we'll find out amazon's strategy for growing its payments business and what has been an increasingly competitive industry the head of amazon payments
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hope you saw that cnbc exclusive interview this morning, saudi billionaire investor prince alwaleed bin talal addressed a wide range of topics with andrew touching on everything from taxes to twitter and his most famous holding, citigroup. he also talked u.s. politics including his opinion of president trump and how the president's policies are affecting the market listen up. >> look, trump is unique president. president trump, you know, has his own way of governing i know, some people don't observe this issue of governing through a tweet but you have to be accepting that. after all, president trump was elected president by people of the united states so we have to accept that. trump's policies are pretty good and, you know, not to quote president trump personally, he's right.
$5.3 trillion of wealth is being created in stock markets of america. this was created because there was a lot of optimism that health care would be finalized and tax reforms more importantly would be finalized also. a lot of good policies by trump. >> we talked about how much the market moved already where do you think the market is meaning do you say to yourself, this is going to continue? do you think that there's going to be a hiccup along the way as an investor, how are you thinking about it in. >> let me quote the treasury secretary of the united states, mr. mnuchin. said if there's no tax reforms then the market will tank. >> will tank. >> he said that. i'm just quoting him. >> is that what you believe? >> look, all a bet right now on tax reforms clearly because tax from 35% to 20% and the corporate tax going down also. inevitably, profits of companies will go up the valuation could go up also i think there's a big bet on that obviously clearly there's a lot of optimism in the united states. you know, we've seen right now how the north korean affair is not affecting much the market because they don't believe it's going --
>> right. >> so raeally there's a lot of positive things. the main ingredient that i now -- of what happened in the stock market is the tax reform expectation. >> you've been a longtime investor in citigroup and there's a long history to that but you've remained an investor in citigroup how do you think about the banking world in the united states today have you ever thought to yourself, i want to make an investment in goldman sachs or an investment in jp morgan instead? >> you've seen that now how after the election of president trump how the stock market related to those banking industry ballooned, for example, citi went from the 50s to now mid 70s. so that's 50% increase in less than -- less than one year so really the environment in the banking industry is very favorable not because interest rates would go up, even they go up -- going to be the main ingredient of having the income go up, but also the less regulation is also helping the banks also so less regulations,
more controls by the banks, learn the lessons of last decade and interest rates obviously going up will support. all those -- all these events are really helping the share price for those companies going up but i'm really happy with ci citibank still plenty for citigroup to go 100 and above. >> i wanted to ask you about twitter. i mentioned earlier you spent a lot of time on twitter are you still bullish on this company? >> you know, our investment is a part of -- part of a plan whereby moving from the old investments that you had into the new, like twitter, lyft, another hail driving in the middle east. we're optimistic of that obviously, two-third not going to be easy in the face of some difficulties
our entry point was very reasonable right now it's holding our own break-even point any good news from mr. jack dorsey and his team at twitter, i think this will be reflective very much on twitter >> first of all, let me just say i've never heard him be this animated on television i've heard him speak privately off camera he gets that animated. first time i've seen him act that way on camera. >> strong opinion. >> very, very savvy investor he does his homework man, he's like the saudi version of warren buffett. he does his due diligence, makes the investment then he stands back and lets the company do its thing. >> i actually found it interesting to hear him talk a little bit about geopolitics, about president trump. >> right. >> really a backer of president trump in many ways it's sort of unusual to go outside the united states and hear that. commending him for his straight talk >> that's, you know, it's all about performance. >> even on the nfl did you hear that? he weighed in on the nfl the president said you should
stand during the anthem. you should stand during the anthem >> i think he's applauding the performance of the market at this point because he's made a couple dollars. >> he has made a lot of money. >> he wouldn't reveal how many billions he did say that the kingdom holdings are up billions also the new relationship between trump and saudi arabia was certainly friendly in president trump's first trip and reflected in some of those comments as with el. >> very, very smart man. big news on the tax reform front. president trump pulling out a big change in 401(k) contributions even as republican leaders in congress consider not cutting taxes for millionaires we'll have details on all of it in a moment. plus a new report says fox news extended bill o'reilly's contract sortly after he paid millions to settle a single sexual harassment claim. how that could affect 21st tntury fox's bid for sky news inhe uk. that's coming up later on "the closing bell." 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. well, it'sonce again.eason >>yeah. lot of tech companies are reporting today. and, how's it looking? >>i don't know. there's so many opinions out there, it's hard to make sense of it all. well, victor, do you have something for him? >>check this out. td ameritrade aggregates thousands of earnings estimates into a single data point. that way you can keep your eyes on the big picture. >>huh. feel better? >>much better. yeah, me too. wow, you really did a number on this thing. >>sorry about that. that's alright. i got a box of 'em. thousands of opinions. one estimate. the earnings tool from td ameritrade.
president trump is shooting down this idea from congress that would limit 401(k) contributions to help pay for tax reform ylan mui has more on the very latest on that story ylan >> reporter: bill, republicans are looking at limiting how much you can contribute to your 401(k) without paying taxes upfront. right now, that cap is at $18,000, but a source on capitol hill tells me that republicans are thinking of reducing it to
just $2,400. and the appealing thing for republicans is that they'd be able to shift all of that deferred tax revenue from the future into the present in order to pay for those big tax cuts that they promised but president trump made his stance very clear this morning, he tweeted out, "there will be no change to your 401(k)s. so not a lot of room for republicans to work with there and meanwhile, first daughter ivanka trump was also hitting the road for tax reform today. she was in pennsylvania holding a town hall to make the case for expanding the child tax credit >> the cost of raising a child has gone up so much while wages have stagnated often frustrating a parent's ability to provide for their children in that regard >> reporter: this is all about republicans trying to argue that their tax plan primarily benefits the middle class and not the wealthy. there are currently three individual tax rates in their plan, 12%, 25%, and 35%.
axios is reporting they're considering fourth rate on millionaires taxpayers that have $1 million in income or more currently pay an average federal income tax of $921,000 overall, they pay about 18% of the nation's in time, we'll see if the shurms shift over time. back over to you. >> it's early. thank you, ylan. >> waiting for the vote on the house to vote on the senate budget. facebook recently allowed users to order food through its app. now amazon is following suit the head of payments details the move into the world of brick and mortar retail. hold onto your hats. this is the busiest week of earnings season with amazon, alphabet, many more blue chip names on the calendar. coming up, find out how important this week ulbecod when it comes to earnings for
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now what? well, after your first reaction, consider your choices. go it alone, against the irs and its massive resources. hire a law firm, where you're not a priority. call your cpa, who can be required to testify against you. or, call the tax law firm of moskowitz, llp. i went from being a cpa to a tax attorney because our clients needed more. call us, and let us put our 30 years of tax experience to work for you. if you're just joining us, here's a quick look at the day on wall street minus signs across the board for the major averages the dow, the s&p and the nasdaq all hit intraday highs at one
point. so that would have been putting them in record territory but the markets sank into the close and all of them finished with minus signs, the biggest decliner today percentage wise was the russell 2000 where the small caps live. sara time now for cnbc news update with morgan brennan hi, morgan. >> hi, sara, here's what's happening at this hour joint chiefs chairman joseph dunford holding a briefing on the niger operation which left four dead. dunford saying the soldiers attacked in niger did not seek additional help for about an hour adding that their families deserve an explanation of what happened he plans to share information once the investigation is complete the ambush happened on october 4th. president trump awarding the medal of on mhonor to captain g rose, ran into enemy fire several times to provide medical care to his comrades during the vietnam war. the 69-year-old is a 20-year veteran of the army. secretary of state rex tillerson urging the iraqi government to resolve their conflict with the kurds through
dialogue tillerson making that call in a meeting in baghdad with iraqi's prime minister and rowing away in the giant pumpkin. west virginia university college students hosting a special relay race on a lake horticulture students hollowing out pumpkins to make them float. who knew races like this are apparently popping up all over the country. what i want to know is how many pumpkin pies can you make with all that meat? >> you. >> that's the cnbc update at this hour. back over to you. >> what will college students think of next? thank you, morgan, see you later. the money 2020 conference kicking off in las vegas this week where top names in the fintech and payments space are all gathering. one of the top ideas this year, of course, targeting millennials. chase unveiling its thin by chase app. the app allows users to open a bank account, make deposits and set up savings plans right on their phones finn is available for ios users today in st. louis and rolls out to other cities and android
users next year. intuit, maker of turbo tax, launching an app called turbo which connects the tools users can track income, credit score, debt to income ratio, to help them better understand and manage finances plus turbo provides advice on how to improve credit scores and how to qualify and secure a loan at the best possible rate the app will be available in january just in time for the next tax season. don't we look forward to that? our own deirdre bosa is at money 2020 right now with even more news starting in november, amazon users can order takeout from local restaurants directly from the amazon app. it's all about apps. deirdre is joined exclusively by the vice president of amazon pay patrick gauthier deirdre, take it away. >> reporter: that's right, thank you very much. patrick, thanks for being with us today. >> my pleasure. >> reporter: news of the morning, expanding amazon pay in the real world order within the app, don't have
to use cash, credit, debit card when you get to the restaurant my question, are we going to see this program expand beyond restaurants perhaps to other retailers? >> of course as a matter of fact, amazon pay is not a particular type of use case, it's about enabling the amazon customer to use their amazon account and amazon information to get what they love wherever they can find it so, of course, we're going to expand that to different kind of in-store examples. announcements we made today with clover is, of course, one we're very excited about because of the growth of order ahead, but it by no means -- >> reporter: whole foods, eventually, a feature like that? >> i wouldn't speculate on whole foods. as you can imagine, this is a massive project for amazon and it has to be, you know, managed by the team that is working -- >> reporter: can't wait to hear about that side of things. you said before trust is example for amazon pay, for customers and her chaptermerchants. how do you build trust with
merchants that may be worried about amazon using their sales data to eventually compete against them >> that's a good question, obviously one i get quite frequently the reality is, first of all, we definitely segregate the data. the data we use about payment is only for processing payment, but more importantly, amazon as a kpan company has built its succe success, indeed, on trust and you can't be trustworthy with one type of customer and not with the other the reality is increasingly merchants find that we are able to help them innovate and capture the customers who are absolutely willing to embrace digital experiences. that's, you know, 300 million customers that any merchant really is increasingly looking at talk bing to. >> but even if the data says otherwise, you look at the markets and you have, for example, a blue apron that went public, and they would not have wanted amazon to have their sales data because amazon shortly after went into meal kits. >> yeah, so amazon pay first of all, the data that comes out of amazon pay is really only the
data necessary to process payment. we don't know what customers order, we do not have any detail of that in that. the relationship remains between the merchant and customer. we would be untrue to our belief that we have to earn and nurture the trust with our customer if we try to be in the middle of it so we're here to facilitate the transaction. i am in charge of making it easy for an amazon customer to buy what they want to buy, wherever they want to buy it. there's plenty of places in the world other than amazon where lots of things are happening. >> reporter: okay. bill's got a question for you back in new york >> yeah, patrick, i'm curious, is this just a mill lennial pla? growth of amazon pay everybody is getting into the payment processing business but from what i keep hearing, i mean, finn by chase, this new app they just introduced today, they admit it was developed by millennials for mill lel l millennials. millennials are the growth for a
lot of you guys. is that what it's all about? >> clearly millennials are an important population and we pay attention to the segment but clearly not limited -- amazon has $300 million customers and cut across a segment of age and democrat graphics and even geography. we're very sensitive to providing solution to all of these customers. now, one thing that is certainly worth mentioning is we see a preponderance of prime users very engaged with amazon pay and prime users as you can imagine are a particularly important segment for us that we want to serve with the best experience possible >> patrick, who would you say are your top competitors is it a paypal or is it an apple pay? >> you know, at amazon we don't spend a lot of time focusing on customers. jeff is famous for saying -- sorry, focusing on competitors, jeff is famous for saying, you know, be competitor aware, be
customer obsessed. and so there are plenty of people that are in the payments business today i think, you know, the world of commerce is vast what i certainly can attest to for the time i've been in this business is that consumers increasingly are focusing their attention on the providers, the brands that they trust they're willing to deepen the relationship with grants that they trust there are plenty of brands with whom certain segments of customers have relationships with we're clearly excited about being able to serve the amazon customer wherever they are. >> something that i think that amazon pay, apple pay, the paypals of the world, all have in common is they envision a cashless society how many years until we get there? >> oh, boy you know, cash has been around for several hundred years. i think that first what we're going to see before cashless society is definitely other forms of paper money start to
gradually move out of the system if you look at, for instance, northern europe today -- i'm sorry, checks are almost extinct. and so i wouldn't necessarily try to predict when cash is going to go away there seems to be always be some industry that prefers them but there are definitely many other forms of paper money that are going to go electronic for sure. >> okay. got it thank you, patrick, very much for being with us. enjoy the rest of the conference one of several big tech executives at money 2020 back over to you guys. >> deirdre, thank you, patrick, thank you for joining us as well. an earnings report, here we go on whirlpool. seema mody. >> big move in after-hours trade. shares of whirlpool down 8% on a disappointing report earnings, $3.83 adjusted that is lower than what the street was expecting analyst forecast was for $3.94 sales also a miss at $5.42 billion. wall street was expecting $5.51
billion. perhaps most notable, whirlpool is cutting its 2017 earnings guidance i want to break out the regional impact north america region reporting 5% revenue growth and 11.7 operating margins. that's despite a 90 basis point raw material cost increase now the company also notably announcing a global cost base price increases on a majority of its businesses to offset the impact of sustained raw material inflation. perhaps something traders are, in fact, focusing on here. here mark bitser, chief executive officer of whirlpool saying "we're pleased with revenue growth and free cash flow improvement but not satisfied with operating margins which were impacted by raw material inflation, unfavorable price mix and slow process on our european integration." again, guys, shares down 7.7%. noteworthy name to keep an eye on back to you. >> indeed. ouch >> that's a new ceo. >> maybe another kitchen sink
earnings report there. >> it has been a weakish stock. >> wonder how much the hurricanes hurt, too hurricanes had to have hurt. thank you, seema the potential takeover of sky by 21st century fox may have hit another bump after news of bill o'reilly settling a $32 million sexual harassment suit just the latest in a string of such agreements made by either o'reilly or the network. the lawyer who represents more than 20 former and current fox employees in various lawsuits against the broadcaster will be joining us to talk about it next meantime, shares of hasbro finishing sharply lower down nearly 9% after reporting earnings and concerns about the toys "r" us bankruptcy impact on the toy maker. chief executive brian goldner will be joining cnbc's jim cramer on "mad money" tonight. should be very instructive to mere what he has to say about the holiday season coming up that starts at 6:00 p.m. eastern time don't miss it. in the meantime, "closing bell" is back after this
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former fox news host bill o'reilly back in the headlines "the new york times" reporting he personally paid $32 million to settle a sexual harassment suit the timing here is key our julia boorstin has the details and the impact >> reporter: this is the sixth reported settlement bringing bill o'reilly's total reported
payouts to settle sexual harassment suits to $45 million. fox says that while it was negotiating a four-year contract worth $25 million annually with o'reilly, it was aware there was a claim and a settlement but it was not aware of the financial terms. saying, "his new contract added protections for the company, specifically aimed at harassment, including that mr. o'reilly could be dismissed if the company was made aware of other allegations. fox noting it subsequently dismissed o'reilly o'reilly's attorney saying, "the "times" printed leaked information provided by anonymous sources that is out of context, false, defamatory and obviously designed to embarrass bill o'reilly. as for whether this latest scandal will impact of fox's pending sky acquisition, fox says "this matter was discussed with offcom and reflected in the decision ruled fox was a fit and proper license holder another british regulator,
competition markets authority, in the process of reviewing this sky deal now back over to you >> all right julia, thank you so the question really is could o'reilly's contract revelations put fox's sky takeover in jeopardy again? let's talk with the lawyer who's been leading the legal war, your word, not mine, against fox news douglas wigdor represents 22 form and current fox employees who filed sexual harassment, discrimination and retaliation suits against the company and in may, doug testified before the uk communications regulator on whether fox was fit and proper to purchase sky. good to see you, thank you for joining us. >> thank you for having me. >> did they invite you to testify or did you volunteer >> they invited me they knew i represented a wide spread of current and former employees. >> were you surprised by that? >> i'm a solicitor actually in england and wales, went to oxford, married an english
woman. i have an affinity for the english people didn't come out of the blue. >> do you think you'll be called back >> don't think it will be. we're submitting correspondence tomorrow to the authority based on some things that happened since i was there in may and based on that and based on the people that i'm talking to, i think that i probably will be either called back to the cma or perhaps parliament if they have hearings >> forgive me, i'm curious why you would be called to testify in this particular case, about buying another company, whether or not they're fit to buy another company. you're suing them. you have an ax to grind here. >> that's a good question. i'm glad you asked it, actually. what they're trying to determine is whether fox should purchase sky. the foxification of sky. whether they meet the broadcasting standards, whether or not they're fit and proper. believe it or not, i have not told the competitions and markets authority or offcom or
the british government what they should or shouldn't do i have not made recommendations. i feel obligated i have lot of information. 22 clients i believe in transparency. that's why i've asked fox to lift the confidentiality agreement so they could make an informed decision. i'm just part of the process i'm giving them information. they can do with what they feel appropriate. >> okay. based on your 22 cases and your 22 clients, what will you tell the regulators as far as the corporate governance at fox, whether the murdochs are fit and proper and whether the leadership pays close enough attention to issues like this which seem to be blowing up by the day. >> especially bearing in mind that they keep saying they've changed leadership there as well. because of this. >> they've made a lot of changes -- >> they said that, don't forget, after roger ailes was terminated and now we learn from "the new york times" piece this weekend is that in april of 2017, at the very same time that they're trying to convince the public
that they changed thingthings, everything's great, they're not only renewing bill o'reilly's contract for four years, with these revelations, but they gave him a pay raise to boot. and not only that, when you read the article, you also find out that their general counsel was also trying to think about hiding that general from the u.s. attorney's office so you really have are systemic issues from the top, from the murdocks down. >> i'm coming off really cynical here, but another part of me thinks, okay, you're doing this to gain leverage with the company because you're in negotiations with them and if you can use this as leverage with them, to get a better settlement, maybe you don't go the second time if you get decent settlements with your 22 clients. >> you know, i'm trying to represent my clients zealously under the auspicious of the law. i've never tried to use this in my negotiations with them. i'm going to continue to do what i do while i represent these people i feel as i said the public at
large in great britain has the right to know this fox has tried to say, insinuate what you are suggesting, but i'm just informing them of what i know and there's a lot to be shared i mean, i represent rod wheeler in the seth rich murder fake news case. i mean, that goes to the very heart of broadcasting standards and whether the british people want the foxification of sky is a serious issue for them to consider. >> what's your sense of the british regulators and how carefully they're considering these specific claims by your clients and the whole sexual harassment issue in part of the decision about whether they are fit and proper to own all of sky. >> i think the british government from what i can see is following this very closely they originally were going to make a decision right about now or earlier they've now prolonged that investigation which is going to, by all accounts, go into next year they put a lot of resources into this investigation they're speaking to a lot of people a lot of people are making
submissions on both sides. and i suspect that at the end of the day, the prime minister who doesn't have a majority in parliament, who's, you know, in a coalition, is going to have to listen to all sides of the argument and ultimately make a decision that she feels is in the best interest of the british public >> it doug, thanks for stopping by. >> thanks for having us. >> it attorney doug wigdor joining us at post 9 at the new york stock exchange. from mcdonald's to microsoft, this is going to be the busiest week of earnings this season. bob pisani will have key numbers coming up next. coming up on "fast money," one wells fargo strategist weighs out why he isn't more bullish on this rkmaet rally scott wren coming up with advanced safety.
ought we mentioned, this week will be the busiest of the earnings season with more than 170 companies reporting. bob pisani joins us with the numbers. >> the numbers are good, but heaven help you if you miss. one that's in a lot of trouble, now, the numbers for the third quarter are a little louter. double-digit gains if you look at the insurance companies, they are taking it on the chin this quarter, down about 60% in their earns because of the effects of the hurricanes so down 63%. everything else is in trouble.
the other issue is what's going on with energy is they're being affected. the other thing is the numbers are changing a little, because last year, we finally starteding to a rally in oil, so the profits started getting better, remember 2016 was a complete disaster for the oil companies now this year you get the crazy numbers up 500%, because the earns are starting to come back. but overall the numbers really are pretty good. here's the problem heaven help you if the miss the numbers. i don't care whether you're up for the year or not, you see what's going on with whirlpool they miss by ten cents the guidance is poor look at that, this is not a big winner whirlpool is already down on the year, so you can imagine what would happen. the point is with stocks this high, they are not given any -- any break to any company that misses on the numbers.
you do better, you might get a modest pot, 1, 1.5%. >> it's revenue beats, actual revenue growth, and better outlooks for the future. >> we had that revenue recession for a while. i'd be interesteding to how it this stock has skyrocketed seems to do no wrong lately. heaven help you good if it doesn't work out that's got a lot of momentum behind it. week dollar. >> the dollar has turned around a little >> that always hits with the lag, which is why i think.
>> earnings are severalally at historic highs i want to quibble about a few pennies. the global economy is continuing to expand. that's what's powering the markets. stocks tread on a perception of forward earnings, and when you see the numbers there, they're at historic highs. by the way, they are not accounting at all right now for any tax breaks in our heads emotionally i believe there's a premium. but the annual lists are not incorporating any number. >> it will beinteresting to se if management comments at all. for planning decisions >> john hancock customer accounts get an apple watch for only $25, but of course there is a catch. we'll tell you about it, next.
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to exercise. >> there's a $25 activation fee. if members exercise for two years, they can keep the device for free, but if they fall off the workout wagon, they'll have to pay for it in installments. >> this is -- this is great marketing. >> you think >> absolutely. >> for the insurance company >> and even for apple. it's a trojan horse. you get some of these customers, some of them may not be apple customers, not part of the universe, if they like what they see, they're hooked. >> the question is how much do you have to exercise i'd like to know. >> she always worries about the details. >> and how much data do they have on you? if they're doing this to try to track your activity and learn more health insights about you -- >> why is that a bad thing >> it's just uncomfortable for people. >> the wellness is -- >> how is your fitbit doing? >> i have the old one they
always showsh this one i keep forgetting to charge it. there's the old one. still sitting in the -- >> it doesn't quite measure your heart rate accurately, i found, because i have one. >> you know what your accurate heartbeat. >> i know it's higher than what it says. >> we'll work it out i hope you can join us then. "closing bell" is over, "fast money" is right now. our tracers are on steve grasso, karen finerman -- and tonight walmart target, costco, all surging back. plus stocks are at record highs, but wall street has been playing catch-up all year, so why aren't wall street strat yis more bullish we'll take one of those tim mid bulls to task, and president trump saysou