tv Closing Bell CNBC May 2, 2016 3:00pm-5:01pm EDT
>> it was back in 2014. >> way when they wanted to -- >> yeah. bients more than a year. i don't know. it get it if you think now would be the time, but he's been in in a lot longer than that. >> it's great to have you back. >> great to be back. >> thanks for watching "power lunch." >> "closing bell" starts right now. hi, everybody. welcome to "closing bell." i'm kelly evans. >> i'm bill grifgriffeth. so much for a sell in may. this hasn't been unusual lately during a rally of this kind during the month. since 2012 it was the last time that the major averages actually closed lower for the month of may. coming up we're going to look at the data and see whether this will continue that trend. up 111 points. >> investors are selling oil after a production by opec
members. profit-taking could be a motive and remember oil rallied 27% in april. >> drug prices are under fire on capitol hill. as you well know, glak glak sew's an dry witty will be talking. jackie deangelus has a story from us from the nymex. good afternoon. >> closing under 45 dlp a barnlts. you mentioned opec. that's certainly the big story today. analysts sur vaved expected to see opec's production going up from march. traders tell me they're not surprised by that at all. if we do see some sort of a freeze or accord, of course, these producers want to freeze at record levels so they can
continue to pup its economic for them. what's going to influence oil within the next month or so, certainly supply. the dollar we've been discussing all day as well. that's another piece of it. the dollar index is support ivg of crude prices. it could take us higher, especially if the dove continues to be. i know you've watched the gas prices closely. they're going up. consumers are expecting to hit the road. there's one other piece to the demand equation i want to mention here. traders, analysts alike are look internationally. we're not seeing an uptick from europe which is typically the place we'd expect to see it. a lot of people are talking about what's happening in india. a lot of iranian crude is flowing there. that went up to 17 million barrel as day in march. when it comes to market share, this is all a big part of the story. the saudis and the iranians fight for this share, and
they're looking to india right now which is looking to grow at 8%. we could see a little bit of movement there. we do know this. when it comes to supply and demand, if the producers don't, you've got to see an uptick in consumpti consumption. back to you. >> jackie, thanks very much. interesting that we see oil going lower and stocks higher. sure. >> we're not getting that correlation we've had for so long. shares of halliburton higher today. you've probably heard the two oil services providers have decided to call off their $28 billion merger after opposition from anti-trust regulators. >> if you'll recall back in march i spoke with jeffrey ubben about baker hughes. >> we felt the spread wasn't quite big enough that we would buy both. but the spread is one that we've
gone completely into baker hughes. the reason is if it happens, we'll do really well it's 25% spread. i think people wonder what happens to baker hughes' balance sheet. >> with us for more on this is robin shoemaker with keybanc capital markets. robin, we've heard some news out of baker hughes. you know, be from halliburton's point of view, why agree to that? did they have such confidence it would improve? >> they had confidence. they insisted on a huge breakup fee because they were concerned at what happened yesterday is exactly what would happen so they insiftd on a very large a breakup fee and halliburton agreed to that.
>> you maintain your view, why is that? >> halliburton's stock was up a little bit, investors relieved they did not overpay for baker hughes. you know that price was set 18 months ago when oil was much higher. for baker hughes, i think it's a recovery story. they've outlined $500 million in cost reductions they intend to take right away and they'll pay down some debt and buy back a billion and a half in stock, but their case for the investment case for baker hughes is a little bit longer term, and, of course, we're in a severe downturn for both companies in terms of environment. >> that's interesting because it came up this morning when warren buffett was asked his thoughts on "squawk box."
>> it sounded initially like they were putting together two companies that were either actually twal or potential customers in many ways. that's the job of the trust department. they are to look for when things are anti-competitive. and my guess is that certain competitors of those two companies objected strenuously. >> we know the firms after schlumberger, robin. what's interesting is he said they let the airlines go through in some cases because the industry's profitability was so bad, but now with oil prices so low, could the same argument have been made for this deal going through instead of being blocked here? >> well, it wouldn't have made as much difference for the competitive landscape today, but if oil prices recover and a few years down the line there is great demand for oil field
services, that's when they were concerned it would make a big difference in terms of the cost of drilling. that's why they oppose the merger. >> so what does this now do to the dynamics of that center? does it -- is it based on what the price of oil does or not at this point? >> that's the main factor. while the oil price has drifted up a bit, it's still above a level that would encourage oil companies to start increasing their drilling budgets again. we think that price is around $50. you'll start to see a little bit of improvement in demand for oil services, but so far it's just been down quarter after quarter, and that includes the current quarter. >> robin, thanks for joining us. >> thank you. >> robin shoemaker with a look that wasn't today, one of many, by the way. >> all right. let's talk markets at the "closing bell." larry glazer from may flower
advisers is with us. rick santelli checks in from chicago as well. ben, 113-point gain. a good start to the month of may. what's going on here? what are you watching? >> $26 million merger falls apart. than's the power of the oracle of omaha. his positive comments about amazon got the juice under this market even in the face of falling oil. keep an eye on asia but particularly china. there's this thought that they' they're. we know the last few weeks there were 08 super tankers lined
outside the ports of china. when that stops, think oil is in for a very hard landing. >> larry, what are you watching and is the place investors need to be? >> i think great points are being made, love is in the air. love is in the face of that puerto rican debt result. those are major mackerels. look. full discloser. we do own some berkshire hathaway. i had a diet coke for lunch and my wife loves dairy queen. i think with that said, it's not immune from a few dogs. he's got problems. his stocks have gone nowhere. that's the issue here. either chase the momentum and chase the crap or wait for the good stuff to pull back, ibm being in the latter camp.
i'd be a little more patient. >> rick, it does seem that the markets are taking the puerto rican default in stride. what do you think it does to the credit markets right now? >> you know, i'm thinking we receive a lot of what it's going to do, which is a lot of nothing. i think the biggest issue personally and they're hitting very close to home is how whaufr outcome we see over time of puerto rico, how that may feed into something like an illinois/chicago situation. of course, many are watching that closely. as i look at the markets today, the biggest thread that all traders and my sources seem to have shared is the weakness in dollar, the strength in gold, and how big and mackerel some of these events are when you look at the charts. so especially the current dollar index. you need to pay attention. it's the lowest since 2015 and if you look at the year
preceding that. there's a lot of room here. i think these issues will come home to roost and i think that investors also are experiencing lots of ill logic market moves. whether it's the strength of the dollar. the way the stockmarket refuses to give it up when the fundamentals have been a bit lacking and based on it, we'll have two jobs reports. it will be interesting to see how they digest that in lieu of policy from the federal reserve. >> quick follow-up, rick. anybody guessing how much higher gold goes? i guess it depends on the dollar in part, right? >> yes. there's many of this trading floor that thinks there's hundreds of dollars left on this move. looking at the charts, i would tend to agree. >> did they always think that, rick? >> pardon? >> did they always think there was hundreds of dollars or is this a good thing? >> good point, kelly. there's also optimism on gold.
honestly i haven't seen this much concentration among traders who turned a bit skeptical when it had its downturn. so even throw's a lot of truth in your question, i think this time there's a little extra horsepower. >> larry? >> rick, some of that gold move potentially is a hedge against that disaster, that may crow concern coming out of japan. i think they're saying what do i own if something really goes wrong here and i think it illustrated the issue of when you have a really crowded consensus trade coming into the year like a strong dollar, like an anti-oil, anti-gold trade. things can really blow up. i think it's an opportunity for us to keep our heads. >> totally agree. but i think it's even more. i think add it all up, and it's a big mix. >> hey, ben, before you, you sound a little skeptical about this rally, giving some of the reasons why it shouldn't be going up. so what levels are you watching? >> actually we've had a great
performance. we got through 2071, so this may have some legs but i have been worried about it. i was trading from the long side from friday because eight of the last 11 years the market has seen an up move after the berkshire hathaway meeting. it's a strength in the dollar and dropping dollar and dropping oil in the middle of that, but commodities, the crb index all the way through oil, corn, some of the other softs continue to drive the markets. i'm still looking for some of the breaks to the downside. but the move to the upside today is far more than i had anticipated. >> very good. thanks, guys. good to see you. 45 minutes to go. the s&p's up 15 points. the nasdaq participating too. actually the outperformer today. we mentioned amazon, some of the other movers. it's up 38. up next, how will the presidential race and all the market chatter of selling in may
affect the markets as we begin the fifth month of the year. also ahead, glaxo smith ceo speaks with us about new drugs in the pipeline. you're watching cnbc, first in business worldwide. it was a simple idea. for every pair of shoes we sold, we'd give a pair to a child in need. at&t has been with me since day one, keeping me connected to my team, to my business, and to the reason we put giving first. toms started small, but now we've given shoes to more than 50 million children in need. i'm blake and this is my network. the network of at&t. this just got interesting. why pause to take a pill? or stop to find a bathroom? cialis for daily use is approved to treat both erectile dysfunction and the urinary symptoms of bph,
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45 minutes left. a couple of things to tell you. wynn resorts spiking. 5% decline in mccaw's casino. sound familiar? something that las vegas has been trying to do. minewhile cisco boasted an earnings beat. they were helped by local growth and extension management. kelly? >> what's an investor to do as they compete with a cacophony of
presidential candidates. mike santoli back in business has written a piece on cnbc pro and he's here. >> good to be back. >> nobody broke anything. there's a good republican for the sell. they have come between november and april. and may through october if you sat out the market, you sidestepped a lot of bad stuff, but i think this year there's an extra intensity of talk because we have a so-called open election year. obviously both parties are nominating somebody and, of course, it's very contentious. if you look back at the heistor of those in particular, they performed badly. i think we have to take this with many, many grains of salt here. 2008 and 2000 were the last such
years when you had this open election. obviously we had financial crashes. i don't think anybody looks back and says it's because of the political landscape. also the sample size is so small. there have been four open elections in the last 50 years. since 1996 there have been achlt you can't necessarily rely on them. i'm totally on board the election this summer can get noisy and ugly and it's going to keep economic discontent very close to the surface. to me the calendar is not the thing to be most concerned about. >> it's funny. it goes back to that whole point which, you know, you come away from a weekend of talking aboutf the goal is to rise, that fines. if you're looking at some business that you want to invest in, even if there's some selloff based on it, no big de. >> i think that's what warren buffett has done. he's got the benefit of 60 years
of always looking to be a buyer and it's kind of worked in his favor naturally. so the best six month os testify year was supposed to be november 1st through last friday. the market did nothing. it was down slightly. >> but as one pointed out to me, it's typically the latter part of may as the selling begins as we get to it. >> the summer is definitely where things could obviously get choppy. you have a lot of things. it's fundamental reasons why. you have the fed inplay and all the rest of it. yeah, there's many reasons to be concerned. i just feel we're kind of overplaying, i think, the significance of some of the seasonal stuff out there. >> and the earnings beats, i mean those lowered expectations have helped to some degree. >> so far it's been enough to hold things together, yes. >> i know where you went so i'm surprised you really are glad to be back. by the way, you can read the full article that mike wrote at cnbc.com/pro. 40 minutes left in the trading session with the dow up.
holding on to pretty good gains to begin the month of may here. >> glaxo klein's ceo spooe speaks with us next. >> later insurance giant leads today's rounds. we'll tell you what analysts are looking for and when it happens we'll break it down. still to come on "closing bell." here at the td ameritrade trader group, they work all the time. sup jj, working hard? working 24/7 on mobile trader, rated #1 trading app on the app store. it lets you trade stocks, options, futures... even advanced orders. and it offers more charts than a lot of other competitors do on desktop. you work so late. i guess you don't see your family very much? i see them all the time. did you finish your derivatives pricing model, honey? td ameritrade. we built our factories here because of a huge natural resource.
37 minutes left. the dow is up and holding. boy, it's been pretty quiet. the s&p's up 15 at 2080. yu heard ben willis say once it got past 2071 it waufs to the races on the upside. the nasdaq up 38 points. by the way,er is rep ta therapeutics is rising. oppenheimer changed it from outperform to perform. oppenheimer expects the fda to approve the company's new drug to treat de-shane muscular dystrophy despite the panel's high profile definition last week not to. it's pushing it 17% higher, almost 18% higher today.
joining us now we welcome backglass galaxy oh klein's ceo sir andrew witty. good to see you. >> thank you. >> there's been a lot of talk about drug prices. is it fair that it far outwags. would you agree with that? >> i think what we're seeing in the u.s. things have to change and there's a few things that have to happen. first of all we geefbet to understand the list price is nowhere where what it is. discount price is 45%. secondly in certain areas we're seeing intense competition bring prices down. overall we're seeing drug prices at the net level reduced. at gsk over the last two years we receive a negative price impact at the net level.
what we're also seeing is we're trying to hard to introduce new technologies at more affordable prices. in fact, our last six medicines launched here are at or below the price of previous technology. what we've all got to do is get like-minded people together from government, from industry, and start to really sort this out. there is a lot that can be achieved through some more transparency, through some simplification of regulation. with've good to make sure we're getting better money. >> you know, i've heard it suggested by investors in the pharma space that, you know, this has been a volatile climate for years now that, you know, you've about had these big companies with these mega blok buster drugs and then that whole period ended and oust that sprung valeant. but that people have really tried hard to figure out what is
that next area. you know, how are we going to backfill the pipeline? how are we going to develop new kinds of treatments and products? and you guys have sort of been in the middle of that, right? how difficult is it to read the tea leaves and try to continu continually reinvent yourself? >> it's hard to reinvent but it's not hard to read the tea leaves, kelly. discovery of meds and vaccines have made a real difference to patients. that's what we've dub at galaxy o smith for the last seven years. people have been critical with how we embrace and move things forward. i think the reality is we have to make sure there aren't any shortcuts yochl u have to make sure you're connected with biotech and academia and you have to be patient. have to bring the new meds forward. the last five years we've had
more drugs approved by the fda than anybody else in the u.s. we now have launched six new drugs which are 20% of our new business. that's old-fashioned drug discovery taking advantage of new technologies and we've turned our face away from some of the more novel business approaches which a lot of times look interesting in the short run but don't have the legs in the long run. i think what you're seeing from the big pharma companies is a real commitment to innovation. what we want to do is work with pay yores and policy makers. >> even at glaxo, you look at it. the revenue has come down. you guys are into vaccines, you've made a swap with novartis and in other areas. is this a case where, you know, at some point you say, hey, we need to do a big acquisition and just kind of go back to that
size first aspect here or could you actually be better osbon. of smaller more focused units? >> we really like the model we have. and what we've done over the last six or seven years, kelly, is we've focused on our own r & d operation. we believe it would have distracted us. we've done that. the number i've just shared with you demonstrate the progress we're making. just to give you an idea, we have 11 more coming through. we've got five medicines. we have a brand-new vaccine coming for registration approval later this year. these are examples of what we're doing to drive that forward. over the last five or six years, we've successfully replaced that which has gone off pa tent. you're right. that pressure has been on. but we're coming through that. as we've just shown in our
results, with the exchange rate, revenue's up, plus a tail wind from currency, we feel like the strategy we've take chn has been patient but focused on organic intervention has been the right strategy. >> before we let you go, let me ask you about that little vote coming up on june 23rd. you're on record saying you don't want to see an exit from the c.u. so let me ask you a question. would that have an impact, negative, on your company if there was a brexit, and as unthinkable as it might be, would you consider leaving the uk as a result? >> first of all, if it was a vote for brexit, which i think would not be the right conclusion, but if there was, it wouldn't have a material impact on it. 90% of it are outside of britain but it would create a distraction, which is why we think it wouldn't make sense for the company and i don't see a circumstance where it would lead
it. we're proud of being an international company and super proud of the research our scientists do here in america. >> but you think it would be an increase in regulation? what is it you are against as it pertains to your companies specifically? >> i think there would be an increase in regulations. so if by regulation, of course, we're going to continue to trade in britain and europe. if we leave, we have to create. as company, we'd have to follow a british regulation and european. that's an obvious increase in regulation. over time, who knows. those could start to diverge and create challenges and contradiction. secondly, we've operated under the common european agency. that's our primary european regulator. i don't know what would come after this. from my peck speck irspective, to be a distraction and i don't
see the economic currency for it which is why i think the right thing to do is for the uk to stay inside the eu. >> what about your own plans post transition out of your ceo role next year. >> i said i'm going to retire march 31 next year. i've got to tell you, i'm 100% committed on focusing on strategy for 201016. we're off to a terrific start. great progress in the pipeline. i'm all over that for the next year. >> sir andrew witty, ceo of glaxo smith klein. good to see you. >> good to see you, thanks. time for a cnbc news update with sue herera. >> thank you. here's what's happening this hour. severe weather has claimed four lives in the japanese north alps. one called for help but a blizzard prevented rescuers from
reaching him in time. altogether four were plucked from the ams. meanwhile punishing heat shows no signs of diminishing. the temperature is 105 degrees today. it has been in excess of 100 degrees since leites last month. may and june are typically the warmest. and researchers are gathering around atlanta to discuss the zika virus. they'll look at the current strategies to look at minimizing the spread. a public briefs on developments could come later in the week zwroo and this photo of justin bieber has peta growling. the bengal tiger was reportedly on display at his engagement party in toronto. peta said the big cat's owner was charged with five counts of cruelty. bieber has yet to say if he's sorry. that'sy t update this hour. >> whose engagement party?
>> his father's. >> justin bean 'eers father's engagement party has a bengal at their party. >> okay. i think i'm going to go home right now. >> because they could. >> if he was a couple pounds bigger, i wouldn't want to get any. >> that's no bengal tiger cub. trust me. >> that was not a cub. >> a tiger. >> see you in an hour. >> thank you. >> see you later. 25 minutes left in the trading session. still triple-digit gains point wise. we have a leading trader lined up to tell us what he's watching into the close of the trading day. >> later, why the best days of american express shares may be long gone. stay tuned.
fact, the nasdaq is up about 0.8%. the dow's up 113 and apple is on track for its eighth consecutive day of losses. the tech giant has lost 11. that's down about a quarter spernlt. >> i one der what tim cook thinks of all that. we have peter from empire executions joining me on the floor ott the new york stock exchange. big decline last week had them saying that. there's some skepticism today. where are you on that? >> right now i would say this is a mediocre rally. if you look at it, they're almost equal, so to me that says --
>> hardly some conviction there. >> there's not a lot of conviction. i do think we'll have an opportunity again. maybe not that level. but you're going to see a pullback at some point. >> you can't look to oil. >> not yet. you're seeing the divergence, the disengagement, today especially. we're seeing it more and more. and i think what ends up happening with that is that it's less part of the conversation. so when people aren't really talking about that, how they trade, you know, in lockstep, then it becomes a nonissue. >> we're at 2081. starting to levitate a little higher here. you want to see a pull back before adding to positions. >> i don't think we're going to see the 1806 level any time soon. i know it's a moovgs but -- >> you'd be putting your napkin on it. >> yes, i would.
>> thank you. >> thank you, guys. 20 minutes to go. getting to the close. the dow's up 125, which i believe is a session high. and american express is seeing an uptick today despite warren buffett telling cnbc it's under attack. what the oracle of omaha had to say about the company is right after this. a deluge of digital records. x-rays, mris. all on account...of penelope. but with the help of at&t, and a network that scales up and down on-demand, this hospital can be ready. giving them the agility to be flexible & reliable. because no one knows & like at&t.
the whole area is they're smart people. they're trying to figure out faster cheaper better way f os handling payments and american express without being their business is not only under attack now but they'll be under attack as far as the eye can see, but they have a very strong franchise too. >> the payment system. a lot of people talking about that these days. people talking about payments and his position in american express during that discussion on "squawk box" this morning. >> for more let's bring in jeremy miller who's author of the book "warren buffett's
ground rules" and david ho of deutsche bank. david, i'll start with you. the stock has clearly struggled. what you do say the company has to do to fend off a number of attacks? >> there's a problem of innovation, right? warren obviously think's the company -- and i agree, it's been under pressure unprecedented, but in order to thrive in the new payments department, innovation, that will translate to revenue direct. >> but, journey, warren buffett's approach, he went through the litany of the problems they face with the people of the high-tech field coming at him but the last thing they said is they have a good brand, a strong brand position. that's what he thinks, right? >> that's right. they've been under pressure over the decades. still american express is a leading company. attack is nothing new to american express. >> what does it mean to have a
strong brand if you're not competitive with the cutting edge technology that's coming at them right now? >> they're going to have to reinvent themselves. buffett will have to look to the business to redetermine its value and look at the success. >> i also thought it was interesting when he said, look, you know, taking my money out of american express means i can find somewhere better to put that money to work, which is a tall order especially with markets being as highly valued they are or as big an acquisition he'd have to be taking to put apples to apples there. perhaps, david, it's not as fair to put his particular investment into this conversation the way others might be out of the stock in three or six months, but that said, what kind of innovation are we talking about? does american express need go out there? what pa ofrt the payment system in particular do you think it needs to focus on here? >> well, i think there's a lot of interesting technologies out there. i don't think the winners have
been set. i think they need to continue to have a diverse portfolio and play capital where you get the highest return and the growth will be there on the digital and mobile space. that's where they get excited. the bread and butter of the business continues to be business and the lending part of the business. so i think in order to take the next level of revenue growth. they need to show an attraction on some of the core aspects of the core franchise. >> we remember from the '90s warren buffett not only doesn't invest in technology. doesn't understand the technology and doesn't want to understand technology. is he missing the boat on those out there that are in this budding payment category and sticking with the old school companies do you think? >> well, i mean buffet might not understand technology or he might tell you he doesn't
understand technology. i think he understands a lot more than he leads on. he's really got the leadership of the american express. he doesn't need to necessarily do it. he'll expand on the capital they deploy. if the core business is under attack, he would say they need too let it run off. >> or increase the pay of buybacks. >> or increase the pace of buybacks. whatever they do, he'll judge it based only the capital and the returns they get back. >> gentlemen, thank you both for joining us. appreciate it very much. >> thank you, guys. >> warren buffett has the luxury of time for those where he wants the deploy that capital. >> we have about 13 minutes speaking of time. the dow is left. three-quarters of 1%. the nasdaq is up 45. up next, why commodities could be a place to invests right now. portfolio manager michael guy
yad will be up. >> and tim cook and jim cramer here to talk. that entire interview is coming up at 6:00 p.m. eastern tonight. we'll see if we can get a little snippet. stay tuned. i am benedict arnold, the infamous traitor. and i know a thing or two about trading. so i trade with e*trade, where true traders trade on a trademarked trade platform that has all the... get off the computer traitor! i won't. (cannon sound) mobility is very important to me. that's why i use e*trade mobile. it's on all my mobile devices, so it suits my mobile lifestyle. and it keeps my investments fully mobile... even when i'm on the move... ahhh.
welcome back. aig among the companies reporting earnings after the bell. mary thompson is somewhere on the floor at the trading post with what to expect. >> right in front of 6 p which is aig trades on the floor at the new york stock exchange. they'll be looking at the availth of their commercial line. that includes buybacks and dividends and cost cuts. revenue expected to come in at $13.6 billion. but at insurance, what's important is net premiums written and paul newsome expects those to increase by 2.9% in aig's commercial business. they're expecting to stay flat. under fire from activist carl icahn last year, aig's stock has had a nice run since the beginning of the second quarter. it's up about 5%. they're still down year to date. back to date. >> thank you, mary.
we'll see you in a little bit when aig reports. joining us on the floor, micha michael giad from pension partners. >> you're having inflation expectations rising. remember the a great relocation allocation? >> out of bonds into stocks. >> markets are funny. there's a fine line between being early and being wrong. i do think if they're going to keep picking up the way commodities are picking up, so charlie and i looked at a new white paper. it's one of the things we showed. now if you add stabilization to commodity prices, that alone is very bullish for expectations, for stocks, and the theme of that great rotation. >> this all sounds very thoughtful and very intelligent. what about apple? buy, sell, or hold, michael?
it's had such a tough slog of it the last week or so, but it was such a widely loved, widely held name. >> it's been a portion of many mini market caps. so that also is a different type of great rotation that maybe apple's catalyst for toward smaller median stocks. >> all right. we mention it because apple's ceo tim cook sat down with jim cramer of "mad money." have a listen. >> when i read the stories, it seems like people think it's over. how could it be that you can't have this ever or the ecosystem, but it's dead? >> yeah. i think that's a huge overreaction. look. we just had a -- actually an incredible quarter by absolute standards. you know, $50 billion plus in revenues and $10 billion in
profits. to put that in perspective, it's more than anybody made. clearly not up to the street's expectations clearly. >> there's much more of that interview coming up tonight on "mad money" at 6:00 p.m. >> rare full hour with tim cook. that should be great. >> what day it's been. >> a crazy day, that's for sure. michael, good to see you. >> thank you so much. >> we'll come back. we have the closing countdown in just a moment. >> after the bell, we're talking more thin tech. we're going to speak with a key player with one of the big bangs about this threat. you're watching cnbc, first in business worldwide. and that a tired dog is a good dog. [ dog barking, crashing ]
plan your never tiring retiring retired tires retirement with e*trade. three minutes left before we go into the closing countdown. we're very excited to have tim cook on "mad money" at 6:00 p.m. i said it was rare to do a whole hour. that would be rare. we're doing two segments with jim cramer. just wanted to make that clear. we're with dom chu. a lot of traders saw this happening on friday. once you get the berkshire hathaway annual meeting on saturday, you hear all these positive comments on the markets and the economy from warren buffett and you get a rally.
that's what's happening. >> you get it here. the volatility index. that track of fear is down a point. about 14.5. small caps are doing well. some of the traders will point out there is perhaps a little bit less conviction in this than people expected. >> not a lot of volume. >> even with the spiders. they received the most widely traded etf in it has traded less than half of its average daily volume. >> they've rallied without oil. the price of oil down 2 1/2% today. the output at opec coming out higher than expected. iran, they plan to pump as much as they possibly can. >> and energy stocks have lagged as a result. we should say this. one day a trend does not make. how long have we been talking about this correlation, the trading relationship between the stocks of price and oil. today it's down 2.5% and we have
the stockmarket un. >> one trader is hitting me, don't get comfortable with that. >> exactly. >> gold continues higher. the dollar lower. that correlation continues at this point and the price of gold did touch $1,300 and plus so the highest level since january 2nd. pull bagging a little. >> as a result, the gold mining stocks have been on a tear so far this year. they're giving you a little bit of it back today. check out the etfs. doing very well in trading today. you can see the trading. the etf. >> good day for netflix and amazon. >> it is. these are two stocks that continue to defy gravity so to speak. they've been on a tear. these two stocks lead higher in the s&p 500 overall. i would say that along with internet travel. some of the best performing stocks. trip adviser, expedia, priceline, along with those guys. internet stuff. it works with today's market.
>> no one's better, dom chu. thank you, my friend. >> you're welcome. >> going out with the gains hanging on. the s&p right at 2080. see what it does for tomorrow. we have aig coming out. we have executives of ellie may at the big board. stay tuned with the second hour of "closing bell" with kelly. see you tomorrow, kel. >> thank you. see you tomorrow, bill. a lot of factors coming at the market to digest. we'll get into those. the dow up 117 points. it was the underperformer. the s&p adding 16 points to close at 2081. the nasdaq buoyed as you heard. amazon and others was up 22 points. still well below the 5,000 mark but a gain of about 0.9%. we'll also have earnings from
aig any minute here. we're going bring those to you as soon as we move across the wires. we're moving through the earning season. joining today's panel, we have cnbc's market commentator and mark santoli. welcome back. along with cnbc contributor carol roth. welcome back. it seems like we were just here. tim seymour joins us as well, miechl mike. ben said this is a warren buffett day. what do you think? >> i think his comments about amazon maybe if i could point to one thing could have put a little life into that stock and that whole category, but on the whole, though, i think what really went on here today, first of the month, you mentioned the first trading day of the month. you got back three quarters of what you lost last week in the 1% decline. to me last week's decline was relatively contained.
it was related to stocks. to me the dollar down big again. mine you can't really hide it. that's why you can go up when oil's down 2.5% when you have the dollar making it. >> i was looking at that. let's show it on the screen. the dollar index. i had to -- a couple of months ago it was at 100 very briefly. >> you hear a lot of people saying, well, that going to defend 94. something announcement that. the yen is surging. >> you wonder which is the -- is the dollar wagging the yen's tail? >> i can tell you what's not wagging anything and that's earnings. if you look at earnings, we're about 60% to 70% of the way through reporting for the s&p 500. and we're down pretty close to 8%. so unless that other 30-plus percent all of a sudden just completely kills it. we're going to end up with another down quarter year over year. that will make it the fourth year-over-year down quarter in a
row. we haven't seen this since the end of 2008 through 2009. even with the supposed beats, we projektded a growth and it came down big. it came down so big they're beating slightly. if you look alt us being down four quarters in a row year over year potentially, that does not justify the valuations that we're seeing. >> jim, one of the things we're seeing is exxon hasn't moved that much, who has a big dividends yield, it had a lot do with the chemicals. it's clear they want the stability through some of these tumultuous times that these companies seem to offer any how. but are they the wisest place to be, do you think? >> exxon is one of these places where obviously it's a down sheet. it's got all kinds of fronts. but it's not like exxon is not going to cover up. they should be a great position to do very well when the
industry covers but yet they're not doing much to give you that excitement. so it's defensive and yet it's really disappointing in the defensiveness. when you look at the oil and gas stocks, especially the big cap integrated names, they've actually come a long way back. you start to think how much can oil do in the long run. i don't think oil is going to fall out of bed at all. i do think at 48 to 50, brent's got a lot of trouble getting higher because the guys not as strong have hedged all that production out for the next year, year and half, but we're going to get to the place where resources trade legs up again. meantime i think that's the part of the trade that can work. people want to say, hey, what happened to some of the names. they've been exploding higher and i think they will. if you look at the inverse correlation, they're going to do well. the multinationals will do well because they're all things they have looked at when the dollar
has been a headwind. >> you know, the other factor really weighing on the discussion this weekend and the markets is the talk, everybody, about negative rates, the impact. what does it mean. nobody seemed to have a clear explanation of this. almost a side comment when he was asked about this. warren buffett and becky quick had this hypothetical scenario for us to think about. >> it's a total hypothetical. but the government absolutely said interest rates are going to be zero for 50 years, you know, the dow would be at $100,000. >> $100,000. okay. what do you think he was trying to say? >> first of all -- >> i assume he meant it will go to $100,000 relatively quickly. if it goes to $100,000 in three years, that's a lousy return. i do think he meant relatively quicker. if you take the core of his point which is view anchor rates
low, you're going to have all this mown flow into some other asset that has some kind of yield or cash flow attached to it so you can say, okay, fine. rates are not going to be zero for 50 years but they're really low historically. they're not normalizing very fast. what does that mean for what you pay for stocks right now. that's the question. >> i think it was an incredibly bizarre comment but we'll give warren the benefit of the doubt. i think perhaps what he was trying to say is if you let these central banks go on and on, they'll continue to juice the markets but that doesn't mean they're going to actually have a good impact on the economy, and they that's the bigger issue. so i'm not sure if that's what you meant, warren, but that's what i'm giving you credit for. >> what were you going to say, tim? >> earnings yield, dividends yield, we get it. if you look at valuations of stocks and lower the rates. obviously the higher the valuation goes. therefore you can juft fie a
higher s&p. carol's bringing up a good point also. what happens in an earnings environmental when you have rates at zero. certainly the frontal boundary financial sector. but i do think that's what's playing into why consumer cyclicals and conservatives and food stocks continue to trade hire despite valuations that really make no sense. i think the trade is going to continue to work and i think value is going to be more interesting than high growth and i think last week's scare in the markets gives you a glichls of really where the pressure points are. i thisnk you have to be careful >> there was great mungerism from the weekend when he said micro economics is what we do, macroeconomics is what we put up with. they're saying we're looking for ways. >> without a doubt. i think that i've been cob sis tent about that.
they've run multiple companies really. i think that's what they have. i don't think they're trying to keep up with the markets. it really does have this afternoon. i'm going to look at the fundamentals of each little business. you'd love do it. >> also it's national small business week and i can tell you the entrepreneurs, the small business owners do, not care at all about this macroeconomic environment until we get the sustained environmental. they've got their heads down, working hard and create jobs and be the backbone of this economy. so i'm hoping one day with can let them get back to and that a take the extra circus from the sidelines and put it way. >> meantime, tim, one of the comments about jeff bezos and we can't outbezos bezos and the whole amazon thing coming out of the kmemtds from warren buffett this weekend. we saw that effect and saw bill
miller and others making big pulls on this company. is amazon or facebook after -- i mean are these the new momentum plays f you will? i mean are they great businesses that people with coming around to finally appreciating or do they risk finally becoming the next widely held, wildly loved stock you can't lose on so everybody piles in kind of thing? >> they're not new flavors of the month, that's for sure. this is the only growth they're getting and the mega caps out there. i'm not surprised people continue to fly toward them. i think there's a tremendous amount of good news in amazon stock. that's place where at times that's proven to be absolutely right and it seems like if you want to believe this company can turn on the levers wherever they want, to i think chasing all the good news in amazon is tough to do. it's easier to do than it is at amazon because it gets back to the multiples that make more sense.
both have made more commitments and have a scaled advantage over their competition. especially when you consider the industries they dom nachlt it's very exciting and very difficult to blow holes in both of those companies. i think the stocks reflect a lot of good news right now. >> just to extrapolate a little bit f you project forward what the market is trying to say about the companies, they're going to command 100% of the growth in those sectors in a way. they're going to be so dominant they're going to eat the rest of the industry. it's this deflationary boom story and it's not clear how much is left over and drive total economic growth. >> i sort of agree with tim, which, tim, i absolutely hates to do. >> that's nice. that feels great, carol. beautiful. happy monday. >> facebook i do agree with. i do think that's going continue to command that extra market premium. amazon, i'm still not convinced on that story. i think they're in too many businesses and the multiple and
evaluation is going to be too hard to justify that evaluation. so i think face boong will continue to be the market leader. amazon, i think that's going to be the one we ceecee saw. >> we prefer disagreement. it's a healthier market for sure. thank you, timmer for joining us. >> it's a pleasure. >> they're talking scott wren. that will be interesting with scott wren. now, financial technology is shaking up the banking industry. up next we'll talk fintech and some of the hidden risks. later carnival is cruising to cuba. we'll go aboard the first cruise ship to travel toll cuba in more than 50 years. and later tim cook is sitting down with jim cramer to talk china and a whole lot more. that interview ask coming up at 6:00 p.m. eastern. keep it right here. you're watching cnbc, first in business worldwide. t hearing th.
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banking. some are embracing the technology, but others are a bit worried. last night on "6 0 minlt s kwts pandit gave his opinion. quote, a lot of what you're seeing in fintech is like what you're seeing with uber or airbnb. i mean you've seen the impact of technology on travel and industry. that's what pandit had to say. what's the threat of what you're seeing? >> well, in our research the customers are telling us that they really feel like the game is rigged against them, whajd we think this whole fintech discussion of-on-robo has opened up is the ability for transparency and making advice acceptable to the main street investor. but we believe in the hybrid
approach. that come bun nation is what they're looking for. >> it's not just payments or savings apps. >> right. that would be like the automatic services. yvette, i wonder, if this perception is true as you say that this generation of investors doesn't necessarily have great trust in the old way of doing things, how does that affect you. you're part of a fwiger company, an established brand. >> that's right. in many ways we feel like a starter. we asked the consumer what they're looking for, and they're looking for intuitive tools, unbiased advice, and a brand that's on their side, and so that's what we're building together. >> what i see is a great conduit
to get the millennials, to get the new investors not currently involved in the market involved in the market but obviously there are a lot of people who get involved in other means through other ways. do you see any sort of trend that may emerge where companies instead of going with traditional 4 o'1 k advisers or traditional plan advisers going in more of a robo direction? >> i this i what consumers ultimately want is they want their financial life to catch up with the rest of their digital life. they can do so much online and get so much information and empowerment and they're used to it. so that pouring over into the retail market where customers know this has been vetted, this is best for me and low cost and i can check in with my money when i'm ready to is really what consumers are looking for. >> i can barely remember my log-in half the time to check in on the most important parts of
our financial portfolio. but the convenience factor that you can track on your phone and make transactions and get advice. i wonder if this ujds mines people's trust in it. >> it's funny. it seems to me especially with younger investors, they have greater trust in a software tool or something that seems very intuitive as opposed to somebody who's going to take you and say, meet me for golf. >> there are some things technology can do better. it can read balances better and read technology but a robot can't have empathy or talk to you when life happens or adjust your portfolio when life happens. >> it's very, very scary. do you imagine some of the mna will get in there and see some of the up in upstarts at that
entrance? >> i think we've seen some of that. they're going through some of the deep analysis of what we should build, where we should buy, where we should partner. >> and it means that it's -- anyone's for grabs. it can be a kid building something in garage, capital one building some of the biggest names. it's really who has the best technology. >> it be l be fascinating to see where it goes. yvette butler is capital one's investor. watch out. with so many skinny bundles coming to the market, does it have a fighting chance? that's late jeer first karencar has docked its first cruise ship in havana and how you can get a spot on one of the future voyages right after this. millin this company's servers. accessible by thousands of suppliers and employees globally. but with cyber threats on the rise, mary's data could be under attack.
sfx: leaf blowers the yardley's. dad! sorry. spring is on. start your trugreen lawn plan today. trugreen. live life outside. welcome back. insurance giant aig is out with its earnings. mary thompson has more. hi, mary. >> analysts were looking for a dollar a share from the insurance giant. the company says its return on equity did increase to 8.9% and it also cut operating expenses by 5% from the first quarter of last year when you adjust for currency. however, the company said it was negatively impacted by market volatility in the first quarter. if you look at the operator and the pretax income in the first two lines, commercial and
consumer, the commercial line was well below expectations of $89 million. analysts were looking at a quarter of a billion dollar and on o consumer side, analysts were looking for $862 million, although we do want to note its pernlts insurance line within that group performed well but it was weeker in retirement and life as well. so once again, some disappointing results from aig. they've written in their commercial line. they were expected to be up. they actually declined to $4.3 billion. so, again, some disappointing numbers from aig in the first quarter. back to you. >> thank you. the shares down 3/4 of a percent. peter hancock will join "squawk" on the sfretreet in an intervie you'll definitely want to catch it. mike, any thoughts on this one? >> remember, there was that
where they said let's split it up. they said, no, we're going to streamline. they're doing it on the efficiency side. but the growth is hard to come by. the stock trades at 75% of book value which a lot of these multi-lines do. so it seems like they were not as high but it's been tough for them. >> true. they're also continuing do a huge buyback. >> marking the first time the u.s. has sailed from u.s. to cuba. our simon hobbs is on board the "adonia" with more. how is your espanol, simon? >> my spanish is actually pretty good. more lobster than they could eat. it's interesting to watch hardened cruises if you like come back. clearly as far as many people are concerned is still frozen in
time. a lot of the architecture aunld here looks derelict. it was interesting for this american cruise ship to come up after so many years and for the first time for cuban born americans to be allowed to arrive or indeed leave as it turns out. the caribbean is an amazing market potentially for the cruise industry. cuba is bigger than all of the other caribbean destinations. essentially havana is to cuba what miami is to florida and the question is whether they can open up this island with its almost unlimited beaches and koevs and other islands and whether, of course, crucially there's the investment for that. for the cruise industry, they want to be there gorks there, and do excursions. on the other hand they don't want to invest their own money. they could go to china with
these ships if they so chose. so if you listen to carnival's ceo, obviously he's over the move that they're the first in with this ship. again, you get quite a guarded answer to the question how much you can spend here. take a listen. >> cuba has been very cooperative. we'll invest alongside whoever they're going to invest. it's great for the entire caribbean. it's not just for cuba. >> yeah. it's interesting the degree to which perhaps the rise of cuba will take away from the other of the ports and destinations around here. essentially if you leave florida, they split them into west and east. if you're one of those east coast destinations in the caribbean, you're fine. but you may find right across the region people raise their game in terms of destinations in terms of what they have to do to get the cruise ships to still come and, of course, in general, kelly, you'll see this, there is a halo effect. these types of perfects we're
sending now and other broadcasters will, it entices people to book more on some of those caribbean voyages and you've already seen pricing firm up if you look, for example, royal caribbean's results. back to you. >> simon, just briefly, what is the result of passengers on board with you? are they enthralled or you mentioned how derelict it is. are they underenthralled? >> this is in a practical sense, a, not just another cruise. they're here us that because they cruise a lot. the question will be when it feeds to the cuban born americans who are able to come on because there's a delay in the visa situation but we don't have enough time nr that. going forward that will be a major event as it will be if they can bring their private boats back to cuba. that's another story. back to you. >> we'll be following it with great interest. for now, thank you so much. our simon hobbs outside cue
bachlt time for a cnb news update. let's go to sue herera. >> here's what's happening. the government of japan is conducting its own fuel test. it revealed it had been falsifying records some-on-some of its bed models for decades. a court has upheld a ruling on the maker of faulty breast implants. at least 45,000 women were given the implants from 2001 to 2010. they were filled with industrial silicone rather than medical silicone. he's facing fines and is barred from ever runs a company again. health care is a dangerous business. the report shows the health care industry is the most violent nonlaw enforcement industry in the u.s. researchers say the violence is
often tied to patients with dementia, mental health, around substance abuse problems. and take a look at the brand-new barbie. she's made in the likeness of misty copeland. the first african-american principal dancer with the american ballet theater. it's part of the barbie's sheroes breaking boundaries. >> love misty copeland. do you think with can do that, wear the headpiece and flowy -- it would be kind of fun. >> you never know. i'll do it if you do it. >> i wonder if under armour is in it. >> all i can say i have my own action figure. been there, done that. >> i still want to wear the flowy. >> kelly just wants the hair. >> you're right. sue, thank you so much. lieu report ldly jumped into the cable biz.
there this skinny bubldle entice more consumers to cut the cord? that's right after this. i'm here at the td ameritrade trader offices. 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 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. impressive... what's up, tim. td ameritrade.
welcome back. here's how we kicked off the trading week, also the trading month. let's send it over to seema mody for earnings alerts. hi, seema. >> the company reporting earnings a narrower than expected loss. the company citing a cost stricture of $800 million. they also issued $3 billion of new. next the ceo says they're currently in the process of advancing another 700-plus million in die vesta turs. the stock down but on decent vacuums. moving on to texas roadhouse, revenue in line. sales growth of 4.6 is looking at 30 restaurants.
you're looking at the stock up. >> thanks, seema. hulu getting ready to take on cable television on rates. julia boorstin with what hulu is up to. hi, julia. >> hi. they're targeting cord coves and cord levellers. it would include live tv and on demand content. the more content and likely the price tag of around $40 according to bernstein analyst todd younger. it's in enhanced negotiations with disney abc as well as fox, both of whom are hoerlsds on hulu's board. for both of those media giants to earn as much as the traditional atv providers pay them. so if this indeed drives cord
cutting, they won't lose revenue. they've been starking talks hoping to include nbc, bravo, and its other channels. we also can expect hulu to reach out beyond its owners to cbs and time warner, by including some of of their chanls. none of the media giants or hulu would comment. we do expect ceo mike hopkins to address it at the advertising presentation on wednesday. kelly? >> we'll see if we get any more detail. thank you. what's the fallout. joining us now is matthew hair began from wunderlich securities. what do you think -- where do you think this is taking us, matthew? >> what's really interesting is all the large traditional companies had slightly flat amounts for the quarter. they're enjoying a tremendous
amount of success is where they have appealing content in-house like netflix and frequently more homes are taking multiple services as a complement but not a full displacement like your traditional bundle. we'll see where this goes. >> i had to break this down to a very simplistic way to wrap my head around it. originally you could stream what's called a hulu on your laptop. then you could stream it on your tv. now instead of watching hulu on my tv, i'm watching tv on my hulu, mike? >> it's something like that. they're bringing the same pipes to you. they're trying to blur the lines here. i think the question is going to be as it shakeses out is the decision to cut the cord going to remain except a lot less choice for a little bit less money? i think in terms of the money, how it's all going to develop. >> i think the question is what do these agreements look like in
terms of exclusivity and terms. so are these, you know, big guys going to be part of lihulu, doe that mean they're part of it or they could get it after a period of time? because if it ends up being in multiple places they could end up being more. i love this from this particular provider and i can tell you right now, we still have our cord, we have amazon prierjs anymore felix. i just realized that "south park" is on hulu, so i'll end up getting hulu. you end up paying much more because everything is buy fur indicated instead of all bundled together. >> what do you think, matthew? >> i think when you have that, i think 4k is going to be a big deal, tv everywhere. but i do think the services need to differentiate. there's too much of a me-too
product. you see sometimes on the streaming side and it feels to me like it's a little bit crowded. they'lgive their content at the same price to everyone out there. >> i'm wondering. if you look at a comcast and fox and others, dwlou think the stock price is affected by all this? >> i think the traditional media companies are pretty inexpensive. most of these stocks, belo e the s&p 500. i think people are consuming so much more video and winners are the fang names but i think the old media guys who can block and tackle and have creative execution are in a pretty good place. there's no question that they're in a very good place. >> so it's good. >> if you look at it. i think this takes some of the espn concern off the table and i
think if you look across the table of different players that have this content that's been traditionally linked to the cord and the concerns about cord cutting, the fact that they're very proactively going out and finding a replacement potentially at similar pricing it's good for the stocks. >> i think it's fascinating. matthew. thanks for joining us. can millennials save the housing market. don peebles is going to weigh in next and starbucks has a customer suing the coffee chain over the amount of actual liquid in its iced drinks. is the lawsuit without merit or could it put a line on starbucks. that's coming up next.
want to track mortgages? diana olick has more on this innovation. diana? >> and why do we care about millennial s and their mortgage, kelly? >> because they have peak ed. now after more than a decade of growing urban concentration, the millennial trend of downtown living is in decline. granted many of these millennials who are living cities will not be able to buy a home, so they'll be able to rent
in the suburbs. there's still a great debate about whether lending is too tight or too hard for young buyers to save if a down payment. i will not argue that here but i will show you findings from the new millennium mortgage tracker from elliemae. 30% were government insured fha loans. women were listed as the primary borrower on 31% of those loans. the fico score was 724 and the average age was 30. men were listed as the primary borrower on 66% of closed loans. they had an average fico score of a higher 727, average age, 29. in context fhl is only 22% of the general loan population, so young people are using that low down payment option which also allow for slightly lower credit scores, but apparently it's just not enough to get the real
numbers in for home buying. >> diana, stay right there. let's check in with don peebles of peebles corporation. we have to ask you about running for mayor. we'll save that. in the meantime, what do you think? have urban millennials piqued and can they buy the houses they want? >> they can't buy the houses they want. you have the urban centers, washington, d.c., for example, the millennials are moving to the suburbs. after that they can't buy. that's not going to change until lending regulators reduce this vice grip on credit. that's why you see a disproportion at amount of millennials doing those loans. >> so the very housing collapse that psychologically made them wary of homeownership is the very reason they won't have access to it even if they come around to the idea? >> yeah. because one of the things that
millennials have is they receive a collapse in the housing market where baby boomers and those behind us have seen generations of housing appreciation as a great investment and so there's this fear factor of losing money, plus now as they get more comfortable with buying a home and the cost of rent on an aftertax basis is now more than what it costs to buy, they can't qualify. it's absurd. >> rents are up, carol. rents are up. >> i was wondering, one of the other things millennials have seen, they've seen a tremendous amount of student debt that many of them are still carrying. how has that affected the prices of the types of homes that they're looking for and their ownall ability to get a loan at all? >> i think that's a very good point. the millennial's are a burden with the disproportionate amount of student debt. their buying power based on their disposabling in on paying
student debt forces them to go out in the suburb. they probably want to stay in the city but they can go out on the city limits in washington, d.c. and chicago and other major cities and they can cust their costs by half or by double the house or double the home in the suburbs. >> mike? >> it's amazing. all of these effects we're seeing post crisis, it's been very hard to tees apart which's the cyclical element, what's the choice and demographic group who wants to do different things. this is like the retires leaving the work force and all the rest of it. we don't know what the root demand is. >> it reminds me of someone's remark about a recession that it usually takes a lot more. there's five or six or ten things that have to come to a head. that's true unless we oversimplify. don, what would you do about it if you were mayor? >> well, look. i think new york city has the biggest housing crisis in the country in terms of
affordability. it's essentially almost unaffordable for anyone. so we need to increase it. we have to build more affordable housing. that's wuk of the things i would focus on. that's a key ingredient. also we have to expand jobs, create an environment for more businesses to come to new york city and stay. >> i'm just fascinated because you're a prominent democrat, don. >> yes. >> this would be a big deal. interparty challenge, you would take on bill de blasio, trying to unseat him in his next term. >> unfortunately we as democrats get it wrong. we got it wrong with him. he's not qualified to run the city and it's showing every day. what we thought was integrity. now he's under investigation by four different agencies all about campaign finance, fraud, and corruption. it's very considering thing. i think it's going to affect also whether businesses want to continue to be here as well.
and, of course, new yorkers are having a tough time financially right now as well. >> it's a big topic of conversation in the city, that is, the current state of things. don, thank you for joining us. >> thank you for having me. >> don peebles make nothing bones about how he's feeling about it. they're weighing in on apple's results. apple's ceo tim cook spoke with jim cramer about that. you can find out what he's saying next. tomorrow kyle bass will be live from the milk-in conference on what he's betting on right now. that's tomorrow right here on "closing bell."
for a large part of the company's decrease in revenue. ceo tim cook sat down with our jim cramer to talk about the outlook on the region. >> i could not be more optimistic about china. i think the long-term thesis is intact. there has never been anything like it in the history of the world. i'm still as optimistic as i've ever been. >> you can catch the whole exclusive interview tonight on "mad money" starting at 6:00 p.m. what did you think? >> long-term thesis, maybe not saturation over there, but i think this is now a show-me stock. obviously you have to prove in the next couple of quarters you'll see reacceleration. i still think the street has time to figure out what they can expect from this company. >> i think it's one of those that you really do need to watch the stock price. because if it starts breaking through more and more levels, then who knows where it can go. if it does maintain those levels, it could end up being a
buy. it is certainly very cheap. whether or not you were disappointed in the last quarter, i think everybody still believes apple is a powerhouse. they've got a ton of cash. they can make a lot of strategic moves here. i wouldn't be writing them off quite yet. >> it's also perhaps a test of this notion you can get dividend yield report for the big cap stocks. it will be pushing the 2.5% ditch dend yield. one thing they can still do is share cash with shareholders. that will show you whether you get buyers. i still think the target looks like a pretty optimistic scenario. >> i'd like to see them make a bold m & a move. whether it be the area of cars, or otherwise, that they could certainly move into. they have plenty of xash to do so. i think something like that would be well received by investors. >> we'll see what tim cook tells jim tonight at 6:00. starbucks sued for a whopping $5
we'll send it right over to seema mody. >> yelp moving higher after david einhorn reporting a new stake in yelp in the first quarter letter. in the letter saying that yelp was purchased at an average price of $21.16. saying that yelp has added more transaction based revenue. gradually relocating its sales force to more cost-effective cities. that's in the capital letter. shares up better than 5.7% after hours. kelly? >> yelp? >> it's a dumpster dive. $1.6 billion company, down by three-quarters since a year and a half ago. probably has some strategic value. also, i notice it was up strongly on more than expected -- more than usual volume during the regular session today. >> we might hear more about it at the conference as well.
nobody likes to feel like they're getting cheated. a woman in chicago is suing starbucks for putting too much ice in her drink. it only has 14 ounces of coffee in it. joining us is attorney andrew stoleman. andrew, you don't think she has standing, do you? >> kelly, i knew you wouldn't like this lawsuit. i didn't file it. but it might be meritorious. we have consumer fraud protection laws for a reason. and if you're shortchanging people, even if you call it a salami scammer, just cutting off a little bit each and every time, that's potentially actionable. i don't hate this lawsuit as much as you do. >> really? >> this is why americans can't have nice things. because of instead voting with your dollars and going somewhere else, or perhaps asking for no ice if it's an issue, we decide we're going to bring this to trial. we're going to have a lawsuit. this is absolutely outrageous. >> but it's a slippery slope. can mcdonald's say we're going
to sell your juicy hamburger and in reality give you spam? can an auto manufacturing company say we're going to give you a v-12 and give you a v-6? >> first of all, it's not clear to me starbucks has some really driving motivation to shortchange people on ice. i think maybe it's a work flow thing that they probably prefer -- >> it's an ingredient. >> they perhaps prefer to not brew and chill more ice coffee. given the starbucks is willing to bend over backwards and make your drink however you like, i'm not sure i exactly see what the pain and suffering is. >> when you get your name on the cup, which i had a really big messup today -- >> just don't advertise 24 ounces when you're giving people 12. it's a basic concept. i know it reminds everybody of the mcdonald's burnt coffee -- >> but it's a 24-ounce cup.
you're getting a 24-ounce cup that you can get with or without ice to your specifications. >> andrew, i just think you want this case. i think that's what's going on here. >> no, look, i'm not involved with it. all i'm saying is we have so many companies that doo indeed take advantage of customers. if indeed starbucks is doing this, there's at least a prima facie case something might be amiss. we'll find out in the lawsuit. >> legal reform. legal reform. >> andrew, thank you. >> anytime. >> if anything comes from this lawsuit, just wanted to briefly get a word in here. what are you watching? >> obviously still watching the remainder of earnings coming out. i think one of the key things about earnings is not that they're just weighting the low bar, which they really are, they're not going down as much as they usually do. maybe we get the second half turn. >> starbucks is responsive to customer -- remember, outrage about stuff before, but if this woman wanted publicity, or to
draw attention to the issue. >> if you're going to bring a lawsuit for not being able to order with ice, you shouldn't be allowed to spend $5 on a beverage. >> that does it for "closing bell." thank you. "fast money" begins right now. that's right. fast mope starts live from the nasdaq market site overlooking new york's times square. i'm scott walker in tonight for melissa lee. our traders are tim seymour, karen finerman and steve grasso and ryan kelly. the worst slide in two decades. is tim cook worried? we'll hear what he said to jim cramer exclusively moments ago. plus, missed a rally? we've got three stocks making 52-week highs. a top technician says we're going even higher. we'll see if any of them are worth buying. wells fargo says the s&p 500 could rally 10% this year. the bull behind the call makes his case in just a