tv Closing Bell CNBC April 19, 2016 3:00pm-5:01pm EDT
a weigh station. thanks for joining us. guys, back to you. >> all right. fly me to the moon. thank you so much for being with us. >> it was great. >> new episode of billion dollar buyer tonight at 10:00, looks very interesting. 10:00 eastern and pacific here on cnbc. closing bell starts right now. the closing bell -- no. no. this is live with kelly and michael because we understand the name is now up for grabs today, mike. >> you've got to move fast on that one. >> i'm kelly evans at the new york stock exchanges with mike santoli. >> i'm mike santoli in for bill griffeth. while everyone is watching shares of netflix declined today, another mad i can't name is sinking, viacom's slide coming up. >> target raising it's minimum wage to 10 bucks an hour. we will break down the impact of the wage debate. >> plus the car of hbo's silicon
valley will join us live ahead of this weekend's season premiere. we will discuss the potential impact on the real silicon valley will have on that show. >> as we await earnings after the bell today from intel and yahoo among others david faber spoke with jeff smith earlier. he joins us with more on that fascinating tale. >> people are so focused or at least many publications are very focused on yahoo's potential sale of its core business but there doesn't seem to be quite as much focus on the impending fight that's taking place with starboard, the firm that owes 1.7% of the shares of starboard launched an attempt to take control of the board of directors of yahoo, but it's interesting, the conclusion of that proxy fight will come after the conclusion of the process to sell the core business. so i asked mr. smith wouldn't it be better to try to settle and get on that board now to potentially influence the sale
process as opposed to be there when it's over and done with? >> if we get to the end and they haven't been successful as it relates to getting the company sold, the core business sold we are going to need to pick up the pieces and be able to make change a. now, the other choice as you mentioned is settling. the advantage of settling today is to work with the company and be a part of this process and add capability and credibility in the boardroom. >> mr. smith indicating of course they are talking to yahoo. that is often the case between an activist and the management board of the company that they're targeting. it doesn't appear that they're close to a settlement, he wouldn't give a lot of specifics in terms of what he might accept, but it is certainly a question that he is taking very seriously because there is a question as to whether or not you have more influence being in the boardroom if you can get in there now as opposed to when yahoo has concluded the sale process which by the way as many
as we know were due not first round, we'll see who actually moves on to the second round aside from verizon, which has made no secret of its interest guys in buyingia and did show up with an actual bid to do just that. it's complicated, though, as you know. let's not forget it leaves behind an investment company main holding of which will be all those shares of alibaba. >> david, among the many things that was interesting from your interview was when he was talking about the sale of the core yahoo business he said somebody can come along and pay 3, 4, 5, 6, 8, $10 billion he had this wide range of notional values for this thing. i thought that was fascinating. >> yeah, i mean, i think obviously as a large shareholder he's hoping it will be as high as possible and perhaps there will be a bidding war that leads somebody to do something irrational. i don't see or hear a lot of people in the reporting i've done believing that you're going to get a number let's call it much above 5 or $6 billion.
i think that's fair to say. his point is every -- you know, as an additional dollar a share every billion dollars. they are hoping for as much as possible. his other point which is well taken is what is left behind is really more important and the governance there and what will happen not just the stake in alibaba, the 34 million shares, 15%, but also yahoo japan stake. there is still a lot to come on joo including right after the bell when we will get another look at how much the fundamentals of the company are deteriorating. that certainly if that's the case will help mr. smith's attempt to unseat nine board members late as it may be in the sale process. >> we will get those results next hour. david, you have had a full day, a busy day there speaking with a number of different guys. what jumps out to you from the interviews and the discussion that you're taking in today? >> you know, speaking of keith meister was interesting, he is a board member of williams ways in
this extraordinary battle with its merger partner ete for one of the largest infrastructure/pipeline deals we have ever seen. that is not going particularly well. he did comment a bit on that. and speaking of ed gardner about their large interest in ge. they are one of thieves funds that is trying to transform themselves, that is, trian from being seen as an activist to being seen as more of a blue chip endorsing, if you will, of the strategies of corporate america. so that management will reach out to them and bring them in as a sort of seal of approval that might garner interest from other institutions, but interesting to hear some of the thoughts and some of the ways these activist funds are trying to transform themselves in what has not been a great period of course as you guys know for activism at least not recently. >> david, thank you so much. viacom falling on news it's agreement with dish network
expires tomorrow and no new deal is in sight. julia boorstin tells us what's going on. >> that's right. the pressure that cord cutting is putting on media companies is on display as we see the battle between viacom and dish, the impasse between the two companies sparking concerns viacom may be forced into a bad deal sending viacom shares up 8%, dish shares are up 1.5%. both companies coming out swinging. viacom telling subscribers we are extremely dish is not engaged in a serious way to reach an agreement. this is on par for the course for dish which was deliberately derailed ten renewal negotiations since last year. dish firing back that viacom is asking for hundreds of millions of dollars in increases despite the changing landscape that includes drastically reduced viewing of viacom channels. if no deal is struck in the next
day viacom channels could go dark at the end of the day tomorrow. guys. >> that includes comedy central, mtv, nickelodeon is that that might be the big one. >> at your household. netflix sharply lower as well. which is interesting because we're talking about how they're disrupting this traditional space. there's concerns over subscriber growth at netflix especially on the international side. >> yes, well, it was really the subscriber projections for the second quarter that sent the stock lower. coming in despite the fact that those first quarter earnings and subscriber growth in q1 did exceed expectations. a number of analysts have lowered their price targets on this news including jpmorgan though he does recommend buying on weakness he says that investor focus is shifting from the u.s., slower an expected international growth. despite questions about growing competition for netflix including some amazon's monthly
video subscription service the ceo reed hastings says there is room for many players to succeed in this digital video space. >> hulu is doing great work, amazon is, hbo, showtime, there are so many competitors and everyone is working hard to build the best content. so, you know, we're seeing growth in the overall internet tv market, of course, that's displacing linear tv. >> hastings says that netflix is going to stick with what it does well with no plans to move into live or into sports programming. guys. >> all right. julia. >> seems like investors in netflix get a gut check with these quart reports. >> or a punch in the gut. >> turning to the markets joining our "closing bell" exchange we have nancy tangler, dan willis and our own rick santelli. nancy, we have this market continuing in melt up mode, nine
weeks and 14% isn't so bad. are you finding some things that actually look attractive even after this rally? >> yes, we still have. we look at relative price to sales ratio, mike, and also relative dividend yield. we are still finding attractive names in fedex, or cal is also at a historical low and even google which is a little dangerous because they report on thursday still attractive to us on a relative price to sales ratio basis. >> nancy, what about ibm? we had that after the close yesterday. you mentioned or cal, but ibm shares around i think about 6% today. what would you make of that? >> kelly, i'm actually a little encouraged that they are not down more. this is a story, it's a deep value story, attractive on a relative dividend yield basis of course. the company has been buying back stock raising the dividend and now is on an acquisition binge that is the greatest they have seen in the last 15, 20 years or
in their entire history spending $9 billion, buying 20 companies. that's the hope for the future, that ibm can buy the technologies that they don't make internally. and they've been unsuccessful at. we have hope for the could go sieve bases, we just initiated a position a few weeks back, i wish i had bought it two months ago, i think the question in three years will be why didn't you buy more. >> ben, why don't you address the overall market here. we have had some round numbers come into play the last couple days, dow 18,000, crossed 2,100 on the s&p 500 today. how does the market field position look to you here? >> i think the best way to look at this market going all the way back to february is this has been a risk off market. the huge short interest rate if you look by sector by sector there seems to be a daily love in covering of shorts positions that drive the equities related in some case the commodities like the oil stocks. oil is a great example.
huge short position in the oil stock and in the oil commodity in anticipation you will have a much worse result out of doha, that trade was so crowded i think that's what you saw today was again a short covering on that issue. we follow a basket of stocks that are followed by a negative research firm and the stocks that have the -- continue to have downward momentum have those issues where they continue to fall but when there is a which ha whiff of upside potential the short cover has monster move, the blue chips if you can bring up a chart of exxon you have had the whole street talking about this chart for the last two hours, the stock looks like the market, it's flat lined. >> that's pretty remarkable. >> you have to be sector specific in looking where -- what's been going on and if there's a large short position you need to be very careful. it hasn't been a risk on trade, it's been a risk off trade that's been driving the up side. 12 straight weeks of smart money out of merrill lynch has been
selling into this market. >> okay. rick, you know, we also got comments from boston fed president eric rosengrim earlier today and he said markets are off the market, you are only pricing in one more rate hike, he thinks that the rate hikes will be more rapid than that. and he's the guy that's pretty dovish, it seems significant that he would come out and feel comfortable enough to say this and you really don't see much of a reaction, do you? >> no, it makes me even more nervous that a dove would speak this way despite the notion that he probably forgot to tell janet yellen the market is wrong. i don't know. i think when it comes to fed we can talk all day, let's look at how it pans out, there is counterintuitive activity. i'm surprised that the strength of late in the equities, this is only us, take a look at the dax, one of the few times in year it's in positive territory and interest rates are ignoring it, we haven't settled above 180
since the end of march for 10. there is a red flag, b, ecb meeting this week, ours and bank of japan next week, notice how the dollar index is teetering here, we are losing the 94 handle. this is very significant technically and i think that speaks more to draghi. last but certainly not least i think that when we look at some of these unique stories, whether it's the financials, the bar is low, many people are -- wouldn't be diffused numbers a month ago but none of that matters any more. there is momentum in i can wits and i think it leads for the next several weeks. oh, and one other thing. we hit negative 12 1/2 basis points in the japanese government bond. that might be the pulling effect of our rates despite the rightness of what's going on in the equities side. >> rick, it's not just -- and the treasury side of things, in equities where showing risk on. argentina $15 billion in debt and the riskier parts of the
credit markets doing okay as well. >> absolutely. let me tell you, mike, in the type of environment we are in now as long as equities are doing good all the other derivative markets, high yield investment grade, foreign high yield, i can't see how they are not going to be popular as people do as you pointed out feel a bit more comfortable in this eye of the storm. the eye might last longer than we all think. >> nice, thank you. rick, ben, nancy, appreciate your views on this market. 45 minutes left to go here. we did briefly go into negative territory throughout the session today. the dow is up 33 points, the s&p up 5, the nasdaq has been laggin lagging. >> and netflix and amazon also weaker today. target is reportedly raising its minimum wage but will the move miss the market with shareholders we will discuss that next. also ahead silicon valley hits wall street, the story of the hbo series, thomas middlevi
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let's take a look at ebay. morgan stanley downgrading from underweight to equal weight today and reducing the price target to 22.50 from 24. increasing competition from amazon. >> tough bay for ebay. target reportedly mazing it's minimum wage for the second time in a year. courtney reagan has more. >> so target won't confirm or deny reports that it is increasing its minimum hourly wage to $10 in may, but it seems all but inevitable. it would be the retailer's second wage bump in a year after increasing to $9 per hour last april while also putting target in line with walmart which raised its hourly minimum wage to $10 january 1st. employees at target and walmart already taking over $10 an hour will be reportedly eligible for further pay increases based on merit and experience. i spoke to one target employee that tells me that is what she's
been told as well. target's official statement says only that it pays competitive rates and regularly benchmarks the marketplace to ensure its compensation and benefits are in line to recruit and retain talent but target doesn't disclose the details of its compensation programs. it's not clear how many of target's total 340,000 employees will be eligible for the reported raises, though safe to assume it's much smaller than walmart's eligible employee pool. target has admitted that labor costs are going to be a head wind this year and analysts i've spoken to think that it has been accounted for in the guidance, but there is still some skepticism whether the retailer can hit its gross targets even before this report of higher wages. kelly and michael. >> courtney, i'm also wondering, you speak so much with these different retailers, do you get the sense that these minimum wage hikes are a push or a pull? in other words, is the company pushing them through because of regulatory reasons or otherwise
or does it feel like the strength of the economy is naturally pulling them higher? >> that's a great question, kelly. i think it could be a combination of the two but i would err on the side of it being a bit of a push. i think it really is to retain talent in the marketplace. a lot of these retailers are shifting some of these labor hiring and wage growth in their e-commerce fulfillment. those areas often have higher wages and that has become very competitive as well. >> all right. courtney reagan. it definitely feels like there is a mainstream over wall street dynamic going on for a while now, at least a year. let's see, we have 40 minutes to go left in the trading day. we still have the major indexes up about a quarter of a percent each, s&p 500 up by 5, to 2099 or so. >> and yahoo and intel will report their earnings after the bell today. we will tell you what to expect, break down those numbers until they hit the tape and stacy smith will speak with us minutes
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welcome back. let's check in on tesla, those shares are lower today. consumer reports says the model x is facing quality issues. tesla says it is seeing some issues with model x sales but they are not widespread. the report in consumer reports notes that such quality issues are expected from brand new models. let's take a look at a couple of movers today. goldman sachs gaining ground, the dow component reporting better than expected earnings for the first quarter amid deep cost cuts, the revenue did come in below street estimates, the stock up 2.25%. united health group also higher, the health insurer reporting better than expected results, also raising the full year forecast. they say they're removing offers from almost all affordable care act exchanges by 2017. those shares up a little less than 2%.
hbo's hit show silicon valley returns sunday for a third season. the show follows a group of young program percent who create a tech start up called pied piper in a life i'm mates art scenario. richard hendricks has to deal with being ousted from his company. >> check this out. turn your head. do you see that? compositing perfect 3-d holographic mustaches. no one is to go this. >> nobody. >> sorry. this is the -- this is the mad thing? >> look, richard, we agree, okay, we are not there yet, we are using a crappy plug in so the lay tensy is fast, but with your help we can cut our stash lag to 20 millie seconds in nine months. >> just in time for november. >> joining us on set right now is one of the stars of the show, thomas middleditch who plays richard hendricks.
you do have a news ash. >> and i do have a cane. >> is that a wall street nod here. >> yes. yes. i wanted to appear as though i was a 1980s villain and i would be like hands off my girl. >> an 1890s villain. >> i needed more grease. >> welcome to post 9. we know you will be ringing the closing bell in just a moment. you mentioned just a moment ago the line up for hbo come sunday night, it's "game of thrones" and you games and john oliver. >> it's a crazy night. >> interestingly i think one of the moves hbo has made is to air "game of thrones" simultaneously around the world and create an event out of that. >> yeah. >> do you think that that's one way to come back against the netflixes of the world where everybody is binge watching on their own to make more of an event out of these kinds of things? >> i certainly -- i certainly think it's a cool idea. it doesn't work for every show. i was fortunate enough to be invited to the "game of thrones" premiere in los angeles and it was a grand old event at a grand
old theater and it was very fun, but that's a big show and it's very well done but also a big epic fantasy show so it works in a theater. i have to be honest that beats any other viewing party i have been to. people were cheering and stuff, it was really fun. i teared up i won't tell you what parts and i won't tell you i'm embarrassed because i'm not, it's brave to cry. >> i expected teasing of all the things you can't tell us. your shore, though, obviously pulls from real life or maybe real life emulates what's going on there. it started out kind of as things were seeming like they were a little nutty and frothy in the real silicon valley. how does it feel now? are you tracking this maybe coming off the highs of silicon valley or is it all just coincidental? >> i don't know. i don't know. i can't tell you the algorithm, fun keyword there -- to the show's success, but it definitely feels like -- well, for example, the mustache bit.
we were writing that and laughing about how ridiculous that is. face swap is out it now, big, very popular app. i remember in the first season when richard was being offered -- he was initially being offered $100 million for pipe piper and we thought that was too crazy, no one would believe someone would turn that down so we lowered it to $10 million. in between that pilot and the first season the snap chat guy turned for 4 billion, $5 billion and we underestimated that. >> the challenge is to stay one step ahead of reality with is a tire. >> i guess. it ems so the challenge is keep the insanity high enough so that you are sat rising it as opposed to -- >> i know people ask you all the time about your personal involvement in silicon valley and whatnot. i thought i did read that you are into game design, is that right? >> yeah, i've been a cripplingly addicted to video games so my way into tech is through there,
that's where my knowledge and interest. who knows, maybe you are looking at jared lee toe 3.0. >> i also read you are big on microsoft and the pc and the gaming platforms but also on your mobile phone, too. >> oh, yeah. i hate to say on my mobile i do use android. >> that's sort of against the consensus these days, i go he is. >> i think there are windows phone makers that would be like, i don't blame you, but in terms of, you know, operating systems i do like windows, man. windows 10. >> also wondering who your real life character -- do you have any sense who that's based on? >> i think it's an amalgamation of stuff that one might assume through pop culture, you have to make the show appropriate -- i meant to a approachable for people who aren't necessarily in silicon valley. >> and appropriate. >> it is. rated for language and nudity.
>> but, no, i didn't go in -- i don't want to give myself too much credit as an actor, i didn't go in and research the part. talking to mike judge and they were like what do you want the character to be and essentially telling me and i was like let me try to do that. >> i appreciate you stopping by. thanks very much. you will be ringing that bell up there. >> i can't wait to ring it. >> don't mess up. >> i was going to say order, order. i demand order in my stock exchange. >> you might actually get it. >> good. >> and there will be boos, thomas, if this doesn't work. good luck with the new season into my pleasure. >> silicon valley returns this sunday 10:00 p.m. eastern on hbo. time for a cnbc news update let's get over to sue herrera. >> senate majority leader mitch mcconnell telling reporters he's still considering a bill that would allow u.s. citizens to sue
the saudi arabian government over the september 11th attacks but has not set a date for dee gate baiting that legislation. syrian government air strikes continuing on rebel held areas. searching for victims and treating the injured hit by the strikes. >> visa and walmart each taking steps to speed up checkout for customers with chip enabled cards. visa announcing it has upgraded its software to reduce the checkout times. walmart has eliminated a prompt to confirm the amount of the transaction. >> attention french fry lovers one mcdonald's frark ice is putting all you can eat french tries on their menu in st. joseph, missouri. customers will be able to customize their burgers and desserts by ordering through a kiosk. the location will open in july. road trip. that's the cnbc news update this hour. back to you kelly and michael.
>> i appreciate it. i think we have some branding. i would like to think that that promotion of all you can eat fries is one of those things that's not going to cost the store anything -- >> but they will. >> in the social media -- who is in the going to want to be the guy who goes and has 12 pounds of fries. >> my kids will be all over that. my kids alone will dent the bottom line for mcdonald's with that. absolutely. >> summer road trip. >> probably very nice in july. >> absolutely. or any day. bye, guys. >> thanks, sue. 28 minutes left before the bell. the dow still up just about 50 points, the s&p 500 also up about the same percent, nasdaq marginally down still. when we come back td ameritrade fred tomczyk.
welcome back. looking at shares of td ameritrade down 2.5% today on a revenue miss this morning in their earnings result. they posted $14 billion in new client assets. joining us now fred tomczyk, president and ceo of td ameritrade to talk about those numbers and his business. >> it's great to be here. >> tell us about the environment in the first quarter. tough for markets but your customer activity went up and you pulled in to net new assets. >> i think if you look at the first quarter it almost got bifurcated. january and february the markets were down, we had a technical correction, people pulled in our margin fell, the stock lending fell, in march we came all the way back, but during that period we had essentially two-thirds of the days where markets moved 1% or more. that's a great environment for
trading so we wound up having record trading results. >> the net new assets you're pulling in you point out in your announcement 8% annualized rate. where do you calculate most of that's coming from? who is losing market share in all of this? >> we have two channels, a retail channel and institutional channel. historically the institutional channel has been three-quarters of that. most of it will come from cash, from banks or other people starting to move into the market but a lot of times it's coming from the independent broker dealers. >> how does it shake out for you guys, the fiduciary standard from the labor department? >> i think we are sorting through that. i think the new proposal is better than the previous one, there are some things that we add kuwavocate that they reacte but it's a 1,000 page rule that's hard to digest and a lot of areas open for interpretation. it will take firms a little bit of time to sort out what it
really means. but i think our business model was in a relatively good position to adapt and take advantage of it. >> your business model obviously you kind of encompass the retail business you've talked about, active traders within that, active retail traders, the institutional channel investment advisors who keep assets with you. what about the new move to passive automated robo adviser type platforms, is that going to be the winning approach over time? >> i think it will definitely take a piece of the market it looks like that, it is a newer disrupter technology but they've been around for five, six, seven years and so their assets while they're growing are still relatively small in the overall scheme of things. but we're rebuilding our oel experience front and back and putting in goal planning and tracking against those goals. we still believe the hybrid model which uses a heavy dose of technology augmented with an individual is the right way to go for the broadest part of the market.
if all those do make a bigger impact we will be able to adjust and emulate that model, too. >> when is your tdbot launching? if you look at mark zuckerberg he says the future is not going to be apps. if he's right that there is a shift under way and people will open their messenger app to chat with their dd account about what this he will do with their stocks. do you see that as the future and trying to build a presence there? >> one of the features we are building is live chat back and forth and we will also over time start to use technology for the interface as you track against your overall investing experience. one you think about in today's world there is no reason you can't give a review through a youtube video, no reason you can't have skype or face time to interact back and forth to make it a more personalized experience. >> you are not snap chatting
your results just yet? >> no, my successor chairman is big into all that stuff, is that.chat and twitter, he will continue to push newer technology. >> he will keep some compliance officer pretty busy trying to figure some of that out. i remember when it was touch tone trading on a phone. fred tok zik, thank you so much. we have just about 20 minutes to go before the bell. dow still up 60 points, a little bit below the highs of the day. up next we will tell you what to watch in yahoo and intel's earnings reports which come after the close. and we're also going to get those intel numbers for you, break them down exclusively with the cfo stacy smith, it's all right after the closing bell. stay tuned.
welcome back. two big tech names out with earnings in just minutes, josh lipton is tracking yahoo and dom chu is on intel. we will get a preview of both with josh kicking off on yahoo. >> mike, yahoo's ceo marissa mayer does have a plan in place to turn around this company but will with see evidence it's demonstrating any progress. analysts expect yahoo to report earnings per share of 7 cents on gross revenue of $1.08 billion.
it's that net revenue number that's really important met interest i can to check out. that's the one that's going to tell us what progress if any yahoo is making this this turn around. doshi not optimistic. other analysts say those financial results take a back seat to that potential sale of the company and nasty proxy fight from starboard value. >> dominic chu, what are you expecting from intel? >> considered many by a bellwether for the health of the tech industry. earnings per share 48 cents, sales of $14.8 billion. a big focus will be on the health of that personal computer market, the company's biggest segment by is revenue, also looking for news on possible job cuts this spring after reports to that effect last week. as usual any guidance on the current quarter on full year will be key as well.
that stock has lost 8% year to date, 2.5% in the last 12 months, the options market pricing in what could be a move on this report of inches 4.5% up or down, that compares to a 4% move over the last eight quarters up or down. >> thank you. mike, i am reminded on intel, barron's piece from last year i believe when they were saying catch out intel here comes facebook. not the like leeest, you know, issue for them in the space but how these -- >> just win intel basically killed the rest of what used to be the pc chip competitors they have to worry about some other platform entirely. intel, yahoo, ibm yesterday all these old stalwart tech companies in a vulnerable transition case. >> some investors love it and plenty others staying away. we have 15 minutes to go and a market that's still in the green but we are certainly off the highs of the session, the dow is up 39, the s&p 5 and
nasdaq still negative. >> oil breaking a four day losing streak today, will energy be one of the sectors that can lead the market to the next leg higher to those all time highs. that's next. or not in vests. this is my retirement. retiring retired tires. and i never get tired of it. are you entirely prepared to retire? plan your never tiring retiring retired tires retirement with e*trade.
welcome back. president obama is heading to saudi arabia amid a long simmering tension between the two nations. eamon javers has the latest. >> the president was wheels up for saudi arabia from andrews air force base a couple minutes ago but before he left he poured a little cold water on the september 11th bill that's moving up on capitol hill. that bill would make it easier for american victims of the september 11th attacks to move forward with lawsuits against the government of saudi arabia in u.s. courts and in an interview with cbs this morning the president said he doesn't think that's a very good idea. here is what he said. >> this is a matter of how generally the united states approaches our interactions with other countries. if we open up the possibility that individuals in the united states can routinely start suing other governments, then we are
also opening up the united states to being continually sued by individuals in other countries. >> speaker of the house paul ryan also expressing doubts about the legislation earlier today paul ryan not as definitively negative as the president, but expressing some of those doubts. here is what he had to say. >> i think we need to look at it. i think we need to review it to make sure that we are not making mistakes with our allies and that -- that we are not catching people in this that shouldn't be caught up in this. >> that puts the two leaders at odds with some people in their party including john core anyone of texas a republican and chuck schumer of new york a democrat both of whom are pushing that legislation on capitol hill. not clear whether that ledges lay will pass particularly in the face of a white house veto threat that's now been issued but obviously the president on his way to saudi arabia now we will see this contentious relationship continue to play out in the coming days. >> thank you so much. our eamon jofrs in washington. >> oil on the rise today as a
strike in kuwait is put cut noog crude production there. there could be larger concerns as the balance of power in the region shifts. >> joining us to talk about the oil market is michael cohen. so we have no agreement on a production freeze, the market maybe was expecting some of that and yet it's traded pretty strong firmly after no agreement. what does that tell you about the balance in the oil market? >> right now on the supply side we are seeing non-opec supplies outside of opec countries starting to i a just, especially here in the united states. we've seen production coming off 50, 100,000 barrels a day every single month. on the demand side it's a mixed story. we see strong consumer led demand for airline and also for gasoline, but on the other hand industrial demand is actually coming off pretty steeply because of this reduction in drilling activity, reduction in rail activity and shipping and freight. we're worried about that. we think that also some of these
unplanned outages are likely to come back on so this kuwait problem is not going to last for a very long time, but it is from a balance perspective at least we see things being very constructive and getting nor constructive by the end of the year. >> i'm struck by the dollar index today. it's barrel above 94 right now, we've unwound a year's worth of gains in the last several weeks. are higher commodity prices the flip side of the high dollar story. >> both of these aid sets are moving in a related manner. there are implications of a weaker dollar on oil and an implication of higher oil prices on the dollar. and i think that the major place where that's going to have an affect is on the demand side in terms of china's commodity demand in a weaker dollar environment and at the same time those producers that saw benefit from a stronger dollar are going to be disadvantaged from a weaker dollar. so that's going to have head winds and tp to tighten the
supply side of the market. >> so you see crude oil going just up to about, what, the mid 40s. pretty much this is the top of the range right here? >> we think prices are going to be remaining range down between 35 and 45 for this quarter. as i said we're concerned about the demand side of this story, especially as we get closer and closer to the end of this summer. we're going to face another season where there's not really peak demand. so we see prices averaging that 35 to 45 during this quarter and then moving up higher to 45 or possibly 50 in december by the end of the year. >> we have to go but does that mean more bankruptcy on the way for the oil and gas space? >> absolutely. that's what ouren a lists are saying, we will see continued bankruptcies anywhere -- several companies already have that. so we will see it again and even more by the end of the year. >> michael co hasn't thank you very much. we're coming back with the closing countdown in just a minute. after the bell yahoo and intel both on hand, they will
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first time it's been there in some time, i think since november, bob. >> that's right. >> obviously not pulling back, everyone sort of seems to think we're poised for something like that. >> i know it doesn't look like much, but remember something, we are 30 points from a historic high on the s&p, 300 points from a historic high on the dow. this is two good days of trading. the question everybody wants to know is what could do it. my contention is just like banks moved it last week it's industrials this week. illinois tool works historic high today, that's going to be reporting today. i love illinois tool works. they make stuff all over the world, refrigeration equipment and industrials and automotive -- >> buying up companies for decades. >> for decades and selling off slow growing parts. if the global economy is improving in any way they will see it. my position is in any of these company, honeywell on friday, ge on friday, if they say you know the global economy is a little better than it was three months
ago, even a modest comment like that might be enough to propel these stocks just a little higher to the record highs that we are talking about. >> industrials a lot of technicians have loved that group recently because they have started to skrout perform in the last three months or so. >> that's the down side. these stocks are mostly trading at 19, 20 times forward earnings. they are essentially fully valued. they are pricing in modest growth already. the question is do you have enough to get it even further? and it's quite possible we could have good comments from illinois tool works and may or may not be too much because it's already moved up. historic highs. this is the group that could move the market to new highs. >> we have tech and consumer stuff softening up today. industrials capture your weak dollar play, your china. so it's the sum of a lot of fears there. >> remember, weak dollar, fed putting a floor under the market, oil -- all of these capital equipment names, the markets fell apart, all of their markets particularly in the
emerging market countries, they all fell apart because demand fell apart. the question is is there any kind of slow improvement, is it not as bad as people anticipated? they flashed the numbers for all these companies, maybe they went too far, maybe it's going to be a little better. i know it sounds like a wing and a prayer, but that's what it's like in the markets today. that's what it's like with a 2 rs gdp growth. you look for anything, pay up for any modest growth like an illinois tool works. >> also i guess you broaden out, 2100 on the s&p you have gone sideways in a pretty choppy way. i guess the way will be can you generate any real momentum above that even fugts some good in ms. >> we are not talking about a lot here. they're talking about 1 to 3% organic group in illinois tool works this year. that's nothing to write home about but that's what we're like, slow growth, they will pay a lot of money for even little bits of growth. >> all right.
we will be listening to see. thanks a lot, bob. >> up at the nasdaq we have bio marin pharmaceutical ringing the closing bell, down here st hbo silicon valley, time warner. kelly, over to you for the second hour. >> a top notch on the bell from thomas middleditch. welcome to the "closing bell" i'm kelly evans. the dow adding another 50 points, 1854 is the closing level, gain of a quarter of a percent. the s&p up a little more than that, 2,100 pretty much on the nose closing up 6.5 points, a benchmark level to discuss there. the nasdaq not participating today, in fact, closing down
about .40%. illumina a business disappointment and netflix had a weaker session after the results today as well. s that the dak down 19 points. investors are set for another big pair of tech earnings, josh lipton and dominic chu. back with us for the hour is mike santoli along with dennis berman. tim seymour joins us as well. mike, just some thoughts. >> just tacking on a little bit, even though it's a pretty obvious place for this market to pull back after a 15% gain off february lows. i've been keeping a running tally how many times we closed 2100, 56 different days we have crossed aen only gotten a percent and a half past it ever. i think people will begin to
wonder if this is all you can expect, but there has been a lot of doubt accompanying this move and you can burn up a little more of that skepticism. >> as ben willis was telling us the smart money leaving the market. this concern or skepticism remains, yet you look at another day when the dow and s&p is higher. >> there were earnings surprises but those are off estimates that the companies bring down in the first place. >> the banner runs weren't even that great. >> people are looking for the best deals they can find, the dividend yielding stocks. it's the same story. i don't think there is great catalyst for elation, but we are not at least where we were at the middle of february which was in the dull drums, the whole world was going to explode. >> how quickly, tim, we have turned from those lows to almost all time highs or back above big levels for the major indexes. what about the dollar, tim? we were below 94 on the dollar
index, above 100 briefly. a huge reversal there and this even as the boston fed saying markets should expect us to raise more than they're currently pricing this year. >> the fed has to fight both sides of the aisles and sernl the doves are winning the war within the fed are beginning people a sense that the dollar -- if you look at levels on the dxi is very much weighted towards the yen and your row is not looking at currency which have been missing against the dollar over the last two weeks. there are a lot of parts for the world, industrial parts for the world like korea and even some parts of asia that are actually already experiencing a huge move lower in the dollar. ultimately we are at a place where i think this is where the paint tray lies. for all the people that were saying that the dollar is going to 110 and china did dee val massively and the fed will be actively involved in this market, it's clear that the fed
has to talk a tightrope because the market right now has no fed in it. that's way too complacent. i think you have to be careful about that environment. >> we are going to flip to results from intel which are starting to hit the tape. check in on those shares as we send it over to dominic chu -- sorry, the shares are still halted just to clarify. we're digging through the results, we will be back with dominic chu in just a moment, guys. >> one thing we are not talking about today to me is the biggest story in the market, argentina pricing $16.5 billion worth of bonds, it was out of the market for 15 years, it is selling 30-year paper at 8%. how crazy -- you can't get any yield in japan or ecb, you have to get to argentina and get 8% there but you're taking a huge risk for that sort of yield. >> what a votes of confidence in macri. basically global investors willing to give argentina for the eighth time because they see
him trying to move the country in a pro business direction. >> simple sisity also is a bet that argentina genuinely is incentivized to make good here and actually to run things a little differently and not essentially gain the capital markets. >> the curb is so narrow there, it's so flat, a ten year was going at 7.5%, 20 years extra risk you only get 50 more basis points, it's rather incredible. >> tim. >> yeah, i think it's ridiculously figridiculous ly tight. it tells you how many people will be short on this em credit bubble. first of all, in this environment high yield was outperformed. argentina was five times oversubscribed today. i think it's way too tight. i think the opportunities on the corporate side not on the sovereign side. but it tells you where this market is. first of all, it's starved for a yield, starved for paper.
issuance in the first quarter was down almost 70%. if you think about where em has been these guys haven't been able to come to market. the animal spirits are back and that has the bears fired up because that's the environment where we say hold on a second, jeff gunlock is out there, saying this is what's going on in in high yield and emerging credit. >> i want to check on shares of yahoo. as their results start to fizzle out. intel we will have the comprehensive news in just a second. yahoo does appear to be moving around a little bit. we are getting a little dribble through here. the question -- let's just turn it over to dominic chu. we'll go to intel. dominic chu has the numbers. what can you tell us? >> what we have right now are numbers that are a little bit difficult to parse through possibly even for analysts on wall street right now, the reason why is we don't know whether these numbers are comparable in terms of the
overall headlines. what we do have is a nongap or adjusted earnings per share number of 54 cents a share, it's a question whether or not it's comparable to the average analysts estimate, we are not sure of that yet right now. a nongap or adjusted revenue number of $13.8 billion, what appear to be in line if it's comparable with analyst estimates, however, we are still not sure whether these are comparable numbers so that's the reason why there is a little stickiness here. they're reporting numbers and there's a question as to whether or not they match up with average analyst estimates. what we can tell you is that the cfo stacy smith is going to transition to a new role leading the sales effort over at intel. so transitioning away from the cfo role to a head of sales type role there as well. also some questions in recent days over the last week with regard to possible job cuts. we learned last week from oregon live that there was possibly a number of job cuts coming out. with he do have it on the record right now intel says that they
will be eliminating jobs globally, a reduction of up to 12,000 positions or approximately 11% of employees globally by the middle of 2017. intel is expected to take a $1.2 billion charge in the second quarter with regard to these job cuts. so, again, they are announcing certain restructuring initiatives, it's going to involve job cuts, a charge as well. cfo stacy smith will be moving to a head of sales role. we are parsing through whether or not the head line numbers of 54 cents a share earnings on $13.8 billion revenue is comparable to the average analyst estimate. we will be back with more but those are the headlines right now. back over to you. >> dom, thank you so much. stacy smith will join us in a few minutes to talk about his transition to a role leading the company's sales. obviously this is a pretty momentous release out of intel here. we know the company has been changing the way it's reporting which might account for some of
the inability to have a an apples to apples camp son. >> the stock still halted so we haven't had the market's verdict whether or not this was a beat or not. clearly if it's actually -- if it is in fact on face value then it looks like it's okay. >> but overall at least on the quick read these are not encouraging signs. moving the cfo moving to a new role, maybe he will tell us how great is job it is, i hope he does but the positions that are being cut and the transition to mobile 10% sales declines in pcs in the first quarter. the world is changing and intel is trying to keep up. >> perhaps they're accelerating some of their response to that. yahoo's numbers are out. let's get over to josh lipton with that. >> yahoo just reported. yahoo reported 8 cents on gross revenue of $1.09 billion. analysts had be looking for 7 cents on $1.08 billion. just looking through the release
here mavens the acronym for mobile, video, native and social, $390 million. search revenue up $492 million. you back out the cost of that revenue which was $144 million. des play revenue 463 million $. the cost of revenue there $83 million. on this conference call what i want to hear more about ceo marissa meyers turn around plan that involves cutting costs and shutting down offices, exiting products, keep investing in some of those potential areas of growth like mobile advertising and of investors also want to hear any color or insight she can give us on that ongoing sales process, that calls starting at 5:00 p.m. eastern. back to you. >> josh, thank you. yahoo shares up about a percent on the news. i want to mention that intel shares will resume trading at 4:20 in ten minutes time. on yahoo, tim see more, some thoughts? >> i don't think we really care about these earnings. it's nice to see maybe there was a small beat here but this is a decelerating business, a
business that they are actively trying to sell, bravo and the question what's the value on this. the advertising assets worth a billion and a half, the nonadvertising people somewhere at 3.5 to 5, but depending on where you line up on this is where i think you see the stock trading. again, 6 to $8 billion verizon clearly looks like they have an interest here. starboard's involvement i think is positive for investors. i am long the stock and some of the parts not even including the tax efficiency of the baba stake is worth owning right now. >> mike. >> i actually think that the one thing you might have been bracing for if you were an investor in yahoo is a radical change to the four year guidance or big acceleration in revenue declines which you did not get. it seems as if gase clee this was a nip and tuck beat on the top and bottom line, they're harvesting free cash flow, cutting costs, putting the company in a financial position
where it looks reasonably good as well as can be expected. >> they are shining the wheels on that car to make it as signee as possible for the buyers. these revenues are down 10% from where they were at the end of the fourth quarter in 2015 and all of 2015. that might be a beat but at any real level as tim was saying it's a declining business. let's flip over to intel nor just a moment. the shares are halted but more than just their typical earnings release is out, there's also word that the company will be cutting 12,000 joebs globally, 11% of its work force and the cfo stacy smith will be transitioning to a role leading sales. what are your tauts? >> i don't think these are decisions made rationally and overnight. intel's business of yesterday is no different than the business it's going to be tomorrow. i'm surprised analysts are having a tough time with the new financial disclosure when they've known about this. the bottom line for the company is the pc shipments in the first quarter were down 9 to 11%,
probably going to be almost as bad in the second quarter. the extended pc weakness as much as the data center group is an overriding positive is it enough? this company has made no money for two years, it's had no earnings growth i should say, it's been flat in terms of earnings growth over the last couple years, now it's pushing it out to 2017, pays a nice dividend, it's not expensive, they're doing the right thing to run the company, the best run in the business, i don't think you run from it. i don't think anything about this announcement that i've heard so far scares me. >> intel has reinvented itself before. >> it has. data center business as tim mentioned clearly where a lot of opportunity has been. there's so much competition and white box design and contrasting ideas out there that it doesn't have the hold on that business in the way it did on the pc business for so many years. 10% declines every quarter that is pretty stark. >> i mean, obviously for over a decade now you have had this company do an amazing job of
essentially going -- because the overall business has been to challenged and they plow more into r&d and maintain the product edge and the rest of it but it doesn't necessarily amount to enough to overcome the real secular story here. >> we will have more in just a moment. tim, a final word before we let you go on these companies or the markets. >> just to speak about markets what's interesting is that the resources trade still continues to go higher, a lot of companies who aren't necessarily seeing growth but spot tries prices in agriculture, iron orr, i think these are more than just, you know, rallies on a week dollar. look at emerging markets, these are places that still have room to run. not a straight line so be careful but there are places that were oversold two, three, four year trends that are now reversing. >> thanks for joining us. more are tim see more next hair on "fast money." starting at 5:00 the man who called the rally said we have further to run, tom lee will tell us which sector is going to
take us to all time highs atop the next hour. coming up much more on big earnings results from yahoo and intel including thoughts from two young shareholders on what these numbers mean for the companies sales. stacy smith breaks down the chip makers earnings and job cuts and why he is transitioning into a new role at intel. first netflix shares plunging on weak subscriber guidance. you are you're watching cnbc, first in business worldwide. let me show you. okay. our thinkorswim trading platform aggregates all the options data you need in one place and lets you visualize that information for any options series. okay, cool. hang on a second. you can even see the anticipated range of a stock expecting earnings. stacy smith breaks down the . td ameritrade.
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shares of intel are about to reopen in just two minutes. we have stacy smith coming up in a couple of minutes as well to elaborate on the company's earnings results, layoff announcements, his own role change and more. let's get to dominic chu more more. >> so there are a number of factors at play with regard to how intel is going to trade when it does reopen at 4:20 eastern time. one of the things we will offer up as we crunch through these numbers, they do offer intel does, current quarter q2 revenue guidance, they are saying on a gap or generally accepted
accounting principles basis, standardized basis they are expecting $13.5 billion worth of sales plus or minus $500 million. $13.5 billion worth of sales in the current quarter plus or minus $50 million. analysts were on average looking for $14.2 billion. so current quarter sales expectations appear to be a little bit light. again, some questions with regard to comparability, but for right now it appears as though q2 revenue guidance is coming in lighter than some analysts expectations. we should report again that we have an earnings number of 54 cents that we are still trying to figure out whether or not it's comparable to the average analysts estimate. current quarters or the first quarter sales numbers came in at around $13.702 billion on a gap bases comparing to a about a $13.8 billion expectation. so that in addition to of course the headlines with regard to up to 12,000 positions being
reduced globally, which is approximately 11% of their work force, a $1.2 billion charge in the current quarter related to those job cuts as well and you have the makings of what we are going to try to expect or try to ascertain during the conference call element later on this element with intel shares which are about how five seconds away from reopening. we will see how these things do as we go in the first few seconds here right now of after hours trading. back over to you. >> thank you so much. a move to the down side is what it looks like. a reminder the expectations were low coming into this report. the shares look like they are down 2.5%. >> it does seem about that second quarter not the full year which they imply is going to be made up on some level. you can say that it was sort of anticipated to be weak, but you did have the stock like everything else come up off the lows and therefore built in some hope -- >> and as tim indicated a moment ago layoffs can be read as a positive in a certain sense.
if they're cost cutting for the right reasons and investors feel like they are getting ahead of the ship and steering it in the right direction, that's why it's good to look to see that the moves put the struggles more behind instead of inn front of. >> it's been a sideways dance and they've been dancing sideways for a long time. with he saw the same dynamics in the banks, a goldman sachs, whose revenue was down 40%. but they've been aggressive on their cost cuts. it gets to the bigger question why is the market the broad indexes doing so well when this is largely the story across corporate america which is cutting your way to prosperity. >> intel shares down about 2, 2.5% on the reopening. we will monitor them for you. today netflix shares were plunging after the video streaming service issued weak subscriber guidance after the bell yesterday. let's get to deirdre as to whether this stock will keep falling or rally back. >> beat or miss, netflix is
always a wild ride after a report, popping or tanking by double digits the next day, it is not at all unusual for this stock, but history is any guide a big post earnings draw like we saw could be a good buy the dip opportunity. over the last 20 quarters it has fallen [ inaudible ] >> two weeks later, though, netflix has outperformed the s&p 500 and [ inaudible ] by more than [ inaudible ] on average. >> sorry about that. sorry to interrupt. got a little bit of audio issues there with deirdre bosa's hit, but as you can see a positive two weeks and a month later for netflix after these big earnings disappointments, guys.
>> on average it looks like you're positive for a little bit of the trade. i will say that you have whole years in this massive run off in the last ten years of netflix, whole years when it has done nothing, it's not been constant lockstep appreciation, you have had -- basically the market keeps it on a short leash. when it feels as if the valuation gets a little ahead and they need to raise more capital and spend more money on content the markets get a little nervous. >> it's tough for companies once the valuation becomes a multiple as high as netflix is to keep absorbing any kind of hits. >> i suppose but i would argue the other side of that is which is if they are truly building the first global content system and delivery system and brand name around that, yes, there might be temporary hiccups about growth or whatnot, as they approach 100 million users that is a substantial accomplishment and silicon valley ringing the bell here notwithstanding would you rather bet on time werner, hbo or netflix over the next ten years globally?
>> or if netflix becomes another plug in through or to the cable box what does that mean for the more dim future of that industry. >> across the board. people will continue to fight desperately about the valuation of netflix, i think long-term they are doing pretty darn well. >> i don't know if that management ever sees that day five years out where they will start to harvest the cash flow. you give us the running room, capital to dominate we will do it. >> when they release the price by 50 cents across the board it will go to the bottom line. >>ntel shares are lower after reporting earnings earlier. stacy smith is here to report the numbers, job cuts and his own transition into a new role in the company. and american express one of the worst performing dow stocks over the past year will report their numbers tomorrow. that's also coming up on the "closing bell."
welcome back. checking in on shares of intel after hours, the stock down about 3, almost 3.5% after the company just reported a miss on revenue, 12,000 job cuts and a new role for chief financial officer stacy smith. in a cnbc exclusive we are joined by stacy smith. welcome to you and tell us about this new job and when you found out about it. >> oh, yeah. hi, kelly. good to be back. so the new role that brian and the board has asked me to do is
to go and lead really the operations of the company. so it includes sales and manufacturing and some of the other operations. i'm really excited about it. it -- you know, that's the operation that has a responsibility for all the execution, delivering and delighting to our customers and i'm just excited to go over there. it's, you know, more importantly to a strategy of the company when the midst of the transformation, we are executing well through it and this gives me the opportunity to go and lead a broader role to actually help and accelerate that. >> is there a chief operating officer at the company who you will report to, stacy? i know this is a role brian had as well before he was the ceo? >> no, there is no chief operating officer. i will be reporting directly to brian and this role running that broad swath of the company. >> so what does it now -- you're moving from financial side of the business to running its operations. there are challenges on both sides of course. on the operations front this news about the 12,000 layoffs,
what can you tell us about where those layoffs will fall and what kinds of roles they're falling on? >> yeah, let me put this in context of the strategy of the company. you know, we are in the middle of this transformation as we move from being a company that's been historically at the part of the pc market to a company that is now at the heart of the cloud and surrounded in inside of all these smart and connected devices that are connecting to the cloud. we are executing quite well throughs that transformation, you can see in the first quarter we are demonstrating growth even with a weak pc market. what we want to do now is accelerate that transition. so this restructuring is a tool to do that and what it allows us to do is be more efficient, be more profitable and to increase investments in some of these new areas, things like the data center and memory, internet of things, 5 g and look at opportunities in the client
space where we can concentrate on areas where we think we get a great return and can generate growth in the future. we're looking at building on our strong execution and accelerate it. i will also say we are not going into this lightly, we know that this is a very difficult thing, we know that there will be employees that are impacted by this and so it was a tough decision, but i think it's the right decision. >> how many of them will be u.s. employees, stacy? >> you know, so first of all i will just say this is a worldwide action, it's not concentrated in any one geograp geography. we're certainly not doing it in order to change the mix of employees across the different countries in which we execute. but i also want to be respectful of the employee base. we are just starting that communication with employees so i'm not going to go into details of the actions, we want to be able to have the conversation with the employees and we will roll that out more publicly over the coming weeks and months. >> sure. also sort of speaking of the
structural change that's going on here i read that pc shipments dropped below 65 million units for the first time since 2007. so this obviously was your bread and butter. how do you become the go-to player for the mobile and database world here, which is -- it sounds like it's still up for grabs. >> i mean, let me actually put this in perspective because i want to highlight the execution as we're going through this transformation as a company. if you look at 2014 and 2015 what you see is consistent with what you just said, the pc market over that time period is down in the double digits. over that two-year horizon we were able to grow the revenue of the company 5%, grow the operating profit of the company actually 14%. so even in that model the pc is down we're able to grow the company. you then get to the strategy, we want to accelerate our growth in these new areas like the data center, internet of things memory, but we also want to make
sure we're making smart investments in the pc segment and the other devices that connect to the internet so we can demonstrate growth. you see us inn test v. he issing in two in ones and those kinds of things, making investments in automotive and retail and making investments in phones and tablets and particularly the modem technology that goes across our product line. >> since you're still wearing your cfo hat for a moment a couple questions on the financial side. it's been quite an alpha tax rate was much lower this time around, why was that because it did help contribute to the results that you guys posted? >> yeah, when you parse down the q end results relative to our guidance what you see is that we were at the lower end of the range on revenue, we were inside the range but at the lower end, we were at the upper end of the range on gross margin as a result of our costs getting better and that's as we're ramping our factories we're seeing nice improvements in yeeltds there, that points to
that manufacturing leadership. we had good news in spending, good news in the tax rate and all of that led to the results that you saw. i know there is some confusion on comparing this to the consensus that's out there. i think you would cleanly see that our results in q1 were a beat to overall consensus, the tax rate was one of the pieces of that. specific to the tax rate we had some one-time benefit associated with a divestiture that we did in the securities space and that's one of the reactions we're taking to focus our business and make it more profitable. it's consistent with what we've been talking about here. >> one of the metrics that's followed intel as much as anything or more than anything for years has been your margins, keeping those in the 60s which any company would love to have. >> yes. >> going forward as you guys are moving into an entirely new space in a way, what kind of visibility will you have into the profitability of these new lines, you know, in what sense -- when will you know? in other words, as this takes
multiple kwurters, years to play out should we expect a lot more volatility? >> so if you looked at our gross margin this quarter it was 63% for the year we're predicting 62%. so as you say that's a margin that most companies are envious to have. when i look at the last five years as a company we've been in that 60 to 65% very consistently and that's even as we're going through this transformation. so what you see from us as a company is our business is becoming much more diversified, but we're seeing a lot of growth at the high end. think about servers and data centers and things like that. that's actually one of the fastest growing segments of our business. and then we also have growth going on in the internet of things and in the client space. when you average all that out i'm very comfortable we kind of are in this range that seems to hovering into the low 60s, that's what we're forecasting for this year and i don't see that changing in the near term. >> stacy smith transitioning to
a key role to lead operations. thank you for joining us to help explain a lot of what's going on here. we appreciate it. >> thanks for having me. time for a news j up date with sue herrera. >> secretary of defense ash carter arriving in saudi arabia as part of an extended overseas trip and meeting with his saudi counterpart. carter will be joined by president obama in the saudi capital tomorrow. the new york city comptroller is ordering an audit of the city's poured of elections, citing deep concern over widespread reports of polling irregularities. this comes as voters cast their ballots in the state's primary election today. gop presidential candidate donald trump has used his own cessna plane to crisscross the country making dozens of campaign stops. the only o problem is the faa says the plane's registration is expired, the plane could be grounded while the issue is sorted out. this is my favorite story of the day, take a look at that,
young israel girl was sifting through piles of earth as part of an archeological dig four years ago when she discovered that. turns out it's an ancient egyptian a.m. let, the relic dates back more than 3200 years to the time of fair rows and bears the name of an egyptian ruler. took them four years to authenticate it. that's the cnbc news update this hour. back to you. >> that's a drop in the bucket of a 3200 time horizon. incredible. >> it is. >> see you tomorrow. yahoo shares higher after reporting its earnings. up next we will dig deeper into the shareholders who aren't the biggest fans of marry is a meyer. donald trump casting his vote in today's new york primary. our john harwood tells us what a win in the empire means for trump's presidential hopes.
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$1.09 billion, the street had been looking for about $1.1 billion. it looks like the company also reaffirming its revenue guidance for the year. in addition to these quarterly financial results and guides there are broader questions for the yahoo, the future of this internet company. we are hoping marissa meyers will give us more on that. >> joining us now is pair of shareholders who have been critical did about the company, eric jackson and larry had a verty. eric, thoughts on the quarter and the guidance here? >> to put the quarter in perspective, kelly, you have to remember two years ago for this q1 period yahoo it did 38 cents a share in eps, last year they did 15 cents a share, this year they're proud to announce they did 8 cents a share in eps. sometimes we get too caught up
in the minutia of the short term. this is a company that has been put into nose dive by its ceo and a lot of these problems with their own making. last week com score released a study saying desktop growth in pcs and usage of the internet had kept growing until a few months ago. these problems are of yahoo's making. >> we've spoken about that in the past. larry, this is the last report, the company in the meanwhile is reviewing bids for the sale of its business. of course, david faber spoke earlier with starboard and they are looking to replace the board and kind of go in and do a whole other strategic review of the company. how do these results fit into all of these transitions under way here? >> i think they support the case for owning the stock, not because it's good and i think the situation is actually worse than eric explained, but because you can define what the bottom
is. i think it's in the neighborhood of $750 million cash flow, kelly. i think you put an eight multiple on it, you have $6 billion for the base business. this is hundreds of millions of dollars of users and there are products, warren buffet is going to use one to stream his annual meeting and that's worth it to somebody who has the management still like tim armstrong at verizon, there are surely others to try to monetize those users. it only costs you to finance that $6 billion in the neighborhood of $150 million before any interest deduction. if you accord $6 billion to the value of the company, the other assets are pretty easy to value, there is some tax link annual, owning the stocks at $36, $37, you will easily get $45. i think if marissa doesn't lead the process and board somebody is going to do it for her. we will see some action in probably four to six months. >> larry, just to follow up
there you kind of laid out the case for why there might be more than one bidder willing to go above $6 billion. i wondered if you think that's where this might lead in future bidding rounds as you have other players surfacing and also you talk about $750 million in cash flow as a baseline, you know somebody is going to come in and say i can cut a lot of costs get that up a little higher. >> i think right on both cases. i've watched through the years a number of movie companies get acquired and it was always the last studio that was going to be for sale and the unique thing here is not the cash flow it's hundreds of millions of users. that's really unique in internetville and if you get somebody who thinks they can monetize these users just a little bit more then let the games begin. i think the classic is the paramount sale in the '90s that redstone participated in, it was called the deal from hell. i think there will be multiple bidders. i'm going with verizon as the
favorite right now before the kentucky derby, but we will have to see. i think the pressure is on, there is a lot of value here, the value is in the users and i think the stock moves higher as the process unwinds. >> guys, i'm sorry we don't have more time. thank you for joining us with some early thoughts here on the quarter. eric jackson, larry haverty. coming up, much more still on earnings. we will count you down to the conference call for intel and yahoo coming up. first the race to the white house in new york today, the latest on the empire state's primary when we come back. i'm only in my 60's. 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% of your part b medical expenses.
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donald trump and hillary clinton could greatly improve their chances of winling their party's presidential nomination with wins in today's new york primary. john harwood has the latest on the race for new york. >> new york isn't going to decide either party's primaries but it can help. donald trump has a 30-point lead in the polls, he can -- if he can sweep delegates in new york, win almost all of them he will improve his chance of getting to 1,237 by the summer convention in cleveland. on the democratic side hillary clinton has a double digit lead, bernie sanders has a to hope for the upset he had into michigan a few weeks ago. if he doesn't get it his path in passing her in delegates will get difficult and the outcome of that democratic race will
determine the themes for the fall campaign. i asked vice president joe biden about the suggestion from bernie sanders that the obama administration has been playing small ball on the economy. >> when you hear him say dodd-frank didn't go far enough to break up the banks, not just reduced community college, free college, bigger programs, is that just campaign talk that can't possibly be realize snd. >> no, it can be. it can be, but what i don't see enough of it is an explanation on how to do that. but i do think that bernie has raised a very legitimate issue that has consequences beyond the way bernie talks about it. we have 20 -- what is it, almost 24% -- 24.1% of all the income in america earned by 1% of the people. that hasn't happened since 1922, i believe. >> and of course income
inequality has been a theme in the democratic campaign all year long and it will be whichever democrat hillary clinton or bernie sanders is the nominee this fall. >> all right. john, thank you. john harwood as we watch results from new york's primary tonight. american expression has been a major drag on the dow over the past year, could that all change when the company reports earnings tomorrow? we will tell you what to expect next. understands the life behind it. those who have served our nation. have earned the very best service in return. ♪ usaa. we know what it means to serve. get an auto insurance quote and see why 92% of our members plan to stay for life.
american is set to report its earnings tomorrow. here's a look at the stock's rocky performance. >> investors have had quite a go of it. if you look at american express, it's been the worst performer for the dow in the last 12 months. investors got blindsided earlier this year when the company took its expectations way down for the year. revenues expected to grow 1% over last year's earnings per share, expected to fall by 9% from a year ago. a long laundry list of items investors want to see progress on. costco and jetblue are coming to an end. although there will be one-time benefit, the bigger question is, how do you replace those card members, how do you make up that loan volume. the company is undergoing a restructuring plan they laid out in january. $1 billion in cost cuts by the
end of next year. finally, how are they wooing millennials? they have a lot of disposable income, soon the majority of the work force, but they're disillusioned for getting rejected from the amex. amex is changing its business focus altogether away from the annual fees, they want to earn more money on interest payments. the problem is, that makes them look more like a bank issuer, less like the platinum, premium, closed-loop brand they've been trying to promote all these years. >> a lot of challenges. millennials apparently do not like to be rejected. it offends them. but look, we talk about things going across the show here. and it's fascinating. more cost cuts at amex. it gets me to the general theme, where is the growth in the economy? it's not there. >> kayla, they have to come out with gangbusters rewards cards,
right? >> the problem is, where a lot of the value for the consumer is, is in cash back. that directly detracts from the company's revenue. that comes straight out of american express's pocket. >> by the way, the premium that the investors are paying is way down, too. about 11 1/2 times earnings this year. capital one, discover financial, nine, ten times. >> we'll see how it impacts the markets. kayla, thank you. we'll count you down to conference calls for reports tonight.
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welcome back. conference calls about to begin. here's a check where yahoo! is after posting results. inl about 3%. guys, what do you think? >> yahoo! continues not to price in much in the core business. it seems like it's been very steady for a month now. >> fascinating to see how the yahoo! shareholders -- >> you guys have reported 40 people potentially. >> everybody wants to take a book, kelly. if you're actually writing a check and willing to pay, that's
a different matter. >> i wonder it's so widely reported, that verizon is the leading horse. does that mean it actually has all the negotiating power? >> i don't think so. only because yahoo! they wouldn't be happy if they walked away. there always is that possibility. >> the issue, i think, is whether they can keep the whole thing together, whether they have to sell it in parts. they probably would much prefer to sell it -- >> verizon is not going to come first with a last and final offer. verizon $200 billion-plus company. are they going to quibble about 6, 7, 8 or allow somebody to outbid them? >> i'm reminded in between shows today, walking downtown, there was another very loud strike happening at a verizon store. but that still reflects a lot of wireline business it's moving away from and moving, again, by taking it out accelerating that. >> there should be a david faber special on what verizon is doing. we're talking about conversions for 15 years. it is truly a situation where
verizon is going to be in arguably direct competition with hbo and netflix before too long. >> oh, sure. >> your media company -- >> look again, there's a small acquisition they made today. complex.com. accelerating their move and launch shows for go 90. >> quadruple play, that's what everybody is. even though know knows what the four are because they all seem like they are. >> what's the fourth one? >> it's mobile. >> okay. got it. >> it's your mobile phone. you have the land line, you have the tv, you have the -- >> video. >> -- video and now -- >> it's really just broadband and mobile. >> i'm sure the hipsters at complex are so happy to be working for the phone company. >> intel, where the call begins? >> it's hard to see a lot of glimmer of bright side in the actual numbers, except they're just holding their own in a
losing industry proposition. >> financial engineering is sort of the flavor of the day. >> yield support is what you might hear. >> yeah. yield support. >> how nice. >> the girdle. >> thank you so much. that does it for us on the "closing bell" today. "fast money" begins right now. indeed it does. live from the nasdaq market site overlooking new york's times square, i'm scott walker in tonight for melissa lee. pete is here, and karen and guy adami tonight on fast. intel slashing jobs. that stock is falling this hour. yahoo! out with a beat slightly higher after hours. both those calls under way. we'll have full team coverage throughout the hour. all of the headlines coming to you as they break. plus, the man who called the rally, not once, but twice this year, says there's still room to run in this market. he's going to tell us the sectors he says will lied