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tv   Closing Bell  CNBC  August 31, 2017 3:00pm-5:00pm EDT

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gavelston will resume operations this friday, and seven ships are scheduled to dock at the container-term falls union pacific says repairs are completed between houston and brian, texas, so rebuilding and reopening is happening. >> terrific news for the supply chain. thanks for watching "power lunch" and thanks, kayla, for joining us today. >> "closing bell" starts right now. >> hi, everybody welcome to "closing bell." we're going to see how much we can squeeze in before we get to that press conference happening at the white house in a couple of minutes i'm kelly evans at the new york stock exchange >> and i'm mike santoli in for bill griffeth. dow closing in on 22,000, could be poised for its fifth straight positive month healthcare the best per former today. >> trying to see if the s&p can stay positive. >> up a couple of points in the green for the month. >> 2470, chamber of commerce to watch. gasoline prices surging today on
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news of more pipeline and refinery disruptions are all in the aftermath of hurricane harvey now reports of more storms brewing. we'll break down the impact on energy prices. >> and explosion and fire at a chemical plant in texas. we're live on the scene with the impact. >> scary stuff trying to figure out if it's toxic or not we bring with treasury secretary steve mnuchin picking up president trump's baton who spoke to our steve liesman earlier with hoy lights of that conversation. >> thank you very much u.s. treasury secretary steve mnuchin sitting down exclusively with cnbc saying the detailed plan cometh despite criticism that president trump was promoting a plan without detail. mnuchin says there is a plan, and it will be released within the next few weeks. >> originally our goal had been august unfortunately, things got delayed a bit, but we're on a track to get this done by the end of the year, so you're going to see the details come out later this month it's going to go through a
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committee process, and we expect the house and senate will get this to the president to sign it this year and could be be more excited about the progress we've made. >> they are aiming for a revenue neutral bill, one that doesn't increase or decrease the deficit, but that would depend on how much growth the joint tax committee ascribes to the tax cuts, and that is a controversial issue that needs to be debated. mnuchin playing down apparent differences between the federal reserve and the administration on the critical issue of changing the post-crisis banking regulation. >> i had breakfast with the fed chair yellen this morning. we meet on a weekly basis as have previous treasury secretaries and the fed, and we have a very constructive dialogue on a lot of issues, including regulation, and one of the areas we are focused on working on with the fed is fixing the volcker rule, but i think as you've seen the treasury put out a report on what we believe are regulatory
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changes. i would describe 70% or 80% of them we can work with the regulators which we have a working group on and the balance we need congressional support for. >> speaking of issues on the highlights of the interview. he said the debt ceiling will still be hit september 29th though aid for hurricane harvey victims and areas can have an impact on when they hit the debt developing we's working with the fed on financial regulatory reform. replacing andrew jackson with harry tubman, still an idea. mnuchin didn't talk up the dollar or talk it down saying over the long term the strong dollar reflects market sentiment of the economy but doesn't cause it. >> dan, what's your latest thinking -- i know you have been saying you think it's going to happen, this tax reform, by the
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first quarter of next year. >> okay. >> but lately it sounds like the whole idea of what's possible and if anything is possible it's kind of being talked way down, what do you think? >> well, that's right, kelly i would say the market is ascribe a 25% probability towards tax reform happening, so the expectations are very low right now, and if the treasury secretary mnuchin is able to get this done by the end of the year, that's great i think treasury and the white house and congress they want to get this done before december 31st, and as we've seen over and over again, these time lines continue to slip, and we think the first quarter of 2018 is a more reasonable time line for tax reform to get enacted. let me just make one very key point about what secretary mnuchin said that i think investors are mission. a lot of progress was made between the white house, the senate and the house, not full progress, but they have made a lot of progress, enough to hand this over and let congress start working its way through, and i as investors should be an tis
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baiting to hear about tax reform every day for at least the next four months if not the next seven months this is going to be part of this story. >> dan though, what will the elementsp of what we're calling tax reform in seems to be a pretty wide range of possibilities of the elements that could be in here. >> i want to make it clear that this is tax reform with some tax-cutting included in it when i say reform, we're going to reform our international tax code to prevent future corporate inversions it will be permanent it's total reform and at the same time we're going to do temporary tax cut like three or four years of accelerated depreciation to encourage new investment so it's a hybrid plan itself, but there's a lot of elements of reform that the market are not giving credit to, and then the final point on this is that there is probably going to be a deficit increase through dynamic scoring and through a change in the baseline politically that will make it easier to get through, but if this is -- does not have those components to it it will be very tough to take away a lot of
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deductions, some deduction closings but not fully >> that's for sure dan, they say we only have time for one more lets me try to boil it down to this you said there's going to be a wave election for the democrats. >> that's right. >> in the mid terms. >> if they do get something like what you're describing on tax reform done, can that stem that tide >> we believe that tax reform will get done because the republicans have no choice the election was held today they would lose 30 seats in the house. they need economic growth. we believe that this tax cut is going to get growth higher, and it's the only thing that can save their majorities. that's why they will end up passing something by first quarter of 2018. >> all right dan, thank you appreciate you joining us. >> thank you for having me. >> dan clifton meantime, fairy cohn will be on "squawk on the street" tomorrow morning at 9:30 a.m. eastern and a first on cnbc interview. don't miss it. let's get to our "closing bell" exchange joining us we have quincy crosby from prudential financial and pete costa from empire executions, both here at post 9
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and, of course, rick santelli out at the cme in chicago. quincy, this market all year, the story has been, well, maybe we'll get tax reform and the market seems to say, well, maybe, we don't need it given what else we have to fall back on which is pretty decent economic growth. low rate, high liquidity is the that going to continue to be enough or will we get to that moment when we need something on the fiscal side to happen. >> well, you know, as the fed keeps moving towards its schedule and if we get a series of positive economic data releases, december may come in play, at least the market may think that the fed will give us a rate hike and then you've got to the have fiscal stimulus. you've got to take the baton, especially at these valuations, it has to have a transfer, and i think that could actually get the market a little bit nervous if the economy date, particularly wages, start to gain traction. >> peter, zooming out again, the last day of the month right now. as mike mention had had earlier
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the dow would be up for a fifth straight and nasdaq up nine months out of ten and the s&p is trying to stay boss tough for the month, and august is usually a tough one, right i mean, i know september is not much better. how much do you put into those historical things anyway >> you should. history repeats itself i think we learned that back in second grade, but i think, you know, what you're seeing is this is a lot of etf activity it, and i think that while you have the inflows, you know, and dominic and i were talking about this earlier about the consistent inflows of cash into the market via 40 is ks, so on and so forth and any time there's a reason for a pullback, there's always money flowing into the market and it's just going to continue. i'm not saying it's going to continue forever because i do think we need to have some sort of tax reform, and i agree 100% with dan. i agree it's probably not going to happen until the first quarter of next year i just think washington, you know, if you look at it from an outsider's superintendent, that's probably one of the most conviewsing places probably on the planet right now
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that and, you know, capital of north korea. >> rick. if you take secretary mnuchin's word that the dollar is going to respond to the general trend in how the u.s. economy is going to go, monetary policy. if that's the case, what's the foreign exchange market telling us right now for prospects >> well, i think the foreign exchange market is a bit blind right now because i think it can't get over the issues of europe fair negative rates and what happens to the balance sheets and the fact that the currency is so strong that it hit 120 recently at a time when other central banks are putting pressure on everybody in that very unique group to also start addressing balance sheets, but if you start to do that. if you even taper a little bit in the current environment that you're on where the euro is already strong, my guess is it gets stronger, so i think europe has really muddied the waters if you're trying to look at something like the dollar index and walk away smarter. now, if you look at the
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trade-weighted dollar and other me truckers i think you get a much better answer, but we live in times where the hard rules of economics really are broken in many ways because of all the faux issues going on so look at whether a currency strong or weak when their central bank is printing or trying to control interest rates really kind of become as mug's game just after having said that, to look at a euro dollar, euro versus dollar chart, i mean, it just didn't lock that vulnerable each thoughour central bank most likely within the next couple of weeks is going to make very concrete such stantive observations about what they are going to do in the here and now regarding making the balance sheets smaller, but yet the dollar is in negative territory again! >> under 93. quincy, let me ask you about biotech real quickly on a strong run and real breakthroughs in the treatments happening the last couple of
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days do you think it's still an attractive place or do you think biotech can be an attractive place in the market again? >>those who say it's been overbought because it has been attractive and money is going in consolidated ever since the primaries when both sides of the aisle said we're going to control these prices however, the market is saying we need these and we're going into the season where the medical community is having their meetings all over the world. it's helping bring attention to these new therapies, and the investment banks will be holding conferences over the next couple of months. again, it brings attention to biotech. you may want to wait and let it pull back a little bit but mergers and acquisitions are up. gilead waited a long time before they put $11 billion to work for kyle pharmaceuticals others will be doing the same. >> and gilead having an outsized impact on the biotech index that we see, up 2% today.
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>> thanks very much, quincy, peter and rick, of course. >> 50 minutes before the close the dow hanging on to a 56-point gape the s&p sitting at 2471, just a point above break even for the month. nasdaq higher by 53 and also the russell is up 12, but flooding and fires are rocking a texas chemical plant in the wake of harvey with no solution in sight. we'll go live next for more on dangers that the residents are facing. >> still ahead, president trump says if he can't renegotiate the north american free trade agreement the u.s. will work away from the deal, a move that cargill's ceo says will be a negative we'll speak to him coming up
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welcome back with the markets trying to end the month higher, let's check on some of today's market movers. shares of campbell's soup are getting hit hard in the session. the company missing wall street estimates on both the top and bottom lines and warning that fiscal sales could decline this is campbell's 11th straight revenue decline. the stock is down 7% today in trade. shares of apple are meantime
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hitting another all-time high. the company is $30 shy of the $1 trillion market cap. up .4 of a percent and the tech giant rallying on anticipation which is building to the iphone 8. that's expected to be announced on september 12th. apple officially sending out the invite for that unveiling today. that's helping the stock move higher >> meanwhile chemical explosions and fires at a chemical plant in the aftermath of hurricane harvey leaving the surrounding community on edge. cnbc's scott cohn is in the flood-of a rajjed area nearby and joins us with the latest hi, scott. >> reporter: hi, mike. hi, kelly. the plant we're talking about is a cap called arkema. we've about looking at it all week it's about a mile up the road from here. we know that there have been fires there, and we also know that it is going to be on fire for a while. basically inevitable at issue refrigerated compounds, organic peroxides basically that are supposed to be kept gold
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they lost power and backup generators and moved the chemicals to refrigerated containers those have failed, and it's inevitable when that substance heats up there's going to be a chemical reaction >> when they decompose they generate heat and when they generate heat there's a possibility of a fire and possible explosion >> now, from a mile off, we have not really seen or heard anything so the hope was that it would be sort of small, almost controlled sort of pops as proposed to explosions, but all they can do because they can't get to the chemicals at this point is to let the fires out. 15 sheriffs deputies went to the hospital after inhaling the fumes and they all checked out fines, but residents, about 100 of them, are being kept out and this is just one thing that's going on other there are issues, disasters unfolding throughout the region.
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take a look at the seen right now in port arthur, texas, about 60 miles away from here along the louisiana border it is under water. we have a crew on a boat there we've been showing pictures all day of rescues there one man was rescued today having been trapped for five days he evacuated as the storm hit and then that place flooded. >> we were able to get to a second floor apartment all the bottom floors are flooded. people were taking in people from the bottom floors and, you know, assisting everybody. everybody is really helping out with each other. >> chase howden is back on dry land after five days awaiting rescue, so that's one issue of things getting back to normal. we also are hearing that the ports of houston and galveston are now set to reopen so things are slowly coming back but they have a long, long way to go.
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guys >> that's right for sure thank you very much, scott scott cohn a new law takes effect to make it more complicated for resident to sue their property insurance companies if there's a dispute the new lab dubbed the hail storm bail was enacted to cut down on excessive lawsuit and it will limit policies when policy holders sue them to be slow to settle a claim. >> joining us on the phone is bob hunter, director of insurance as the consumer federation of america and the former texas insurance commissioner mr. hunter thanks for calling in for us. >> glad to be here how are you? >> so how did this all come together and what should homeowners do at this point with such a tight deadline, and what can they do? what is their recourse at this point under the new law? >> well, you know, they can file their insurance claim any time the law affects filing of lawsuits if if the insurance company agree to it
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appropriately, and, of course, they have hurricane sandy with lots of trouble with the insurance claims so it ended up, unfortunately, being a lot of lawsuits hopefully fema will do a better job but the new law will make it harder for people to file lawsuits and less likely that laws will want to take even good cases because there's sort of a sliding scale if the lawyer doesn't get all of the money that the homeowner asked for and gets a little less and it could end up losing money and if it get a lot less it could end up not getting any money even if they win the case so i think the problem is going to be people will have trouble find willing lawyers and then they have to go through several hoops to -- including giving insurance companies 61 days notice prior to filing a lawsuit and a bunch of paperwork that is new that will make it it a little harder for people who are in all this
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trouble to get what they deserve in terms of claim settlements. >> bob, how do you think this is going to play out in realtime? basically this isn't affect claims that are filed, but if you want to file a law south and by the way the rescue effort is still under way so it's a little premature. i would imagine people would be doing that basically file the lawsuit by today if you want it to be under the old rules and going forward after that it would be under the new rules and how restrictive would the new rules be >> well, first of all, you can't file a lawsuit before you see what's going on and, you know, a lot of insurance companies are good, a company like usaa from texas that i used to examine frequently myself. really tries to help people with their claims, and not many people are going to sue a company that helps them like that usaa won't get many lawsuits, so not only is it going to affect the people who are being abused by insurance companies and they are then going to have trouble finding lawyers and -- and getting lawsuits and even if
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they finally win they will get interest than they used to in terms of if other lawsuits happen their interests will be cut in about half >> obviously it's early and there's so much going on in the immediate aftermath, but is there any time at this point about trying to mitt gate the effects of the law or even something in the legislature to try to -- to try to, you know, overturn it or back it away? >> yeah. you know, it seems to me this event happened prior to the law. we know for sure that there's going to be a lot of lawsuits filed ultimately because there's always trouble after these major events after katrina there was a lot of trouble. after sandy there was a lot of trouble so there will be lawsuits that's when the trouble is going to hit that's when people are going to be -- lawyers are going to say i'm not interested and people will have difficulty that's just going to be a second crisis for all these people that we see, unfortunately, coming in in boats and being rescued, et cetera. >> bob, real quickly before you go there's some concern about how
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many people weren't protected by flood insurance in these areas and going forward. what kind of reimbursement and rebuilding is appropriate? it's tricky in a place like houston. i don't know what's in the flood plain. do you have any thoughts on this being formerly the insurance commissioner >> not only the commissioner i ran the national flood insurance program. the flood insurance program was designed in a brilliant way, but it hasn't been administrated properly the idea was to give subsidized insurance to existing structures, existing as of 1970 and new structures were supposed to be built wisely up to the 100-year flood level and that only -- that after that all structures would be safe except for extreme events like this one and this program hasn't run well
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the maps have gotten out of date the elevations are wrong they are too low congress won't allow the rates to go up to the actualial level so right now you have subsidized flood insurance even for new bad construction so it's actually bad construction so the program has to be significantly changed and congress is going to have to get out of the way and let rates go where they belong >> all right going to be a lot of rethinking of the program and development plans and all of that have in the aftermath of of this emergency. bob hunt her, former texas insurance commissioner thanks for your time. >> you're welcome. thank you. coming on 35 minutes before the bill, the dow and s&p all solidly have been up all day dow is up more than 190 earlier. about 69 points. about one-third of 1%. the s&p 500 still looking like it's going to be positive if it stays here for the month of august today the last day of the month and the russell 2000 outperforming as it has been the last couple of days.
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a pair of dow components slimming down as ge and disney set staff kut backs. those details are next. >> and hurricane harvey forcing the shutdown of the colonial pipeline that provides 40% of the south's gas line we'll look at the cost of that shutdown after this.
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welcome back two corporate giants reportedly preparing to cut jobs. according "the wall street journal" disney is eyeing weighs to restrict costs. separately reuters is reporting general electric's new ceo hoping to boost profits and cut spending big reduce the company's corporate staff as well kell, these struck me as slightlycontrasting in the lif cycle of the business. a new ceo is going to come in and definitely try to cut away whatever fat it has built up over the psych for abc and the business division it's different. >> i wonder if the job cuts reflect in a way a lack of vision we know one of the most northern things to do if you don't have huge top line growth right now is to trim costs, and i'm not saying it's not effective, and
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by the way, we hope the strong market is very strong enough to easily absorb anybody affected by this. >> sure. >> but it doesn't seem like they are doing this from a place of strength. >> certainly not from abc's point of view. that's been shrinking for years. for ge, obviously they have not been necessarily fit and trim for a while. at least by a lot of investors. >> they have moved to boston now. >> the corporate staff there that they are targeting. disney shares down a percent and a half today time now for a cnbc news update with sue herera. >> hi kelly and mike rescue efforts are in full spring in hard hit port arthur, texas. a fleet of helicopters flying over areas of the city completely flooded by harvey busy pulling stranded residents one by one from rising waters. energy secretary rick perry warning that hurricane harvey's impact is leading to a spike in gas prices speaking aboard air force two he told reporters that more than 30% of fuel production is shut down. >> the colonial pipeline has
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been shut down, for instance that's a major deliverer of refined product to the southeast united states. gas prices are going to go up because of the cut in supply. >> amazon has been hit with a proposed class action lawsuit by a couple who claims defective solar eclipse glasses purchased through the online retailer damaged their eyes the couple say they developed vision impairment in the days following the eclipse. you're up to date. that's the news update at this hour kelly, mike, back downtown to you. >> sue, thank you very much. less than half an hour to go in trading. we have the dow up 71. pretty resilient market, would i have to say. we had a couple of weeks that the market wanted to back off august and all the rest of it. it managed to find its footing this week. it's amazing >> missiles flying over our allies, tweets, all kinds of crazy tweets this month. this market sells back
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selsz off a little and bounces right back good u.s. economy numbers coming out. we should get good jobs numbers. gdp 3% this quarter, so overall things are very strong here's the question. we'll be bumping up against the old all-time highs and do we have enough to vault ahead of those? >> depends on tomorrow's jobs number if we get a strong jobs number, i think so. >> thank you very much. >> thank you. >> kell. >> thank you both. 30 minutes to go dow is up 72 so we're inching higher lululemon is out with earnings after the bell the stock is down 12% year to date time to true ruy lulu on for sie and more later with cargill ceo david maclennan. stay with us and at $4.95, you can trade with a clear advantage. fidelity, where smarter investors will always be.
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welcome back treasury secretary steve mnuchin sat down exclusively with cnbc's senior economics reporter steve liesman earlier. trade and nafta were a huge part of the conversation, and the secretary weighed in on president trump's threat to pull out of nafta >> i'm hopeful there is a win-win solution, but the president has been very clear he
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intends to renegotiate this deal, and if not he wants to get out of it. >> the cargill ceo has been outspoken on the subject and supports nafta and says exiting would be, quote, a big mistake a cnbc exclusive we're joined by cargill ceo david mac cleanan. thanks for joining us today. >> thanks, mike, for having me. >> what is your basic message about nafta as relates the u.s. agricultural industry or in general when it comes to this debate right now, renegotiate or pull out what do you basically expect to happen, and what would you hope would happen >> well, obviously it is being renegotiated we think trade, whether it's nafta or elsewhere, is a good thing. it's been one of the core principles of cargill since we were founded in 1865, and the american agricultural economy has benefited significantly since nafta was put in place in
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1993 agricultural trade has gone from roughly $9 billion in '93 to close to $39 billion today so it's been very good for the american agricultural economy. relative to what i expect to happen, i agree with what steve mnuchin said secretary mnuchin. i'm hoping for a win-wings, and i think we're going in there it's a 24-year-old agreement it needs to be renegotiated, but i see no reason why all three countries can't benefit from a renegotiation. >> mr. maclennan, is it true that agriculture has a lot of subsidies, u.s subsidies built into it, that we do away with it and then there's a free market price that's damaging on top of what we've already seen on the farm economy. >> all agricultural commodities have subsidies i don't think that's anything endemic to nafta
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it's for tariff-free trading amongst the countries. u.s., mexico and canada are number one and three and china happens to be number two looking at nafta per se as being good for the ag economy because of trade, it supports jocks and the numbers have shown how agricultural trade has grown since nafta was put in place >> are there particular products, you know, crops or other that you feel are essential to try and either improve the terms or to kind of defend when it comes to your business and when it comes to u.s. agricultural exports? >> well, i think u.s. agricultural exports in particular, corn, soybeans, beef and pork and those that were involved in three of those four were not in the pork business anymore, but particularly to the first three are ones that we are
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paying particularly close attention to, but, you know, those goods move in both directions, so, for example, can l.a. comes out of -- canola seed and oil comes out of canada and the u.s. and agricultural products in all three countries have been beneficiaries of nafta, and that's why we think it's a good thing. it's a good thing for jobs and it's a good thing for agricultural products. >> to keep it in place by the way, we're trying to renegotiate and perhaps bilaterally a lot of u.s. trade deals now that it seems like the big global agreements aren't going to move forward. how should we be doing this, a hangup for everything when we try to do something whether it's australia or partners in europe. it always comes back to the agricultural industries. is that important for every nation to protect their own versus kind of trying to free that all up and clone that out and move forward to them i don't know if it's a more
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modern economy where you don't run into these hangups every time. >> think about it. it's relatives to jobs and the agricultural economies in any economy, it's farmers, and, you know, farmers have a tough job they have got things like the weather as we're seeing in houston to deal with, but fact is it's about food and getting nutrition to places of need and getting nutrition and food, agricultural product from where they are grown you know, the thing -- something about tpp is it took a long time to negotiate it, and we got it -- the negotiators got to the point where it was ready to go but the new administration made a decision that that was not in the best interest, that that was not something that they wanted to proceed with. it can be done and to your point about bilateral agreement, tea a lot harder and time-consuming, or can be, to negotiate it bilateral. that's why in the case of nafta,
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tri-partite, tpp where you had multiple countries participating, more efficiency and school and while it takes longer for a multi-partner agreement there's prove it can be done as we've shown it can be done with nafta. >> we know you operate down in the area of hurricane harvey hit in south texas and elsewhere what can you tell us about your operations down there and anything you've gleaned about the aftermath. >> yeah, mike. we have two facilities down there, a steel service center, and we also have a port and storage facility obviously like everyone else we've been following it very closely. we don't have a large employee base there we have 130 employees, but the most recent information that i had is that eight of those employees have lost their homes. we've sent financial support and also sent $100,000 are karg gill feed for the livestock industry and for pet food, and we're going to continue to monitor the
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situation and do everything we can to help in this very tragic situation and all the people who have been displaced and need our help we're ready to go. >> all right david maclellan of cargill, thanks for being here. appreciate your time. >> thanks, mike and kelly. appreciate it. >> just under 20 minutes now left before the bell nasdaq is looking like the big winner and even on pace for a record r.dow up 83 p.s&p up about .7 of 1% any touts that gasoline prices will rise as a result of hurricane harvey were he raised today at the closure of the colonial pipeline in houston up next a look at the impact on pricing and inventory. >> and accuweather says harvey is going to cost, get this, $190 billion, but other big banks differ the founder of accuweather and deutch will offer their assessments straight ahead
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welcome back, the markets keep crawl higher off. the dow is up 25 point and we're within the 22,000 points the nasdaq on pace for a record close. >> month end helping out a little bit as rotation into stocks we'll see. the impact of hurricane harvey will likely reach beyond texas'
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gulf coast as gas hits a two-year high. the colonial pipeline temporarily shut down due to harvey-related refinery shutdowns. >> what do the shutdowns mean for the gas line prices throughout the country joining us is john kilduff, a partner and cnbc contributor aaa was saying we're nearly at 2.50 on average nationwide haven't been above that level since 2015 how much higher do you think it's going to go >> i think it's going to go a bit higher, probably another 30 to 40 cents higher we may get a $3. >> 30 to 40 cents? >> yes, yes, because of what's hatching -- this colonial pipeline closure was really the tipping point that's going to cause tightness of supply if not outright shortages for a time across the southeast and all the way up into the southern part of new jersey also, too, tennessee is also
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heavily reliant on a -- a portion of the colonial pipeline which juts out that way, so it's -- it's a big deal. they are working hard to get it back online fully. it didn't go down completely thankfully there's still some gas and diesel fuel flowing, but it's -- it's a major artery, and you're going to see the tightness and the shortages spike these prices higher. >> yeah, john, usually this kind of thing will get the broader market's attention if it goes up a lot and last a while what's your best guess on whether this spikes or will it stay till year's end >> you'll see them hit quite rapidly. it's labor day weekend, a huge major movement of cars and automobiles and people traveling for the unofficial hurrah of center and already at this storm they were topping off the retail
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tapings and causing demand to spike up this is one of the biggest leaks since the fourth of jump and the biggest one we'll have until the holiday shopping season kicks off. >> and i expect gas stations to raise the price because we know they can and psychologically people will be expecting it. let's quickly take a live look at port arthur where we have marine corps troops and amphibious assault vehicles making their way around. saw some of the vehicles earlier this week going through galveston but the type of vehicles, michael, could be used obviously when you need to deal with a lot of water? >> in fact this morning when we did show some of this activity, there were one of these vehicles that got caught in the high water and others had to come in the boats to help it out. >> they had white caps on -- yeah it looked like the ocean had come through, unbelievable in parts of port arthur and we'll continue to keep an eye on that there prices could speak $3 a gallon
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that feels like a huge jump after we've seen it up quite significantly. >> today's action, for example, on new york mercantile exchange where we saw gas prize for the expiring futures contract up 25 cents. that has not been seen anywhere in the system yet, so the price rises you're seeing are from the past several days, not what hit us today in turns of exxon mobile's biggest u.refinery and also, too, improved opec compliance with the production cutbacks and also helping to get the price of crude oil up. it's within the range of possibilities. just a matter of how tight things get now, i do have to give some props to the department of energy they have stepped up and are allowing phillips 66 to tap 1 million barrels of crude oil from the strategic petroleum reserve to keep them going, so -- so there are things being done to address this
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that's why i do think it will be fleeing the, but there could be a brief stop at this national average. >> john, thanks so much with a look at the gasoline price picture. with less than 12 minutes to go before the bill, market at levitation mode in the last half hour dow up 73 and the nasdaq remains the outperformer under 1%. >> and loumon is trading down fractionally today in advance of its earnings after the bell, a bell and bear face off on whether it'sor buyg wthinwhen we come right back what's happening right now? we're facing 20 billion security events every day. ddos campaigns, ransomware, malware attacks... actually, we just handled all the priority threats. you did that? we did that. really. we analyzed millions of articles and reports. we can identify threats 50% faster. you can do that? we can do that. then do that. can we do that? we can do that.
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go irish! see that? yes! i'm gonna just go back to doing what i was doing. find your awesome with the xfinity x1 voice remote. welcome back with. a big number art cashin saying 1.3 billion to buy on the bell as we wrap up the month of august on pace for a record close in the final hours and bertha coombs has more from the nasdaq. bertha. >> reporter: we're on pace for a record the nasdaq at one point was negative for the month at the beginning of the week it looks like it will be closing up 1.25% for the month. big reason why, the big caption, usual suspects today, among the all-time highs including, of course, ale getting close to an $850 billion market cap with that september 12th expected unveiling of the iphone 1, but
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microsoft, adobe and large-cap biotechs at all-time highs back to you. >> lululemon is reporting earnings today >> dietz is our bull. >> and we also have sam poser from susquehanna who is more cautious on the name thanks to you both david, set it up for us. what's there to like here? >> you've got the first mover in the biggest category, this athletic leisure and category. what's it going to e, david? it's going to be the increasing traction this company has with men. the marketing surveys are showing they are increasingly engaged. if my 19-year-old son is any example i think they love the
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shorts the shorts they wear and not the -- you're a bear because you're neutral on the stock. price target between 60 and 64. >> we think they have done a great job on executing on the engagement and they have had execution issues from process ezra taft benson getting enough quantity in the right place at the right time and until we see them put the whole thing together we're just a little bit staying on the sidelines for now. i do agree with what they said that, there's a lot of great stuff but if the consumer gets discouraged -- >> that's all the time we have. >> we'll see if that turms out to be a fulcrum for that stock which has been a battleground. anvid dietz and sam poser, thks very much for weighing in next up. >> next, we'll have the closing countdown for you.
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♪ ♪ i'm living that yacht life, life, life ♪ ♪ top speed fifty knots life on the caribbean seas ♪ ♪ it's a champagne and models potpourri ♪
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♪ on my yacht made of cuban mahogany, ♪ ♪ gany, gany, gany, gany ♪ watch this don't get mad (bell mnemonic) get e*trade and get invested just about three minutes to the close bell we have the dow up 72 t.its high for the day was a gain of about 93, but it looks like it's going to be a positive month of august today is the last day of the trading month. the s&p 500 needed to get above about 2470, the all-time high. intraday 2490. so it has been a pretty positive resolution to kind -- kind of a tricky period the last couple of weeks. actually had pullbacks in the average stock. the indexes, dom chu, have been
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resilient. biotech has a lot of growth money flowing into it today. obviously the nasdaq on pace for new high those things are not unrerated and the volatility index, the vix, getting crushed below 11. >> we have a ten handle on it right now. 10.6 is the last print there for the cbo volatility index it speaks to the tug-of-war that's happening in the marketplace, right we know that we've got threats from north korea we know that we've go the other geopolitical and washington risks and we've seen it as high as 16 earlier this month only to come back down again the volatility sellers, people betting on less volatile markets, have been wing out. at the same time, you take a look at what happened with gold prices and gold mining stocks. the gdx, that ticker is up 8% versus the flat to half a percent gain that we'll see for the s&p 500 and gold prices up as well. >> yeah. >> then, of course, you've got the defense industry stocks that you've been talking b.many sitting here or at record highs right now so all of that risk trade for geopolitics and gold certainly outweighing certain
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parts of the market and then you're seeing all of this churn happening and net-net we've got an s&p that's flat. >> i do think it's worth mentioning even for summer vacation heavy period it's been light volume >> no doubt about it. >> activity has been light kind of a slow motion levitation and tomorrow, of course, is september, and if you care about the seasonal stuff, september is not usually -- >> a lot of guys have been talking last couple of days are waiting for some kind of action to return back to this market, something that will get things moving around and they are hoping if people come back to work from all that have summer holiday they have had, they will kind of start to do things a little bit more and get more active and involved in the marketplace to spur things to be a little bit more. >> might be seeing more rotation into stocks out of bonds at month end and tomorrow we get the jobs number. hasn't been the biggest market mover lately. >> but the market has been numb for a while for a great many things need to point that out.
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>> keeps shrugging things off. looks like the dow is losing steam at the close, still positive, up about 60 points s&p 5 up, could be nip and tuck for positive or negative for the month of august. looks like it's to the upside. ringing the bell, here's kelly with the second hour of "closing bell." >> welcome to "closing bell," everybody. i haven't had to pull out the all-time high sheet in a couple of sessions now, but here's how we're finishing on wall street looks like a record close at nasdaq 6422 was the previous closing high, and we're at 6428 for the nasdaq with a 1% gain today, and it's been hot for a couple of sessions now again, a fresh record for the tech-heavy and biotech heavy index. that's been a big contributor lately the russell 2,000 up 45% and the s&p 500 up half a percent.
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it's about nine points shy of its all-time high but i do believe this puts the s&p in the green, just barely for the month of august, actually by just under a point. the dow up a quarter percent to 21,950 an dow looks like it's on a five-month winning streak and the nasdaq up for nine months out of ten, so there's some context despite some of the recent choppiness for you. we've had key earnings driving these markets, and we've got more headed our way after the bell we have numbers from lululemon, gopro supplier, amberella and palo alto networks and mitch landrieu with how the big easy fared in hurricane harvey hand how they are helping out nearby texas. joining me is markets commentator michael santoli and tony dwyer and david bonson, ceo
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at bonson. >> we had two or three weeks where there were makings of a serious pullback, and people thought it was time for one of those things, yet the rotation where one group grabs the baton and if but go back and look at what's really not to like. the economic data has firmed up a little bit bond yields remain low but the credit market is still relatively solid consumer confidence at a high so it's not enough bad news to pile on this market i was going to say the banks couldn't get out of its market not universally positive but we still have the overhead challenge of the old all-time hoys above us, but it seems like the market got things back. >> let's put the interest rates back up for a moment been incredible how low, david, the ten-year yield has been. just about 2.1% and granted you had north korea and some of the concerns there and kind of a flight to safety, but then this morning you have the core inflation number on that personal consumption number.
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it barely was up a tenth on the month. up 1.4% on the year and here's the fascinating thing. have you an economy that's adding jocks at a record-breaking payments have you no inflation insight i mean, are these potentially conditions for a bull market to keep on going? >> they are across the board conditions for a bull market to keep on going. now, of course, a number of those conditions are susceptible to change quickly, but, yes. low yields and low inflation with accelerated earnings. this is a perfect formula, but one thing that's really interesting. i was thinking has michael was talking about sort of the no alternative trade that you saw maybe a year ago, of course, we're piling into equities, nowhere else to go but it's not really like that right now. the reality is that japanese markets, european markets, emerging markets look quite strong. >> yeah. >> yet the u.s. equity markets still continue to find some spot of attractiveness. >> tone to, you guys were smart enough to pick um brian
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reynolds he's been saying -- i know you've been saying, look, there's still reasons you can be bullish on year eight, nine of this bull market. >> how long can this continue. all the signs you would continue to look for in terms of topping out and a recession looming. how many do you see and the horizon? >> i didn't ask the class strategist he comes in it at a little bit of a different angle listen, cycles are not driven by too many they are driven by fundamentals and the fundamentals are driven by fed policy and look at real feds fund rate and look at inflation over the course of the last seven years it really hasn't changed as a result it's given the fed the ability to really stimulate growth and now what we have is very different and starting to attract a little bit more attention. for the first time this cycle we have synchronized global growth and have a weak u.s. dollar and reacceleration in the u.s. all of that leads to upside for equity prices, and i think it's important to kind of point out that equities haven't done that
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much since june so we've been in the pullback camp as well, and the average stock and indices are pretty much flat during that period, setting up for the next leg higher again which will will be driven by better fundamentals one thing that brian and i have keyed off on is kind of interesting, don't you think, that the bond market believes that the inflation numbers, but it doesn't believe the growth numbers, and i think where there's going to be a mistake in policies, it's going to be that the growth numbers are being underestimated, and they are more sustainable >> all right we'll come back to this, but we have some breaking news out of washington to get to here. let's send it down to i'm on javers eamon, what's happening? >> reporter: just finished up the white house press briefing from sarah huckabee sanders who is had a couple of announcements to make at the white house, one of which is that the president is going to join the thousands of americans who are making financial contributions to help with hurricane harvey disaster relief here's what she had to say >> i'm happy to tell you that he is -- would like to join in the efforts that a lot of the people that we've seen across this
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country do, and he's pledging $1 million of personal money to the fund, and help's actually asked that i check with the folks in this room since you are very good at research and have been doing a lot of reporting into the groups and organizations that are best and most effective in helping and providing aid, and he would love some suggestions. >> sanders didn't say whether that money is going to come from the trump found day, the trump organization or from the president personally, but in any case the president pledging $1 million towards the disaster relief and also so many speculation over the fate of gary cohn, the national economic director, will he stay or go cohn is say he's saying and is reluctant to resign in the wake of the racist violence that we saw in charlottesville, virginia, and the president's handling and sanders was asked whether the president still has confidence in cohn. >> the president is working hand in hand with gary and the rest of his team on tax reform.
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as i've said several times earlier today, that's a big priority for the administration moving into the fall and gary is an integral member of the team leading that effort. >> so an endorsement for gary cohn and the tax relief effort we saw treasury secretary mnuchin on cnbc talking to steve liesman saying there is a detailed white house plan that has not been released for tax relief sarah huckabee sanders was asked 16 different ways by my count what the specifics are of the president's plan and wouldn't reveal any of them other than to say the president cited broad principles, four of them yesterday in, his speech yesterday on tax reform. this white house apparently not ready to put out any specifics or to stand by any specifics in terms of its tax refor appropriate sam. it's up to the hill to do the legislating. >> i like how she said you guys tell us where to send the busy bus afternoon.
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national economic council director gary cohn will appear tomorrow morning on "squawk on the street" starting at 4:30 a.m. eastern time. lululemon is moving its earnings around let's get straight over to courtney reagan. courtney. >> reporter: hi there, kelly take a look at lululemon earnings for the second quarter after the bell shares are higher and shares beat coming in at 39 cents adjusted revenues also higher, and the total comp, the store and online together, beating wall street's expectations for 4.is%, coming in at 7% year over year. if you just look at the store comp oz those, those are up 2%, so the net revenue from online, that was up 30%, so a big help there. grossing margin coming in at 51.2%, that looks pretty good, and if you look at the full-year guidance, both the earnings and the revenue, slightly above, where analysts are look. kell de, back over to you. >> courtney, this is how you do retail in this environment, right? i mean, you do a 2% comp which is actually, you know, it's
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okay, but you do a 2% comp when you throw the online piece into it that's how execute, right? >> that's right. >> we've seen actually some pretty good decent retail reports out of a lot of companies this quarter, and the stock prices went down because there's negative sentiment lulu is not the only one who have seen a good quarter there's been pressure from a number of athletic names lululemon looks a little stronger than what we've seen out of footlocker and finish line which aggregates the names like nike, adidas, under armour, which all of those have seen some strength, particularly in the footwear and we know lululemon is a little different, but something to watch for for sure. >> that's a great point, courtney thank you. the lululemon ceo will join "squawk on the street" in an exclusive interview tomorrow morning to discuss the results 10:00 a.m. eastern time. michael, here's the thing f.it was the other way around if they did a 5% store comp and a 2% online i don't think the
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market would have liked it so much, but when you can show you have that coined of organic online growth, i think that's what the market wants to see. >> online it's a smaller base. >> for sure. >> the market is trying to draw a distinction between lumu and some others first off, not many stores not one of the huge legacy retailers that's basically burdened by a lot of unproductive stores. they have a great online presence because the brand is distinctive, and they are not trying to sell basketball shows up against adidas the way nike and under armour are all those things playing in favor. the stock is down in the past few weeks. >> kind of a weak performer year to date anyway. >> it's well above its lows but it's really been this kind of battleground name. >> does this tell us that these brands and direct distributors are going to win in the retail environment. what would you do with finish line and others? >> we don't like the sector and some of the individual names that maybe do have promise and trading opportunity, we still
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wouldn't invest on it, but i do think that's exactly right the e-come presence you're talking about would cause one of these names like lullu today to stick out and another piece that gets ignored a lot is they don't have significant marketing advertising needs. it gives them a bigger advantage in mar egyptian. for us though we're dividend growth people. i don't expect these names paying let alone growing dividends. >> you're focused on blackstone over here. >> really boring names like in a. >> i don't know about boring >> we're free cash flow people and we're cyclical in a different way. >> let's get over to josh lipton and amberella's earnings. >> reporter: reporting eps of 40 cents versus expectations 464 cents. revenue up 10% to 71.6 million analysts have been look for 70.5 million. non-gap gross margins clocking in at 63%. turning to the guide, kelly, amberella is looking for q3
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revenue. 77.5 to 90.5 million that's basically in line on the wall analysts were playing questions about the core markets so that's security cameras, drones, wearable cameras as well as surely some questions about the new chips enabled for ai that call starts at 4:30 eastern. kelly, back to you. >> all right, josh thank you, amberella shares up 3% anything would you add there >> not too much, no. obviously, if it's well off its highs, kind of the fever broke after the whole gopro craze. did cool off a bit seems like a decent quarter and the market won't get too overexcited about it. >> yeah. david as well. by the way, when you're talking about some of the growth in this market, traditionally we would have in the past talked about a gopro and all the new exciting devices and things i mean, what's more interesting to you guys when it comes to opportunities? >> well, tony mentioned earlier that the index right now is sort of at the same level that it was a couple months ago, but it doesn't necessarily feel that way to a lot of investors, of
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the feels better because of the sector rotation that michael talked about earlier in the stegs. the market hasn't moved a lot in total, but certain pieces have sort of changed. we've been talking about the selectivity need really a good time for active managers seeing it forever, but i think this particular season we're seeing it really play out and in terms of where that opportunity has changed, not in the gopro or f.a.n.g. names necessarily i really do believe to what we alluded to here before, the dividend growth names provide two things that are important. they are a relatively more defensive name, so should we get more north korea, some more fed tightening -- >> what happens if what tony is talking about, the ten-year and interest rates go up half had a percent because they are kind of coming in line with growth, for example? >> so if you look back fog when the ten-year did go up half a percent after the election and the end part of 2016. >> but it was so low, it was like 1.6% at that point. >> it was 1.2, yeah, you're right. it was a little bit lower than
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it is now, but it's already back to -- it's 2.1 not too far away from it. >> yeah. >> either way, theinterest rat sensitivity and dividend growth names is very short lived. i'm not talking about reits but growers are more defensive. >> tony, what would you say to that >> look, if we're right and the data is right and the economy is synchronized and the dollar stays where it is, value will outperform growth. it's believed in the inflation numbers is low hand not believing the growth numbers if it starts to believe growth numbers you'll get the curve flattener and the cyclicals to outperform on weakness we favor the financials, industrials, and if you get a tax cut it will be so much better. >> palo alto is out with
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earnings, and seema has those names. >> reporter: palo alto, the security player, reporting better than expected earnings, kell de. take a lock. 92 cents adjusted versus the street consenseups of 79 cents so basically a 13-cent both. ref now topping expectations at $509 million citing that a delivered record and delivered record and bilgts have seen the highest number of additions in a single quarter and shares, as can you see, spiking here up 5% in extended trade. i want to switch focus to another name nutanix, one of the biggest backed tech companies. better than expected numbers, a logs of 33 cents but that came in better than a loves 38 cents and revenue at $226 million versus the estimate of $218 million. the company citing a big uptick in bookings and you can see that stock up about 4% here kelly? >> all right, seema.
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thank you. final word from everybody. michael, you first. >> see if the reflex bounce lasts. boast stocks -- both of the stocks. >> david, what about you >> people will get statements and not excited about how equities came off a difficult period their bonds are going up, emerging markets going up. at global reflation trade is back on, and all asset classes are enjoying it. >> consumer confidence number was pretty hot tony, last word. >> >> i'm with mike. i'll be a bit skeptical. i'm not sure if you can grip it and rip it but next year we'll have a lot more upside on the back better fundamental trends that we're talking about. >> all right we haven't even gotten back to school yet i'm not ready for 201. thanks so much for joining us. tony dwyer and david bonson and
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we very to look six months forward. not ready. members of the marine corps going into flooded port arthur, texas. here's some footage from the crew that rode in the amphibious assault vehicles with them just in the last hour did you see that water splash up holy cow coming up, more coverage of the harvey aftermath and we'll talk to new orleans mayor mitch landrieu about the houston recovery and what new orleans will be doing to help. he was lieutenant governor of louisiana during katrina and remembers the rebuilding from that storm well. and there's talk of waving 401(k) penalties for people who need money fast. we'll hear more about the pros and cons of such a move. stay with us
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welcome back fires and chemical explosions caused by hurricane harvey he had the arkema chemical plant in crosby, texas, creating fears about community safety scott cohn is still in flood-ravaged crosby, texas with more on that situation scott? >> reporter: there's 300 people give or take who live within a mile of the plant and they are not going to get back home any time soon. they were evacuated when this
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situation developed. the plant flooded and the power failed and when will happen because the chemicals need to be kept cool is there are fires or already have been fires and the only thing they can do is allow the fires to burn out. while officials say the fumes are more noxious than anything else, not necessarily toxic, there's a chance of explosions, and imagine you make it through the hurricane. you don't have any water at your house. you want to get home but you can't. people we've talked to are upset and they want answered >> they won't answer a phone call they act like the this ain't their fault but this is their fault, and they need to step up and talk to the people and the people that got displaced due to this, they need to get the checkbook out. >> i asked a company spokesman whether the company should still
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be considered a good neighbor and he said, yes, and clearly people here big to differ about that, but in the meantime there's kind of a study in contrast as will happen as we head to about the one-week mark after harvey hit in many parts of houston it seems like things are just fine. there are pockets of flooding and neighborhoods are still underwater, but in many ways houston is getting back to normal compare that to the scene 100 miles in port arthur they are still staging rescues and still on boats getting people out poo who have been trapped since the storm began. this situation is not over even though harvey is long gone kelly? >> in many ways it's just beginning, thank you scott cohn. >> joining us is mitch landrieu, new orleans' lieutenant governor during katrina thanks for being here. >> good to be with you thank you. >> i was struck by two things,
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the houston mayor imposed a curfew while at the same time he wanted the astros game continued. what's that balance you have to strike as a mayor during moments just like this >> it's very hard, you know, because every storm as we've said a thousand times is different. it could look like the entire city of houston is flooded when really only two-thirds is so the other third stands up as if nothing has happened it's a very surreal experience to actually go through simultaneously the storm can be finished in houston and then it can move over. what you saw in beaumont, plaina and lake charles spanked really bad a couple days after it hit houston there's a rolling recovery and one of the things that the local officials have to manage i've been in touch with the mayors of both beaumont and plano and, of course, lake charles. motiva shut down the refinery are. the colonial pipeline shut down. you just ran a story about another particular plant those individuals are still being rescued. it happens from jurisdiction to jurisdiction and the emergency operation teams are in partnership with the governor's
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office and white house, and they are doing the best they can under what is obviously the most difficult circumstances that we've seen in a long time. >> i was struck. i hadn't realized that the population of new orleans is still smaller today than it was before hurricane katrina over a decade ago. >> when you look at houston now, that area in particular might be vibrant enough that it's still growing, but what about some of the communities east much smaller and much harder hit? what's the future for them >> first of all, it's very give for everybody that was hit we're still estimating and based on the estimates 21 up,000 homes were hurt and we don't -- it depends on where you are looks like plano and bowman have taken a huge kicker. economically it will be a really difficult recovery still in recovery and then have you to get into rebuild which changes from community to community. it's not going to be easy. it will take a long time and it will really require the whole nation to lift them up the way they helped new orleans up
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>> what specific kind of principles are you conveying to those mayors you're consulting what guidelines, not only do they have all the demands on them from safety and assessing the damage and all the rest of it, but they have a flood of aid coming to them as well, right? you have all this money heading in that direction? how do you quarterback that situation? >> first of all, have you to take care of the immediate crisis which is rescue fema is in much better shape and our emergency responders across the country on the federal, state and local are much, much better and everybody seems to be performing at high capacity right now. then, of course, you get people in shelters. the sooner you can get back into some semblance of normalcy, it will never be better so you see houston opening back into that by opening up the schools because their electric grid is on if you don't write down to plaina all of a sudden they are not. that puts them in a whole different ball game so what were other trying to do is help the mayors along with other folks to think about how you triage
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how you focus on what's in front of you, but you also want to stay four or five days ahead of it and then hope that something bad doesn't happen like you're seeing with particular plants, you know, beginning to compromise safety in those areas. that's very hard to manage. >> one of the bright spots, if you could call it that, to come of katrina is the way the city turned over from a charter school system. should houston think about doing something like this, saying this was a comprehensive failure. maybe it's a moment to make comprehensive reform as well >> i would say this. i think it was pretty clear. katrina was an awful experience for us no way to count it good but instead of building the city back the way it was we took a deep dive to see if it caused all of our historical challenges and we took it as an opportunity to build back many ways. kept the authenticity historically and thought about ways to prepare to live better based on a 21st century-based knowledge economy and we
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designed the city and rebuilt and every community has to go through that soul searching once they have a disaster like this, and that's a good thing to force yourself to do. >> in houston's case seas being better prepared for floods much more glaringly obvious now. >> it's almost impossible to prepare for something like what harvey brought you. >> 50 inches of rain, how could you be. >> that's incredible. >> the rebuilding has only just begun. thanks for joining us. great to get your perfect pitch on all of of this. >> sure, good. >> mr. mayor of new orleans. president trump isn't the only politician who can take to twitter for sharp words. senator elizabeth warren has wells fargo and the bank's board of directors in her sights again. that's next on "fast take. and how much of a blow will harvey leave on the ony?ecom the president of accuweather and deutsche bank offer their
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duelling assessments straight ahead. and can help protect your potential profits. fidelity -- where smarter investors will always be.
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welcome back with some breaking news on tenet healthcare what's happening >> reporter: a big shake-up in the board rom and in c suite chairman and ceo trevor fetter says he'll be stepping down following a transition period either march 15th or if they manage to hire a new ceo they have going a search for a ceo. the official says it is will be shaking up the board membership and it has also adopted a
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shareholder's right plan, a poison pill, if you will this comes just a week after glenview capital to you members resigned from the board and they will possibly divest some units. we'll be calling glenview to see what they have to say back to you. >> yeah, he's been trying to improve the outcome there for some time. shares just fractionally higher on back of in a. let's send it over to sue herera for our news update. >> thanks, kelly here's what's happening. vice president pence toured storm-ravaged naubds the death toll rose to 31 and some 100,000 homes have been damaged. pence and texas governor greg abbott spoke to homeowners on one residential street. >> president trump sent us here to say we are with you, the
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american people are here with you. we are today and we will be here tomorrow and we will be here every day every day until this city and this state and this region rebuild bigger and better than ever before >> apple confirming plans to hold its annual product launch event on september 12th at its new headquarters t.confirms roars of the unveiling of a new iphone model loadled with features like facial recognition technology and wireless technology and the nba has fine the the los angeles lakers for tampering. an independent probe found that both team president magic johnson and the lakers gm violated the tampering rule in connection with paul george while he was still under contract with the indiana pacers you are up to date, kell de. i'll send it back to you >> sue, thanks very much it's actually time now for today's "fast take "we begin with a huge jump in fake accounts over at wells
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fargo. now that the bank's internal investigation is finished there were potentially 3.5 million unauthorized accounts created over an eight-year period, 50% more than reported but now over twice as long a period of time what are your thoughts >> the bank is trying to convey the idea they had their arms around this. been months since they tried to put this behind them, on the other hand, it still remains one of these scandals that sound worse than it was in terms of customer experience. i think it cost the bank a lot in terms of reputation and trust, but i'm not sure it packs that left in terms of financial reaction. >> shares down half a percent. >> shopping maugham operator simon is sawing for closing the teavana outlets. i'm thinking of my parents who are will lose teavana and
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perpumania do they have a case? >> a lot of these chains, because of bankruptcy or distress or otherwise, really have to close. >> and if you're starbucks. >> well, we're sunsetting this brand. don't need this anymore, but in theory, the other thing, starbucks is closing them because they were not traffic drivers >> exactly its success becomes a problem for starbucks. >> since they were attractive visually. >> i liked samples finally, i'm all for six-second ads that reportedly that the nfl is going to try out. it works for them since they get the same amount as for a 15-second ad it the works for me but i would like total ad time to be six seconds. >> this is obviously mimicking the kind of average attention span pre-roll ads is definitely six minutes. >> i think they will have for it. >> it will all be subliminal in
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six seconds. >> soccer can sponsorering, but just don't a commercial break. >> another story we're following. the s.e.c. is suing navellier claiming clients were misled about the track records of one of its strategy products the suit alleges they distributed false marketing materials. we did reach out for comment he said i stand by my firm's performance accounting on actual accounts and look forward to asserting that in district court k.as of march 16th this year, navellier had $1 billion under assets management. >> it's a dispute about disclosure and what you're supposed to present as a real portfolio. they haven't gotten into satisfaction negotiations apparently. >> the numbers associated with hurricane harvey seem
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unimaginable up next, the ceo of accuweather who says it could cost $190 billion and a top analyst with deutsche bank offer their estimates on just how much this storm will cost coming up. and live tv. the channels you love. your favorite shows and movies. making your iphone into more of a... oh my tv is ringing. hey...i'm in the middle of a...a second iphone from at&t? okay! right now when you buy a new iphone 7 from at&t you'll get a second iphone 7 on us. and power both with unlimited data and live tv. tand the alzheimer'sf association is going to make it happen. but we won't get there without you. visit alz.org to join the fight.
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welcome back, a decent day to close up the session. dow up just shy of 23,000. the nasdaq, by the way, closing at a new record high, 6428 today. >> now, plenty of numbers are out on the economic impact of hurricane harvey banks are looking at insured losses in the 20 billion and 50 billion range. accuweather using historical evidence says the total coast could exceed $190. joining us is the chief international economist at deutsche bank and joel meyers who is founder, president and chair of accuweather welcome to you both. i just want to make sure i have this straight. what's the number that you have, for total losses or insured losses >> first effect is on imports and the second on cleanup and the third is now that we're seeing gas prices go up consumption will take a hit. the number we have is basically what it means for gdp which is 0.2 which really mainly is the
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export channel positive effect later on will include a lot of numbers. >> do you have any rough dollar amount do you feel comfortable putting on the economic costs of this storm? >> really difficult to quantify. curious to hear what the other guests are saying, but basically it adds up to the timing of this from a gdp perspective absolutely critical that it's here now and the rebuild and everything that comes along should be quite substantial. >> joel, how did you get to 190 billion because that's more expensive than katrina and sandy combined. >> exactly, and in fact it's the most expensive natural disaster in american history the way we calculate it of course, we have statistics from all previous storms and in this case you had the greatest rainfall measured in the united states there's prords 160 years and the way we calculated interest is several different factors.
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first of all, you have houston which is a tropical city fourth largest in the country it you have tremendous water damage not only to houses, cars, plants, factories, stores. many of these buildings and many of these businesses will not reopen you also have damage to the supply chain which will increase the price of food, gasoline, heating oil because of the refineries to all americans so this is a natural disaster that was not fully calculated, and that's why we wanted to make sure that people realize the total impact here is about 1% of the gdp, even though it's somewhat localized even the area affected is very large and extends east of houston into louisiana, and some of these towns and hamlets and cities are totally underwater and it's in a hot area so there's going to be damage in a tropical climate as the temperatures and humidity are still very high hand will be for another month or so which will
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create all kinds of disease and after effects, jobs lost health problems so it's a massive impact in that region anded it will extend elsewhere sdwlu constantly are talking to professional investors about characterizing the economy and what the trends look like and what they are paying the most attention to do you think this means a period where almost all economic data in the u.s. is going to be taken with a grain of salt and we'll be downplaying effects on jobless claims and gdp and things like that, and can can you ever come out ahead with the rebuild or is it just making up for what you lost? >> absolutely. the data will be heavily distorted over the coming months the key issue is that houston itself is 3% of u.s. gdp and you ask the question on an annual basis. if you're shut down for quite some time, you do begin to get cumulative effects that are quite significant. yes, it is something that investors and discussions i've had with clients the last few days have definitely been all about what's the impact on not only houston and broader gdp and
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the most important thing is the shutdown of the colonial pipeline energy transported all the way up to new jersey and the new york region where we sit and that's a very important part of the story of what the impact will be. we'll see how much gas prices go up for retail consumers here over the coming days >> got to go dr. myers, fair to say the estimate while a specific number is a rough sense of how much this storm will cost from what you've described there's a number of factors but this sounds like a spitball, if you will, that it's far too early to get precise. >> no, it's not. the effect will be longer lasting because of the extent of the water damage, so, yeah, i'm not going to bet 189 versus 190 but we really factored in a lot of different impacts here. remember, some of these jobs are going to disappear, and, you know, rebuilding comes from somebody somebody has to pay for it the government, insurance companies, the companies who were damageled either with or without insurance, so there's a
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loss associated with that. >> all right thank you both it's going to be a big impact next quarter. lobbyists are pressing are the government to the waive financial penalties for harvey victims who may need to withdraw money from retirement funds to fund home repairs. the prosnd cs aonof that next you're watching cnbc, first in business world weighed hey gary, what are you doing? oh hey john, i'm connecting our brains so we can share our amazing trading knowledge. that's a great idea, but why don't you just go to thinkorswim's chat rooms
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welcome back hurricane harvey victims may be
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considering tapping into their 401(k) savings to get through the economic losses, and a new proposal for waiving earl el withdrawal penalties to koik the money easier to get but is that the wisest choice. joining us is rick adelman of adelman financial services to look at the pros and cons. thanks for joining us. i do imagine a lot of people will return saying if i can get this money without penalty or even with the 10% penalty, i have to do this, i need to do this, i don't have any other recourse what do you think? >> it's the last resort quite clearly. we want to recognize that taking run from your retirement account is never a healthy thing to do we recognize how das dardly and destructive that this event has been and how important it is for you to get through this crisis so if you have absolutely no other cash resource available to you while you're out of work or until your job get resurrected are, okay, that's what cash
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reserves are for, for other financial planning is for. you shouldn't be in a situation where you're forced to tap into your retirement account at work but if you have to, you have to. >> if you say it's last resort a lot of people are going to be choosing it between running up credit card balances or kind of effectively borrowing from their own future. >> you're right. quite frankly, they are all terrible choices i would rather you run up the credit card balances because if you pull the money out of your retirement account you're feeling a cries you'll severely feel in retirement and as much as we hate the notion of credit cards at 18%, i think the pain of that 18% will motivate you to get rid of the balances very, very fast. much more so than psychologically you might be tempted to refund the money back into your retirement plan. >> that's a really interesting point, rick. you're basically saying to people look at taking that on your credit cards. any other options better than
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borrowing from your retirement account. >> look at the small business administration they have announced a series of loans, not just to small buses and homeowners and even renters. homeowners can get up to 200,000 and renters 40,000 at interest rates as low as 3.35%. >> okay. that's also good to know the other thing i wondered, too, when people get money potentially disbursed to them from the government, how does that all work? how does this affect their income is any port of this tax-deductible what should people do with those funds? it's not going to be a perfect match for their losses how would you tell them to think about that >> if you're taking money from your retirement plan like your 401(k) you have two choices. you can either do it as a loan or as a hardship distribution. if it's a loan, it's tax-free. you have to pay it back within five years but it's tax-free at the moment if it's a hardship distribution then the normal taxes and 10% penalty will apply so you really don't want to do that if it's at all avoidable.
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one interesting note you don't have to be in the path of harvey to be a able to go for a hardship distribution. if you have a family member who was victimized by harvey, say you live in california or new york but your relative lived in houston, you can take out a taka hardship distribution for the benefit of your son, daughter, parent or grandparent living in texas. >> wow so, ric, finally, what's the benefit of -- if you do it on a loan, it's tax-free, but you have to pay it back in five years, but if it's a hardship basis, the penalty still applies? what's the benefit of a hardship withdrawal in that case if you have to pay so much of it in penalties? >> the only benefit is the fact that you have access to the money. under normal circumstances, many people don't have the privilege or ability of a hardship distribution, or the paperwork takes a really long time what the irs has simply done, and i agree with you, it's not all that much, but what they've said is we'll make it faster and
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easier so you can at least get ahold of the money while you urgently need it. >> i hope this is helpful to everybody. since we're talking of harvey, take a look at some of these pictures of members of the marine core in port arthur rescuing a fire truck stuck in the floodwaters. i believe that's our crew as well on one of the amphibious vehicles. >> everyone knows you shouldn't try to ford these rivers but you just don't know. you look ahead, and if you're a fire truck that needs to go somewhere that needs help, this is the clincher. >> these vehicles have been involved in multiple rescue operations port arthur, beaumont, and houston, some areas completely under water. >> it's low ground more recently they got all this rain and some ofthe reporters are reminding us that you look at --
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you don't actually know where it dips, and what the depth is, as you go down a road. >> exactly we'll check back in on this. i mean, it's not easy to move a fire truck, but obviously if they could save that right now -- i think that's marines working there with the amphibious vehicles, that would be a sight to see. investors being blamed for the economic demise of a small wisconsin town washington is taking notice. what that could mean for the hedge fund industry is next. short seller andrew left has a new target, bitcoin trust. the most dangerous way to own the crypto currency, coming up
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welcome back
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a small midwestern town is sending shivers down the spines of some activist investors leslie picker is there in brokaw, wisconsin, to explain. leslie >> reporter: hey, kelly, that's right. it's because of what's known as the brokaw act named after this town and more specifically this old mill that you see behind me. about two hours ago, senator tammy baldwin, a democrat from wisconsin, addressed a group of people here and told them that she was reintroducing the brokaw act. and this time, with the republican co-sponsor, senator david purdue of georgia. now, the bipartisan bill would restrict activist investors by narrowing the window that they need to disclose both long and short holdings greater than 5% as well as whether they act in a group of other hedge funds and hold stakes through derivatives. why is this hedge fund legislation named after a town of 250 people? well, this mill was shut down six months after star wars took a stake in warsaw paper. people here, including senator
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bald win, blamed the activist for the closure. >> so often, not always, but so often their focus is on jacking up the stock price, for maximum profit, but without a view to the long term. without a view to the workers, the communities, and the companies that are impacted. and so it's creating upheaval in many instances this adds transparency it's kind of like an early warning system >> reporter: now, critics say that the bill unnecessarily scapegoats activists now, the paper industry was in decline well before star born took a stake, kelly. >> all right fascinating stuff. thank you, leslie picker in wisconsin. let's get back to texas where there's a rescue operation under way in port arthur members of the marine corps are trying to get a fire truck
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struck in the floodwaters out. they're hitching it to one of the vehicles huge piece of machinery trying to move there. >> we'll see if they have the capacity to get through the water. >> they've also been involved in operations trying to get people who are stranded as well at this point they pretty much have identified where most of those are and have moved on to this operation we'll get a check on what's moving ♪ there's nothing more important than your health. so if you're on medicare or will be soon, you may want more than parts a and b
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welcome back i asked my father, apparently if you're rehabbing a house you can apparently take a loan out of your 401(k) for more than five years. >> you're paying yourself back >> michael, thank you. that does it for "closing bell" today. "fast money" begins right now. "fast money" starts right now. live from the nasdaq market site, i'm melissa lee. tonight on fast, high hopes for tax reform treasury secretary steven mnuchin spoke to our own steve leesman. >> we expect the house and senate will get this to the senate to sign this year we couldn't be more excited about the progress we've made. >> jim said not so fast. he'll be here to explain why he says there's no chance of a tax plan for

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