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tv   Closing Bell  CNBC  March 7, 2017 3:00pm-5:01pm EST

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side. lowest cost. highest capital. solid reserves certified by third party agencies. great assets, integration. >> "power lunch" always surprising to the up side. i'll see you tomorrow. >> see you tomorrow, brian. >> great stuff, brian. closing bell starts now. hello, everybody. welcome to the closing bell. i'm kelly evans at the new york stock exchange. >> i'm bill griffeth. how many people understand the new health care proposal. anyone? anyone? >> trying. everybody is. trying. >> meantime, the stock market doing not a lot. the dow, the s&p in jeopardy posting a first back-to-back decline since the end of january. all three of the major averages are in danger of closing lower for the fourth time in the last
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six sessions. >> the big story on wall street and in washington is the new house republican plan to replace obamacare. the bill facing resistance especially from some republicans but coming up we'll hear from one congressman who's also a physician who does support the bill. >> plus, after a big rally last year, oil prices have declined 1% so far in 2017. we'll get the outlook for crude oil prices. we'll hear exclusively from the secretary general of opec himself coming up this hour. >> and don't miss our exclusive interview with the ceo of chevron, john watson on everything from oil prices, to deal making to the future from the energy giant's dividend. >> let's start with the controversy surrounding the new house bill on health care reform. kayla town, she's on capitol hill and bertha comes. k coombs, you get the pleasure of explaining it. >> reporter: there's been a
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flurry of activity. the president called our plan. just moments ago the vice president was leaving a senate working luncheon to discuss the new plan on his way to meet with house republicans to discuss the new plan. he gave some brief remarks about his view on the draft. >> the american health care act is the framework for reform. we're certainly open to improvements and to recommendations in the legislative process, but this is the bill and the president supports the american health care act and looks forward to working very directly with leadership of the house and senate to move this bill. >> reporter: the health services secretary tom price made a visit. he was taughting the new draft bill as a starting point that signaled the conservative
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principles that the party could get behind. here's what the secretary said. >> the president and the administration support this step in the -- what we believe is in the right direction, a step that repeals obamacare and gets us moving in the direction of those principles that i outlined. this is a work in progress and we'll work with the house and senate in this process. as you know, it's a legislative process that occurs. >> the problem is there are a lot of gop legislators that don't agree with the plan in its current form although it will be negotiated. one of the reasons is they don't know exactly how it will be paid for or what it will cost. mitch mcconnell said moments ago that he does expect the cbo to weigh in this week. then there's the issue of the fact that it doesn't start from scratch. it keeps part of obamacare legislation in place. ideologically a lot of conservatives don't like that. it may not provide adequate cover for states that expanded medicaid. that is something that a lot of senators are worried about.
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so far today we've already heard from senator mike lee of utah who said its bill doesn't serve the intended purposes and senator rand paul said the bill would be dead on arrival in its current form. we'll hear from the house freedom caucus to see if they have had a change of heart since the bill's come out. guys? >> kayla, thank you very much. as you mentioned, bill, people got the first sense of if last night as the day progresses just feels like there's been more push back perhaps than embracing of it. >> i mean, it's still early. i mean, there can be changes made, probably will need to be changes made if they want to get it through the senate. >> it's early but there's some that want to get it out before the cbo scores it. kayla, thank you. let's get over to bertha coombs for the stock market's reaction to all of this. >> reporter: that is one of the issues, isn't it? how many people would be covered. how many people might lose coverage. there's no cbo score so we're hearing from analysts and over
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at s&p global, the rating side, they think that we could see between 6 and 10 million people lose coverage. they don't think this is bad for the insurers because a lot of the major insurers have already gotten out of the individual market, at least on the exchanges. and under the proposal because they can only really deal with the budget issues, they won't be changing those health benefits issues. so insurers would still have to offer richer plans even though they could charge some older folks a little more. that is not seen as helping the risk pool on the exchanges. the other issue s&p talks about is for the medicaid players. you can see some of them have had a tougher day of it because we're going to be changing to a system where medicaid funding for the states will be per capita rather than an open ended amount that will be funded. so states will either have to come up with more to make up the difference or really tighten their belts. finally, the big losers today
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are hospitals because if we see more people lose coverage who had gained it under the aca that's going to perhaps mean more uncompensated care. that's going to be tougher for the hospitals as you can see they're one of the biggest losers today. >> bertha, thank you. let's look at the policy issues. >> joining us right now, chris meekins is research analyst and vice president for health policy and spencer pearlman is managing partner and director of health carey search at vida partners. good luck to both of you guys here. chris, have you figured out who the winners and losers might be in the bill as it exists right now? >> sure. we took a look at it last night and worked through kind of where we thought people were and what people are really over estimating is what's going to happen four or five years from now with medicaid moving to a per capita model. >> right. >> what people are ignoring is the fact that in the near term
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not only is medicaid expansion staying through 2020, states, new states can expand medicaid and you get an additional $10 billion in medicaid for states that haven't expanded not including the state innovation grants that are 15 billion a year over 18 and 19 so there's a lot of extra money here and i think people are thinking about what negative things could happen four, five, six, eight years from now which is an eternity in politics and not focusing on the near term. >> yeah, because of what you just said, spencer, i want to ask you because you think this could have a devastating effect on some state budgets, right? >> yeah, absolutely. there's no question that the whole point of moving per capita is an offset. the republicans are using it to essentially pay for some of these components in the legislation including the tax credits. the design is to pull federal money out of the system. the costs have to come from somewhere. the payments have to come from somewhere. so inevitably you're shifting significant costs onto the
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states and from a state perspective, there aren't a lot of good options. when states have short falls, they have to raise taxes, they have to collect more in provider taxes, they have to charge more, they have to cut enrollment, they have to cut benefits. none of these things help governors get re-elected. they definitely are left holding the short end of the stick. >> spencer, one of the key components was everybody needed to participate for it to work. you needed young people, you needed well people, you needed old people, you needed sick people all participating to keep the premiums at affordable levels. it didn't happen especially among young people and well people. what happens this time around if you get a number of people who are either opting out or can't afford coverage? what happens to premiums in that regard? have you figured that out yet? >> well, i think that's the $64,000 or 64 million or billion dollar question. there's no question that with regards to the affordable care
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act there were some flaws in both design and implementation. there's no question that the younger and healthier folks have not come into the market and that has resulted in a deterioration of the risk pool. some other republican ideas especially in terms of the continuous coverage requirement as opposed to an individual mandate, the design there is to really try to encourage people to maintain coverage and to lower costs to get younger people in. if they're able to get younger folks in, obviously that is going to improve the risk pool. that would lower premiums. that would be good for insurers. i think the jury's still out quite frankly on whether or not some of these policies will have the intended effect. >> chris, meantime you're a little bit more optimistic on the prospects of this bill. how quickly do you think something like this could get passed? >> look, the goal is to get it done by passover, which is april 10th. none of these members of congress want to go home and face their constituents and have their crazy town halls that they had before. they want to get it done then. they don't want it rolled into
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the government funding which expires april 28th. if they don't get it done now it's a much tougher road to who he going forward. >> go ahead. >> i want to pause real quick and say for younger americans, if you're 35 years old living in arlington, virginia, where fdr's headquarters is, you will get a $2500 tax credit and get an aca tax compliant plan. it doesn't work for everybody. you're older, you're sicker, this is a bad plan for you. if you're under age 40, things are looking pretty good with what they're proposing. >> chris, what if your income is on the lower side? how does this tax credit help you? >> it's not income based except that they put a cap for higher income people so if you're that 35-year-old making 20 grand a year, you're that 35-year-old making 55 grand a year, it doesn't matter. you get $2500. >> but i guess my point is is it realistic and feasible to expect people on the lower end of the
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income spectrum to -- i can barely follow what you're talking about and to figure out how it's going to be affordable, accessible to them and an incentive to sign up. >> yeah, no question there are going to be questions and people are going to have difficulty figuring out what plan just like you saw some difficulties in sign being up for the affordable care act. my point is investors need to focus on what this bill would do in the next three years, not what it could do five, six, eight years from now because three years ago no one thought donald trump would be our president and who knows what's going to happen three, four, five years from now before the per capita model on medicaid or before the tax credits go into effect. will there be some controversy, no question? >> there already is. >> already is. >> we wait for the cbo, too, if they can get their arms around it and figure out scoring action there. >> chris and spencer, thank you both. >> appreciate it. now congressman andy harris will join us in a first on cnbc
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in the next hour he'll tell us why he supports the new health care reform bill. we have about 50 minutes, little less than that to go in the session. dow is down a little bit, 14 points. in fact, slight declines across all the major averages. snap's ipo, the euphoria there continues to evaporate. the social media app's stock declining for the second consecutive day as a group representing institutional investors seeks to bar snap's stock from inclusion in the major indices. we'll explain why coming up next. also ahead, opec's secretary general weighs in on energy prices from the energy conference in houston. you're watching cnbc first in business worldwide. is happenin. sixty to seventy million people are moving to cities every year. at pgim we help investors see the implications
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they're all doing it. hank smith from haverford trust. cnbc market analyst, stewart frankel is right here next to us. and post 9, rick santelli in chicago. steve, if it's not up sharply,
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it's sideways. >> you know, the market has had every reason to sell off. last week we had protections with russia. the market wanted to give a little bit of an open loop. maybe we'll let the bears back in. maybe we'll let them sell the stock as a whole and the market was bought back and it was much ado about nothing. yesterday we had every reason. we had global growth concerns, china concerns. we've had every reason to sell this market off to your point and the market seems to want to hang in there or go higher and it stands to reason that there's still that lopsided transition trade, rotation trade if you will. it's into the based on valuation. even though valuation is not that extended. >> right. >> it's not based on that to the extent that the market can hold it at these levels so i still think there's some off sides. people were caught in bonds. they're getting out of bonds. they're moving into risk assets and they do believe that pro growth policies ultimately will
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save the day and save the market. >> hank, why do you think investors should reach for a budweiser right now? because i can think of a few reasons. >> well, look, i think we have to play both sides of this market. the offense, which is financials, industrials, materials but also defense and particularly those blue chip names that have been beaten up on the trump trade like anheuser-busch which has corrected some 20% since the election which we think offers a great value in here. but you don't want to ignore both defense and offense for sure because this is an economy that is ticking up and improving and corporate profits are improving. hard not to be bullish here. >> is jpmorgan your idea of playing offense? >> yes, absolutely. >> the raising right environment. >> i see what you did there. very good. >> so, rick, we've been seeing a rise in yields in the treasuries as we get ready for the fed meeting next week.
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now even that has stalled here. is that it for the foreseeable future? what's going on? >> well, i think it may be. you're exactly right. this could be the fifth day that we're going to basically close between 245 and 250. that's a pretty tight range for ten year treasury and, indeed, if you look for the year, 230 to 260, you could probably even tighten that up a bit with regard to where the most frequency closes have been. dollar index is really no different. we continue to whoever a bit below unchanged on the year. so as steve grasso said, there is definitely a transition trade going on. i think what seems to be missed by many is that those that believe that the landscape is much more friendly for business also believe that as messy as this is, many of the promises made by this administration are coming true. now whether the health care plan passes on the first run,
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modifications, the executive order on immigration, what he's working on in a parallel process with taxation. listen, you can say what you will, but it's not as though they're all taking a vacation right now with regard to this administration. i think the market's highly cognizant of that. if you were just to look at the charts for ten year treasuries today, believe me, wasn't a lot of volatility. if the treasury market is your barometer unease in the marketplace, there's very little of it showing up. >> steve, i was going to ask you about the fact that all of the sentiment data, stock market has been very good. atlanta fed q1, it's 1.3%. i know it's early, i know, i know. >> when you look at it's backward looking, forward looking and when you start talking about anemic growth and this is the most anemic recovery we've had, we're all familiar with the tag lines that we've established in this last market for the last eight years or so, but when you start to examine gdp and you start to put in your
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models, maybe 3% growth. that's what gets investors excited. that's where people are starting to chase the dollar, so to speak, and to say, you know what, maybe if we can rise to about a 3% gdp level going from 35% tax bracket down to 20% and maybe if we can get an infrastructure bill i know conservatives like myself don't like spending a whoet lot of money when we don't have to, pro growth policies will add to gdp pricing increasing here and globally. >> i had no idea you were conservative. >> you had no idea i was running for president. >> thanks, guys. good to see you all. you can find out if billionaire hedge fund manager david tepper is still long stocks and short bonds. he'll be speaking exclusively with the "squawk box" gang. that's tomorrow morning at 7:30 a.m. eastern time right here on cnbc. looking forward to that. meantime, 40 minutes left in the trading section. the dow is down 10 points right now.
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>> two heavy weights in the energy industry discuss how high oil prices could go. opec secretary general and chevron ceo join us. up next, snap takes another leg lower on wall street. we'll tell you why. there's specific reena parentally coming up.
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welcome back. check in with the movers on wall street. dish is rising on news out late yesterday that the satellite tv provider's stock is being added to the s&p 500 index effective monday. it is replacing linear technology, which is being bought by chip maker analog devices. meanwhile, snap is trading lower for a second consecutive session since going public last thursday. here's the interesting story. a group representing institutional investors has reportedly approached index providers s&p, dow jones and msci about barring snap from inclusion in their stock benchmarks. reuters says that the council of institutional investors is taking issue with snap's sale of only non-voting shares because they get public shareholders no say in company matters. the managers of stock index portfolios, of course, would have to buy snap's shares if the company stock were part of the various indices like the s&p 500 or the msci u.s.a. index.
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i knew this was going to come back to haunt them. whether this haunts them or not, i don't know. certainly it raised eyebrows when they announced in their s1 that all these shares would be non-voting shares. >> there's a sense that we lost the plat because snap and other investors can rightfully point to all the successful companies that have similar structures and if you're trying to do something more principles base, hong kong has had one share one vote point of view, you start to worry not necessarily about the specific company we're talking about, although you could, but, again, whether this becomes something that is so common that plenty of companies who need to have more pressure put to bear don't have it. >> there's evan spiegel in the middle, the co-founder and ceo. i think certainly the institutional investors, they don't want to buy the shares and have no say in how the company is run and you don't want to open the door to other companies to do the same thing. if snap can get away with it, i want to do the same thing.
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>> i don't know what the bar is to get into the s 5u7bd p 500. speaking of price action, it's lower for the most part, the dow down ten points right now. opec secretary general will give us his exclusive take on where he feels oil prices go from here coming up in a moment. also ahead is hawaiian airlines right for a merger. we have a special report from honolulu. stay with us. the future of business in new york state is already in motion. companies across the state are growing the economy, with the help of the lowest taxes in decades, a talented workforce, and world-class innovations. like in plattsburgh, where the most advanced transportation is already en route. and in corning, where the future is materializing.
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welcome back. dick's sporting goods lower by 9% today after issuing disappointing guidance. overshadows a beat on comp sales and earnings in the company's latest report. clothes improvements and e. commerce, it's all about the outlook. roughly 30 minutes left in the trading session. the dow down 29 points. i'm on the floor of the new york stock exchange with matt cheslock. if the market is not in a big
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move higher, it's sitting there. has it figured out everything? what's it waiting for? >> we keep anticipating this massive selloff when we get markets that stop and it's just not the case right now. the trends are still higher and i don't see any change that's gone on. nothing fundamentally. the white house give us pause but the market's not pausing. leads me to believe it has another leg higher. >> what do you think the market will do -- well, first of all, how important is the jobs report on friday? >> longer term, i think it's more important. shorter term it's a foregone conclusion. >> whether it's a bad number or not? >> yeah. they've already talked us into that. i think it would be more scary or it would bring more pause if they don't -- if it's bad and they don't raise the rate. that would scare the market a little bit more than, in fact, raising rates. that's a foregone conclusion. that's not something we're looking at.
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there will be people hess tent going into it. that's why you're not seeing any trading. down side volume is almost 3. that's the up side but the market is only down 20 points. >> indication of people taking a breath and waiting to see friday's numbers and waiting for next week when we get the rate hike. >> the vix still sitting at 11. >> at some point smart money's going to get in. >> you would think so. >> thanks, matt. time now for a cnbc news update. let's get over to sue herera. >> here's what's happening at this hour. new york city mayor bill de blasio meeting with jewish community leaders to talk about the new wave of threats for the jewish community nationwide. >> i want to say to all of my brothers and sisters in the jewish community, new york city stands with you, the nypd stands with you, as your mayor i stand with you. we don't take this lightly at all. we understand history. >> electronics and appliance
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retailer hh gregg has filed for bankruptcy. this after the company announced it would be closing 88 stores in 15 states. the company recently reported poor holiday sales. songwriters for artists like garth brooks and beyonce plan to tell a judge this week that music streaming services like spotify will destroy their profession unless they get more royal at thises. tomorrow they will try to persuade three federal governors to set a new standard. that is the cnbc news update for this hour. >> sue, thank you. see you next hour. sue herera. a short while ago i spoke with chevron ceo john watson. one of the topics was opec and its latest production cut. >> opec has cut production to try to accelerate the rebalancing of the marketplace and so we're seeing that happen right now and there are debates about whether the market is fully balanced or getting there. but the general point is as
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demand grows about $1 million a day and as we start to see the impact of lower investment in the business, the market is coming into balance. so i think we're seeing that more and we can anticipate some recovery in prices over the last six months or so. >> john martin suggesting that the market is not over supplied and there's going to be demand for barrels of oil still above what is being produced. oil price sitting around 55, $50 for wti in brent. it has been hovering here but it has not stopped the u.s. for doing huge production. exxon talked about this, huge amounts of capital. >> i'm very interested with the opec secretary general has to say about u.s. production and the impact on the cuts that they're having, whether that completely balances it out or whether it can mean higher prices. >> be sure to stick around because next hour we'll bring you much more of that discussion with john watson.
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cnbc's jackie deangeles is in los angeles at the annual gathering of energy leaders. she joins us with that very special guest. jackie, it's all yours. >> thank you, so much, bill and kelly. we are here with secretary general of opec, great to have you. let's talk about the production cuts for a moment. you've already said that you'll in march see if you're going to extend them, but what are the criteria that you're going to be looking at to make that kind of decision? >> thank you very much, jackie, for having me. when we met on the 10th of december in vienna to enter into this declaration of cooperation with 24 participating countries, one of the key objectives was to address the issue of inventories that have built up over the past two years of the supply-driven
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cycle to unsustainable levels sending this market into disequilibrium if you like. so when we meet in may we would be looking at how far we have gone in aiding the market to accelerate the stock draw down to bring the stocks to near at least the five-year industry average. >> let's talk about where we go from here. the russians have told me that they are meeting their targets. opec obviously has met its target in terms of production cut, but as our anchor just said previously, in the united states production is going up. how do you balance out the different factors across the globe? >> i think the opportunity of coming to houston to meet with several of the leading producers in the shell oil industry in
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order to understand the more disciplined the operations, the state of the companies, their plans, the cycle in the last two years and their plans going forwa forward. there is no doubt that they have played an important role in meeting demand. at the time the combination of technology controllers of these companies, managerial ingenuity of the companies and the operation in a financial environment of favorable credit, easy access to money all played very well in this revolution that we saw that brought millions of dollars of oil and gas to the market at a time when
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the wall had lost production from libya, nigeria and other places. so the plate of stabilizing growth up to a point because if they have not done what they did, probably the global economy entered into another energy cris crisis. and it was our first meeting with this group of producers and i think we broke the ice and we agreed to continue this so that we can fully comprehend ourselves. >> last time you and i spoke we had just heard about the appointment of rex tillerson as secretary of state. fast forward inauguration day. some of the policies by the trump administration are starting to be rolled out. what do you think of the energy policy in the united states as we move forward? >> i think it's a work in
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progress. the administration is gradually settling down with the appointments and i think the oil industry is waiting for the rollout of the energy policy of the administration, but i think for us and with the industry, so far so good. traditionally republican government in the united states have always been pro business, they have been pro oil and the trump administration is no exception. we welcome that. we welcome the appointment we have seen fromstituencyconstitu, rex tillerson, industry leaders in their own right and they will definitely bring vast knowledge and experience to government. >> final question to you.
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you know, this morning saudi arabia chairman said the forecasts are misguided. he's worried about the long term investments for the industry. what are your thoughts on that. >> i thoroughly agree. in aramco, we have lost significant amount of investment in this industry. in 2015 according to our estimates the industry lost almost 26%. in last year, about 22% and for this year the jury is out but it's not encouraging. most of the funds went to short cycle projects, so various concern within the industry that if this issue is not addressed globally, it may sew the seed for another cycle of energy crisis that may be difficult to
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grow the growth. >> secretary general, so great to see you again. >> thank you. >> guys, i'm going to send it back to you at headquarters. >> great job, jackie. >> mohamed barkindo, secretary general of opec. we have 20 minutes left in the trading session here. the dow down 35 points. after a wave of airline mergers, hawaiian air is one of the few stand alone carriers with any sizeable footprint these days, but could a larger carrier be eyeing hawaiian as a takeover target? we have that story coming up next. holding a press briefing to offer comments on the obamacare replacement bill. coming up we'll talk to physician and caucus member maryland congressman andy harris. stay with us.
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welcome back. signet jewelers cutting its price target on 66 from 90. at 63 right now. maintaining its neutral rating. the firm expects signet's guidance to disappoint. sighting signet's weak valentine's day sales and the credit standards and a sex
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discrimination lawsuit. stock down 3.75%. hawaiian airlines, will they be a takeover target? phil lebeau has the difficult assignment of heading to honolulu. unbelievable, phil. >> come on. >> it's amazing. >> reporter: guys, come on now. i never hear you compliment me when i'm hanging out in flint, michigan. we are in honolulu. why are we out here? because this is the time of day you get a real sense of the growth and the strength of hawaiian airlines. and we'll give you sentences some sense here. we're moving along one of the baggage handlers. this is a 767. they use to fly to the main lands, the west coast of the u.s. you see the type of planes that have become incredibly popular inner island or interstate if you will from one island to the
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next. it's the boeing 717. this plane is the workhorse for the success that hawaiian has seen as it's grown. to see that success, look at the number of passengers the airline is flying now compared to ten years ago. it's essentially grown four times larger in the last six or seven years. the question is where is the growth in the future? for hawaiian airlines they're targeting large asian cities, particularly if you look at china as an untapped market right now. they're also adding new planes, airbus a 321s joining the fleet later this year. relative to the airline index and other airline stocks, hawaiian airlines has not been keeping up with them which brings up the question, can it grow as an independent airline and become a truly international carrier? here's the ceo mark dunkerly from earlier today? >> we think we can continue to grow. i think what's important for our business is that we run the best possible airline that we possibly can as an independent
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airline. >> i thought he was taking many seconds to get that satellite signal. >> here's what i'm thinking. he flew 7, 8 hours to ride the baggage truck there at honolulu airport. that's efficiency, by the way. and it's too bad because i was going to tell him the mayor of flint, michigan is on line 2 for him as well, by the way. phil lebeau somewhere in hawaii right now. and we have 14 minutes to go in the session. dow's down 43 points. transports are down more than 100. dollar up .1 of a point. >> a new immigration system backed by president trump. peter teal may put the tech investors at odds with the rest of silicon valley. we have the rest of the details just ahead.
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your path to retirement may not always be clear. but at t. rowe price, we can help guide your retirement savings. so wherever your retirement journey takes you, we can help you reach your goals. call us or your advisor t. rowe price. invest with confidence. so what else is new? humm..she's doing good. she needs more care though. she wants to stay in her house. i don't know even where to start with that. first, let's take a look at your financial plan
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and see what we can do. ok, so we've got... we'll listen. we'll talk. we'll plan. baird.
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moments ago art cashin told us that the market on closed orders have paired off. no imbalance either to the buy or the sell side today. >> but there's bigger news on the cashin front. >> happy birthday, art catch shin. the gang at "squawk on the
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street" gave him a bottle, it was wrapped. i don't know what was in it. we can always guess. we decided he needed ice to go in with it. we presented him with some ice to marinate and i haven't seen him since. >> very, very happy birthday, arthur. thank you for everything you -- >> our great friend and mentor. so we've got about ten minutes left in the trading session with the dow down 44 points. joining us right now david sauerby and matt freun. hi, guys. david, have you figured out who you should be buying or selling after the health care bill was introduced yesterday? i mean, so far today the insurance companies seem to be okay but the hospital companies are going down and drug companies are feeling the pressure. >> too soon to tell. >> yeah. >> one thing i know with washington, bill, they will always take an hour or two longer than my patience to try to solve a problem.
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>> just an hour or two? >> he's a very patient man. >> hour or two, week or two. at the end of the day if i find good health care companies in the service equipment area that are generating good, free cash flow, i'm going to be better off. >> matt, you're approaching this from the fixed income side. it's real interesting to see, you know, people do keep buying bonds here, don't they? despite everything we've said about brightening outlook, growth, the way the markets run up. >> yeah, no, they sure do. you know, the big news in the fixed income markets was the fed last week. so the first time in a long time the fed pulled the market's leach and t leash and the market listened. that was a bit of a change. we think markets are going to be heading up on the short end but we think the long part of the curve is going to be able to handle that fairly well. >> gentleman, one moment. >> president trump meeting with the house deputy whip right now. are we going to listen to this? let's see what he says here. >> this is a new national pride
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which is sweeping across the land. i see it. there's such spirit whether it's for the business things we're doing or whatever, it's such spirit that we haven't seen in the country in a long time. jobs are pouring back. you saw what happened with exxon where they just announced a massive jobs program. so we're going to have some fun. now we have to remember, obamacare is collapsing and it's in bad shape and we're going to take action. there's going to be no slowing down. there's going to be no waiting and no more excuses by anybody. we're all now, i can proudly say, i'm a politician, okay? i'm a politician, but we're going to get it done. and you're the leaders that really will get it done for all of us and for the american people. obamacare is in very bad shape. i believe that we wait two years it will totally implode. it's really pretty much imploding now, steve. it will implode.
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the democrats are already asking for help in the true sense of the word because it's a disaster. the insurance companies are fleeing. some states are up over 100% in costs. the deductibles are through the roof. you don't even get to use it. we're going to do something great and i'm proud to support the replacement plan released by the house of representatives and encouraged by members of both parties. i think really that we're going to have something that's going to be much more understood and much more popular than people can even imagine. it follows the guidelines i laid out in my congressional address, a plan that will lower costs, expand choices, increase competition and ensure health care access for all-americans. this will be a plan where you can choose your doctor. this will be a plan where you can choose your plan and you know what the plan is? this is the plan. and we're going to have a
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tremendous -- i think we're going to have a tremendous success. it's a complicated process but actually it's very simple. it's called good health care. so i want to thank you folks for being with us today, ladies and gentlemen, and we will do something really, really important and really good for the american people. i think it's going to go very quickly. i hope it's going to go very quickly. as you know after that we work on the tax cut. we're going to be planning a major tax cut. i know exactly what we're looking at. most of us know exactly the plan. it's going to put our country in great shape and we're going to reduce taxes for companies and for people and i can use the word again massively. it's going to be a big tax cut. the biggest since ragan, maybe bigger than ragan. so i look forward. i really look forward to working on that but we can't get to that unfortunately because of the way your system works. we can't get to that until we take care of health care. we'll take care of health care. i appreciate your great support
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and let's get it done. thank you. thank you all. fantastic. >> mr. president, thank you for having our deputy whip team to the white house and thank you for your commitment on following through on what to most americans is probably one of the most important promises that was made not only by you but by all of us in getting this majority both in the house and senate and white house and that is rescuing the american people from the failures of obamacare. we've heard the message for years. we've seen the dramatically skyrocketing costs. you're seeing double digit increases every year in most parts of the country in health premiums for families. many families are seeing deductibles that rise above the $10,000 range which means people don't have access to health care. people don't have the ability to choose their own doctor. you talked about this the other night in one of the best speeches i've heard from a president standing at that well in the house chamber when you addressed the joint session. you gave an inspirational speech laying out the things that need
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to happen and to create jobs and to secure america but one of the things you talked about is how it's wrong that unelected bureaucrats in washington have the ability to tell you what you can and can't buy for your family in health care. one of the most personal decisions families make. this bill finally starts the process of not only repealing obamacare but also replacing it with reforms that put patients back in charge of their health care decisions, that lower costs for families. let them actually choose the decisions between them and their doctor which are so personal and so as we start this process, the people in this room, the chief deputy whips, are the ones that are going to be working directly with members to ultimately pass this bill to your desk so that we can quickly provide the relief from obamacare to the people of the united states. i know we are honored to have our former house colleague and now our vice president of the united states who's been involved in this fight from the beginning as well, vice president mike pence joining us, too.
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thank you, vice president. >> thank you very much, steve. and, again, we're going to work quickly. it's a -- it's a great bill. we're going to have -- i really believe we're going to have tremendous support. i'm already seeing the support, not only in this room, i'm seeing it from everybody and i'm seeing it from the public. they want obamacare over. i got elected to a certain extent, i would say pretty good little chunk based on the fact repeal and replace obamacare and many of you people are in the same boat. very important so let's get it done. thank you all very much for being here. thank you. >> meeting with house gop leaders on the day after they introduced the replacement bill, the proposal to replace obamacare with what they're calling the american health care act and trying to drum up support the day before they begin the markup process in the ways and means committee. you saw kevin brady, the chair of that committee and the health and commerce committee will begin the markup process as
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well. they hope to have it to the senate in a couple of weeks. that's really the issue where they will look for some changes to get senate approval in this process for a group of senators that have already sent a bill -- a letter to the president saying that they're concerned about some of the costs to medicaid to the states as it pertains to medicaid and rand paul said a little while ago in a press briefing that they can agree on the repeal process, they just can't agree on the replacement. but we'll watch this and see how it goes. we have two minutes left with the dow down 31 points. morgan brennan is with me on the floor of the new york stock exchange. we've been watching the health care stocks to try to get a sense of wall street's response to this. it's mixed. the hospital stocks are down. drug stocks are under pressure. insurance companies are doing okay today. >> exactly. health care one of the laggards in terms of sectors in this down market though not the worst performing sector coming out of
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the open this morning. as you mention, we've got investors trying to parse out winners and losers. managed care seen as potential winner. humana is trading at 52 week highs. some of the losers, drug stocks. not surprisingly. president trump put out the tweet suggesting he has more pressure on drug companies with their prices. the idb, xdi down 1% each. >> the estimate now, and it's very early in the process, you could get as many as 8 to 10 million americans who lose coverage as a result of this new bill. that would put pressure on hospital companies because they would have to come up with the services to these people who don't have the coverage and find a way to pay for it themselves. you know, we remember those crowded e.r.s before all of this in that whole process. >> yes. >> that's putting pressure on that group today. >> yes, most definitely. there's another group i want to highlight, unrelated health care, and that's retail. we had urban outfitters reporting after the bell.
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retailers today, under armour, dick's sporting goods, mattel coming under pressure after disappointing forecasts. >> coming up here, the dow down 38 points on the close. first time we've got back-to-back declines in a while for the dow. stay tuned for the second hour of the "closing bell" now with kelly evans and company. see you tomorrow, kel. thank you, bill. welcome to the "closing bell", everybody. i'm kelly evans. another down session on wall street. the dow jumping 31 points to 20,922. declines across all of the major averages. in fact, the dow held up relatively better than most. the s&p down 1/3 of a percent. 2368 the level there. the nasdaq down 1/4 percent to 5833. the russell 2000 down .7 of a percent, 1374. by the way, the transports were
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also down more than 100 points. dollar index up a touch and oil prices also lower after climbing more than 18% since donald trump was elected. you can see wti in about the $53 per barrel range today. coming up, chevron ceo john watson weighs in on oil's move. opec and what's next for the energy industry. my interview with the ceo coming up in a bit. joining me on the panel we have cnbc commentator michael santoli. director of tactical research ralph basgora and director of equity strategy mike alfa. i feel like a basketball announcer sometimes. gentleman, come on out to the court. let's do high fives but not high fives about this market today? >> not too many. all these little declines we've seen even before last wednesday has been kind of grudging. they've been moving lower. another one today. we did close pretty close to the
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lows. the big question is is it going to be like mid december when we saw something similar. we were at the highs. market kind of rolled over. looks like internally it was going to trade heavier. we never really got a pull back back then. for four days we spent the entire time within the range that we traded on last wednesday's top, so i think the key is are we going to undo the entirety of it because the s&p is pretty close. >> ralph, what would you say about that? >> i agree with mike. it could be something like we saw in december, january and february. could be very, very tight trading range, 2, 3%. unwind the excesses of the last couple of weeks and move on higher. so i don't have any technical evidence, kelly, to suggest much worse than that, at least not now. >> so when we talk about the up side then, for people who might say, all right, there's been a pause in this rally, maybe i have a chance to get in, what kind of up side. how strong? how durable is the rally you're
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talking about, ralph? >> well, i've had a long standing target, a little over 22,000. i'll stick with that on the dow for now. >> all right. let me bring mike in here as well. how do things look from where you sit, mike? >> i think it's always a healthy sign to see a market that's had a big move to digest the recent gains and get a chance for investors to catch their breath and get a sense of what the fundamental back drop is in the economy and corporate back drop. that's one of the things we're trying to assess as investors with the fed at the early stages of a tightening cycle and the economic health or expectations of good economic health for corporate america, the fed begins to tighten we'll tend to feel a rotation from the so-called bond proxies or high dividend yielding into equities that exhibit more dividend growth. those are signs of growth tends to out perform and the fed tightening cycle.
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those are the types of companies that we'd like to invest in good, solid fundamentals, good strong balance sheets and indication of management confidence. >> i want to mention in case anybody missed it. moments ago we played some new comments from the president. the subject was of course the just announced plan for how to repeal obamacare, but he spoke about why it was important for him to get that done saying that after we work on that, then we can start working on the tax cut. he said, mike, as you probably heard, that it was going to be a major tax cut. he said massive, possibly bigger than ragan. now he said this just about as the market was closing or thereafter. >> yes. >> so typically -- >> i don't know that there was a direct market response to that. we heard more than two or three weeks ago that he was going to have a great tax plan in two or three weeks. i don't think the market is hinging on that. i don't think a revamp, a second revamp is going to be something to sweep out of the way until we get to taxes. so i think the policy stuff is -- look, i keep saying this.
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worst case scenario from a businessman's perspective and investor's perspective, it's status quo. that's okay for the market right now. i don't think it's an up side catalyst because they're seeing tangible stuff. >> have more on that in a moment. wanted to mention a few other things happening in the market today. how about retail, by the way. you can have an anecdote. radioshack is filing for bankruptcy again. down 9% this morning. decent earnings but the guidance was weak. you can see some of the performers in terms of the retail basket. target and walmart. xrt. ralph, do you have a sense even though we talk about the support you see for the rally more broadly, what happens to a lot of these brick and mortar guys? >> well, i think that's a situation that they've had for quite some time and it's becoming more visible now with
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the e. coecommerce. i think a lot of these brick and mortar operations are probably starting to feel the effects of it. i think from the xrt, to use that as an analogy, it's been under pressure and i don't see that pressure ending any time soon. >> you can see performance down about 1%. some of the all-time highs in the market included phillip morris, csx. activation blizzard which has been a top performer, facebook and visa. >> we're talking about growth. organic, traditional growth stock. they are kind of the havens in the cyclicals that will benefit. in fact, gdp for the first quarter got revised down to 1.3%. so obviously i think it's time for some of those economic surprise indexes to roll over. that's pure math. they have to roll over. they can't keep rising. i don't know if that's what's
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weighing on those sectors or we're resting. >> mike, you think the place to be at some of those dividend increasers. how many companies are there whose valuations you thought you were comfortable with? >> well, i think there are many areas of the market that are still attractive. you mentioned health care. there's a lot of controversy around health care and that remains to be seen how the fundamentals of the company sort out the policies which may take some time to negotiate through congress. for example, j&j is a good example of a company that has attracted a value and has attracted dividend yield. more importantly in our minds it's a name we've owned for quite some time. has a history of growing their dividends in the mid to high single digit range. from our perspective that's an indication of a healthy enterprise we can invest in for the long term. >> by the way, the all-time highs were not on the close. they would have been earlier. got weaker.
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urban outfitters earnings are out. let's get to courtney ragan with the report. >> hi, kelly. just a reminder that urban outfitters did give us numbers earlier in february on february 7th so we do have the earnings coming in a penny light, 55 cents. wall street was looking for 56 cents on revenues of $1.03 billion. that's in line with what the company told us early in february. comp sales for all of the brands total coming in flat. what urban outfitters had shared in february. no guidance given, however, the company does say the direct to consumer channel was the strong point. that includes those internet, those online sales. the ceo says the company will continue to shift efforts and spend into that fast-growing channel. if you look at the individual brands, urban outfitter comp sales were up 1%. the anthropology comp sales were down 2.9%. that was a weak point but it is
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smaller than the namesake brand of course. >> we've been supporting the holding. urban shares up 2.25%. remember when we had kim forest in the past week or so. she said, look, they're not as leveraged to the mall. they have direct to the consumer and separate locations. >> the heritage of the brand is actually college towns and urban centers, obviously, where it's not purely the regional ball exposure. not at the very lows but clearly expectations were low enough. i think the big question for the entire sector is which february exacerbated beyond the long-term decline. volume significantly lower. >> consumer weakness. >> exactly. the question is was february just a little bit of an outlier and a catchup into march. >> urban is up a little bit more. still up nearly 2.50%. whirlwind day at the white house, about to get busier as
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president trump gets to meet with one of the largest union heads. eamon javers has more. >> reporter: the white house beginning what will be a long push to passion its obamacare repeal and replace plan. already some skepticism among con ser va 't-- conservatives. these are the folks whose job it is to count the votes and get this bill passed. that's why it's so important for the president to meet with them today. in that meeting though he talked about getting through health care relatively quickly and then moving on to a tax cut. here's what the president had to say. >> i think it's going to go very quickly. i hope it's going to go very quickly. and as you know, after that we work on the tax cut. we're going to be planning a major tax cut. i know exactly what we're looking at. most of us know exactly the plan. it's going to put our country in great shape and we're going to reduce taxes for companies and for people and i can use the
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word again massively. it's going to be a big tax cut, the biggest since ragan, maybe bigger than ragan so i look forward -- i really look forward to working to that. we can't get to that unfortunately because of the way your system works. we can't get that until we take care of health care. >> the president met with senator lindsey graham. it was a little bit of a hatchett burying session. lindsey graham tweeted out that he gave the president his new cell phone number. donald trump read out lindsey graham's actual cell phone number on the air in a fit of anger with lindsey graham. lindsey graham took to youtube to smashup that cell phone because it was now useless for him. they've somewhat patched things up for him. richard trump from the afl/cio will be here. a lot going on, kelly. >> i can hardly keep up. eamon, thank you. at the white house. before we let you go, any
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thoughts you'd adas people go through the obamacare repeal, go through the prospects and plug in the 234er78s in terms of what a that might mean? is that important to you as you assess the market? >> obviously very, very important. the market's hesitating here only because it's anticipating it. and what little did i know the new president, he seems to be the type of a guy, he has a deadline. he wants to get everything done i think by the end of this first 100 days. he's got a goal and wall street's going to love it. stay with the leaders. stay with the financials. stay with technology. i think the next leg is up, kelly. >> all right. thank you for joining us. ralph, mike as well. still to come, president trump praising the house plan to replace obamacare but the bill may not have an easy road in becoming law even with members
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of the gop. up next, we'll hear from a member of the republican freedom caucus. then we'll assess the outlook for oil prices with the ceo of chevron. you're watching cnbc, first in business worldwide. this car is traveling over 200 miles per hour. to win, every millisecond matters. both on the track and thousands of miles away. with the help of at&t, red bull racing can share critical information about every inch of the car from virtually anywhere. brakes are getting warm. confirmed, daniel you need to cool your brakes. understood, brake bias back 2 clicks.
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welcome back. house republicans releasing their proposal to replace obamacare. kayla tausche is on capitol hill with the latest. kayla? >> reporter: kelly, the backlash from democrats is to be expected. that's why the push to reform health care requires a simple majority in the senate. no democrat would vote for it. the early push back from republicans, both in the house and senate, was called significant by jpmorgan in terms of actually making progress with this legislation. senators mike li and rand paul have come out and publicly opposed it. here's congressman jim jordan last hour. >> we put on president obama's desk a bill that repealed obamacare, got rid of every single tax, got rid of the mandates and now the first thing republicans are bringing forward
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is a piece of legislation that we're going to put on a republican pred's desk but keeps medicaid expansion. that keeps some of the tax increases. that is not what we promised the american people we were going to do. >> it's pretty clear the administration wants to put this through quickly with tom price showing up at the daily press briefing and vice president mike pence coming here to the hill to talk to some of those during a working luncheon earlier. now they're meeting earlier. mike pence said there might be some changes but this is the bill that will make it to the president's desk. this is what they will be negotiating and this is the starting point to be working from. their collective point is this is the first step. it's not set in stone, but with the vocal opposition it's hard to see how some of that gets
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quieted from here. >> kayla, thank you. kayla tausche with the latest from capitol hill. joining us is representative andy harris of maryland's first congressional district and a member of the house freedom caucus. welcome to you. >> good to be here with you, kelly. >> i was going to ask, i know we said it, if you were a member of the house freedom caucus because as i understand it you support this bill and a lot of your colleagues do not. >> i support the general framework. we're going to see some changes. some things the conservatives ask for but it's gotten into the newer version. >> there's been plenty of concern voiced already from your colleagues, for example, lindsey graham did tweet i'm not worried about the recess, i'm worried about doing it right. i saw the process that produced obamacare. rand paul, everybody had the 3:30 news conference.
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the leadership plan is obamacare light. #fullrepeal. how do you expect everybody to get on board? >> again, this is the art of the deal. we're going to see it happen. the president said he wanted the bill passed. there are going to be some more concessions especially on medicaid. one of the big things the conservatives should be happy about is it devolves the mandates. it gets the federal government out of the obamacare decisions and sends them to the states. protects people. i think it gets better over the next two weeks. >> congressman, how crucial is the congressional budget office score of this bill in terms of your scoring and your framework? >> we've given up on the congressional budget office. we know it costs hundreds of billions of dollars a year. a couple of years ago they gave
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up saying they could score anything with the affordable care act. you will make it more accessible to people and it will be cheaper regardless of what the cbo says. >> some of the criticisms say the tax credit homes to a new entitlement program. do you agree with that? >> it evens the playing field between the deductions that employers get, large employers for their health care, premiums and with what individuals have not gotten up until now. i think a lot of us conservatives have talked about leveling the playing field. this is one way to do it. we know one change has already been made. some of these refundable tax credits, that was a change made over the weekend. it gets better and better over the next two weeks. i think we'll have a product that we can deliver to the
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president's desk in four or five weeks. >> yeah, i understand your support for it. it's interesting to see how many people come out of this including the club for growth, kato. kato called it a train wreck waiting for it to happen. afp called it oiblg 2 poi -- obe 2.0. this makes the repeal replaceable. >> first of all, republicans have been talking about the ways we're going to replace oiblg for several years despite what was said in the news media. the bottom line is, look, they want to push this in a more conservative direction. i think it's going to get pushed that way in the next two weeks. i don't expect them to like the product that we have but i do expect in the next two weeks it will improve that you'll see the president influencing some of these decisions and i think ultimately the president is going to get his bill, put on
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your desk. what does that mean for the prospects going to the senate? >> the president has to spend some political capital. he has to sit down with the senators and make it clear that we have to get this out of the way before we get to what is really going to affect the american economy which is significant tax reform. >> easier to get there, not deal with this one. it's a thorny one. congressman, thank you for joining us. >> thank you. >> representative andy harris on the latest plan. paypal co-founder peter thiel is one of president trump's biggest allies in silicon valley. we have the details next. plus, find out whether energy giant chevron is eyeing up any acquisitions and what it will do with the dividends. what we'll hear from the company's ceo right after this. portfolio s with powershares. before investing, consider the fund's investment objectives, risks, charges and expenses.
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welcome back. we have a news alert from washington. john harwood with the latest. john? >> kelly, we've just gotten the announcement from house intelligence commit tie chairman devin munez of the house investigation hearing of the russian investigation. ties to donald trump, leaks about that. since then the various reported contacts that we've seen between russian intelligence operatives and some associates of donald trump. the first meeting on march 20th
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is going to have as witnesses james clapper, the former director of national intelligence, the former cia director, john brennan. the current nsa director, mike rogers, and other security officials, fbi director comey as well, and they're all going to testify with the intelligence committee. you're going to have the most sensitive things done in private but they're kicking off the public phase in a short period of time, guys. >> all right. thank you, john. john harwood there. president trump's biggest ally in silicon valley may be key in helping him crack down on illegal immigration. aditi roy has more. aditi? >> reporter: hi there, keelly. peter thiel could be a big beneficiary of president trump's push to crack down on illegal immigrants. the system was approved in 2014 under the obama administration
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through a $41 million government contract awarded. the system could be used to carry out the trump administration's immigration policies. icm allows investigators to build profiles by pulling data from other agencies, such as the tsa. it puts power in your trump co-adviceor and peter thiel. under the program outlined in publicly available documents reported in the intercept a suspect profile can include personal biographical information. icm will reportedly be ready in the fall and the aclu has concerns already about how it might be used. >> i.c.e. agents who are potentially going to be involved in rounding up undocumented immigrants have access to an enormous range of information not just about suspected undocumented immigrants or people convicted of crimes but
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about all-americans. >> reporter: we reached out and they did not respond. kelly, back to you. >> aditi roy in palo alto, california, thank you. up next, don't miss an exclusive interview from john watson. so that i can take my trading platform wherever i go. you know that thinkorswim seamlessly syncs across all your devices, right? oh, so my custom studies will go with me? anywhere you want to go! the market's hot! sync your platform on any device with thinkorswim. only at td ameritrade
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welcome back. it's time now for a cnbc news update with sue herera. hi, sue. >> hi, kelly. here's what's happening at this hour, everyone. secretary of state rex tillerson meeting with ukraine's foreign minister at the state department. tillerson will travel to japan, south korea and china for four days of talks beginning next week. the british government encountering more opposition from the brexit plan. by a 366 to 268 vote the lords passed an amendment requiring parliament to approve the brexit deal with the eu. that will go back to the elected house of commons where it might be overturned. international women's day is tomorrow. the dating app tindr says it will give people $100 to donate. you can tweet the name of one of
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12 charities. they'll donate up to $250,000. harvard announcing facebook founder and harvard dropout mark zuckerberg will speak at the university's 366th commencement ceremony in may. he kidded with bill gates about the event. >> we didn't actually graduate, right? >> oh, that is the best part. they actually give you a degree. >> you don't even have to go to class? >> no, no, you just put that degree on your resume and it looks great. >> that's the news update this hour. >> kind of hard to relate to that. couple of billionaire college dropouts. >> sitting around on the couch. >> yucking it up. >> good for them. sue, thank you so much. >> you're welcome, kelly. i spoke with chevron's ceo john watson earlier today. spoke about a range of topics including opec's production cuts. here's more of what he had to say. >> opec decided to cut production to try to accelerate
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the rebalancing of the marketplace and so we're seeing that happen right now and there are debates about whether the market is fully balanced or getting there, but the general point is as demand grows about 1 million barrels a day and as we start to see the impact of lower investment in the business, the market is coming into balance. so i think we're seeing that, yes, and i think that's why you're seeing some recovery in prices over the last six months or so. >> interesting that you say it's coming into balance because i'm amazed at how much investment is happening in the u.s. right now. the production is huge. i mean, we're rivaling saudi arabia nearly at this point. exxon just committed billions more, especially to the gulf region. you guys have committed billions to the permean. is there a gold rush happening in terms of the investment in the u.s. oil these days? >> well, we have a terrific environment for investing in this country right now, particularly in the shals. certainly for chevron in the
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permean basin we're spending $2 billion this year but our overall investment in the united states in the next four years is expected to be close to $30 billion. so there is a positive story in the u.s. but i think it will take all sources of oil to ultimately meet the demand that's growing worldwide by about a million barrels a day. >> okay. i know a lot of the regulatory things you mention you view as positive for the industry but what about the border adjustment tax or any kind of tariff that might come out of the white house? >> i strongly support tax reform. if we think about what we're trying to do with tax reform is the administration is trying to make it competitive which involves reducing rates and eliminating double taxation on foreign income. that's very positive, but they're also looking for pay fors for lower rates. the border adjustment is one of the concepts that's being evaluated. now there have been some concerns cited about the border adjustment which for industries like the refining business in the united states, the retail business will result in
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immediately higher costs to consumers. and then over time the theory goes that you'll have an appreciation in the u.s. dollar and that will cause imports to come into balance. >> which could hurt the oil price, too, by the way. >> increase in the -- >> the stronger dollar, wouldn't that be bad for oil? >> what will happen if the dollar appreciates, it can hurt -- it can hurt oil prices but i think what you'll see is a disconnect. you'll see u.s. prices rise and international prices perhaps fall over time but overall for consumers i think you'll see higher prices in the near term and then the unpredictable effects of the u.s. dollar strengthening i think is what concerns a lot of people that are looking at this border adjustment concept. >> for sure. and another international issue related to tax reform goes to the fact that you guys have obviously huge natural gas investment, obviously in australia. as those kinds of projects come
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online and you're expecting to reap billions, is that money held off shore? how might it be affected by a repatriation tax break if that were to happen? >> in our industry we typically have tax rates higher than the u.s. statutory tax rates. what we'll tend to do is take the cash flow that's generated after the significant investments we've made and we'll recycle it into profitable shorter time cycle investments headlined by the personal me an investment and also the portfolio of assets that we have in the united states in the gulf of mexico, in california and elsewhere. so it's really a decision for us where we can profitably reinvest the dollars that we'll be generating out of australia as well as thinking getting people back to shareholders. >> do you expect those dividends to increase even with oil prices at this level for some time? >> we've increased the dividend 29 years in a row. one of the things i showed
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analysts today is that we see growing free cash flow from our business as we finish projects under construction. we see growing free cash flow and some of the cost reduction work. even if oil prices stay flat we'll have growing revenue over the next few years and growing cash flow over the next few years which we expect will give us room for some nice dividend increases for our shareholders. >> john, as you communicate, you know, that positive news coming out of your organization, do you ever feel like you're in the shadow of exxon because it has the white house putting out its press releases when it's doing a capital investment or hiring push as it has been? >> kelly, we think we've got a great story to tell. in fact, if you look at our company and performance, we've out performed all of our peers over the last one, two, three -- 25 years. our total shareholder return is higher than our four competitors. we stand on our own. we're reinvesting in the
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business so there's plenty of room for all the competitors that we see in the business. our big competitors and our small competitors. >> by the way, i imagine you know the secretary of state. what's your communication been like with the new administration? >> well, i have paid some visits with some staff and certainly i've been encouraged by what i've seen. the agenda as i've seen as it relates to our business. we've seen certainly more pro business environment with the talk of tax reform that frankly had been out there for about a decade and hadn't happened. we've seen the permitting of pipe lines. we've seen a stronger cost/benefit push so i think the approach they're taking for business toward enabling our economy to grow again is a real positive. >> one interesting issue is the support exxon and -- secretary of state tillerson have shown for the paris climate talks which president trump and some of the administration aren't so fond of joining. is it important to you that there be global accord on climate change?
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>> well, we said if we're dealing with the risks of rising greenhouse gas emission there needs to be climbing engagement. whether it's the paris accord or methane fuel standard, all of the interventions need to be evaluated with a real strict cost/benefit lens. >> great point. final question, john, is actually about chevron. as people feel pressure or make the choice or the economics because incentives change towards alternatives in the future, is chevron going to have a leading role there? >> i think chevron will have a leading role in the energy space. remember, even under the most significant environmental restrictions going forward, the energy mix is very likely to be 50% or more oil and gas going forward. so there's plenty of room for investment in our business and there will also be growing renewables where they are economic. it's vast worldwide. it's going to need investment in
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all sectors to meet the demand and consumers that are entering the middle class coveting the things we want in our daily life. >> that's john watson, the ceo of chevron. couple of interesting things in here. broadly i did think his point about cost/benefit when it comes to new regulation is going to apply to anything remotely approaching the billions that are tied up in any paris talks. also interesting the way he emphasized their outperformance relative to their peers. talked about they have growing free cash flow. and talked about how the u.s. oil price might go down. >> yeah, i think that basically is a pretty good tell. the wtiu.s. price which is brent on what the market thinks the prospects for our adjustment tax is. that's exactly what would happen. it would flip. that would be the expectation anyway. i did find it interesting his emphasis not just on company's expectations for free cash flow
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going ahead but also emphasis that demand is growing a million barrels a day. he said that a couple of different times. story for the crude market, supply. >> supply, supply and nothing else. the dividend yield is below 4%. he talked about the record of increasing it. >> let me guess. it was 7%? >> not quite, above 6% briefly. conaco was well above there. that shows you there was tremendous liquidation and people saying never mind the record of dividend increases, there was general risk. they obviously got through that, oil prices came back. now they see their way to free cash flow. >> that was a year ago? >> yes. ceo john watson speaking with us. csx falling after saying they're getting a new ceo. why they think it's a big win for shareholders despite the drop. stay with us. whether it's bringing cutting-edge wifi to 35,000 fans...
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ready to help you if you need it. ♪ ♪ it's like having the power of a trading floor, wherever you are. it's your trade. ♪ ♪ e*trade. ♪ ♪ start trading today at welcome back. this is a live shot from capitol hill where house speaker paul ryan is getting set to address the media on the house's plan to replace obamacare. he might take questions as well. we're going to bring it to you live as soon as it begins. a csx freight train carrying sulfuric acid and other materials derailed in newburg, new york. none of the materials were spilled or leaking. you can see a photo of that derailment. there is report of a fuel leak. officials are on the scene investigating. csx also announcing a new ceo. hunter harrison, formerly of
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canadian pacific is the new chief effective immediately. shares lower by 1%. despite that our next guest says this move is a huge move. joining us is donald bralton from abendale partners. welcome. >> welcome. >> what does hunter have up his sleeve? >> what doesn't he have up his sleeve? if you look at what he did at illinois central, what he did at canadian national, what he went on to do at canadian pacific. this guy is the most prolific creator of shareholder value in the rail industry. csx just hired the michael jordan of the railroad industry. >> the market certainly seems to agree with that assessment, donald. they basically kind of run the stock up in anticipation of what might come. do you actually think there is enough there operationally at csx to kind of redeem investors' bullish view of this? >> oh, absolutely. absolutely.
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understand that, you know, we've gotten, what, a 12, 13, almost 14 point move. gave a little bit of it back today as you point out. there are still plenty of doubters out there just that there were doubters that he couldn't take his -- >> donald, i'm sorry to jump in here. speaker paul ryan is beginning his news conference. we're going to take this live from capitol hill. >> this is the american health care act. it's been a long time in coming. this bill, the american health care act, it keeps our promise to repeal and replace obamacare. it delivers relief to americans fed up with skyrocketing premiums and fewer choices. it moves us away from the broken status quo towards a better patient-centered system. that means lower costs for hard working families. it means more choices in competition so that you can buy the plan that you need and that you can afford. it means greater control of your health care. as you know, this is the culmination of years long of an inclusive process that we've been doing here for years.
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last june as part of our better way agenda we put forward our agenda for health care. after the election we began to work with our counterparts and with the trump administration on this plan. i want to thank president trump. i want to thank vice president pence and i want to thank secretary price for their support and their hard work in getting us to this repeal and replacement point. i also want to thank chairman brady who's going to be joining us in a minute and chairman walden for their leadership. now this will go through the regular order process in the house. as it does, i encourage all-americans to read this bill online doing big things is never easy but we have made a promise and we're going to keep that promise. we made a promise to repeal and replace obamacare with conservative solutions and reforms. that is exactly what this bill does and that's why we're here.
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thank you. >> we want to echo a couple of things that the speaker said. i do want to thank the president. i do want to thank the vice president. i do want to thank our new secretary, tom price as well. just listening to the president meeting with the deputy whip team he said he was proud to support this new bill. why? because of the years of work that has gone into it. we know why we are here today, because obamacare did three essential points. one, created exchange. we all know the history of what's happened to that. the failures. the companies pulling out and now you have 1/3. entire country, 1022 counties with one only health care provider. it created 23 co-ops, provided more than $2 billion, 18 of those co-ops have collapsed. it expanded medicaid. we know it can't sustain itself so we have to put medicaid on being able to sustain itself. that's why i want to thank
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chairman greg walden for the work they're going through as well. third, it made government controlled health care, the regulations it imposed on everybody else. today is a new day. we stand proud with our president that he supports this bill to move forward to keep the promise that we made that we would repeal obamacare and replace it, put the power back with the individuals. >> hello. good afternoon. i want to thank my colleagues for their work on this, especially the president, vice president, secretary price, mr. brady and the members of our energy and commerce committee, especially our subcommittee chairman, dr. burgess, who have put this work in. it woent public last night about this time. this is the conservative alternative to obamacare. this is how we're going to reform health care in america and give choice back to people, rescue the failing individual market. we're proud of this piece of
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legislation. we look forward to marking it up tomorrow. remember, we made a promise to the american people that we are going to keep it right here, right now by repealing obamacare and replacing it with something that will work for them. remember, this is just the first step. this is just the first step. this legislation the process of reforming the health insurance market. it amounts to the biggest entitlement reform since bill clinton signed health care reform into law. we'll restore to the states authority that has been taken away from them. make them have to not come to washington and ask bureaucrat for permission to do anything. but allow them to innovate and get their hands around patients who need their health the most. with medicaid, it amounts to per capita allotment. so they'll know what they can expect. it works for them. we work closely with the governors. so tomorrow at 11:00, or 10:30. we'll kick off the mark-up. we'll begin in an open and
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transparent way. we'll make sure that those who have pre existing conditions continue on get health care and health insurance. we'll make sure there are no lifetime caps and we won't kick your kids off their plans until after they turn 26. we'll help you kick them out of the basement maybe but not off insurance. we look forward to moving forward on this and providing the rescue for the individual market and relief to the states and help to the people sent us here to get this job done. >> what i think mr. brady, he's still at the white house. we'll have him go next but we'll go to questions. >> when democrats worked on health care, it was a long process and it was led in the house by nancy pelosi who did a very effective job wrangling her members and getting it done. are you prepared to do the same thing is that. >> i'm prepared to lead our conference to doing what we said we would do in the election. we ran on a repeal and replace plan. that's what this is.
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the repeal and replace plan. now i am intent on making sure we fulfill our promises. i believe in going through process the way it was meant to go through. we didn't write this in my office on christmas eve like they did in harry reid's office. these committees will be marking up the legislation tomorrow. and then it goes to the budget committee next week and then to the floor the week after that. which is regular order. i'm excited we're doing this the right way. i'm excited we're doing it in plain sight. to go read the what i want to tell my fellow citizens, as the nightmare of obamacare is about to end. we are doing what we said we would do. which is repeal and replace this awful law that is crashing. let me say one more thing. let's not forget, obamacare is collapsing. obamacare isn't staying. if we did nothing, the law would collapse and leave everybody without affordable health care.
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we are doing an act of mercy by repealing this law and replacing it with patient centered health care reforms we have been fighting for for years. >> some conservative groups, are skeptical about this. a lot of this bill home run, are those criticisms the repudiation? >> i don't think so. let me give you a list of what's in here that conservatives should be a part of. number one, it repeals obamacare. number two, it repeals the obamacare attaches which is a massive tax relieve for families for the cost of herring. it repeals did cost of spending with the obamacare six disof the it repeals the mandates. it ends funding. it is the biggest entitlement reform anybody has seen in decades. it nearly donees the amount of money people can contribute to
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savings accounts. it equalizes the tax treatment of health care. i've been doing conservative health care reform for 20 years. for 20 years we as conservatives have been arguing for legalizing herring for all americans so we can have a vibrant individual market so we have choice in could that petition. here's, there are two ways of fixing health care. have the government run and it ration it and put price controls. that's what obamacare does. that's what the left wants. or do what conservatives have been arguing for for years. have a vibrant free market where people can buy what they want. equalize the tax treatment. stop the discrimination against people who want to go in the free marketplace and buy the health care of their choosing. this allows choices. the most important thing this does is it takes power out of washington. it takes power out of the bureaucracy and puts it back to
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doctors and patients where it belongs. >> by some estimates, 10 million people could lose their coverage. is that acceptable to you? >> what matters is that we're lowering the cost of herring and giving people access to affordable health care plans. if we mandate, everybody buys what we say they have to buy, the government will always think they'll buy it. i think that's bogus. the entire premises doesn't boring. we won't have the government tell you what you must do. tell you what you must buy. we'll allow the market to do that. we'll let people decide what to do with their lives and we want to lower costs by having more competition and equalizing, having health savings accounts. that gives people the want that they can afford. this is the beginning of the legislative process. we'll have 218 when this thing comes to the floor.
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i'll guarantee it. >> what do you say when people say this is a big fat tax break for the rich. >> go to read the >> the first step, vice president pence said he was open to negotiating. >> it is not that it is open for negotiations. what he is trying to describe, we envision three phases. let me describe those to you. number one, there big which we use as reconciliation. as you know, you can't filibuster a reconciliation bill. so this repeal and replace bill is the reconciliation bill. the secretary of dhs, the flexibility that he has to lower the costs is that stable ties market. that's what tom price will do. there are something like 1,400 incidents that gives the secretary discretion. secretary tom price, unlike the obama administration. so that's phase ii.
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phase iii is to pass the bills we want to pass we cannot put in. what's an example? interstate shopping across state lines. we love that policy. we think it is critical. but as you know, you can't put that in a reconciliation bill. we believe in health plans. let people through their trade associations, farmers, strunlt you'res with the restaurant association plan, small businesses, buy in buying that's true. we believe in that policy but we know the rules don't allow us to put that in. medical liability refor that. the practicing defensive medicine which makes health care more expensive for everybody. we know we can't put that in reconciliation. we'll move those at the same time. we'll push those to the finish line. those will take 60 votes in the senate. so phase one is this bill.
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phase ii, we'll have more choices and more plans to regulate health care. phase three, that's a those reforms we believe in. that we think will make it even better. but we know we can't put this reconciliation because of the y 60-vote threshold. >> house speaker paul ryan. let me start all over again. just this laying out his defense of the obamacare repeal bill that was just announced last night. there's been some pushback already. >> plenty. this was his opportunity to hold the floor and say we won't worry about the resistance and say this is why we're doing it. by whatever plan you wants means if you can afford it you can buy it. or you can buy a minimal plan that obamacare does not permit. i think it is a long road. and he has acknowledged the legislative process will not be
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smooth. >> do you think you can add to that? >> it was clear that speaker ryan was trying to defend why they're trying to go through such a narrow scope in this process. there are certain things they can't do right now. that's why they're going through reconciliation process. they only need a simple majority to get this passed in the senate. that means whatever is in this bill has to do with taxes and it has to do with revenue. it has to do with the budget and financial issues. they can't introduce new policies like selling insurance across state lines or the additional stuff that they would fwhanlt broader effort that secretary price has invoked today. the president has talked about. now we're hearing about phase one, phase two, phase three. with much fanfare this was rolled out last night. this has turned pretty rocky. the speaker has found himself will in a position to defend it all right. >> that's a good point. i want to talk about jimmy
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buffett. >> i have a feeling that story will live another day. >> to talk about margaritaville. okay. thank you. we'll have much more on this in a moment. the market told you it will be fewer people covered because hos went down and insurance companies might be okay. >> appreciate seeing you tomorrow. that does it for closing bell. "fast money" begins right now. this is "fast money." if you are investing in money, the second bester investment this year. it certainly didn't pact way today. >> i'm kind of confused. i think there's a lot that needs to be fleshed out. i own anthem. i think that anthem will probably be fine. i think that this stock has been helped by a lot of general things that helped stocks so far in this rally. corporate tax reform. i think for the


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