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tv   Closing Bell  CNBC  September 6, 2019 3:00pm-5:00pm EDT

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of plant-based meat in the long term it's total addressable market is like plant-based milk and could be smaller wildfire goi we're going to have the analyst on tonight on "fast. and jay powell over in switzerland. >> thanks for watching "power lunch. >> nice to be back with you all, everybody. "closing bell" starts right now. welcome to "the closing bell." we have a post fed speech and post jobs number rally on our hands. just 2% or 3% from all-time highs with just 59 minutes left in trade. welcome, i'm sara eisen. let's look at what's driving the action higher right now. the federal reserve, as chair jay powell says trade policy is weighing on investment decisions but doesn't see a recession coming. jobs come in light but wages and participation rise and the unemployment rate stays at 3.7%. and china trade talks do appear on track for october.
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both sides claiming progress joining us for the entire hour, karen finerman, ceo of metropolitan capital welcome. >> thanks for having me. >> this looks like a strong way to end what has been a strong week for stocks. what stood out to you in the rally? >> to me it's the volatility that stands out to me. volatility both up and down. i'm always long bias, no matter what, which is a blessing and a curse. to me this is a scary time i think i'm a little more in cash than i would be and desk y definitely more protected. i want to be more hedged. >> so you've been buying puts? >> yes over the last week i think the volatility -- i think it doesn't fully reflect the volatility that is out there, the tweet that could come at any moment. >> why do you say it's a scary time >> to me trade is really the
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issue here, not the fed. i think what keeps cfos up at night is not are we going to get 25, are we going to get 50 it's what does our supply chain need to look like, how much can we pass on, how much do we need to absorb. those are much bigger issues to me than rates. >> so a believer in equities lots to unpack with karen over the next hour. first, let's focus on the big stories. courtney reagan is tracking the movers, dominic chu is diving into the sectors at all-time highs to find some undervalued names and sara will have more on today's jobs number and jerome powell's comments. stocks selling on gains, though off session highs, briefly negative early in the session. materials, health care are the leading sectors, utilities lagging. docu-sign, earnings miss overshadowed by a revenue beat
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the ceo points to a growing number of customers and some new product launches shares up almost 21% beyond meat issued underperform on d.a. davidson. but the firm says it's not a negative view of the company or the ability to execute but a cautious approach to the total addressable market, which they think might be more like plant-based milk right now those shares are down more than 4.5% sara. >> who knew. courtney, thanks. consumer staple stocks near the top of the pack today. also among the strongest sectors in the past month, dom chu with a look. >> past year, whatever you want to call it, consumer staples have been trading so much higher than the broader market. that secreta but are there still places you're trying to find value in consumer staples like record highs? if you're like karen finerman and a little more long biased, maybe some of these names pass up on screens despite underperformance take a look at the consumer
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staples versus the etf and s&p 500, a massive outperformance over the last year if you want to take a look at valuations, a couple different ways to look at it if you look at price-to-earnings ratios, that's one way to look at some of these moves in that regard, those moves can be at least sometimes a little bit more unnerving for investors. walgreens trades at 9 times earnings, kraft heinz 10 times, kroger 11 times, molson doors 12 times. could those be opportunities from a valuation standpoint. dividend yield another way to look at it a little more thicker in forecast here. altria, 7.3% coty 4.9%. kellogg 3.5% all yielding more than the consumers market so are those places that you can still find value in a sector sara, wilfred, that is already at record highs. back over to you.
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>> dom, thank you very much. karen, you might say within that subsector, individual names that have a reason why they're cheap. >> that's quite a collection of some of those ones that are really cheap you could pick out -- >> kraft heinz -- >> kraft heinz. >> cheap for a reason. >> and they keep giving you new reasons. kroger to me, they couldn't survive the onslaught of an amazon/whole foods they seem to be surviving. but walmart and target are really pushing their grocery business hard, so that's cheap for a reason >> the ones that have invested and are showing some promising signs of growth with dividend? >> to me the dividend is a red herring. you could lose your dividend in a day if something trades poorly, right. >> 7% on altria, though. attractive in an arbitrary way. >> there's some big bear theses
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there that are potentially scary. >> let's turn now to the august jobs report. the labor department reporting that the u.s. added 130,000 jobs in august. weaker than expected estimates were around 150,000. for the third straight month the unemployment rate remained unchanged, 3.7%, near a 50-year low. earlier today in zurich, jay powell weighed in on the state of the consumer and whether he sees recession on the horizon. listen >> the consumer is in good shape and really there's -- our main expectation is not at all that there will be a recession. i did mention, though, that there are these risks and we're monitoring them very carefully and conducting policy in a way that will address them no, i wouldn't see the recession as the most likely outcome for the united states or for the world economy. >> joining us now to talk about the jobs number and the broader markets is courtney dominguez, senior wealth advisor at payne
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capital management, brian brenberg is back karen finerman is with us as well so, brian, your take on the jobs number and how that feeds into the fed debate and the recession debate. >> well, the question everyone is looking at with this jobs report, is it going to give us a big recession signal and the answer is absolutely not of course the headline number is weaker than people were thinking this late in the recovery, i don't think it's a particularly week number and you're seeing some underlying signs of strength wage growth was pretty good, hours worked ticked up a little bit, the participation rate ticked up. from the standpoint of the federal reserve, you look at this jobs number and say it probably merits a cut. does it merit 50 basis points, 25 basis points, i don't know. but it makes the fed's job easy in terms of we're not seeing that odd strength that we saw in the adp number yesterday that was sort of like where did that come from. this is in line.
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i'd expect us to be here at this point in the recovery. >> courtney, we're close to the all-time highs but is bad news priced in it that makes it sound like we're not pricing in any at all. >> we have our trade wars and the inverted yield curve than been priced into the market. the markets are looking for signs of good news i think the trade war has been overarching right now. but the fact that companies are still hiring right now despite the uncertainty with the trade war i see as a rely good sign. maybe we didn't hit expectation with the job numbers but they're still coming in and companies are still hiring, which is a good thing. >> does it give you comfort at all to see the numbers on the consumer wages were up. hours worked came back the services number that we got earlier this week in the u.s., for someone who's a little worried about the backdrop, these numbers are reassuring. >> they are reassuring for the consumer for so many reasons, with rates low and being
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employed and wages rising, that creates a good environment also looking at gas prices today, gas prices are really low, so that's nice as well. there's a lot of tailwinds for the consumer as long as they are employed, which they are but, you know, i looked -- does the fed ever signal a recession? do they ever foresee a recession? it's not really their job to say we foresee a recession >> afterwards. >> we all know it afterwards like everybody i know it later. >> so this is not the indication we're going to get a recession. >> courtney, what are some of the asset classes that you think are attractive at these levels >> i think looking at your value companies over your growth companies is a better value right now. not to be too cliche that there's value in value, but they have been trading lower than their historical averages compared to the growth companies that are still doing fantastic i think at some point you'll see
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that reversal so i think that's a much better place right now. >> what type of companies and sectors? >> i think specifically looking at your small companies, i think they can really value, especially once the trade wars get figured out. you'll see some of those come through. i like looking at the broad sector so i'd rather look at an etf or small cap value sector rather than individual companies. >> brian, in that clip from jay powell, he said he's not expecting a recession in the u.s. he also said he's not expecting a recession around the rest of the world. is he missing a trick with certain subregions >> you never know if he's missing a trick with certain subregions, but i think he's speaking to what the data is showing us the data is not showing us red alert, red alert recession it's showing us slowdown, driven primarily by the fact that we have this uncertainty around trade. i'm one of those people who looks at the october trade negotiations and says maybe we'll get a deal, maybe we won't. frankly i don't think it's going to make that big of a difference in terms of reducing the
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uncertainty around trade that's going to linger even if we get a deal. it's going to be all about enforcement. so i think he's looking at the world economy, the u.s. economy, and saying weakness yes, flashing signs of recession, no. i think the fed's policy will be consistent with that viewpoint. >> do you think, karen, that the no deal scenario and the risk of more tariffs and more tweets is in earnings estimates? can you model that out already >> i don't think you can yet it's just been ratcheted up i guess late at the end of the second quarter and then over the summer and september 1 so it's a little early, but i do think it weighs on sentiment so i think for a lot of companies, people won't care what they did in the third quarter. it's about what is your guide -- how are you feeling? what is your guidance, what are your expectations if this tariff environment we're in, if there is no deal and we just have uncertainty. markets hate uncertainty. >> i think they're looking primarily at that december 15th date they want to know are we going to get tariffs then on those
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consumer products or not if we aren't, that's going to help the holiday shopping season in the short term markets are most concerned about whether a deal gives you something on december 15th. still to come, mike santoli will break down one overlooked part of the jobs report and what it says about the state of the economy. later, "mad money's" jim cramer getting a shoutout on twitter when the president said i agree with jim cramer, the fed should lower rates jim will tell us where he's seeing the biggest opportunities right now in the markets, especially some unloved names. the dow is up about 40 points. we're about 48 minutes until the close. at fidelity, we believe your money
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45 minutes till the close, 84-point rally on the dow, about 0.2% on the s&p. let's go to mike santoli for today's market dashboard. >> sara, here's what we have coming up for you. you have to pay up for good players. that's going to be one angle on today's jobs report. and then the old saying is the best offense is a good defense we'll see if that will continue to be the case in the market and in the red zone, this week's rally has gotten us within striking distance of those old highs. we'll take a look at the field
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position and then a balanced attack that's about how corporate players are spreading out their cash flows first, let's look at a measure of total worker income that actually really encompasses all we want to know. job growth, hours worked and how much are you getting paid per hour our friend likes to look at this figure you see it running around a 4% rate it ticked higher this time below it is the consumer price index. clearly, workers are earning plenty more than inflation right now which supports household spending and this is for nonsupervisory workers so this is rank and file workers take a look at some of today's all-time highs in the market in the consumer's base and you can see that the market is figuring out this is a decent backdrop. these are the winners, costco, home depot, pultegroup and target this is a story about consumer's
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keep spending. >> mike, i guess the theme after chart one, which is rare for me. still, it's victory. >> i think it's an interesting take, mike, which is alan ruskin had this take from deutsche bank which is the key question going into this jobs report was answered in one of the charts that you showed, which is can we continue to rely on the consumer to carry this economy. you know, the answer is in some of those metrics, whether it's wages or hours worked. what you're looking at is that, yes. >> that remains relatively steady obviously it's industrial production, it's investment and exports, which are the swing factor in terms of additional growth or less growth on a gdp basis. but i think the basis at the core of the economy remains pretty healthy at this point. >> mike, thanks very much for that karen, overweight consumer stocks or not? >> well, i love the consumer
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i believe they'll spend through just about anything, so that is good i love target. i think they have really done a great job. we've seen a re-rating there from a very low p.e. to a medium p.e. something like footlocker has not worked although it's rallied back but the consumer, i think there's a lot of tailwinds there. i'm actually surprised home builders aren't even higher. >> home builders. >> yes. >> are there any other good bargains in consumer, because some of those names have gotten really beaten down. >> pvh the other day we saw $10 million of stock and people are like maybe it's overdone maybe there are some that were thrown out with the department store bath water. >> is that one you like, pvh. >> i do kind of like it. up next, one wall street firm out with a new note picking winners and losers in the airline space. plus is netflix falling behind in the streaming wars
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welcome back to "closing bell." time for word on the street. berenberg initiating on some airlines today the firm citing free cash flow opportunity for both american
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and delta but sees headwinds from the 737 max uncertainty for united and southwest. kbw downgrading bank of america citing deteriorating economic and rate outlooks this comes after raymond james also downgraded bank of america last week. morgan stanley out with a note on apple. they saw its largest month-over-month acceleration since 2015 i'm more interested in this bank of america note. the same comment i made with the raymond james downgrade, there's nothing new here we've all been well aware of bank of america's relatively high exposure to high interest income and so it feels like a late downgrade rather than something particularly ground breaking >> i think it was a downgrade to 29, which is higher than here. >> to market perform, not to sell >> so i am long bank of america.
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i sort of agree with you i think that the metrics, which is under 10 times earnings, right, and it does have a dividend yield but i don't love to rely on dividend yield, i think that's on the low side of their historical p.e. so it's obviously very cheap to the market, but it's cheap to itself as well. and so i like it >> on that note, as you said, so they have got it on 9.8 times p.e. for this full year, on 15% return on equity and continue to say even with the current falling rate environment, we expect returns to remain well above the cost of capital which is the valuation case. but momentum can still work against it, i guess, is the reason. >> i'm familiar with the bad side of momentum. >> i think the apple call is interesting because there is no information there citing app store revenue, biggest month-over-month acceleration in years. we have a big apple event next week. >> i'm long apple as well. that would be good as this story
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of the evolution from the hardware business to a software and different multiple business takes place. that obviously feeds to the software part of it, to the recurring revenue, rather. so i like it i don't know that next month will be the big launch, but i like it. >> apple is up about 0.2 of 1% today. netflix versus disney, as the streaming battle heats up with the launch of disney plus everyone is wondering who will win. julia boorstin has a look at what the rising competition means for netflix and that particular stock hey, julia. >> well, we're about two months away from the launch of disney plus and have seen quite a reversal of fortunes between netflix and disney over the past year disney shares gained 26% and netflix stock has fallen 14% disney's market cap is nearly double its streaming rivals. now two studies project a shifting power dynamic digital tv research projects
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netflix will grow its subscriber base to 219 million by 2024 but its dominance will fall with amazon prime growing to 127 million and disney to 82 million subscribers. so how will netflix manage its decline. the streamer will look overseas and it could ramp up its local language films in series in australia, germany, poland, france, germany and the netherlands. now, we'll also have to see what kind of threat all the other new services that are launching could pose to netflix next week when apple has its iphone event. we could hear how much it plans to charge for apple tv plus. back over to you. karen, what's your take on netflix and whether this is a defining moment for the company as disney plus comes out >> i sort of think it is
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the stock has been reflecting that a little bit going into this but before all these competing products were on the horizon now they're coming clearly into view and so you have multiple fronts that netflix is going to be sort of competing on. and then so even if the other ones don't do as well as some of the more optimistic projections, i still think doesn't that put some sort of ceiling on netflix' ability to continue to raise prices at will i think that's part of the story. >> what about disney plus, do you own that >> i don't i don't. you'll be getting disney plus, i have no doubt. you might need four disney pluses i like disney. netflix i couldn't own here. i'd much rather own disney. >> we have got 34 minutes left of trade we're higher by 95 points or so on the dow gains, not resounding gains but
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it's topping off what's been a healthy week close to 2% of gains for the week as a whole. coming up we have your last chance trade. later, richard fisher will break down the jobs report and chairman jay powell's latest comments and last comments ahead of the fed's next decision as we head to break, here's a look at how commodities are trading today. oil getting a lift, up around 2% for the week gold and silver are bo plithulng back "closing bell" will be right back ♪
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just under 30 minutes left in trade the fed as chair powell says, trade policy is weighing on investment decisions but he doesn't see a recession coming a slowdown in hiring, jobs come in light but signs of strength in the labor market as wages and participation rise and unemployment stays low at 3.7%. and china trade talks appear on track for october as both sides claim progress we are higher by 106 points on the dow. time for a cnbc news update with sue hererherera. hurricane dorian has flooded
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north carolina's outer banks video showing the high water rushing through ocracoke island. governor roy cooper says there is significant concern about hundreds of people who could be trapped on that island in the bahamas, several hundred people waited to be evacuated off of an island the royal bahamas defense force was helping people board a ferry that had come to pick up its employees and they had room for an additional 160 people the queen of denmark responding for the first time to president trump's abrupt cancellation of his state visit to her country she was gracious, saying cancellations happen sometimes and her invitation to the president is still open. oakland wide receiver antonio brown will play for the raiders on monday night against the cleveland browns raiders coach jon gruden making that announcement. the team had been planning to suspend brown over his tirade against the general manager. brown apologized to the team today.
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you're up to date. that's the news update this hour sara, wilf, i'll send it down to you. >> and i'll send it to mike santoli for the second dashboard of the session mike. >> sara, the best offense for investors this year has been playing defense. let's look at some of the sector dynamics that illustrate this trend, see if there's any sign that maybe we're going to see some sort of rotation back toward the cyclical sector so here you have in blue and green the stuff that's been working. that's tech, which is quality growth and economic defensive and staples. they're outperforming by a lot over the past year stuck below that is financials and industrials. financials and industrials have participated in the rally this week, but you just see this spread here, how it's not really showing you a sign that this is turning. the good news here is the stuff that's been working has not sold off much it hasn't been a one for one rotation as a matter of fact, fewer of half of all s&p 500 stocks are even within 10% of their 52-week
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high so in theory there's a lot of room for the laggard stocks to start working that's your formula for the index doing better of course you probably need to see a little more traction in terms of economic sentiment for that to happen. >> so much plays into that trade whether you want to go to defensives or cyclical stocks. if the fed is embarking on a more prolonged easing cycle than maybe they would like, which groups do best >> the traditional playbook would say things like housing, things like autos even could be refreshed, so therefore you get more of a consumer cyclical and industrials working. the problem is at this point in the cycle it's hard to know if investors will project ahead this will work for years to come and you can start to raise earnings estimates going forward. also retail stocks are so challenged secularly that would be a place you normally go and nobody thinks auto stocks are a very long term growth stories so that's one of the issues for
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figuring out if the fed works. there's not a lot of dry powder in those areas, it doesn't look like it given how they have become overheated in the last several months. >> okay, mike, thanks very much. is wall street falling out of love with recent ipos zoom video, crowdstrike, medallia, all three reported a beat on top and bottom lines after the bell but take a look at the stocks. all three sinking in today's session. quite sharply as well. joining us to talk about the ipo landscape, mark lehman, president at j & p securities which has underwritten a number of ipos, including crowdstrike and zoom and santash mou very good afternoon to you both. we've seen big price cuts of late, wickly in wework
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is this a sign we're starting to get to the end of the cycle where they can push through an ipo regardless of the evaluation >> no, i don't think so. i think the market needs to get more rational, maybe just got ahead of itself. the market is getting more -- they want a path to profitability. they're not willing to just throw money at it so you're seeing some rationization. the ipo pipeline is robust what you'll see is more ratio l rationalization in terms of pricing. that happens in the ipo game you overshoot and need to pull back. >> mark, how would you characterize the health of the ipo market now that we've gotten through a quarter or two and a lot of misses? >> well, you talked about a few misses but they were some of the best performing stocks of 2019 up until this morning. so there's huge receptive tee by
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portfolio managers we've gone through price discovery before and we'll learn a lot going into the fall because there are several more high-profile ipos we're talking about. i don't think the appetite is gone i think when you talk about a lot of good stories for the rest of the year. >> you invest in some of these companies before they go public. have you seen extraordinary prices even when they have been private, again, coming back to the likes of a wework who's halved its valuation, also uber high profile ended up listing below its private market valuation. is it the private market that's pushed these things up too much as opposed to greedy entrepreneurs and founders >> yeah, i think to some extent. there's a rush to get in you don't want to miss out on the next big thing overall you'll see it will rationalize, like i said earlier. it's totally part of the
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process, so i wouldn't put too much into that i think price rationalization is part of the process. >> karen, where are you on these ipos >> there's sort of been what i call gap growth at any price and now we've reached the any place for some of them it's just too high so i was actually wondering, are you seeing less appetite for that giant growth but don't make money yet? >> no. i think people wanting good stories. they will invest in that there's a big appetite for that. in the early stages, you will see that that's what happens, in the private market, you're valued more on the sales, on the traction, on is the concept being received well. the funding rounds are based on how well the revenues are going. so you'll see that bump in the early rounds when you come to the public side all the rationalization takes place, so you see some pullback in the public market but the
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stories are intact you have to wait a year and a half to two to get the story right, let the models take hold. there's no point rushing in. they're not quarter-to-quarter stories. >> mark, do you think that's the pr problem with the ride sharers? what's the biggest skepticism from wall street facing the uber and the lyfts? why can't they get out of the gate >> it's valuation that was robust, a path to profitability that will take years, not quarters i think there's a whole question mark whether that business, the taxi business, does it scale into something much larger and becoming more of a transportation company versus a ride-sharing company that's why the stock hasn't acted very well. if you believe it's a taxi company, you don't want to own it if you think it will change the way we do ride share or autonomous, then you probably want to own it that's why stocks trade every single day. >> i think uber is being unnecessarily overpunished
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they're growing very well. every metric is growing on the right side uber is pulling it back a little bit. uber needs to settle down, too many moving parts, but it will come together in the end they already said it will take two years for profitability. i think we are rushing every quarter getting the headline news but i think they are on the right track. you will see that they will execute and we put money on the line for them. >> you're not in wework, are you? >> no, we are not. we passed on that. it's really a real estate company, even though we looked at it. the risk/reward was not right. >> does it hurt the prospects of airbnb which you do own? >> no, airbnb is profitable already, it's expanding beyond its core business. by the time it comes out, it's going to be a very well balanced company, very diversified company and operating very well. >> mark, so many haters. >> it's so fascinating to me i talk to a lot of portfolio
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managers, as i have over the last 25 years, and the disparity in terms of expectations for wework is probably the largest gulf that i've ever seen you have growth portfolio managers who believe in that story and value portfolio managers who think the company will not survive so it is going to hurt wework has it has potentially given the recent talks of evaluation but i think it's very, very company specific and i think that's the case going into the fall. >> final word? >> i think wework is a good story at the right price it's in a good market, it's a grow market. they're well positioned in that market maybe in the $20 to $30 billion you can justify it it's a global company now. at the right price it makes sense because the flexible lease market is 1% of the total office space so there's tremendous penetration to be had. this company is well positioned for that let's see how it plays out profitability of course is a big issue, but they are in the right space.
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flexibility is a big issue and mobile workforce is a big issue and wework plays right into that space. >> we'll receileave it there, ts we've got 20 minutes left of trading here going strong we're looking at nearly 2% gains for the entire week. second week in a row of gains after four down weeks for the market we're up about 0.2 of a percent on the s&p 500 the dow is up about a third of a percent. as far as what is working best right now, most sectors, but materials and consumer staples leading. state attorneys general launching new investigations in big tech we'll share the details next. plus jim cramer will lay out his top picks. as we head to break, here are the leaders in the s&p 500 this week. we're paback in a couple of minutes.
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15 minutes left of trade let's check in on individual market movers. grubhub moving after mcdonald's has used it as a deliverer in
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the tri-state area that stock up 4% it's now trading only up about half a percent also check out shares of lululemon, big winner today after posting an earnings and revenue beat after the bell. same-store sales jumping 15% results were boosted by strength in online sales and in men's i told you to watch out for both of them. they were major growth drivers the stock, which had already been up more than 50% this year going in is now getting another almost 8% pop. best in retail really when you look at some of the numbers. >> you told me and i listened. you framed that as if i ignored it. >> no, no, i was just reminding you and everybody. we do these previews for a reason >> are you in lulu >> i'm not i feel terrible about it and i have a lot of lulu attire. remind me. >> strong performer there for sure. state attorney generals launching an antitrust
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investigation into facebook and google -- into facebook and google might not be far behind. >> reporter: the facebook investigation is being led by new york's attorney general. it was announced today and it's a bipartisan effort involving the district of columbia and seven other states, including nebraska, colorado and ohio. i'm told additional states could sign on later. they pointed to three key questions. has facebook endangered consumer data has it reduced the quality of consumer choices and has it increased the price of advertising facebook is responding by arguing that, quote, people have multiple choices for every one of the services that we provide. we understand that if we stoppin va -- stop innovating, people can easily leave our platform. next week google will be in the hot seat 30 state ags are planning to launch an unrelated antitrust
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investigation into the company in front of the supreme court, they certainly know how to send a signal back over to you. >> and i understand the significance that it's bipartisan here, ylan, and it's a pile-on as well as the federal investigations what powers, though, do state attorneys general have when it comes to these investigations and any authority to make rulings on the basis of what they find? >> well, very similar to what the federal authorities have, sara they can certainly impose penalties. they can certainly impose some sort of injunctive relief. some experts say perhaps the new york case against facebook is the one that ends up breaking up the company. so you do find the state attorney generals individually do have quite broad powers and authorities. we'll see how far they take them >> ylan, thank you meantime the department of justice is now launching a new investigation into four automakers phil lebeau with the details phil. >> sara, this is a fuel fight
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between the trump administration, the state of california and caught in the middle are auto majors, four of whom have already agreed to new standards with the state of california the four automakers, ford, honda, bmw, volkswagen, they reached agreement in late july to agree to new fuel economy standards with the state of california this is what it's all about. remember going all the way back to 2012 when the obama administration locked in new fuel economy standards there was a mid-target review, which is what we're in the midst of right now the trump administration is saying, you know what, california shouldn't be able to set its own standards, it should be us setting those standards. by the way, the trump administration wants lower fuel economy standards, not 54.5 miles per gallon i just received a comment from the california air resources board. they're on one end of this battle with the trump administration the chairman says the u.s. department of justice brings its weight to bear against auto companies in an attempt to frighten them out of voluntarily making cleaner, more fuel
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efficient cars and trucks than the epa wants. consumers might ask who is andy wheeler protecting andy wheeler being head of the environmental protection agency. by the way, you take a look at these stocks, the four automakers involved, they dipped lower when the doj probe was announced today, but they came back so there's been minimal impact since the probe was announced. >> phil, thank you very much for that volkswagen doing a little better year to date than i realized, in positive territory no less phil lebeau for us. up next, we've got your last chance trade. former dallas fed president, richard fisher is here to weigh in on the jobs report and what etent e xtewedne f f meings ♪
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welcome back to "the closing bell." we've got just over seven minutes left to trade. the nasdaq just below the flat line, the s&p 500 just above materials and energy top the list tech at the bottom so no clear direction from the sector performers today compared to the rest of the week. as we said, seven minutes left karen, what are you going for for your last chance trade >> it's two parts. united rentals, which is a name that you probably know it's really out of favor right now. and the valuation to me is extremely compelling there's a lot to love here the scale is great they're almost entirely u.s. centric, so foreign exchange isn't a problem. the u.s. economy is where you want to be i think that their balance sheet is near the most conservative side it's really down to as conservative as they get
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very diverse user base i believe the story of -- >> what's been the problem >> the problem is it is industrial, it is sort of a poster child for industrial. if we have a trade war, you know, it's not going to trade well i think it's way overdone, that's the problem it's an opportunity. the other part of the trade is s&p puts if we get a tweet, those s&p puts are going -- you're going to see a big spike there that i would trade around. united rentals i don't trade around i like the management team, i like the business, they have done a good job. >> and the puts as a form of protection you think are very cheap. >> very cheap. given the ponssibility of very weird stuff in rates, interest rates, and trade stuff, all kinds of stuff hong kong getting back heated up again and brexit, your favorite. >> well, not my favorite but i have to talk about it a lot. >> under six minutes to go in today's session. time now for the closing beyonddown let's trade the close with sean cruz, trader strategy manager at
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td ameritrade. what are you watching into this close? it looks like we're capping off a pretty good week here with a pretty strong finish. >> i think it was interesting to see just how everything played out. mid-week we got a resolution to a lot of the second, third, fourth things on everyone's list that they were watching on a geopolitical front that allowused to move up to the 2940 level the new level around 2955, 2960 is we got a little good news on the trade front. that's what allowed us to break out and hit up towards the higher levels. i don't know that we'll be able to move above 3000 or maintain a move above 3000 unless we get something positive on the trade front. >> what about the fed, that's not significant in your eyes >> i think the market one is fairly well prepped and been fairly well signalled that the fed is going to be accommodative. so i don't know that any cut from the fed is actually going
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to really be what pushes the market higher. if anything, there could be a little bit of a risk to the downside if the fed cuts and then in a conference we don't like what we hear from the fed speakers. >> we are losing some steam here actually, near session lows for the nasdaq, which just turned negative the dow is losing a bit of momentum here, up 53 points. shawn, is this heading into a weekend kind of close activity. >> i noticed starting 30 minutes ago the s&p really sold off, kind of fell off a cliff what i would tie that to is it looked like that news coming out about facebook and some of though investigations, not just on facebook but i think the overreaching implications for tech in general, if how these companies are allowed to yoz data really disrupts their ability to operate caused tech to fall off a cliff. they're pretty much going to follow the same path lower so tech is what is dragging down the s&p. we're still in positive
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territory for the day. >> shawn, thanks for joining us. let's send it over to mike santoli for the third installment of the dashboard. >> a one-year look at the s&p 500 to get the field position because it shows the index pretty much in that red zone, not too far from record highs. excuse me, this is the other chart, which is going to show the volatility of the market or actually lack of volatility. even though it's felt very, very choppy, this is the annual number of 1% daily moves in the s&p 500. look at this this is this year right here we're really not even up to the average number of 1% daily moves. down here 2017, one of the calmest years on record. so arguably we still have catch-up to do potentially and through october is when you typically have the opportunity to have upticks in volatility. let's see if we have that one-year chart of the s&p 500. basically 2980 or thereabouts where we hung around virtually all day today was also where we
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closed july 31st so it seems if we reset expectations and also had gotten corporate and government bond yields a little lower, this is kind of what we're working with here only in a few weeks in july were we ever above this level we can do 2% one way or the other in this index any time but it shows not a lot of long-term damage has been done, even if the upside will be a little tough to get let's get out to rick santelli to wrap up a jobs friday. >> thanks, mike. indeed the jobs number this morning was very important it was also the fulcrum where interest rates pivoted lower if you look at one-week charts, look at our 10-year. midweek we were sailing pretty good, bouncing nicely off the lows today was a down day as a matter of fact, if you look at bunds, they were down today although up on the week. that is significant. it gives us a little cushion finally the dollar index, it closed unchanged but as you see
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in the middle of the week it extended its highs to around . 99.5, fresh 28-month highs corporates this week were record three-day record of $74 billion. you want to keep an eye on that. much more competitive rates than the last big issuance in the fourth quarter of last year. now to the red nasdaq, let's go to frank holland. >> that's right. the nasdaq finishing in the red after two positive days. chip stocks improve 4.5% on the week due to the trade optimism shares of semantech rallying on reports offic quit interest. lululemon up 7% after better than expected earnings pretty strong day for consumer staples and retail stocks as well pepsi trading near all-time highs. this is closing lower because of faang stocks, a lot of concern about big tech being under fire. now over to courtney reagan at the new york stock exchange. >> we have 30 seconds until the closing bell sounds and we are
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holding on to gains for the dow and s&p 500. you can see we actually had a pretty decent downward trend in the last couple of seconds or minutes of trade intel and home depot putting up the biggest percentage gains for the dow. as you can hear, the closing bell is sounding right now and welcome, everyone, to "the closing bell. i'm sara eisen. >> and i'm wilfred frost mike santoli is here let's check in how we finished for the day. as we discussed, a little slippage in selling in that final half an hour meant that the nasdaq closed lower by 0.2 of 1%. dow up by a quarter of 1%. for the week as a whole, sara, decent performance up close to 2% on both the s&p and the nasdaq today there wasn't a very clear sector performance but there was for the week all sectors were higher and
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there was a risk on constructively to it consumer discretionary in general yields ticked up. >> strong week for u.s. stocks, even stronger for chinese stocks that's the chart that i wanted to show right now. if you look at the shanghai comp, up 4% for the week, 5% for the shenzhen index trade talks are back on between the u.s. and china in october. the chinese currency has stopped weakening. in fact it's strengthening a little bit the world likes that the markets like that. hong kong caved in, gave the protesters what they wanted. a lot of these factors helped propel stocks worldwide but china was the epicenter. quite a turn-around in sentiment from what we've seen. >> and cut their rrr reserve ratio requirement. but china got to the punch bowl first. >> yes
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joining us to talk about the market today, karen finerman is still here also joining us is michael yoshikami and mike santoli on today's rally and the second week in a row of pretty decent gains for stocks. >> i would look at today as mostly holding the week's gains. it was pretty much a back-and-forth day a response to a jobs number that more or less confirmed that the economy remained steady, but it did not really deliver a persuasive argument one way or the other, if you already thought the economy was on the wane, this didn't fully dissuade you. but also pretty consistent with a 2% economy therefore, i think we'll be a little data dependent. the thing about this number that got us out of this cycle of saying are we okay or are we not okay and looking at the bond market as i wrap up the week, we had very negative sentiment, reset expectations a lot lower through august for the economy and for
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markets. people got too defensive with low bond yields and a little glimmer of hope on the trade front, it was pent up and buying had to be done. >> do we get a glimpse that without the bond market showing -- >> the bond market didn't do much of anything and yields were soft again i do think that the equity market is a little twitchy in terms of making sure things were lining up in the way of fixed income and just general economic sentiment before there's much of a move. >> michael, what do you make of the week that was and how are you positioned, given the risk on tone that we saw the past two weeks, the fact that bond yields have at least found a temporary bottom we don't know if it's a real bottom. >> yeah. to some degree we're embracing risk on, obviously as you mentioned, sara, the news out of china was pretty significant for the global economy maybe that's why the actual currency did start to strengthen just a bit
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so we're positioned mostly still in u.s even though you've seen a pretty strong rally in chinese stocks, we still think china has structural problems. there are a number of names we think that are interesting at this level, particularly given how volatile the markets are and how low yields are so i don't think it's a time to run for the hills. i think mike is absolutely right. the numbers that came out really are supportive of some fed easing but not blowout numbers where we'll see much more aggressive action beyond september. >> even if the chinese economy seems supported in the very short term and maybe even plateaued a little bit, what about the german economy and again bad data this morning. does that concern you? >> it does concern me when you have negative yields i think europe is being held hostage from what's happening with brexit right now. investors need to be really aware of where the revenue from the companies they own is coming from don't just look at where a
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company is domiciled nestles is a swiss company you want to look at companies that are levered to european -- you want to look at companies that are levered to european earnings german earnings in particular. be aware of those in your portfolio strategy. >> i think we should hit, karen, on the market action today, the weakness in faang. facebook, netflix, alphabet, they were all lower whether it's this news of the new ag's investigation on facebook and google. >> right. >> it just keeps coming. >> it keeps coming, although they kind of cycle and then go higher i think that the ag news is -- it's out there, it's negative, it weighs on the stocks for me it's going to be a little while until we have what i like to base investing on is how are the earnings so we're not going to see that we're not going to see it again until next month so i still like them a lot i think they represent
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tremendous value, facebook and google netflix i think is very specific as we were talking last hour about the disney story and ongoing threats and the valuation being too high for those threats. >> national economic council director larry kudlow spoke out earlier on "squawk on the street." here's what he had to say about the august jobs number. >> 130,000 is a very solid number but august is always a quirky month. usually the print comes in too low for seasonal reasons and then it's revised up household survey up 590,000. it's been unbelievable blowout number civilian labor force picks up by 571,000. all i want to say is america is working. >> mike, your take on not just the number, his take on it, and it fits the narrative that's going to get the fed rate cut that they want but doesn't
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derail the economy. >> the numbers themselves fit the narrative. larry is correct that august is often a soft print on the initial. the household survey is massive margin of error. there's a reason we don't look at the job creation based on the household survey and the bond market, by the way, did not say this was a blowout number i think it's pretty steady as she goes on the labor front. among the things to worry about, the market for employment is not the first or second or third thing. >> it's a lagging indicator, right? >> it always is. >> i think, michael, september will be an interesting month because it will show, a, whether this august weakness point is true, and also surprise tariffs and more tariffs came toward the end of the month the hiring in early august was a kind of different climate than later in august. >> yeah. i think tariffs are going to have some impact, sara, but i think it's going to take some time companies at this point are essentially eating these
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tariffs, so i don't think it's really a headwind for consumers beyond the sentiment number. but you're right, september will be an interesting number but i agree with what mike said. it's a steady as you go economy. i think it sets us up for a quarter point in september and not much more beyond that unless something dramatic happens, and particularly if there's some sort of settlement, which we expect there to be some initial settlement in october during those trade discussions. >> michael, i read from your comments that you're into dividend stocks overall. give us a couple of names. >> i think there's a couple of names that are interesting to look at. first of all, you want to look at blackstone. it's an interesting name it's essentially private equity. here's the thing that investors need to be aware of. this company pays out 85% of the money it makes basically in dividends. are you ready for this right now it's paying out a dividend over 4% what's the 10-year treasury paying right now and will
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blackstone be higher in ten years than it is today i think probably so. secondly, you want to look at a company perhaps like walmart remember, it all depends on your own situation, but walmart is a company during the financial crisis when the stock market was down 35%, walmart was up 15% or 20%. why? because when times are tough, people buy cheaper products. and walmart sells cheaper products those are a couple names that i think investors ought to consider looking at in their portfolio strategy. >> walmart has done well in a strong consumer environment as well karen, is that one of yours? >> i like walmart. i actually own target because it's cheaper but they have both done a tremendous job. the momentum doesn't seem to be stopping, it seems to be accelerating. >> we will leave it, guys, thanks very much. still to come here on "the closing bell," former dallas fed president richard phifisher wil weigh in on the ecomy onand say whether jay powell gave rate cut
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clues in today's speech. we're back in 90 seconds so servicenow put your workflows in the cloud, huh?
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mm-hm. your employees must love you. thank you. ah, you could say that. so how are things with you guys? great. thank you. thank you, sir. lunch next week? terrific. say hi to the team. will do. call my office, i will. -sounds good. alrighty. servicenow. works for you. welcome back wall street posting its second straight week of gains courtney reagan is wrapping up the week's big winners from the stock exchange let's start with you. >> thank you very much, wilf stocks higher for the second straight week. the dow gaining more than 1.5%,
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the s&p 500 up 2% for the week much of the gains on hopes for some kind of agreement to at least quiet the trade war when the u.s. and china meet next month. retailers have made a lot of headlines as trade war casualties but with possible hope for a deal. they are up more than 3% tapestry is leading the s&p 500 for the week they announced a new ceo wednesday, a long-time board member. calvin klein/tommy hilfiger pvh the second best performer. tyson foods down 7.5% after warning that it will miss forecasts. sara, back over to you. let's see what drove the nasdaq this week frank holland with the highlights. >> really a mixed bag. we have to start off with one of your favorite stocks to cover, lululemon. those stocks up exactly 10% after better-than-expected earnings also chips improved.
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western digital the best performer. shares up more than 8.5% pretty good week for consumer and retail stocks. look at dollar tree. those shares nearly 8% higher. also strong week for transports. american airlines really having a boost after deutsche bank said it's in great position to take advantage of the return of the 737 max when that returns to service. all around, kind of a mixed bag for the nasdaq back over to you. fed chair powell making his latest public comments earlier today. steve has the highlights for us. hey, steve. >> hey, wilf, good afternoon jerome powell speaking in switzerland asked directly by an audience member what he was going to do with interest rates. let's listen to his response. >> we're watching all of these developments you know, the geopolitical risks. we mentioned brexit. the events in hong kong, watching those carefully watching yen coming data and really looking at financial
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conditions prodly. we're going to be assessing those as we go into our next meeting and future meetings. what we've said is we're going to act as appropriate to sustain the expansion. >> did you hear it well, markets heard and many believe the chairman is leaning in favor of a september rate cut from that response and others as well powell's comments came after the jobs report which he said showed a healthy job market and underscored the outlook for a healthy economy. he played down recession fears saying it was not a likely outcome for the u.s. he said interest rate policy, we'll address them, sara. >> steve liesman, steve, thank you. for more let's bring in richard fisher, former president of the dallas federal reserve. do you agree with that market interpretation, richard? when powell says he's going to do what's necessary to sustain the expansion, that means more rate cuts are on the way >> sara, i used to always feel that when the fed chairman made an announcement or we made a decision it was like the
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sacrificial ceremony the markets slash you open, try to read the entrails, try to infer what they want to hear or what they're worried about hearing. i think powell handled it very well he didn't say a thing, which he shouldn't. i don't think there's any indication whatsoever as to which way they're likely to go of course we all assume they're likely to do a quarter i think the idea of a 50 base point cut has been thrown out the window, but it's not clear remember, they have a limited number of pennies in their purse. they only have so many cuts to offer before going back to the 0 balance which nobody wants to do and they don't want to think about going negative nothing was said today i wouldn't expect anything given my experience. i think he handled it very well. very importantly, sara, he punted away and put to bed the insecre
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indiscreet comments that bill dudley had made. so i thought it was a good speech it was good because it didn't say a damn thing how's that >> richard, i want to come to the dudley comments in a moment. but sticking on the content of the speech for a second, clearly he was quite relaxed or struck an unconcerned tone about the u.s. economy also kdid so for the international economy saying he didn't see a global recession coming and yet that has been one of the reasons used by him and market followers as a justification for a potential rate cut to come what did you make of that lack of concern about the global economy? >> i don't think they have used the word global recession. they talked about a slowdown we know that germany is struggling we know that the chinese economy has slowed down. we know that europe, argentina and so on. as i've said many times, the u.s. is the best-looking horse in the glue factory right now and we keep moving forward remember, he has to manage too
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the u.s. economy that's the charge you're given by the authorities that gave the fed their license, the congress of the united states yet at the same time you can't ignore what's going on around you. as he summarized, the u.s. economy dpricriven by consumptin and strong employment numbers is still doing well that's what his job is you can't ignore the international economy. you take it into account as to how it acts the real economy of the united states, not just the markets. you manage to the real economy and i thought it was a pretty optimistic view. i may not share that optimism fully, but nonetheless it was pretty positive. i think now the question is will they move september 16th or 17th or not i think the jury is out, although i do expect a quarter point move. >> the market is at nearly 100% with a quarter point move in september. the question is october. >> sara, sara, sara, remember,
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sara, the markets have never been accurate forecasting what the fed is going to do nor has the dot plot ever been accurate in forecasting what the fed is likely to do. >> the dot plot for sure but richard, what would happen to the markets if the fed didn't deliver a cut in september >> i'm sorry, you don't manage to the markets, you manage to the real economy that's the way it works. >> do you think all the people on the fed agree with you on that it feels like the fed -- >> there's a division of opinion. eric rosengren, one of the great thought leaders, obviously is resisting. kansas city is resisting st. louis is moving in the opposite direction this is a very healthy dialogue and i thought powell handled that question very well as well. there's a division of -- it's not confusion, it's an honest debate you put your arguments on the table. everybody listens to you and then you try to figure out what the proper course of action is
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according to the total unanimous part of the group. that's the way decisions are made so i think there's a division of opinion here i do expect a quarter rate point cut, but i don't think it's a lock >> richard, i wanted to ask you about the ecb. next week of course a meeting coming up, mario draghi's final meeting. why the expectation that he's going to announce a further cut and perhaps reinitiation of bond buying one simple question on that. it's his final meeting and a new president is due to come in. in your mind do you expect that that would see a big change in direction in policy on a final meeting? is that something that people like yourself would normally do or would you wait and let the new president have free rein. >> i know everybody's is expecting this i'm kind of expecting it i'm not sure it's the right thing to do. mario has done a good job given his portfolio.
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i am in total disagreement with the idea of negative interest rates. it trashes the banking system. it hasn't lifted the economy it creates a misallocation of resources. but he's already gone down that path very articulate individual, very market savvy it should be a benediction at the ending, not a confirmation of locking in the next leader, miss lagarde, assuming she takes the post which is almost 100% certain she will i don't know, it should just be a great benediction and a wonderful celebration and i hope he treats it as such he's a good guy, by the way, and very market savvy. >> richard fisher, thank you for joining us. >> sara, wilf, thanks very much. >> have a good weekend. still ahead, speaking of the fed, president trump tweeted he agrees with jim cramer calling for lower rates. jim will join us and talk through some disliked stocks that you should be looking for in this market. plus we'll break down the chance to see current capital expenditure levels a rreaising a
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let's go back to mike santoli for the final dashboard of the day yes, even i figured it out today. >> hold on, i got grief for saying that earlier. how are you allowed to claim credit >> for me it was less clear. but the red zone i know. >> well, balanced attack is something that is -- refers to football offenses but also in a bigger picture it's what companies have been pursuing so it's become very conventional wisdom that there is a capital spending deficit that companies somehow are giving short solicit to capital expenditures. that's really not the case the green line here is capital expenditures it has been very much flat in a range for a while with this one bulge after the tax cut in 2018, which has since come down. but in dollar terms, it has been relatively steady. where it has been a little bit light is relative to overall profits, because profits are much higher, especially after-tax profits are much higher, cash flows are much
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higher and companies are electing to essentially use more money for dividends and buybacks as opposed to adding to cap ex, so i view this as -- this is the kind of economy that we have right now. companies don't necessarily see the need to build more buildings, buy more equipment or spend money on the things that get measured as capital spending software licenses, not capital spending, but it's how you get productivity hiring people is another i think it's a little bit of a misapprehension to say cap ex has been in a drought. >> the increase in dividends has outstripped the dividends in buybacks maybe in percentage terms they're about equal but we've talked about money pouring into buybacks, the dividend increase is pretty stark. >> and i think there is a quarterly base or something like that yeah, no, essentially they're saying giving it back to investors one way or another is preferable to investing for its
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own sake. >> can you draw a play >> give me a little bit of notice. >> mike, thank you very much the s&p 500 creeping back towards new highs. up next, "mad nemoy's" jim cramer will give us some opportunities in this market we're back in two. ♪ keeping the night interesting, is all about setting the right tone. ♪ lower carbs. lower calories. higher expectations. ♪ the light beer you've been waiting for has arrived. corona premier.
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song. >> welcome back. time for a cnbc news update with sue herera. >> hello, everyone here's what's happening at this hour the justice department has launched an investigation into four automakers that defied the trump administration in signing a deal with california on vehicle emissions standards. in july ford, haunonda, volkswan and bmw reached a deal to abide by standards that are stutoughe than those preferred by the trump administration. texas lieutenant governor dan patrick says he is willing to take an arrow and defy the national rifle association by pressing texas to close one loophole in gun purchaser background checks. patrick said it is just common sense to tighten those checks. the michigan state board meeting today after the university was fined for mishandling sexual abuse complaints against dr. larry nassar in a statement during the meeting, new msu president samuel stanley said that he intends to change things for the better >> yesterday two u.s. department
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of education investigations were concluded, and michigan state university received a $4.5 million fine i am grateful for the thoroughness of these investigations, and i intend to use them as a blueprint for action >> just a quick note, last hour we said oakland wide receiver antonio brown would be playing against the cleveland browns monday night well, the raiders are actually playing the denver broncos so now you're up to date that's the news update this hour guys, back downtown to you. >> a fix that neither of us would have picked up but glad we cleared that up. >> i know. >> good attention to detail. i like it. >> have a great weekend. big day for cnbc's own jim cramer president trump tweeting i agree with jim cramer, the fed should lower rates. they were way too early to raise and way too late to cut and big dose of quantitative tightening didn't exactly help either where did i find this guy jerome ole well, you can't win them
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all. >> if you're an investor looking at the market, where are there still opportunities to buy it'sbeen the subject for jim o "mad money" and he joins us from the studio to discuss. >> how are you i miss you both. what's going on? >> very well. >> always love having you on. >> all the better for seeing you, jim let's start with the tweet i mean how quickly could jerome powell turn things around here is one cut enough for you to be back onboard an think he's doing the right thing? >> sara talked last week, earlier this week or last week about how you can't let the stock market bully you if you're the fed chief. i think you can let the bond market bully you because the bond market is telling you exactly what to do i think jay powell is having a problem listening. just like he felt like we needed three or four hikes in october when most of the data turned soft, he is still talking about the idea that maybe we do a quarter point. he has to be with -- he's so high, the rates are so high
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versus everybody else. i know a lot of hedge funds will say, jim, didn't you see how unemployment is so low we are in a different regime we are in a regime where our country can have tremendous growth but the fed is a huge factor i think the fed made a lot of mistakes with the aggressive hikes. it's tough for jay powell, who's a very good man, to say, hey listen, i screwed up, but that's what he did. >> isn't he sort of -- hasn't he found religion, jim? he started cutting interest rates, he's totally changed his posture. sounded a lot more dovish. the market didn't have a problem with what he said today. >> well, i don't know if he's found religion i think he's looking for religion i don't want to say that he's a convert because i think if he's a convert, he'd be saying, you know what, what we want to do here is get this economy so it is humming you know what he needs to do look, the president, what he said is where did i find this guy. the answer is you found him and he's the opposite of janet yellen i think janet yellen would have
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said, listen, let's get this thing humming. let's get everybody to work. let's get all of the people who have been disenfranchised to get jobs let's get a little wage growth instead of just having it so the ceos have wage growth and the president i think pretty much agrees with that too i mean it's a little shocking. >> jim, back to the tweet itself do you agree with the president's tone in the tweet that he made a mistake and that jerome powell is the wrong man for the job? >> i don't like -- there was a time in my life where i was ad hominem and i would say things like that and i've tried to get away from that the reason i have is because i don't want to say things about people that are untoward who i know are working very hard for the country who just have different views from me. and i have known jay powell as a person obviously i think that you don't like to make fun of people i'm sorry to sound like i'm a fifth grade teacher but maybe that's where i'm back to.
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>> diplomatic. hey, jim, we wanted to ask you about stocks, especially ones that are disliked right now in this market. it's been a big theme of yours. >> sure. >> what can you tell us? >> take a look at a stock like cvs. every time that senator warren or senator sanders says something bad or goes for single payer, they slam the stock because they went for aetna. it's selling at eight times earnings that's not right to me it's not an eviscerated retailer like some of the department stores it's a company that's very vibrant with a terrific ceo. he's doing a great job the stock is just plain old too cheap. i like campbell's. they are finally getting delevered. they have a lot of good brands i just think it's a very inexpensive stock. look, i will tell you that i think that amazon is inexpensive versus walmart, target, costco and home depot
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i know that people don't want to hear that amazon is a bargain, but i think amazon may be a bargain. >> jim, one thing on your fantasy portfolio is roku. i don't think that's underperformed much. >> no. the great thing about roku is we just have more and more cord cutting and a lot of people were betting against the stock and that makes no sense to me. the reason why it makes absolutely no sense to me is because it has changed into a very different company from when it went public people continue to underestimate the power of this company and what it's doing. i just think that it's a revolutionary disrupter that is not valued high enough in this market, even though i know on a given day it has gotten too high i feel strongly that you look at roku is it cheap? no, it's not cheap is t-mobile cheap? absolutely service has come down a great deal look at salesforce i know these stocks are in a funk because people feel like the economy is accelerating, but
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these companies are doing so well and salesforce has been unrelentingly going down since the last quarter. >> why they had a good quarter. >> look at the group look at the cohort look at crowdstrike. these are all the same stock because they're all in the same etfs i think that the etfs are just plain stupid they bring the stocks down without any sense whatsoever i think -- could twilio break down to 110? it's a platform for the new economy. so i like these stocks when they're out of favor when they're running, no i will say listen, wait for a pullback crowdstrike is tougher becau because -- they're going after z scaler so there are some companies in the crosshairs of other companies in cyber security but advanced micro at 30 i think nvidia
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i know it's up 20 straight but nvidia is a great company. sometimes you have to pay up to get great companies but not when they're running. the ones that i mentioned are not running so i think you've got to stand there, buy some and take some pain people don't want to take pain, they want to have whatever is working today. i used to have that too. i've really sobered up and got mature. >> jim, i want to ask you very quickly -- >> i had mrs. nixon. she was super. i hit her in the head once when i was playing dodgeball. she never forgave me. >> i thought that was an imaginary game. >> it's like cricket >> great game. i want to ask you about the apple/goldman sachs card you've been using it for a while. what do you think about it >> well, it's heavy. look, goldman is at eight times earnings i mean that is unbelievable. what the heck is that? and that is because people don't understand the power of the card by the way, everyone has to read
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the piece about how apple is cheap today. look what they're doing. they're getting rid of partners. do you know how hard that is that's really hard to do if you're trying to beat the numbers, you've got to do that goldman has the lowest price-to-earnings multiple of any financial institutions that i follow that's an embarrassment. they have got to change and they're doing it no more on the dj thing. you do the dj thing when you're multiple 17 and trade at 300 sorry. he knows i feel that way you don't joke around when your stock is at nine times earnings. you get serious. >> jim, he needs to come on and answer the question perhaps. jim, as always, great to see you. >> guys, i am now like jefferson. it's kind of happened. and my old buddy, my old friend the dalai lama, whose last book
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was dynamite. >> there we go the peace maker. >> he's mindful and he's buying lululemon pants. >> lululemon is not done athleisure is higher than ever, sara >> anyway, jim, great to see you. >> i love coming on your show. will you have me again or am i done pau done >> you are always welcome here. >> that was like lightning round. >> sweet man i can't believe it myself. >> all right "mad money" is on at 6:00 p.m. eastern. up next, find out why weworks move to lower its valuation is the latest problem for softbank's vision fund we'll tackle that angle next every day, visionaries are creating the future. so, every day, we put our latest technology and unrivaled network to work. the united states postal service makes more e-commerce deliveries to homes
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wework weighing a major reduction in its valuation and that's been pressure on its longest shareholder, softbank.
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dreed ra bo deirdre bosa with the story. >> where wework could be valued at could be a stain on his track record and impact his ability to raise money for a second vision fund vision fund one is already u underwater to the tune of hundreds of millions of dollars. wework is if out in the low $20 billion range that, would add to pressure and could overshadow some big returns from nvidia, flipchart. it had two others that had good. they have seen seven exits out of more than 80 investments. some of them are yet to be tested, some with unproven business models in ride sharing on food delivery this all begs the question why vision fund has valued these companies at such high multiples through these very high capital injections massa is known to be a ruthless deal maker
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he touted gains of 45% for vision fund lps, 29% at a blended return which includes a fixed payout but those were mostly unrealized paper gains. investors considering putting money into the second fund may be beginning to see reason for pause. guys >> that touted return even of 49/29%, was that per annum or over what time frame >> that was over the first year and a half of the vision fund's life remember, these are mostly paper gains, so this would have included uber's raised valuation, wework's valuation, door dash, slack, 81 investments across the company only seven of them have actually exited. >> okay, thanks very much for that. still to come here on "closing bell" an american airlines mechanic accused of kef.taging a flight before we'll have that story next i can. the two words whispered at the start of every race. every new job.
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with sofi, get your credit cards right- by consolidating your credit card debt into one monthly payment. and get your interest rate right. so you can save big. get a no-fee personal loan up to $100k. welcome back an american airlines mechanic being charged with sabotaging a plane before takeoff phil lebeau has more on this story for us phil. >> wilf, this is an incident that happened in july but the arrest affidavit came out last night and that's why people are talking about it today here's what happened it was a flight, an american airlines flight from miami to the bahamas on july 17th the mechanic who has been arrested altered the air data module this is something that controls the pitch, air speed, other critical data from the plane it measures that the plane aborted its takeoff.
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in fact it never got to the point where it was speeding up and going down the runway. once the error light came on, they went back to the hangar the fbi says his intention was not to cause harm to the aircraft or its passengers, but to cause a delay or have the flight cancelled in anticipation of obtaining overtime work why is that important? as you take a look at shares of american, keep in mind that there has been a bitter dispute going on between the mechanics union and american airlines. these contract talks have been going on several years, guys, and the delays this summer, that weighed on american's results. by the way, both the mechanics union and american say this is a one-off incident we don't condone it. at the same time, guys, it's a scary example where one incident involving one employee is getting a lot of attention today. >> all right, phil, thank you. phil lebeau. still ahead, new york fashion week officially under way. zac posen joins us next.
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his thoughts on the state of the luxury consumer and how the trade war is impacting brands. "closing bell" will be right back the game doesn't end after a spectacular touchdown grab
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up next, find out how the trade war is impacting the fashion industry when we shimon peres to designer zac posen. ♪ we trust usaa more than any other company out there. they give us excellent customer service, every time. our 18 year old was in an accident. usaa took care of her car rental, and getting her car towed. all i had to take care of was making sure that my daughter was ok. if i met another veteran, and they were with another insurance company, i would tell them, you need to join usaa because they have better rates, and better service. we're the gomez family... we're the rivera family... we're the kirby family, and we are usaa members for life. get your auto insurance quote today. at verizon, we're building the most powerful 5g experience for america. that's why the nfl chose verizon. because they need the massive capacity
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>> flork fashion week officially kicking off. famed fashion designer zac posen joining us to talk more about the big week ahead, the state of the luxury consumer, the trends and more, in a fabulous suit welcome back. >> thank you thanks for having me back. >> nice to see you the consumer has been front and center for us, trying to figure out whether they can carry the weight of the economic recovery and strong economy on their backs. how are you seeing the luxury consumer right now >> well, i think the luxury consumer is a very special consumer it is a discerning consumer. you know, it is changing we are looking to the next generation so i mean that's really where our focus is right now. >> millennials >> millennials, gen z and how to bring them into your brand. >> how do you do that? >> while maintaining your core customer. >> what does luxury mean for them what sort of price point >> luxury is really what you choose as a price point, right luxury, to different people it
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is different things. luxury is something that the rare that's how i design luxury something that is of quality and of craft and of authenticity i think authenticity is essential for the luxury consumer today. >> yeah, i mean i often find that people on wall street when they invest in some of the retail stocks, which are really a tale of winners and losers, need to know what is working for the millennial consumer. that's why we go to mike and ask what his 15-year-old daughters are wearing on their feet? >> that's gen y. >> that's the discerning consumer that i think in past generations had a great deal of loyalty. today there are so many choices that they have the ability to look and really search, you know, daily what is different for them, and what is important as a brand is to create content that keeps them interested, that keeps them engaged you know, really have soul behind the product and the message you are putting out there. >> how long in advance do you
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have to plan to bring out the products that you think are going to be winners in the season ahead can you adapt weeks ahead of a product launch based on seeing what other things are successful or do you have to make it six months early >> not in luxury luxury takes time to build it starts about six months in advance, in its shortest lead time fabric need to be woven, patterns need to be made, pieces need to be crafted i don't think there's enough emphasis always or understanding of what goes into making something of quality and of luxury. >> you sell at department stars. >> yes. >> but you also -- i mean people are changing the way they bias we buy as well. >> yes. >> do you see hope for department stores? the stocks continue to be losers. >> i am always an optimist i am here with positive news, which is if the retailers create an experience they will be able to keep enticing new customers
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it is about capturing new customers. >> is anyone doing that? >> you know, i travel internationally a lot. >> japan they nail it. >> japan they nail it. i think i am seeing a lot of evolution in domestic retailers, too. more experiences with designers. i travel the country all the time and meet with customers, and that creates something special for the consumers. also how the stores look, bringing in, you know, more food vendors into their store, more reasons to come into the store and experience it in shop. >> given the six-month lead time point you made, the tariffs a problem for you? is it hard for you to adapt coming from china? >> i make my collection here in new york not everything, but the majority of what i make obviously tariffs are challenging for all of us. i think as the -- you know, as the american community of fashion really needs to support each other. >> what's the number one trend
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for fall >> gosh. the number one trend for fall. could be a green suit. you know, i say investment pieces, so i say invest in a beautiful, warm coat. >> ah, meaning spend a lot of money and hold it for a long time. >> nice fabric you can't cheat a beautiful fabric. >> quality and authenticity. >> quality and authenticity come first in everything good. >> zac, thank you for joining us. >> thank you. >> the clear theme of the week as a whole and risk on sentiment? >> i would say tension really. we came into the week not being sure if the market would be able to find its footing, and we probably overanticipated bad things in august for the fact that the market was only down 6% people got very over-excited about the negative. >> the market keeps getting what it wants, which is it doesn't look like we're going to recession. the economic data is okay, and some of it is actually decent but it is not great, which means the feds can cut rates.
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>> yes, the market keeps getting what it thinks it needs and wants. you're right, for now it is the case the question is, will it be enough it seems like a bit of a delicate balance as you suggested. i think right now it is not too bad. >> we are out of time. thank you very much for watching that does it for "closing bell." >> have a good weekend "fast money" begins right now. live from the nasdaq market site overlooking new york city's times square, this is "fast money" i'm million. your traders on the desk are tim seymour, bryn kelly, dan nathan and guy adami. is there trouble brewing in ipo land why this year's most highly anticipated debut may pull the plug on going public beyond meat getting grilled. we'll hear from the man who made the call later, the big battle between netflix and disney what netflix needs to do to come out on top of the streaming wars the s&p 500 now is just over


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