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tv   Closing Bell  CNBC  August 17, 2015 3:00pm-5:01pm EDT

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grow the two at a greater rate. >> got to leave it there. mike george, qvc ceo, thank you. we will what's on fast tonight? >> home builders, technical analysis of the sector tonight at 5:00. >> look forward to that. thank you very much. take care. "closing bell" starts right now. hi, and welcome to "closing bell." i'm kelly everybody vance at the new york stock exchange. i'm bill griffeth, my luck, wint on a diet and lost height. very tall. oil prices dropping again today, trading now below $42 a barrel at wti, intraday, but we have someone who says gasoline prices in many parts of the country will not be falling any time soon and he will break down more on these refinery issues especially in those parts of the midwest having problems. >> working on my posture. hedge fund giant stanley miller.
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>> take a look at zulily, probably heard about this already, shares of the e-commerce site up nearly 50% today on news it's being bought by qvc. we've got another e-commerce ceo here to discuss whether more consolidation in that space may be ahead. and the new housing problem, first-time home buyers waiting longer than ever to take the plunge into home ownership. we'll get you details on that and the implications across the broader economy coming up. >> rents are at all-time highs right now. do you know in the new york metropolitan area now, rent takes up almost 45% of the average renter's income right now, 45%. >> and 30% being the bar i think analysts point to say it's too much. >> incredible. >> let's talk about the markets in our "closing bell" exchange. a volatile day already, john brady from rjr. brian is back and david and kenny from o'neill security is
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with us at post nine at the new york stock exchange. john, what a day. on one hand we've got the empire state manufacturing number that just killed the market in the open and then the home builder sentiment brought it back again. what's the market trying to tell us here? >> well, bill, i think we want to be careful, right. the third monday in august and average vols or vols today are running 66% less than their 15-day moving average. your bigger picture is that the market is unsure of things here. in light of last week's china devaluation, some of the manufacturing export numbers as seen in the empire number were not just depressing, they were very depressing actually, whereas the home builder sentiment a sentiment number, a survey number, was stronger than expected. we have a to and from, going back and forth in the market and it only heightens sensitivity to asset prices ahead of an important mid-september fomc meeting. >> which do you think is more important for the market, the
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new york fed manufacturing reading or housing data? >> i actually think the fomc is the more important number. this morning that -- the empire state number was so so off the charts. i think that it created immediate kind of sense of oh, my god panic. remember, empire state is a regional number, right. the new york state region. it's not a national number. but look what we did. we traded down to support at 2075 on the s&p, turned there and bounced and up through 2100. i think the market is preparing to move higher in the long term than not. i think that you're going to get confirmation on wednesday when the fomc comes out and says nothing new and says nothing about a september rate hike. >> david, you seeing any opportunities investing right now given all this volatility here? >> absolutely. you can find a number of higher quality, good cash flow generating companies. the average stock in the s&p 500 is about 13 to 14% off its
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52-week high. semiconductors have been hit hard. they're down more than 15% so a name like arm holdings which is a long-term wealth provider, had some skepticism because of the mobile business, that stock is 20% off its 52-week high. good cash flow generator. norfolk southern on the weakness in oil representing longer term wealth opportunity, discover financial which has been the best consumer finance company in the last five years, those are all good, solid companies that are off its 52-week high and i'll quickly add, too many of us are trying to call the elusive 10% correction simply put, good luck trying to call it. it's the 20% that will take the market down. i can't see the kind of factors that will take the market down 20%. good luck trying to call that 10% correction. >> john brady, what about the strong u.s. dollar, though. could that be one of the factors? >> kelly, it's going to be the factor. the single most crowded trade in
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global markets today is the long u.s. dollar trade. and your great intro, i heard you reference stanley drunkenmiller's accumulation of gld recently. looking for the cheapest way to play asset market volatility and to go against the single largest crowded trade in global markets it's to be long gold at these levels. high interest rates, higher short rates are built into the market. if the fed surprises and doesn't hike rates in mid-september, gld is going higher and it's a great way to accumulate cheap volatility on risk asset markets. >> we have a bull/bear debate on gold coming up in a few minutes. kenny, what about you, are you seeing any opportunities? we've talked as commodity prices go lower, sometimes that creates opportunities in the equity market that trade, you know, in those categories. mining or energy stocks. are you seeing anything along those lines? >> i think that's true. the other guest just said that. there are great opportunities
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out there if you look at some of the video names that have gotten -- individual names that have got beat up. for the long-term investor i think that's where you should be looking. commodities are trying to form a bottom and start to move higher. they've already collapsed. i don't think they're getting worse than this and this is where you start to get the opportunity. you don't go all-in necessarily on kay one. phase yourself in. that's where you have to look. commodities are certainly a place. gold is making that story. >> david just a final word before we close it out, would you play around in commodities and gold here? >> if it's a piece of the pizza pie it's a small piece, kelly. i think longer term these are still companies that face more headwinds but if you look on a price to book basis on a relative value, i think energy is again looking more interesting, not trying to predict the price of oil, but on a valuation basis in the commodity space it starts to look more interesting. equity and potentially debt. >> come on, david. try to predict the price of oil.
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everybody else tries. >> go the contrarian route, bill. >> as always. thank you for joining us. appreciate it. let's focus in on oil. those prices sinking again today but how low does wall street think crude can go at this point. >> jackie deangelis at the nymex with the results, speaking of what the contrarian or general view is, cnbc has done this exclusive oil survey, what are the findings. >> this is what we found, kelly. we found that people actually think oil prices are going to go a little bit lower from here, and that's a significant change from what we've been hearing before. so we polled analyst, traders, major energy fund investors to get their pulse on pricing now and especially significant, after closing under $42 today. the close $41.87. so for the short term, we're talking september, october, forcrude prices most of our respondents about two-thirds told us they think oil prices will be in the 30 to $40 range. oil hasn't necessarily bottomed just yet in their opinion.
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meantime we also found that more of them polled think that we're going to stay lower longer than they were previously expecting where the notion was that we'd rebound by the end of the year to the 60, $70 range, now most people think we're going to be stuck somewhere between 30 and $50. meantime when we asked what factors were the most important in terms of determining the oil price, the overwhelming response was that it still is supply. you've got u.s. production at record levels and opec production abroad continues to reach record levels as well. next in line was the dollar. obviously fluctuations because of the impact of what's happening in the eurozone has been very important and 10% of our survey respondents said technicals, short term movements are driving oil prices right now. when it comes to u.s. supply, 60% of respondents told us they think u.s. production will flatline or rise. if they are correct that means that oil prices will move lower and they probably will stay there longer because if you don't see demand spike, and a
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lot of people aren't forecasting that it will, that everysupply is going to continue to cause a glut in the market, guys. >> isn't that interesting. yeah, all the drillers are saying let the other guy stop, i want to keep pumping here. >> exactly. >> low prices. thanks, jackie, very much. let's talk about this, joining us now for more on this neil is energy analyst at sun trust. i don't know if this is a valid question to ask, but it occurs to me, what's more important for you to watch, supply or demand right now? >> bill, i think they're both valid but nearer term it seems like the demand is driving. we heard this morning it was china last week, obviously, with what they're doing with their currency today, we heard about japan now with them pulling back, and, you know, i think the big surprise is everybody thought we would go to the low 40s. we'd immediately have a supply response or i should say a demand response and we just haven't seen that. >> yeah. >> want to ask you about what's happening across the refinery space and the reason a lot of americans, neil, are still
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paying a high price at the gasoline pump, we had one twitter follower send us a picture of a gas station in wheeling illinois, where prices reached $3.49. >> ouch. >> how much longer is it going to take for prices there to catch up with this plunge in crude, neil? >> yeah. it's interesting, much like we've seen on the natural gas side where you've seen in the east coast a lot of the differentials are materially different than parts of the midwest we're now seeing that in the refine market as you mentioned, kelly. again, the problem is, it takes so long for these refineries and infrastructure to be built out, we haven't had a major refinery built in over 20 years, so to have something like this to balance that out, it could still take several quarters in my opinion. >> by the way, we're feeling your pain out west. here's one in southern california, john, tweeted us saying that it's still $3.88 there in i assume l.a. area. as far as some of the lower
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prices, trade nine said in new jersey and north philadelphia, he saw $2.17, and $2.54. it depends of course where you are, right? >> and what that shows you, bill, that's not necessarily the oil supply, that's the refiners, especially around the philly market. that's the case. >> where do you see oil going then? i mean, based on your gauge of demand and the continued fracking in this country, where are we going here? >> right. unfortunately as much as i hate to say it near term i was listening to what jackie was saying you're right we could test the 3 handle but what everybody forgets about is the right now the conventional supply that's out there. that probably is going to take a hit, beginning of next year. although i do see a 3 handle at some point this year i think you're back to a 6 handle at some point in the 60s some point next year. >> we see sampson filing for bankruptcy. more on that next hour. see if others follow, those at high debt loads. thank you. >> thanks neil.
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>> thank you. we have about 50 minutes to go until the close. the dow down 125 points after the umpire fed survey with a miss this morning. housing data and other factors pushing it higher. the dow up 58 points, nasdaq nearly 10 -- no 39 i should say, the s&p nearly 10. >> it is on low august volume. qvc you may have heard buying on-line retailer zulily for $2.4 billion. are we about to see more consolidation in the on-line retail space. we'll bring back the ceo of wayfair, with us last week, will join us exclusively and give us his take when we come back. >> stanley drunkenmiller placing a bet on gold which is down 14% over the past year. should you follow his lead and get in on the contrarian play. we'll hear from both sides later on "closing bell."
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welcome back. dow up 57 points at the moment. that's a big swing from the declines we saw earlier today. a survey of new york manufacturing activity, it doesn't usually get a lot of attention, plunged to the lowest reading since 2009. we had the association of home builders index build that moved the opposite direction surging this market, choose og to take the glass half full point of view. >> speaking of which on-line retailer zulily is one of the big winners after being acquired by qvc's parent company for $2.4 billion. the deal values zulily at 49% premium to friday's close, up 47% now, but had been down 66% prior to this, so obviously liberty, the company doing the acquiring and john malone knows a bargain. >> got a good deal. >> let's get reaction to this
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with another retailer in the space, welcome back wayfair ceo niraj shah joining us exclusively. >> welcome back. >> thank you for having me. >> so your thoughts on listen, if this is kind of a traditional player, qvc player going after zulily, does this mean the first of what could be a wave of consolidation across the space? >> you know, qvc is a great company and zulily and qvc i think are a pretty good fit for each other. from a consolidation standpoint, though, what's interesting they're just not that many scale e-commerce companies out there. could there be more consolidation, sure. i don't think there's a tremendous amount of great pure plays. >> i mean, you know, we mentioned they were down 66%. you're just going the other direction, your stock has been on fire here which would -- but would you entertain offers if they came your way? he asked naively. >> here's how we think about it. would you look at an offer?
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of course you would. for us we're in a great situation where we have basically sales at about $2 billion run rate and our direct business grew at 80%. it excel rated its growth even though our marketing costs are coming down. we're in a good position and we think there's -- this is only the beginning for us. >> it's interesting, niraj, what you said, if we put amazon aside, the behemoth, $250 billion market cap, you're saying the rest of the on-line retail space is actually too small, that it's not really attractive enough to most of the name brand retailers, bricks and mortar that we know today? >> i think for the larger bricks and mortar retailers who are not where they want to be on-line for them to make an acquisition that will move the needle, that will help them advance the ball they would need to buy someone who has scale and i think they're not that many pure plays who have real scale. we're talking about $1 billion, $2 billion plus in sales. that's the kind of level that they'd be looking for. >> the knock on zulily maybe these flash sales, these daily
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barga bargains, has created consumer fatigue out there. do you agree and is that a strategy that you would avoid as a result? >> yeah. what i would say, the flash sale format is niche by its nature, that it requires the consumer to come back every day. we know that because one of our brands, joss and main, the number one home flash sale business and we know it has a very loyal base, but it's going to be a smaller business. for the really big market opportunity you have an everyday store with a huge selection and we have the dominant brand in that space in home which is wayfair. i think all the brands have a spot, it's just, you know, the -- there are just different merchandising approaches. >> while we have you, have you hired any employees from amazon in building your business? >> you know, any in e-commerce has. we have folks from all places amazon includeded. >> do you find when they come to you, they're fleeing a difficult work environment and looking for
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a more welcoming place? >> >> what i will say about amazon is, you know, clearly very ambitious company with amazing talent and, you know, what we try to do is we try to be a really appealing place by in our space in home being super ambitious, being super hard working and innovative and we also embrace work/life balance. on the amazon front i wouldn't say that i've seen folks fleeing from there but we're excited where we are and the talent we're able to attract in boston and all over the country. >> do you understand, i mean clearly they've excelled in this category, they created the category really, do you understand the notion, in fact, the work place is that difficult, that that's what you have to do to achieve the kind of success they have? >> you know, don't -- i never worked inside amazon so i can't speak to their work place, we find you can have a balance and it's the optimal situation.
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you get the best people and they're really enjoying every aspect of their life. that's certainly what we do at wayfair. >> no issue with the culture out there? >> we think wayfair, you know, we think it's a super attractive place to work and we're seeing great retention of people who come to wayfair and we're seeing a great success at attracting great talent. we're very focused on the culture and, in fact, we think that's part of why we're having the success we're having. >> thanks for coming on. appreciate it. >> thanks, niraj. >> good to see you again. >> thanks for having me. >> the ceo of wayfair. 40 minutes left, little less than that, actually little more than that, the dow up 51 points right now after a pretty volatile day, typical i guess for a monday in august, not a lot of volume so more volatility there. take a look at gold prices down 14% over the past year. but billionaire stanley druckenmiller is making a bet on a comeback. will it pay off? both sides of this bullion battle straight ahead. >> will thes for be with disney's plan to exed.
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a its amusement parks with two new 14 acre "star wars" theamed parks? where are they going to find all that land? coming up on "closing bell."
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>> let's check in on the day's big movers, tesla shares driving higher after morgan stanley raised its price target to a whopping $465, 66% increase. the firm believes tesla could announce an uber like on-demand car service in the next 12 to 18 months. part of the tesla ecosystem is paying off. morgan stanley hiking its price target on the stock to $80 from $68 because it has a key self-driving technology as a supplier to tesla. the shares up 7%. and shares of skin products maker estee lauder under pressure moving about 6% to the downside. the company reporting better than expected quarterly profit but its revenue came in below estimates because of slowing sales of clinique. bill? >> kelly, gold as you know is down more than 5% so far this year, and then we get news friday that showed noted investor stanley druckenmiller has taken a stake in the gold etf, the gld.
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stan is a smart guy so we're wondering should others follow suit. >> joining us adrian day who does think gold is a buy, john from ned davis research thinks it's stuck in price purgatory. welcome to you both. adrian, i'll start with you. make the case for gold these days. it has struggled. >> well, i think there's a couple things to say about gold where we are right now. first of all the sentiment is so overwhelmingly bearish. and as a contrarian, that makes me optimistic about gold. i mean, we could go on, but, you know, the option sentiment, the bullish consensus numbers, commex open interest show us a bear sentiment of gold is about as negative as it could be. gold down 43% or top to bottom down 43%, which is coincidentally exactly the decline we saw in 1975/ '76. sharp declines in a bull market
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are not extraordinary. and then the last thing august is typically a weak period, june, july, beginning of august weak seasonal period for gold and begins to move up in september, october, november. i'm quite bullish on gold. >> john, my question is, what makes gold go up and what makes it go down? it's something i ask all the time. is it an inflation hedge or a risk asset? what's your answer to all of that? >> well, good afternoon, bill. i'd say more importantly now when a super cycle is dying, which it is, not just for gold but all commodities, for one it's all about supply. supply is the one on the margin aspect you will pay attention to. eventually it will balance but as of right now there's still too much supply. what most tend to miss in gold, look at the last two years, even though gold is down, the numbers you just kritsds, production of gold has been up the last two years. that's what happens at the end of a super cycle. people tend to overproduce.
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too much money in the ground now need to get it out, make money from it and you get oversupply. >> yeah. adrian, i hear in what you're saying a case for maybe a trade based on sentiment but i don't really hear a long-term argument for holding gold. >> especially if the dollar gets stronger. >> yeah. well the dollar to me is the one major negative for gold at the moment, but interest rates and the u.s. economy, and all these things i think are more than fully priced into the gold price right now. if i may just make one quick point on production, it's absolutely true the mine production is up this year and last year and the year before, but most analysts i speak to are looking for it to level or certainly beginning to level off and looking for it to level off this year or next year and start to decline thereafter. it's easy to see why that is because as you know, the time from discovery to production is anywhere from 10 to 15 years. so we know what major mines are going to be coming on stream. we know what the production profile should look like at
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anything around today's price. the truth is, the discoveries that were made ten years ago, were sharply down on the discoveries in the previous period and it's those discoveries that will fuel mine production in the years ahead. >> all right. john, we hit a peak in gold above $1900 a few years ago. you say the super cycle continues lower. it's over. how much lower does it go then, do you think? >> well, if it follows the pattern of a normal super cycle about to years, the average bear market super cycle 20 years, looking at data back to the 1700s and that's the case and we follow something like the 1980 case which also lasted about 20 years, you're looking in the mid 600s for gold before it's done. >> all right. gentlemen, thank you both. that's adrian and john, two different views on gold. >> very different views. let's get out to cnbc update with sue herera. >> good afternoon, kelly. here's what's happening. a computer breach at the irs in
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which thieves stole tax information from thousands of taxpayers is much bigger than the agency originally discloesds. an additional 220,000 potential victims were involved, more than doubling the total number to 344,000. the white house drug policy office will spend $5 million to partner with 15 states to stem an alarming rise in heroin addiction and deaths. part of the plan teams law enforcement with public health workers through the heroin response strategy. starbucks is expanding efforts to sell wine and beer in its u.s. locations. another 2 dozen stores will take part starting on wednesday bringing the total number to more than 70. and a big surprise for chris singleton whose mother was one of nine people killed when a gunman opened fire inside a charleston church in june. singleton is a college sophomore at charleston southern university. and he was speaking to "today"
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show's tamron hall when yankee players alex rodriguez, brett gardener and dilllan po tan zi walked on set telling him he will throw out the first pitch at tonight's yankee's game. terrific story. your cnbc news update this hour. back to you guys. i'll be watching. >> that's awesome. good for him. >> that's awesome. thank you. appreciate it. 30 minutes to go, dow up 55 points. >> that's all you need to know right now. >> that's it. >> new data shows americans are waiting longer than ever to buy the first home. so what does that say about the financial health of millennials and the future of the housing market. we will talk about that coming up. >> the fight for higher minimum wages end up replacing workers with robots. should employees be afraid of other things taking their jobs? we've got those details coming up on the "closing bell." here at td ameritrade, they're always working.
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welcome back. less than half an hour to go in the trading session. it's been a volatile one. joined by gordon of rosenblat securities. i guess we're looking at the
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housing data. a bullish move across interest rates and everything else you're seeing. >> a lot of things in play on monday morning. we came in a little sloppy. people are looking at the macro and china and saw some of the data come out, empire manufacturing, and said maybe it's possible that they don't raise rates. so that came into play a little bit. always have don't -- they say short a boring market or so. >> dull market. >> wait a minute. are you saying the reason, because initially the dow dropped 125 on the weak data, now we're higher, but is that because people think the fed is not going to move? >> those are two things people were talking about. there's a lot of people down here who believe that there's a lot of corporate buyback activity, corporations starting to put some of the excess capital to work and those are the things that get investor confidence up that will allow people to start getting aggressive on the buy side. i think what we saw was people feeling a little more comfortable that maybe we were in a range and we're sort of at the bottom end of a range and now is a good time to try to do bargain hunting if you will.
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>> what are you watching into the close specifically? >> i wanted to see how strong this close is, a knee-jerk reaction to some of the things we saw today or carry through into tomorrow and set us for a strong week. >> sure. we'll leave it there. we'll let you get back to it. thank you so much. >> all right. we are looking at this new report that finds rents are rising to, quote, crazy levels. diana olick is in washington with the crazy details. diana. >> well, bill, we've heard reports ought year this year showing that rents are reaching record highs but it's that affordability factor that is illiciting the word crazy. but rent is now considered unaffordable in three quarters of the nation's housing markets. that is that renters have to pay more than 30% of their income on the rent. home ownership is considered more affordable now except, of course, in most california markets and in denver where you pretty much can't afford housing either way all according to zillow. there are not enough apartments
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to meet the current strong demand. we may see a lot of cranes out there especially in big cities, but remember, multifamily construction all but ground to a halt during the housing boom and then during the recession, we're still making up for it now. much of the construction is in higher-end, big city markets, not in the middle range where people tend to live. this may be why renters are waiting longer to become homeowners. used to rent for two and a half years and now more like six years before they buy. it's taking more time to save for the down payment. bill? >> it is. diana, thank you so much. and stay there, actually. want to talk about how young americans are waiting longer to buy their first home. >> let's bring in anthony chan, chief economist at jpmorgan. is this an economic event or sociological, young people may not be interested in tying themselves down to a mortgage as well. >> i think you're right. a lot of the young millennials saw what happened during the financial crisis where you had so many foreclosures but it's an
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economic event. when you look at first-time home buyers and their affordability index, what you've seen is that their median income has increased by 6.9%, but qualifying income has gone up close to 40% from 2012 to now and against that backdrop it's a lot more challenging. that's not true for the general population. general population is doing a little better. the market is getting better. household formations which diana olick has talked about many times we saw that number below 400,000 back in 2013. now it's 1.6 million. got to put those people in rentals or new homes and guess what with these low interest rates it's getting exciting. >> glad you brought that up about household formation. data separately today suggesting household formation isn't necessarily the young people. it might be some older people as well as the economy improves. i'm just wondering how that fits into the case for long-term, for home ownership to go back it to normal levels or are these the normal levels? >> well again it's taking away
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from that home ownership level because it's not the millennials so much forming the new households, when i say new households i mean renter households the downsize baby boomers, choosing not to buy a smaller condo or house, choosing to rent. we've seen that in the high-end rental buildings we've done stories on and keeping that occupancy level very, very high pushing rents up, pushing affordability down and keeping even the millennials from being able to save for home ownership. >> and with the fed getting ready to raise rates that's not going to make it easier to afford a home right now. >> it does not. if you look at -- i've been in the business now as an economist for 31 years. one of the things i have found is when the federal reserve is getting ready to raise rates people jump off that fence and start doing it. you saw today's national association of home builders index, the highest reading since 2005, and by the way, there's a strong correlation between that and the university of michigan's consumer confidence. not only good for housing but the overall consumer and overall real gdp.
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>> a despaisparity in that repo not having anything to do with home construction. what i found interesting in that we did see the bump up in home builder confidence but usually builder confidence and single family housing starts to travel together and if you look at a chart they are wide apart. builders may be so confident about the market why aren't they building more houses? why are they putting more stock into the market that will take the prices down. >> the reason for that is that you know the last couple years, guess what's happened. we've seen a huge surge in renta rentals. as you pointed out rental prices are rising much, much faster than inflation and inflation is low and guess what, if you look at case-shiller housing prices are rising rapidly. that equation is starting to turn. there's a lag but when you see housing prices rise so much over the inflation rate at some point you see that turnaround. last point, what you -- recent survey is showing even the millennials are getting much more excited about thinking about buying a house over the
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next 90 days. the highest we've seen in the next 90 days over the last couple years. that is going to change. >> diana? >> thinking about it but we're not seeing them show up into the numbers. we're seeing them say yes, they want to buy a home, every survey that a realtor will put out or a builder are going to say, yes, mill yen yals want to buy a house, time horizon for buying is shorter. they get married later, have babies later. those are the triggers for home ownership. as we see in the numbers it's a 33-year-old buying the first home as opposed to back in the '70s a 20 something buying the first home. because the time horizon is shorter that home ownership rate is going to be lower going forward. >> that is 100% correct but guess what, if you look at the real gdp numbers, you had virtually a 10.1% surge in residential investment in the first quarter, 6.6%. much faster than the economy is growing. in the first quarter the economy grew at 0.6%. second quarter, 2.3%. >> is that multifamily or single family? >> it's residential investment
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includes both. guess what? we know that the push for real gdp when you do multifamily is a lot less. there's about a 30% bigger hit to the real gdp when it's single family than multifamily. the numbers are so large that it's helping real gdp. >> i think we have to take this discussion on the road. >> yeah. suddenly a housing debate broke out here. love this. >> i love it. guys, we have to leave it here. >> i'll get my bags. >> diana olick, anthony chan, we look forward to continuing the conversation. thank you so much. >> thank you. >> see you later. >> 18 minutes left in the trading session, now flatlining, the dow up 54 points as it has been. s&p up 9. right at 2100 level. >> i swear in december we were sitting at 2100. feels like deja vu all over again. galaxy far far away is coming to a theme park near you. disney announcing a major expansion of two of its parks to create a "star wars" land. will that give a new hope to the stock down 10% since its
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earnings, that's next. >> later, why the collapse in oil could be crushing news to emerging market investors. that's coming up on "closing bell." hey, you're watching cnbc first in business worldwide. it's more than the cloud. it's security - and flexibility. it's where great ideas and vital data are stored. with centurylink you get advanced technology solutions from a trusted it partner. including cloud and hosting services - all backed by an industry leading broadband network and people committed to helping you grow your business. you get a company that's more than just the sum of it's parts. centurylink. your link to what's next. i've got a nice long life ahead. big plans. so when i found out medicare doesn't pay all my medical expenses, i looked at my options. then i got a medicare supplement insurance plan. [ male announcer ] if you're eligible for medicare, you may know it only covers about 80%
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. welcome back. about 15 minutes to go in the session. on this monday we actually haven't had much big deal news, bill. that's been one difference this week, but in any case -- >> no merger monday. >> not much china news. wasn't much about greece. in the absence of that and a little bit of economic data this morning, the dow is up 60 points and actually the nasdaq is up nearly 0.8, up 39 points today. >> the force clearly helping disney become one of the big winners in the dow today. the company reveelg a huge "star wars" expansion plan for two of its theme parks. julia boorstin joining us now with details on that. julia? >> bill, that's right. disney ceo bob iger announcing two 14-acre "star wars" lands in anaheim and orlando, a multibillion dollar investment. >> we're creating a jaw-dropping, new world that represents our largest single theme land expansion ever.
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>> reporter: iger didn't announce an opening date for the parks but would have rides based on the force awakens in december, and a flight in the millennium falcon and cantinas as disney looks to cash in on its $4 billion of lucas film in 2012. fdr analyst barton crockett says this investment will give disney leverage to raise prices at the parks, says it's creating a double digit growth opportunity in the launch year for these attractions. this comes as disney continues to look to cash in on its marvel acquisition as well, working on a new iron man ride in hong kong disney land and a greater feature for marvel characters at its u.s. parks. the brands are helping disney stay ahead of universal which has been investing billions in its theme parks in florida and california as well. back to you. >> let's not forget comcast owns
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universal which owns cnbc. just for full disclosure there. >> this is going to be i mean a massive -- how much do you think this is going to cost? >> now we -- disney has not announced any numbers on the amount the investment will be. we've seen numbers from the analysts in the 2 to $3 billion range. this is a big investment. it's unclear how much they're going to be spending at the california and orlando park, but based on crockett's analysis it should pay off in the years following the launch. >> i mean, i'm going to sound naive asking this, but i'm guessing they're betting that these movies will do well at the box office then, right? >> better be. >> if they don't then who's -- >> business really hinging on the bet that the launch of the new movie in december, december 18th, "the force awakens" opens will be massive. on a recent call with analysts, disney's ceo bob iger did try to dampen expectations because there has been speculation this would be the biggest movie of
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all time but it is sort of this idea that you're going to introduce a new generation of fans to "star wars" when the movie comes out in december and then, of course, appeal to fans who have, you know, been familiar with the brand since the '70s. really try to get people of all generations there to the park. >> the question is, will this next movie be more like the first three "star wars" movies or the next three -- >> or the subsequent three, right. >> hope it's the first three. >> thank you, julia. >> exactly. bill. >> we've $1 billion to $2 billion for the box office. no wonder they want to tamp it down but playing into the expectation it will be huge for the company. both in the box office and theme parks. >> i think it will do well. >> ten minutes to go. >> and the dow is up 65 points. forget the u.s. our next guest says investors are better putting their money in europe. he will make the case for that straight ahead. >> and sprint firing the latest salvo in the wireless wars has this iphone forever deal.
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who really has the best deal when it comes to your plan? we'll break it all down later on the "closing bell." stay tuned.
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♪ whoa what are you doing? putting on a movie. i'm trying to watch the game here. look i need this right now ok? come on i don't want to watch that. too bad this is happening. fine, what if i just put up the x1 sports app right here.
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ah jeez it's so close. he just loves her so much. do it. come on. do it. come on! yes! awww, yes! that is what i'm talking about. baby. call and upgrade to get x1 today. ♪ eight minutes left in the trading session. joining us now kevin nicholson from riverfront investment group
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back to make the case for europe. is it because of valuations here or what? what's the case here? >> well, when we look at europe, the valuation is cheap on a long-term basis when you look at their trend relative to the u.s. we look at europe right now and we see that it's about 26% cheap relative to its long-term trend where in the u.s. we're closer to fair value. so that's why we feel that europe is the place to be right now. >> but you're not alone. in fact, it's one of the most crowded trades out there, brian kelly was making the point in his note this morning he thinks it's risky to invest in europe because everybody is on one side of the boat and we might have some readjustments in the dollar and other things going on here. >> well the way we look at it is that when you take europe, right now, we're investing in on a local basis. we're trying to hedge out that currency for the u.s. investor. so we think that if the fed
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starts raising rates you're going to see money from europe come to the u.s. you have long-term -- you have rates in europe negative, out to four years in germany, out to ten years in switzerland, so money is going to go where it's best traded and we feel like it's going to come to the u.s. in the treasury market and it will cause the euro to depreciate and since we're, you know, investing in it on a hedge basis we'll take advantage of that. >> where locally in europe do you see opportunity? is it germany or do you pick some of the other countries? >> we really like germany. that is where we find the most value in europe at this point. >> what about spain? >> spain is -- >> nice gdp numbers. >> yeah. i mean spain is kind of bumping along. it's, you know, it hasn't been a great outperformer, but what it has been doing, it is meeting expectations at this point. and when you start with low expectations you figure that, you know, if you just meet them,
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things will look pretty good and -- >> anything here you would buy before we go? >> well, i think that when we look at europe, we would buy the low volatility because that's what -- when you -- qe came in the u.s. our low volatility type stocks were the ones that really outperformed and that's kind of where we've been focused in europe. >> great. kevin, thank you so much for joining us. >> thank you for having me. >> kevin nicholson from riverfront. up next we're back with the closing countdown. >> hello, denver. hello, denver. >> got the shoutout. >> okay. >> there we go. after the bell, by the way, brutal work place reputations. is "the new york times" piece on amazon's work environment proof that technology jobs are becoming the new wall street. a top silicon valley recruiter will join us to talk about that coming up. you're watching cnbc first in business worldwide. thank you for watching us in denver, colorado. then it would be easy to know everything about that one breed.
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stan druckenmiller has taken a position in the gld etf on gold. and six month chart of gold will show us decline that we've seen here this year and the bit of a comeback in the last month or so up $4 today, back to 1116. finally urban outfitters will be reporting earnings coming out. courtney reagan, what are we looking for tonight? >> urban outfitters one of the names that a lot of folks think we could see signs of strength but it's not coming off a super strong base. maybe it's better than it was but not quite great. we've got walmart and home depot tomorrow, big, big players obviously. give us more clues about how the consumer is feeling beyond just basic sort of trend pieces that an urban outfitters is selling. >> the numbers herk ki jerky in retail, so are we seeing a real trend yet. >> some of it. we are seeing and the numbers will prove out we are buying less clothing but what we are buying less of and we use that money that we're saving in clothing spreads out among a
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bunch of other categories. home depot will i strong, walmart i'm not sure. it's very big. takes a lot to move that needle. >> see you later. we're going out at the peak of the day, the top up 69 points on the dow jones industrial average. stay tuned. more on this crazy story in "the new york times" about working at amazon on the second hour of the "closing bell" with kelly evans and company. i'll see you tomorrow. >> thank you. welcome to the "closing bell." i'm kelly evans. the dow aiding 68 points, the s&p adding 10. it's up half a percent today. not bad. the nasdaq up better up 0.9%. 43 points, shy of 5100. more thoughts from today's panel. joining me michael santoli from yahoo! finance and cate kelly. with us, fast money trader dan nathan.
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welcome to you as well. mike, start with you, you said this is the market everybody has been hoping for. what do you mean by that? >> in a way. might not feel like it. essentially the market is responding to corporate level fundamentals, making sector moves but not selling off broadly in response to macro moves. the action today showed you the market doesn't crave negative data, doesn't want bad news that will push off a fed decision. that's what you saw with the dynamic of the data releases this morning? i feel like i always say this, maybe i talk to too many hedge fund and traders, people i know are cynical. >> you do. >> for sure i do. and, you know, especially in the credit area, people are always bearish, right. but people think that this is going to be a tough month, we're seeing redemships on the hedge fund side to contribute to any sell-offs we may see. i noticed with the recent round of corporate filings a lot of big money managers would appear to be bottom fishing which you would think would be a bullish signal like in energy, for instance, or they're loading up on some of the more troubled media names and it's a mixed bag
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in technology. certainly there are bull stories there. so that would seem to be like good macro indicators. at the same time the general sentiment is one of fear and anxiety. >> dan -- >> i think it's a hedged market. i think that tells you that this long period, we hit 2100 on the s&p, hit it exactly six months ago. >> it seems to me early reminiscent of december. a number of days where we closed at 2100 or sitting right there i remember an hour down here can't seem to get off this level, dan. i wonder which direction you think we're going from here? >> well for now it's going to be range bound. when you talk about that 2100, it's been 2140 and 2050 on the downside and let me tell you, you and i should talk more frequently because that skepticism is healthy. when you think about the range bound market like we talked about the 4.5% range for 6, 7 months, the path of least resistance is no longer higher and that's i think the big point that some of these hedge funds that cate is speaking to are skeptical because they don't see
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a lot of great opportunities and they see a lot of risk. when you see risk assets moving around the world, see commodity prices continue to make new lows, the 10-year yield at 2.18 this is not bullish price action in my opinion throw on top of look at the revenue growth or lack thereof we had in that q2 reporting period, it was down 3.5%, you know, that's the first or actually the second sequential decline but the first two groupings of quarterly declines since like 2012, to me i don't see a whole heck of a lot to get excited about and i don't know, it doesn't seem to be a heck of a lot of leadership that will break us out in a near term. >> i don't know if you have to get excited on an index level but what cate's talking about divergence of performance in the market where sectors got beaten up that's where performance potential is. >> 2100 on the s&p, where we were in december was a different market, actually in some ways beneath the surface than where we sit today. >> this is something we've been saying but it bears repeating
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this feels like a stock picker's market, is yo sin crattic market story. i was looking at another list of some of the best stock pickers tracked by symmetric one of the providers we use and in the top 20 and it's primarily hedge funds, only three or four names we talk about. shame on us but a lot are smaller funds more nimble deploying less capital and it's really i mean of the well-known folks, bill ackmans, pershing square -- >> what's working. >> what's that? >> what's working for guys at the top of this list? is it event driven stuff, they pick the right sector? >> i think it's a combination. one thing we're seeing that's working for people is pharmaceuticals and a lot of merger opportunity there. valiant has worked extremely well for a lot of people. i think maybe bill ackman in the recent wave deserves credit for discovering it but a lot of folks have piled in there. >> huge in europe at the beginning of the year and you levered it you're doing well right now. we get blinded by the fact that the u.s. has underperformed so much. >> that's true. >> cate mentioned
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pharmaceuticals. the biotech sector, look at the xbi, the s&p biotech, it's down 13.5% from the recent highs last month, still up 23% but what cate mentioned was think about all this m&a, what's propping it up. when you take a look at the a stock like valiant it's worked because it's a special situation and you had a handful of guys push this thing higher based on what they think should happen. at some point the wool is going to be pulled, you know, out from under or the ground out from under this whole biotech bubble here, the valuations are ridiculous. >> engineering at the stock market level, dan? >> it seems to be. listen, you can say it's a stock picker's market and, you know, you're going to get some things right when some of these trends continue, but right now i mean it seems like this m&a thing in biotech seems a bit long in the tooth. >> all right. well let's get over to the consumer discretionary sector and get retail earnings this week starts with urban outfitters right now. let's get to dominic chu with the numbers. >> good afternoon, kelly. what we have right now is a stock up 5.5% on 109,000 shares
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of volume this after urban outfitters teen retail talking about more of a trendy stuff that the younger folks wear, report earnings per share of 52 cents beats the average analyst estimate of 49 cents. seas missed $867 million, analysts looking for $881 million. comparable store sales coming light of expectations, comparable store sales 4%, gains versus estimates for a 4.4% gain. also there was a little bit of a stumble there for anthropology and urban outfitters posting comparable store sales for those individual brands that were slightly below analyst estimates but again the setup is a stock down about 9% year to date down about 1 1rs over the past 12 months. combing through the report but seems like for now a favorable at least stock reaction on decent volume giving the fact they had an earnings beat in a sales miss we'll keep an eye but stock up 5.5%. back to you. >> it's interesting.
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thank you. let's get to oil prices here. they were down again today. they did rally off the lows of the session but jackie deangelis has a wrap-up from the nymex. >> that's right. and the close under $42 was key today because even though we've touched these levels intraday we haven't closed under 42 and a spence of support at that level. we saw volatilitity september crude going off the board and we turned positive but it was short lived. we have stronger dollar today adding some pressure but also it was a near 2% decline in gasoline that took crude down with it. traders at first were scratching their heads because we've been hearing about refinery problems sending prices at the pump higher. why was gasoline going down today? one person explained it this way. summer driving season is coming to its end so demand will be coming off the table. refineries will be switching to cheaper, winter blended gas and that's what's pushing the price down. the refinery issues that we're seeing we are expecting them to resolve themselves in the next
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few weeks so at this point, traders are going the other way on the arbob trade. crude prices are down 20%. arbob gasoline down 14% and those pains that we are seeing the at the pump especially in the midwest, they are expected to subside somewhat. back over to you. >> yeah at some point, jackie, won't hold our breath, but thank you very much for now. cate, there was a big development friday evening, a lot of people might have missed because of the timing, samsung filing for bankruptcy. why is this significant to everybody watching and thinking about whether they should invest in the oil and energy space. >> couple reasons. one thing about sampson, which makes them an unfortunate story for them or kkr, which led their lbo in 2011 and has written off that investment as of late last year they're natural gas story and natural gas has been dirt cheap for years now. a lot of our conversation in which jackie was touching on really i mean putting gasoline aside, deals with crude and crude fell out of bed a year ago as we know and there's not a lot
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of hope in sight. not to take too strong a point of view, there are bulls who feel equally strongly, but very a oversupply issue and seasonal issues. >> that's what makes it interesting if you want to make an analogy to what's happening in oil right now there are no production cuts. maybe that's putting it a little too strongly but we could see an analogy to natural gas where this becomes the new normal this supply. >> and here's the deal. we're entering into a season where refineries jackie mentioned i think she was probably alluding in part to the midwest issue with the bp refinery that has a mechanical problem, probably will be resolved but some refineries will go in repair season in september and october, won't be buying as much physical crude could have an affect on prices and banks will hold discussions with e and p companies about how much they can borrow and almost certainly the price that the banks are using the forecast for crude are going to reflect cheaper prices and the borrowing base will be lower and that could add to the wave of bankruptcies. i was looking at the futures curve it doesn't cross for crude
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oil doesn't cross $60 until 2019. >> the credit markets have been telling you this is what we have to deal with with right now. the lower energy names are in this fix, pricing in more defaults. the production cuts haven't come because if you need to service debt you need the cash. not like you can be this utterly patient producer and say wait out the price. >> exactly. final word, dan, to you before we let you go here. what do you like in this market? >> well, just quickly, kelly, on oil, i mean it feels like it's on the presspy pus of a dramatic decline. the way it's moved down 20% over the last month or month and a half or so it's been like a slow death. to me it feels like when it breaks 40 it's going to go hard and i think on the stock level, the next thing to think about is yes, here's one bankruptcy i think we're going to see more, don't know if you noticed chevron down 2% today, that dividend yield is pretty fat. we know these guys have cut back on their buybacks as the stocks have declined here and i expect the next thing is possibly a dividend cut in the large
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integrators here. to me when you think about what a huge part of s&p earnings chevron and exxonp are the way the stocks act, the commodity acts feels like there's more pain to come. >> dan, worth noting that a lot of money managers piled into chevron and schlumberger during the second quarter didn't work out well for anybody, and, you know, it's just a tough picture out there i would agree. >> yeah. guys, thank you. appreciate it. dan, let you go and get ready for the next program. dan coming up on the "fast money" crew at 5:00, talking to carter worth who's got the sector you should hide out in to escape the volatility. don't miss that straight ahead. once best known as a tropical rain forest in brazil, but in the tech age amazon is known as a leading eretailer. now it's after "the new york times" piece maybe an awful place of to work. we'll talk to a recruiter about whether tech jobs are being skruts mized more than wall street jobs. brazil in the news not for its rain forests, protests surging
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across the country as brazil is engulfed in a corruption scandal, reception, plunge in commodity prices we talked about and we'll see what this means for investors in the emerging markets. you're watching cnbc first in business worldwide. while every business is unique,
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it was the headline heard around the world. "the new york times" inside amazon wrestling big ideas in a bruising work place shining a light on callous management at the company. amazon ceo jeff bezos responded with an e-mail to employees stating the article doesn't describe the amazon i know or the caring amazonians i work with every day has it become the new cut throat wall street. jon fortt joins us with morgan, founder of main and top recruiter for silicon valley's biggest companies like google twitter and four square. welcome to you both. morgan, start with you, as a recruiter do you see a lot of people fleeing to you from amazon trying to get away from its toxic culture? >> not so much. an important thing to remember is that amazon is up in seattle which works well for them because there's less competition. mostly microsoft and facebook has a big office there now but i have heard some of the things that did appear in "the new york times" article. >> jon, now that we've had more
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than a day to get through the reaction and details to this, what more is emerging? are we hearing from more who are defending their culture, you know, agreeing with the piece? what are you hearing? >> both, kelly. and i think that's what puts this piece in a different light. the sweep of the piece from the top is, here's the experience at amazon. it's tough, it's heartless and the people who can deal with it and the people who can't, but there is a post on linkedin from an engineering manager who said that's not the amazon of today. there have been some cultural changes at the company over the past couple years, top managers recognize they were burning out some employees who they really valued. there was another blog post by another employee echoing this experience is not everyone's experience. so sort of what's emerging is some people saying if you have the wrong manager, if you have a manager who has somebody above them who's not empathetic you might have a really harsh time at amazon but that's not everyone's experience. that said, amazon is known as a tough culture but it's not alone.
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you can see the similar story about apple around product launches, netflix has a tough culture. the stories about the mark zuckerberg wealding a samurai sword around the office in early days and stories about microsoft 20 years ago in a similar vain. this is common. >> yeah. kate, there are -- you could -- the analogies to wall street are endless, compare it to bridgewater, the investment banking or analyst training programs people go through for a couple years or just the whole maybe this is because so much has shifted out there? what do you make of the whole thing? >> i thought of bridgewater in terms of the utter transparency recording of conversations and that sort of culture and you know what it's radical but there might be something to be said. i've never worked in a culture like this but about total straightforwardness and transparency in talking about colleagues and superiors and so on. having said all that, first of all, if i was an investor i think i might have bought shares today because a routhlessly efficiently run organization with this sort of track record, has to be compelling on some levels but i also just want to
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say, just looking at the linkedin piece interesting to have that perspective and i'm sure there are a myriad of ways to look at the company. i think criticizing the journalist is totally lame. i know jodi cantor, incredibly principled and hard working and i don't know her co-author other than by reputation which is a good one. i'm sure there are other things that aren't in the piece. maybe amazon should have cooperated more than they did. that was mentioned in the piece they didn't get access to a lot of senior people. but i just -- >> in defense of the company, this is nick cubotariu, he said he thought that the article was just a hatchet job. >> that's what i'm referring to. >> it was so blatantly incorrect and purposely designed to be that way and by the way, this -- his defense of amazon which he said he didn't write for a check, this is how he felt, has really gone viral and in response to that he said, quote, i never thought that would happen but i'm glad it did because it's the truth and it needed to be said. >> to me, the veem meant and
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enthusiasmful of the defense of amazon, not just from people inside amazon but the tech industry is one of the most telling things about the episode. when people had reports about goldman sachs they called 10% a year, they get rid of the bottom performers make people sleep at their desk, all that news from ten years ago when riding on top you didn't see the industry saying lay off goldman. these people think they're creating the future in their own words. >> morgan, before we go, who would you say has the reputation or in your experience in actuality is the most difficult place to work for? >> well, there is inherently a lot of expectations on the operations component for companies like apple, uber, amazon because they're moving around warm bodies. i think that increases the pressure. so i would say those. >> all right. well, as mentioned, a lot of these names, very successful companies, difficult environment to operate in. thank you, morgan, jon. appreciate it. >> thanks. still another shot across
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the bow in the wireless wars. sprint offering a new iphone forever. we're going to break down who is offering what and which wireless company may have the best deal. but first, we've heard the robots are taking our jobs but a cnbc survey shows americans are more scared of their jobs replaced by something quite different. we'll tell you what that is next. ah! aflac? aflac! i thought you said this guy was the best? oh, he's a horrible stylist. gah? but he's the best at paying claims fast! really... mmhmm. paid mine in just one day. one day? yea. aaaflaaaac! in just one day, we approve and pay. one day pay, only from aflac.
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it's how you stay connected. with centurylink as your trusted technology partner, you get an industry leading broadband network and cloud and hosting services. centurylink. your link to what's next. at ally bank no branches equalsit's a fact.. kind of like mute buttons equal danger. ...that sound good? not being on this phone call sounds good. it's not muted. was that you jason? it was geoffrey! it was jason. it could've been brenda. welcome back. let's send it back out to dominic chu with a market flash.
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>> we're watching shares of es spear yon therapeutics a smaller cap biotech company that focuses on cholesterol lowering drugs. up about 6% on 250,000 shares worth of afterhours volume after the company issued a press release regarding one of its treatments for low density lipo proteins the bad cholesterol. meg turrel is going through it and tells us right now this press release tells the public that they've met with the food and drug administration and that they won't have to do a huge study for cardiovascular safety before filing for the final approval of this cholesterol drug so again, this is a stock that's up about 6, 7%, right now, 239s,000 shares of volume. it was up about 14% in the regular session and this stock at one point in the last year hit about $121 a share and as low as 15. this is a roller coaster ride of a stock but again, one that's worth about $1.7 billion given the price action to the close today. so again, up about 6% on that
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bit of news. we'll follow it closely and get more details when they become evident here. they will have a conference call. we'll bring you more details. back to you. >> some incredible swings as you just mentioned there. stock price. thank you. technology changing our lives at a rapid pace and caught in the ebb and flow is the economy from driverless cars to robotic bar tenders jobs at risk but steve liesman says americans fear something replacing their jobs more than robots. what is it? >> trade. in two separate all america economic surveys cnbc asked roughly 800 americans whether they thought there were more drawbacks or benefits in trade or technology. turns out americans think the ships bringing cheap goods from china are a bigger threat to their jobs and livelihoods than the potential for robots to throw them on the unemployment line. the results from the two surveys, technology, 37% say there's more harm from technology than there are benefits. 55% say more benefits. other side the ships bringing those cheap goods from china, 50% say trade provides more harm
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to their livelihoods, 42% say more benefits. part of the reason may be that americans see the benefits of technology in their daily lives. smartphones in their pockets, for example. the benefits of trade less obvious, tending to come from cheaper priced goods. also it's political football with the likes of gop frontrunner donald trump complaining that bad deals with china and japan are costing americans jobs. he said the mexican government is taking the united states to the cleaners. few politicians on the other hand are berating the negative effects of technology. i would venture to say they don't usually do too well at the polls. >> i'm just interested in what kate and mike have to say about this. >> wow. i mean, 40% of people think technology is harmful to the economy and even more than that don't like trade. i'm sort of at a loss. >> kate, have you been through a cvs trying to go through their automated checkout. enough to drive a person -- >> that's the -- >> i thought there would be social unrest as a result of
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electronic phone trees and only thing worse is the total lack of a customer service phone number such as with uber where i was not able to order a ride for six months. >> frontier you have to pay if you want to use their customer service. >> but in general these are absurd protests i think. >> sure. it's ob slusly a well known fallacy like the lump of work given an amount to be done a person or machine does it when in reality -- should we be making, shirts in north carolina. that's the question here. >> kate. >> people can't see how the economy -- >> i'm surprised that you're surprised that there's fear and concern out there about technology. this is something that goes back a very long way. in fact, hundreds of years. there's been this persistent fear out there that technology will take jobs away. i found it more interesting people are more afraid of trade than technology, but the idea that there's this persistent underlying fear of technology not only taking jobs but also complicating our lives and the idea that technology is moving with such a rapid pace, before
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our brains, our culture, our society is able to keep up. >> i'm afraid of technology. i haven't looked at an iwatch and i don't participate in customer loyalty programs because i don't want my shopping to be tracked, but in general i see that although we have to work out kinks it's a benefit to the economy. it feels like a sort of worry about jobs. it's very understandable but mike makes a point you can't hold back the hands of progress. you got to have free trade in order to keep the cost of goods affordable and -- >> we have to go but a final word to you. >> just quick, there's a big debate in the economic community you know about, which is that is technology helping a worker do more work or replacing a worker. and the idea that's been out there from some is that we're moving to this place where more and more of the technological progress is replacing workers not helping an existing worker do more of that work. >> caught up in the current minimum wage fast food debate. see what happens on that front. thank you.
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>> sure. >> interesting findings. our senior economic reporter steve liesman. breaking news on petco. dominic chu what's happening. >> petco is where the pets go. i'm a pet owner but what we have right now is an s1 ipo filing. petco files its s1 for going public. no indication on the exchange it will be a at or what the ticker will be, but we know among the underwriters are big names like goldman sachs, b of a morgan lynch, wells fargo among the underwriters listed for this offering. no indication on size, the typical $100 million placeholder amount is there. for context remember this is a company that went private not too long ago, about $1.8 billion was the leverage buyout, the lbo, that tpg capital and leonard green partners did to take this company private. petco looks like it will go public again, no ticker, no exchange. we know a placeholder amount but still underwriters listed
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goldman, b of a, merrill, more details to come. we kind of had an idea about this at the end of july, some of the reports surfaced about a possible ipo for petco. back to you guys. >> we'll see if performance starts to improve as we head into the fall. thank you, dom. appreciate it. petco. time for a cnbc news update with sue herera. >> hi, here's what's happening this hour. the state department saying it's too soon to tell if that thailand bomb blast this morning was a terrorist attack. 27 people were killed including four foreigners when a bomb planted on a motorcycle exploded in bank cook near a popular shrine. more than 100 were injured. the federal government giving royal dutch shell the final permit it needs to drill for oil in the arctic ocean off alaska's northwest coast. the first time in more than 20 years that permit has been given. environmental groups oppose arctic offshore drilling saying it will harm the natural wide life in that region. wisconsin governor scott walker heckled during his turn at the iowa state fair soap box
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today but dished it back telling the crowd the pro-union protesters who traveled to iowa from wisconsin didn't intimidate him. researchers from the dana farber cancer institute says there's evidence coffee may help some patients suffering from colon cancer. they found that those who consumed four or more cups of coffee a day, were about a third less likely to die from colon cancer and 42% less likely to have a recurrence. all right. that's the cnbc news update this hour. drink your coffee, kelly. >> i was just going to say, another excuse for tomorrow's cup. >> there you go. >> thank you very much. the olympics in rio just a year away but the people in brazil taking to the streets not in celebration but in protest against corruption and a recession looming there. tough times for brazil and it could mean tough times for emerging markets investors. we'll examine that next. and later we'll show you how the railroad industry is trying to get safety back on track to prevent big accidents caused by oil tanker trains.
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when i do get a chance, an opportunity to work with him, it's always a pleasure. i love my job and i care about the work i do. i know how hard our crews work for our customers. i want them to know that they do have a safe and reliable system. together, we're building a better california. welcome back. here's a look at how we finished the session on wall street. the dow adding about 68 points. the s&p and nasdaq did proportionally better up about
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half a percent and nasdaq -- for the s&p's part i should say of 10 points. nasdaq added 43 today. brazilians are taking to the streets in a big way fed up with a shrinking economy, rising inflation a huge corruption scandal. the problem a dramatic drop in commodity prices. two of brazil's exports sugar and coffee beans down 34% and 25% respectively. here to help us understand how the breakdown is impacting emerging markets, jeffrey dennis, head of equity strategy at ubs. welcome to you. is brazil -- >> thank you. >> the worst of the bunch or is it just the most prominent example, jeff? >> i think it's probably the most prominent example. it could be the worst of the bunch to be honest because you've not only got the commodity price decline, which has been so problematic for brazil, including above all iron ore given that it sells to china, but also you've had a big
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expansion of the economy in previous years fueled by credit. inflation went too high. you've got rising interest rates and a need for the government to tighten fiscal policy because the budget deficit is too high. you've got quite a perfect storm in brazil right now and, of course, commodities are an important part of that. >> mike, is it systemic? >> here's the question, is it systemic? i mean it's across emerging markets. we know the dynamics at play. i guess my question would be for jeff, do we know why this is going on? we have the fed out there, also adding to the gains in the u.s. dollar. what will break this cycle? is it just further adjustments in the currencies of these countries? >> we suspect currencies probably do have to go somewhat lower, not across the board but selectively within emerging markets including, for example, in brazil, possibly some of the more vulnerable asian currencies as well, but what we think is going on you've got a perfect storm.
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you've got weak growth in the emerging markets, particularly, of course, recently a lot of focus on china, you've got decent growth in the u.s., you've got decent growth that's picking up in europe, and so the fed is wanting to raise rates. therefore, you've got kind of two things going wrong if you like. our sense is that what will happen is once the fed starts to raise rates, once everybody gets used to the idea the fed is going to raise rates they're probably not going to move that quickly that could be the sort of thing if you like buy on the news, you've settled down once you've got a fed rate hike out of the way. what we really do need in the end which we haven't had now for many months is better growth numbers and there it's the drag that china is providing. that's been the biggest problem. >> kate? >> when you see protests in the streets looking for the resignation of rusef who has among other things lost people's confidence because of the pet tro bra scandal, to what degree would a leadership transition if
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it occurred affect the broad picture? we saw, for example, in greece that the installation of a alexis tsipras was disruptive and almost resulted in a grexit. but that caused much more short term uncertainty and concern. what about the situation here? is the country and sort of the macro picture better with rusef or without her? >> well, i think there's a huge differences, of course. >> sure. >> dillma rousseff and the pt party is a left wing party and some hope if she were to be impeached or resign, that she would have a government that was trying to move a little more towards the central. to be fair, under dillmer, the second term of her office they're trying to move towards the center anyway in terms of fiscal policy. i don't think you're going to have a big lunge to the left when you had in greece when mr. tsipras was elected in january. i think there are differences
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there. i take your point because just because you have political change in brazil, by by the way is far from certain, it doesn't guarantee that suddenly things will get better. brazil is facing enormous structural issues. >> and that's -- >> as i say, an overly large public sector, economy that's in recession, collapsing commodity prices, you need more than political change to get out of this one, although psychologically of course the markets might like to see that. >> jeff, we have to go. is it your view that broadly speaking emerging markets are headed for a crisis like the late 90s? >> absolutely po not. the difference is the fundamentals are better, so many countries with fixed exchange rates pegged to the dollar which blew up, we now have floating rates. people are getting too bearish. you will have a rally to the end of the year. >> we hope it's because of growth reasons. we'll leave it there for now. thank you so much for joining us. >> thank you. jeff dennis on emerging markets. there have been nearly two
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dozen deadly and costly oil train accidents in the past two years. now regulators and railroad companies are teaming up to ensure fewer accidents and casualty. morgan brennan has an up close look for us next. sprint launching a new program allowing customers to upgrade their iphone any time a new one is released. we'll debate whether that's a game changer in the wireless wars coming up. .
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welcome back. all week long cnbc is taking a much needed look at the state of
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our infrastructure. morgan brennan is focusing on the rails and joins us to update us on the safety in the wake of two dozen derailments of crude oil in the last two years. morguen. >> >> hey, kelly. earlier today on cnbc we told you about the growth opportunities in this freight, intermodal containers but by far the fastest growing business for the railroads in recent years has been crude oil shipments. oil shipments have soared 5,000% since 2008. it has capacity to move more crude by rail has ramped up a key part of that infrastructure is safety. making sure local authorities are properly trained in the case an accident does occur. there have been quite a few accidents over the past few years. a 19 car crude train derailment, fierce flames, firefighters scrambling to react. it looks real, but this is just a drill. part of the association of american railroad's training program in pueblo, colorado. at the security and emergency
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response training center. >> our goal is to help them get better trained, have more knowledge and specifically crude by rail. >> reporter: emergency training has been conducted here since 1985 but it's within the last two years that crude oil specific training has been offered. classes are booked solid through the end of 2015. >> a class like this where you can actually do hands on, it just opens your mind to all the different aspects of it. >> reporter: the training is sponsored by companies like bnsf and csx which makes sense since derailments are costly not to mention a pr nightmare. >> this process of training first responders is about the response piece and how we respond and ensure that we minimize the potential for damage. >> reporter: in addition to the training, the aar's also rolling out a mobile app for first responders. on the heels of a federal mandate from regulators. the app lets firefighters quickly identify what may be inside those often nondiscrypt tankers by scanning the number on the outside of the car and tank cars themselves will soon
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be changing. part of an overhaul ordered by the department of transportation. >> we think most certainly that we can move crude oil safely through communities and having a safer tank car will go a long way towards that goal. >> reporter: so those new tank car standards go into effect over the next few years though the industry has been pushing back on a key part of those rules, the implementation of a new braking system. still carriers are pushing shippers to adopt newer tank cars. they've been charging higher fees for customers that have been using the older ones. really the focus here as more crude moves by rail, the focus is increasingly becoming safety. back over to you. >> morgan, i was wondering about costs here. i mean this can't be cheap. we're talking about railcars. it was interesting you mentioned that they're charging higher fees for the older ones. how is that affecting this move to get these new cars on-line? >> yeah. so that's a great question. you already have some of the railcar manufacturers have developed sort of these new tank
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cars of the future. they've got orders in place and they're starting to roll those out. we'll see how it goes in the second half of the year in terms of those orders when they come out with their earnings reports. but we are starting to see shippers begin to place these orders and adopt some of these new cars. certainly you have companies like bnsf that are pushing for some of these new tank cars to hit the tracks faster because quite frankly when you see a crude train derail or an accident around that, that is a very, very costly situation and no one, not the railroads not the local communities, no one wants to be involved in that. it's extremely expensive. >> great point. love the hard hat. >> it's tragic. >> morgan brennan looking at train safety this afternoon. few people -- their mobile phone provider but that doesn't stop the telecom companies from trying to win you over. sprint trying to get the edge over at&t and verizon today with an offer of new iphones for life. we'll break them down and see which wireless offers the best deal and the best investment. stay tuned. the promise of the cloud is that every organization
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t mobile, sprint, at&t, it seems every day each one has a new deal to trump the competition. sprint was add at it today and
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josh lipton joins us with what they're offering now and breaking down the deals from each of the major telcos. hi, josh. >> kelly, ahead of the next generation iphone launch expected next month, carriers as you mention ready rolling out new plans so bear with me because shopping for the right one is no simple matter. let's start today, sprint launching the iphone forever plan. 60 bucks for unlimited data until december 31st pay $15 per month to trade in a smartphone for a new 16 gigabyte iphone 6 or, s if it launches before the end of the year. total monthly charge on this one $75. t mobile with its simple choice plan, customers pay $08. consumers if they buy an i phone 6 before labor day pay $15 per month. total monthly charge $95. t mobile doesn't charge the $36 activation fee that sprint does. at at&t the mobile share value
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plan. $115 for 15 gigabytes, 32.50 to upgrade annually. total 147.50 though with at&t, you own the phone, you don't lease it, so you can it in. at&t arguing it means you have more options, more flexibility. now, finally, verizon charges $100 for 12 gigabytes for the smartphone, $27 per month to upgrade for a total of 127. though verizon notes that most customers only use about three gigabytes or less. and for that verizon charges some $60, not $100. still with me? so the bottom line is this for consumers. how much data do you really need? that's the question mike gikus of "consumer reports" says you have to answer. he says most people don't need more than two gigabytes a month. also she says watch those access speeds because those can range from $15 to $40. kelly, back to you. >> my head is spinning. i'm wondering, kate and mike, what you guys make of it. >> it's no accident your head is
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spinning because they don't really want clarity here. what was interesting to me was the street there, was some analyst commentary just today saying they were enthusiastic that the promotional activities become less aggressive among the carriers. so maybe you have these -- >> less aggressive? >> just very much right now. not in general. but we're in a phase before the new iphone comes off. >> anecdotally that was not my experience with at&t. i went to buy a charger the other day. it was a long interaction with the service provider with follow-up texts to get -- and the tv and -- >> it's all well and good to get super cheap data but if you can't receive a text message or use the roaming service where you are that's a huge problem, right? >> josh, i don't know offhand. but have the t-mobiles -- oh, josh is gone. i do wonder if the t-mobiles and sprints of the world have closed that gap which was really a problem for them years ago.
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zblif a babysitter who can't get any t-mobile service in our home which is where her job is. that's a problem. you hear that that's the case in a lot of places with that service. >> we'll see how that picks up once the next iphone fresh cycle happens. up next she's been called the martha stewart of silicon valley. brit moran joins us to look at homemaking in the digital age. you're watching cnbc, first in business worldwide. i'm here at the td ameritrade trader offices. ahh... steve, other than making me move stuff, what are you working on? let me show you. okay. our thinkorswim trading platform aggregates all the options data
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she's been dubbed the martha stewart of silicon valley. brit moran went from google exec. to do-it-yourself expert, to founding herr own diy and e-commerce site that scored 7.6 million in funding from the likes of marissa mayer among others. she's also now the author of "homemakers: a domestic handbook for the digital generation." and brit moran joins us now on a day when there's a lot of focus about the culture of silicon valley and your own purchase, somebody who's been in these rough and tumble companies and now a book called "homemaker." it's great you have to on the program and explain how this transition came about. >> yeah. you know, i was working at google for several years. apple before that. i've lived my life in silicon valley. and when i left, i find myself just wanting to create stuff. all of my friends who were women in their 20s and 30s loved diy
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but they were going to the internet to find out how to do it and what they needed to learn it and there was no resource for them. it's a $34 billion market and no one is serving the millennial crowd. so i did just that. >> give us some examples of what people were looking for. is this basically old school kinds of projects just presented in a new way or is it new kinds of projects as well? >> this is new. and you know, i like to call it diy instead of arts and crafts so that it doesn't feel like a 5-year-old and it doesn't feel like a 65-year-old. women today are wanting to work in the workforce but also come home and learn to bake cupcakes, to do calligraphy, to knit a blanket for their baby, to 3-d print something. and this gives them all the inspiration they need. there are over 50,000 projects they can find. but we also teach online courses. we have a couple dozen courses. bit end of the year we'll have 50 to 60.
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these are multiple hour-long courses where you can learn specific kills ranging from html and coding to cake decorating and calligraphy. and finally we let women who are making things sell their products back to our audience of roughly 13 million per month right now. >> wow. and for those who think 3-d printing is just a fad, brit, we should mention that you incorporate a lot of this kind of high-tech stuff as well. >> that's right. i think that's the difference with brit and co. we really try to integrate technology wherever we can. whether it's actually giving you machines and apps and ideas of how to leverage other things that can make stuff for you or we connect you with makers and designers and artists through technologies so you can learn from them, get inspired by them, ask them questions. and it's really a community at large. that's what the co. in brit & co. stands for. >> kate? >> i can see the gap there because unless you work in a corporate environment or an academic environment where you have people for example that can teach you these tech skills or
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on the old school end of it if you have a grandmother or a mother who's terrific at sewing or knitting or -- as my grandmothers were, you may not know where to go for that kind of instruction. whether you need it for a job or you're just interested. >> do you have any male -- what's your male-female breakdown, brit? i'm just wondering. >> we're like 95% female. we actually launched a spoof on april fool's day called about & co. and some people got upset when we took it down and told them it's a joke. so maybe we'll enter the male market one day. >> i'm just asking here because mike is dying to figure out -- >> i was waiting for my opening. >> brit, can i just ask you real quick while i have you this article about amazon and its culture. you've come from some of the most difficult and successful companies in simm colicon valle. do you think it's sustainable for you as a young mother and somebody as you're getting older able to stay in that kind of work environment? is it toxic for people, do you
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i? >> i don't think so. i worked at some of the large companies as well like google and apple. and even at brit & co. we offer our employees flexible time off. we have no vacation policy. you can take vacation whenever you want. you don't have to document it. if you need to come in late to the office that's fine. and what i find is because all of our employees are now connected it's so much more easy to have that work-life balance. you get your work done. and that's all i care about as the ceo. so hopefully these other tech companies are following suit. >> and brit, real quick, how do you feel about #this 30? >> i was next to chrissy teigen. so having to model next to a supermodel on the cover of a fashion magazine was very -- >> i was hoping to mention that you also shared some of the ink with these folks. >> yeah, i was not next to chrissy teigen, though. >> congratulations. >> what i love about it is i took ell for granted as part of the cultural milieu. i had no idea we're all turning
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30 this year. brit, thank you so much for joining us. it's great to hear what you're up to. and congratulations on all that. >> thank you. >> brit & co. the september issue of "elle" does hit newsstands tomorrow. i'm blushing heavily. thank you for being here. mike santoli, kate kelly, thank you for being here. that does it for us. "fast money" begins right now. live from the nasdaq marketsite overlooking new york city's times square, i'm melissa lee. this is "fast money." our traders on the decemberric tim seymour, steve grasso, dan nathan and guy adami. tonight on "fast" the apple rumor mill is heath up from self-driving cars to sprint's new iphone forever plan. what is real? what is fake? we're separating fact from fiction on all things apple. plus mickey and darth vader coming into town. a special report on disney's big plans roll out "star wars" theme parks in the near future and what it could mean for one of the most widely held stocks in the nation. the dow staging a 200-point reversal from the low. the s&p bouncing off a key level for the fifth day in a row and


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