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tv   Closing Bell  CNBC  April 8, 2019 3:00pm-5:00pm EDT

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following you. >> exactly on the markets it seems quiet, but quietly, there are a couple new all time highs today. technology and communications services >> into fast money >> yes thank you for watching "power lunch. >> "closing bell" starts right now. it is the final hour of trade, ipo's in focus as pinterest kicks off its road show in new york plus, two fed recommendations, the president planning to nominate herman cain and steven moore, art lapper is here to weigh-in boeing shares sliding after cutting production of its 737 max planes, why wall street is getting concerned, and retail investors are buying in. closing bell starts right now.
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welcome to "the closing bell." just under an hour left to trade, let's check in on the markets, a steady recovery, the low was down 12 points, about 15 minutes after the open, and steady improvement to take us back to flat on the session, the nasdaq just higher the nasdaq lacks 0.4%. russell is down 0.4% many. >> we may not break that winning streak after all 7 days in a row, which is pretty rare, we saw in 2017, let's see where we settle. >> down a couple basis points. >> coming up on the show michael avenatti, claiming he has evidence nike bribed players to attend nike colleges. he'll join us in a first on a cnbc interview >> let's begin with today's ipo action the good and bad of the ipo blitz. the pinterest road show. let's start with you
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>> well, generally the ipo blitz is doing okay, since levi strauss went public on march 21st, there have been 8 ipo's, four of them are up, including levi strouss trade webb's done well they've all had big moves off their initial prices four are down, that includes lyft this is just the first round of more than 200 ipo's scheduled to go public this year. so far the stars are still aligned, stock market within 2% of historic highs, and the renaissance capital ipo etf. one of the best performing etf's of the year, it's 32%. the real test will come with the smaller and mid sized companies, this week, two companies in the hot cyber security space go public
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providing operations management in addition to security, i'll be all over them. later in the week. sarah, back to you >> thank you, let's turn now to the next ipo coming down the pipeline, pinterest. more on that company's expected pricing. leslie >> pinterest revealing terms which showed that its seeking about $9 billion in its ipo set to debut next week that amount is about $3 billion shy from its latest private valuation back in 2017 we're here at jpmorgan where the executives including ceo ben silverman attended a teach-in with the sales force to help explain to them how to market this deal to investors, based on this morning's terms, they're looking at selling upwards of a billion dollars worth of stock now, i'm told in pitching this deal, they're looking at differentiating pinterest from your traditional social media company.
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now, they make money based on ad revenue, displayed on their site, for those of you who are unfamiliar with pinterest, they allow users to learn new things like how to cook, how to decorate for a wedding, they really showcase these inspiration inspirational broo aal boards tl save they've only recently started monetizing they did disclose this morning their first quarter projections showed revenue of about $201.9 million. that's the most high end of the range that they showcased for those projections. that would imply, though, top line growth of about 54% although there are losses, they still would post losses from operations in the first quarter, those seem to be narrowing over time, guys >> leslie, thank you very much for that lyft is threatening litigation
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against morgan stanley accusing them of short selling. >> we got ahold of the letter that lyft sent much it questions the bank in its alleged role that would help preipo investors bet against the stock. these investors sign lockup agreements that block them from doing so some investors found some ambiguity in their agreements and morgan stanley provided a product that acted the same way as a short, so letting these investors hedge their long positions. morgan stanley has denied any wrongdoing and says that any suggestion that it engaged in an effort to apply short pressure to lyft is false key questions remain whether morgan stanley unknowingly or knowingly provided a short instrument to ipo investors and if certain lyft investors violated their lockup agreements it begs the question, could it happen to the other tech ipo's in the pipeline? there is likely more to come on
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this story, because the financial industry regulatory authority, the agency that patrols the banking industry has become engaged in the matter according to a person with knowledge. back to you. >> joining us to discuss more on the state of ipo's, ceo of rapid ratings, business editor at axe yoes good afternoon to you both i'll start with you on this morgan stanley lyft issue. what's your take on whether that's going to be competed in future ipo's >> it probably won't be in too many ipo's, morgan stanley wasn't on the book for this ipo. they're going to do it for uber, they weren't on the lyft book, i don't think it will happen in the same way >> what's your reaction to the pinterest pricing. >> so i think it's good they're trying to come out and be a bit more conservative than lyft did
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after the four or five days in trading after the ipo. it's not as aggressive, and i think that's really important for all of the ipo's coming up, they've got to have good clean sailing if they don't want to be a momentum player, short term trade, and i think ultimately they want to get enough buy hold investors in here to keep a steady stock price over as long a period of time as they can >> what's your overall rating on pinterest and how does that relate to lyft >> they're reasonably similar but going in different directions, we have the financial health rating, a 100 point scale. pinterest is rated a 48. it's rated an 18 for the 2 to 3 year core health score that means in the short term it's got relative stability, medium risk, doesn't have much chance of defaulting, doesn't have much to default on to be fair, the long term core health really does have weakness that
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they're going to have to improve. it is up from 45 a year ago. when you look at lyft, lyft is rated a 41 with the same core health score you look at the two of them, they're in the general zone, but going in different directions. >> what metric are you using to define long term health? >> the core health score at rapid ratings looks at a wide variety of financial elements, we use financial statements from companies that's evaluating how well a company is run. the financial health rating modifies that to look at what the shorter term resiliency are for a company. >> how do you weigh up this valuation of pinterest and what are you comparing it to? >> well, for starters, if you look at pinterest, the loss is on a profitable company. the losses have been narrowing year over year
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for them, it's a good thing, i think it's really hard, pinterest is a unique company. it's not really a social network, a content company, it's not really an e commerce company. unlike with lyft, everyone knew uber was coming next, you could argue snap chat, parts of amazon or parts of ebay it may be a bit of posh mark which may become public this year, it's unique. >> what do you make of the lyft ipo, how it went? >> i think it's gotten hit harder than it deserved to get hit. two schools of thought here you price low, you get these headlines, that's better for employee moral and you bring less money in, lyft brought in over $2 billion on its balance sheet, it's trading around where the ipo was.
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friday it closed higher, it was an up sized ipo. ultimately, i don't think it's that bad a thing for the company. i think the bank clients didn't make a huge amount of money. if i'm lyft, i don't care about the bank clients >> we'll leave it there, thanks very much. we have breaking news right now in the college admissions scandal. >> we have 14 defendants in that case, 13 parents and one coach who have pleaded guilty to charges of mail fraud and honest services mail fraud. among those pleading guilty, one is gordon kaplan, the co chair of wilke farr. he agreed to pay this ring leader $75,000 to participate in college entrance exam cheating and then felicity huffman, the actress from "desperate housewives." she has plead guilty and released a statement, i want to
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read two lines i am in full acceptance of my guilty and with deep regret and shame over what i have done. i accept full responsibility for my actions, and i will accept the consequences more importantly, she says, i want to apologize to the students who work hard every day to get into college. and to their parents, who make tremendous sacrifices to support their children and do so honestly she goes on to say her daughter knew absolutely nothing about these actions and that she betrayed her, so interesting comment from felicity huffman there, one of 14 parents who just pleaded guilty in this case, guys, back to you. >> robert, thank you very much for that ongoing fascinating story for us now, the heat is getting hotter for president trump's recommendations for the two open fed seats. sending shock waves into the political and financial worlds, up next, we'll debate the case for both. later in the show, michael avenatti disclosing alleged evidence
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but moving your internet and tv? that's easy. easy?! easy? easy. because now xfinity lets you transfer your service online in just about a minute with a few simple steps. really? really. that was easy. yup. plus, with two-hour appointment windows, it's all on your schedule. awesome. now all you have to do is move...that thing. [ sigh ] introducing an easier way to move with xfinity. it's just another way we're working to make your life simple, easy, awesome. go to to get started. according to a new survey, more than half of respondents believe neither stephen moore nor herman cain should be confirmed to report on the fed >> some on wall street blasting president trump's intentions to
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nominate stephen moore and herman cain. only 33% say they should approve moore. half say the senate will approve moore and 49% say cain will get the nod. both moore and cain are highly unconventional and if confirmed would be destructive trump is holding the fed accountable and as the man who apoints fed governors, that is entirely appropriate neither cain nor moore should be approved more than 70% say bothare too political. more than 70% say both are not qualified. the president's criticism of the fed along with his nomination of moore and cain -- most people
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think the president should not be commenting on the economy >> this is obviously a big deal, and there's a lot of chat around it, you know, it's a big story about who the president nominates to the fed and these are unusual picks. but the market doesn't appear too concerned about the whole issue of fed credibility and independence would you agree? why is that? >> it's not necessarily a near term issue for the president i think the question becomes when the fed has to hike or cut. the other thing, sarah, it could be introduced volatility into the market over time, that's something that's hard to notice, but it is something that you have to notice, for instance, if
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there was a recession. >> thanks. for more on the impact, let's bring in arthur laffer, and kathy basjanzic. are you supportive of both of these prospective nominees to the fed board? >> i'm supportive of steve moore, i think he's wonderful, he's known to everyone, that's probably why a lot of them think of him as too political. he would make a great federal reserve board member i know herman cain as well i know him in terms of his presidential run, i think i was partly to blame or responsible for the 999 if you remember, when he ran in 2012. >> oh, we remember >> i did jerry brown's flat tax,
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which was 13% on two things, he compared it with the fair tax and made it 999. steve moore is imminently qualified to be on the reserve board. i hope the senate confirms him >> what's your view? >> i have questions whether both are qualified. i think if they were, these seem to be politically motivated choices is problematic as you said, so far the markets haven't reacted. if they made it through the nomination process, and confirmed by the senate, we may have a different reaction by the markets. >> define exactly what you mean by political in this sense >> well, we heard from president trump that he's been highly critical of the federal reserve, particularly fed chair powell, for raising rights now he's calling for them not only to go on hold, which they have, and they've become very
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dovish they should cut rates similar to 2008 nominating these two people, they've advocated the ned has been too tight, they've been highly critical of the fed, it seems to be in keeping with what trump is looking at, i don't know that he looked at the qualifications very closely, it's the fact that they're in favor of what he's advocating, which is easier monetary policy on the economy >> i mean, that's the concern here, right? the white house, president trump has called for 50 basis point interest rate cut and quan tative easing. we've not found a single economist that says this is an economy that needs that sort of crisis era policy. he's injecting two voting members if he gets his way on to the fed board. is that not problematic? >> let me say this, i've never known a president to nominate someone he doesn't like, and doesn't want to be on the fed board, it makes no sense i was in the white house with richard nixon back in 1972, and
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there was all sorts of pressure put on arthur burns to get him to change monetary policy. the president and white house and the administration, have always been very interested in fed policy of course it's something that they would do. i've known lots of members of the federal reserve board for many years, most of them are fine people, all of them are very political, that's what the fed board does, they look at the politics, the economics and make judgments as to what they think should be done you just have to know who they are, because they are such public figures, they would be no different than any other member. lots of people have been -- you can go through janet yellin. all of these people are very political. but in the nicest way possible they should be qualified to make decisions. these two are just as fine
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they vote in one direction or another, but when it comes to the day job, they're professional and they assess the economy based on facts are you suggests that you think cain and moore would not do that >> i think that would be the concern. and i would say it's more what i believe. >> i think it would give the market perception, the others did hold positions in different administrations, but when you look at janet yellin, she had a very stellar career, and deep as an economist and different functions. seen with bernanke as well, these were tried and true and more traditional economists, there was less concern they would be politically biassed >> i -- also, art, the difference here -- i get your point, that, you know, the president is always a point -- political nominees, but one of
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these nominees ran a pact supporting president trump's policies and another wrote a book supporting president trump's economics called trumpenomics >> i don't know if you remember who the co author was of that book, trumpenomics, it was me. >> it's not a problem having that, and having views, strong views, janet yellin is a great economist, she's a professioner, and all that, she hasn't run businesses and that. herman cain ran a pizza business which is a serious business. i don't want all pizza business leaders in there, i really don't. i think the two views here by steve moore and herman cain are great contributions to this board. it in no way detracts from the rest of the board members. their academics, i'm a yale
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graduate, they're fine, fine people and deserve to be on the board, and so do herman cain and steve moore, they just provide diversity of views and they get along with people as well. they're not going to sit there and have a revolution going on and doing all that, they're going to work it out with them and have the arguments and discussions, and come up with a lot better policy for the country. >> good debate guys, thank you boeing still plagued by the safety issues over the 737 max 8 claims we will discuss coming up. disney investors gathering this afternoon for a special preview of the dneisy plus service. a live report straight ahead
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dow down 117 mostly boeing time now for a news update with sue herera >> felicity huffman and 13 others, including 12 parents and one athletic coach have agreed to plead guilty to charges of mail fraud they were arrested last month and charged with fraud to secure the admission of students to colleges and universities. president trump ordering the firing of the secret service
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director one day after the resignation of another top national security official the president picking james murray to lead that agency. iranian leaders warning the u.s. that it will reciprocate after the trump administration designated iran's elite guard unit a terrorist organization. it named the u.s. central command a terrorist organization an antiquities group in egypt unearthed a mummy of a high private who was buried 2500 years ago in an ancient cemetery south of cairo what a discovery that is the news update at this hour, i'll send it back downtown to you. >> we are just lower on the s&p. it fractionally went positive a moment ago, is flat two basis
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points >> boeing knocking 114 points out of 115 off the dow shares of boeing are still under pressure after cutting production of the 737 max, up next, how retail investors are ayg atto rhtow this changes everything. you're right sir... everything. no not everything, i mean you're still blatantly sucking up to me gary. brilliantly observed, sir. always three steps ahead. six steps ahead. sixteen. so many steps. you done? a million steps ahead. servicenow. works for you.
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welcome back to "the closing bell." here are the winners, p&g, and walgree walgreens. >> shares of boeing under pressure after receiving a downgrade from bank of america over concerns that the 737 max could create longer issues for the stock. >> it's crucial for boeing as you take a look at the 737 max look at boeing's commercial revenues and how much come from the 737, particularly the 737 max, 48% this truly is the cash cow for boeing, and when you look at the earnings estimates and how they've changed today. it's reflected in what wall
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street is expecting since they're going to be delivering fewer of these the consensus is down to full year earnings, you know what it was on friday? 1990 and we're still getting a few more analyst notes bank of america out with its note today, and perhaps the most bearish of all of the analysts notes we saw today, saying, previously, our base case was a 3 to 6 month disruption in which boeing continued to produce at a rate of 52 per month, however, we've refusing our estimate to 6 to 9 months of disruption. the production rate is dropping down to 42 per month they will be reporting first quarter earnings on april 24th, it's a couple weeks away, what we should be focused on in terms of whether or not boeing says, we're changing our guidance for full year earnings expectations. they tend not to issue quarterly guidance
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we would expect a full year guidan guidance. >> phil, overall the analysts note this is a short term and sensible decision by boeing that leads to a small further delay to when they can get back to further production and the plane fully in service again >> that's the expectation or that's the hope. let's be patient with boeing, they will deliver all the planes that are ordered we're not going to see mass cancellations, we're seeing the analysts saying, the disruption, we thought it was going to be three months, now it might be six, now it might be nine. look at the airlines too, guys, you talked earlier about how southwest and american are feeling pressure, they're not extending their cancellations in terms of not having the max on the schedule at least into june. >> thanks very much.
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now, main street investors have been trading j.j., great to have you with us. >> always great to be here >> joining us as always, with your monthly survey out. >> if you look back at how this has progressed, mid-march is when the story first came to light. it was a stock people were buying, one of the things interesting in the two time frames, millennial clients really picked up their trading, approximately 20% more than normal, and our normal -- the rest of our group, about 10% more than normal it seems like there was -- >> as buyers on the dip. >> there is a belief that longer time, over time they will be okay, it's a matter of how patient you're going to be i'm sure -- i hope some people got out after we bumped back to
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400. as i said, we get back under 375, it will be interesting for me to see how our clients did today, if they came back again >> the bad news headlines didn't spook your clients >> no, they really didn't. overall, they've been looking at things like this, as an opportunity rather than as a time to sort of run and hide so i find that encouraging, i think, actually, because what our survey showed last month is that our clients took more exposure again for the second month in a row, to the market, highest level we've seen since last october as you know, we did four months in a row -- >> this is the market as a whole? >> not just as boeing, i'm sorry, the difference in last month, compared to the month before, is to the boeing story, they went to more individual stocks, where as in the past -- in february, we saw them doing a lot more etf type broad markets. >> buying in march that was the theme, how bullish overall on the market? >> as i say, the last october,
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still at the lower end to be honest with you, sayre remark they're not wildly buying, but at least, you know, if we say they had -- went from a toe to a calf, now we're knee high in the water. as long as we have this tariff situation, when i talk to clients, that being the overriding theme, people are struggling with where that will end and so that then can hopefully give them more answers going-forward, and earnings starting -- >> what about fang names in march? >> the names that were such the momentum, sellers of all of them last month, except for alphabet. what i will say is encouraging, as you know, there were buyers eight months in in a row of amazon continuing to sell apple and facebook, when they go higher, there's a lot of questions around facebook, what was interesting, turned to a seller, two stocks that surprised me number one, netflix, they were sellers of, number two, our
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millennial clients were sellers of chipotle. we don't often see that -- >> i also see amazon was a sell. >> yeah, amazon as i said, they bought that eight months in a row, and it turned to a sell >> tesla was a buy >> yeah, the electric car companies, again, driven primarily by our millennial clients. >> j.j., thank you >> always a pleasure, thank you. michael avenatti says he has evidence that nike bribed players to attend nike affiliated colleges. how disney plus could shake the landscape of the streaming world up every day, visionaries are creating the future.
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in clinical trials, prevagen has been shown to improve short-term memory. prevagen. healthier brain. better life. welcome back, we have just 20 minutes left to trade the s&p at this moment is pretty much flat. it is just positive up 2 basis points, there are the sectors on the s&p for you just a bit bubt consumer staples up at the top, utilities, industrials at the bottom the streaming wars are about to get its biggest new contender in
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years, disney plus shuds more on what the platform will look like >> the platform is the center of bob iger's strategy. we don't know how much the service will cost. it will be less than netflix, we don't know had it will launch. iger said late 2019. we expect him to focus on disney's unique brands, including marvel and star wars and exclusive content with the production value of new shows and movies for this new streaming service at the same level as theatrical releases he expect them to navigate new content. 7,000 tv episodes and 500 movies analysts are largely optimistic disney will be able to grow its subscriber base for this service. morgan stanley raising its forecast, predicting disney plus together with hulu and disney
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plus will reach 20 million subscribers by 2022. they're the only media company with the brand intellectual property to join the marketplace. ubs projecting disney will have as many as 5 million subscribers in its first year. how quickly the service grows is very dependent on the cost and the value. back over to you >> the cost is going to be absolutely key i mean, on that morlgen stanley estimate, 70 million, how many of that is existing subscribers for hulu and espn plus how does that rate them against netflix. >> we have two different services one is a direct to consumer streaming service, it's just alla carte, video on demand. the other is a tv bundle
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a skinny bundle you would get from direct tv or other players. espn is a beran log, it's about exclusive content that you can only find on espn plus, whereas the tv service that hulu offers is similar to everyone else. i think they're trying to give a sense of how big disney's total direct to consumer business can be disney has the perks, the consumer product business that are touch points for consumers, the 70 million number is trying to give a sense of how many people disney can give content to directly. >> pricing will be crucial julia, thank you chief u.s. equities strategist tells us why he th k thinks an earnings session will are brighter [leaf blower]
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welcome back to closing bell, here are the winners on the nasdaq the nasdaq at the moment trading up by 0 b.2%. we have about 12 minutes to go in today's session. joining us from credit suisse, jonathan we've seen a pretty nice turnaround here for the overall markets. maybe eight days in a row, positive up. what's fueling this momentum on the up side. >> it's interesting, you look at the market all year long, it's not because the economy is coming in stronger, it's the fact that the risks seem to be waning so ott fed is basically -- it appears like they're done for the cycle, the session risks are down, i think the surprise is that you have the discussion of earnings is going to be off the
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table once we get into earnings season, and we're going to have a positive overall growth rate >> because earnings are going to be better or because guidance is going to be better >> probably, yes i mean, the economy, if you look at the most recent highs, is coming in pretty good, that tends to signal upside, oil prices being up tends to be a pretty good signal >> your year end target is 3025, not often you're coming in as the bear between the two >> i wore the wrong suit, i should have worn my bear suit. >> you're bullish as well. >> well, yeah, i mean, i think we'd be a lot more bullish if the curve was inverted i think that's the only thing we need to figure out, i think the tape's acting like most people are either on the sidelines with cash or short. and that's why we have shallow pull backs >> it's something you're worried about, you're not quite sure why you're worried about it, is that fair >> the curve has three term
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structures, it's curved on the front end, normalized on the belly. it's not an inverted curve, it's just that there's -- it could be telling us the fed is cutting rates it could tell us there's a speed bump or just be doing this because of brexit in china i agree with jonathan, i think pe's the big story, we could easily be 3100 for now, we need to see the curve itself >> the story around earnings, most of it has been, there's been a lot of earnings and warnings over overseas growth. we've seen all these risks piling up around the world, and u.s. companies are going to feel that >> the one thing that we're not focusing on, is none of these tech names are delivering some weaker results while i like tech, if you look at four of the fang stocks, facebook, apple, netflix and google are all showing margin pressure, to me, if there's any
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story, it's not the overseas growth, it's probably that tech looks a little bit less strong than -- >> why are you not worried about overseas growth? >> well, i mean, first of all, i mean -- >> 40% of earnings are are from overseas >> yeah, something like that, but, you know, i -- i'm looking at the u.s., i'm looking at -- i don't know, i'm not as concerned that we're going to get bid on it's already in the stocks i mean, i don't know it's a good question >> is it in the stocks what's the s&p trading at now, 17 -- >> but the earnings growth is really really weak, it's not like the estimates are calling for some huge number, and what's really surprising, sarah, is that the industrial companies which are the ones that are most overseas exposed, actually have pretty good expected numbers >> i mean i agree that there's
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an earnings recession. the damage from shock and oil recovery takes time. people are hedging, but i don't think it's going to mean the stock equity market is going to have a down year in the last 28 years, only one of the years is explained by earnings revisions being down. if pe's are expanding this year, i don't know if it's going to be 7 or 11, it should be a lot of up side. >> which sectors are set up ahead of earnings? >> i think if second half advisability is better, and we get trade, and the dollar starts to flatten or rollover, this argues you have to be cyclically other yernted. that's where you're going to get the earnings lift i think you have to be looking at the smoke
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stacks and tech is a great all weather sector >> what is tech these days it's basically solving a lot of problems >> i think industrial tech makes a lot of sense remember, the world is running out of labor supplies. it's facing a worker shortage. which means software, microsoft, tech is going to grow as a percentage of the s&p. >> you look at hardware and semis, they've done unbelievably well year to date. that is a bounce off the fourth quarter up unless we see a stronger economy, i wouldn't play this cyclically i think it's going to be software names you have it's going to be those names that are less economically intense. in the industrial space, i think
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areas like business services that are less a play on global strength and more a play on stable long term growth. >> what about overseas are there opportunities? >> the rest of the world has been cheaper at least for a while. i think the emerging markets are going to be big stories when value comes back, that's what they represent mostly. i think the u.s. is still the blue chip. i can see the s&p having an elevated pe. you're paying 16 times for the same company, i think equity multiples can go up a lot. >> we have 5 1/2 minutes left of tradesing. >> after the bell, attorney michael avenatti will join us in
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an interview to talk about the allegations he's making against nike what do advisors look for in an etf? i tell clients, etfs can follow an index, but which ones target your goals? it's not about quantity. it's about quality. no trendy stuff. i want etfs backed by research. is it built for the long-term? my reputation depends on it. flexshares etfs are designed and managed around investor objectives. so you can advise with confidence. before investing, consider the fund's investment objectives, risks, charges and expenses. go to for a prospectus containing this information. read it carefully.
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bell we are just in the green as we approach the closing only up a point or two steady improvement throughout the session, and a little bit to talk to now. the dow is down and it's largely down throughout the day. a little bit against the two of the four indexes sectors for you. doing relatively well today. a fairly thin range as we look at the individual sectors there, showing you the dollar, a little bit of help today. it's been strong of late, not below 97, but just above 97 with a 0.4% decline on the dollar intech bob pisani, the takeaways? >> the dow is dragging a lot of industrials down today
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when was the last time we did that october 2017 very impressive. >> we saw simi conductors move up i want to show you boeing here, we can thank you for boeing, that's 119 points on the down side. the dow would be up if it wasn't for boeing and again boeing up far and away the highest priced stocks you kind of have to not throw it out, but it's been the primary mover here. >> even when we were lower earlier today, they were kind of relaxed.
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>> here we are with only a third of the point right now >> they're having a good sess n session -- there's the bell. the fda closes higher by 0.08% holding on to the session as we mentioned back to you. welcome everyone to closing bell, i'm sara eisen take a look at how we finished up the day on wall street we mentioned to close the day up higher early afternoon wasn't much, but good for an eighth day in a row of games, for the s&p 500 up a tenth of 1%, today's energy that let the charge go above $64 a
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barrel utilities the biggest loser, the nasdaq closing up 2/10 of 1% the dow weighed down all day led by boeing. boeing closed down 4.4%. oil prices a four-month high capitalism needs to be reformed. we'll talk about those issues, first, joining us to talk about the market day, welcome back, sam, michael santolli, what drove the turnaround. >> it was a firming up of the market late in the day the fact that it didn't fall back, we're at the year's higs s
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the dow dragged down and we didn't do it the one thing i would note in terms of the s&p is apple. clicking toward 200 up a percentage a half had for no particular reason, it was one of the stocks getting a push to clear the s&p. >> markets waiting for earnings season now >> absolutely, and i like what my father used to say, you can rarely hurt yourself from falling out of a basement window, what we're seeing right now is the first quarter earning s earnings down 2.7% is the expectation, it's going to be up at the end of december of this year this reduction is three times what we normally see in the first quarter, what is the end of the quarter estimate i
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think that analysts have been slashing estimates worrying about trade and so forth. >> it brings up the question of guidance and what more they're going to project how much clarity do you think they have in the future. >> the question is, how much clarity they believe they have here's why i think it's crucial, the market is acting as if it's willing to look through the first quarter numbers that sam was describing there why we're willing to look through them the forward 12-month estimates include a big comeback in the second half of this year that's why the market doesn't look more expensive, they bake in the infliction in the positive i think it's going to be a lot
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of back and forth noisy. it's going to bring a sector down the next day that's how earnings season tends to go, and we're entering on a high. >> the oil cartel's pledge to you withhold 2.4 million barrels a day. >> we've been seeing strength in the markets, when you compare it with 2018, we're down. the energy sector will see a decline of more than 20% in a sense it's almost like 2016, take out energy and oh, by the way, take out materials as well and we're looking at a strong
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first quarter, it's like taking boeing out of the dow without that, the dow would have been in positive territory >> the stocks got a bid, but i assume it's because of what sam's talking about. >> it seems like there's a chance for them to catch up a little bit especially if it seems like they're going to stretch to new highs, i wonder if the equity market is saying, oil prices are high enough to keep north america drilling, but not high enough to keep it lucrative. it seems like there's a zone of commodity prices where yeah we're going to keep the drills on, but it's not extremely high return it's the kind of market that keeps rotating from group to gro group. >> they kind of are very quiet
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and sleepy, and they don't have great leverage i think if they do get i bid, sometimes you get a defensive orientation. >> the reason they've been moving today, sanctions in venezuela. does it say anything for the outlook for the global company that prices have rebounded so much >> i think that's more a reflection of supply disruption rather than a demand falloff i would say the demand expectations have been built in, and now how much uncertainty regarding tensions will continue to provide support to oil prices blistering criticism of american capitalism, here's what
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he said on sidewalk box this morning. >> i said it needs to be reformed i'm a capitalist, a professional capit capitalist, the system works for me, i didn't have anything, and then i got something through the capitalist society i'm supportive of that >> you know, this is becoming a big debate as we march toward 2020 some people say, american billionaires weighing in on the problems with capitalism that they benefited so much not just him, jaime dimon, warren buffett. does it mean higher taxes on the wealthy? >> that's one shortcut to doing something about it, it's telling it's been a theme for so long. if you think back when was occupy wall street
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20 2012, 2011 >> it was a knee jerk reaction to the financial crisis. you have to go back decades to see this pattern someone who thinks of the world in these long term eras, that's how he's made his fortune, he feels like, here, something here is untenable we have to get a little proactive with policy, and try to make it seem as if there's more mobility in this country or else there's going to be a less favorable resolution -- >> in terms of policy risks, do you think it's priced into markets now, or might it do so in 2020? >> we have a long ways to go before we worry about policy risk, et cetera. this is a third year of the president's term in office the market has been up 94% of the time
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so far the october 31 of a midterm election year the market's been up 18 of 18 times with an average gain of 17% many you have a lot of the seasonal factors that are very supportive right now. yeah, i might worry, every republican president has had a recession start in their first term of office we have another year to go to see what's going to happen under trump? >> i think it's a little early for it to start. we don't know what we're dealing with, i think the market will trade in a reflexive way that's wary of progress in the polls made by the democratic nominee that's always the way it goes. >> i will say as well, for the billionaire club, mr. schultz has a lot of criticism for the way he's gone about it
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>> he's left his day job and willing to consider going into politics which can be phenomenally well intentioned. it's not really manifesting that well as people being in the right place to defend capitalism as you said at the top tesla, phil lebeau with the details. >> take a look at shares of tesla, confirming it has notified a number of employees that they will be losing their jobs, these are sales employees around a number of places around the country. it doesn't mean those indications closed down completely this is what elon musk outlined. online sales would be eliminating jobs as part of the physical presence we see a
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number of employees are being let go this was news the company forecasted back in february and march as they talked about the shift to online sales. back to you. >> is this a big deal? >> i think it's part of the continuing story. >> they're trying to find the right approach >> the story of tesla trying to right size it's business >> little headlines like this will get a lot of attention. they forecasted this a while ago. still ahead, warren buffett has some surprising ceo advice -- michael avenatti releasing documents he shows nike bribed players to attend colleges that wear i gr.tsea woman: my reputation was trashed online,
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the ceo's of the nation's biggest banks are heads to capitol hill this week what can you tell us about what to expect? >> the ceo's of 7 of the
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nation's biggest banks will attend in attendance will be the ceo's of jpmorgan, bank of america, goldman sachs and state street the hearing is title d holding mega banks accountable it suggests a broad range of possible topics. the absence of wells fargo removes what might have been the most focal point for ceo's dimon and moynihan have been on the hill following the financial crisis the questions for investors, does it lead to one thing does it alter the outlook of regulation for banks going-forward. does it increase pressure on
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boards to change management. probably not especially with wells fargo out of the lineup. the hearing starts 9:00 a.m. wednesday. >> it feels like the tech executives have replaced the banker bankers. >> it remains to be seen, the anger comes on wednesday it has some people asking, why they have to go back wells fargo, there's a specific reason for it. just using the tim sloan one recently, going into that, the thought was, can this really hurt the bank, the share price almost certainly not can it hurt tim sloan and his position and would extra pressure from the senate and elizabeth warren and most important ly an occ. he decided to retire
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that doesn't apply to these 7 or certainly not in expectations coming into it is a fact finding mission that will lead to drastic action >> speaking of sloan, wells fargo continuing to search for a ceo to replace sloan pushing for a more conventional pick berkshire hathaway ceo saying wells fargo should look outside wall street. saying insiders are going to draw the ire of a significant percentage of the senate and the u.s. house of representatives, and that's just not smart. any ideas out there in terms of names you can think of >> i think warren buffett's advice even though it doesn't seem like it, he is a 9.9%
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shareholder. i think this is a tough job to fill you're going to need a strong, charismatic leader to overcome the discouraging process that's gone on on the hill. it's been very toxic and discouraging and certainly with customer facing jobs, that's the case i don't think you're going to get a big money center back to take this job. i think warren buffett's position is seen that's a bank that i know from personal experience has been sensitive to what we call headline risk.
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and it's been a very clean bank i think richard davis is a possibility. i think marion lake is a lesser possibility. i suppose possible it is ironic that wells fargo has had an ordeal here on capitol hill since during the great recession they were clean and almost a poster child for good behavior. they created so many problems for banks and their balance sheets >> no doubt, the cross selling was unfolding. what warren buffett, we just read the quote from, surely the reason wells fargo continued to be in the spotlight so much over the last couple years, simm sloan had been an executive at the time and maybe not a culpable executive, but he had
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been there at the time doesn't that issue get solved? perhaps it doesn't need to. >> possibly, but i think the attitude of congress and the senate toward the largest banks, particularly the wall street firms, is probably aversive, i believe that more of an outsider would be preferentials. >> a lot of this is going on at the same ime, the large banks are trying to figure out the right way to approach customers in general, right? i wonder how wide open the board should be considering someone from outside the industry.
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>> that's an excellent point if you think about what they're doing with markets, and how hard they're pushing into the retail space, it's possible that someone with a strong retailing orientation could be their choice that could be helpful and very effective in terms of getting their earnings going again i think the retail side of this bank is a real powerhouse. >> what's the worst case scenario that can come out of it for the banks? >> i don't think these congressional hearings do anything buts show we have a lot of politicians that like to get on camera and be angry and be
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outraged and self-righteous i don't think anything untoward is going to come from these hearings i think this is a follow-up where the congressional finance committee is saying to the the banks, now you see what we've done with wells fargo, be careful. that's one of the reasons the bank sector is under pressure. obviously interest rates are another factor, i think it's more than that they're so heavily regulated they have to be careful and conservative >> thanks for joining us >> you're welcome. thank you. up next, investor sentiment is surging and will break down the chance to see if the rally has more room to run
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wall street's sentiment has been surging this year is that a cautionary signal at
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this point looking at sentiment now >> yes, it could get there what this is measuring is wall street strategists recommend ed allocations. this is what you should have in equities this is capped by bernstein advisers doing this for decades now. one thing to note. here we are right below 60, the only time it was above that is the time right near and after the peak of the tech bubble in the late '90s, year 2000 if i wanted to create a parallel, this is 1999 it's the makings of the late stage of that big rally in the '90s i wouldn't use this as isolation, if you want it as a general mosaic, it's more
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positive than negative you have to see how this develops and continues as a trend. >> how do they -- >> i'm sure, sentiment is strictly >> it tends to follow the market >> the sentiment plateaus, you don't have a warning sinai more. >> it was common to say the market goes back up. >> time for an update. >> hello, everyone the mayor of south bend appearing at a las vegas coff coffeehou coffeehouse, he spoke to the crowd about his personal and
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public life he's also hinting of a special announcement in south bend on april 14th >> when there's something like 20 of us, you're not thinking of any individual competitor, we need toll run that play, and we think we have a winning approach he here it certainly feels that way. >> a ceremony was held today to honor a patrol officer kill in the line of duty >> a suspected drunk driver crossed over the interstate and struck him rm. >> the first woman to win the same prize money as the men's champion at a surfing contest in australia. caroline marks taking home $100,000
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>> you're up to date, that's the news update at this hour as the u.k. moves to creating a regulatory body facebook is calling for the government to regulate the internet. we'll look at whether that could end up backfiring. attorney michael avenatti releasing proof atth nike encouraged recruits to go to schools that wore they're apparel. i'm off to college. i'm worried about my parents' retirement. don't worry. voya helps them to and through retirement... dealing with today's expenses ...while helping plan, invest and protect for the future. so they'll be okay? i think they'll be fine. voya. helping you to and through retirement.
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controversial attorney michael avenatti facing charges of extortion, continuing his crusade against nike this weekend. 41 pages of documents that he says is evidence the shoe giant bribed amateur basketball players to attend nike affiliated colleges. violating ncaa regulations in a first on cnbc interview, we're joined by michael avenatti thank you for joining us
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>> for those who haven't been following as closely, what are you alleging >> for the better part of five years, nike and its highest executives have been bribing amateur players and their families in order to get them to attend nike colleges, colleges that are affiliated with nike apparel and that have contracts with nike, this constitutes a violation of numerous federal laws and puts nonnike colleges at a severe disadvantage and is highly criminal. >> what proof do you have? >> we have text messages, bank statements, emails and the like. and unless nike is claiming i fabricated all of those documents they are guilty and i'll also note that for all of
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nike's puffery they have yet to prove what they're saying is untrue >> they can't because they're cooperating with an actual federal investigation. why not let that play out from law enforcement. why are you going public with all of this. >> they're not cooperating with any federal nvestigation that's b.s. >> nike told the public that a week ago it's going to be shown to be a stunt. they sold the government a bill of goods, they told the government 10% of the story. the executives have been covering up the bribery scandal for the better part of five years. they've been deceiving the government for over air year, if anyone thinks they provided those 41 pages a year ago, and the government sat on it and
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didn't look into it, i have a bridge to sell them. >> why didn't you send your pages to the government instead of making it all public? >> well, i want to be clear about something. >> we made it clear to nike from the get go, they were going to have to come clean one way or the other. and that's exactly why nike pulled the stunt they did. they knew they could not control me and this was going to be disclosed. what they did was, they pulled this stunt in order to try to shoot the messenger, to try to discredit me before the information was disclosed. if i get hit by a bus today, this story will go on, and nike's corruption eventually will be exposed and the world will know what really happened here
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>> but why did you go to nike in the first place? did you seek any form of financial gain from this at all? >> i had a kwlint to represent i like other attorneys around the country went to the nike to settle a claim on behalf of a client there is nothing wrong with that whatsoever it was important to the client and it was important to me we made that clear to nike and their lawyers from the first communications that we had but what's interesting is, that nike didn't bother to tell the government that when they putted the stunt they did two weeks ago. >> so just to be clear, you're facing federal charges of extortion. in the complaint it says -- i mean, this is 12-d, a lawyer
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wearing a wire, if nike wants to have one confidential settlement and we're done, they can buy that for 22 $1/2 million and we're done, full confidentiality, we ride off into the sun set >> full confidentiality relating to the payment that was made but that ignores all the other context and other communications that took place before then, during which we made it clear that we would never -- and i want to be really clear about this we would never agree to anything that would obstruct justice or keep this information out of the hands of governmental investigators. we made that crystal clear from the very beginning communications, and that's why nike ultimately went to the government, because they knew they couldn't control us, period, we were never going to participate in any cover-up whatsoever so you, just to be clear, you are denying that you threatened to release damaging information
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about nike and this company if it didn't meet your demands for $20 million. you're denying all of these charges? >> i want to be clear about something. we demanded a settlement on behalf of our client, and we demanded that nike come clean about this, in connection with an internal investigation that nike was going to have to incur or undergo in any event. we did not trust nike's law firm, outside law firm to conduct that investigation, because they had attempted to cover this up when responding to a september 2017 subpoena, from the government in connection with the adidas case, they hid documents along with nike, and information from the government back in september of '17 we wanted our client compensated for what he went through and we wanted to make sure the truth was known. and i find it very, very curious, as should the american
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public which is very smart by the way, or who was very smart that nike has yet to deny players in connection with this five-year scandal. >> but michael they are -- as sara said earlier, in the middle of a federal investigation. if you're so confident that they will indeed be found guilty in due course, why are you seeking that statement from them right now, and why did you make all of this public rather than working with the government to secure the ultimate indictment that you believe will come, which is them being found guilty through the judicial system. >> i am going to work with the government, i've provided information to the government. i'm willing to work with the ncaa, i'm willing to work with any much these colleges that who like information, i'm an open book, i'm going to work with all of them. i want the truth known about nike and the corporate executives about what went on here, when the truth is ultimately known, when people see what happened here,
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especially in connection with what they did two weeks ago to me, people are going to be outraged by this level of corruption and nike investors are going to be asking themselves, why hasn't nike disclosed this bribe require scandal in their 10 ks and 10 q's along the way investors had a right to know that they were bribing amateur athletes this was rampant we're not talking about a few instances. those documents only scratch the surface. >> if nike for its part did put out a statement saying it wouldn't respond to your allegations of an individual facing federal charges of fraud and extortion and aid in his disgraceful attempts to distract from the athletes on the court at the height of the ncaa tournament your response. >> you know what's disgraceful, bribing amateur athletes in need, and putting them and their families at risk for federal charges all in the interest of corporate profits. you know what's especially
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interesting about that statement that nike issued, they didn't deny a single thing, did they? >> i mean, i think they would argue they're working with federal authorities. adidas has already gotten in trouble as you noted for a similar issue. of course they were going to go after -- the government was going to go after the biggest company in the sector and look into this, and nike was going to take what you took to them directly to the authorities. did you not realize that >> you know when nike found religion when they knew i was going to out them one way or the other. they've known about this problem for years, their executives have been trying to cover it up along with their law firm and all of a sudden, they found religion when they knew i was going to out them, how convenient >> i want to ask about williamson, you're claiming his mother received payments from nike, during her son's recruitment too duke do you have any proof of that?
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>> well, i don't traffic in nonsense, and i don't make claims that can be backed up, i think people are going to be shocked when they learn of the totality of the evidence of nike's corruption and bribery of players like mr. williamson. >> michael avenatti, thank you for joining us >> thank you >> we appreciate hearing your side of the story. we did reach out to duke university and in a statement, the director of athletics said, we are aware of the allegation and as we would with any compliance matter are looking into it, duke is fully committed to compliance with all ncaa rules, every student athlete at duke is reviewed to ensure their eligibility with regard to men's basketball all recruits and authorities are vetted through eligibility centers, amateur ic., certification process. this is a complicated one, adidas has been charged with a
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similar accusation here. i think the outrage that michael avenatti is trying to create publicly is not there, the adidas scandal kind of came and went, and meantime, nike has not been accused of anything >> you could argue there isn't a level of public outrage. it seems like noise around an ongoing issue, which is the fact that you have this massive business attached to college athletes it seems like another kind of story related to that, not -- >> right up next, going public again. one of america's most iconic restaurants is heading back to the new york stock exchange, we're telling you a name straight ahead >> merrill lynch is setting its sights on younger investors.
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here's some other stories on closing bell's radar today heading back to the public market, cec entertainment agreeing to a merger with leo holdings it's kind of complicated, the deal is expected to close in the second quarter of this year, will trade here at the stock exchange under cec. it's not the chuck e. cheese we grew up with, they've redesigned all the stores it's not loud clinging machines and bright colors any more.
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>> a lot of times companies are saying, we can operate outside the global markets >> they're standing internationally too. >> i didn't grow up with it, but i'd like to try it out >> maybe your kids can >> maybe they can. >> sonos and ikea are introducing a partnership, a bookshelf speaker that will sell for $99 and a table/lap speaker. sonos has moved down the value chain so much. originally it was the elite thing to get 5 to 10 years ago now, partnering with ikea, it's now trying to hide speakers. and the lamp one is a great example of that. they're changing tastes in where we were years ago, where the speaker was something people were proud of. >> now, do you have to put the speakers together yourself
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>> i hope not, the intricaci intricacies -- >> ikea has task rabbits now you can hire very talented. >> i would disagree with that. >> a little bit ironic merrill lynch is getting a hand in reaching younger clients. bank of america sending 300 employees to merrill lynch wealth offices it's the first time these specialized employees will work outside call centers i think this is representative of a dilemma that all wealth management businesses have, the advisers are on the older side, when wealth is inherited typically the younger generation fires the adviser. there's a clog in terms of them getting their services to the younger people >> the tech side of this as well is showing the opportunity, i
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agree the trans significance difficult. but the opportunity to lower the cost -- financial advisers are very expensive and if you can really build this in in a tech platform that millennials welcome and want to engage with, the cost going-forward is massively reduced. >> merrill edge is something that was launched years ago, a little like mass affluent. >> coming up next, cracking down, big tech coming under fire 'ldiuss enwel scwh closing bell returns. looked at chart patterns. i've even built my own historic trading model. and you're still not sure if you want to make the trade? exactly. sounds like a case of analysis paralysis. is there a cure? td ameritrade's trade desk. they can help gut check your strategies and answer all your toughest questions. sounds perfect. see, your stress level was here and i got you down to here, i've done my job. call for a strategy gut check with td ameritrade. ♪
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welcome back uk this morning taking another step toward regulating big tech companies. announcing a proposal to remove
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harmful content and ignited debating on how far regulation should go and how to pre-sfservn open internet. a poll found although most think of social media as divisive, a waste of tine ame and threat to privacy, most continue to use them daily and more than half of americans are not satisfied with the amount of regulation joining us to discuss, director of civil liberties at tech freed freedom. thanks for joining us. what is your take on this proposal in. >> this proposal is basically creating censorship in uk. it won't just regulate google, it will regulate almost every single website online. and it will cover all the content that there is there. it is basically censorship in uk
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and that -- theresa may is going to break the internet. >> wow, that is quite a big statement. it is a proposal at this stage, pretty much everyone has been calling for some kind of way to accurately review content that is damaging how do you get to that proposal to breaking the intent >> the proposal says even if the proposal is not illegal, if it is harmful, the contents should be down and the platform can be held responsible criminally and civilly when you have a vague definition of what harmful content is, that means anything that means a reporter risking his life from going on facebook live from syria, that content can be considered harmful. that means that the photo of a girl running away from a blast in vietnam, that is harmful.
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the way they are wording this will create self censorships by the flat foplat forms and on tof that government send or ship >> isn't that always the problem, how you can properly define what speech should be violated >> absolutely. there is always that struggle between speech and national security or whatever important values the society has here in the united states, we have the first amendment and the first amendment says that private actors can do whatever they want with speech. if you have twitter and you only want to allow content that is dogs, that is okay now in uk, we don't have the first amendment. however that didn't mean that these rules shouldn't apply there. >> but there might not be a first amendment in the uk, but
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there is very much free speech and if any proposal went far beyond that, it wouldn't go forward. i think the reaction is just simply because there is not an enshin enshrined bill of rights to suggest there isn't free speech in u kuchlt k is ridicul. >> i'm not saying that but if this proposal went into law in uk, it would completely -- uk government would have an ability to block websites if there is any kept that they didn't agree with. vague laws like this, you can be held liable for it, that is russian laws that is laws that are in china >> well, i think it is a proposal at this stage and we'll see if it develops to a similar
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situation as you see in china. thanks very much for joining us. >> thank you still ahead boeing drags down the dow, but witas a pretty good overall day for the market more details when we come back
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. we have another strong day on wall street with the s&p 500 eeking out 0.1% gain >> strong is a little generous but we've improved >> there was an improvement in theoff a oeverall tone. so reason for pause and we did not get really that. >> seemed important to somebody that the s&p get an eighth straight up day. i'm not that cynical but actually if you look back at previous times when you've had an eight day win streak in the s&p, something like ten times previously, it went higher at some point in the next two weeks to a month in each time. so it seems like this is what strong markets that are difficult to rattle act like >> apple good momentum, boeing less so. >> exactly apple is interesting because it is not really going up for any particular reason. sometimes a sign that move has gone pretty far along.
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>> and the theme continues to be hopes for a trade deal we're awaiting earnings. and this idea that the fed is on hold and that is helpful >> i think we're idling ahead of earni earnings at this point >> and "fast money" begins right now. live from the nasdaq market site, i'm melissa lee. our traders are at the desk.% boeing got slammed today after bank of america downgrades the stock. we have the could i tadetails. plus lyft is back below its ipo price. and pinterest says its price range below last valuation, so how do you know what unicorns are safe to buy? we'll explain. we start off with the markets on the edge of glory as


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