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tv   Closing Bell  CNBC  September 5, 2018 3:00pm-5:00pm EDT

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>> he received the designation >> he's good at it >> he earned that certification >> that is a low price for the iphone >> that's right. >> thanks for watching "power lunch. >> "closing bell" right now. it's time for "the closest bell." a showdown on capitol hill between lawmakers and social media companies. we'll break down what it means for the share prices of google, twitter, facebook coming up. i'm jackie deangelis in gulfport, mississippi, where we are monitoring former tropical storm gordon and its impact on the gulf coast and big oil >> i'm steve liesman a huge surge in the july trade deficit. i'll break down the numbers and what it means for the u.s. economy. >> i'm sarah eisner in theranos is set to officially dissolve the company "the closing bell" starts right
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now. ♪ long way down a very good afternoon to you. welcome to "the closing bell." we'll get to all those stories in a moment. first a check in on markets, the dow down 81 points at the low, flat at the moment the high was up 59 it's been on both sides of the flat line. the nasdaq, however, has gone down sharply >> that's the 1% loser on the day. the biggest drop since back on august 15th as tech ceos appear on capitol hill, which is our top story. twitter ceo jack dorsey appearing right now before the house energy and commerce committee after testifying this morning before the senate intelligence committee cnbc's kacarl quintanilla >> reporter: not long for google but overall some level of
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understanding and maybe we'll see cooperation between lawmakers and social media executives take jack dorsey, for example, raising the prospect of potentially one daylabeling bots so you know when you're interacting with one on twitter, giving journalists the ability to call out fouls information, revamping the rules even which he says, even if you read them today, are probably still too hard to understand take a listen. >> if you were to go to our rules today and sit down with a cup of coffee, you would not be able to understand them. i believe we need to do a much better job not only with those rules but terms of service there's a lot of confusion around our rules and enforcement. we intend to fix it. >> reporter: we talked to senator mark warner after the hearing. we asked him why he thought companies were starting to get some religion on this. he thinks it's because users are starting to, themselves, fear or at least use the sites with more caution. we asked him about google's absence today and the degree to
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which a subpoena one day to compel them to testify would be possible here is what he said >> we're going to keep all our tools. i would still rather start the process in a collaborative fashion. we've not heard in a formal way back from google other than the fact they weren't sending anyone else and were willing to send for a briefing they need to be publicly explaining why they think they shouldn't be part of the solution since clearly there have been challenges >> reporter: so we'll find out later if google does something beyond privately briefing members of congress and the committee, guys. shares under pressure obviously in the space all day long. you saw the difference between the senate side and the house side congressman billy long there tried to drown out a protester by starting to auction off, a fake auction, just moments ago what a day here in washington, d.c., guys >> indeed, carl. you've been there for us all day. the difference between the quality of performance from
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sheryl sandberg and jack dorsey. very polished. dorsey saying he, himself, was nervous and shy coming into this stock prices have reacted accordingly. what else could have led to this big sell-off >> reporter: i think definitely jack's honest take about how the rules at twitter are going to have to be -- if this were a house, he's painting it like a gut job, like they're going to have to go down to the very basics and rethink how these things are built what are the metrics you want to watch? is it important to have more followers? is that going to be the key thing that you sell to your users? the prospect of getting an audience i think it was those wide-ranging possibilities of range, tectonic shifts, as he put it, that might have some concerned. i will say that i thought personally going in the take was that sheryl sandberg, a much better interviewee would have an easier time today. i thought jack came off as more
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forthright and earnest than sandberg and that probably gave him mileage with lawmakers today. >> she has the washington cred, former chief of staff for treasury secretary larry summers. carl, what's your take after hearing from lawmakers in both houses now about the probability we're actually going to see some sort of regulation on these companies? >> reporter: i think right now the message is they're going to try to do more, get more with honey than vinegar it's an old cliche that's the narrative that stands i do think there's genuine surprise and shock that google didn't show up underneath all that have is speculation they just didn't want to answer questions about building a search engine in china, for example china did come up on the senate side but i think for the time being they're going to try to get through the next eight weeks going into the midterms in the hopes these companies have gotten the messages. for our purposes on cnbc later we'll be talking about how much this is all going to cost.
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right? how much costs will go up. does that collide with margin compression and will we see a repeat of the 20% that facebook has lost in the past couple of months >> carl, great stuff thanks very much carl quintanilla in d.c. let's continue the discussion and bring in a fellow at the harvard kennedy school and facebook privacy and policy adviser and the chief technology officer to break down what sort of outcome this testimony might lead to. given your former role as a privacy policy officer at facebook, do you think facebook has done enough in the past? will it have to do a lot more in the future >> well, i think facebook has done a lot in the past let's be clear about that. facebook has a robust privacy policy, engages a lot with policymakers around the world. it has done a lot. in recent months it has taken a lot of steps especially in light of the cambridge analytica
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incide incident these are all small steps. in the way forward, in the next few months, leading up to the 2020 election and beyond, the company will have to deal with policymakers in the u.s. and around the world who are thinking about more robust privacy protections for the electorate and their consumers >> do you think they should be regulated like traditional media? what does that look like >> i think at some point they'll have to be the social media is acting like manufacturers in the '20s and '30s they know their platform is toxic to some portions but it's a public square. it's a public area marketplace but hate speech has no place on the open marketplace neither does selling poisoned goods. they know internally they have a bad product. they may have to gut the house and rebuild it cleanly they're still taking a technical approach to a social problem
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in software bugs are accepted. you have a bug, no big deal. we'll fix it in the next release n. a media platform like this there is no room for bugs. you can't have a poisoned bottle of water they have not done a good enough job of cleaning their house and i take exception that they've done a lot of good things. they've done good messaging. promoting hate speech because it leads to eyeballs. >> i'm not sure they have no problems with it but how big a task is this for them? you mentioned facebook has done quite a lot since cambridge analytica. have they spent 5% of the amount they need to spend or almost spent all they need to >> the previous speaker said they've spent a lot. i don't think they've spent enough it's an incentive problem.
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for the exxon valdez, they knew the tankers were dangerous until they had the big spill and the political backlash, they didn't reinvest in the fleet similarly facebook -- >> you're all in for regulation? >> i'm all in for either they step up and take responsibility for what they have built or they're the new philip morris. it's a perfectly good product for adults but they have no business selling to children they have no business selling to disadvantaged communities. it's not our fault if you get cancer >> that's not really where the debate is going right now. i want to shift to the mid-term elections. lots of questions about foreign interference in elections, mentions of iran by sheryl sandberg, of russia, of course do you have faith these companies this time around have a handle on this and we'll have a free and fair mid-term election without foreign interference
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>> i think it's actually a very difficult question to answer right now. based on what we've seen thus far, these platforms have not done enough. i'm actually in complete agreement with raj that if they don't step up within the next few weeks and months, then we're going to need some governmental intervention in the united states i think the alex jones takedowns from a few weeks ago as well as the disclosures facebook and other companies made a few weeks ago are illustrative of this these companies should have been more forthcoming in releasing this information more proactively and only when under pressure from public interest groups and the public do they really take action that is move the ball forward a little bit. if this industry continues, if they withhold information from
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the public and being very reticent in their dealings with government, then we're going to need public interest to rise up. we're going to need the government to come in and swing the ax down. and really do things in the short-term interests in the american electorate and long term to establish better privacy protection, better competition in the market, and better protection for the american individual >> as part of that, the protection of individuals, long term should individuals own their own data as opposed to these tech companies that are scooping it up >> i think so. privacy is, as far as i'm concerned, privacy is not about telling a company whether or not -- or, rather, regulate that go a company can or cannot collect certain times of data. that can create unintentional
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and arbitrary boundary on the use and sharing of data. privacy really is about putting control in the hands of the individual giving the individual autonomy we need american consumers and consumers around the world to understand how these companies work, what kinds of data these companies have on them if we think of facebook or twitter or any of these companies that have testified, individuals really don't have that control they use these platforms and the platforms collect tremendous amounts of data about them and we as users can't see what they know about us. >> it looks like we're start to go have that conversation at least. thank you for weighing in on today's testimony. the tech heavy nasdaq getting hit hard throughout today's
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testimony, and it's not just social media stocks. bertha coombs with more. bertha >> reporter: that's right, sara. it's a big large cap tech swoon today, and it's really focused on the software and cloud players overall. in terms of negative impact, facebook is certainly among the big losers, although sheryl sandberg seemed to have acquitted herself fairly well during that testimony. nonetheless facebook slipping back below into a bear market territory, down 22%, from its july 25th record high. also big negative impact, microsoft. one of the best performers during the quarter, up 15% with this quarter today among the biggest negative drags on the nasdaq 100 along with amazon which yesterday hit that record $1 trillion valuation interday amazon, netflix, and google,
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alphabet, youtube. an app that measures the speed of how the apps perform on the wireless carriers, those are the three that are most often throttled. that is slowed in terms of their streaming speed. apple today had moved into yet another new record high, was positive earlier in the day. looked like it was trying to recover midday but is now closer to the lows of the session the best performer this afternoon is express scripts reports from dow jones that it looks like regulators are getting ready to approve that mega merger between cigna and express scripts and that between cvs and aetna. >> bertha, thank you a news alert on american express. leslie
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shares of amex weighing heavily on a "wall street journal" report just out moments ago saying the fbi is investigating their foreign exchange unit. this comes on the heels of a "wall street journal" story last month that showed the foreign exchange unit had been potentially offering different pricing to different customers which they said was unfair without the customers' knowledge of that. now it's important to note this story citing people familiar with the matter shows the fbi investigation is in early stages and that amex declined to comment to "the wall street journal. we have our own calls out to amex and the fbi back to you. meantime let's continue the broader discussion with our exchange rick santelli is at the cme in chicago. good afternoon
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kenny, i'll start with you markets are down today, particularly the nasdaq. >> let's just talk about this. the rest of the world is under pressure you have china potentially slowing down the whole emerging market disaster that's potentially out there. this money is going to come to the safety trade when you think about the u.s., it's a safety trade. therefore, we're not nearly getting hit as hard, although if this continues, this contagion around the world, it's only a matter of time before they start to come here and reasus prices look, you're seeing a lot in tech, certainly what's happening in washington for sure but people are also taking the opportunity to take some money out of the really high performing tech names and either put that money and hold it on the side or reinvest it in some of the other new emerging ideas that are starting to present themselv themselves >> is this short-term phenomenon or the start of a potential new trend as we go into the fall >> i think more of the same,
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tech will maintain its leadership after this little bumpy pause through the end of the year it's where sustainable growth is a lot of the names have made so much money for investors this year it's natural for nervous people to want to take a few chips off the table when we see a little bit of wobble. i think it's more of the same. >> rick, the dollar is somewhat all over the place today what's going on today? >> reporter: i think the word that best describes some of the issues that kenny talked about, whether it's emerging markets, what's going on with various economies from china and throughout europe, divergence. we traded at a time the correlations were so high, all markets moved in sync and we still see much of that in the fixed income space but in other areas, divergence is getting bigger, and i think it's very fascinating because this could be a big question for the rest of this year and potentially next year that if the pillars of stability of the u.s. economy remain how are
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investors globally going to deal with the divergence? will they look at the numbers and think, well, when europe turns around i will have a bigger wave to make more money if i invest now or are they going to stick with the u.s., and i think the latter is probably the credible direction but will be an adjustment for investors and the market >> on that stick with the u.s. theme, sometimes we see emerging market contagion it doesn't necessarily affect the infect t immediately. the question is, how long can the u.s. stay safe >> and that's the question, right? ultimately you don't want to see it spread beyond those emerging markets. you don't even want to go there. that is starting to be the conversation amongst analysts and strategists that it is only a matter of time before they put pressure on the u.s. i still think the safety trade, we're the strongest at the moment in terms of our economies, we're doing very
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well therefore, i think any pull back in u.s. market will be muted i'm not looking for all of a sudden the u.s. market to fall apart by any stretch come under pressure for sure maybe. i still think the safest place >> thank you all for joining us. still ahead here on "the closing bell," we'll bring you the latest headlines from jack dorsey who is continuing to testify on capitol hill. and up next a deep dive into the trump economy. a look at whether the policy will lead to sustainable economic growth in the face of a number of big head winds coming down the pike. that's coming up at fidelity, our online u.s. equity trades are just $4.95. so no matter what you trade, or where you trade, you'll only pay $4.95. fidelity. open an account today.
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going right? >> reporter: yes, he does. president trump has seen more than his share of controversies and chaos during his administration one area, though, he has been scandal free has been the economy which has boomed under his watch. in fact, trump has put a unique stamp on this economy in ways the country probably has not seen since at least ronald reagan and now even his critics are conceding the booms we've seen in gdp, employment and investment are due to trump's policies alone mark zandi was one of the president's early detractors early in the campaign and predicted a lengthy recession. now he tells cnbc his predict n predictions are 0.7% higher for 2017 and and that's thanks to trump's policies we've had increases in business investment and near record levels of consumer and business confidence those are courtesy of the trump economy.
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how long will it last? zandi still thinks a recession is on the horizon, perhaps 2020. an intensifying trade war with china, rising interest rates and also the swelling debt and deficit issue that could be made worse, again, thanks to trump. for now, though, the economy is booming. the president at least has that to brag about amid all the other issues dogging his administration guys >> jeff, stick with us let's continue the discussion and we'll bring in chris thornberg. chris, i guess we could go into the question of how long it would last, but is it fair to say that regardless how long it lasts the economy is stronger than anyone predicted before the election >> no, i wouldn't say so in fact, i think the underlying trends in the economy today are very similar the pace of job growth is a little slower now than it was
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then mind you that's driven by labor scarcity but the numbers we're seeing today are what i would expect given the expansion we've been in. the only real change that's occurred of any significance, of course, is that tax plan that went into place last year. it's traditional fiscal stimulus they increase spending and cut taxes. obviously that will give us about a half-point boost remember, that half-point boost comes from borrowing from the future we are fueling this little bit of a surge on the basis of borrowing money at the federal level and some day we're supposed to be paying that back. >> what about deregulation, chris? why we're seeing some momentum and high confidence levels >> no, not really. i know some deregulation has taken place. to try to tease out the impact of small amounts of deregulation here and there relative to the,
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say, overall size of the economy, it's very hard to see those effects and they tend to be minute at best. remember, the big number we got in the second quarter of this particular year, that 4.2%, was largely driven by consumer spending not by business spending that goes back to the relatively weak first quarter we saw. it's a good, solid economy no ways about it i don't see anything significantly different than years ago. >> in terms of whether the president does deserve credit and if it's likely to continue >> i would argue that in general presidents don't have nearly the power -- >> chris, my apologies that was for jeff. >> i think when you look at the duration of the economy, you have to look at the history of what we've seen during the recovery we've seen low levels of confidence we've seen low levels of business investment and, most
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importantly, we have huge levels of liquidity sitting on the sidelines waiting to get put to work you cannot discount the importance of those consumer and business surveys you have over $9 trillion. you have probably well north of $4 trillion in cash on balance sheet for corporations you've got $2.7 trillion and still low yielding money market accounts there's so much liquidity out there and so much that could get put to work from the sidelines and i think it is uniquely that business feels they have somebody on their side in the white house now, they have more of a known quantity and somebody more amenable to what they need to put cash to work. nobody saw this economy coming prior to the election. a lot of people thought we would trudge along, 1.5%, 2% that's a big boost
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>> i agree i think it was largely unpredicted. we'll continue to have this debate in the midterms and for more on the topic you can, of course, read jeff's article, cnbc.com. there's a lot of facts in there. when we come back, the saga of the embattled blood testing company theranos coming to its final act. the journalist who wrote the act on the rise and fall of the company and its founder elizabeth holmes will be joining us live. plus, shares of walmart up nearly 15% in just three months. and a new note from barclays says there could be more upside ahead. i think that she's a very nice girl...
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welcome back to "the closing bell." we have a half an hour until the bell rings the dow is positive. it's been going steady all day it's the technology sector that has seen the bulk of the action. visa, microsoft and american express are the biggest decliners right now. >> time for a cnbc news update and contessa brewer has it for us here's your news update right now. questioning of supreme court nominee brett kavanaugh began this morning as protesters interrupted proceedings for a second day kavanaugh had this to say when asked about his position on abortion >> i understand how passionate and how deeply people feel about this issue
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i don't live in a bubble i understand i live in the real world i understand the importance of the issue. >> paraguay says it will move its embassy back to tel aviv reversing a decision to move to jerusalem. netanyahu responded by ordering the closure of israel's embassy in paraguay. a number of sick passengers on a flight from dubai were quarantined on the plane at the tarmac at jfk this morning ten people went to the hospital while 100 others had to be evacuated by the cdc that's the cnbc news update this hour one of the passengers on the plane told local news there was all kinds of coughing going on before people got on the plane in dubai an interesting story >> we hope they're all all right. contes contessa, thank you very much for that coming up next, morgan stanley's chief global
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strategist says what will dictate the fate of the world's economy. plus oil prices take a dip after tropical storm gordon did make landfall near the alabama/mississippi border last night. we'll take to you gulfport, mississippi, for the latest on the storm and the impact on gulf oil producers. does it every go down? yes. can't do my job. business grinds to a halt. our gig-speed network not only downloads files up to 20 times faster, we go beyond fast with 4g backup for complete reliability. so if the unexpected happens... (snaps fingers) you stay up and running. we lost power... but not to that. i want that. (laughing) get fast, reliable internet and add tv and voice for a low price. call now. comcast business. beyond fast.
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welcome back to "the closing bell." the s&p 500 you have some sectors working today. consumer staples and utilities seeing a gain of 1% or more. the defensive groups on top, telecom as well. the biggest losers, information technology and energy. those are the down ones. >> emerging markets under pressure today widening the gap between u.s. markets and the rest of the world. bob pisani joins with us more. >> reporter: i've been the stocks correspondent for 22 years for cnbc and i think i have rarely, if ever, seen the kind of divergences we're seeing now. let me show what you i'm talking about. the s&p is up about 8% this years. look at the rest of the world, though germany representing europe, down 7%. indonesia is down 10%. shanghai, the biggest market, down almost 20%. the philippines, most emerging markets are down double digits
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a 26% divergence between the united states markets. that does not happen very often and it's rather startling. a lot of people are looking at this and saying this has to change and go back to some kind of mean reversion here morgan stanley yesterday, for example, had an overweight on the united states. they said listen, the prices are so crazy we're neutral on the united states we think we should have a modest overweight because the pricing divergen divergence, though they don't recommend overweighting them right now. that's the kind of thing going on on the street we've seen social media stocks across the board in the wake of testimony from twitter and facebook executives on capitol hill at the same time chinese social media emerging market media stocks are under pressure like weibo, sina, renren and yandex not because of pressure from washington but they, too, are under pressure in china.
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chinese regulatory officials are pressuring them for some, not all of the same reasons we're getting pressure here in the united states. it's more economic issues. right across the board, strength of the dollar, a little bit of weakness in china economically, some regulatory pressure, some of these emerging markets are having a really tough time guys, back to you. >> bob, thank you for the rundown. joining us to discuss more about the recent weakness in emerging markets, the chief global trat gist, head of emerging markets at morgan stanley investment management the author of "the rise and fall of nations forces of change in the post crisis world. welcome back good to see you. how much more pain generally do you see now? >> i think the big call now is to deal with china as far as the economy, this size is very small for the global economy like argentina, turkey, even south africa. you take them all together, the
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size in the global economy is about 2% china has some vulnerability if you look at the last decade, more than half of the increase in global debt has taken place in just one country. and that's china if something happens this china, that has major implications. china accounts for 16% of the global economy >> clearly the countries that have been in the eye of the storm during the summer and in august particularly, the likes of argentina and turkey, people point to fact they have these twin deficits and that's partly why their currency has been tanking. they have to honor their debt. that doesn't apply to china in the same way, does it? >> my base case is not that something really bad happens in china, but china does have a problem, something we have to recognize. for this to take the next leg
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down something has to happen is my point otherwise i think with the dollar stabilizing we can come out of the woods and this may represent a great buying opportunity in the markets the earlier segment was showing the u.s. and the other emerging markets and the global markets has been this year but, remember, divergence also means opportunity because the last time you had such a massive divergence and the u.s. markets so dominated the global financial landscape was in the late 1990s we set up the decade for emerging markets subsequently. i do think that they are coming close to a point where this will turn out to be a once-in-a-lifetime buying opportunity for some of these emerging markets do we have one final leg down and that will really depend on the fact that does china get caught up in what's going on out here because, you're right, they
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don't have the classical problems of a large current account deficit orificecal deficit but they do have a very large increase in debt this is a really important point. for the first time in my memory, u.s. and chinese interest rates have converged that means the incentive for the average chinese who take their money out of the country is pretty high. >> the chinese currency has stabilized recently. what would lead you to this biggest opportunity of a lifetime to buy into emerging markets? a lot of these markets are still bleeding >> if china stabilizes here and the dollar stabilizes that's a big opportunity. at some point in time these valuations need to matter especially the currency front. the mexican currency, the south african currency these currencies, even the
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turkish currency, extremely cheap levels the dollar is very expensive and looking out the next three to five years i think the dollar will be weaker not stronger in the next three to five years >> in terms of your scary scenario, looking at the chinese yuan, what level would start to make you worried that china could be drawn into this capitulation >> they've put the line in the sand arnesound seven the other thing worth monitoring are china's foreign exchange reserves that's what happened in late 2015 and early 2016 which came back to have a blow back impact as well. the u.s. markets have been pretty teflon-like ignoring this crisis in a way they did in 2013 and 2015 as well until it really began to impact china.
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i think even for the u.s. markets watching china is really important. argentina, i don't think that's a big deal >> if we see a drawdown it means it's getting too extensive and you could see weakness spill over here. >> capital outflows have begun in earnest china no longer has a surplus. that's disappeared in china now. you begin to see reserves begin to decline and you have the first data on friday when we see what happened to reserves. there are many ways we can see that but the trend will be visible in the next few months >> in the positive case scenario one country hit too hard and you would tell people to buy which country? >> eastern europe, poland in particular they are booming, growing very rapidly, but have been caught up in the whole negative sentiment towards europe poland would be the country trading in relative terms.
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i would say that's the place you buy. >> you like all currencies >> i do. >> that wouldn't make the top ten, would it? >> i bet it would. it's not the yen >> appreciate seeing you chief equity, global strategist at morgan stanley. the tech sector has driven more than half of the gains in the market this year we'll discuss if investors still have an appetite for tech or if it's a sign of things to come. and tropical storm gordon is making its way across the gulf states a live report from the ground, how it's impacting the oil market next on "closing bell." are you taking the tissue test?
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and they whiten 25x better than a leading whitening toothpaste. crest. healthy, beautiful smiles for life. welcome back tropical storm gordon making landfall late last night near the alabama/mississippi border cnbc's jackie deangelis is in gulfport, mississippi, with the latest on the storm and its impact jackie >> reporter: good afternoon to you, will. let me start with the ports. gulfport here in mississippi behind me you can see is fully operational. there's some activity and buzz after the storm or the worst of it has really come through the region
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pes ka go storm gordon did pass through about 50 miles east from here packing that powerful punch but not as bad as the forecasters were expecting there were severe winds, a lot of rainfall and storm surges that caused did i rupgss throughout the area. it was relatively quiet. it was a lopsided storm that didn't hit gulfport that hard. gulfport braced for it because it was hit very hard by katrina in 2005. last night there was a mandatory curfew everyone is saying it's better to be safe in these situations than sorry we're roughly a little bit through hurricane season it doesn't end until november. this was one of the first to get us started here and the energy
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industry worries about these storms we saw with hurricane harvey a lot of damage could be done here about 9% of u.s. production was shut down in evacuations and shutdowns preparing for the storm. remember, if there is no flooding, if there is no damage, these operations can get back online rather quickly. most folks in the area say while it was a tough storm to get through in certain parts it wasn't as bad as it could have been hurricane season is not over yet. all eyes still on the gulf as we get through it back to you. >> jackie, thank you very much for that jackie deangelis in mississippi. we have 11 minutes left until the close. markets are lower. they're off the lows of the day. the dow is flat. the nasdaq with declines of just over a percent twitter down 6%. and we could see selling
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pressure into the close. 1.5 billion to sell. it's actually quite a big one going into the close with ten minutes left a. retail mover to show you down 17% for the week down more than 10% today we will reveal the stock and what's driving it wnexondo nt "the closing bell. do you want the same tools and seamless experience across web and tablet? do you want $4.95 commissions for stocks, $0.50 options contracts? $1.50 futures contracts? what about a dedicated service team of trading specialists? did you say yes? good, then it's time for power e*trade. the platform, price and service that gives you the edge you need. looks like we have a couple seconds left. let's do some card twirling twirling cards e*trade. the original place to invest online.
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and two-hour appointment windows. click, call or visit a store today. welcome back to "the closing bell." we have seven minutes left of trade. we are trading lower, 1.2% on the nasdaq the dow is flat. some individual stocks to watch. up first, walmart. barclays has reinstated coverage the firm says the big box retailer is in a phase three of what has been a successful transformation saying it will be more relevant in improving e commerce barclays has suspended coverage since early may because of a conflict of interest >> it blew away expectations next up another retailer, the mystery chart revealed, restoration hardware
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reported mixed results yesterday after the bell missed on revenue and cut its revenue guidance it had been a big winner up more than 75% down 13% a great interview tonight. the ceo will be joining jim cramer it's an exclusive interview, talking from the brand-new store out in the meat packing district of manhattan at 6:00 p.m. eastern including a restaurant and the restaurant has been talking up these high-end restaurants, one in chicago, for instance we have some comments from president trump. >> i think i've ever had, in fact, mitch has never said anything so nice i think steve said something just as nice i think the book is a total piece of fiction, and he was totally not even misquoted he never made the statement. he came out with a statement that honestly i've heard over
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the years that general mattis is an intellect and i asked him whether it was true. he said not only is it not true. thank you very much, that's very nice he wrote the most beautiful statement. i think he's a terrific person >> and he'll stay in that job? >> yeah, he'll stay right there. we're very happy with him. we're having a lot of victories. we're having victories people don't know about he's highly respected all over the world. i did appreciate his statement he didn't have to write that statement. i appreciated the statement of john kelly and i appreciated the statement of many others every week i seem to have a book coming out i like to take them on when they come out thank you, everybody [ all talking at once >> make your way out let's go
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>> well, if you look at bob woodward's track record, he had the same problem with obama -- excuse me. ready? he had the same problem with president obama. he had a tremendous problem with president bush every time he wrote a book they were complaining about it. they were complaining about the lack of accuracy and i understand him and that's what he does and i fully understood that before in the end i'm happy with the way it has turned out. thank you very much, everybody [ all talking at once >> press, make your way out. we're finished let's go >> if it happens, it happens if it happens, it happens. if it's about border security, i'm willing to do anything we have to protect our borders if we don't protect our borders, our country is not going to be a country. so if it's about border security, i'm willing to do what has to be done thank you very much.
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>> come on, guys, let's go >> what about the people -- >> sir >> thank you very much eamonn afteris is ready to . the president maintaining the tone he has been articulating pretty loudly that he believes the book is discredited. >> reporter: that's right. the president may have something else to deal with in terms of the pr front "the new york times" just after those remarks were taped, "the new york times" just posted an op-ed from a senior member of the trump administration this is something i've never seen before in my career in washington, d.c. this official writing in "the new york times" that he is working -- he or she is working to resist the president from inside the administration saying that a number of officials
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believe our first duty is to this country and the president continues to act in a manner that is detrimental to the health of our republic saying that is why many trump appointees have vowed to do whatever we can to preserve our democratic institutions while thwarting mr. trump's more misguided impulses until he is out of office. the op-ed goes on to say the root of the problem is the president's amorality. anyone who works with him knows he is not moored to any principles that guide his decision making. stunning criticism of the president of the united states by someone who works inside the administration who is not willing to put their name to this op-ed to make this criticism public because of fears for the person's job, suggesting he or she wants to continue in office in order to thwart the president of the united states stunning stuff never seen anything like it. you can imagine that is going to drive some of the conversation here in washington this
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afternoon in a white house that was already concerned about leakers in terms of the woodward book will now be consumed with questions about who it was who wrote this op-ed and why they did it >> a senior official in the trump administration by your interpretation that have phrase, how senior could this be >> reporter: this could be a cabinet official, it could be a senior person appointed by the president. the person refers to themselves as a trump appointee so a political person at a senior level. "the new york times" says they know the identity of the person. they're with holding it for that person's job security. that's a wide range t. could be any number of officials. it could be somebody less senior than that description might initially give you the sense of. >> what are the consequences of this the fact it's in "the new york times," a frequent target of president trump, the fact that it is anonymous, does it do anything to change the story for him?
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>> reporter: i think you're looking at this is the president's love/hate relationship with "the new york times. he reads it xulsively but he also calls it fake news and says it's failing at every opportunity. so this will be seen as especially a dagger in the heart for the president given that it comes in "the new york times" itself the comments give the impression there are other like-minded officials who are part of the resistance inside this administration, this official saying they're not in the resistance of the left they like and officiate many of the president's policies but they don't appreciate the president himself and think he's harming the country. i can't think of a situation we've seen that before >> thanks. >> that was loud >> the closing bell. >> the closing bell. markets actually turned a little bit higher at the close. 23 points higher
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the rest of the markets led lower by the nasdaq as we've known. tech was lower >> nasdaq closing down a little more than 1%, 1.2% the worst day since the middle of august. the russell 2000 down by a third of a percent another day of selling for the major averages the dow ending the day flat to up slightly. kevin o'leary and the big news today, the president talking about trade and we wait and may have an agreement soon mike, let's first react to that news we're discussing with eamonn clearly another high level attack on his administration by one of the continued critics as sara pointed out is that a big extra pressure or are we a long way from breaking
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point impeachment? >> it doesn't seem like it moves anything that much closer to anything that will jeopardize the president. i think it's consistent with the storyline of this administration there are people with different agendas, really chaos within the staff. i think that's reflected in this hotb op-ed. >> we have no idea what the agenda is or who the person is or whether it changes the story at all for president trump would you say the same thing about the book it's gossip and it's important but does it do anything to change the trajectory of the presidency heading into the midterms as we continue to see this economy do quite well >> not in any, i think, predictable way. because of these revelations of books, i do think that maybe one
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of the fringe risks out there is how the president reacts to it if the president says i'm cornered, i'm frustrated and want to get something done on my terms. that is conjecture i don't think most observers would go there >> some contradictions in this article. on one line it says that we want the president and the administration to succeed and another many officials are working diligently to frustrate the agenda there are some critics >> we take it all with that context and the president is involved in some heavy duty negotiating on trade we are getting some headlines that he said trade talks with canada are coming along.
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we'll know the outcome the next few days the worry for the markets this would be a distraction as we await the details of some high stakes trade >> i don't think we've seen anything new there's always this going on in washington, but the focus is really on the tariffs and i think are we making progress and what's that going to do to the earnings trajectory. now we have canada, next step china. i know we're jumping ahead we have to get there for the markets to stay where they are if we don't get this and earnings don't stay strong, you won't have the support it's a lot more noise than substance. >> there's a lot of noise on the topic of trade negotiations, whether your country men are likely to form a deal in the near future. >> this is going to be a big problem. we've talked about it.
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the canadians never wanted to use the u.s. court system to resolve any trade disputes they felt it was onerous and wouldn't work. yet when the mexican deal was negotiated in principle, they eliminated that. they're going to look for their relief in u.s. courts. now we have a problem, a tri-lateral agreement. i don't think we'll get anywhere anytime soon the canadians don't want to move on the milk subsidy because it's vote time in canada. 7 sea9 seats are basically bougt with milk subsidies. they don't help canadians. they're paying 35% more for cheese try to buy a pizza in toronto some time. it costs you 30% more than what you buy in new york city there's many canadians who would like to use this excuse, trump , to actually get rid of the
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subsidies in a way no canadian politician ever has. you have that going on this week they're not going to resolve this thing this is going to hang out there. canadian dollar has lost 4%. it's not a pleasant time in the canadian investor's mind right now. >> between canada and china, there are headlines here on china that trump says we have been doing very well we are doing very well in negotiations with china. we're not prepared to make the deal they want to make we are up against another deadline where we can see another $200 billion of chinese imports get taxed in the next round. how would the market take that >> i think this is the classic art of negotiation, kind of came out with positive news, look what's going on in china i think if we do do the $200 billion, the short-term reaction will be negative up until then, until it happens, because the market today will only act when it sees it not on news anymore we have to actually see those tariffs.
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>> in light of this week's news you have to ask the question whether it weakens the negotiating hand of a president who is seen as basically not having tsupport of his own administration they were trying to think about when they would have more average and so it seems like that's at least thrown into the mix. >> does he have the backing of his own people speaking of trade, president trump said a deal with canada could be reached soon. meantime, the u.s. trade deficit posting its biggest monthly increase in nearly 3 1/2 years, our steve liesman joins us now with why that might be a good sign for growth, those trade numbers today, steve >> reporter: sara, it's the opposite it surged in july 9.5% and this now politically charged number hitting $50 billion.
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that's the largest number since february year to date up 7% to $337 billion over the first seven months of the year is it really a bad sign for the economy? the trade deficit, the excess of imports over exports, has been about constant as a percent of the economy for the past eight years and that's contrary to those who say it's getting worse. go back to '98 it only improves during recessions and worsens or gets larger when growth picks up almost all the time. that's because more inputs from abroad are needed when the economy grows and more growth gives americans money for imports. the trade deficit by country shows that canada has a surplus if you take goods and services together and the european union far more modest than china where the trade deficit is a point and a half of u.s. gdp they rise when the u.s. economy does better. you can see there the need for the president to focus on the chinese deficit.
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he and his economic advisers have support on wall street and gets unfair trade practice when is it comes to technology. in fact, many forecast bigger trade deficits, sara, if growth accelerates. >> quick question, steve did you see anything in there, and i think a lot is being made of soybeans, but anything this there that indicated there was a rush to buy american or foreign products ahead of the tariffs going through? >> reporter: absolutely. you had a falloff in the u.s. food exports, and the reason is because you had a huge runup in soybean exports ahead of chinese tariffs. a lot of the data in the prior months, and some that have data, by the way, flatter second quarter growth that's going to go the other way and trade now will probably be reducing u.s. growth a big positive to something more modest in the quarters ahead
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>> steve, thank you very much for that this discussion on trade, thomas, are you optimistic, pessimistic that any sort of deal with mexico and ka canada or just mexico gets done >> i'm not optimistic. you'll see a deal move forward with mexico and canada asking for more time. how congress reacts to that and how the president reacts to that is what remains to be seen >> what about the point just made about we have this e anonymous op-ed in "the new york times," the bob woodward book getting a lot of attention now and some of the backlash the president is facing domestically whether that could influence his
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negotiations on trade. >> there's no question this white house needs good news and there's nothing the president likes better than good news on trade. it's certainly true in the past that there's been a lot of runup to tension and negotiations whether it's north korea or even in the korea free trade agreement before and it's been involved by a relatively modest agreement and victory being declared that said, the outstanding items for canada are really hard to see exactly where they're going to agree without the u.s. moving back from some of that in particular on dairy and on the intellectual property issue. canada would have to change its laws in order to back down to the trump agreement's position and on the ip side it's already in the mexico deal it will be hard from the u.s. standpoint to back down from that there's real tension there >> thomas, given the economy does remain as strong as it does
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and if that does maintain until november, how does all of this trade issues play out? does it still help the president even if no final deal is done or not? >> what i think is likely to happen the president will argue that congress should pass the bilateral deal with mexico, and canada can join at a later date. it will be up to congress itself its rules as to what qualifies under the executive branches and having an up or down vote. ultimately no one else can sue under that it's congress' job to decide that will fall in the hands of mitch mcconnell and paul ryan. that's ultimately in the president's interests. that said, a lot of people really care about the details and having canada involved so what i think you're more likely to see is a president declare victory, congress say wait and see, canada wait and
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see, and this agreement will sit. >> someone with a lot of money in the market, are you nervous at all about the way canada talks in particular? >> actually being i'm not. so much is negotiation it's going to be a win-win, quote, for both sides. canada, we saw their markets are down already they're not going to really dig in because it's going to cause more pain for them and then it will actually show we're winning. i think both sides need to show they got something out of it and move on. >> in other words it's just politics >> it is just about politics until we kind of get all of this resolved >> kevin, you mentioned it's not a particularly optimistic moment for canadian investors north of the border do you think people can still be optimistic about the u.s. equity markets? >> definitely, canadians that only invested in canada have wildly underperformed. most canadians diversify their
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portfolios by holding a large portion in the s&p 500 canada faces some other problems that have emerged in the last two weeks. the government nationalized the pipeline when kinder morgan put up their hands and basically said canada is no longer investable it's tied up for years they just gave up the ghost and sold the pipeline for $4 billion. and unfortunate the federal government itself through its court system ruled against the pipeline in another set of litigation the canadian people bought a pipeline that is basically worthless. this is a whole series of bad news events and, of course, the canadian dollar has reacted so this has not been good
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we're now debating are we going to have a better nafta or worse nafta? if you're optimistic a deal will get done, and i'm not, it's not going to be one that was better than the last. it's going to be worse for canada which is why i think the domestic markets have reflected some pessimism and can't seem to get positive they're negative on the year that gives you the idea of the delta occurring here >> you have a competitive edge and that weaker dollar on the year when it comes to the exports. guys, we'll leave the conversation there for a moment. thank you for joining us as we got that breaking news coming up, we'll talk tech stocks taking a dive today. up next, we'll discuss whether investors are starting to get teched out and later, theranos telling shareholders it will dissolve after defrauding investors the reporter who broke the story in the first place will join us
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to discuss and, of course, we want to hear from you. you can reach out to the show on twitter, facebook, or send us an e-mail we just got married. we're all under one roof now. congratulations. thank you. how many kids? my two. his three. along with two dogs and jake, our new parrot. that is quite the family. quite a lot of colleges to pay for though. a lot of colleges. you get any financial advice? yeah, but i'm pretty sure it's the same plan they sold me before. well your situation's totally changed now. right, right. how 'bout a plan that works for 5 kids, 2 dogs and jake over here? that would be great. that would be great. that okay with you, jake? get a portfolio that works for you now and as your needs change from td ameritrade investment management. oh good, you're awake! finally. you're still here? come on, denise. we're voya! we stay with you to and through retirement... with solutions to help provide income throughout.
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welcome back twitter ceo jack dorsey currently testifying before the house energy and commerce committee, this comes after he and facebook coo sheryl sandberg earlier answered questions from the senate intelligence committee. julia? >> reporter: well, this house hearing is still going on behind me the house energy and commerce hearing in which jack dorsey is testifying right now its intention was toter is bias. dorsey has said there's no bias in how twitter enforces its rules for what he calls the digital town square that is twitter. he admitted that it is still early days in understanding how to make sure all their algorithms are fair. >> bias is a rather new field of
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research within broader artificial intelligence. and is something that is certainly new to us as a company as well. we do have teams focused on creating road maps so we can fully understand best practices for training, data sets. >> reporter: much of the questioning have been focused on twitter's failings dorsey apologizing and promising to fix a lack of clarity around terms of service and the fact offensive content is not pulled down fast enough >> our current model works in terms of removing content based on reports we receive. we need to take the burden away from the victim having to report in the first place >> reporter: dorsey was asked whether its ad targeting can exclude certain groups and be
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discriminatory dorsey answered in the affirmative, perhaps yes twitter says are down today. though dorsey was pressed on a range of issues he was commended for coming in to testify and for answering this pretty wide range of questions this is put in contrast to google google called out several times even in this afternoon hearing for failing to send a senior executive to the senate hearings this morning back over to you >> just on the 6% decline, julia, i wonder if it was unnerving to investors they didn't have the outrage that many expected the fact dorsey was so up front with just how much needs to change and the recognition of the scope of this problem, i wonder if that was a little bit of a wake-up call to investors that things will look different business wise. >> reporter: i think that's exactly it dorsey even said earlier in his testimony recently that at the last earnings call they were
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very up front, they're prioritizing cleaning up the platform, getting rid of abuse, getting rid of fake accounts and they're going to give up that activity on twitter because it's fake even if it means giving up revenues in the short term he said the stock reacted negatively when they made those announcements over earnings and reiterated that again this afternoon saying they understand this could be -- they're going to be giving up accounts they're going to be giving up some of those monthly active users to clean up the platform they understand for the long-term health of twitter they have to do that. perhaps some short-term losses for long-term gains. >> not prioritizing profit just now. julia, thank you the tech heavy nasdaq selling off today as dorsey and sandberg spoke on the hill. it wasn't just social media stocks taking a hit. it was broader than that bertha coombs with a look at some of the movers bertha >> reporter: that's right, sara. the third day of negative trading on the nasdaq, down for
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the third day in four. facebook suffering collateral damage a number of analysts said sheryl sandberg acquitted herself well. these will impact facebook facebook down about 23%. it wasn't just those big social media stocks take a look at netflix one of the worst performers. the big impact came from these large caps, big momentum players selling off today. netflix, amazon and alphabet, parent of google and youtube as well a report from one watchdog group that says that the major wire also carriers are slowing down the streams of netflix, google, youtube and amazon that's something that could impact their revenue even more you saw jd.com, the worst decliner today, hitting a near
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two-year low as they're continuing questions about the arrest of its ceo in minneapolis on allegations of sexual assault. still no word on that. worst day despite earnings down today trading down this stock was actually up and at an all-time high for seven days running into that print back to you. >> bertha, thank you very much for that now sticking with tech, mike has the latest about the performance so far this year and the names that have driven it so far. >> and really how big tech has become within the overall market it's not so much an immediate short-term warning of an urgent nature but the market's dedication to tech in terms of the s&p it makes up is 26% it was only above this level around the march 2000 market
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peak and that doesn't have netflix. all that means is what we've known, tech is a popular, highly valued part of the market. long term the biggest sector of the market, once it gets to a peak, does not deliver good returns over the following cycle. that happened in 2000. financials in 2007 nobody knows what the threshold is i do think you have to keep in mind it's getting a little crowded. it's getting a little bit perhaps consensus overheated sector it doesn't tell you where we go from here directly >> the comparison to the 2001 tech bubble, is there a difference in terms of what the valuations are relative to earnings clearly some tech stocks today are quite stretched, but a lot of them like apple have delivered huge earnings growth since then >> absolutely. in absolute terms, the valuations don't really compare. so, in other words, today there's much more of a fundamental basis for where the companies are.
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everything is on a scale of since the tech bubble of the late '90s we're at valuation extremes we're arguably at sentiment extremes if you look at net analyst buy ratings on tech stocks it was basically at a peak so all these things are the atmospheric conditions that say, okay, maybe be careful it's no longer some kind of an edge to say we're going to drive in tech. tech is so much a bigger part of the economy right now. it's almost a false distinction. we should keep in mind s&p itself is taking matters into its hand and will spread technology stocks across three sectors. xh that will make it look like there's less of a tech but it will not change the basis. >> houchl of your money is allocated to technology? >> so we're underweight technology i think if you look to mike's point as an industry it's 26%. if you look deeper and at the
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amazons of the world, there are some valuation issues we think are pretty strong in this market that i think if you do see a rotation out of tech especially the momentum tech i think there's opportunity in other sectors and that, we feel, is how the market can go to the next leg without that the momentum is really carrying a handful of stocks that's proven to be more than half of the s&p's return. >> i wouldn't say no to that but i think it's a low probability to say it has the beautiful passing of the baton to everything else without a massive correction or bear market >> along the way there will be some bumps to get to the next level, we're not going to see a linear line if those two things don't happen, these tech stocks that have big valuations are going to fall really hard >> we have a news alert on cbs
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and viacom cbs is reportedly in talks to settle litigation with sherry redstone's national amusement over control of the broadcaster. according to people familiar with the matter who spoke with the dow jones, the settlement, according to this report, shows cbs would agree to drop its plan to issue a dividend in order to maintain voting control of the company. now in return national amusements would agree to refrain from pushing cbs and viacom to merge. now representatives for cbs and national amusements declined to comment to cnbc. >> leslie picker, thank you very much we watch cbs shares, a little bit higher, mike is this surprising >> i don't know if it's surprising that they're trying to come to some accommodation here but the idea there would be
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no forced effort to merge these two companies, i think would be taken as a concession by the redstones. i'm not sure if that will hold up in terms of a final agreement. if that were the case -- >> small move. kevin, final word on the broader market discussion, do you think that a day like today where for political reasons at least today we did see those tech kms decline. twitter as much as 6%. it makes you fearful the rally that has been so led by tech could be coming to an end? >> no. about every six weeks we have this debate, is leadership finally leaving the tech sector and moving to energy or to financials no, it's not happening the growth still remains intact in tech. there is one big problem if you're a traditional active manager, you live by certain codes. i'll give you a couple very few light to let a single position be more than 5% of a
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portfolio. very few like to let a sector be more than 20% of a portfolio if you have trimmed tech to 20 over the last five quarters, you vastly underperformed. and that was sitting at 26 for the s&p. two are causing havoc, amazon and apple. apple is not really tech many call it consumer discretionary. by keeping those at 5% you've also wildly underperformed the market the trouble for most managers they don't want to let amazon be 15% or 16% of their portfolio or apple. 80% of the performance have come from the two stocks and that is becoming a concentration issue, and that's why days like today feel scary, but i think tech will remain the leadership group going into the back end of the year >> okay, kevin, great stuff. thank you very much. kevin o'leary. walmart trading higher today after barclays resumed coverage on the stock with an overweight
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rating $110 price target the firm says walmart is in phase three with advancing e-commerce and technical capabilities >> joining us to discuss is karen and pete najarian. good afternoon to you. it's had a decent run already but another upgrade. >> i'm sorry, i couldn't hear you. had a decent run but what? >> but another upgrade how much more upside is that >> it's getting pricey they've done a great job phase one and phase two. obviously e-commerce is a big thing for them however, at this price when i look at companies in the middle of transformation, i would rather go to target which is maybe a phase behind but they're making progress. they're making progress and trades a lot cheaper than walmart so that's where i would go if i had to be in the space, which i like to be in.
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>> what do you think, pete >> target. i own target for that reason i got in at about the $50 range and continue to hold on. i continue to hold on and this is why when i look at this thing, and it's trading at a 15 and walmart trading at a 20. when i look at margins, it's not comparable walmart, 50% of the revenue comes from grocery that's low margin. when you look over at target, you have five different segments and the $7 billion to push to the next level to karen's point when i look at what phase they're in i think they're a phase or two behind walmart. they're killing it in e-commerce there's a lot of reasons to be excited. >> i get the valuation argument, mike target is cheaper than walmart when it comes to actual amazon competitors, digitally
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internationally -- >> they've been making the heavier spend and are further along. in terms of the everything store, walmart has that advantage. in fairness, if you have a minneapolis guy and you ask that question to you have to have somebody from bentonville or little rock. >> you know where this guy is from, right? >> yes, exactly. >> it's not amazon and nobody else there is room for target and amazon and walmart >> guys, great stuff karen finerman and pete najarian tune in to "fast money" at 5:00 p.m. they have gene munster joining who will give his take on jack dorsey and chersheryl sandberg' testimonies and what it means going forward. let's have a look at how we finished the day on wall street. the dow flipped positive right towards the close up around 0.1% 22 points or so. the s&p lower. the nasdaq the laggard
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throughout the session down 1.2% of course weighed down by the likes of facebook and twitter. twitter was down 6%. the russell down 1%. time now for a cnbc news update with contessa brewer. you almost got it out and stopped yourself just in time. secretary of state mike pompeo arrived in india after a brief visit to pakistan. he will hold talks with the country's leaders to try to boost strategic security and defense cooperation between washington and new delhi as potential jurors showed up for the trial of chicago police officer jason van dyke, protesters staged a justice for laquan mcdonald. he was shot by van dyke nearly four years ago as a teenager walked down the street toyota is recalling about 182,000 prius hybrids. it could cause a fire that affects the 2016 through 2018 model years.
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a video released bay safari park shows the moment a lion got into a tourist's car now that is up close and importantly. as you might imagine the video is going viral it shows the lion climbing over the tourists, just, you know, for a little cuddle and a lick the incident happened after a woman was hurt by a different lion but in the same park. i mean, those people got more than they paid for at least it ends well, is all i'm saying guys >> it's not quite wild i didn't know they had lions in the crimea there we go. >> i didn't know lions cuddled that looks scary contessa, thanks so much to learn >> i would not be embracing the lion >> i wonder if that's a new attraction since russia seized it or whether it was always there like a new zoo or something. extraordinary. >> do you think you could outrun the lion >> i would run, though
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i wouldn'ting hugging it maybe i would throw something at it coming up, alphabet's top executives were missing in action today during the big hearing on capitol hill drawing the anger of some lawmakers, whether that could come back to haunt the ch gntteia later on "the closing bell. and they greeted me as they always do. sergeant baker, how are you? they took care of everything a to z. having insurance is something everyone needs, but having usaa- now that's a privilege.
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"the new york times" just publishing an op-ed written by what it says is an anonymous
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senior official within the trump administration titled, i am part of the resistance inside the trump administration theanonymous author says, quote, i work for the president but like minded colleagues and i have vowed to thwart parts of his agenda and his worst inclinations author of the gatekeepers, how the white house chiefs of staff define every presidency. ever seen anything like this, chris? >> no, absolutely extraordinary and unprecedented. in my mind i can't think of anything quite like this the only thing remotely comparable, it seems to me, would be during the darkest days of the nixon administration when al hague, the chief of staff, and james schlesinger, the secretary of defense, took care to make sure that any military commands that were issued by richard nixon who at that point was walking the west wing corridors and talking to the oil portraits and obviously a
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desperate man, when they took precautions to make sure that no military orders would be given that didn't go through them. this kind of defiance by an anonymous high-ranking staffer is pretty extraordinary. >> the president has faced many attacks since he took office including very often from "the new york times." how much further does this go to hit his, whether it's credibility or his ability to continue operating >> well, you know, again, i don't want to play armchair psychoanalyst but anybody who knows, who has been following this white house for any period of time, knows this kind of thing is really the sort of thing that might completely drive him crazy.
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it seems like the kind of thing that would make him furious and i would think that he would be barking out orders to john kelly and everybody else to find out who this person is >> i mean, extraordinary, yes, chris, but is it consequential at all >> i think it could be extremely consequential. we've all wondered for a year and a half now if there was, in fact, a grown-up in the room or a group of grown-ups who felt they were the thin line between the president and disaster and so this sort of confirms, if true, there's at least one very high-ranking official who believes that and maybe more >> well, we don't know how high-ranking, i guess, at this stage. to what extent, chris, having written a book as you have on the importance of the chief of staffs within the white house do
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you feel this individual instead of doing this anonymous article should instead come out, resign, and be public about their attacks as opposed to anonymous and attacking the team they're a member of from within? >> well, it's extraordinary, no question about it. you could certainly make that argument i suppose this official would probably counter with the argument that he believes or she believes that this person is, again, a thin line between the president and disaster it's been speculated about john kelly and others if they feel they are there to make sure that we're not in harm's way, that they may be saving the president from himself there are others who think there are high-ranking officials in the trump white house who
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believe in duty, honor, country and they stand between the president and rash decisions >> chris, i mean, to that point, on the one hand you might say it's supposed to be a reassuring message perhaps to some people who don't necessarily agree with some of the things the president wants to do. on the other hand the cynical view is that ultimately perhaps the identity of the person will be revealed at that person's choosing it will preserve life after the trump administration if they fear career wise it will be some kin kind of a taint there. >> i suppose that is possible. it's possible to look at this from so many different angles and to psycho analyze this unidentified author. i think that's probably a fool's e errand might it be that cynical someone trying to distance him or herself from the trump
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administration after the presidency is over i don't know one thing is for sure. it's absolutely unprecedented as far as i know. >> maybe we'll learn more. i appreciate you jumping on the phone. author of "the gatekeepers" about previous white house chiefs of staff. leslie we have a news alert on papa john's a man by the name of timothy o'hearn has decided to retire effective immediately. he was seen as a friend and confidant of the founder and public face of papa john's who, of course, has recently departed as ceo and is embroiled in a public dispute with the company.
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as you can see shares are down about 1.7% interday. not moving much on this news but we will take a look and get back to you back over to you >> down 1.7% theranos is set to formally dissolve in an e-mail the ceo and general counsel david taylor reportedly says the company plans to pay creditors its remaining cash in the coming months. >> the move to dissolve comes as theranos founder holmes and president bawani await trial on charges of wire fraud. joining us now to discuss more on this is "the wall street journal" investigative reporter who first broke the story on theranos back in october 2015, author of the book "bad blood -- secrets and lies in a silicon valley startup." good to see you. so you're going to have to republish this book. we have a new ending
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>> the writing was on the wall the remarkable thing if you rewind to october 2015 when i published my first investigative story on theranos the company had $400 million in the bank and it could have called it quits then and elizabeth holmes could have apologized to investors to patients, to everyone she misled and returned that money. instead she dug in her heels and has use that had money to hide the ball, to pay lawyers, to thwart litigants, to ward off lawsuits unfortunately for her it hasn't changed the outcome, the predictable outcome, the disillusion of the company and the criminal charges filed in june >> what do you expect to come of the criminal charges and the case that's been brought >> well, i guess one open question is whether elizabeth
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holmes and her ex-boyfriend, ex-number two at the company, will seek a plea deal. i think that the chances of that are pretty unlikely. from what i hear she's telling her friends and her entourage that looking forward to her day in court, and that she thinks that the real story, her version of the story will come out at trial, and so she's actually putting on a cheerful face with people she knows and people who have seen her recently and saying that she's looking forward to see this go to a jury. >> how far do you think the kind of impact extends in silicon valley in the world of private company financing is the, you know, the mark of having invested in this company or not really asked the right questions going to stick with folks there or it's just hey, sometimes you lose some. >> i think there are definitely big lessons for silicon valley in this scandal. it remains to be seen whether those lessons will be drawn.
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i've heard a lot of people say, well, look, the sophisticated vcs, especially the ones who had experienced in med tech stayed away and so actually silicon valley functioned well, but really there are other things about silicon valley and pernicious things about the valley's culture that came out and in particular the founder's myth and it was steve jobs to blame for and the myth that the tech founders were all knowing and can see without finishing their college education and getting college degrees and that myth has somewhat pierced with the theranos scandal, and i hope, you know, that people draw this lesson from it. >> very quickly, the star-studded lineup of investors. do they get anything or they lose all of the money? >> they got nothing. the coxs of atlanta, rupert
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murdoch, they lost a total of almost a billion dollars >> john, thank you very much >> the book is a must read >> tomorrow, don't miss jim cramer's exclusive interview with the comcast ceo brian roberts as they count down to the nfl season and it's an all-live show from philadelphia and it's a very strong lineup. of course, including brian roberts. 6:00 p.m. eastern time. >> the city in philadelphia. >> thank you making my dreams a reality takes more than just investment advice. from insurance to savings to retirement,
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>> jack dorsy and sheryl sandberg testified google left an empty chair any dorsey and facebook's samberg,
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and co-founder larry paige bothy declined to testify. to talk about what it means for google is formerly of the washington post and auth are or the google story. >> why do you think google came? when the king summons you to the castle you show up and google's failure to show up today is going to be seen as arrogant in washington it's the kind of thing that would never have happened at google 20 years ago, and i think they didn't show up because there were some things they didn't want to talk about. >> well, what would be those things they don't want to talk about? and i guess, how would they imagine that staying away from the hearings would insulate them from criticism >> well, i think they didn't want to talk about the fact that senior management is planning to re-enter china with a sensored search employ inthat would enable the chinese government to
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tell google exactly what results and it cannot show to schechine citizens and secondly, it didn't want to talk about the allegations to president trump and others that search results have a liberal bias. to your last point, i think google hoped that by not showing up they would not be thrown into the same category as facebook and twitter in terms of having problems with meddling in u.s. elections. >> david, who did best out of samberg and dorsey today, and do you think that it's testified that it's done the most. >> samberg won the day for sure. she talked about why facebook has to do more, and how much facebook has already done. jack dorsey, i think, scared a lot of investors because he made it sound as if twitter needed to be rebuilt from the ground up.
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sheryl samberg and facebook carried the day. there are a lot of issues at twitter and jack dorsey acknowledged that. >> david, you mentioned that you felt that the leadership of google wanted to stay away, in part because they want to join the station between facebook and twitter, is there a search function of google and the search platforms >> i think there is a distifrpgs which gives you results and social media where people are interfering with one another >> twet are owns you tube and it has problems about election, why did he take down you tube and other material other googles suffers from some of the same problems. >> david, thank you for joining us author of "the google story" on gaggle's absence. >> let's take a look at the
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headlines making news after hour it is raising its guidance >> also watching database company moggo db despite a smaller than expected loss and dronemaker aerovironment >> to come back to the stories of the day as we kick off with the op ed as it's being described you mentioned earlier that it could undermine the president because it makes him look weaker and harder to negotiate with the likes of canada >> i wonder to what degree he was steering the process with canada particular with china it changes the calculation slight she.i don't want to make this incremental move with the op ed because it's consistent with the longer term story of this administration being across purposes with
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itself and it might filter in at least in terms of the perception of the counter party. >> things that we'll watching was cats. >> a crowded trade and a normal pullback, if nothing else septsd the message that user engagement would be more free wheeling and, pence of with the kemp and realistically, congressional action will take a long time. >> exactly i don't think it's directly how the market fears and it's more how they'll evolve the business model. >> beyond that, we're awaiting word on canada and how the trade talks are going and going into a jobs report on friday. so far it's been very strong >> the market has been sort of tentative with all of this and not necessarily outright weak, but there's been kind of a softness to it in the last couple of days of trading. big chunks of the market going
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down being rescued by others like banks today i do think there's apprehension with the headline. >> positive on the day and a big day depressed to mapth marks, does it for the cloelgz bell and fast money starts right now. >> "fast money" starts right now, in nasdaq marketsite overlooking times square in the midst of key trade talks the administration is dealing with another bombshell as staffers go rogue >> nike r releases the controversial ad with colin kaepernick this afternoon and some are calling it a dangerous move first, we talk about executives having their day on the hill in washington, d.c. jack dorsey at the tail end of six and a half hours of testimony between both the house and the se

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