tv Closing Bell CNBC August 19, 2019 3:00pm-5:00pm EDT
owner of the rockets and restaurants and casinos basically saying that he is concerned that the consumers might be conservative because of when they are hearing. >> don't pay attention to the stock market >> exactly thank you for watching "power lunch. >> "closing bell" starts right now. welcome to the "closing bell." i'm scott wapner and i'm at the chevron post energy leading the market higher 59 minutes left to trade, we'll tell you wherein investors can trust this rally that is all coming up. >> and welcome, i'm sara eisen let's look at what is driving the action trade headlines document nature dominate the bullish tone and tech stocks are surging. new stimulus husbaopes from arod the world. and yields climbing has the financials stronger.
joining us for the entire hour is tobias levkovich. welcome. >> thank you >> is this just a bounce from oversold conditions or would you buy into the rally >> i think that it is more of a bounce off oversold conditions look, things like energy, financials, have come back we were so hammered in the last couple weeks the issue that you need to resolve is earnings. that will be the more problematic phenomenon >> and so do you feel good about what earnings could be >> i think that earnings are still too high for the balance of the year and beginning of next year. i think consensus numbers for next year for example are about 10%, probably should be more like 5, maybe 6. so that is the issue >> so doesn't feel so good the white house pushing the message that recession fears are overblown. president trump tweeting today, our economy is very strong
decembspite the lack of vision the fed but democrats are trying to will the economy be bad for purposes of the 2020 election. very slchish before our dollar is so strong that it is sadly hurting other parts of the the world. this is after the economic team made rounds with a similar message over the weekend >> technically we did not have a yield curve inversion. inverted yield curve requires a big spread all we've had is a flat yield curve. >> it is inverted for a little bit. >> that is not technically an inversion. it was a flat curve which is a very weak signal of any possibility. and in this case, the flat curve is actually the result of very strong trump economy >> i sure don't see a recession. we had some blockbuster retail sales consumer numbers towards the back end of last week. really blockbuster numbers and in fact despite a lot of worries with the volatile stock
market, most economists on wall street towards the end of the week had been marking up their forecasts for the third and fourth quarter >> those comments all helping to give the market a big boost today. let's dive into the other stories we're eamon javers has n huawei and josh lipton has the conversation with tim cook and rick santelli watching the bob pisani at the new york stock exchange >> a lot of mixed messaging coming from the white house on the issue of huawei. take a listen to what the president said yesterday which made a lot of people think that he was about to crack down on huawei here is that comment >> i'm talk position to ing to u we don't want to do business with huawei for national security reasons we'll see what happens i'm making a decision tomorrow it could be temporary, maybe not. but we'll make a decision
tomorrow >> so the president there saying that he doesn't want do business with huawei and then today we see the commerce department offer huawei a bit of a lifeline kicking a deadline about 90 days into the future that allows u.s. businesses to continue to transact with huawei despite the national security concerns that you heard the president talking about there. the administration explaining that as sort of a bit of a lag time design to let american customers of huawei adapt their supply chains. and figure out exactly where they will get their material from next. so why the disparity between what the president said yesterday and this new lag time kicking in that he is offering today? well, a white house official tells me when the president says i don't want to do business with huawei, he is not talking about the whole u.s. economy they say what the president meant yesterday was he was just talking about the federal government buying from huawei. and that is why sounded like maybe mixed messaging, but he says no, the president is
sending the same message this whole time >> okay. thank you. president trump spoke with apple ceo tim cook over the weekend as well josh lipton has the details on their conversation >> so scott, obviously concern for investors is whether that company's iphone franchise will get hit the with tariffs but president trump is saying that he spoke to tim cook who made persuasive arguments about why that isn't a good bet. take a listen. >> tim was talking to me about tariffs. and you know one of the things that he made a good case is that samsung is their number one competitor and samsung is not paying tariffs because they are based in south korea and it is tough for apple to pay tariffs if they are competing with a very good company >> now, obviously if those tariffs went through, apple executives and many other executives would have to make a choice, absorb the tariffs or
raise prices but possibly risk demand guys, back to you. >> josh, thank you have you gleaned anything over the last, i don't know, three days from the president's trade strategy, the punting on huawei, the comments of cook >> we were in washington last week visiting with people up on the hill, wilobbyists, et ceter the message was that the white house wanted to push through usmca october, november, replacing nafta. they were trying hard to get a gentleman can pan trade deal by the u.n. general assembly. and they were going to be working closely with bore about r boris johnson to get something done there we know there is concern, but isn't trade problems everywhere. trying for send a modifying message to china >> that sounds ambitious >> well, they have been negotiating with japan for a while, so it is more about when the president and prime abe are
in new york, they can theoretically shake hands to the agreement. and usmca has been on the dockets of congress for a while. >> let's get to rick santelli for a look at bond yields. key for where stocks are trading. >> yeah, definitely rhyming together it is hard to tell who is leading, but i can tell you who is leading the treasury, today it has been the short end. look at the two year note yields, notice it is the highest yield of the day if you look at the 10 or 30 year, they are starting to come back, but they have lagged but that 30 year bond right now is testing 210, a significant level. finally, the president mentioned the dollar being strong. he doesn't like it most americans like it, we get to buy things at a discounted price. dollar index very solid. back to you. >> yeah, rick, going to be interesting. jackson hole this week, i mean rick, i was asking earlier on halftime, what is more at risk, bonds or stocks. and i guess they both have a lot
hanging in the balance of what could be said later this week. >> oh, absolutely. and i think that the center stage ought to be mario draghi passes the baton and anything that we learn about the next administration with so many hints that we will see a rather aggressive stimulus announced on the 12th their next meeting. >> rick, thanks. dow and s&p up for the third straight day bob pisani on the floor of the new york stock exchange with a look at how things are going >> and it is a broad rally and not just apple very broad rally so you have individual industrial names like boeing, united technology helping, other tech names besides apple, micha microsoft is doing well. walt disney, the energy names. even chevron is helping for once and exxonmobile is doing well. lagging are defensive names. so coke, mcdonald's, verizon,
johnson & johnson. united health to the down side what is missing is volume. light overall. there is a few big etfs out there, utilities, vanguard another historic high, another big volume day high priced utilities continue to do well and hong kong etfs are doing well and finally one of the only things down today is the vix we're right near the lows for august breaking 17. back to you. >> bob, thank you. joining us to talk broader markets, global al chief market strategist and head of cross asset strategy at cantor fitzgera fitzgerald you know you are cautious on the markets. where do you stand on the recession fears with the inversion of the yield curve >> my concern really started with global growth slowing sort of towards the end of last year. we all seemed to have for gotten that there was a lot of talk of
recession towards the end of the last year and i thought at that point of time it was a bit early, i thought the fears were overblown. buts as the fundamentals continue to deteriorate the sole bright spot is the consumer. and that is still a result of relatively favorable financial conditions lending standards are tightening a little bit but as rates have come in obviously, that is a boon to the consumer so i'm concerned about a recession on the horizon, but we need to see the consumer weaken a bit more than we've seen thus far. >> some say the selloff is overdo, some say wait to jump back in, what do you think >> well, i think chairman powell will be cautious in jackson hole
with what he says. i think that it is actually a verymportant communication particularly because it is an intervening communication. and he did have two dissents so i think that chairman powell will kind of try to hit a single or double, not say too much, not say too little the make yrket is expecting qui bit. and i think the rally is wholly based on this idea that we'll get policy stimulus out of europe and that frankly the fed will be more aggressive than it has so far communicated so i don't think that we see much out of chairman powell and i think that the market will be disappointed with the minutes and with chairman powell'sson he >> do you degreyou agree? >> i think that they are expecting him to say we're still data depend ntd aentdependent
>> you don't think he will say don't worry, we got your back. >> wi don't think that he will use that terminology, but yeah, fed is here to support the economy. >> all he has to do is get rid of mid cycle adjustment, talk about an easing cycle. >> but he shouldn't. to get about what wall street wants. fed chairman shouldn't be saying i won't talk about easing cycle, i'll put in the words you want to hear. >> the words he said before were confusing to people. >> i get that, but most of the data we're looking at is mid cycle correction, not recessionary even the word -- >> why do you say that others don't agree >> look, i'd have to see further credit conditions. i'd have it see even small business credit harder to get by and they are not saying that i'd have to see new orders in the low 40s to believe that. i would have to watch capital
spending collapse. we just did a study look at 700 plus companies on kapts specan'g and they are still saying growth so not like we are rolling off the edge i disagree with the overseas perspective. 75% of s&p sales are north american de-reiched and 10% are noncyclical international. like food, beverage, tobacco, drugs. so we're not -- we're wagging the tail of the world not the other way around >> peter, do you want to push back >> i would say i don't think that the revenue at friday abuse number is correct. >> i've done every single company. this is what i do for a living with all due respect. >> i understand. but moreover, the s&p 500 in and of itself i agree with you it is only -- it is only a piece of the equation. lending standards are starting to tighten and by the time frankly we see all these
conditions emerge, we're already in recession what one needs to do is look the earlier cycle indicators like the yield curve. typically financial conditions are a much better indicator of future recessionary conditions than when the data is already screaming. by that time it is too late and the market is down double digits >> if you have 75 to 100 basis points of massive steepening after an in-version, you are on the verge of a recession we haven't seen anything like that gist h every major bank is saying they are not seeing any deterioration with the do you remember consumr >> so if the consumer holds up, you feel good about the state of the economy? >> i think that the recession fears are there. the trigger for the recession after a ten year expansion is that the feds will tighten too much, will it be in trade war, is it -- >> some say it is tightened too much >> but the data would show up
already. you would see that consumer falling, manpower survey of 30,000 companies saying that they will hire more people, that is not consistent with the data on a recession >> all right we'll leave it there peter, thank you coming up, more than 180 ceos of major american companies say business needs to do more than just make profitses. what it may mean for investors, the market and corporate performance. >> plus calling the bottom in semis. some specific calls on some trade sensitive stocks and later, liyft lockup expirin. that stock falling down 28% now since the ipo. we'll discuss how new ipos pillfair it never questions the tasks at hand. but this year, there's a more thrilling path to follow. (father) kids... ...change of plans!
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stock versus bond valuations, how bonds are giving a lot of credit to stocks in terms of valuation. and then unjustly punished, a whole class treated pretty harshly. first of all though, we are coming up on one year since the s&p reshuffled its sectors and about 14 months since the xl etf began trading. here is a chart since that day in june of 2018 of the communications services sector, the xlk, the tech sector and consumer discretionary along with alphabet which is the 15th anniversary as a public company, biggest holding what you will see is it has been the big underperformer there was a lot of concern that most of faang was going to move into the communications is services it has been a laggard. looks like s&p maybe top ticked the faang trade for a while. google has been a bit of a weight on that as well the story with tech is softer.
and communications -- i mean consumer discretionary is basically walmart holding its own right there. so interesting a lotof people thought communications was going to be the way to play this new tech world but hasn't panned out that way >> all right mike, we'll see you in a bit how do you play tech with so many different exposures >> we don't love the services side as much and semis are interesting. we did a capital spending study 700 plus companies and we are seeing chip companies kind of pulling back they are not adding too much capacity they get pricing power and the stock -- >> good for the chip stocks. >> right they are not screwing themselves by putting on too much capacity. >> you feel like the faang trade can reignite itself between now and the end of the year? just too many questions about growth and -- >> regulation. >> people looking for quality so to speak >> it is really about momentum what is working on the price momentum is what to a certain
degree investors kind of chase because they have to perform and it is one of the problems for value stocks the value could be there, but if it is not working for you, you don't want to lose your job even though the stock looks attractively valued and you've underperformed >> google has been public for 15 years. >> i know. >> seems like a long time. 40 minutes before the bell dow rallying full percentage point here, 261 points higher. it is a pretty wood based rbroa rally. continuing the bounce since thursday afternoon things really started to sharply rally after the giant pull back earlier last week. coming up, tech stock s surging. faang all higher into the close. >> and we'll discuss tech more broadly with the former apple retail chief ron johnson, he is now ceo of enjoy find out how americans are shopping and what it mean for the likes of apple and amazon.
on semiconductor just talking about the chips >> we like the chips i think revisions have been bad already. and if you look downward revision, you are at the lows historically >> but you have negative trade headlines, chip stocks will go down >> especially at huawei. >> not necessarily because that is already in -- i mean very much in the far debt >> but it happens every time >> if you look at individual names, you can find the ones directly exposed >> barclays is initiate chevron as overweight and exingxon as el weight they site permian is the larger driver and firm says their investors
should take note of the recent cbs viacom merger and newly formed company interest in stars which lions gate did acquire in 2016 maybe an m and a play there. wanted to ask you about energy because it is a standout performer higher today up 2.7%. but it feels like this one got very unloved the sector. >> unloved, you're understating it despised it has been a horrific underperformer, not just for one year or month but for several years. return on equity has been way below the rest of the market they need to get it -- management has been talking about it, but they have to show the discipline permian, they actually got undisciplined. so they have to return cash and prove that they are doing it i think the stocks are interesting. relative discounts is remarkable if you look at history so there is opportunity. >> doesn't suggest that maybe there is a broken business model or something, or that future
returns in energy can never be what they were >> probably true for a lot of reasons as well. industrial vehicles using less gasoline, like esg being an important l. but that is different than saying you can't have a 30%, 40% bounce back versus historical highs. >> i think as long as you have questions about the global economy, you say the stock can decouple from the price of oil, but worries about the global economy, stronger dollar, harder environment for the price of crude to go up and therefore these are always going to be somewhat tied to the price of crude oil. >> i hear that what i'm saying is if you look at the price of crude and you layer it against what has been happening to the stocks, there is a massive disconnect. stocks have underperformed crude materially and crude is up roughly 16% year to date. and oil is up -- xwhogold is up% year to date and narratives are wildly different. but if you started january 1 and looked at the price, stock
prices have acted wildly differently. and interesting to see that. coming up, your last chance trade before the close >> and after the close, a significant statement from the business round table ceos can't just worry about profits. we'll debate what that means with the fmeorr head of the business round table john engler memory support brand. you can find it in the vitamin aisle in stores everywhere. prevagen. healthier brain. better life.
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welcome back here is a check on the s&p 500 heat map as you see, most stocks are higher today we have every sector positive, energy and technology, communications services also doing quite well as far as the dow is concerned, 29 out of 30 dow stocks higher except for unh, cisco, walgreens leading the charge and let's look at what is driving the action today trade headlines dominate, bullish tone from the white house and huawei rebelieve has tech stocks surging. new stimulus hopes and what we hear from the fed this week. yields climbing has the financials stronger. time for a cnbc news update with sue herera >> here is what is happening twitter says it has suspended more than 200,000 accounts that it believes were linked to the
chinese government and a disinformation campaign targeting protestors in hong kong facebook says that it also removed some accounts based on a tip shared by twitter. it said its probe also found links to individuals associated with the chinese government. president macron welcoming vladimir putin to his summer residence in sfrafrance a man accused of shooting six philadelphia police officers has been charged with attempted murder maurice hill now facing numerous charges stemming from an hours long standoff last week. >> as to the officers who were actually shot, he has been charged with attempted murder which is a first degree felony, assault on law enforcement officer, first degree felony, aggravated assault >> you are up-to-date.
sara, scott, back downtown to you. >> sue, thank you. dow up almost 300 points over to mike santoli for the second dashboard of the session. >> calling this escape from new issue. a lot of interest in how lyft and uber get to their expirations. looking at a few previous highly anticipated ipos and what they did, facebook, this is from the moment they began listing. so each of these stocks will be from the time that they were listed that was the expiration. excellent buying opportunity, stock had been a terrible performer from the ipo into that expiration november of 2012 and that obviously was pretty of the low. take a look at twitter, not exactly the same story, but you have a theme here which is that it was not necessarily the start of a new down leg in the stock stock had surged, come way down. that was actually a pretty good short term buying opportunity. didn't tell you anything about
how the next few years were going to go. keep rolling through these, we actually see ali baba and at the time was the biggest ipo in years. and there was a lot of fear that in fact it was going to also be another. so here you go, didn't really create a buying or selling opportunity, but basically went sideways from there. and finally snap, this is one that people point to and say everyone kind of got out when they could, it was a really poorly received ipo. but look at how weak it had been before you got to the lockup you made another plunge to the new low and then chopped an before going its own way so i feel like there is no definitive way to say that the lockup expiration is really an edge one way or the other. >> i wonder though what role an uncertain market will play in all of this. if you have been sitting on these shares, lyft was private for ten years, if you are sitting on the shares and you are thinking about what might happen in the stock market over the next few months, why wouldn't you sell. >> sure, but what it doesn't tell you is how that supply will
be absorbed. alot of big institutions would say i can't really own this stock. you could have it play both bullish and bearish. i also would point out that since all of these ipos, it was almost always an uncertain moment late 2012, it was right after the election, people didn't think that everything was all in the clear. that is when facebook bottomed so i still think that you have to keep in mind it doesn't in itself tell you which way these names are going to go. >> all right thank, mike. expiring today more than 250 million shares eligible for trading. let's bring in dan ives. you heard the report what do you think? >> the tidal wave of shares that are coming out especially in the private side, some of the early investors will sell at any price. but i think so far the absorb shon absor
absorbtion is a positive thing and i think how it trades is key. it continues to be glass half empty on lyft as well as uber. >> and still 27%, 28% lower than the ipo price. how much did the fears of this early lockup period expiring have to do where the weakness we've seen so far? >> i can tell you from institutional investors hard for anyone to really build a significant position knowing that this tidal wave of shares was coming out so i think it has hurt share, but i think what you have also seen is part of the issue with uber, that has been a negative on the stock right now ride sharing has a climb to get back street ability. >> so why are you glass half full >> we look at the fundamentals if i look at lyft specifically, what you saw this last quarter, i think that they gave a lot of reasons that gave the bulls i think ultimately in our opinion
you look out the next year or two, i think this is a penetration story just starting. >> but it is a profits ability story isn't it and a lack there of >> that is the issue right now in terms of where profit able comes. next two to three years? that is why ride sharing as opposed to some of the other ones that continue to be ones where a lot of investors won't own it just given profitability not on the horizon >> is lyft better than uber? >> right now i think lyft is a better stock than uber longer term i think that uber from the sum of tsum of the pard overall business model is a better story, but near term i think lyft could work better than uber. >> you don't think that investors look at these companies as basically the same, they don't sit there and look at the glan uhe rarity of each individual story they are like uber's earnings were bad, i have no idea when they will be public and neither
frankly do they. >> profitable. >> so why would i buy lyft they are in the same business. even though there are differences between the businesses, maybe people don't see that >> well, that has been an issue and i think right now it is a synchronized swimming situation between two companies. you sougaw lyft strong numbers so i think right now it is a prove me sector. but i think if you look at where lyft could go, there is a better opportunity in the near term in terms of numbers and i think you saw that in the quarter. >> i think investors are so price momentum sensitive and they have to perform in an active management way that you have to give me a catalyst that tells me i'm going to make money in the next month or two, not the next 12. but that is the problem that investors are having in general. and it is why certain areas of the market that are rocking continue to rock nobody wants to step in the way
of that applies movement in either direction >> is there a catalyst that could change the tide? >> i think the catalyst you are starting to see the price wars dissipate. and i think that ultimately in terms of ride sharing, you start to see penetration levels increase, and you start to see a share gain story start to develop. and no doubt right now just as you are saying it is a glass half empty in terms of the street and you have see it since the ipo was a mini disaster. >> and the price action today down 1.25%, is that positive we were expecting a flood of shares to hit. it is being absorbed well. it doesn't appear to be a mass exod exodus is that reason -- >> this morning if you asked me what shares, today down 8% to 10%, so i'd call it a small victory. but no throughout they are losing the war in terms of the ichlts p och ipo. >> and what about tesla.
this new idea that they will start renting solar panels >> at this point, solar continues to be a head scratching move. and i think that it is one where it is smart on the renting, but ultimately this continues to be a disaster story in terms of the solar city acquisition right now for tesla, it is a fork in the road situation, but solar continues to be an overhang on the stock. >> what is your call and rating here >> we have a neutral and $230 price target >> you used to be bullish. i remember those days. >> used to but iltly it co ultimately it comes come unto the demand story and can they be profitable and that continues to be for tesla what will be what i view as an ever slight climb. >> so why not just tell people to sell it >> i think there is an asset and value in tesla that as you start
to get below 200, it is hard to get more negative. we're not doomsday type prognosticator for tesla right now we're neutral relative to where we see demand playing out. if there is another way down, we'd have to revisit our thigh sis. >> all right thank you. see you soon tune into "squawk box" tomorrow, we'll have an interview with ron baron. hear what he has to say about tesla and much more. still to come here, target getting a boost after announcing its own in-house grocery label plus we'll break down the state of the american consumer with former jcpenney ceo ron johnson, why he says shoppers have no tolerance for insufficiency. and the earnings results from baidu. ♪
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estee lauder hitting all time high levels in today's session after reporting an earnings and revenue beat the beauty company is setting strong demand for skin care produc products also issued a much better than expected full year outlook and the stock is higher as a result. shares of target also moving higher on news that it will launch its own grocery brand it will be called good and gather good and gather. and is expected to hit stores starting on september 15th target says that by the end of 2020, good and gather will have more than 2,000 items. that stock up almost 3%. increasing shareholder value no longer the primary focus for many of america's top business leaders. that is correspond to a new statement by the business round table out today, a group of ceos from nearly 200 major u.s. corporatio corporations, the updated commitments which in addition to generating shareholder value do
now include investing in employees delivering value to customers, dealing fairly with suppliers, and supporting local communities. notable companies that were missing from the pledge included ge, alcoa and blackstone any significant implications for investors out of this new pretty wide-ranging pledge? >> most of the things that they are talking about, investing in communities and employees, that is just good business. i'm not sure that these are a hindrance to shareholder to value enhancement. so i think that the idea of placating maybe some people who are feeling that cooperates are becoming rapacious, i think some of that is pr, you abo but goods in general >> curious why the companies that didn't sign on -- >> a company like ge is
struggling with shareholder value, so maybe they wanted to keep the message that they are focused on that. >> or the guy who was supposed to sign off is on vacation it could be something simple like that. >> presumably they did the survey longer than a few days ago. >> again, sometimes we pick at things that we shouldn't do because it is good story, but i'm not sure that it is actually the depth of it. >> i guess i'm just wondering if we go into an economic downturn or bear market and companies, you know, can use the excuse of prioritizing employees and customers, i don't know, does it open them up to lawsuits for instance in shareholders >> there are stakeholders across a broad spectrum again, i think it is good business if you are investing in your employees to get them trained and educated and they would be more productive, how is that bad? i don't understand that. >> do you think the flip side i
that sometimes ceos are tunnel visioned to get the stock price up, you will make your shareholders happy but at what extent >> let's take a very harsh example where companies have layoff people, right where you know that you will be ruining some family's life by laying off an employee, but you have to make the hard decisions. i would never want to be ceo because i because i'd never want -- >> a perfect example can we use this clip hopefully we can use this. we have a clip from 2015 where pike pemike pearson runnig valiant, stock price catered deal after deal after deal listen to a clip from dachd fvih pressing him on the deal as the company was doing all transactions >> do deals to continue the
growth >> absolutely don't. but they create more value for share holders and that is my job. that is our board's job to do whatever we can to create value for shareholders >> interesting ceos whose pay is tied to the performance of the stock price. do you think the ceo always has the best interests of the stakeholders at heart or just the shareholders and getting the stock price up >> when i was an analyst, i beat up on companies at times but i think most people do try to do the right thing. i can find examples in every industry, every place that kind of sit there and only sfres one thing, and it is hard to take a singular interview and say -- >> no, i think it is just representative of a mindset -- if everything was perfect, why would we have a new statement? >> no, i'm just saying i think management teams try to enhance
shareholder value. that is their job. but they don't have to do it at the expense of other stakeholders necessarily some will do the wrong thing i think that the vast majority don't. i think that they really try to do the right thing but there are bad examples i've worked for some and i've also seen other companies do really stupid things >> i think it is a strong statement of where we are in 2019 where corporations have to feel responsible for more than just shareholders. hopefully that will be a good thing for society. up next, the one move to make before the close, your last chance trade when we ce ghomrit back do you up 279. woman: my reputation was trashed online.
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about six minutes to go, i can't believe market is almost over >> time flies when you're having fun. >> and i think you should be buying financials. yes, we know the shape of yield curve and all the concerns around that, but the stocks are so beaten up and so attractive, they are buying back tons of stock. banks are telling you that the credit losses are rely in check. so it seems like something people have taken too much of a bat to >> do we have to see the yields bottom >> i'm not so sure i think banks are different. >> tobias, thank you for joining us >> thank you >> time for the closing
countdown. kevin hanks, how does this rebound which continues from thursday afternoon into friday and into today look to you >> you know, we told our customers and we talked about it at td ameritrade how because this week is so light in economic data, that frankly once we hit thursday's strong close, this market had room to run for a little while that is what we told our clients to be careful because until wednesday's fed minutes, and then thursday, friday, jackson hole, there is not a lot of data, economic data, to get in the way of the market. just earnings. and there is more of a micro economic story >> do you think the expectations are too high going into jackson hole >> well, you know what, jerome powell would love to naot make
headlines. but i think the market will get more volabtile later this week you know that there will be something, you are just bracing yourself for whatever the news is out of jackson hole 37 i think that the volatility will pick up as the week goes along >> so you look at a group like energy leading the market higher today on wti being higher, but is this a sector down 4% last week worth performing secreta worst performing sector. so how much do you chalk it up to this could just be a bounce >> we talk so much about oil stocks and oil sector stocks the way we try to educate our viewers is sichlgly th simply t, correlations are so strong and in most cases 90% of the cases, you know, these stocks will track crude oil. so we -- as traders, i like to
look for triggers. so if you are going to trade the energy sector, watch crude oil, watch how the futures move and the news there >> good to talk to you, kevin. see you soon over to mike santoli for the dashboard. >> we've been talking about interplay betweenstocks and bonds. for good reason. but bond yields in general being so low are really giving a reprieve to stock valuations that are otherwise wouldn't be so attractive. so this is the earnings yield on stocks you see this spike as bond yields have gone lower to where you have this really thick cushion of valuation, i guess cushioning stocks against further down side because of this, we saw something similar in december. and you go further back, we saw in 2016, it is not the be all and end all, didn't tell you that the market has to go higher, but it does show you
that stocks will continue to look better in a lot of these models provided there is no recession of earnings down the road so that is part of the context for what we're seeing today. out to rick santelli in chicago. >> thank, mike if you look at a one week chart of 30 year bonds, you can see what mike is talking about thursday last week, 191 intra day low. but it has had a nice bounce look at year to date investment grade, can't get enough of it. it is hovering at all-time high prices even though the add on to treasuries for investment grade is so small. finally euro versus the dollar, hovering near 27 month lows because the dollar is near 27 month highs. let's go to the nasdaq where we will find low volatility, solid gains and better thrtha coombs. >> and apple continues toexten the gains this week. apple is almost a break-even for the month and you can't say that about a lot of big me mof mega s
chips have erased most of the loss losses and finally, chinese stocks surging as well. huge surge from weibbo and sina, more monthly active users. >> 800 point move.o and sina, more monthly active users. >> 800 point move. stocks responded to higher bond yields by pushing up economically sensitive secretary te sectors like industrials and as well as technology stock and consumer names were strong. sectors like industrials and as well as technology stock and consumer names were strong everybody contributed to the party today. defensive names lagged but what is missing is volume.
it is august we did have nice volume on a few etfs and there is the closing bell. essentially flat lining for the afternoon. dow jones industrial average climbing 248 points. that is an almost 800 point move as i say from the thursday lows. >> welcome to closing bell, everyone and let's take a look at how we closed it out. big day across the street. almost 1% for the dow. 26,000 so we retook that 26, 134 the s&p. 2923 a gain of 1 pb.25% russell 2000 up 1%, 1508 pretty good couple of days we
put together >> and what stands out today, whether you call it a bounce or a comeback or however you want to look at it in perspective, it was broad. he have sector closed led by energy, every s&p industry group actually closed higher as well you don't get a lot of days on the market where you are seeing that kind of broad strength. >> still a lot of questions as to whether people believe that it is real even with that broad based gain that understayou said whether lo just a bounce in what is a very important week just day one of retail earnings as the consumer has been the pillar of strength can that hold up and then jackson hole. >> and joining us to talk about the market today, liz young and also matthew dizok mike, your take on the strength. >> yeah, i think that yields
kind of letting up on the pressure a little bit. lifting a bit. you actually could look at it in-extra day just before noon, treasury yields on the ten year dipped below 159, that was the ton in the s&p for the day and then yields went back up again. so that makes sense in the short term i do think that ultimately down the road you'd love to see if the stocks have an ability to rally in the same day, but we're not there yet. right now it is fine i think to just say oversold market, people got way too negative, people started to extrapolate everything and now we're easing up on that. but to your point about whether it is a bounce or not, we're not yet at that level. i would say another half percent, that will tell you if it is a bounce or more >> is it that simple, that is the game we're play something. >> going to your point about if this bounce is real, you could also question last week if the
inversion and fear was real and it turns out it wasn't and it was only one day that we got really scared and then we were oefsh iver it so everybody trying to time the markets, just stop it is not a winning game and you have to continue to have the long term view there is still a lot to be excited about. >> i feel like takes good time it is good time to have a debate about what is working and what is not those that say look at the new orders in manufacturing, the bondmarket, commodities. and those that are positive say look at the fundamentals, retail sale, would you really have a consumer so strong if we were heading into recession >> i think a lot of those things could be true at the same time and there is also a lot of room between we have an accelerating economy and we're dipping in to a recession.
a slow ambiguous picture is where we've been >> we were having that debate last december when stocks were tanking. >> i think liz had it right too much worry last week and right now. but some degree of worry is probably warranted so we probably put it at about a one in three chance of recession over the next 12 months. but it is by no means a foregone conclusion we believe the ball is still in the fed's court. the ball is in their court and they can maintain this economic expansion with the right monetary policy. but they have been behind the curve for a while. and they need to at some point get ahead of that curve. >> do you think we've boded on yields >> so our official call for the end of the year is 1.25 on ten year yields. but basically we think in this range we're probably finding a bottom
core cpi is a level that is extreme valuation. we think that it will dip to meet that, but in this range you should probablyfint support fd o treasuries >> if they are right, look out for stocks >> yeah, at 1.25, we are below the lows that we hit a long time ago. that is where we think some of the algorithmic trading comes in if we go below 139, i think that stocks really fall out of bed for a while. i don't know that i feel like it will be that dire of a situation. i think the fed has a chance to ekt doctor us here and save us
>> are you recommending people buy stocks >> i am. i still think you should own bonds and there is an opportunity to own long duration but when you look at where dividends have, it still makes sense to own stocks. even if the inversion was real, we have 2wehave 12 to 18 monthse stocks will continue to go up before the market turns negative so you have to be in the market. >> and now a market flash on disney >> shares fell after an alleged whistleblower is claiming disney overstated its revenue for years. disney responding saying they found that the claims were utterly without merit. a spokesperson for the s.e.c. declined to comment. and we are attempting to make contact with the whistle blower. shares are finishing off the lows of the session.
>> we should be clear as well, we're not just talking about anybody here this is somebody who was on the inside this is a former senior financial analyst. an insider >> yeah, an accountant at disney so awaiting a full statement from disney. again, so far a no comment from the s.e.c. on this unconfirmed report >> seema, thank you. disney shares not doing a whole lot of movement. but as we said, as the story alleges from a former insider, just a handful of days after an outsider has made these allegations on general electric and its accounting >> i think the market can look at the fact that can i sdisney the claims
say organization fine, maybe they have been vetted. to be specific, they were in the theme parks division and just for context, i mean disney is a company that is, you know, very reliable cash flow generator. it is not really in these intricate businesses that i think where you have a lot of revenue recognition games. >> are shares halted in the post market i wonder if they had to do that to put out the statement >> this is a journalistic report on the whistleblower >> so as we gear for jackson home and look at this inversion and people ask how much doom is coming from the bond market, what do you tell them? >> so there is a little boom doom, not too much so the two inversions if you saw
intra day last week, not really big news flash because we have been seeing that the past several months fed funds to ten year inverted back in may. that is now 50 base points inverted the fed needs to act and bring rates down by another 50 to 70 basis points to get ahead of the curve. >> you still think that they have that window >> i do think that they have a quick window to do it. but if you look at credit equities rate, they have time, not a lot of time, but if they act quickly and aggressively, it can be put to the expansion. >> all right thank you both very much still ahead, former business round table president john en r gl r acts to shareholder value should for longer be the main focus of the cooperation. ♪
value should for longer be the main focus of the cooperation. e shareholder value should for longer be the main focus of the cooperation. rgler rye acts to shareholder value should for longer be the main focus of the cooperation. rye acts to sharehr value should for longer be the main focus of the cooperation. er value should for longer be the main focus of the cooperation. rn . n ♪ boy boy bands without dancing are just ok. get a better than just ok unlimited plan with spotify premium included on america's best network. only from at&t. more for your thing. that's our thing.
a few consumer names at new highs. h hershey, kimberly clark. utilities hitting new highs as well very heavy volume in some of the utility etfs finally the vix sort of collapsing as it went into the close below. next contract that comes in to effect is higher and dloe anhigo to 18. >> and the news that the huawei ban will be extended or postponed for another 90 days certainly helped chips today an nvidia got news that it will be
included in mine craft apple was a big factor, biggest impact coming from apple microsoft up for the month finally new highs here, all-time highs, kind of interesting if you are thinking that maybe the economy will slow down, wouldn't be seeing cintas, verisk and fiserv hitting new highs along with the utilities back to you. and shareholder value no longer the sole focus of major ceos this is according to a new business round table statement that promises to place employees, customers and suppliers on equal footing with shareholders joining us now to discuss, john engler governor, how big of a
shift is this? >> i don't think that it is a big shift. i think that it is an important restatement though of what has been largely true for companies across the country we talked -- when i was at the round stable about long term sustainable value creation and to be long term, you have to pay attention to customers, search your communixhu certain your xhucommunity. so i think that companies have been doing this. i think the good companies, successful ones, they are well aware of is the broader responsibilities but still you have to sell cars and want to make some loans. >> but isn't,er is, the ceo always going to be focused on the share price appreciation at the end of the day, that will determine things like bonuses,
whether they have their job or not after a set period of years. >> no question that you are talking about good news in the market the last three days investors will pay attention to that too so that is still very much a part of the equation but i think one of the points that i thought about when they made the announcement today of the restatement of the corporate gorsuch nance princip governance principle, you are sending a message to millenni millennials. there was a survey a few weeks back that over half of the millennials are disfavoring capitalism we have to tell the story differently and better and i think that that is what the brt is very sensitive to, we better let the american public especially this massive new generation that is coming up understand what has brought them unyou precedenced wealth and success and opportunity. and the statement also i thought
was notable in that it didn't call for senator warren to be appointing boards of directors or senator sanders to be setting the energy policies for the companies. it talked freedom a frumt fundl door principal so a smart way to go >> what about the companies that didn't sign on, the brt members that didn't sign it? we don't know why in each case. but what sdch sadoes that save
>> he has been paying attention and giving back. because the center at oxford he is on at humanities. so only a handful. only 181 ceos signed and anytime any organization you get 181 of approximately 200 to sign or 190, that is pretty successful and i think that according to the release, there were some who were interim ceos and others there are some well sdaestablis. so i don't know their reasons. but i think the statement is nicely timed with this presidential campaign already under way in 2019 for next year, i think that it is important to say to the american public that this economic begin of the united states, which is really driven by business, there are key principals and key sort of guardrails that should be in place so that they can go out and compete.
because we're not just competing for favor here we're competing against a very tough set of global competitors and you just talked about one in huawei and the government and the company are hard to sort out and that kind of competition isn't fair, it isn't even and it is complicated then when you get into the china trade negotiation where the key there is protect our intellectual property. i mean, our freedom has allowed us to create a lot of thing wills but we need to keep it and this is a great -- to me takes great statement and a great way to go on offense and defend free markets and companies that are free to go and compete recognizing that they don't do that without obligations to broader communities. >> governor, does it do anything different, do companies do anything differently in practice as a result?
>>. >> i think a lot of these companies have been doing this all along. who is the worst one that gets a call when there is a natural disaster the companies in the area. when the community needs something, the companies get the call so here's what i hope it does, it arms them with a set of facts to be able to explain. and who better to do it than the major employers. especially at a time when savings are going up we talked about the consumer strength i don't think that there is a recession in sight for 2020, but there is a political headwind that is campaign rhetoric.
if that ever transferred to gha nationnag national policy, heaven help us i think corporate america has to do a much better job of stating this case. and i hope that this set of corporate principles allows every ceo to make about five speeches in the next year in the middle of this campaign season about why what they are doing is important and it shouldn't be could you bed e curbed by the government >> john engler, appreciate the time >> thank you very much >> up next, we'll break down the charts to find out why high yielding stocks still look cheap. and a new poll shows support for free trade increasing. we'll debate where the tariffs or free trade is the better bet.
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santoli. >> goldman sachs arguing that high dividend socks s high dividend socks tocks on a relative basis have been unju unjustly punished. look at chart. on average almost by definition on average they traded at a discounts. so long term average is about 80% of the pe of low dividends stocks but what is interesting, it is sector neutral, so not just capturing the fact that higher dividends sectors are out of favor perhaps or now getting more in favor, it is basically saying this is an outgrowth of the growth versus value story and a lot of higher dividend stocks have been shoved aside by investors who feel like they are disrupted. so that is the extreme example of all this. arguing here goldman is that at least right now with the overall bond yield, that this could present an opportunity, again, it is within sectors
it is within each is he can tse that dividend yield is underappreciated even within financials for example, higher yielding ones are considered low growth. >> all right up next, former jcpenney ceo tells us what kind of impact tariffs could have on american consumers ahead of the all-important holiday shopping season plus sales of consumer electronics down more than 4%off the last year, but not all bad news for gadgets find out which ones are still hot.
time for a cnbc news update with sue herera. >> and here is what is happening. planned parenthood says it is pulling out of federal family planning program rather than abide by the new rule prohibiting participants from referring patients to predicts m women will go without care the president of the new
york police benevolence association speaking out about the police commission near's decision to fire daniel pantaleo, the officer accused of using a banned chokehold >> all we ever asked for is fairness in the process. we have not gotten that. >> and the fiblg tounals touche put on the memorial for the boston marathon bombing victim, three stone pillars were installed today completing the $2 million memorial. you are up-to-date that is the news update. sara, back downtown to you consumer spending in the u.s. accounts for about two-thirds of the overall economy. so throughout the day we've been focused on the great american consumer and now we turn to the electronic sector and a mixed picture. josh lipton is in san francisco.
>> the u.s. government paints a down beat picture saying year to indicate sales of electronics and appliance stores total about $57 billion and that will be a dron drop of 4.4% but a lot of people buy their gadgets on line oig. so if you take that into account, the consumer electronics market is actually doing okay growing in the low single digits and within that, which categories are growing strongly? baker points to smart home products like smart speaker, thermostats and doorbells. health and fitness is another strong category. apple has you now sold 80 million of its watches and then the airpod 2s 50 million have been sold of those. and on thppenheimer sees steady consumer demand for big screen
tvs. and as for pcs, certain sub segments therelike gaming pcs remain in demand so which categories were under pressure that includes basic head phone, smaller screen tvs and thanks in part to smartphone, the point and shoot cameras as well. and speaking of smartphones, the u.s. smartphone market will decline about 9% estimated back to you. >> josh, thank you for more on the american consum consumer, let's bring in ron johnson. good to see you you again. >> great to see you. >> consumers have been strong no doubt about that the question is, can it hold up. >> consumers have changed dramatically really driven by smartphone they are smarter, access to pricing information looking at their gonphone, much more is an
have i but more fortunately, they have become more demanding.savvy. but more fortunately, they have become more demanding. they can pay with a click or have something deliver the to their door so it has had a profound impact on the retail industry and in effect they are running away from tired retail and that is the change i see is that so many of the large retailers that i grew up with were designed for a different era, and they just can't compete with today's changing consumer >> including the one that you ran. jcpenney which is among the struggling retailers. what happens to companies like that and you could look into l brands and victoria secret, j crew, a lot of the department stores if they can't even turn it around when the consumer is in such strong shape right now economically >> it is really hard to take a mature company and make it current. consumers are always looking forward, but they are looking
forward even fasters today so when they walk in a tired store that hasn't enabout a remodeled, when they see per chan d merchandise that looks the same and the same marketing approach, they turn off. they abandon, they look for new. so i have to be nimble and quick. you have to invest and now some have got it right so it is not a verdict on large retail look at target they made investments highest stock price ever walmart and amazon that investments. best buy turned itself into consumer electronics and they are doing great. so you have to stay ahead, but once your business model is outdated, people are not coming. >> if you were still running a department store and you were on your computer or your smartphone as it were and saw a tweet by the president
that said tariffs going into effect in a few months, dedicated to the consumer, how would you react, what would your first and second thoughts be >> as a consumer, i wouldn't react. >> not as a consumer, as someone running a business >> yeah, you have to make a tough choice you raise prices and your volume goes down. or you keep prices the same and hit your margins both are difficult in the short term but i would tend to hold my prices to maintain my share. retailing is a fixed cost business you got to get people in the door once you lose a consumer, as we found at jcpenney, it is really hard to get them back. >> and ron, talked about the power of the smart phone and changing basically the way that we do retail and commerce. do you think in general that we've reached a level of maturity there, talking about electronics sales that we have
look elsewhere in terms of where the whole category will grow >> i think temporarily that is true our smartphones are so great i just watched a youtube video that compared the new android phone with last year's iphone. and last year's iphone held up great with the year ago phone. so the reason to upgrade is not as great but that has been nice because apple is growing its user base people are now spending money on different things like services on phones to help them get more out of it. so we have to do move from the mind set that everything is what you sell today it is really about the deep engagement with the customer bases. great brands are loyal large customer bases that overtime you will learn to serve and learn to monetize nobody is doing that better right now than apple >> ron johnson, thank you for joining us >> thank you and this may be one of the
most important weeks of the summer for the economy the fed, consumer debate thursday and friday are steour steve liesman interviews the powerful minds in the world. we'll be live from jackson hole thursday and friday. baidu results just out, deer bra b deidre bosa has that for us. >> and shares up more than 6%. major beat on the bottom line. coming in at 10.11 rmb so big beat there. much better than investors were fearing. revenues a light beat come can go in at 26.3 billion yuan so analysts were expecting a decrease and this is a small increase of 9% daily active years it up 28% so this is really a story about a stock that has been beaten
down before today, down about 40% year to date saw nearly 8% pop during the session out on the 6.5 pop after hours. and it is coming back rebounding quite a lot. some worries about its core advertising business as chinese economy slows, but again much better than expected and when you look at it with some of the other big internet names, a pretty good earnings season for the likes ever s of baidu and . still ahead, an overwhelming percentage support free trade. we'll debate whether that is better for the economy than the tariffs.
all-time high. 64% of measures namericans now e trade is good for america and 27% say it hurts manufacturing here to doiscuss is doug and these new numbers are a reflection of how the tariffs are impacting americans? >> i think that there is a real learning moment right now. the president has made this the center piece of his economic policy it has had dramatically bad impact 00 faimon farn farmers, manufacturing chicago economies can talk it, but this is a more effective way to teach people the importance of trade >> i'm assuming if you would have asked people do you favor free and fair trade, they would
probably say yes, i do in similar numbers. it just goes to trying to push the chinese like the president and his team are to be more fair as to we can have free and fair trade. >> yeah, i'd like to see that question about do you support free trade broken down by country. i hope i support free trade with china would be low you cankncan't have free trade h the chinese. and so with many countries we have free trade, but not with china. >> i guess the question is what is the takeaway for politicians running in 2020? you have president trump on one side and a lot of democrats on the other not sounding that different from trump in some of the protectionist we have to go after them, make sure that they are playing by the rules or else we will punish them.
even joe biden who under president obama was trying to sell tp now says he wouldn't back if. >> yeah, i think that everyone knows that china has been the bad actor on the global stage. and there is agreement across the spectrum on that point and so no one is going to get into a thrill figpolitical fighe president about singling out sxhooi china on bad trade.
idea as something that the white house advisers are looking at potentially to deal with a softening economy. not clear how much this idea is getting. white house not confirming it right away, but remember the president likes to talk about tax cuts this is his signature achievement. back in 2018, a year ago, right in the run up to the midterm election, the president began talking about another tax cut, a 10% middle class tax cut, that idea vanished after the election now according to the "washington post" officials are sguing tdisg the idea of cutting the payroll tax in an effort to send tax benefits to middle and low income americans in case of a softening economy. and it might be effective in 2020 to do that during an election year. but again, not immediately clear from the white house how you serious this idea is, how far
along in the planning stages they may be or whether it has any hope on capitol hill where a number of democrats and republicans are concerned about deficit spending payroll tax cut could add to the deficit going forward into 2020. so something to keep an eye on >> eamon javers, thank you so the boobama administration dd cut payroll tax but then reset back up? >> and this is a potentially temporary cut. that was when you needed to stimulate spending part of the whole general stimulus effort. right now ironically the strong e. part est part is the spending >> sorry to step on you, but larry kudlow again this weekend talking about -- he said it the last three or four times that he was on television. retail spending, retail sales,
consumer strong. jobs are plentiful consumer is doing great. just shows that there are limited tools if you really did want to give a jolt to the economy. if you staring at a 2% economy and that is not acceptable to the at a 2% economy and that's not acceptable, you know, to the administration, then there's not much else to propose. >> the idea that the fed needs to cut 100 basis points and immediately implement quantitative easing which you don't usually do when the economy's great. >> right. >> still ahead, a slew of retailers set to report results tomorrow the key things to watch when the "closing bell" returns ♪ eliquis is proven to treat and help prevent another dvt or pe blood clot... almost 98 percent of patients on eliquis didn't experience another. ...and eliquis has significantly less major bleeding than the standard treatment. eliquis is fda approved and has both. don't stop eliquis unless your doctor tells you to.
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: quick check on shares of baydu. surging 9.2% after reporting an earnings beat or a squeezearoni mcfatty. >> i think we'll hear more from jim tonight on mad look forward to that it's a big day for retail earnings tomorrow. courtney reagan is here with a rundown of exactly what to watch. hey, court. >>ly there, scott, it's going to be a big day and a wide variety
from hardware to crop tops whachlt what a mix it's going to be tomorrow home depot expected out before the bell comps expected to rise about 3.4% investors are going to want to know if some of those delayed home improvement projects from the spring did eventually end up getting done in the summer months and then we're going to hear from kohl's. those comps are expected to be down about 2.4%. the department store has struggled since earlier this year investors had a lot of questions about the tariff mitigation strategy now that we're going to have a list, part one in september and part two in december shares are down about 25% for kohl's since their last report and urban outfitters is going to report after the bell. that whole company is expected to see comps fall 2% to name sake brand urban outfitters is going to be the weakest segment according to analysts' estimates. those shares also under pressure down about 23% since its last report in may.
let's take a look at how we finished up the day on wall street 1% gain for the dow up nearly 250 points, continuing the rebound that we really saw kick into high gear thursday afternoon last week. s&p 500 up 1.2%, all sectors finishing higher, and the nasdaq up 1.3 prer%. even the small caps got a nice boost on wall street. toll brothers results are out tomorrow see seema mody with a look at what we should be watching for. >> analysts expecting earnings at $0.83, and revenue of $1.3 billion wall street will be looking at if lower rates are fueling demand for home buyers and second thing to watch out for, expenses and whether it's being challenged by higher construction costs due to tariffs. now keep in mind, lower rates have sent real estate stocks to new highs and homebuilders have done pretty well in 2019 up about 30%. we'll see if that can continue guys. okay, seema, thank you so much that does it for the "closing
bell." >> first got to get mike santoli's take. >> i was getting it, wrapping it up it was a slow wrap >> i didn't want to step on -- step on your opener there. obviously, you know, the market these two days you mentioned how broad it was you said these clustering of days when 78% of volume or more has been to the upside friday and monday a lot of the historical studies says the market has found its footing for the short-term it's not really distended beyond a pullback, the market last week didn't go below where it was in early august i actually think you can say we're in this range for a while and maybe trying to make the case that recent lows if bond yields don't collapse. >> who knows what's going to happen if chairman powell's going to say anything, but i wouldn't want to be negative overly ahead of that a lot of central bankers there people are talking about global
stimulus. >> is this still the kind of market that can be rescued by central bank stimulus, fiscal stimulus, payroll tax cuts, german stimulus? >> it's twitchy. >> it could show you we're a little jumpy that is it for the "closing bell." >> "fast money" begins right now. live from the nasdaq market site overlooking new york city times squa square i'm sorry, dan nathan and guy adami, the bulls are back, baby. stocks rallying to kick off the week whatever happened to that bond market panic of just a few days ago. we are digging in. we're also keeping our eye on shares of baidu. we'll have more on what is driving this big surge ask later the great american consumer being put to the test we'll get a floo