tv Closing Bell CNBC March 5, 2018 3:00pm-5:00pm EST
left hand amputated when he was four because of a genetic condition because of a lot of pain he has not let that stop him. >> i should have been watching big news here. zaggat is getting sold to a company called the infatuation google bought it for $150 million. >> thanks for watching "power lunch," everybody. ♪ "closing bell" is next live from the new york stock exchange in new york city this is the "closing bell. i'm michelle caruso carrera in for kelly evans. >> i'm bill griffeth discussions over trade do continue to dominate the market moves and the headlines. our reporters are covering the action, literally, from around the globe today. >> beijing, phil lebeau in
chicago, steve liesman in mexico city, kayla is in washington, d.c., leslie picker in canton, ohio, and we start with bob pisani at the new york stock exchange. >> important -- do you think they care about the tariff situation? they care an awful lot 10:45, 11:00, reports started coming out paul ryan, speaker of the house, was trying tochange donald trump's mind about the tariff business that changed things. we were down 150 points, we immediately moved to the upside. what moved would be those most impacted by the tariffs. boeing was up 2.5% boeing moved $17 from the top to the bottom that's about a 5% move united technologies did the same thing. take a look at utx, 128, 127, it's 132 now those are big moves for big, big stocks same situation for some of the other big industrials. i'm pointing out industrials because those are the ones that moved the most caterpillar, $5 up it was $144 a few hours ago.
now it's almost $152 we also saw the ten-year yields rise and is that finally got some of the banks, which have been a little -- moving. dow component, $6 on goldman sachs. that's almost 50 points on the dow jones industrial average these are remarkable moves the s&p is routinely moving in a 2% range almost every day for the last several weeks we went years not moving in a 1% range. just think about how remarkable it is. back to you. >> that is remarkable considering how it was all last year so, quiet. thank you, bob let's turn now to washington, d.c., where it's never quiet kayla tausche is watching another round of tariffs >> reporter: this decision has created decisions among white house advisers, within the steel industry, and now with capitol hill as well few republicans support the move, but today house speaker paul ryan publicly broke with the president, as bob just
mentioned. saying, we're extremely worried about the consequences of a trade war and are urging the white house to not advance with this plan. the new tax reform law has boosted the economy and we certainly don't want to jeopardize those gains, end quote. two gop sources say leadership is now focused on thwarting the announcement president trump said he doesn't believe there would be a trade war and is not backing down, even with nafta talks imperled. >> there would be tariffs on steel for canada and for mexico. so, we'll see what happens right now, 100%, but it could be a part of nafta. and i understand, i just got a call from the people who are right now in mexico city negotiating nafta. mexico and really canada want to talk about it. >> reporter: in mexico city the three countries' top trade officials are about to take the
stage to make individual remarks. the body language and tenor is always closely watched but today more than ever back to you. >> thank you today's nafta trade talks are getting a lot more interesting in light of the president's tariff plans steve liesman is live in mexico city where you just heard reps from the u.s., mexico and canada are meeting and set to speak steve? >> reporter: a packed meeting room ready for the top three rock stars when it comes to economic policy. mr. ligh we're waiting for them and their briefing coming up in a few minutes. some of the questions we want to know, we understand, by the way, there will be no joint statement, just like the last time they haven't issued a joint statement since the fifth round. in is the seventh round. some of the questions we want to know, will the scheduled eighth round happen do they keep talking do the tariffs threatened by the
president, do they doom this nafta talks going on now, or will the mexicans and canadians negotiate under the threat of these tariffs or do they come to the table and is this seen as a brilliant negotiating stroke by president trump? i will say earlier today, morgan stanley out with a statement in which they said that markets may have to reflect some probability that nafta may fail. i don't think today's that day, but i would say the chances look higher given those tariffs and so far the negative mexican and canadian reactions to those tariffs. michelle, bill >> how could it not derail the talks? he announces these tariffs in the midst of these talks i can't imagine the canadian and mexican trade reps are going to say, ox, let's keep talking. >> reporter: there's a number of things to talk about there are energy issues, telecom
issues today they appeared to have gotten closer or even agreed on some food and animal health issues so, it's a huge framework to come to agreement on one of the things we've heard from one of the technical people working on this is, hey, we just have to plow ahead with some of our work and let the bigger folks deal with these bigger issues that are out there while they deal with that lower level of stuff that needs to be done to modernize this whole agreement. >> that's what i was getting at there. institute the president tweeted that he would continue taxing european cars if the eu takes retaliatory measures against the tariffs he announced last week phil lebeau is in chicago with how that might work. phil >> at the geneva motor show that's a question being posed to a number of the auto executives in europe. one possibility is for them to move more production over here to north america, specifically to mexico. they're already in the process of doing that. audi opened a plant in 2015 --
excuse me, 2016. that's where they built the q5 cuv. daimler has a plant opening later this year. bmw has one opening next year. here's the chairman and ceo of audi talking about what kind of thought goes into potentially moving more production over here >> we in the industry got this message some hours ago of course, we first of all, are listening. i'm a big friend of open and free trade markets of course, we will have to check whatever will be decided >> they're not going to move production any time soon but increasingly mexico is the place not just europeans but all auto manufacturers have been producing cars and trucks. look at the growth since 2009 in terms of auto production of course, much of that ends up here in the united states. as you take a look at shares of volkswagen, we should point out cnbc had a chance to talk with
the ceo of volkswagen. he said he's calmly assessing the situation before they make any comments about what they might do with production what's the story when it comes to the steel manufacturers let's go to canton, ohio, where leslie picker is at the timkin facility >> reporter: that's right. we're here in mission control at the newest facility, which opened in october. after sitting idle for about a year during the downturn in the steel industry between 2015 and 2016 during that time they had to actually reduce head count by about 12%. while they've been ramping up as the economy has improved, many of these jobs here have been placed -- replaced by automation this facility, for example, has only two people working. the rest is being done by machines out this window behind me here. now, the company has improved man hours per shift ton per 16% over the last seven years. in other words, technology has
helped timkensteel become much more efficient meaning they need fewer employees to produce and sell the same amount of steel these tariffs may not necessarily be a boon for jobs they may just, instead, ensure sustainability of the jobs that are already on the ground here back over to you, michelle and bill. >> amazing increases in productivity thank you. let's get a quick check on the markets. the dow up almost 400 points. >> this is one of those days where we're seeing a surge going into the last hour of trade. >> another day where we'll have a more than 500-point range at this point it's unbelievable. >> the tariff tantrum, as mike santoli tagged it, seems to be over. >> we regained everything we lost last thursday and friday. back to the tariffs because officials in china are reacting to the president's proposal. we have the latest from beijing. what are they saying >> reporter: well, michelle, china is saying that it doesn't
want to engage in a trade war with the united states the vice foreign minister said sunday that both sides would suffer unintend the consequences, but he also said that beijing wouldn't sit idly by and watch their interest get damaged. the minister was speaking in the context of the annual people's congress, they set annual policy for the year at the opening address, which is china's version of the state of the union, the premier didn't specifically mention trade with the united states. but at the same time, he did say that china would cut steel capacity and he also reiterated that china would continue to open up the market here to foreigners in manufacturing, health care, education as well as new energy vehicles now, separately, the chinese state media has been putting a pretty interesting and very different spin on the d.c. visit of president xi jinping's
right-hand man on the economy. word is that his visit with the trump administration didn't go particularly well. however, here in china it's being painted at somewhat of a success. in fact, today in the state media, the official press, they've been saying both sides agreed that the way forward would be to resolve trade frictions with cooperation rather than confrontation. so, i think the message out of pay jing today is that china really doesn't want to resolve things with confrontation, but wants to resolve them peacefully guys >> and yet they never get resolved when you see wilbur ross speak about steel capacity in china, he puts up a chart which shows it has gone up dramatically year after year after year for the last 30 years and he also puts on there how often they say they're going to cut sxaft this chart is from dan rosen which shows the overcapacity, the oversupply coming out of china. it's one of the great frustrations of this
administration that they say in china they're going to cut capacity, but then they don't. i mean, why does anybody believe them now i think it's one of the reasons we're having this discussion about a possible trade war >> absolutely. i think that's the exact point we have been seeing very high level discussions and dialogues dating back to the bush administration some of the discussions go back even further when it comes to, say, the currency. yet we see there has been a lot of talk but not a lot of action. that's why there's been so much frustration, not only with the business community be where you are, but also here in china. also in europe and they haven't really seen a lot of action, even though the chinese have been talking when you were talking specifically about the steel industry, what's interesting is steel -- there is definitely, according to many of the trading partners of china, china is a problem in the steel industry but at the same time, it's a capacity issue has steel capacity ten times greater than the united states,
but what people have been telling me is this is an issue that the u.s. cannot deal with alone. the u.s. is a very powerful economy but the exports to the united states directly are so small that the unilateral action isn't necessarily going to do a lot to try to change the way the chinese government works and that the better way to try to solve this problem is for the u.s. to coordinate with the europeans, with -- -- in terms of steel, the japanese, the canadians, the south koreans and yet that might be much more effective, but at this stage it looks as though the trump administration doesn't necessarily have those trading partners on board when it comes to steel. >> no, instead, using this blunt instrument thank you so much. >> sew you what's going on with the sector heat map. >> all are positive. utilities are leading the way today with lower interest rates, to some degree the intrasensitives are the best
performers today >> financials are second best, even though we're seeing - >> talk about the odd couple. >> exactly, right. but almost everything is up more than 1% except for consumer staples and also health care but everything is having a good session. the breadth is wide, as they like to say. >> yes and volume so-so want all that heavy. you can make money and lose money whether the volume is up or down. that's what's happening right now. >> 45 minutes before the bell. the dow jones industrial average looked like it was approaching 400 points now up 365, 24,904. >> wie already covered the whole world, but you know what, the "closing bell" is only just getting started. >> announcer: it's the big debate of the month for the markets. will tariffs help us or hurt us? we're talking to the head of one business who says this is going to be a disaster for just about everyone next. plus, is the stock market already moving on from what some are calling a tariff tantrum
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industry executives divided on president trump's tariff plan joining us to make their cases, dan eberhardt, ceo of canary energy company and against imposing tariffs also with us is alan, founder of reality check, in favor of tariffs. mr. eberhardt, let me start with you. you run an oil business. how would it be impacted by steel tariffs? >> it's already impangting us starting today we buy more than $10 million a year of steel from -- imported steel and our steel costs since thursday have gone up 8% normally when we buy steel, we get quoted three weeks -- the price holds for three weeks. as of this morning, we were told they're only holding the price for a day. it's already negatively impacting our business >> people say, why don't you just buy domestic steel.
the special steel you use in your pipelines, you say, there's a shortage of here in the united states that's not an alternative, right? >> it's not really priced to us as domestic or international we're looking for the cheapest steel we can find that meets our specifications so we can be xettivity with our competitors and so that the u.s. oil and gas industry can be xrcompetitive wh opec. >> why do you want to hear his business >> this sounds like a company that's telling us the only way that it's become competitive and remain competitive is by being able to purchase large volumes of steel that is not only priced artificially low but whose prices are being set by a big foreign government. >> alan -- >> let mhim finish. >> what about innovation what about productivity? what about improving products? what about improving processes
and how about -- >> dan - >> how on earth did you ever compete before chinese started massive ily dumping steel on global markets >> we did and we do compete. i think u.s. shale has changed the world. >> it has, absolutely. >> 5 million barrels a day - >> not because you're getting cheap chinese steel. >> it's being dumped by the chinese government. >> i don't think it's artificially low - >> it's not being artificially low -- >> hang on, hang on. one at a time. >> dan, go ahead >> look,i think it's a free market i would like to have a free market where we can buy where we want to buy from and make it the most competitive as possible so we can compete with our competitors and opec and other oil-producing companies to keep the jobs here. also i think it will drive up the cost of energy that consumers pay at the pump and jet fuel via plain ticket prices, et cetera, et cetera. >> dan, imagine you're an executive in the steel industry
and you know that china has a lot of extra capacity that they subsidize uneconomically which leads to far greater supply in the world market than would otherwise be there and, therefore, depresses the price of their product i mean, what if china -- in fact, probably do this -- artificially subsidize or really subsidize all of their oil companies and, hence, would push down the price of oil? >> sure. then we would have to focus on something else i think everything is a worldwide industry and i think we've got to be competitive. i think it goes back to economics 101 and guns and butter i think trying to set prices artificially high, we should look to history, look to smoot-hawley and see how that turned out well. i think the initial cost being the 25% and 10% on aluminum is one thing, but we also have to factor in the retaliatory measures that are going to happen by our trade partners that's going to be a further knock-on effect that affect the
entire economy. >> alan, big picture, though ultimately is our tariffs a growth strategy for the united states >> in the biggest possible picture and the longest run, absolutely unless you think that the united states can keep on -- can growth healthily at all with a steady increasing presence of chinese government subsidized products in its own market. if you value free markets, which we all do and we all should, that's the last thing you should want to see and it can't possibly make for healthy markets over the long term. >> alan, you've been a guest on cnbc as long as i've been anchoring. if there were zero tariffs in china, if china did not subsidize steel, would you be against these tariffs? you have supported tariffs ever since i've known you do you want them because you think the rest of the world is hurting us or would you get rid of them if, in fact, we really did have free trade? >> we are so far from a free
market in not only steel, in farm products, in aluminum and manufactured goods all over the world. in fact, free trade happens to be a principle that is largely honored in the breach by the entire global trading system except for the united states which remains, by far, the most open market in the entire world. and when this system is being -- >> i disagree with that. i think you look - >> you may disagree -- >> you look at singapore or hong kong - >> singapore is aid city state this are city states - >> they are -- >> they have nothing to do economically and geographically or national resourcewise or anything wise with an enormous 330 million population country like the united states that's a ridiculous comparison. >> singapore has 6 million people and a gdp of $150 billion. >> that's about as big as what new york city back in 1961 >> contrary to your example,
it's still a country. >> fine. but its circumstances are so completely different from those of the united states in more ways than anybody could possibly count. i can't imagine i'm even hearing this. >> why does that matter? i think the free market will drive costs down which is ultimately better for our economy, better for economic growth and better for consumers. >> first of all, if you think there's a free market in steel, you are soarly mistaken because you seem to be totally missing the massively important role being played by chinese government policy and chinese subsidies. and because steel is -- >> what we control - >> please let me finish. there is no free market in china and china sets the global price. just as oil is a single integrated dmroebl market whose price is often set by the actions of a cartel like opec, steel is a globally integrated market and the price is set to a very great extent. again, by a chinese government whose policies have ensured that it makes half the world's steel
now in a totally un -- a totally unprofitable basis. >> we have - >> gentlemen, we have to go. >> when china is such a major actor is obviously going to have a huge impact on prices. >> we'll let you talk to each other on the break thank you. >> this is what lunches have been like in the last five days. >> right >> dan eberhardt from canary oil, alan, thank you. breaking news on the mueller investigation. kayla with the details. >> sam nunberg, a one-time aide for the trump campaign received a subpoena and rejected it, he's saying today, but he appeared on msnbc last hour. remember, this subpoena comes just nearly two weeks after he met with some of mueller's investigators. he said on msnbc that after that conversation, he thinks they may have something on the president. take a listen to this exchange. >> do you think they have something on the president >> i think they may. i think he may have done
something during the election, but i don't know that. for sure. >> why do you think that >> i can't explain it unless you were in there. >> explain the atmosphere. >> the way they asked questions about anything i heard after i was fired from the campaign to the general election to even november 1st it insinuated to me that he may have done something. and he may very well have. >> if you got that sense from the special counsel's investigators, why would you not want to cooperate with them? if you got a sense that something happened - >> because i'm not interested in handing all my e-mails over that i communicated with steve bannon, with other people, and with roger stone i'm not interested in it >> he said, let them arrest me in response to his decision to reject this subpoena a few moments ago in the white
house briefing, sarah sanders, the press secretary, was asked about nunberg's comments saying he has limited knowledge, he's simply incorrect and he never worked in the white house so she can't speak for him. he was an aide on the campaign from april 2015 until august 2015, but he's been one of the most vocal commentators on the investigation and the campaign since then, so we'll see where this goes. back to you. >> wow all right. thank you. >> take a quick break with the dow up 356 points. how are retail investors handling the market's ups and downs? we have a look at a new report from td ameritrade showing what clients bought a sndold during the month of february when we had all that volatility, after this my experience with usaa has been excellent.
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time for a cnbc news update with sue herera. wait, we'll talk about the markets. they just told us to do that. >> yes, they did rally day on wall street we were up, get this, 399 points a little while ago this is an interesting rally seems like everybody is in the water today, all 11 sectors of the s&p are positive and the two leading sectors today move upward for different reasons utilities, which usually go up when the interest rates are lower and the financials, which usually go up when interest rates are higher both have gains of more than 1% today. >> i'm curious to see what happens in the next few minutes
because the press conference steve is at has gotten under way, and we've gotten comments from lighthizer saying he would prefer a three-way nafta deal but would negotiate a bilateral pact, if need be, suggesting things haven't gone well also they haven't made as much progress as many had hoped the tonality thus far is pretty negative if we see increased fears about nafta falling apart, maybe we'll see it in the marjor averages still a strong move. now it's time for cnbc news update with sue herera. >> grood to see you both here's what's happening at this hour, everyone saudi arabia's crown prince meeting with egypt's top islamic cleric as part of his three-day visit to egypt it's the first trip abroad for the 32-year-old crown prince since he became the h hechlt ir to saudi throne.
shkreli has to forfeit $7.3 million in assets. this comes four days before he is to face sentencing for his conviction last year coastal communities in massachusetts are bringing in heavy equipmequipment to clear s after last week's nor'easter several homes were damaged and many don't have power. officials expect full restoration by wednesday. the television audience for the academy awards broadcast on abc fell 16% from last year, according to the preliminary nielsen data that is the news update this hour i'll send it back down to you guys >> very good thank you, sue we'll see you next hour. >> you got it. >> what did they tell us to do
now? go to commercial. still ahead, defense stocks have rocketed higher since donald trump was elected president in 2016, but will these new tariffs negatively impact us? an analyst who's been covering general electric for three decades making his case for why he thinks the stock will gain 50% stick around "closing bell" will be right back jooishs
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nafta trade talks have concluded in mexico. we're hearing from the three point people from those countries are what kind of progress thet didn't make. >> chris freeland, minister of foreign affairs for canada said canada would view any tariffs on steel or aluminum as unacceptable and will take appropriate measures to defend workers and industries if need be that's one of the first comments we've heard in response to what president trump said now the mexican commerce
secretary is speakingnow we'll be watching for those headlines as well. >> our u.s. trade representative robert linehizer said they were open to bilateral. >> echoing what president trump said in the past if you were looking for positive tonality about a market worried about a trade war, that isn't a good sign. >> tariffs aside, earlier on the halftime report, stephanie link made the case for fundamentals in the midst of the trade talk mess >> the fundamentals still remain very strong. earnings are good. cash flows are great excellent and growing, expanding. balance sheets are really good for now, i think you can focus on the fundamentals. don't know which way the market's going but i know good, strong fundamentals when i see them. >> for more on the market and the economy, let's bring in our "closing bell" exchange. keith bliss is with us, michael hans, jack and mike santoli. we have no idea who they work
for, but apparently we don't care mike, was that a head fake last week then? if the fundamentals are still good, is there any reason for the market to go down? >> we're in this wide-swinging range. i think the corporate fundamentals have been the one thing almost everyone can agree is good. the question is, are corporate fundamentals joined by very loose financial conditions, which is what we had in january and low volatility environment, or do we have to brace in advance of these headwinds, inflation, everything we've been talking about. i think we're in this wide-le swinging market within this range that tells you there's a bit of indecision. with this giant rally today, we're back to wednesday afternoon levels. >> there you are. >> which means the big, huge decline where everyone was frightened on thursday about a possible trade war is, poof, just disappeared >> right. >> are we not worried about trade anymore? did we get news suggesting we shouldn't be
what happened? >> of course we're worried about trade and this white house they're so capricious in their policy moves that there could be a trade war. but i think we're getting quite used to the way president trump negotiates out in the open and i think most traders are reacting to that today especially when you hear the soothing tones, paul ryan trying to soften the stance a little bit. i agree with what michael was saying, and i was saying this on february 5th when we called the markets very oversold and we continued to trade lower and runoff february 9th. nothing has changed on the macro or economic picture. so the market is at that tenuous point where it is reacting in probably an overzealous fashion on points to the upside and downside the trade war was the latest one. i'm still very bullish our model shows the s&p 500 should be trading back up to 2800 once this dust settles. >> one asset class that collapsed is the dollar, the
dollar index on wednesday late and it is still hovering near those lows in the 90 range. >> it's still a warning signal for me i think today could be an aberration we have to pay attention to what happens over the course of the next couple of days. i think the buzz word is containment. everyone has been talking about containing this tariff talk, containing the protectionist type of ideology that's going through right now. i think we have to be very, very careful. there's a lot of headline risk not only with the dollar but with just every other asset class. michael was talking about the tariff tantrum we might be going through. that could go into a tariff terror very quickly. a lot depends on whether or not this tariff talk is contained to just steel and aluminum or if we see it leak out into other parts of the economy that was the fear on thursday and friday and so far it's been alleviated, but i have to tell you, if we hear that talk again,
watch out. this market could be in big trouble. >> we just watching the dow again, up 391 points, reproaching that possible gain of 400 points. michael, what do you think what's correct, what the market did or thursday or what the market's doing on monday >> women think the market right now is reacting to risings interest rates and increasing volatility while we've had a lot of headline risk, the near-term technical has been driving markets. we saw the 200-day move much higher and then the other day, the 100-day held to us that's the near-term noise as we thinks about the market reacting to rising rates it has to take a check and think, what ultimately has changed. monetary policy is actually getting a little more restrictive. as the broader market can digest that information and move forward, then we do think that the balance of the year should remain pretty strong because of the fundamentals that were mentioned earlier. the s&p 500 topped out at around 18 1/2 times forward earnings which is fairly elevated
everybody's big concern about valuations have come back into check because eps growth in the fourth quarter was about 15 or so percent that's a real benefit to the overall market >> do you agree with stephanie link that the fundamentals, which a lot of people feel that's all that matters, are strong enough to keep this market going >> they still are but it's a bit of an adjustment as interest rates move higher. that 280 to 295 range has really had the market fairly concerned because the valuation story in comparison of fixed income does diminish a little bit. as the market can adjust, we think the balance of the year should remain strong. >> bill highlighted the ten-year has behaved today, which is perhaps one of the reasons we have so much strength. thank you, guys. >> we'll let you get back to those jobs >> keith bliss, michael, mike santoli. heading to the close with 18 minutes left in the trading session here, we approached a gain of 400 points a couple times. we're trying it again right now.
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the stock is up 3.8%. there's a news conference going on in mexico city. the three representatives of the nafta negotiations speaker we just heard from robert lighthizer. >> the united states has midterm elections coming up in november. all of this complicates our work i fear the longer we proceed, the more political headwinds we will feel. thus, in the u.s., we must resolve our outstanding is issue soon to maintain the possibility of having this measure be considered by the current congress >> words of urgency from lighthizer. >> how would you like to be him right now? >> it's got to be super difficult. >> what do you have to offer when you have the president imposing these tariffs right in the middle of discussions? >> i guess you could say the u.s. market, right, which is so important to the mexicans and canadians, hence, why we buy so much steel from canada, for
example. >> defense stocks have been rallying ever since president trump was elected. shares of boeing are higher by 141% raytheon up 56%. northrop grumman up 48% and lockheed martin is up 48% since the election morgan brennan joins us. >> so, the world's biggest defense contractor uses steel and especially a lot of aluminum we spoke to lockheed martin ceo and chairman marillyn hewson to get her take on whether president trump's perspective tariffs would be bad for business >> well, i think the tariffs will have to wait and see how the details that come out -- what the impact would be for our business one of the things that's important is this administration is focused on making companies more competitive globally. the thing i hope we can continue to focus on is how important our strategic partners are around the world and those alliances we
have that affect our national security and how we can -- our allies as we go in the coalition environment together. >> so, when these tariffs are discussed as an issue much national security, do you think that makes sense >> well, i think that the administration has a responsibility of looking at what those impacts are to the extent they see a connection with national security, then that's what their role is. >> reporter: now, with 30% of overall sales coming from abroad, i also asked hewson if she was worried about potential of retaliation from trade partners, if we were to see the u.s. roll out tariffs in a blanketed way. she said right now she does not believe at this point in time this would affect foreign military sales she sees looking across the geopolitical landscape that there are too many security rivengs that the need for security and military might is still too strong of course, she like many other she has spoken to in this industry is waiting to see the details and if there's going to
be exemptions. guys >> morgan, thank you very much morgan brennan on lockheed martin art cashin just told us the market on close orders show an imbalance to the sell side of about $500 million as we head to the close with the dow up 384 points. td ameritrade on where his clients are puing eimottthr ney coming up next on the "closing bell." today, a focus on innovation in the southern tier is helping build the new new york. starting with advanced manufacturing that brings big ideas to life. and cutting-edge transportation development to connect those ideas to the world. along with urban redevelopment projects worthy of the world's top talent. all across new york state, we're building the new new york. to grow your business with us in new york state visit esd.ny.gov.
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it's hard to remember back then but february was a wild month for stocks td ameritrade investor movement index, which measures the holding and positions of clients decreased by 23% in february to the lowest level since january of 2017. joining us for more, j.j. kinahan, td ameritrade's chief market strategist. >> hello. >> it's not surprising people would sell a lot considering what we saw in february, no? >> no, but this is the biggest movement we've seen. i think one thing about it is what people did, and i think one of the things you're seeing in the market overall is they don't necessarily want to turn to
bonds in this market so they're selling stocks that are higher beta going to stocks that are considered safer investments i think one of the things that happens there is you start to maybe change your view of what's traditionally a blue chip compared to now where apple is a blue chip stock. >> let's be specific here's what they bought in february we've got a board to show it ford, nvidia, amazon, boeing, microsoft, berkshire hathaway. it wasn't about sectors, you're saying, it was about stock performance. >> it's about stock performance. netflix and amazon, two in there that have done well, continued to do well basically the f.a.n.g. stocks. the other end was face book was a sell. >> here's what they sold that's facebook, snap, then some biotech or drug companies, bristol-myers squibb, conocophillips >> one of the things i would say is if i really think about the month, the month was -- and you look at the patterns, during that selloff on february 9th, our clients were buying across
the board, but as soon as we started the rally, they wanted to take profits and they wanted to sell some of the stocks they bought in 2017 one of the interesting things to me out of there is we also do a millennial part of this index. the millenials perform very much like the traditional investor expect for on the sell side, they sold lululemon and under armour, which we didn't see in transitional investors i find that very interesting because that's the target market of people that are selling those two products >> maybe they sold the stock fickle millenials. >> great to be here. j.j. kinahan, chief market strategist at td ameritrade. the dow up 377 points. right after this pgim sees alpha in real assets. like agriculture to feed the world. and energy to fuel its growth. real estate such as e-commerce warehouses.
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did you say yes? good, then it's time for power e*trade. the platform, price and service that gives you the edge you need. looks like we have a couple seconds left. let's do some card twirling twirling cards e*trade. the original place to invest online. two minutes to go in the trading day. bob pisani is here with me i'm putting up five-day charts because i want to go just before the tape -- the tariff tantrum in the market. we got the dow here. we've come back to some degree from where we were when the tantrum began with this rally today. we're up 362 we were up 415 points. the ten-year yield, we saw they bought some bonds so the yield collapsed.
and we've come back some from that what hasn't come back, and this is interesting, the dollar index collapsed late wednesday and we're still hovering near those lows right now. >> you left out oil, which has had a big comeback. >> oh, yes, that, too. >> everything turned around including the ten-year and the s&p around 10:45 that's when we heard from the ryan camp that he was trying to turn the president around on the tariff issue ter theresa may made some positive comments on brexit as well how much do people care about the tariffs? they care a lot. industrials beaten up a lot, your boeing and caterpillars of the world, they immediately turned around. >> today an interesting dichotomy of sorts the utilities have been leading the way, upside, but number two are the financials they move usually in opposite directions. >> the ten-year has been moving up today that explains the financials which have been plat recently. i agree. utilities and investment trusts have had a good day. the only explanation is they're
lifting them and dragging them along. >> we go out with a healthy gain of 350 points on the dow we'll talk more about the tariff possibilities out of washington. a preview of an interview with the ceo of saudiaramco more coming up on the "closing bell." welcome to the "closing bell." wow, what a market day take a look at how we finished out the day on wall street the dow jones industrial average had been up as much as 390, now finished to 24,881, a gain of more than 1% for the s&p 500 the nasdaq higher by 1% and the russell 2000 higher by roughly 8% joining us, cnbc senior markets commentator michael santoli, ian
weiner from web bush securities. topping the dow was caterpillar while nike was the only dow stock in the red xl group was the big leader on the s&p 500. marriott was the big laggard mike santoli, let me start with you. that big, wow, tariff tantrum on thursday, poof, never mind it's all gone. we erased all those losses. >> the market has kind of seized on these headlines since we've been in this corrective mode to kind of push it in the direction it was already leading, which i think happened on thursday you were giving up some gains from earlier in the week then he we got in the crescendo with trade war possibilities, and coming into this week, whether because we downgraded the possibility it will be trade war hostilities or because we were able to put it in some perspective, we bounce we got good numbers on the im services index this morning. that didn't hurt a reminder that a big chunk of the u.s. economy is performing pretty well. i would still say we're in this
wide-swinging range right now. i would have expected the volatility, the vix, to have fallen a little more than it did. it close at 18.5 given thisle huge rally intraday. it's a market still on edge and kind of trying to find its bearings after the sharp break. >> with the decline of last week, ian, you thought the markets were trying to price in the possibility of tariffs now that we're back again, what do you think is going on here? >> i think most people have made the assumption, at least the investo investors i talk to, that there isn't going to be any tariffs. every member of congress come out and say stuff, every business leader say things i think at the end of the day, most people don't think anything's going to come of this that's why you had a lot of the recovery mode we saw today we'll see what happens throughout the rest of the week, but right now the investors are not set up for these things to actually take place. >> big smeed, do you agree with
that that the tariffs won't happen that the president was talking about last week? >> trump kind of looks crazy like a fox you know, you got a good cop/bad cop going now. trump is the bad cop, ryan is the good cop it looks like trump wants to negotiate with the kansas plant. he wants to start on the 25-yard line of the other team oh, by the way, they don't get the ball rather than, you know, kicking off and having to go the length of the field he comes right out at the beginning and says, hey, this is what i want and then it forces everybody to move his direction somewhat >> so, i'm trying to decide what you're buying as a result of that - >> as a long duration investor, you watch this stuff go on around you you know, chasing momentum in large international companies
like boeing and caterpillar is -- has been a very popular trade for the last six months. and and then doing the fai.a.n. thing, the market jumped back in doing the f.a.n.g. today so you have to be disciplined. you have to sit and watch this stuff go on around you and stick to the companies you want to own for the next five to ten years >> mike santoli, both of our guests are suggesting that maybe this trade talk is a lot of noise. grover norquist was on saying, president trump started at 15% when it came to the corporate tax cut where everybody else in congress -- the republicans were saying 20, 22% he says we wouldn't have gotten the tax rate we got except president trump started at 15% is the market optimistically looking at what's going on with tariffs and saying he's move the ball to a certain part of the field so - >> could be because we don't need congress for this this is something that can be
done maybe he backs off on the percentage of the tariffs or something like that. i honestly think that the market is able to assess the more direct impact of this, eeb if it were to happen this is not a particularly trade-dependent country. i do think s&p earnings are pretty -- getting a big slug of tax cuts to the bottom line. it can be absorbed if this is going to be short of an outright trade war. i think the market is trying to figure out how tight financial conditions are going to get maybe later this year and, therefore, what multiple to put on very good earnings. that's the process that's been under way for a month and a half. >> stay right there. we want to talk oil and get your response to this prices rallied today in the oil pits as crude continued its comeback from february selloff one company very interested in where oil prices are headed is saudi aramco, which is expected
to go public in the most highly anticipated ipo. we'll sit down with the company's ceo right here on "power lunch" at 1:00 eastern time brian joins us with a preview. >> bill, thank you i wonder if one of the reasons oil rallied today is what came out. there was a huge 137-page report from the iea in that report it estimated globaldemand for oil will jump by nearly 7 million barrels a day by the year 2023 7 million barrels a day. that, by the way, the united states will be able to cover about 80% of that. so if you're a u.s. oil producer, that means u.s. oil production could rise from 10 million to 12 million a day. saudi aramco which has three times the reserve of exxon however big you think they are, they are bigger. by far, the biggest company in
the world, biggest oil company in the world they would like a piece of that global demand growth as well that will be one of our topics tonight when we sat down with amin nasser of aramco, with a lot of other topics. >> what's the talk around the conference when it comes to whether or not aramco really can go public? there's so much skepticism about whether or not they'll be able to reform the company and country, separate them, and be able to at least list part of it >> well, they say it's going forward. i know they sat down with cnbc and our colleague andrew ross sorkin saying it's going forward but we have somebody who's very well known to cnbc audiences sitting right next to me we had to come to houston to get her on set you would know more -- you think there's a chance the ipo doesn't happen >> i don't think this saudi leadership is not going to let this happen. the question is, where is it going to happen? what form is the sale going to take is it going to be a local listing and private placing?
mohammed bin salman is determined to sell some of this company. >> brian, thanks for doing our job by bringing haleem in there. that was so smooth. >> i'm so big, i didn't want my elbow to get in the shot i thought i better introduce her. >> we're aware of that the saudis seem to have been trying to talk the price of oil higher going into this ipo is there a price -- an ideal price they want around ichlpo t, do you think >> i've been told they basically saw $60 brent as the sort of minimum they wanted. now, it's not just for the ipo saudi arabia is making a big transition they are increasing some of their social spending to keep the population on board for the broader economic reforms so, do i think 60 to 70 brept is the range the saudi government is aiming for? absolutely >> can i bring it full circle
back to you, which is this, do you know what norel big topic is venezuela. you've covered venezuela more than anybody venezuelan oil production has absolutely collapsed it's down 30% to 50% year over year depending on what estimates you believe. as global demand grows, venezuela comes down there's a couple million a barrel gap there that is probably keeping oil prices afloat so for aramco, good news for u.s. oil producers, for the permian basin, good news but venezuela is a big part of the story. it's a humanitarian disaster, as you know, but also an economic disaster. >> venezuelan government much more interested in producing drugs and narcotics than -- >> and cryptocurrencies. >> thank you it's going to be interesting and exciting >> you can catch that interview tomorrow on "poir lunwer lunch"
1:00 brian will be on "closing bell" tomorrow with michael wirth and bob dudley write all of that down that's a deep tease. >> new ceo >> let's bring in bill smeed and ian weiner are you going to buy shares of saudi aramco when it ipos? >> i'm not going to buy shares mostly because i have no idea exactly what the numbers are, exactly what things look like. i know it's a country that just jailed a bunch of people that had a lot of mope. so any time i see things like that, i tend to question whether or not i really need to be involved i'd rather try to play stuff that i think i know. i have a hard enough time making money in the stuff i think i know so i'll try to avoid is that one >> all that focus on rule of law. what do you think, bill? >> the oil market is now in its second big rally after the peak of $145 a barrel in 08
so, this is the second bear market rally and we're completely convinced it's a bear market rally because virtually no one on cnbc calls it a bear market rally michelle, you and bill remember really well in '09 and '10, '11, every commentator came on, you asked them what they thought of the stock market and they said it's a bear market rally we're now nine years into the bull market. andist been a bull market, right? if oil, when does anybody say it's a bear market rally we were 145, went to 132, went to 115, went down to 25. we're rallying to 65 of course these guys want to get these shares sold in here. if it, in fact, is a bear market rally. unless i'm missing something, musk and those guys want you driving an electric car with nobody driving it. i just don't see the attraction in here at this point in history
of trying to fight a bear market rally like this. >> all right guys, we love having you on. bill smeed and ian weiner, thank you for your thoughts on today's market action. we have a lot more ahead on the "closing bell." >> straight ahead, more on the big tariff debate as another gop member of congress tells the president he's wrong see what she has to say to a ceo who says he needs those tariffs to survive plus, the analyst who says this is a great time to buy ge just wait until you see where his models say the stock will be in nine months this is the "closing bell," live from the new york stock exchange finally. hey ron! they're finally taking down that schwab billboard. oh, not so fast, carl. ♪ oh no. schwab, again? index investing for that low? that's three times less than fidelity... ...and four times less than vanguard. what's next, no minimums?
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we talk about the rally in the market but the -- and the end of the tariff tantrum, but look at this the tantrum continues in the steel stocks. >> yeah. so, it would seem that maybe the market doesn't believe this is actually going to happen, when you -- >> the overall market? >> yeah. that when you see most stocks
rallying today with the exception of the steel stocks, which are getting hit hard, maybe they think this is all a bunch of bluster. >> mike santoli is here. >> that would be the implication. basically you're going to reverse that whole move of thursday and friday today where the only things getting the benefit of the possibilities >> somebody to whom it really matters, whether or not there's going to be steel tariffs is barry zekeleman, a steel pipe and tube manufacturer. his company issuing $1,000 annual bonus to every employee following the president's tariff changes. also with us is republican congresswoman from indiana, writing a letter to the president expressing concerns that tariffs could lead to job cuts in her district thanks for being here. you run a business here. clearly you'd like to see prices go higher so you're supportive of what the president's doing. the market seems to be saying today, they don't believe necessarily those tariffs are going to happen.
do you believe it? >> i certainly do believe it you know, president trump made a promise and certainly -- he himself and the administration have dug into this quite well. they understand it quite thoroughly and are on the verge of -- i'll use the football analogy, about getting it across the goal line. we do expect something to be done and we appreciate their efforts. >> congresswoman, we heard from other steel manufacturers that they welcome this. it could create jobs if there's more demand for their product. you fear there would be a loss of jobs in your district why? >> absolutely. and while you were congratulating barry on his employees receiving this bonus because of the tariffs that are coming, my district is in danger right now of losing bonuses from tax reform that they were given because the economy is booming we all know we're on this track that's very positive, regulation reform, tax reform, companies
expanding, but in my district, just the thought of tariffs and when the president started talking 25% here and 10% there, in the rv industry, the recreational vehicle, boating, trailer manufacturing, we have one of the largest manufacturing districts, employees right now aren't looking at bonuses. they're looking at jobs hung up, jobs potentially leaving, orders in the queue, expansion plans downsided. >> congresswoman - >> there's a cost to this. all i'm saying is let's be balanced. >> i absolutely beg to differ. we supply those rv manufacturers and actually their business is booming right now. >> it is now, but there's no tariff. >> hold on let's talk about the actual cost of this product. let's put this into perspective. you talked about caterpillar, an american icon, a great company makes the best equipment in the world. a d-9 bulldozer weighs 71,000 pounds, about 40,000 pounds of that is actual steel not cast iron or parts.
that bulldozer cost $950,000 the increase in the price of that steel going into that bulldozer would be about $300 a ton or roughly $7,000. if you're telling me that caterpillar doesn't have pricing power of less than 1% and that's going to affect their sales, you're crazy. >> oh, but let's - >> hold on >> if you let her -- >> let her answer that >> look at the steel - >> i'm interested to hear the answer to that congresswoman, go ahead. >> with all due respect, $350 here, $7,000 there, is real money to hoosiers in the indiana second district. when they look at tax reform and they're looking at continuing job expansion and a lot of momentum, and i know you service them now, but they're also getting -- i ran into a ceo at the airport this morning who's already getting a 20% increase in the material from these domestic companies here because they know tariffs are coming. >> and what if - >> there's no choice. >> what is that as a total
component cost of that >> it's real money to real people. >> i know it's real money. i have 2,000 employees in the u.s. who make real money i would have 3 sthou employees in the u.s. making great money if i diplomat have dumped illegal imports coming in at subsidized prices from foreign governments. >> the difference i hear here, barry, you're the producer and the congresswoman's district is the consumers. >> i hate to tell you -- >> their costs are going to go up because you'll charge more. >> i don't - >> they're charging more now. >> i do not produce steel. i'm a consumer of steel. i use that steel to make my products i'm well aware i fought this fight and have been in this fight for 32 years. i know exactly what's going on. >> you know exactly because you own a company here, up own a company in canada. there's very -- there's very little harm done here to china which is the -- we should be
focusing on china and not trying to hurt each other. >> hold on a minute. i own one plant in canada with 300 employees. i own 15 plants in the u.s. with 2,000 employees. we're the largest -- >> but her point is -- her point is that when talk about the illegal dumping that makes you so angry, it is china that's doing it. >> it is >> china - >> and aren't you concerned that these are such unilateral in every single country instead of just focusing on china >> so here's the issue there are no question there are what we refer to as the dirty dozen of countries that are the primary problem. the issue with that is, china takes that product and moves it all over the world to then move it into substantial transformation to move it into our country. so there's no question that there are worse offenders. we, quite frankly, would like to see the duties on those dirty
dozen much higher than the 25% that are being proposed today. there are countries that are good trading partners with us. no question. canada is one of them. we're hoping that something can be worked out. but in the absence of that, this is a net/net overall good for the usa. and in the end, canada will take measures as well to block illegally dumped steel into that country, which have cost us hundreds and thousands of jobs >> and that's your world and your view. my reality is, when we're an end user and we manufacture at the rate that we're manufacturing, this is a pure jobs issue. all i'm asking the president, all i asked him two weeks ago was, let's have a balanced -- a fair and balanced look at this we don't have to annihilate one industry for everybody else to survive. let's make a way for them to actually have good customer service. go to a domestically produced product. if they can't get it, let's give them a way to be able to still survive and stave jobs. >> no one's saying that.
no one says there won't be exemptions - >> i haven't heard one yet so i'm pleading for an exemption. >> absolutely not. there is an exemption inclusion in this. if you can't get the product here, there will be an exemption, a waiver and you'll be able to bring that product in. >> congresswoman - >> no, the steel -- the steel industry used to make 100 million tons here a year 120 -- or 2.3 million tons a week it now makes 1.7 million tons. i shudder to think how you're going to build those rvs with tubing, by the way, that i supply just in time to elkhart, indiana, when you're going to bring that product in from china for those rvs because there's no steel industry here? i would like to see what the costs are then. >> i've got ceos calling me when i talked to the president a couple weeks ago, he gave a shout out to the rv industry i've got them calling me i'm running across them everywhere i go. i'm not going to dispute what they're saying about their job force. >> i understand. >> their labor costs the increase -- when you're talking tiny increases and
you're kind of blowing them off, this is ream money, real jobs. this entity, this industry is on the incline of mow men to us growth tax reform and rolling back much regs have done that. i represent them i don't want to stop that growth. >> you're talking about -- >> folks, i have to stop it. we're ut of time we have to move on >> thanks, bill. >> i appreciate both points of view clearly, this is a complicated issue. >> it is. >> thanks for your participation. >> thank you very much >> big market day. if you just joined us, dow was up more than 400 points at one point before falling before the bell we finished up 336 points on the dow. the s&p and the nasdaq both higher by 1% the russell 2000 up almost 1% today. >> plus shares of general electric are down more than 50% over the past year we'll hear from one analyst who says ge is set to gain nearly all of that back and then some
with pg&e in the sierras. and i'm an arborist since the onset of the drought, more than 129 million trees have died in california. pg&e prunes and removes over a million trees every year to ensure that hazardous trees can't impact power lines. and since the onset of the drought we've doubled our efforts. i grew up in the forests out in this area and honestly it's heartbreaking to see all these trees dying. what guides me is ensuring that the public is going to be safer and that these forests can be sustained and enjoyed by the community in the future. we remember up 450 points at the high a bit of a pullback on the close but healthy gain of 1.3%
that was the best percentagewise s&p is up, the nasdaq and russell gaining 8.4% in today's trade as we highlight that all of them are highlighting periodically there we go. got them all highlighted. >> proving volatility keeps coming back. >> indeed. >> time for a cnbc news update with sue herera. >> hello, michelle hello, bill. president trump welcoming israeli prime minister netanyahu to the white house where both leaders praised the decision to make jerusalem the capital of israel trump saying it will lead to peace in the middle east >> the biggest difficulty anybody's had, you look over 25 years, nobody could get past, number one, jerusalem. they couldn't get past it. we've taken it off the table so this gives us a real opportunity to peace >> a new study says elderly adults with high cholesterol may have a lower risk of dementia but that doesn't mean older
seniors should try to increase their cholesterol levels researchers say they may have some other protective factor that has not yet been identified. the rating numbers for the academy awards are in and it shows the nearly four-hour telecast was the least watched oscars in history. a 20% drop from the last year. the 26.5 million viewers was 5 million less than in 2008 and not since 2007 has the awards ceremony lasted that long. you're up to date. that's the news update this hour back to you. >> thank you very much let's get to some other big stories today in our rapid recap. >> investors this morning are trying to make sense of the president's tariff announcements and how it will affect the global economy >> our country on trade has been ripped off by virtually every country in the world whether it's friend or enemy everybody. >> negotiators from mexico, canada and the united states
down here now for the difficult talks on nafta they were difficult and complicated before the tariff threat on thursday they became more difficult and complicated after the tariff threat. >> this administration is focused on making companies more competitive globally the thing that i hope we can continue to focus on is how important our strategic partners are around the world and those alliances we have that affect our national security. >> too many industries doing so well that i find it really hard to get as flegtive as people want me to be. >> the dow actually making a big comeback check things out we're trading near the highs of the session. dow subpoena by 245 points. >> the dow jones had been up by 409 points, now finishing by 343 points >> what a day. shares of nucore climbing more than 3% since president announced those tariffs. "mad money's" jim cramer will
sit down with nucore ceo tonight. >> it was not a surprise to me and it shouldn't be a surprise to others. i'm surprised when i hear everyone say this is coming as a shock to them. >> joining us to trade the steel stocks is "fast money's" tim seymour and dave sieberg. >> both waiting patiently for us to come to them. >> a conversation we can't wait. you know how it is >> what would you guys do here personally, i think the steel stocks are a buy lear. maybe you have a little near-term weakness but absolutely the nucore ceo made an accurate comment. this shouldn't have been a shock to anybody there was a lot of prep ahead of this prebuying. you look at letter "x," u.s. steel, they're trading at a discount if you price it based on where spot is trading i look at it and say, is is there a little near-term weakness if the president doesn't go through with a full-blown tariff? absolutely but the rick to the upside by missing the upside trade, if he
does go through with a full tariff, there could be significant swing higher >> i agree with that i think the fundamentals in the industrial metal space look fantastic. i agree with a lot of what david has said u.s. steel has gone from 20 to 45 in a matter of three, four months if you look at u.s. steel capacity, we're already running around 90% i'm not going to get into what is clearly, to me, about politics i'll leave that. i would just say after the bush tax cuts, we know steel companies went straight up and then they twenty straight down i think there is ultimately an impact on demand and i think there's an impact on efficiencies look to the airline industry where people get very concerned about supply steel companies historically have been as poorly run on efficiency as airlines anyway, i think a good time to own reflation trades, i would be somewhat cautious on steel >> sounds like a little more trade than investment. it doesn't necessarily do anything, tim, to help out the pension situation. a lot of these big overhangs that were reasons people stayed
away from this group before. >> well, look, i think ultimately if you want to look at free cash flow generation, u.s. steel was the great story at 25 bucks. i think the company is being run better i think if you look at the dynamic in the industry, especially some of the specialty metals, these guys are starting to separate from the pack to the extent you can see knock-on effects for the whole industry good for them. a lot's in the price i'd rather be in copper place right now. >> see you guys at 5:00. by the way, you can catch the full interview with nucore ceo on "mad money. you have to watch tim, david and the rest of the "fast money" gang tonight at 5:00 p.m. eastern time. >> sharp, by the way they'll be ready by then general electric gaining 2% today, but still lower by more than 50% over this past -- other oh, this year. is this the beginning of a
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first, let's take a look at your financial plan and see what we can do. ok, so we've got... we'll listen. we'll talk. we'll plan. baird. shares of general electric taking a break from their most recent slide, gaining more than 2% in today's session. stock is still down 51% over the last 12 months as ge timely hit bottom? let's bring in william blair and
nick hamon, long-time guest on cnbc he says ge could climb as much as 50% by year end good to have you on, nick. it wouldn't make up for the 50% decline, but certainly a 50% move from here would be pretty significant. make the case. >> it's a small part of the way back, but basically the idea is at this juncture we don't see any adverse to impair future performance of the company secondly, the concerns about liquidity we think have been addressed. we tried to detail today, probably a bit misplaced the cfo repeatedly came out and said, they're not going to cut the dividend again they're not issuing equity they're not selling large assets i think with the current yield, something in the neighborhood of 3.3% or 4% and the market at 1.9%, you have downside
prediction on the yield. >> first of all, let me mention i have to do this. i have a couple shares from ge from the days when ge owned cnbc. >> me, too. >> it's in our 401(k) so we all watch this very carefully. it was just last may, nick, when jeff emmel told the world that this was a solid company, it's fine he's gone a few months later and john flannery is in panic mode because the cashflow is depleted so badly at that point. did jeff emmel lie to the world or was something else going on >> well, i think clearly the most egregious period of challenge for free cash flow generation was in late '16 that became evident starting in the second quarter of '16. the amount of receivable factoring by the finance subsidiary at the end of 2016 and many other factors lead us to believe that that was the most acute point as it relates to cash generation cash generation in the fourth quarter was actually better than
the company got it to. >> nick, the stock has certainly gone through these periods when it seemed finally as if it were washed out i would say sell side sentiment is very negative probably the fewest analyst recommending ge in its history, i'm sure, about a quarter of all analysts have a buy on it. what's the earnings run rate from here? do we hang our hat on the $1 a share for this year and how much can it grow from there based on the current business mix >> i think right now we have to realize the company is still going through the second year of major transformation for every aspect of its operations you have another $2 billion cost out. it's not going to be because it's long cycle businesses today, it's not going to be better than expected earnings or sales in 2016 or, for that matter, incrementally better in '19 but, rather, the free cash flow the guidance this year is 6 to 7, last year was 5.4 and we
highlighted three critical components from operations are likely to be 3 to 3.5 billion better and two other factors that will reduce cash taxes by a billion. you have an opportunity with flat earnings for possibly 5 billion or more in better free cash than last year which at 5.4 should get you closer to 9 to 10 billion and 5.5% free cash flow build, you're talking stock in dollars. >> i say isn't that interesting. as a shareholder, i say from your lips. thanks, nick. >> okay, thank you very much >> see you later. >> hasn't changed a bit in 30 years. we have breaking news on nordstrom. david faber with details what's going on? >> it's been an interesting afternoon with m&a let's start with nordstrom which rejected a $50 per share offer
to take the company private. this potential bid has been in the offing for some time in a press release that hit a few moments ago, nordstrom special committee of board of directors that was set up to receive this potential bid said that it's received it and rejected it. this indicative proposal to acquire the company for 50 bucks a share. the nordstrom family owns 21% overall of the company's shares. clearly the bid would be for what they don't own in conjunction with their partners. 50 bucks not going to do it. you can see where nordstrom is trading. no surprise that wouldn't do it. they say the special committee, that unless the management group is able to promptly and substantially improve the price it's proets posing to pay, the special committee intends to terminate discussions. last year, of course, there had been discussion about this potentially bid but they were unable to find the financing
necessary to move ahead with that bid coming back this year and actually making the bid, but apparently according to special committee of nordstrom's board of directors, which is set up to represent shareholders unaffiliated with the nordstrom family, it's inadequate and substantially inadequate would seem to be the keys last night that's one piece of news we have this morning on nordstrom. we'll see -- this afternoon we'll see how it trades in the morning as well. >> you also have news on qualcomm as well some sort of filings >> you and i were talking about this this morning, of course, given so much the every of the lack information around this review/investigation in an 8k filed by qualcomm around 4:00, we got more information that i think is important for investors to digest in terms of those interested in broad com pursuit of qualcomm.
according to the interim order we have as a result of this filing from qualcomm, the committee says for foreign investment in the u.s. that reviews these on a special -- on a national security basis, has determined based on information provided to and analysis by agencies to date that there are national security ricks to the u.s. that arises as a result of and in connection with the proposed acquisition of qualcomm by broadcom. what's important here is this -- this is not -- and i checked with people who are experts, as you might expect this is not just the review period 30 days long under which they decide whether it wants to begin an investigation of a deal this is actually the investigation. in the interim order they say it's review and investigation. the investigation is already occurring as to whether this is going to be a national security issue for the u.s. the order signed by the secretary of the treasury, steven mnuchin importantly, if broad com were
to, for example, try to say, let's get redomicile to the u.s. fast faster than we thought, they would have to give notice to them before taking any action towards redomicilization, that's their word, not mine, in the united states while the order is in effect. it would appear, michelle, and this goes to the conversation you and i were having earlier on "squawk on the street" that we'll get potentially a decision based on this investigation. certainly it would seem they're also saying to broadcom, don't think about doing something unless you give us notice five days ahead in terms of redomiciling this could be important here, perhaps more important and significant than appreciated this morning when we first heard about this news and qualcomm delayed its annual meeting. >> wow a lot of news there, david while you were talking, by the way, there's a new ceo at 3m
t micha micha michael roman has been named ceo. he's been a guest with me and with jim cramer on "mad money". >> i can't see the after market trading on that company stock. it would be interesting to see it's unchanged, i'd told, right now. it may just be closed. >> so, other news you'll have to cover tomorrow, david, on "squawk on the street. thanks he's dumb-founded. nothing to say about that right now. so, there's more we've had all kinds of news today. after the break, we're headed back to mexico city for new headlines out of the concluded nafta negotiations beel we'll be right back with more "closing bell.
breaking news on the nafta negotiations, steve liesman has the details live from mexico city steve? >> thanks very much. the u.s. trade representative who was negotiating today with mexican and canadian counterparts held a briefing for reporters. here's my pad with the pen, he said that he needs to get something done in the next month or two and he said it's possible the talks could be suspended because of elections both in the u.s. and in mexico do in his public remarks and this pen-and-pad briefing, a big push by the united states to get something done in the next month or two he said he consulted with the president on these tariffs he said they are "an incentive to get a deal done" but he said they were coincident with the nafta talks. he said the u.s. is making more headway with mexico than canada. and i want to play for you this
sound we have from christa freeland, the canadian economics minister standing on the podium with mr. robert lighthizer about the issue of those steel tariffs, here are her strong words there. >> as a key norad and nato ally and the number one customer of american steel, canada would view any trade restrictions on canadian steel and aluminum as absolutely unacceptable. we will always stand up for canadian workers and businesses, should restrictions be imposed on canadian steel and aluminum products, canada will take appropriate measures to defend our trade interests and workers. >> let me toss it back to you, michelle, apologies when the signal bounces halfway around the world here to mexico you sound a lot like kelly, michelle, back to you. >> they are concerned about the election down in mexico, right they have a raging leftist
running for office he doesn't command a majority but he does have a plurality right now. >> see italy. >> and there are a couple trips to mexico you being the international reporter but lighthizer mentioned the u.s. election that, hey, there could be changes to the u.s. congress either in personnel or the party in charge. they're all about getting this deal done, canadians are about getting a deal done they think is fair. lighthizer noted in his public comments that only six of 30 chapters are done. he did acknowledge that maybe towards the end of the deadline there's another round scheduled for next month that they may speed up and get things done but it seems like there's a long way to go. there was talk that the mexicans compromised on the auto issue but that the american counterpart was called back to
the united states to deal with the steel and aluminum tariff issue so there's an issue with personnel, at least for now. >> thank you, steve. trying to do too many things at once. >> so much going on there. speaking of which, another big week for retail earnings, we'll preview what's coming down the pike next. >> coming up on fast money, one of the most controversial voices in the immediate whmedia space s only one thing disney needs to do to stand up to netflix. he'll say what it is in six minutes. at&t gives you more for your thing.
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news alert from the senate, ylan mui has the details mississippi senator thad cochran announcing his resignation effective april 1 saying his health has become an ongoing challenge. cochran is chairman of the powerful senate appropriations committee. he will remain in the post through the next government funding deadline of march 23 but unclear what this means for the republicans '51 seat majority in the senate meanwhile, also on capitol hill, there is ongoing pushback on president trump's tariffs. house ways and means committee chairman kevin brady is circulating a letter among his republican colleagues urging the president to adopt a tailored
approach to transfers that would exempt fairly traded aluminum and steel products while still allowing tariffs on unfairly traded steel and aluminum products it's unclear if that will be enough for the senate. orrin hatch also telling reporters he is not a fan of tariffs period, with or without exemptions and he feels it would be a tragedy if they went forward. back to you. >> a lot of division within the republican party on this. >> thank you, kayla. >> we've got some big retail earnings on deck this week, including target, ross stores and urban outfitters tomorrow and costco and dollar tree all reporting on wednesday what do you think? >> it's interesting. stocks up from 55% to 75% since thanksgiving that's the tax cut, it will bolster earnings but that's a big one for the retail revival story so that's probably going the one that colors sentiment if any of these reports do. >> those holiday sales, we're
still waiting for those to come up it's been a wild hour for breaking news. first 3m announces a new ceo, michael roman will take over from inge la from inge toolan the company says it will terminate talks if it doesn't receive a higher offer >> and robert lighthizer says president trump's tariffs on steel and aluminum are an incentive to get a new nafta deal done. he is making more headway, he feels, with mexico than he has with canada. >> i don't think they think it will change quarters but the market's attention span isn't that long right now. we're starting around and that's
the rule that will continue for a while. the s&p got back into a zone that has capped. >> it very good, thank you, michael, see you tomorrow someti sometime that's it for "closing bell. "fast money" begins right now. we start live from the nasdaq market site overlooking times square i'm scott walker in for melissa lee. tonight on fast, boyne breitcoig 40% in the last month but there's another cryptocurrency everyone is talking about. we'll tell who what it is and what has everyone so excited one of the biggest and most controversial media voices on the stretch, rich greenfield is here and he says get this, disney can bea