Skip to main content

tv   Closing Bell  CNBC  June 5, 2018 3:00pm-4:59pm EDT

3:00 pm
>> talk about the tomatoes >> wendy's changing how they source tomatoes. rather than the green ones in the ground, they are going to get them from greenhouses vine ripened. this is a dramatic change in the way fast food sources tomatoes one tomato, two tomato is my handle >> exactly appiate for "power lunch," isn't it >> thank you for watching. "closing bell" starts now. i'm wilfred frost, the strength of the economy could be a risk to equity markets, and we are live to explain why. >> reporter: in chicago, i'm phil lebeau counting down to the shareholder meeting of tesla >> repor the united states reportedly asked opec to increase supply. what that means for oil prices coming up. i'm kelly evans. trade talks hit home how the new tariffs impact
3:01 pm
business the "closing bell" starts right now. >> so michelle's handle is one tomato - >> tomato. yes. welcome, everybody, we'll get to the stories in a moment. welcome back, by the way you were in midtown yesterday. >> the old building -- >> that's right. >> saying the carpet was green the day the purchase was made, and what they changed straightaway was blue, and that was it nothing else changed >> very important carpet change. >> well, carpet change, but not much else. just bought as was and continued trading. >> change the carpets a lot more quickly than the business. anyway, that was a decade ago. let's see what's happening today. dow hanging on to a 10-point gain, and averages up and down, and nasdaq up, closed record
3:02 pm
highs yesterday. interesting interestingly, nasdaq up, dow flat, and russell doing all right. >> the last couple hours trade have been encouraging, near the highs of the day also monitoring an event at the white house. president trump participating in a celebration of america >> that's what they are calling it let's listen in. it was supposed to be for the philadelphia eagles. >> along with the secretary, representative lou -- who, hopefully he'll be your next senator from the great state of pennsylvan pennsylvania representative mike kelly, thank you, mike, great to see you. i want to take this opportunity to explain why young americans stand for our national anthem. maybe it's about time that we understood we stand to honor our military
3:03 pm
and honor our country and to reer the fallen heros who never made it back home. we stand to show our love for our fellow citizens and our magnificent constitution we stand to pay tribute to the incredible americans who came before us and the heroic sacrifices they made america is a great nation, a community of family, and america is our home, and we love our home our country has never done better than it's doing right now, never record numbers at every outpost. you take a look at what's going on we've hanemployment numbers lowest african-american unemployment in the history of our country. lowest hispanic numbers in the history of our country
3:04 pm
lowest numbers for women in 21 years. we've created $7 trillion of value in our country since the election with the largest economy in the world and getting a lot larger and fast. it's happening very quickly. actually, quicker than i even thought. we're doing great, and all of those people that we honor, many of them are looking down right now, some of them are right here, but many of them are looking downright now at our country, and they are proud. they are very, very proud, so we stand together for freedom we stand together for patriotism we proudly stand for our glorious nation under god. i want to thank you all for
3:05 pm
being here this is a beautiful big celebration. actually, to be honest, it's even bigger than we had anticipated. so i want to thank y very much, and god bless america. thank you, everybody thank you.thank you. >> that's president trump at what they are calling a celebration of america event right around the turn of the hour, they played the national anthem, signce oall of is, of course, is that the anthem is in the middle of the nfl controversy that was supposed to have the super bowl winning philadelphia eagles at the white house at this very moment, after trump learned last night that fewer than about ten players would be there, out of a roster of probably 70, he rescinded that invitation, and the white house decided today to go in another direction. there were fans coming so that's why they wanted to do something, so we witnessed that something that they are still playing. >> indeed. it continues at the moment, and, of course, sarah huckabee sanders saying a half hour ago or so, it was the eagles that
3:06 pm
changed their commitment in the 11th hour, and that's why there was a change of plans, and, of course, eric is covering this over the last 24 hours or so he's in philadelphia with the latest perspective from there. eric >> reporter: wilf, in front of the rocky statue, and these are fighting words between the president, saying the eagles were not being patriotic, and the vast majority that abandon their fans, and meanwhile, the mayor of philadelphia calling the president an egomaniac obsessed with crowd size ly that nobody from the d eagles knelt during the anthem the entire year. sure, there were players like jenkins that put fists up in the anthem and players like chris long spoke vocally out on issues they care about, so this is a really tricky one. it's bigger than the anthem and goes to that divide that you're seeing across the nfl, among its
3:07 pm
players and ordinary persons the eagles' owner himself told owners in a private meeting you cannot be baited by the president or let him divide our nfl organization, but that's what we are seeing here. the league tried to get over this issue by saying, no one can kneel. stand in the locker room or stand if you come out. as we saw from a tweet from the president today, he said staying in the locker room is just as bad as kneeling. this issue may not go away lebron james tweeted about it in the last few hours saying that whether the warriors arian cavaliers bas, they are not going they don't want the invite back to you guys >> eric, yeah, you know, it is interesting on this one because it was on the eve of the event, you know, they were going to go, obviously, and the president told the dallas cowboys owner he thinks this is a winning issue for him, ands the nfl itself criticized for the decision weeks ago that the players did not totally rally behind i wonder if there's a can of
3:08 pm
worms opening, again, with tv ratings for the fall r: e tv ratings are going down. a couple years ago, people thought ratings were down because of the election, but there was no election last year, and ratings still down, and everyone pointed to the anthem who knows what they will be this year with all the other, remember, l the other football leagues starting up to compete against the nfl, they want to get away om politics, but as you said in basketball, they did kneel, but they are not coming. this is a bigger issue beyond the national anthem. >> american football, wilf, to be clear, not the other sport. >> oh, okay, i was admiring the people taking a photo with the rocky statue, which i've done. thank you very much for that meantime, back to the white house. making appearance at the press briefing, and eamon is out with the latest.
3:09 pm
>> reporter: as it came out, armed with economic statistics, a packet of paper the president wants to talk about the economy today, the philadelphia eagles, cultural controversies in the country, but they wanted to tout some of the economic stats you heard in the press briefing room talking about wage growth how good that's been here's what he said. >> wage growth right now is the highest, if you look over the last quarter, employment cost index, highest it's been going back to 2006, but that's when they changed the way they do da we got more than 6 billion people announced to have a pay raise because of the tax bill. the average pay raise for them is north of $1200. >> reporter: the white house asked here about the tariff issue and whether or not that is going to get in the way of economic growth. he's the response on that question >> the president's objective is to get fully reciprocal trade deals, and if you model a future where everyone else reduces
3:10 pm
trade barriers to ours, that's massively good for the global economy and for the u.s. economy, and now the president wrote the book "art of the deal". and we're engaged in discussions and negotiations and hopeful we reach a positive balance >> reporter: i asked about the whole issue of the u.s. econ where things are headed from here you know, he ultimately said thn terms of nafta, whether or not it's a good idea to divide and conquer and negotiate separately with canada and separately with mexico, that's going to be up to robert lighthizer, refusing to take a position whether or not breaking up the nafta negotiations in two parts is a good idea saying that's something the white house has to deal with we did hear larry kudlow earlier today suggesting that maybe that's the way to go the president likes the one-on-one negotiations rather than larger negotiations, so that's something we might see here in the nafta goenegotiatios coming forward, guys >> thank you
3:11 pm
in the meantime, mitch mcconnell said the senate is working three weeks in august as well to get stuff done joining us to talk about all of this is syliva and rick and kenny. welcome, all kenny, what do you think of the market and moving pieces here today? >> not surprised the broader market is confused, yes, the upside, but you feel the confusion. tech, for sure, is rallying mid caps, the russell almost up 9% on the year, and tech's up 10%, right, but the broader market is as you said almost flat, and it is concerned although, yes, it did not feel like anyone was concerned, today, again, they are concerned because the tone of the conversation just turns to, you know, one of concern, one of trade war, and so it's holding the broader market f? do you think it's the trade >> absolutely it's the trade stuff in the broader market.
3:12 pm
the u.s. small caps stock is u.s. centric, not affected by the stronger dollar, but not those sectors are oo >> do you think it's right tech continues to serge despite trade fears mentioned or is there a repercussion down the line hitting the sector as well >> i think it makes sense that we see a rally in tech right now, and nasdaq is at almost all-time highs, and march was the last time there was a pullback in the sector, besides that, it's been on a tear for the last decade really, and positive news around apple announcing neware, new apps, amazon sales growing, microsoft b takeover, and, you know, you've seen the names performing in the high double digits this year versus the s&p 2% and 3%, coupled with strong fundamentals and twitting joining the s&p 500, and risk on sentiment, could be a lot of momentum in the space, and we've seen that on our side. >> rick, in terms of the data, do we see this morning another
3:13 pm
sign that it's the u.s. that really stands out at the moment around the world with strong economic prmance >> oh, i think that's pretty hard to deny i mean, jolts 6 million,ourth r over 6 million, 10 of the last 13 reads above 6 million, levels never seen outside this most recent move. ism, a couple tenths below 15, 58.6 keep this in mind, only had three reads 60 or higher in the history of non-manufacturing ism. these were solid numbers, and the interest rate market was climbing on this i think the issues, again, resurfacing in europe may have dampened selling pressures we saw in the solid data points you know, italian yields popping, fd yields dropping. draft those together, you clearly see a flight to safety ecb saying the next meeting on june 14th, they're going to
3:14 pm
really decide how to deal with shutting down qe, the eurocurrency responded dr draghi will make houdini look like a novic he pulls this one off. >> ha-ha, thank you, and dow is now negative to your point, kenny, we'll aftthat s&p on pace for a third record close today the nasdaq hit an intraday high for the first time since march other names like amazon and microsoft hitting inting highs >> our regulars. here's more with ari >> there's opportunities our work argues for tech performance whether it's top-down trends or bottom-up trends starting with top down we've. making the case that right now, macro trends argue for growth investing. particular macro trend i'm talking about is the yield
3:15 pm
curve. the chart here, the orange line, is the 10 year curve overlaid with the russell 1,000 value versus growth relationship there's been a very tight correlation between the trends in recent years. we're making the case that you're going to have continued yield curve flattening the long end of the yield curve remains anchored by low rates overseas, and, in turn, that blue line's going to continue to fall that'sng to argue for continued growth outperformance value under performance. let's talk tech and the nasdaq in particular. here's the nasdaq right here we talked about the march levels here is the peak right here.nas it aside from a pause here, we think you play for the breakout because of the bottom chart. that chart is the nasdaq relative to the s&p 500. this has already broken out to
3:16 pm
the upside this is indicating nasdaq is leadership we're momentum investors we want to continue to own nasdaq in anticipation for continued outperformance where do we want to be and buy where's the opport the tech sector is strong, paypal stands out, and another stock coming right in to its january peak we think you play for the breakout three reasons why. ranks high in the momentum work, strong uptrend going into that test, rising 200 moving day average, and top-down tail winds, strong market strong sector. strong industry. >> thank you very much buy the tech seems to work over the last couple days. >> i have to say, venmo bad experience yesterday just saying. they are owned by paypal, right? i'm just saying. i know it's not in the chart, but anyway >> i know. still ahead, highlights from
3:17 pm
cnbc's exclusive interview with howard schultz and whether a presidential run by the coffee tycoon is for the good of the country and the economy. >> plus, shares of u.s. steel maker up 11% since the trump administration first proposed tariffs back in march. could retaliatory actions hurt their bottom line? the company's ceo weighs in next reach out to the show on twitter, facebook, e-mail us the closin iba itw
3:18 pm
anyone can get you ready, holiday inn express gets you the readiest. because ready gives a pep talk. showtime! but the readiest gives a pep rally. i cleared my inbox! holiday inn express, be the readiest.
3:19 pm
3:20 pm
welcome back, u.s. steel companies trade higher off exemptions expiring friday joining us n is tim timken in march, you were a supporter of the tariffs where you stand today, and, in particular, would you have liked to have seen the tariffs placed on more countries like china with united fashion with allies lick the eu or canada or
3:21 pm
welcome these tariffs are going to canada. >> we work closely with th domestic steel industry for 12 months to make 232 a reality, and last week, we got clarity how the rules are implemented. we are supportive of the actions the president has taken, and we believe long term it's not onl good for the domesl industry, but ultimately the global steel industry if used as a tool to help address the massive amount of over capacity that exists around the world >> you know, tim, the "wall reet jal" today highlights that china gets around these things by saying, oh, it's not our steel, it's produced in indonesia, produced in brazil, all the other countries, but effectively under their co so w it be better the u.s. focused at getting at that behavior rather than tariffs that consumers end up paying >> well, i thought that was a very good article today pointing
3:22 pm
out the issue of transshipments that happens around the world, and the way we view it is like winterizing the house and leaving the back door open at the end of the day, you make sure that steel does not enter, you know, through a different port, from a differentntry, so the 232 is an all encompassing approach, all countries, awe product, allowing us to address issues of material moving around the world to gain access to the u.s. market, which is, ultimately, the most open m products >> tim, how long do these tariffs need to stay in place for there to be a transformat n transformational difference to the u.s. steel industry if negotiations with various partners go well in other areas within the administration and therefore get dialled back, how long do they needed to have lasted in place to change dynamics for the steel industry? >> well, there's 700 million tons of excess steel capacity globally, and we believe that they can play a critical part in getting the dialogue in addressing that.
3:23 pm
it's going to take awhile to ensure that that needed capacity ultimately leaves the market we believe the 232 somedtays in place until the excess capacity is dealt with. >> connect the dots here concerns there's too much capacity and china said we have to keep it going in order to keep people employed and keep our economy going, is a tariff, again, consumers ultimately pay that, does that affect the behavior at all? >> you know, ultimately, of the 700 million, 400 million of it sits in china. the other 300 million is scattered around the world when you look at the policies that the chinese government and other governments put in place to develop that capacity for excess demand, sooner or later, we, as a global industry, have to accept the fact that capacity needs to come out. it happened in the u.s look what we've done since the
3:24 pm
early '80s to today, there's been rationalization the efficient capacity left the market we've done our part. time for everybody else to do their part >> all right tim, thank you for joining us. >> thanks for having me. >> the ceo of timkensteel. is it possible it's good news? >> it is not possible that it's good news, kelly we are getting a warning sign from the trustees of social security and medicare that the insolvency of the programs is getting hastened in part by the x cuts passed last year. we are seeing now social security this year for the first time since 1982 is dipping into reserves to pay benefits and by 2034 will not be able to pay full benefits, in fact, we'll be able to pay three-fourths of benefits in 2034 in 2026, medicare dips into reserves what this means is that the
3:25 pm
issue of entitlement reform like speaker paul ryan talked about is going to get increasingly urgent for lawmakers the problem is democrats are going to insist on higher taxes in combination with hurting benefits it's a very difficult issue, and one incidentally, mentioning howard schultz, retired starbucks executive who may run for president, entitlement reform, debt reduction, a big issue he's talking aboutht now, kelly >> we'll have more on that in just a couple minutes, john, for now, i was going to say thank you, but i can't, so we appreciate you bringing us that news john harwood 35 minutes left in trading coming up next, and netflix added to the s&p 500, and one social media company just enjoyed the benefit. which stock hit a three yearhige
3:26 pm
joining the benchmark index. i'm sure you know what it is already. >> well, we got to keep some element of surprise. might be surprise you. >> if you have not watched anything all day >> yeah. >> what howard schultz talked about in life after starbucks and to that point, what he thinks of the democratic party and entitlemen stay with us anyone can get you ready, holiday inn express gets you the readiest. because ready gives a pep talk. showtime! but the readiest gives a pep rally. i cleared my inbox! holiday inn express,
3:27 pm
be the readiest. holiday inn express, when it comes to travel, i sweat the details. late checkout... ...down-alternative pillows... ...and of course, price. tripadvisor helps you book a... ...hotela
3:28 pm
sweat. because we now instantly... ...search over 200 booking sites ...to find you the lowest price... ...on the hotel you want. don't sweat your booking. tripadvisor. the latest reviews. the lowest prices. welcome back, just over a half hour of trade, dow dipped into the red the high of the day up 25
3:29 pm
points, it was 103 points, so, certainly, better than the lows of the day as we stand the s&p's above the flat line. nasdaq up a third of 1%. let's check in now with individual movers, morgan stanley turning cautious on the cruise industry that has carnival and royal caribbean lower today. they track carnival shows solid booking, but flat prices and warned of overcapacity in the sector both down 4% >> ever been on a cruise >> no. >> yeah, me neither. do you want to >> no. >> me neither. netflix joins the s&p 500, and twitter is taking a spot, on the oust because of the sales to buyer. twitter got a boost on this after hours as it was announced, and because of passive investing is so big now, for something like the s&p 500 etf, anything -- it's look up 5% today, it's going to bring in a
3:30 pm
suite of new buyers. >> so many discussions today how it's not part of the s&p 500 alady, but it made it at some point, so there we go. up 5% today. >> meantime, a a cbc news update sue? >> hi, here's what's happening at this hour, everyone a federal judge ordering former trump campaign manager paul manafort to respond to revoke his bail due to attempted witness tampering. they allege while under house arrest, he tried to get two witnesses to lie about the nature of the work they did on behalf of the ukraine. police cancelling an amber alert for an abducted seven month old girl from danville, virginia after the child was found safe in north carolina grace kennedy appears to be in good health, but being evaluated in the hospital as a precaution. she was missing since 8:00 p.m. sunday night when she was abducted by her father who is now in custody parts of washington, d.c.
3:31 pm
still experiencing flooding after days of heavy rain officials warning all who live or work near the river to be cautious of the high water and avoid the river until the flooding recedes and 60 miles per hour winds flipped several small planes on the tarmac at the space coast regional airport in titusville, florida. the airport sustained damage, but luckily, no injuries reported mother nature is reeking havoc these days >> it is >> back to you guys. >> lucky the planes were on the ground, i guess. >> absolutely. >> sue, thank you very much. less than half hour to go, averages are trying to stay positive easier day for the russell small caps are the barometer when people flee the trade spacing stocks to domestic ones, up eight points today. tim cook speaks out the need to combat tech addiction what changes you'll see on the phones in the near future. big question on the minds of
3:32 pm
starbucks' investors after howard schultz leaves. >> if you were to pursue public service, do you worry at all starbucks will be wrapd peup into it? >> his answer to that question and much more from that exclusive interview after the show break don't go anywhere. back in two.
3:33 pm
♪ that's confident. but it's not kayak confident. kayak searches hundreds of travel and airline sites to find the best flight for me. so i'm more than confident. how's your family? kayak. search one and done.
3:34 pm
3:35 pm
welcomck outgoing starbucks' chairman howard schultz sat down this morning, and he talked about his own political future take a listen. >> when you look at the field, people say, you know, will joe biden run, will others run, anybody that you get excited about? >> i think there's a lot of people who might run for president, and i have not focused on that, i wl say that it concerns met so many voices within the democratic party are going so far to the left, and i ask myself, how are we going to pay for all these things in terms of things like single payer or people espousing the fact that the government is going to give everyone a job i don't think that's realistic, and i think we've got to get
3:36 pm
away from all the falsehoods and start talking about the truth and not false promises >> question that really comes from starbucks' investors. i saw this on twitter yesterday. if you pursue public service al wrapped up into it remember when romney ran, bayne got wrappeup in it quick >> i think there's an anomaly here this has not happened often where if someone like me did this, my association and connection with the company, we'd have to deal with that, but we're a long way from there. >> just the whole philosophy of, howard, of redistribution versus the stock market is necessarily a barometer you look at either, but it's possible this year, we grow above 3%, and there's maybe a lot of reasons why that's going to happen, maybe it was set up by the obama administration, but for eight years, we did not. never had a year -- barely got
3:37 pm
2% so there's a never-ending argument abouthether growth and letting the private sector have more capital, keeping it in e seetting that grow the pie, or whether redistribution is the way to go. i mean, if we end up growing at greater than 3% this year, would you repeal the tax reform act and raise taxes on corporations back to where they were if they were presi >> w i don't want to talk in potheticals what i would do if i was president, but i'll try to say this in my own >> i think the greatest threat domestically to the country is this $21 trillion debt hanging over the cloud of america and future generations, and the fact that interest rates go up, we'll s in interesexpense,0 billion which i think is the no. 1 or no. 2 issue in terms of federal expense to the country the only way we're going to get
3:38 pm
out of that is grow the economy, in my view, 4% or greater, and we have to did after entitledmen entitlemen entitlements again, this is where political ideology and political class is not facing the truth or reality. this is about leadership this is about getting people together ia room and talking about the fact that the future of the country is on a collision course with time because we must address this it's not about redistribution. it's about facing these hard truths and dealing with significant problems so that we can put the country in a position where it's not about trade wars and it's not about ul it's about getting our house in order, doing everything we can, and i said it before, walking in the shoes of the american people and doing wahat's right for them >> how do you to 4% growth, that's where the rug is, getting an economy to 4% growth, and best intentions of a
3:39 pm
compassionate -- philosophy with the best intentions end up with income inequality getting worse for eight years. >> well, take the liberal piece out of it. take a central approach of getting ideology out we can get to 4% growth. we can go after entitlements we can do the right thing. if we have the right people in place who are talking about what it is to be an american opposed to being a republican or a democrat and getting all of these issues out of the way so we can fix the problems of the country. >> outstanding interview by our "squawk box" colleagues, andrew in particular. to contribute, we have former pennsynor as well as the one-time head of democratic national committee, ed rendell
3:40 pm
good afternoon to you both jimmy, starting with you, if i may. in that interview, howard schultz clearly criticized washington gridlock, but he also criticized the sort of style of business leader that donald trump represented and differentiated himself from that if howwaarhults successful candidate, would he be able to compete for some of the trump's base or more traditional democratic candidate in that respect? >> i think problem is that he's just -- he's not -- he's not a democratic candidate he just mocked the hot democratic ideas of the federal jobs guarantee, single payer health care. i t like, the market for what he's saying very debt-driven candidacy bond investors don't want to hear that, interest rates are low. so you have a republican party where 85% like the job trump is doing. theric party that's radicalized by trump shthe left, so in the
3:41 pm
middle, you have, like, a few never-trumpers and new leftovers, you know, clinton types. that's not much unless you want to make a purely symbolic campaign built on stability and debt charts. >> and ed rendell, that's what i wonder, is there a plathdemocra schultz right now? >> sure. i think there is absent joe biden getting in, therront runner. it's ae open field 22 people expressed interest in running. if half of the people run, there's an opening created for a new type of canada what howard would do is look at the camera and say, i'm going to tell you the truth, not what you want to hear the truth is important for your lives down the road, your kids' lives, and your grandchildren's lives. we're goto solvee of the problems facing america, and in a bipartisan ideological fashion. >> is that going to get him through a primary? it's all going to be about
3:42 pm
candidates jockeying one another for who is on the furthest left at this point, whether it's social issues or even spending -- >> what state does he win? washington >> let's assume you got 11 or 12 candidates out there fitting the mold, and schultz is telling people the truth and pragmatic realities of what needs to get done maybe 26% wins the primary who is to say he couldn't slice off -- >> super delegates you know, maybe he appeals to the people, but is the party going to back him? >> i don't think we'll have super delegates, and party backs someone who demonstrates the ability to win i'm not saying he's there yet. i hear him give a speech at the constitution center, and he gave a very nice, logical presentation he's got a huge task convincing people to vote against short term interest and vote for the long term interest it's not been done in a while.
3:43 pm
john mccain almost did it in 2000 >> andrew asked the question earlier of mr. schultz, and that was, do you feel that there's going to be a whole slew of candidates energized by the fact that donald trump is, one, an outsider, and either way, which direction do youee the democratic nomination heading towards? >> look, i think there's going to be a lot of people who think, who do not have traditional backgrounds, a business, mayor of a city, if trump can do it, i can do it. that's right there's going to be 25 people running for this office. all of who will be out progressiving each other the party is shifting to the left there's -- listen, howard schultz was in the right part of the party before trump he was -- talking about running before, he was going to run to the right of hillary clinton now the party shifted left there's no place for him be prepared to spend a quarter
3:44 pm
billion dollars, run independent candidacy, and hope interest rates go crazy, and people will start paying attention to his debt message >> or maybe in a weird way, trump created this opening i don't know point about the super delegates is interesting, ed we go, but tngbout that another time. thank you, both, jimmy, ed thank you for joining us >> you bet 17 minutes left of the trade at the moment. the dow is negative, down about 20 points, and s&p around the at line, a nasdaq remains the outpformer we discuss the markets in detail with mohamed el-erian, watching oil as well. we're back in two.
3:45 pm
anyone can get you ready, holiday inn express gets you the readiest. because ready gives a pep talk. showtime! but the readiest gives a pep rally. i cleared my inbox! holiday inn express, be the readiest.
3:46 pm
3:47 pm
markets are higher, and intra-day high, today, for the first time since march, on pace
3:48 pm
for another record close >> when we come back, el-erian joins us and why the move in the dollar could move the markets. (baby crying) (slow jazz music) ♪ fly me to the moon ♪ and let me play (bell ring)
3:49 pm
3:50 pm
3:51 pm
welcome back, keeping an eye, ten minutes to go, whether the dow turns positive down six points now, others higher like the nasdaq and russell today. economic data in the u.s. shows strength still, not just that unemployment report from friday, but even this morning, service sectors and job openings >> the next guest warns a too strong a move in the economy could be a risk bringing instability. let's bring in our economic adviser, el-erian, thank you for joining us >> thank you >> i guess we did, in fact, last week, quickly see a fed rate hike fear grow, but, quickly, back to in terms of the fed rate expectations, focusing on the u.s. data, and that remains very strong >> certainly does, and today confirmed that the u.s. economy's outpacing other large advanced economies, and in a
3:52 pm
meaningful way you have all elements of demand, domestic demand kicking in consumption supported by very strong labor market. business investment and government spending. the u.s. economy will continue to outpace the rest of the world, and that's because it's the only economy right now that is driven by policy opposed to other factors. >> one of the things last week when we had that kind of one-day selloff with concerns about italy, that happened 10-year interest rate, so will we get four hikes in. >> i think three hikes, and i think we'll still get three hikes, and what's important to look at is the interest rate differentials with europe. today, the 10-year, that seems low at 291, actually, it's up 252 basis points above the
3:53 pm
german bond yield. that's a lot keep an eye on that. the market trades in a global sense, and these interest differentials have become quite large. >> mohamed that fear of not c conta contagion, but risk, that's subsided, european banks selling off, is there a big tail risk of something destabilizing stemming from europe out of the political situation in the next year or so or not >> if italy tells you what turkey, argentina, the tradeiscu grow an economy, a global economy at a low level of growth, and what that growth is not sufficiently inclusive, things start to be fraying and could break. you are seeing this in europe. it's the politics driving
3:54 pm
economi economics, and bad politics or angry politics is the as a result of low -- so, yes, there is a tail, but it's mostly outside the u.s. i don't actually worry too much about the u.s. economy being conty europe i do worry that growth differentials start adding to the disruptions facing the emerging economies in particular >> yeah, no, absolutely. we got to go, but the gas price is down in l.a. means you pay $4.50 a gallon, right? >> i know. it's like christmas. >> yes, no, only in los angeles is that like christmas, you know, everyone else,, i don't know, is that it, then will it stay down? >> i think what we're learning is oil producers maximize revenue, not price so when the price is low, they want to hike prices up when the price gets too high, the temptation to be incremental producer is enormous maximizing
3:55 pm
revenue. i think you see supply pressure on oil the only thing that would bring oil back up is geopolitics >> all right well, at least it's in check for now. mohamed, good to talk, thank you very much. >> thank you, kelly. we've got five minutes left, and coming up, back with the "closing countdown." you've got e intelligee 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. that's the power of &. & if your customer also forgets socks! & you could send him a coupon for that item. the line between work and life hasn't just blurred. it's gone. that's why you need someone behind you. not just a card. an entire support system. whether visiting the airport lounge to catch up on what's really important. or even using those hard-earned points
3:56 pm
to squeeze in a little family time. no one has your back like american express. so no matter where you're going... we're right there with you. the powerful backing of american expres don't do business without it. don't live life without it. you mighyour joints...ng for your heart... or your digestion... so why wouldn't you take something for the most important part of you... your brain.
3:57 pm
with an ingredient originally found in jellyfish, prevagen is now the number one selling brain-health supplement in drug stores nationwide. prevagen. the name to re. (slow jazz music) ♪ fly me to the moon ♪ and let me play (bell ring)
3:58 pm
welcome back, about two minutes left of trade, s&p 500 intraday chart, it's been a ckluster session either way, the size of the moves, it's not been too big it's been essentially, well, lackluster back to the original words now, back to the four individual indexes, dow down, and nasdaq and russell lead the charge, there, of course; supposed to be less affected by trade talks they are the outperformers the sectors today, no real cleat part of a percent, a utilities and banks near the bottom. you see thmove so closely together, but realize utilities suffering, and financials more because they are affected by european banks trade if we quickly look at individual stock movers today, barclays on the list for us.
3:59 pm
that's suffered today as well as all european banks dragging down u.s. banks, and starbucks and twitter higher, and crude up a percent, but suffered a lot recently bob, a two-week chart of the euro what can you do to the euro while in italy >> the dollar, we had so much fun in central italy what was 1.16 when we were there. trad val italy falling apart, but nobody told the italians. what a wonderful country they are unhappy, they should be, taxes are too high, but no one has more fun than the italians the food is good, the wine is good, the weather is good. wonderful country. main take away is the names in apple, amazon, micrmicrosoft, netflix, and retailers are running. why? it's happening because the
4:00 pm
commentary from the retailers is great now that the earnings are over with the better traffic, with better weather, and there's been less inventory marked down, and generally, the environment has improved we'll see if it finally translates into top line growth. >> bob, great to have you back glad youad a great holiday down ten points on the dow, nasdaq is the best of the three, up a few tenths of a percent, and winging the board at the big board, napa. that's all for the first hour, and kelly's got the second >> thank you, wilf, and welcome, everybody. i'm kelly evans. looking at the nasdaq in particular, a record close yesterday, and this is how we finished today, dow could not turn positive, down 11 points there on the bell. the s&p 500 is down too, 2749. oh, ael, just a point below the level you said to watch. >> coincidence, we'll talk about
4:01 pm
that >> back to that. 7634 for the nasdaq, fresh closing high there, ane russell, small caps up to 166 h1664, adding 11 points maybe not a coincidence with the trade concerns back in the forefront. shares of tesla finished lower, and we are 90 minutes from the shareholder meeting and whether musk has too much power coming up december ha under -- tesla under 2% today the owner of onef our largest pork producers will join us with his take on what tariffs do for business joining me now, our market commenta commentator, michael santoli topping the dow, dupont, macy's on s&p, and carnival lagged.
4:02 pm
mike, retail, again, with an incredibly strony. overall, what's the theme here >> well, the overall market paused at exactly where you might expect it to s&p 500, mentioned 2750 level. we were right there march 15th, closing there, fell very hard, and we've not been ablto retain it. market up 6% in nine weeks close to 3% year to date, so it's a question of, can we get just past the technical hurdle, but underlying that, you mentioned retail anything leverage to the consumer or technology is working well economic data domestically is very, very strong at the moment, and so we had this weird little lull, and now it's all coming back when it comes to the retailers, it's just enough to go around. >> and they got so bad, so beaten down. on that note, the bureau labor statistics found for the second month in a row, number of job openings in this country exceeds number of available workers.
4:03 pm
6.7 million openings, 6.4 million workers available. what do you think of that? >> i think the economy's very strong i think that really is why retailers are having a bounce. u.s. i% consumption. retailers were beat down i think the bounceback is not terribly surprising. the strong job market really is pretty remarkable what's happening. you know, we all saw stocks with a high gdp promises, but it looks like it's actually happening. now, we're going to watch to see what oil does, if oil prices derail the economic recovery, but all signs are that the economy is going to continue chugging forward, and that's good for stocks in my view >> and, mike, i mean, it's goldielocks. there's no real inflation of the bad kind, a little bit of oil, you want wage inflation, and that seems like it's happening, not totally absent, questions about the composition, where it's not going up further. but this is a sweet spot right
4:04 pm
now. >> what the market is not focusing on is inflation relating to costs for companies. i mean, you're seeing in the ism numbers today, all talk of slower shipments, bottleneck logistical logistically, so, yes, that stuff happens and filters through, but in terms of option, it's subdued after the june rate hikes, we don't know actually, the labor markets are strong, it's hurting the economy. >> that's what happens everybody says it's the fed trades, no resources get tight. >> yes >> businesses cannot put labor and capital resources to work at an economic rate, and then inflation goes up and the fed has to kill. >> right >> that's the process. >> what's the better way out if the answer is - >> last long enough before it hurts. >> or taking about mohamed, is the fourth rate hike happening he's in the camp of three, why not raise, five, six, seven, but the idea is to break the economy without shattering >> i don't think that is the
4:05 pm
idea to break it, but to sort of, you know, normalize without kind of causing immediate harm >> what do you think let it ride? >> yeah, well, i'm of the camp we're looking at three if you do five, six, like, that's dpoigoing to have a bi impact on markets. i don't think the fed wants to send that message. there's inflation data not enough to justify that rate increase it is goldielocks right now. that's why, again, oil is the key issue. what do inputs look like in terms of costs, right? i do believe what mike said is critical there's growth by a very, very tight labor market because it's simply not going to let companies unleash potential as much as they might have. >> yeah, no, i think this is absolutely - >> or spend on technology, so the nasdaq goes up >> to become more productive, but replace bodies i want to just mention some of the retail names in particular hit all-time highs today,
4:06 pm
macy's, kohl's, ralph lauren, tiffany's, tjx is this a bounce has been since last fall. there's a follow-up here the stocks are not particularly expensive. they were beaten down that if they hold roughly earnings levels, they will be okay. >> yeah. >> even if they spend tax cuts on competition as they seem to be there's an allocation trade here look within consumer discretionary, if you own amazon or can't stomach it, media is ugly on the chart. rig right >> it's an extended catc trade. >> great point starbucks, a story related to that, dipping today after the executive chairman, howard schultz, announced he is sitting down andrew sat down with him and here's what he said about the future of starbucks. >> 2018 is not 2008 for starbucks. we are billing a great, enduring
4:07 pm
company, opening a store in china every 15 hours, up to 3500 stores roasteries opening in new york in september and october the future of the company is bright cyclical changes at timm confident in the long term progress >> joining us now is neil, would you bet on starbucks from here >> i like the coffee, but i don't know enough about the company to reay recommd itone wu know, the one thing about it, l kelly, is there's a mundane business such as coffee, but they are shaking it up as we talked about, trying to do other competitive things to keep their name out there and continually grow >> where are you in the consumer space more broadly on a day when starbucks has leadership transition, and as we said, we think of traditional retailers are doing pretty well.
4:08 pm
>> well, you know, there are specialty items to look at, kelly. a stock i like is sanderson farms. it's just a chicken farm, supposedly, but they process 570 million chickens a year, 4.3 billion tons of chicken, and that's all they are is in the chicken business, but here's a company that has the low price to sales ratio, pay a dividend of $1.28 earnings are somewhere in the 12 to 13 dollar range they have 400 million in cash. no debt. now, would you rather do that or buy netflix for the long term? i say -- >> you got tyson out there bung, you know, bought -- they bought jimmy dean, an organic chicken maker now, and we talk separately about how for a lot of the food companies, they are trying to figure out this very finnicy u.s. consumer right now. obvious bet to me, you know,
4:09 pm
there's a lot of people having trouble making money long term in the space >> well, atand the marketplace is really two markets, big market, small market you are either selling to the large store box stores like sanderson, or you're going to be fast food industry they happen to be the third lar in the big markets if you even go to the web page, you don't need to be a financial jeep yo genius it's what you see in the store it's not exotic. on top of it, they have the feed stores that sell the feed to the 900 producers of the chickens. it's just a great, interesting story. >> i'm learning about chickens than -- i wouldn't know trillions from my billions in the u.s. chicken market, but it's a good point. i want to ask you guys when you think about blackrock as well cutting fees on the etf. in the statement saying price changes reflect ability to use the scale ofck's
4:10 pm
platform to create efficiencies for clients. mike, we have not talked much lately, but this continues to happen in the etf space still. >> yes >> and blackrock big enough they can afford it. >> fees going in one direction big guys like this use scale advantage and vanguard is really the unspoken kind of price leader when it comes to this, obviously, run as a non-for-profit, cutting fees -- not vanguard, but the prevailing unibond exchange traded fund, they slashed fees, and probably because vanguard wants to, so i think the lesson is, investors are getting the basic building blocks of a portfolio at app extremely cheap level to the point yoshouldn't worry about it >> it's basically free >> yeah. i mean, for all intents and purposes, the difference between 12 basis points and 7 is probably not going to be missed -- i joke, you have to have so much money for that to make a difference for you that it does not make a difference. >> are we looking back going, hey, remember back when there was a time you could investor free, or is that what's happened
4:11 pm
with the tech companies and technology >> no. i'm not saying it's literally going to 0, but i think this is probably the direction it goes because it's only going to get more, you know, technolo enhanced >> and, michael, this does not excuse anybody from charging moren that if you are active, you can make the case, but they chase everybody else out, right? >> i was just going to make that case we used hundreds of millions of s of etfs in our portfolio strategies so this is just a ne and you're right, it's all going basically towards 0. it really makes folks running mutual funds have a pretty high bar to get over in terms of justifyingees. so it really is shaking up the market place i think it's tremendous news i know the blackrock people very well, and i know they are very much focused on market share and trying to be the low cost producer in the market place, so i think it's good news for consumers, and i think etfs are
4:12 pm
a great way to build out a portfolio strategy >> what's the henessy take on this, bill >> opposite side of the trade. i'g back in the siness, most 40n money markets came out, ther was no ce. all you wanted to do was get money in the door, money in the door, so that you could sell them in the future, higher margin product that's what vanguard's doing and what blackrock's doing i'm not saying they are bad companies, but wat are doing is you can't make any money at those ranges, so they are bringing the money in, at some point in time, it's the customer, the shareholder is going to be sold higher margin product for a different story. once y have the assets in there, they are going to stay there, and that's the game you're playing >> it's the same thing amsazon's doing, right when prime started, it was cheaper, got up to scale and raised prices, and that sort of
4:13 pm
thing. i think recently involving vanguard, tried to push people highefeesr, you know, products are you confident th to happen, or are they able to do things differently because they always have, neil, and this is their m.o., what they are all about? >> well, kelly, if you keep going, everybody's buying in on the story thatthe best for the shareholder reality of the situation, the net profit of the shareholder is the most important thing to the shareholder, so what they are doing and will continue to do is market a higher margin product because you can wanot make money or three basis points, even if you are nonprofit because the overhead is too much look at third party platforms like fidelity or t.d., that's 40 basis points just to be on the platform so you tell me, kelly. i'm not an analyst or mathematici mathematician, but that does not make sense >> all right mike, last word.
4:14 pm
>> they have higher margins, but not forcing anybody who plugs into an etf to buy anything else it literally costs, almost literally costs blackrock nothing to add a billion dollars in assets under management in etf. >> i completely agree. completely agree >> literally nng more. >> good conversation, thank you, all, talking about the markets i want to get you the quick earnings alert on ambarella. they beat expectations, the street looked for 9 cents, got 13 cents, and revenue was beat, but guidance weak on the second quarter, so revenue got spresinspres i -- interesting, and so i should point out the company says we are encouraged by the feedback by customers in the securities and markets, and believe this technology brings new
4:15 pm
opportunities for growth stock is down 17% this year. gopro is also under performing this year. back to you. >> all right, seema, tha you very much. airline stocks down significantly, underperforming broader market today." fast money" talks whether it's a buying opportunity down 1.5%. tesla shareholders set to vote on whether the chairman and ceo musk has too much power. phil lebeau has the story. >> reporter: kelly, there's some investors in tesla who think elon musk should not be chairman of the company do they have a shot of making him give up the job? the odds when we return.
4:16 pm
4:17 pm
4:18 pm
welcome back, a rough year for tesla, stock down 7%, nearly 2% today investors are set to vote on key proposals at the annual shareholder meeting including whether the chairman and ceo elon musk has too much power phil lebeau has the preview. >> reporter: much of the power is granted to him because in the eyes of the board, they are too cozy with rusk, including the board of the director being his brother. these are the three directors up for re-election. only three of the nine up for
4:19 pm
re-election, and most believe they will be reelected by the way, institutional shareholder services are both opposing the re-election of the three directors, but most believe they will be reelected, and he's the reason why. when you take a look at elon musk's power, if you will, in terms of voting for tesla, take a look at what control he had. he has 22% of tesla's voting rights, so you say, well, that leaves room for other people, but the tesla board has super majority voting power, and the board generally speaking goes along with what he is looking to do with the company, is the chairman and ceo for ten years, and that's why it's hard to believe there's any possibility that the proposals do not have directors reelected or split the chairman and ceo jobs away from
4:20 pm
elon musk. he's been chairman and ceo for a decade now highly unlikely we'll see any of the proposals pass just despite the fact there's a few shareholders who say, look, we think it's in the best interest of tesla remember, the meeting starts at 5:30 tonight we're not focused on board politics, if you will, but what musk says about the model 3 and where the company is thin rampig up production. >> always production, but interesting wrinkle, phil, thank you very much. >> you bet >> does musk have too much power? gordon johnson and jeffrey cohen here welcome to you both. interesting to me, if the board has super majority voting power and you split the ceo and chairman roles, what would that accomplish for musk? >> well, i don't think it would accomplish much, and elon has so
4:21 pm
much power in the company like phil said that it's not going to make too much difference from a substantive point of view because he col they they anyway and has the power to get to that point because people love him depends how you define "pouwer. >> so if he's chairmanf a board with super majority voting power and take the chairmanship away, maybe that's key, not just splitting the roles, i don't know what you think, mike, but split and he's ceo but someone else - >> yeah -- >> decides whether he's -- >> trying to disperse authority a little bit i think the moves to split chairman and ceo are almost just a pro forma good government proposal >> right >> and a lot of the shareholder grou ph that it's not someone saying at tesla specifically this has to happen for specific reasons, but a general gesture. >> make you feel confident about the stock? >> not necessarily i think elon musk as you
4:22 pm
highlighted has a lot of power despite the fact recently there's been turmoil there was an article today in business insider that talked about very high scrappage rates, 40% and 5% at typical car companies is concerning. look at the promises made over the years like in 2014, doing over $2 billion in their store segment and only in 2017 the did less than $100 million also talking about the facility associated with the solar city acquisition, ramping up capacity and not hitting that people look at that. are invested in the stock, $10 billion in debt, $1 billion in cash flow last quarter despite those verynegative dynamic, they trust musk >> jeff, it seems like it would hurt the share price a lot if they take any of musk's power away from the company that most people are -- feels to me, are invest eed solely with him
4:23 pm
>> i don't think they take away the power. they know that he's so closely associated with the brand and company that it would be almost stupid for them to do that but having said that, power and that love can fade quickly if they do not fix the model 3 issues and fix probability, so, you know, that love will fade quickly. think about travis, you know, they loved him until unable to actually make the changes and grow and sca as the ceo. so, you know, i think the bod would be smart to give him more guidance, have more backbone, tell him to communicate rather than antagonize shareholders >> you think the board is telling him anything >> i don't think they have the backbone >>ht have it, but he's so much his own person. that's like telling donald trump what to do >> it would. you could have made the argument about travis, and eventually, you know, you don't want to bite the hand that feeds you. he made the decision to go public, and he doesn't need to bite the hands of the investors and shareholders, but be
4:24 pm
transparent, communicate - >> did travis has as much control over uber? >> he had more ownership so i think he had at least as much control they are both larger than life charismatic powerful figures that, again, have a lot of love, and people cut them slack, but love fades if they -- if he can't be an am dexterous ceo, he has to innovate and profit >> the government side follows along if they hit prtion targets, outperforming own estimates for once that's what it comes down to when it comes to the example, you have to appreciate that type of a, you know, type of an antedote, but there's a certain line crossed and cultural issues >> gordon, do you think there would be enough external pressure absent share price
4:25 pm
dropping significantly on musk >> i don't think so. look, reality, though, is this think about things like him promising probability in q3 and q4 we think the way he achieves that like before and positive cash flow is unleashing credits, one-time in nature, and really start to hit a wall next year in 2019 as car manufacturers really start to produce i also think that the federal tax credit going away pulls in demand for them. the point is this. the numbers look good in q3 and 4, possibly, but we think unleashing one time earnings and looking at 2019 when there's a lot of competition, that's going to be very hard for elon to execute, so i think there's a big head wind near term. >> by the way, looking into the -- if the cost of that came down a lot, that could be really interesting. anyway, got to gordon, jeffrey, thank you for joining us >> thank you >> the meeting starts in an hour's time.
4:26 pm
>> oil under pressure, what's driving crude lower now, and if energy investors should be worry. airline stocks, you think they are helped by that, but they were hit today mrathe faston tdewn whether it's a buying opportunity, and we want to hear from you reach out to the show on twitter, facebook, or e-mail we're ba
4:27 pm
4:28 pm
whoooo. when it comes to travel, i sweat the details. late cout... whoooo. ...down-alternative pillows... ...and of course, price. tripadvisor helps you book a... ...hotel without breaking a because we now instantly... ...search over 200 booking sites ...to find you the lowest price... ...on the hotel you want. don't sweat your booking. tripadvisor. the latest reviews. the lowest prices. oil prices falling in the
4:29 pm
last couple weeks or so. will they stay down, jackie? >> that's the question crude oil seeing more pressure today, brent supplies and wti turned at the end of the day the news that the iranians are preparing to rese uranium enrichment should the 2015 nuclear deal fall apart r that's k -- that's key here. the u.s. has withdrawn, so that means iranian barrels could come offline, maybe half a million a day. that should send prices up, it hasn't been because the market believes opec wi save the day by adding barrels back online on their june 22nd meeting. estimates suggest it could be a million barrels a day, and, in fact, reports today suggesting the u.s. is asking opec to do that so prices do not spike. the saudis and russians would like nothing more to get their market share back, especially at the expense of the iranians. wti trading at 65, and brent at 75, and today it reached a
4:30 pm
50-day moving average. there is momentum in the downside in the trade, but most traders say it's limited, maybe a few more points lower, but not a free fall scenario, guys, and lookhere we are in terms of the progress crude made over a year still about 35% in gains >> yeah. i'm amazed it's up there, jac e jackie, and, by the way, what's the spread these days? i keep hearing all the stuff about how it's all just stuck in the per meter that there's basically it's cheaper, but no one gets the crude so it does not matter >> right they are talking about bottlenecks, kelly, in the united states, it's all about infrastructure we've got the oil, certainly, but we have to manage how we can get it out of the country, move it around the country, and that's something that the trump administration is certainly working on, but it takes time. >> yeah. jackie, thank you. as she mentioned, a little bit higher now, mike, 65 bucks a barrel >> looks like a pullback after a very strong run when you had people crowd and chasing it.
4:31 pm
so, for now, it's not a broken thing, so 65, maybe, not -- the floor -- >> unfortunately >> right exactly. >> we want to break that trend >> probably some magic optimum level that makes everybody happy. >> uh-huh. >> but never stays for long. >> this is how we finished today. dow under 13 points today, and s&p was up a couple to 2870, and nasdaq added 31 points and russell up 11. here's the other big stories of the day in the rapid recap. >> starbuck's ceo stepping down. will he now run for president? >> there's been speculation. let's deal with that right away about whether or not i'm running, and what i really believe is there's a lot of things i can do as a private citizen other than run for the presidency of the united states. let's just see what happens. >> the fact that trump won gives people like schultz, bloomberg, dimon, i hope it gives all the
4:32 pm
people to have the courage to say, he did it, i can do it, only a better job. white house called off the celebration celebrates the eagles >> the nfl, if they think the anthem controversy is going away, it's expected to stick around twitter on ete eter on a t high >> shares of apple hilt another all-time high this morning. company's market cap closer to the one-trillion mark. >> the president wrote "art of the deal", and we're engaged in discussions and negotiations and hopeful we reach that positive balance. dow could not turn positive, down 11 points there on the day. also, wondering, mike, journal today hat china offered to purchase nearly $70 billion of farm and energy products if we abandon tariffs this kind of working its way through the markets, did not have a huge effect, but could be a big outcome in terms of the
4:33 pm
numbers. >> if it's presented as a way to declare a mutual win somehow, yes. who knows if they otherwise would have bought this particular $70 billion in energy ricultcts they are net buyers of anyway >> so the market doesn't know. >> right zte headlines and potential deal >> true. >> the market does not seem particularly agitated right now over where the trade issue is, but because they can do the math, it's not a big swing factor or comes to a resolution. >> or go to small caps >> right >> time for a news update. let's bring back sue >> guys, here's what's happens at this hour, everyone senate majority leader mcconnell cancelled the august recess calling what he calls unprecedented obstruction by senate democrats and says the senate needs to work on appropriations bills before the end of september two of the nba's biggest
4:34 pm
stars, lebron james and steph curry, weighing in on today's white house celebration controversy. >> i know who matter wins this series, no one mewants to be invited anyway >> i agree with bron how we handled things last year, kind of stay consistent with that >> the golden state warriors did not attend the white house to celebrate the 2017 title a swedish recorder capturing this video at the white house celebration. take a look. yep. that gentleman is kneeling in the playing of the anthem. efforts to find out who he is and why he knelt were unsuccessful media at the event saw at least one other person kneeling. under armour's dwyane the rock johnson shoes selling out in 30 minutes. called project rock 1, they were released on may 28th and sold out right away at $120 a pair.
4:35 pm
you are up to date that's the news update, kelly, back downtown to you >> i mean, he's athletic, he was a wrestler, t he's not a current athletic star, michael >> no, he's a box office star. >> the workouts are legendary. >> yep >> even though he's just working out for movies >> he's in good shape. >> yeah. >> all right, letting him slide. >> i like -- the athletes get the shoes. >> they obviously only made -- there re made a run that was going to sell out, right >> he does donate a portion of everything that is sold to a charity that he supports, so maybe that mitigates the $120 a pair, but hopefully my son is not seeing this because he'll want them. >> they look better than the steph curry shoes. anyway, sue, thank you very much >> you got it. airlines among the worst performers on wall street, which is interesting because oil prices were down up next, "fast money" says whether the stocks look cheap,
4:36 pm
and mexico set to slap a0% 2 tariff on pork products. a pork producer explains how it impacts their business coming up
4:37 pm
♪ south l.a. is very medically underserved.
4:38 pm
when the old hospital closed people in the community lived with untreated health problems for years. so, with the county's help we built a new hospital from the ground up and having citi as an early investor worked as a signal to others to invest. with citi's help we built a wonderful maternity ward and we were able to purchase an mri machine. we've made it possible for the people who live here to lead healthier lives and that's invaluable. ♪
4:39 pm
. airline index lower about 1.5% today this after the forecast of lower than expected airline profits due to rising oil prices airline index is down nearly 10% this year, so is it time to buy the di joining r "fast money" traders,uy, ren, good to see you. >> hi, kelly >> i thought today this was yesterday's news oil was down today for the most part, so why weren't airlines up >> i don't know. i'm long airlines. long delta long american. i wish i knew that one interesting thing in the report that stood out to me is they talked about normal earnings being normal now in this industry, and this industry trades like it's not a normal earnings industry. it trades like it's cyclical, which, of course, it's been icality is moderating and that it's too cheap for what the industry is now. >> tim, obviously, the over arching fear as karen allude s o
4:40 pm
here is people with muscle memory with united out there, not seeing market share, they are big guys seeing price competition in a time of outlays. >> it's all the right points sentiment is two out of ten if you listen to the top guys, and listen to the rest of the street, they all point out they are concerned capacity growth, although, second half, you see capacity cut united recently guided investor conference to the midpoint of the 2018 numbers nice thing about airlines is any operation, there's lifts along the road airlines, if we believe the economy is chugging and, i believe it is, demand is very high, this is not in question, all about the guys resorting toiester year -- yesteryear. i'm long airlines here >> all right this, karen, final word on this. one of the top stories on the website is the 72 hour sale with
4:41 pm
southwest fares below $100 for a round trip now, they do this twice a year it's not out of the ordinary, but is there -- that what tim is talking about here, the concern that the fares are just going lower? >> yeah. u know, although southwest has problems, but it is not delightfuley are too cheap even with all the head winds, no pun intended, that they face. >> yeah, all right, guys, thank you both, karen, tim, constructive on airlines on the down session today catch all the "fast money" action at 5:00 p.m. eastern in under 20 minutes shares of microsoft post two days of gains now, but the winner is not the ceo. who is in today's takeaway next. it lets you know where your data lives, down to the very server. it keeps your insights from prying eyes, so they're used by no one else but you. it is... the cloud. the ibm cloud. the cloud that's built for all your apps. ai ready.
4:42 pm
secure to the core. the ibm cloud is the cloud for smarter business. secure to the core. ron! soh really? going on at schwab. thank you clients? well jd power did just rank them highest in investor satisfaction with full service brokerage firms...again. and online equity trades are only $4.95... i mean you can't have low cost and be full service. 's imposyou can't have low cost it's like having your cake and eating it too. ask your broker if they offer award-winning full service and low costs. how am i going to explain this? if you don't like their answer, ask again at schwab. schwab, a modern approach to wealth management.
4:43 pm
now you can, with shipsticks.com! no more lugging your clubs through the airport or risk having your clubsost ed by the airlines. sending your own clubs ahead with shipsticks.com makes it fast & easy to get to your golf destination. with just a few clicks or a phone call we'll pick up guaranteed, for as low as $39.99. shipsticks.com saves you time and money. make it simple. make it ship sticks.
4:44 pm
welcome back, time for the takeaway we begin today with more on the microsoft deal from yesterday, an all-stock deal worth $7.5 billion, and new today as a result of the deal, gethub's founders are not only billionaires, but could each end up with ten times as many microsoft shares as the ceo. what do you think of this, mike? >> i'm tempted initially to say maybe he's under compensated, but it shows the difference between founder economics and being an employee. employee ceo at a huge company >> true. >> they just don't load you up with tremendous percentages of equity this is obviously a rich price i mean, it's -- they wanted
4:45 pm
this -- there was competition for it, and clearly the sellers want stock >> yeah. what was the interesting thing about this, finally on this, i wonder if the's just a case to be made for saying the ceo, in this case, should have a bigger ownership share than all of the other -- >> i don't know. i have not done the math, but, look, disney succeeds in fox, murdoch owns more stock than disney, probably >> that's a crazy thought. >> that's what happens with big acquisitions >> britain cleared the way for fox to buy sky, and if murdoch sells sky news to disney, conveniently, they have bids for fox os sassets already how significant is sets for this from the u.k. >> it is significantn tht kind of opens up the field for what everybody expects to be a free-for-all >> you they that's what it does? it does not make it more obvious that the disney box -- you think it opens up now that this -- >> well, as it relates to sky,
4:46 pm
the sky deal in particular, the market is saying, it's a bidding war, somebody has to raise the bid right now, that probably makes sense. a week from today, we get the at&t time warner ruling, supposed to anyway, so that's probably going to say exactly how the pieces move around and could cht is interested in something more than just sky >> great point could be sky news even if they don't get sky and other -- >> and fox and sky >> a a complicated story that's getting worse by the day finally, a deal in online stores today, saka 5th avenue's gilt sold likening the deal to when t.j. maxx bought marshall's way back. now tjx is a juggernaut. is this deal with two little known companies more than just a flash in the pan >> hard to say gilt has been passed around, as
4:47 pm
we know, had supposedly a billion dollar private market valuation, sold to hudson's for 250, and now the sale price is 100. i don't know wt's left in terms of franchise valuere, but mayb low risk acquisition and makes sense to fold in the brand. >> true. >> if you believe in this style of e-commerce. >> and they wanted it for nine years. >> yeah, matter whether the numbers work or whether you sell it >> if they can, curious to see it feels like the moment is past. mexico says they will impose tariffs on pork products from the u.s. a major pork producer weighs in on that next on "fast money," wall street's biggest llbu is now more bullish, tony dwyer and why he excited about the market
4:48 pm
well, it's earnings season once again. >>yeah. companies are reporting today. it looking? >>i don't know. there's so many opinions out there, it's hard to make sense of it all. well, victor, do you have something for him? >>check this out. td ameritrade aggregates thousands of earnings estimates into a single data point. that way you can keep your eyes on the big picture. >>huh. feel better? >>much better. yeah, me too. wow, you really did a number on this thing. >>sorry about that. that's alright. i got a box of 'em. thousands of opinions. one estimate. the earnings tool from td ameritrade.
4:49 pm
4:50 pm
welcome back, jordan peele inked a deal with amazon the writer and director gave amazon rights to a first look ss pretty interesting because in this case, amazon suspect signing up for content directly, they just want the option. >> now these deals exist, they think he has a film first look deal with universal but it's clear that amazon and netflix, they're just studios now but they're the big free-spending studios that need to buy the brands and the brands are the creators in this world you're buying the producing and writing talent as opposed to the franchises right now so it's very interesting and you know almost any time you have one of these deals get struck it's like well, that was the high bid because it seems like everybody's in play and jockeying and kind of forced to pay up. >> kind of going back to your
4:51 pm
point. the studio -- so studios themselves are not a highly valued much sought after business. >> typically not, yeah. >> so just the fact that they're owned by this new distributor in these new tech companies makes them the most exciting thing -- it doesn't totally make sense to me. >> because they're is understand dies bid a different business. they don't have to make money or ratings, they just have to get attention and i guess in large the subscription base in general. hey don't even have to be successful just like the bigger the offering the better regardless if it's outstanding just pretty good. adam shandler movies are pretty good. >> that's kind of what it was except you don't have the bean counters saying look, you have to make money on this particular piece of content. >> and i guessed adam sandler movies don't do very well. >> and no more romantic comedies getting made.
4:52 pm
>> maybe that'sb why i haven't been to the movies in over a decade. up next, how mexico's planned tariff on rkpo products will impact the business of one of the biggest pork producers in the country. the country. stay with us i want etfs backed by research. is it built for the long myeputation depends on it. flexshares etfs are designed and managed around investor objectives. so you can advise wi. confidence. before investing, consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully. that i served. of the fact i was a c130 mechanic in the corps, so i'm not happy unless my hands are dirty. between running a business and four kids, we're busy. auto insurance, homeowner's insurance, life insurance policies. knowing that usaa will always have my back... that's just one less thing you have to worry about. i couldn't imagine going anywhere else. they're like a friend of the family.
4:53 pm
we are the cochran family, and we'll be usaa members for life. save by bundling usaa home and auto insurance. get a quote today. with tripadvisor, finding your perfect hotel at the lowest price... is as easy as dates, deals, done! simply enter your destination and dates... and see all the hotels for your stay! tripadvisor searches over 200 booking sites... to show you the lowest prices... so you can get the best deal on the right hotel for you. dates, deals, done! tripadvisor. visit tripadvisor.com mom anit's not theirs.car... it's mine. mine. mine. and it always will be, forever and forever. the new rx 350l with three rows for seven passengers. experience amazing at your lexus dealer. at fidelity, our online u.s. equity trades are just $4.95. so no matter what you trade, or where you trade,
4:54 pm
you'll only pay $4.95. fidelity. open an account today.
4:55 pm
we want to alert you to headlines out of the a.p. regarding ongoing volcanic eruption in hawaii this video shows lava in a poe hoe bay.kapo bay. guatemala also issuing an evacuation order for towns near the volcano of fire. reuters reporting mexico will impose a retaliatory 20% tariff on pork products. joining us is the former president of the national pork producer's council and owner of maschhoff's, the biggest pork producer in the nation how does this work for you immediately prices go up 10% >> yes the initial tariff is 10%, takes place meetly, escalating to 20% tariffs t s july 5
4:56 pm
that's the majority of the products a few are missed but the majority that we export to mexico. >> so what does that mean in terms of the money that you guys are goin get, the business that will be hurt by this? >> well, it's -- it will have a very large affect. about 26% of production in the nation as a whole our company would weigh in right about the same goes to exports so we're dependent on exports by a whole margin china is probably about -- pardon me, mexico is around 32% so far this year of our exports have been bound. so they're the largest export market in volume and so any kind of hit as we look at nafta, we analyze e woulpull out of nafta, that would have a major impact on our bottom line and the tariff levels in there very, very similar to the retaliatory tariffs that were placed on due
4:57 pm
to the steel and aluminum tariffs that we imposed last week. >> there were other countries that produce a similar product that mexico might otherwise be sourcing so is this a global market for these products that are going to even out if you guys can replace the supply to other buyers >> a great question. it is a global market and the s pork in the world but there are others, other competitors that wherever you have a free trade agreement such as this and you have a disruption your biggest concern is that your customers will immediately begin to look for other sources and that's what mexico probably has been doing leading up to this and also certainly is doing currently. that's brazil, that's europe there are other places where they would like to buy from us they love our product. we would probably -- for them it
4:58 pm
would make a ton of sense for them to continue to source from us but we know from the case of china, for instance, just recently people aren't aware of it my friends aren't aware of it. they say what if you guys get hit by china well, we did so when the early in april after the march tariffs on steel and aluminum were announced on china they came back and they hit a group and by far and away the largest portion of that grouping of products was pork so that number, there's various economists that have given rages but we know that doctor dermott hays from iowa state university pegged the number of $2.2 billion of cost to the industry. so for an average producer, that's $18 a head and i can tell you for a pork producer in this country that is a difference between a profitable operation and a highly unprofitable
4:59 pm
operation so our fear is this will bring the same kind of economic woes. >> have you been a supporter of the presidents yes, i have and actually as you think about the administration as a whole, we knew that we would get regulatory relief and we also knew that from a tax standpoint and a business standpoint there would be a lot of things, we knew that the administration was going to take a hoard liard lin global competition and we also knew that we're a small piece of this but we've asked to be good soldiers and my fear is that producers are getting beat up here pretty hard and we don't want to have the administration forget their promise and that is that they won't abandon farmers and so we've got a good message to tell
5:00 pm
and we've been on defense and we need to be on offense when it comes to trade deals >> keep us posted and thank you for joining us to talk about. >> it thank you very much. appreciate it. >> that's ken maschhoff. they hit the price of bacon in this country, all hell will break loose. >> maybe there will be excess domestic supply and price cuts. that does it for "closing bell" everybody. thanks for join us, "fast money" starts right now. >> "fast money" starts live from the nasdaq market site i'm melissa lee. tonight on "fast," move over de niro, there's a new raging bull. tony dwyer showing his horns 16% higher in the next six months he will be here to tell us what has him pounding the table plus pot stocks heating up as canada gets one step

15 Views

info Stream Only

Uploaded by TV Archive on