Skip to main content

tv   Closing Bell  CNBC  May 17, 2018 3:00pm-5:00pm EDT

3:00 pm
>> more babies can help in a lot of ways. >> birthrate is down to a 30-year low. >> right that was the economic story behind this baby video >> what are the babies going to do other than the vomit there? >> eat >> they are going to eat, how? home delivery. still rocking. >> thank you for watching "power lunch," and "closing bell" starts right now >> welcome, i'm david faber in for wilfred frost in a day filled with news we have new tensions on trade that investors are paying close attention to rising inflation, 3.1% yield on the 10-year, and don't forget rising oil prices. >> reporter: we're in los angeles, shares of cbs fall hard after a judge ruled against the battle, and we have breaking details in the fast moving story very soon. >> reporter: in san francisco, a big setback for smart home
3:01 pm
service after a massive system failure. >> reporter: i'm leslie picker in new york, a major shareholder advisory group unfriends mark zuckerberg in the battle between shareholder and dual class stock ceos i'm kelly evans, focusing on small caps hitting a new record high, and why the ceo of bumblebee tuna landed in hot water. the "closing bell" starts right now. >> you know, it's a different energy, faber. i felt like i was too intense because you were - >> i didn't know what to do there. i have not done one of those in a while. that long open of a documentary. >> i'll take your word for it. >> a lot of walking here in this show >> there is. more to come thank you for being here >> of course >> david faber in for wilf today. we'll get to everybody and the stories mentioned in a moment. a check of the markets, 200-point swing in the dow
3:02 pm
today, down 41 points along this weakness coming just in the last couple minutes, talking about the trade impact that could have fed into that, and s&p and nasdaq lower, and russell 2,000 at another intra-day high. >> we start with comments from the white house, the president actually offering a lot of comment when it came to trade. eamon javers has the latest. >> reporter: the president lowering expectations here in terms of what can be accomplished in the on going trade negotiations with the chinese, which are happening in washington right now here's what the president said moments ago. >> well will that be successful? i tend to doubt it the reason i doubt it is because china is spoiled, european union is spoiled, other countries are spoi spoiled getting 100% of whatever they wanted from the united states, but we can't allow that to happen anymore. >> reporter: so the president there saying he doubts that this
3:03 pm
negotiation will be successful, ultimately, lowering the expectations for it. the president also suggesting there that some of the hiccups in the negotiations with north korea and the fact the summit with kim jong un is now apparently on hold or at least suspended on the nation right now, that, he suggested, has to do with the fact that the chinese are influencing the north koreans because of this trade dispute, so we'll wait to see how if plays out the president lowering expectations there, but if you want to read the tea leaves, david, i just talked to a white house official who said that all indications are that the president will, in fact, meet with the chinese vice premier who is here this week as part of the chinese negotiation. that meeting happen on the bubble, but not saying whether or not it will officially happen, and officials saying all indications is now the meeting is on for later today. waiting to see if that happens, another investigation.
3:04 pm
>> you made comments about zte i mentioned that because it's been a part of this, the no. 4 cell phone producer here in the u.s., had to put all work force out of work for a while there, and any comment overall? >> reporter: a lot of division in the economic team the president said today it was jinping himself look into the issue. that's the first time we heard that, indicating the president and xi were probably talking on the phone over the weekend before the president issued that tweet about zte saying too many chinese jobs were lost because of the issues around that. the white house has been sort of back peddling ever since then, and stirred up a real division inside the economic team, particularly between peter and steven the nevaro camp feels the
3:05 pm
mnuchin camp is too willing to cut a deal with the chinese and not worry about intellectual property and damage to the united states, but the nevaro could be too provocative and hurting the stock market, so all of those divisions, really, e resulting in a series of personal squabbles that we've seen among the economic team in recent days. a lot of tensions here between the united states and china and among the u.s. negotiating team as well. >> yeah, and the president sort of, you know, casting some doubt on whether there's a deal. that also feeding into the market's weakness here thank you. that's one of the big stories today, and one of the others, glad david's here today, latest developments on cbs and viacom julia? >> a delaware judge ruled against les and for redstone in the national amusement saying grant a restraining order
3:06 pm
against red stone setting back moonves's attempt to reduce her voting power through a special dividend saying it's a vindication of the right to protect its interest as we intend to demonstrate the case, the action of cross-examination and the special committee is a brief of duty and show no regard to the significant risk posed to cbs and its investors. cbs responding, quote, the ruling clearly recognizes that we may bring further legal action to challenge any actions by nai, that we consider to be unlawful, and we will bring such action if needed cbs also saying it's moving forward with the plan for a board meeting at 5:00 p.m. tonight at its new york headquarters, and it's leaving an the agenda for the meeting, the dividend deluding redstone's shares she's thought to control about three of the votes, and because just yesterday redstone moved to change the by laws to require
3:07 pm
90% majority vote, that dividend is unlikely to be approved what's for sure, though, this legal battle is far from over. guys, back over to you >> all right, julia, thank you, and, yes, david, coming up against the 5:00 p.m. deadline today so there's a couple hours left to -- >> yeah. well, as julia said, they'll get together it's not really going to amount to much. >> huh >> now, it is unclear in the bylaws themselves if they took effect immediately or wait 20 days on the change they made yesterday. given the judge's ruling today, whatever happens today with the meeting and the board is just about ceremony it's not going to actually do anything from the ground, and the question i've gotten most often today since this broke, what comes next? what now what about viacom and cbs? getting back together? will she get rid of board directors? get rid of moonves i don't know the answer. she was determined to see the companies put back together. in 2005, they were separated and
3:08 pm
tried once before it get back together, did not get far, but determined to see it through, tensions have got higher than we could have imagined. >> high stakes game for moonves. now that the delaware said, sorry, that's not going to work, is he done >> no, he's not, because they can come back to delaware. could go -- the judge ruled there are claims they could potentially pursue, but the question is, over time will redstone replace directors and moonves and possible after all the vi trback and forth, can sin and whether they are a part of a combined company >> don't expect any resolution over hours >> days, weeks, and perhaps months, kelly. >> wow hey, as the companies are in the middle of this, there's a lot in
3:09 pm
the meantime hanging on the outcome here >> absolutely right. >> cbs shares down 4% today. another corporate fight underway with approximaty adviser iss and facebook iss recommending that facebook investors withhold support from five directors including the ceo, mark zuckerberg, so leslie picker is here what a turn of events. >> the other leslie. the other leslie that's the proxy advisory firm with a message for facebook board, better corporate governance is needed, known as iss, urging investors to withhold their votes for five board members including zuckerberg and sandberg. that's out of nine board members total, so majority there iss says that its recommendation stems from the lack of a formal nominating committee as well as executive pay concerns, but it also in this report highlights the board's lack of oversight or what iss says is lack of
3:10 pm
oversight over user concerns for data privacy as well as the controversy over the company's dual share structure even if the shareholders withhold votes, they won't do anything because zuckerberg's vote is the only one that matters. they control three fifths of the voting rights. a year ago, they sought to take a step further issuing a third class of shares to maintain zuckerberg's control while depleting facebook shares, and there was a lawsuit, but it disappeared. they highlighted the company's dual class share something that hinders it, but this brings back shareholder power that comes with it. you see scandals like this, who is in charge of the company. >> at the same time, it's playing out poorly as we've seen now in a couple cases. >> potentially, shareholders need to be aware when they buy intoa controlled company, whether it is a facebook, a
3:11 pm
snap, where you have no votes, or a viacom or cbs >> we're headed that direction companies go public these days, and more and more frequently, there's little to know voting rights for shareholders, but they still buy in. >> other leslie, thank you very much leslie picker. now we have julie from north star asset management agreeing with iss and ross gerber who sides with facebook. ross, let me just start with you. why don't you share the concerns here >> it's not that i don't share the concerns, but when you buy a security and doing your research and see what your voting rights or rights of the share class that you own choose to buy it or not. nobody forces you to invest in facebook, but zuckerberg controls the company whether you like it, nobody's forcing you to do it we were unhappy with the things that went down, so we sold the stock. that's the appropriate action if you don't want to be involved, and we still own stock, and it's
3:12 pm
zuckerberg's company >> julie, at the same time do you think -- well, it is tricky. if you want to buy into these companies, you have to take the governance with it, right? i mean, what else can a potential investor really do >> well, you do know, you know, it does matter what the share structure is, let's just put it that way, but we also hope that, you know, that people on the board are going to have some kind of oversight over management, and in the case of facebook, you know, obviously, that can't happen. i mean, part of what's been going on now and what happened with cambridge analytica happened because of a poor gove governance structure peter teel, up for re-election on the board, was a board member and founder of cambridge analytica, and so and then, you know, the connection between what happened and the storm of bad publicity on facebook caused
3:13 pm
people to share shares it's something that could have been completely prohibited or by, you know, strong board gove governance >> it was the business model, though >> i agree with that the business model was using people's private data and selling it to advertisers, essentially, and profiting from the sale i totally get that >> right that's all they did. >> no, that's not what they did. what happened was -- >> they sold to everybody. >> no. what happened was jared kushner came in looking for ways to try to use facebook to enhance the election of donald trump so he went to peter teel and others in silicon valley and said - >> before we bring up the 2016 election, one second, should -- we've seen this in the past, hong kong, for example, had a standard, look, you want to list with us? it's one share, one vote, you
3:14 pm
know, the wild west americans, they can have their own rules, but now hong kong is changing its posture on that. should somebody else, whether it be exchanges, hold the companies more accountable >> i think that's an interesting way to look at it. so, first it comes to the investment banks that actually create these securities in the first place, really, only to the benefit of themselves and current shareholders, and they really use the public as sort of a whipping ploy for bad securities i mean, look at snapchat, how much money people lost, and so i think there should be structure that looks at this and says, you know what, this does not really fit what a public company should be like, and you should just stay private, or here is the standards that we have for public company stock, and i do think there's something to that because i don't know that i agree with the structures, but i understand what i'm getting into >> right >> julia -
3:15 pm
>> that's actually -- i agree with that. i agree with the fact that it's -- yes, go ahead, go ahead. >> thank you yeah, appreciate that. before we wrap up, is it going to have an impact at all withhold campaigns are for show, so to speak. does facebook listen and pay attention and care about the outcome? >> no. >> ha-ha >> and the reason, you know, no, because what's going to happen, go back, filing the shareholder resolution asking for one vote per share since being a part of that in 2014, okay and we were worried about that because we were worried about poor governance, okay? here we are in 2018, an we see what happens so, yeah, while it's totally true that the, you know, the banks that put together the deal when facebook was public could have had a since of ethics, we know in the country that banks do not have a sense of ethics. it's about the dollar and bottom
3:16 pm
line you guys - >> they can't say no >> uplifting companies >> she's not crazy she's not crazy. >> i'm going back -- >> i agree with her on that. >> i'm - >> julie - >> i'm going back. >> would you share facebook shares >> no. i'll tell you why i won't. i won't sell the facebook shares, and here's why because it's - >> go on >> if we don't stand up and talk about the incredibly important issues that are happening right now among, you know, privacy and communication among people, we're giving over control to the companies, and we can't do that anymore. >> all right >> i mean -- >> good discussion guys, thank you. >> we own the stock because it keeps going up, and that's the reality. >> well, which is why they are going to entertain the structure for now. >> right >> thank you, both >> thank you >> on facebook there that was interesting >> yeah, it was. >> wow >> i got to watch this show more often. munster looking into apple's
3:17 pm
future and breaks down the tech giant as a service part four of the potential new product categories including ar wearables, original video content, and autonomous vehicles >> is this the future of apple this is your way of saying, okay, big, exciting, idea in services that helps take apple to, you know, what next price level what do you think? >> a little different. i have to take a step back every five to ten years is a pair dime shift about how investors think about the apple story. the current paradigm, get excited about the next three iphones this fall followed by anxiety of the guidance of the outquarter there's a roller coaster ten years ago, anticipation of the new product categories, the tv, the watch. the next paradigm is apple as a service. pun aside, the reality is this is more than a services business it's four pieces the most controversial piece is
3:18 pm
our belief that the iphone is going to be a stable business. we're not going to have to worry about these quarter into quarter. the last six quarters, the iphone is up on average 2%, a stable business. that's one of the biggest pieces, and then we believe services that businesses is important, and the buyback is probably much bigger than what people think, and, lastly, lastly this time, new product categories all right. what about services? i mean, investors are starting to buy into this higher multiple scene here, getting larger and percentage of the overall. how big can it get >> 14% of revenue today. probably going to grow at 20% the next few years, getting it to about 20% of revenue in the next three years, and if investors step back and think of them as a stand alone business, a staff multiple that it operates like, the business, alone is worth $400 billion. hard to wrap your head around
3:19 pm
the numbers, but that's how big it can get >> is that true, so, for me, i get the services thing, i have the iphone now, but apple is late on the next product category, which is voice home pod is not doing much, and if all the services are predicated on you having the device and that kind of device is the future, do they have a problem? >> they don't. the reason is that the real substance of their base, they have 1.3 billion active users, 800 million are iphone if they maintain that base and quick math on that, if they continue to retain 90% of those upgrading every three years, they grow at 2% in perpetuity. it's not about the home pod and -- >> as long as i keep and stay part of the ecosystem. >> right the hardware, they continue to make money from that, making money from the services powering the massive buyback. i have to put the buyback in perspective quick. viewers, go to bed with the theme of net cash neutral. >> you want them -- that will
3:20 pm
put them to sleep. >> net cash neutral. this is a significant deal that i don't think that investors are fully understanding. what net cash neutral is apple's going to have the same amount they said they'll get to this point. same amount of cash as debt means they have to unload $145 billion beyond the $100 billion. >> okay. >> put that to work as a buyback, that's adding 16% generating 50 being a year >> taking heat over that, people already in arms, and the buyback is so bad for the country. do you still agree why -- >> i don't even know how to respond why that's bad for the country, but at the end of the day is that they generate, last year, they generated 63 billion dollars from operations, and gave 47 billion to investors, and they are just going to turn that crank higher, and i think there's going to be a paradigm shift to the apple as a services team >> all right sounds like people can count on more capital returns >> definitely. >> gene, thank you very much
3:21 pm
>> thank you >> gene munster. >> 40 minutes before the closing bell the dow and s&p in closing territory. >> did you do bell to bell >> i did i'll probably say "opening bell" i'm afraid >> stay right there. if you have nest in your nest, you may have wanted to fly the coop last night. the smart home system went on vacation we'll tell you about the big failure and whether you can trust these things next. plus, the latest on the sudden eruption of hawaii's big island see what's happening in paradise when the "closing bell" comes right back ♪ that it will only get better ♪ you and me together ♪ through the days and nights. ♪ i don't worry 'cause ♪ everything's gonna be all right. ♪
3:22 pm
♪ no one, no one, no one ♪ can get in the way of what i'm feeling. ♪ ♪ no one, no one, no one ♪ can get in the way of what i feel for you. ♪ ♪ you, you ♪ get in the way of what i feel for you. ♪
3:23 pm
3:24 pm
welcome back, dow lower by 60 points, and s&p down two, and nasdaq down ten, and russell up two-thirds of a percent, another intraday high. google's nest suffered an outage raising concerns about what happened when internet connected thermostats, security systems, smoke alarms go offline. with re we are in san francisco with the story. >> reporter: it is one of the
3:25 pm
pitfalls of being more connected and it's easier to become disconnected for several hours last night, nest users were locked out from their devices remotely happening while many much us were sleeping people could still use their smart devices manually, but unable to control their locks, thermostats, cameras, doorbells, and smoke detectors remotely on the app or on the web. the company says it was a network issue, saying the problem temporarily prevented nest customers from accessing their devices using the nest app. google owns nest, experienced this in the past with an outage in january of '16 in the dead of winter when people's thermostats turned off, sparking angry users to vent on social media about being left out in the cold this brings up the question of vulnerabilities of the smart devices and how secure they really are as for its parent company, alphabet, nest is, of course, a small product category amongst an array of products, and for
3:26 pm
impact on the bottom line, it's not a deal mover back to you, kelly >> thank you not yet. joining us to discuss more about this is tech and social media expert, lance, welcome, and, listen, i mean, what i just had the power go out for a harrowing 27 hours with the storm that came through, that reminds you how many systems are connected and dependent on wifi, whether it's because of a power outage or because of a system malfunction like nest, how vulnerable have we become? >> the more -- obviously, the more vulnerable we are, but, i think just a reminder that all of these smart devices, you know, they just don't sit there connected to the internet, and if you're on the same network, you are connected to them. they are all connected to the internet, beyond your wifi that's how they talk to each other. this whole system, we got this whole network going on and do not realize, we are so used to it, step back, oh, it's under
3:27 pm
control, but, you know, you have the network issue like this, and suddenly, two products in the same room can't talk to each other or talk to the app on the phone even if you are sitting there, so, yes, that can be frustrating, maybe scary, but remember, the power of these devices because before this, you couldn't check on your house from london or adjust your thermostat i could pick up this phone right now and turn on the a/c in the house. that was not possible before, so, yes, we have a list, but we have a much bigger benefit >> so, yeah, these are great things, but we're only at the very beginning of network devices, lance, i mean, a few years out from now and 5g taking off, you have all sorts of things network, not to mention autonomous cars. i start to wonder if there's an outage, a security breach of some kind, a lot of good things can happen, but a lot of bad things can too, can't they >> well, there's always redundancies the devices can be controlled locally, and if you are talking
3:28 pm
about 5g in cars, cars talking to each other on the road, oh, i see you, you're there, internet is going to be out, they have redundant and local systems sensing the other car. it's always going to be a fast system nobody is going to put 100% reliance on the cloud or the internet because that would be a disaster, but nothing is going to stop the infiltration of the smart connected devices. >> are there rules about this, lance or is it up to the companies to realize, hey, we need to build in layers of backups here because nest is one of the first movers and better operators, but people will be rushing into the field happening you a cheaper, perhaps more vulnerable system. >> right as far as i know there's not rules, but programmers understand redundancies. that's what they build yes. you have to be concerned about cheaper systems that promise more and give you less people have to be smart. look, you know, i was looking at the nest fact pages, the
3:29 pm
questions pages, and they all talk about what happened if you lose connectivity and how you can still control the devices so it is going to be up to the consumer to do extra research and ensure they have devices that still work in the event of an outage. >> yeah. and, meanwhile, get that a/c going so it's cool when you're home tonight >> i'll do it now. >> ha-ha, lance, thank you very much >> my pleasure all right, time now for a news update, and for that, sue herera is back at hq hello, everyone. president trump says he was referring to ms 13 gangs with yesterday's comments about animals at a white house immigration round table. at her press briefing today, sarah sanders defended his description. >> frankly, i think that the term "animal" does not go far enough and the president should continue to use his platform in everything he can do under the law to stop these types of horrible, horrible, disgusting
3:30 pm
people >> arab's foreign minister held a meeting in cairo condemning the relocation of the u.s. embassy in israel from tel-aviv to jerusalem, but not clear whether they would take further action in france, men who whistle at or sexually harass women on french streets now face fines up to $885 after lawmakers in the national assembly approved tougher legislation to combat sexual violence. the french president macron said the bill is meant to assure women are not afraid to be outside. that is the news update this hour, kelly, david, back downtown to you. >> i don't know about this $900 fine for this can't just be, hey, knock it off? >> i think they tried that it didn't resinate with parts of the french population, apparently >> all right i don't know what to think about that >> remember that video years
3:31 pm
ago, a young lady walking in manhattan and how much she was harassed in one walk >> i know, just shame people into it, like, hey, don't be a jerk, i don't know >> you'd think >> other people on this site should do that >> i'll have my daughter carry a big bat. >> there you go. >> full length - >> my husband would agree with you. >> yeah. >> oh, sue, thank you very much. >> see you next hour >> next hour, sue herera as you mentioned, lower, and the dow keeps sinks, down 86 points, s&p down 5, russell hanging on positive territory, and shares of jcpenney after a bleak earnings report this morning contributing weakness to weather, down 11%, the shares are, in sharp contrast to macy's being up nearly the same amount yesterday. less than a half hour to go. we'll see if we mount a comeback stocks started selling off after 2:00 p.m., president's comments on trade not believing there's a deal with china.
3:32 pm
semis and suitors in focus, nordstrom reports earnings as well plus, an update on the explosive eruption on hawaii stick around we're back after this.
3:33 pm
there's nothing small about your business. with dell small business technology advisors you get the one-on-one partnership you need to grow your business. the dell vostro 15 laptop. contact a dell advisor today.
3:34 pm
welcome back, hawaii's kilauea volcano undergoing a massive eruption today, and we
3:35 pm
are live to learn what's going on, miguel >> reporter: hey, guys, so we know that eruption happened early this morning pre-dawn at 4:00 a.m., so we were able to actually see the eruption physically, and because it's overcast and cloudy here, we don't see the plume of smoke and ash we were told went up to 30,000 feet, some six miles high now, there's two main events going on here. there was a steam explosion that happened here at the crater early this morning, and then about 15, 20 miles down in the residential neighborhood, that's where there's been volcanic activity over two weeks with more than 20 fissures opening up, massive cracks in the earth that spit out lava and toxic gases. we were at one of the fissures today, and there were guideysero fire shooting into the air, loud explosions, the earth shaking, and so, clearly, some activity
3:36 pm
and volcanic activity happening 20 miles away. again, first concern here, though, this morning, was the massive plume that shot up 30,000 feet. that event, for now, seems to be over, but geologists warn we could see several more of those types of explosions, even larger ones or that could have been it. we're simply in a waiting pattern here they were anticipating a big explosion like we had, but the question is, is there more today and in the days to come? >> has activity there ground to a halt this? how disruptive is this for everybody? >> reporter: yes, we have that big explosion here this morning, and it was pre-dawn so not a lot of people were around and the national park is close no fallout from that we are bracing for ash in communities. we have seen ash on vehicles in some areas, but for the most part, as people have not been affected, there's a warning issued to local residents to stay indoors and keep windows rolled up that are downwind of the volcano, but mostly, we have
3:37 pm
not seen significant fallout from that other than schools shut down, but, again, 20 miles from here, it's another scenario with lava oozing from the ground, geysers of fire spitting up in the air, and toxic gases depends where you are on the big island, you are dealing with two volcanic events. >> wow miguel, thank you for joining us, dramatic we'll see if anything else happens. for now, thank you very much all right. we have 43 minutes to go before we get to the closing bell, and the s&p in negative territory boy about .17% you see the nasdaq lower as we have been saying, small caps showing light today up more than half a percent. up next, we'll have the top strategist lay out what he sees as the biggest risks to the market later, something fishy is going on in the package seafood industry as the ceo of bumblebee tuna is charged himself in a price fixing scandal that story and more when we return
3:38 pm
the governor has declared a winter weather emergency... extreme risk of burst pipes and water damage... soon, insurance companies won't pay for damages. that is, not if they can help prevent damages from happening in the first place. at cognizant, we're turning the industry known for processing claims into one focused on prevention with predictive analytics, helping them proactively protect the things that matter most. get ready, because we're helping leading companies see it- and see it through-with digital.
3:39 pm
3:40 pm
i think we'll see wilf tomorrow, he's going to cover the big event, the grand event, peter is very excited about it
3:41 pm
joining our closing bell exchange is peter costa, john burke, president of burke financial strategies, and our own rick santelli from the cme in chicago so, what do you think here the dow's down 90 now, going back to what the president said about trade a short while ago? >> i think it's a reaction to that, but, you know, we're in this trading range, last five days, last six days, in fairly narrow trading range look over the last three months, it's been about 13 hur00 pointsn the dow and 1800 on the s&p. i think we're in that pattern for a while. the other thing is, you know, i read somewhere people start to talk about we're in a potential bear market showing up, recession. a bear market never starts with the russell hitting an all-time high never happened, will never
3:42 pm
happen jo does that give you comfort >> interest rates, big deal, 3.11% on the 10-year treasury, biggest number since 2011, but look what happened in 2013 when rates did just tick 3%, the market up over 30% and one of the things i'm encouraged by is, and much said about this, the yield curve is getting flatter, well, so far in the month of may, yield curve has gotten steeper again, and there's another indicator, the stock market has never come to a halt when the yield curve was getting steeper. >> rick, you want to pick up where the yield curve left off >> yeah, no, john set the table perfectly. call ourselves the burke society. listen, the more distance that the long end spreads out, the happier we should be because if you think that rates going up under the right conditions is a good thing for equities, for the
3:43 pm
dollar, the economy, middle, upper, and lower class, i agree. the long end spreading out here and doing what it's doing is a good thing i think that the worst scenario, of course, is that rates are mostly propelled by the fed, which would be more of a flattening bias, and, you know, some of the data points today were good. i know philadelphia is not the end all of economic releases, but it was solid and orders were solid, and now we don't have any data tomorrow, we'll have supply against next week, but i'm very impressed. the 10s and 30s, as john said, extend the run, and for 30-year bonds, it's the summer of '15, summer of '11 for 10s, and the 2, 3, and 5s are lazy, not much, couple basis points below yesterday's closes, and yesterday's closes were historic for the short majorities the dollar index continues its nice run, slowing down a bit, but that's the pattern with rates and the dollar on their up moves. they seem to make progress through a certain level,
3:44 pm
consolidate, go higher one thing they don't seem to do lately is have big retracements. >> peter, you know, curious about trade again because this is a little bit of a move, but, you know, take those comments in isolation, we don't think we reach a trade deal with china. weeks ago or months ago, it would have seemed that would have had a much larger reaction. >> first time you say anything that's needle moving, the needle will move. you say it four times, you know, three months later, a month later, it does not move it as much people are concerned about it. i think investors are a little concerned about it, but i don't think -- i think that cooler heads prevail. i really do. >> you actually think there could be a deal? >> i think there's going to be some sort of compromise because i don't see anybody winning. trade wars are the only wars not won. >> the president does not believe it >> he doesn't, i understand that, but, you know, this are advisers that are, i think, are going to be more vocal in going
3:45 pm
in here saying, look, this is going to be -- this could be extremely detrimental, not just to the chinese and world economy, do not play those games. >> sell stocks if tensions with china on the trade front eheat up >> i agree with peter. what we are most worried about is not interest rates, earnings fantastic, but i think that's really the key here is where do we go from here when the trade wars and tariffs, which are clearly bad, but, you know, great i think in a way, you can see trump throughout the olive branch with zte earlier this week, and see more of that, and it's not just china, you know, europe is upset what we are doing with the steel tariffs there, and, of course, we got n nafta too. it's all bad if we get them out of the news and settle it, this is the way it works, these are the tariffs r a markets go higher. >> before we pick them, weren't
3:46 pm
they more bad in the past? i don't know, the market is smarter. everybody's talking about trade. the president's a negotiator it's not about his advisers or what any of the old foreign policy heads think because they failed in the past the fact is, it is not fair. in the past, so, a trade war, we can't lose, we are losing, i think the market looks at it like there's one man that's doing the negotiating, all the rest is sthere, and for now, there's confidence in that one man. >> a quick last word on that, john >> i disagree with that. i believe if the united states were to take a unilateral appointment of view that we're going to free up trade and even if other countries were to erect trade barriers that way, we benefit. it makes you more competitive as a country and find where you have competitive advantages. trade wars are bad and bad for
3:47 pm
everybody involved >> would you - >> what is a trade war >> do you think we've been harm over the last couple decades - >> what is a trade war what have we been in we're in a trade war >> they are exaggerating the issue. first of all, the economy, wrestling me in the dark in this a statistic i like, if you add up all the trade deficit and the trade surpluses in the world, it comes out to be a trillion dollar deficit it should be 0 that tells you the economists really don't know what they are talking about. >> you're right, john, you're right, using the trade deficit is the metric to get into this problem is stupid. they should stop doing it, okay, but the issues they are trying to solve are very real >> you tell that to your friend mr. nevaro, then >> we don't need to, the voters told us. the voters vote for somebody that's going to do something about it no matter what the experts say. >> i love when he ends on those
3:48 pm
whole zen notes. >> yeah. >> great stuff, guys, thank you. rick santelli, john, and peter all right, 13 minutes before we get to the closing bell for this thursday. we are still down on those markets. coming back a bit on the s&p, as you see there, but overall, down, and the russell in positive territory when we return, mike santoli has a stock story. who today, mike? >> yesterday, news on how amazon uses market power to help people get into whole foods we have another maneuver in the grocery wars details when we come back. at&t provides edge-to-edge intelligence, covering virtually every part of your retail business. so that if your customer needs shoes, & he's got wide feet. & with edge-to-edge intelligence you've got near real time inventory updates. & he'll find the same shoes in your store that he found online he'll be one happy, very forgetful wide footed customer. at&t provides edge to edge intelligence. it can do so much for your business, the list goes on and on.
3:49 pm
that's the power of &. & if your customer also forgets socks! & you could send him a coupon for that item.
3:50 pm
3:51 pm
welcome back, i'm mike santoli on the floor stock up a 1.5%, it was up a dollar more, in fact, earlier today, following news that kroeger entered into a deal with a u.k. company to do delivery of groceries here in the united states, kroger has an exclusive deal with the company, built in lo gij
3:52 pm
logistics warehouses, get groceries to the customers they have urgency, investing behind the idea to compete with amazon and whole foods and walmart to get more market share and try to help the customers hang on to the business. as i said, stock up a percent and a half today, down 7.7% year to date, so has more ground to make up. see if the street remains skeptical, long term for kroger or the start of a comeback when we return, we'll have the closing countdown. mom you called?
3:53 pm
3:54 pm
oh hi sweetie, i just want to show you something. xfinity mobile: find my phone. [ phone rings ] look at you. this tech stuff is easy. [ whirring sound ] you want a cookie? it's a drone!
3:55 pm
i know. find your phone easily with the xfinity voice remote. one more way comcast is working to fit into your life, not the other way around. welcome back, earnings after the bell, applied materials and nordstrom to name a few. >> according to kensho, they moved an average of 3.9% up or down after earnings, and nordstrom 6% move after earnings each quarter >> bigger swing. >> yeah. >> more volatile they almost went private >> they rejected -- special committee rejected the offer from the nordstrom family, that's right >> market conditions >> price >> no reaction, thoughts aerft that you stayed long enough
3:56 pm
but, first, the closing countdown. that's after this.
3:57 pm
let's get started. show of hands.
3:58 pm
who wants customizable options chains? ones that make it fast and easy to analyze and take action? how about some of the lowest options fees? are you raising your hand? good then it's time for power e*trade the platform, price and service that gives you the edge you need. alright one quick game of rock, paper, scissors. 1, 2, 3, go. e*trade. the original place to invest online. welcome back, i'm david on the floor of the nyse, counting down to the closing for thursday, and trades dominating the discussion late in the day after the comments from president trump. one name i like to keep an eye
3:59 pm
on, given, of course, the events area, is nxp, but it's become a bouncing ball for sentiment on, whether we reach a deal with china or not reach a deal with china, and the stock, of course, down today also got the cbs file, getting bigger and bigger, bob pisani. what else is going on today in. >> the minute the president says, china negotiations, are they successful? i doubt it dropped ten points immediately >> not that big a reaction in some ways. >> well -- >> take in the comments a month ago -- >> it would have been more >> yeah. >> people are understanding these are negotiating ploys for -- it's still shocking when you hear it, and, of course, when it gets talking about president xi, great friends, optimistic, it was a v we lost ten points and gained ten points back. fuelling that estimate, trade, high oil, all that matters, big
4:00 pm
international company down 9% today, and earnings came out, high oil kills them. let's move the goods, price concerns, there's a good example it does impact >> all right that'll do it for me over here over to kelly for part two of the "closing bell. >> thank you, david, welcome, everybody, i'm kelly evans, sto stocks going out with a decline, dow dropping 55 points r and the s&p, and, by the way, dow and nasdaq down a quarter of 1%, and tenth 6 a percent drop for the s&p, shedding two points, 2720 there, and russell 2,000 with a half percent gain of nearly 9 points, 1625 puts the small caps at an all-time high. it's been a remarkable couple days and run for them bolstered by the strong dollar, up again a little bit today
4:01 pm
we'll talk about that today, move in interest rates, trade stuff everyone was talking about, and we have a pair of big names reporting earnings after hours today. josh lipton covering applied materials and results from nordstrom when they cross. see you in minutes joining me now is michael santoli and stefanie link, managering director, and barbara, senior portfolio manager at yorkbridge wealth partners, welcome, everybody topping the dow was coca-cola today. more on that later in the program, and costco trailed, but the rival is going to file to go public >> that's right. >> i don't know if that was enough - >> one of the old deals to get out of door, sure. >> how they leverage this one? but nector therapeutics lagged today, so, mike, what do you think of it? you know, it was a positive session this morning before turning lower. >> you know, more stocks up than down really thought it was a flat
4:02 pm
day, although, we have been flying for a couple days now at very low speeds, so, therefore, like every bump is a big deal, but reality we have been holding our ground a literally in the last couple weeks, but the economic data, we entered a phase where it is boringly strong. every number, yep, ratifies what we knew, and small cap strength reflects that, plus, people were under invest ted >> is that frustrating for you they need the big guys, and largely has been a big cap story looking at the strength. a huge tech company, but now it's the russ,000 with the glory. >> well, i have a value vent and value is outperforming it's only the last five days relative to growth, but if you think about this year, growth is outperformed value by 800 basis points on top of 1200 last year.
4:03 pm
i'm happy that someone that invests of value of stocks, but we're all obsessing over rates, right? to your appointment, the reason rates are up, stocks confirmed from the data we got, right, great industrial production, good manufacturing theories fro the fed and new york fed too, so i think that retail sales also that the numbers confirm rates go higher, so if rates go higher for good reasons and not skyrocketing up, i think we can handle that because i think the growth is going to lead to good earnings >> yeah. >> maybe we saw peak earnings in the first quarter. i'll give you that >> growth. >> but we'll continue to see -- we'll continue to see earnings growth >> we'll circle back to that in a minute i wanted your thoughts, barbara, after the president put caution on the u.s.-china agreements on trade talks. is that a problem for you? >> in terms of trade talks? no i think we're getting used to
4:04 pm
lots of noise on the trade talks, and, you know, trump rattles chains a lot, and we don't know where it ends up, but there's enough sane voices we will not do things that hurt us in a dramatic way. markets will be choppy, ring bound, a late cycle market, and it's going to reward stock picking, so -- >> all right so, stick with washington, breaking news on the president's pick to be the new cia director, eamon, have they approved her? >> reporter: kelly, they have. senate voted 54-45 to approve haspel for the cia director, first woman to hold that job of cia director, and the debate around the nomination was around enhanced interrogation techniques, critics called torture the united states used in the post-9/11 era and her role in destroying tapes of the negotiation tactics in practice. you remember she oversaw cia sight interrogations in thailand
4:05 pm
back in 2002, but, ultimately, a number of democrats did vote with republicans to approve her nomination, a couple of republicans voted against, so, it was not straight on partisan lines, but bottom line, the president gets his pick, and gina is the first female director of the cia, kelly >> looks like six democratic senators voted for her thank you very much. >> reporter: you bet >> breaking news on united as well, phil lebeau with the latest with the airline, phil? >> reporter: kelly, it's a revolving door with the job of chief financial officer. andrew leavy, been in the job two years, leaves united airlines replaced by the former acting cfo who he replaced, gerry laderman, currently the treasurer, and now the cfo once again. levy, two years into the job, leaving to pursue other opportunities. not surprising in regards to his
4:06 pm
departure in terms of if you look at it from the perspective of who moves into the top job someday what oscar retires, not that that's planned any time soon scott kirby is clearly, you talk to people at united and who track the company, scott kirby is clearly the no. 2 executive at united in terms of wielding influence and pushing the company forward in terms of where he and oscar munos would like to take it, so, again, when you lock at this in terms of andrew levy leaving, it's a reinvolr revolving door would he move into the top job most say, well, it's not planned for oscar to leave, unlikely he would have eventually moved into that job kelly, back to you >> yeah. maybe he saw the writing on the wall phil, thank you. >> reporter: yeah. you bet. >> watching united on the shakeup. earnings from applied materials are out. josh has those josh >> applied materials reporting
4:07 pm
epf of 1.22, street at 1.14. revenue up 4.57 billion, street at 4.45 billion. beats on the bottom and top. the guide, though, q3, 1.13 and 1.21, basically in line. the street at 1.16, and revenue was light, 4.33, and the street asked for 4.53 semiconductor systems, looks like net sales of $3 billion, applied global services, $943 million, and display at $600 million. the comps kicking off at 4:30 eastern. we'll be on it >> thank you shares, guys, down less than 2% supplier for everything from screens to phones -- >> to the equipment to make components >> you can explain it better than me. what's the read, mike? >> i think the read this is your standard 2%, 3% haircut after you get a decent earnings number
4:08 pm
that comes to the user i think it's always all about with the conference call, what are they saying about the cycle? it's very -- it used to be boom-bust. cycle's been strong for a while. they said reassuring things about it, probably say so again, so i don't know that i read too much into the immediate reflex move in the stock. >> down a couple percent today in the session, so add that up, it's more significant. >> same happened to lamb research too, they filed hard when they reported i think the issue with app, they have apple expose sure more than most and other equipment names >> a lot of suppliers are choppy does rig so right maybe that's why guidance is on the light side, but off the february lows so at 5% year to date, so it's not expensive at 12 times, but you got to have visibility and numbers going up for people not to say we're in the peak of the cycle.
4:09 pm
>> what do you add, barbara? >> just that where the stock is in terms of valuation, not much downside it's waiting to get a better feel for the capx, semiconductor spending cycles. >> at 12 times >> yeah. >> consumer staples companies -- >> much more cyclical concept. >> yeah. >> you don't want to buy them when they look dirt cheap. >> fair enough >> for a reason, usually >> shares down 1.5%. let's flip over to nordstrom, the results out also >> kelly, nordstrom shares slipping down nearly 7% right now after a big miss on comp store sales. starting from the top, though. revenues $3.56 billion versus estimates of $3.46 billion that's a beat. eps with a beat at .51 cents versus.43. the company reports comp number up .6% against estimates supposed to be up 1.1%, so
4:10 pm
that's a big miss there, and, obviously, an important metric analysts watch after a strong earnings report from macy's yesterday. back to you. >> thank you nordstrom down 6%. what do you think? >> it was up, you know, a few percent following macy's so i think you had expectations getting ready, a little bit on the comps, probably. >> interesting that macy's looks like the shining light here, right? jcpenney was bad >> look, it's because they moved the timing and friends and family sale in the quarter >> yes even if you adjust for that, it's still 1.7%, that's better than what nordstrom had, and people think nordstrom is more insulated because it's a higher end consumer when, in fact, macy's has the middle consumer and they did better, but it shows that all of the investments that macy's has done in the last few years are kicking in the stock should be up it's down from the high, and so i think that that's the one that
4:11 pm
people will gravitate towards. >> barbara >> yeah, no, i think macy's very stock specific, executing brilliantly because nordstrom triy eied to do the same things, supply chain management, all of that, but known for service, trying to lower prices to compete on price, and it doesn't seem to be working strategy is a problem. i think the same store sales very concerning. >> we know they open the men's store in the city, it's a full service type of thing. >> yeah. >> do you want to see them making those kinds of investments in innovations >> they are trying tor j ining generational trying to do anything and everything, and so far, it's not working, you know, but we'll see. >> i did find a return bar handy. you walk in, and it's just right there inside the door, and you just drop if off and take care of it very quickly the rack is a source of growth as well. does that hurt margins, does it hurt maybe even comps, too, i don't know >> it could. but i think they are trying to find other sources of revenue
4:12 pm
growth, right? hurting in the big box stores, clearly, i go to tjx and pure plays because valuations have come in. >> other signs of the higher end, though, feels like results from a lot of luxury companies have been quite good, even -- what was burberry the other day? >> we had all european, right, but they have big names. >> as they are >> there's gucci, right, estee lauder, but, i mean, great numbers, so, no, the high end is good that's why this is expectations to be good >> macy's called out the strength in tourism. >> yes >> yeah. >> that's, obviously, right there, they catch a lot of that, and nordstrom, not as exposed. >> no. >> i think they have a big segment of international buyers in the whole line stores, but certainly not 34th street victorious mekkah with a movie about it >> plus a new bloomingdale's ad campaign in the subway has to be
4:13 pm
working. >> i have not seen it. >> interesting if tiffany's does well they are a tourism business. that would be a confirmation >> only commercial i've seen is burger king with the whopper and chicken sandwich anyway, too much basketball. breaking news from the white house. >> reporter: kelly, this is likely to happen earlier today, and now the white house just made it official the president is meeting with the vice premier of china in the white house today. the white house putting this notice out four minutes after the event actually started, so they waited until the last second to alert us that the president would meet with vice premier li of china. indications are that the white house would not have put this on the schedule if they didn't think the talks earlier today between the chinese delegation side and u.s. were going well. despite public rhetoric and comments from the president, the fact he's taking this meeting, which they waited until the last second to announce and to make
4:14 pm
an official decision on gives conclusion the white house must think that something has gone well or at least above the certain bar today in order to put this meeting officially on the schedule, so the president is meeting, we're told, with the vice premier of china, and that meeting taking place at 4:00, and they told us at 4:04 p.m. the meeting was happening. kelly? >> better late than never. >> reporter: that's right. >> it is a big step. in fact, kayla has the back story. >> reporter: well, the investing community is trying to digest, kelly, not just the news throughout the day on trade, but the prospect for a few different deals, whether it's canada and mexico on nafta, which are barrelling towards a deadline there, or china, which has that dozen-plus member delegation in washington that is led by li who is meeting with the expenditure, but before that meeting, the president in an oval office meeting with the chief of nato threw cold water on the prospect for a deal with china. listen >> well will that be successful
4:15 pm
in i tend to doubt it. the reason i doubt it is because china's become very spoiled, and european union has become very spoiled. other countries have become very spoiled because they always got 100% of whatever they wanted from the united states we can't allow that to happen anymore. >> reporter: now, that negativity is in stark contrast to a president who on twitter made several mentions of a larger trade deal in the works potentially including relaxed enforcement for china's zte. talks on nafta also at a crucial juncture, and despite december agreement the deal renews every five years, canada's prime minister seems relatively optimistic as he wants to do mexico, though, not so much, tweeting saying a deal that causes mexican job losses is, quote, unacceptable, and then there's the u.s. that has not commented in a full week lawmakers briefed by the u.s.
4:16 pm
trade representatives said they were told to be pessimistic, and figuring out whether this is just posturing or whether thetrg for no deal here >> out of time for anything this year, right? >> reporter: speaker ryan tried to set today as a hard deadline for a deal to be delivered to congress in order to be passed by the end of the year there are some very clear time frames about how long congress needs to deliberate on certain matters like this, but some people that we spoke to say maybe there's a little bit of leeway here, and maybe there's a few days or a week, but, certainly, speaker ryan knows well that people in washington don't get anything done without a clear deadline >> yeah. kay kayla, thank you very much final thoughts before we go? again, the trade issue, looks like kind of burnt stocks earlier in the session >> yeah. i think you get a switch whenever you get one of these
4:17 pm
headlines, but this goes by the rule that traders think giving tomorrow's newspaper headlines, i don't know how to trade it today. i don't know if you told me how it plays out, how much it matters for stocks in exactly what direction so the markets are not, just pricing it in. >> great point >> more concerned with rates, the dollar, and that, to me, what i'm keeping my eyes on. i can't get wrapped up in the trade discussion until i know what it is and then invest about it meantime, focusing on earnings and dollar i worry about that in terms of that earnings growth >> barbara >> i agree i think this is all noise in terms of the trade, the back and forth, and it's not -- you'll see the market react less and less, and for shorter time frames ignore it, and focus on the fundamentals, what's going on. >> if you said it's a stock picker's market. what's one name before you go? >> amazon.
4:18 pm
or visa or mastercard, long term secular plays. >> not outside of fang >> exactly thank you very much. >> thank you a lot more still to come on the "closing bell. straight ahead, one of the most influential health care ceos in the nation sounds off on drug prices. is it price gouging or are the drug companies pricing it right? plus, a big and rare call on dow component, coca-cola will it be enough to change the trajectory of the stock that went flat a long time ago? this is the "closing bl" oeln cnbc with kelly evans live from the new york stock exchange. it took a whole lot more. that's why i switched to the spark cash card from capital one. with it, i earn unlimited 2% cash back on everything i buy. everything. and that 2% cash back adds up to thousands of dollars each year...
4:19 pm
so i can keep growing my business in big leaps! what's in your wallet? at&t provides edge-to-edge intelligence, covering virtually every part of your manufacturing business. & so this won't happen. because you've made sure this sensor and this machine are integrated. & she can talk to him, & yes... atta, boy. some people assign genders to machines. and you can be sure you won't have any problems. except for the daily theft of your danish. not cool! at&t provides edge to edge intelligence. it can do so much for your business, the list goes on and on. that's the power of &. & this shipment will be delivered...
4:20 pm
4:21 pm
welcome back, shares of cbs falling more than 4% after the company lost a key ruling in the fight of controlling key shareholder, redstone. julia? >> stock lost 4% today in reactions of delaware judge's ruling against ceo les moonves, in favor of redstone in national amusement. the judge refused to grant cbs a restraining order against
4:22 pm
redstone preventing reducing her voting power the judge found cbs would not face harm without a restraining order because of the redstones forcing a merger with viacom or remove directors improperly, cbs would have other legal options national amusement said, quote, the court's ruling represents a vindication of the right to protect interest as we intend to demonstrate as the case proceeds actions of cbs and special committee amount to a breach of fiduciary duties with no regard to the significant risks posed to cbs and its investors cbs said, quote, the ruling clearly recognizes we may bring further legal action to challenge any actions by nai that we consider unlawful. we will bring such action if needed now, cbs is moving forward with the plan for a board meeting coming up at 5:00 p.m. at its new york headquarters, so what's
4:23 pm
next after that? well, cbs's special committee recommends against the merger, redstone could sue the board, but they will continue to pursue controls, so it really seems like this legal battle is just beginning. back over to you >> all right, julia, thank you very much. as we said earlier, too, this maybe not a lot gets resolved today at 5:00 p.m., look to the coming weeks or months >> if you look at the way the market's been reacting, it's like as if people are saying, it's not something i can figure out that easily right now, and so it does not seem as if, you know, anything's going on other than incremental value destruction because the franchises are in limbo right now. >> that's the thing. >> we don't know what executives will be in control of them >> in the middle of up fronts right now, talking about it unprecedented timeof change fo the media landscape, and there's probably a lot of investments to be made in a lot of forward long term thinking that needs to happen >> right >> and who knows who is the
4:24 pm
company and who is running it. >> without a doubt obviously, at some value, putting them back together, it's fine, gain scale in areas, hedge that internally if you have the two kba companies, but it's not compelling enough for the inv investors of the outside >> reenforced after the rulings this week, cbs down 4% today, day down 12% this year we'll keep you up to date on developments interest rates rallying recentlily, but the drop in yields created a new world order for a whole industry we'll talk about that. a federal jury found something odany about the ceo of bumblebee fos d tuna pricing that's still to come
4:25 pm
so lionel, what does being able to trade 24/5 mean to you? well, it means i can trade after the market closes. it's true. so all... evening long. ooh, so close. yes, but also all... night through its entirety. come on, all... the time from sunset to sunrise. right. but you can trade... from, from... from darkness to light. ♪ you're not gonna say it are you?
4:26 pm
one second. barely enough time for this man to take a bite of turkey. but for cyber criminals it's plenty of time to launch thousands of attacks. luckily security analysts and watson are on his side. spotting threats faster and protecting his data with the most securely encrypted main frame in the world. it's a smart way to eat lunch in peace. sweet, oblivious peace.
4:27 pm
welcome back to "closing bell," a news alert on carl icahn sending a letter to amtrust financial saying he strongly opposes the amtrust going private transaction saying it's unfair to noncontrolling shareholders, and calling for the company to change the meeting date he was a roughly 9.3% stake in the company special idaizing in insurance services >> thank you up 10%, it's been a back and
4:28 pm
forth. >> obviously, icahn has an issue with a private deal on the books, fresh off the xerox picture. trying to break this deal as well >> watching that, and meanwhile, henry mcveigh is here, out with a new insight, new world order, impact of the drop in interest rates since the global financial crisis, looking at insurance among other places, thank you for joining us >> glad to be here >> the guys got creamed. >> yeah. >> reading about long-term care policies, 12 companies offer them, the pricing is terrible, the business is horrible >> yeah. >> now, in part for good reason because those live longer and dr drawing on benefits. >> two things, one, you make money by underwriting. there's a lot of capital coming in the sector pressuring returns, and more importantly, to your point, you really had a massive decline in interest rates, and so what we see in cio, find innovative ways to compensate for that decline in
4:29 pm
rates. >> when you say "innovative," but you mean risk taking >> well, that's the title of the report i would say in the past, i mean, i started when i first met you, i did financials including insurance, and, really, there was no strategy around capital efficiency, so there's been done a better job, and talking about asset allocation, they talk about yale, and the point in the report of the some of the cios in the insurance industry have been thoughtful about pursuing new products, and when you think -- >> are you suggesting they are following the yale approach here >> no. but what's insurance do? get long duration liabilities, and so if you have a long duration, your about to ride out the volatility, if you find the right products, it's interesting. so i would highlight in life insurance, three areas, one, they have done more in the private and real estate credit two, they are in private corporate credit, and, three, as capital markets have grown, they have done more in structured
4:30 pm
products think about property and cash companies, i think what they've done is take money from equities, absolutely more risky, gone into double b bonds >> okay. not off on an argument about this, but equities are more risky, but measured on quarter by quarter basis, based on how much they move, hang on for the long term, what would warren buffet say own for 30 years, whatever the liabilities are. >> liabilities are not 30 years, so property and cash, remember, their littles are between one and tleehree >> all right i understand >> in some respect, these investors are just investors like anybody else, right low interest rates, meet a mandate. >> yes >> so has this backup in rates at least domestically begin reprieve, breathing room, or, i guess, i'm asking if they have kind of zigged when the markets have zagged. >> well, i think one is, it's in the u.s. alone, it's an $8 trillion industry, so the ability to zig and zag is not there. i mean, a lot of the people you
4:31 pm
talk today tod are hedge funds,i a multiyear move secondly, think about this, the bond market as we define in kkr has gone from $20 trillion whereas in a decade ago, 80% yielded above 3%, 80%. now the market is doubled since then, and in a decade -- >> yeah. >> about a third of it yes above 3%, so if you need to make 4 or 5, treasury at 3 is better than at 189, but rates move up, not materially, so the trend will be with us for some time. >> so the 10-year went back above 3% >> yeah. >> for the first time, maybe it keeps climbing, difficult for the companies to know. they is been counting on this happening for a year, and very weary of it now. >> yeah. >> are they changing behavior and able to normalize to make the balance sheet look like it used to? >> look at most insurance companies, 75% of what they own
4:32 pm
is investment grade debt so they are low in treasuries. what matters the most is the quality of credit of listing early segments, credit should do okay that's probably the biggest risk for them, and then if we do have a meaningful move up in rates, that hurts their book values, and that is problematic, but as michael said, they don't sell these securities, so it's a hold to maturity in most instances, but key point what we learned from the cios is they are now competitive, i think, with a lot of the other vehicles that you see out there, whether they are in dominance or pensions or corporation. >> chemical weapoyep. >> it's $8 trillion moving quickly in terms of where they are putting money, and i guess my comment would be to the viewers, this is something insurance segment or not, that you need to pay attention to we really see a dramatic jump in the business >> yeah. >> related to this in three to five years >> customer base >> yeah. as we look forward, it will continue to be, and i think you'll probably be reporting on
4:33 pm
growth in the security market as well as things we're doing in the private market >> credit boom, i can hear brine reynolds saying a credit boom is a credit boom. this is emblematic of that >> look, key over time in any cycle is not just economic growth, but it's how you underwrite credits ultimately, at the end of the day, i think we made this point, is the goal is not to go deep into the risk spectrum, but write where there's dislocation, and papers suggest when the banks pulled out, insurance companies were very thoughtful to move into the space >> henry, fascinating. i didn't think i'd say that. >> i didn't either, but that's where we are >> henry from kkr, thank you very much. >> thanks for having me. finishing the day, dow dropped 55 points on the bell. small declines to the s&p and nasdaq, and the russell had a gain and closed at an all-time high for the small caps. time for a cnbc news update, sue? >> kelly, thank you.
4:34 pm
here's what's happening at this time, everyone by a 54-45 vote, the senate confirmed gina haspel to be the first woman to lead the central intelligence agency. this despite partisan misgivings about the role in the agency interrogation program after the 9/11 terrorist attack. a school bus crash in new jersey killing a student and a teacher while injuring 43 others, many of the injuries are critical or serious. the school bus collided with a dump truck on interstate 80 ripping the undercarriage off the bus. students on to other busses taking part in the trip reacted to the news. >> it was scary because i know many of my friends on that bus, and i just - >> reporter: are you worried >> yeah, i'm worried everyone is now praying with them because we all hope they're all safe and hawaii's kilauea volcano erupted from its summit, shooting a plume of ash 30,000
4:35 pm
feet into the sky. it comes after more than a dozen fissures recently opened miles to the east of the crater, and then spewed lava into neighborhoods. 2,000 people evacuated that is the news update this hour kelly, i will send it back to you. >> all right sue, thank you very much sue herera for us. one more story we are following today, and it's a fishy one. the federal grand jury in california indicted the ceo of bumblebee foods on charges of fixing prices for packaged seafood sold in the u.s. from 2010-2013. it's not the first price fixing scandal there. the company agreed last year to plead guilty to one count of price fixing and pay a fine of $25 million. two executives pled guilty to charges in december of 2016, and a former executive at competitor's starkist, charged with price fixing on canned tuna from 2011-2013 fascinating to me about this is it goes back to the financial crisis saying, you got to hold individuals accountable for what happened, not just -- and here,
4:36 pm
the case of tuna price fixing, that is what is happening. >> easy to trace it right back >> i guess so. >> obviously, there's a trail, also shows, y you, though, thos are the two brands, the temptation to rig the game is strong >> and it's probably easier when they are lower priced items that might take the consumer -- you are not seeing a big increase. >> how much cheaper should it be >> exactly you can take advantage of that, and retailers are the ones who complained >> absolutely. >> if they would sense it, they say, wait, these prices are too high now i'm going to check the price of tuna when i go to the store to see if it's back down it's a rough year for coca-cola anyway the stock rallied today on a big upgrade. fast money traders say whether they dip in on the stock plus, president trump says a big priority is reducing drug prices hear from the head of a major hospital chain who has a obm.o x aton tfith prle
4:37 pm
what do advisors look for in an etf? don't just track an index, help me meet a client's need. is the fund built to sell or built to last? etfs are only part of a portfolio. so make it easy to explain. give me a quality fund that helps me get clients closer to their goals. flexshares etfs are designed and managed around investor objectives. so you can advise with confidence. before investing, consider the fund's investment objectives, risks, charges and expenses. go to for a prospectus containing this information. read it carefully.
4:38 pm
becareally want to be there, but you can't. at cognizant, we're helping today's leading media companies create more immersive ways to experience entertainment with new digital systems and technologies. get ready, because we're helping leading companies see it- and see it through-with digital. i support the affordable care act, and voted against all trump's attempts to repeal it. but we need to do more. i believe in universal health care. in a public health option to compete with private insurance companies.
4:39 pm
and expanding medicare to everyone over 55. and i believe medicare must be empowered to negotiate the price of drugs. california values senator dianne feinstein zbrnchts welcome bac welcome barkck, shares of
4:40 pm
coca-cola up today, upgraded to overweight on expectations that coke's new product changes leads to increased sales over the coming year, and joining us to discuss, guy and karen, is that a pink shirt, guy? it's cool. >> i don't know, what do you call it? salmon >> salmon. >> salmon. >> it's not coca-cola red. >> it doesn't make sense, i'm sorry. i got to collect my thoughts, go to karen >> what do you think what are your thoughts on coca-cola here >> you know, i looked at the o space, originally, no, i hate the space, the drink, and all of that, however, this piece is actually interesting, made a lot of points that actually did resinate with me the biggest one is the company is asset light having refranchised so much of the business that is interesting to me. however, even with the yield here, and it's a very nice yield, i did not love the part where they think the multiple should be higher that, to me, i don't like a
4:41 pm
multiple rerating, but interesting piece for a company i never would have looked at before >> i don't know how you get to multiple higher. this is a company epf growth of 8% or 9%, and that's just looking at the numbers, trading 18 times next year's numbers that, to me, expensive in and of itself, and pepsi, the more diversified trades 16.5 times. it's an interesting piece, but rate the price from 45 to 48, not all that awe-inspiring to me nor to mike sitting to the left, probably shaking his head. >> i know. i know we don't have the time, but i said, mike, you know, i have increasing republic for the pepsi strategy because they got the lay's chapips, and i go into the stores, and apologies to that, i would rather drink diet coke >> there's no doubt about it, and i think the other piece of it, you know, karen pointed this out, coke already outperformed the stables and pepsi co
4:42 pm
it's not as if this was left by the side of the road look, i don't think -- nobody's going to, you know, get killed by owning coca-cola over the very long term, but, again, i don't know if it's really one of these big catalyst type calls. >> all right, karen, when you get hot on it, i want to know. >> i know we're going into break, but we should be drinking water, not diet anything >> they are the water -- >> buy the water, not the sugar drinks, making us all lazy >> lazy? what >> lethargic and lazy. >> i don't know about lazy i drink one and feel better and ready to take on the afternoon >> all in your head. >> anyway -- >> anyway. >> guy, karen, i stick with my unpopular habit. catch more at 5:00 p.m. pledgin
4:43 pm
tackle high drug prices. we have a for more ideas for washington
4:44 pm
4:45 pm
welcome back, we have some breaking news on paypal. the company is buying swedish based startup izettle to expand presence in europe and latin america and increase its footprints in brick and fmortar this is the biggest acquisition in paypal's history putting in
4:46 pm
great egg competition with dorsey's payment processor, square, calling the square of europe, the devices and technology that nearly half a billion businesses in and around a dozen european countries and mexico use to accept credit cards. the company announced plans for an ipo earlier this month that reportedly changed their minds after meeting with the executive team at paypal we'll talk to paypal and bring you more as we get it. back to you. >> thank you mean time, big pharma mixed, but escaping president trump's crackdown on high drug prices. with more ideas on the pricing, dr. kenneth david, president and ceo of mt. sinai health system >> good to be here >> what's the best idea you have for lowering costs >> oh, my goodness, so many ideas. i think the president put his finger on a good idea when he talked about the problems that we have in that americans wind up paying much more for our drugs than anywhere else in the
4:47 pm
world. the rest of the world controls their prices the u.s., it's a free market so, essentially, the u.s. is underwriting the research and development core that happened to the rest of the world this is the trade issue. this is a fair trade issue we have to bring it up in trade negotiations my kwrn conceconcern, however, e convince the rest of the world to raise their prices, will the drug companies pass that on , their savingsavings, to the amen consumer >> making more money for overseas drugs, so, thanks, that's good, right >> that's the problem, that's the problem. we need legislation to see that that advantage we get for them to fair trade negotiations winds up helping our patients and our consumers. the prices now are too outrageous >> but why -- i have to follow the line of thinking for a second, so, you know, companies
4:48 pm
sell a drug for $1,000 here. britain says, you sell for $50 here the company now, rules change. our president says, you can't do that anymore you know, the price is the price. the company can sell it for 1,000 here or 1,000 in the u.k., good for business and encourages research and development what's the harm to the u.s. consumer >> they can't afford the prices anymore. we got to make this more equitable across the world, and we got to find ways to do that, but, you know, there are other problems there are other issues that we can begin to talk about. for instance, we know that a the u.s. is not going to negotiate with drug companies over medicare prices. despite the fact president trump said that's what he wanted to do there's a reason why that shouldn't happen, but on the other hand, the government does have the right to say, we're going to control what's on the formulary.
4:49 pm
if we think this trust that just came out is no advantage over what our generic drugs are in the same class, we're not putting on the formulary if you want it, you can get it, but it's not with government money. some control over the formulary matters. for instance, we have 30,000 employees in our system, and i'm able to control that formulary for the people who we are self-insured with. i can say, this new antidpr antidepressant has the same mechanism of action as others approved that are generic. we're not putting it on the formulary. medicare can't say that. >> all right >> doctor, what you hear when you speak to pharmaceuticals about the issue is actually drug prices, list drug prices are not the principle issue raising overall medical costs. they say excessive testing or measures taken at the end of life in hospitalizations might be a bigger issue in the system, so how do you respond to that?
4:50 pm
>> oh, it's clear that there are many things to change in health care delivery to decrease prices i mean, how much we spend in the last six months of life for unnecessary care is an issue on the other hand, we really have to ask ourselves if the tae paying for the foundations for most of the drugs that come onto the market, most of the discoveries, what's the return for those taxpayers making that investment i mean, should we really have to spend $80,000 for the treatment of hepatitis c now, look, i know that that's a great drug and that these drugs have revolutionized health care, but do you really think that that's a fair return on investment $80,000? >> i'm sure it comes down over time it's saving lives. it's a cure. we have to go but i know it's one of many things you want to focus on much more coming in the op ed, right, doctor? >> right an ironic part of the affordable care act the affordable care act allowed drug companies to have 12 years
4:51 pm
of market excludes sisivity for antibodies and they cost more money. other drugs don't get 12 years of market exclusivity. it's generally 5 or as long as your patent life may go which is rarely the 12 years. so weize the companies to make the most expensive drugs, the antibodies and proteins. >> thank you for joining us. >> thank you. >> there is a whole lot more to come in his piece. he's president and chief executive officer of the mount sinai health system. now that sports betting in new jersey has been legalized, concerns in professional leagues are cropping up. it's bitcoin week and an early bitcoin investor we'll tell you whichoi cns you should hold and which to avoid you get the one-on-one partnership you need to grow your business. the dell vostro 15 laptop. contact a dell advisor today.
4:52 pm
if thifor under you think a $34,000 looks like... ...think again... ...and...again. the 2018 cla and gla, both starting at under $34,000. lease the cla250 for $319 a month at your local mercedes-benz dealer. mercedes-benz. the best or nothing.
4:53 pm
4:54 pm
now that sports betting is legal in new jersey, a major concern is maintaining integrity in pro sports. >> take a look at this seton hall poll said 48% of americans think that betting on sports betting would erode the trust in games the sports poll's director rick gentile said look the question isn't about whether or not these games are getting tanked, whether there's points shaving, but it's whether public confidence eroded. it's really an optics thing. you go back 26 years ago, this original federal law that was put in place, the one that just got removed, it was put in place led by bill bradley, the senator from new jersey. he played college basketball and pro basketball he saw all these experiences
4:55 pm
it wasn't that he did it, but he played against people that were involved in a lot of these things if you go back, there have been point shaving scandals, sports betting scandals in every decade going back a century whether it was 1919 the chicago blackhawks, the 1950s, the '60s, the '70s, the '80s, the '90s. this has been going on forever maybe now that it's legalized they can shine some light on it and monitor these things there is a big thing, the 48% number, kelly, that's the thing to watch are people going to think that these games are not trustworthy in those results back to you, kelly. >> yeah. mike, your two cents >> i think surveillance, it's going to be like market surveillance when there's money on the line, they're going to scrutinize to make it seem like it's on the up and up. let's move on to a live shot of cbs corporate headquarters. a few minutes away from news from cbs's fight with national
4:56 pm
amusements this scientist doesn't believe in luck. she believes in research. it can take more than 10 years to develop a single medication. and only 1 in 10,000 ever make it to market. but what if ai could find connections faster. to help this researcher discover new treatments. that's why she's working with watson. it's a smart way to find new hope, which really can't wait. ♪ ♪ ♪ you said you're not like me, ♪ ♪ never drop to your knees, ♪ ♪ look into the sky for a momentary high, ♪
4:57 pm
♪ you never even tried till it's time to say goodbye, bye ♪ ♪ everybody fights for a little bit of light, i believe. ♪ geico motorcycle, great rates for great rides. at fidelity, our online u.s. equity trades are just $4.95. so no matter what you trade, or where you trade, you'll only pay $4.95. fidelity. open an account today.
4:58 pm
welcome back here's a live look at cbs in new york key meetings on a very busy day.
4:59 pm
judge ruled in favor of national amusements over cbs's board. shares fell more than 4% julia boorstin is monitoring this for us. julia? >> reporter: kelly, national amusements is telling me it has, quote, no intention of forcing a merger that is not supported by both cbs and viacom. the meeting starts in a few minutes at cbs headquarters. cbs saying despite the judge's refusal to grant a temporary restraining order, it will vote on a proposal to dilute the voting stake from 80 to 17%. even if nunez gets a majority of the votes it will be contested as redstone made a new requirement of 13 out of 14 votes to conclude the plan >> we'll watch that and these after hour headlines shares of amtrus have reported
5:00 pm
that carl icahn took a 9% share. applied materials also down nearly 5% on weak guidance michael? >> ten seconds i don't want to give my 2 cents. >> we'll see plenty of you tomorrow thank you, everybody, for tuning in to the "closing bell. "fast money" will pick it up for us right now. "fast money" starts right now. live from the nasdaq market site overlooking new york city's times square i'm melissa lee. tonight on "fast," bitcoin week rolls on friend of "fast money" and the crypto trader ran neu ner, he made a call six weeks ago. he's back with a crazy call that will shock the crypto universe plus, the cbs civil war is on. the board meeting happening up the street on new york city. you are looking at a live shot we'll get to the ground to get the latest first, we start out


info Stream Only

Uploaded by TV Archive on