tv Closing Bell CNBC November 12, 2018 3:00pm-5:00pm EST
so it has been the epicenter i'm looking at electronic arts, netflix and all negative >> all right that does it for us today. thank you for watching power lunch. >> really good to have you here. >> closing bell starts right now. it's time for the closing bell we are kicking off monday with a big sell off on monday concerns about tech, china and the rising dollar. we'll take you through all of those factors. >> and as apple sets crushed he'll reveal what he thinks moving forward russ will be here to tell us where to find opportunity amid the tell off. >> he speaks out for the first
time about his company ♪ >> good afternoon. welcome to closing bell. big sell off on wall street. welcome back >> thank you >> i'm glad i could join you >> yes it would melt. >> still, they are always around there. >> let's check in on this big market selloff. this would be the third straight day of declines for the s and p. big stories driving today's market moves josh has more on apple slide monitoring the moves and he gets to be in a box today let's start with you and what's driving apple lower?
>> a warning from an apple supplier on that company stock it is slashing the q2 forecast saying that a large customer cut orders they didn't name that customer but investors drawing their own conclusions it enables the iphone's face id feature so it is hard to extrapolate trends from a handful of points. it is not just momentum. they say it reenforces that it is on the decline. on the other hand we know trying to read the leaves on apple could be complicated investors were very nervous about iphone 10 demand because
of what they were hearing. it turned out the iphone 10 was cooks best seller. back to you. >> going beyond tariffs. the administration is working to crack down on theft of intellectual property. we have the latest for you >> yeah. that's right the wall street journal out laying out the case that the administration is moving beyond >> reporting with what officials tell me that this is a whole government effort involving not only the justice but also state,
commerce and the white house and other entities expect a lot more of this. ironically it was jeff sessions, the former attorney general that kicked this off on november 1st with a big speech and crack down at the department of justice officials expect that his successor will continue to step up the pressure on chinese and intellectual property. >> we take this and we put it with the comments on friday and i mean just a few days ago there was a thought in relations are we now expecting maybe it won't go so well and it's not as good as it seems? you know you're right to point out there are factions inside this white house who have different ideas on how to approach this. it is sort of the nationalist
globalist break down, however you want to put it it hasn't gone away. it is up to the president to be the of all of this i think that's why at the end of this month it will be fascinating. that is sort of the time frame everybody points to whether or not the president will decide to get a deal here or not the president could simply declare victory there are elements that say we would need to continue this crack down and ramp up the pressure >> you also mentioned of course the news out of china has not been positive over the last week or so.
>> but with growth -- >> growth rates slowing. >> i think it's being framed as not as good as that exactly. they are doing fine in the grand scheme of things is the economy doing as well as it was >> i think it is slowing another story moving the market today is oil. it turned lower which has turned green for most of the day. we are tracking oil with some key news drivers today >> you're exactly right. oil prices were joining the broader market selloff after trump tweeted hopefully saudi arabia will not cut oil production oil prices should be much lower based on supply. those comments sent oil prices lower. it is 11 straight daily decline while closed below the $70 level. oil initially started the day higher on speculation that the world's largest oil exporter was
pushing for allies to agree to a cut in oil production at next month's meeting. analysts are awaiting new repor reports due tourm which could shed light on whether there are further signs. >> thank you very much we'll see which way it goes after turning lower. the dollar going straight up you have been watching some of the problem children of europe which are leaving the dollar higher today >> sadly i can't really hide, the first thing i want to hide is there has been high correlation. it is remarkably strong. it is true to say that the euro have moved or italy regardless of which country directly it
comes from on friday we have the resignation of a remainder minister which highlighted how hard it will be for may to sell her plan back home she is being criticized on both sides. that is even though the plan between london and brussels. it is important to know the pull back has us in the 127-132 range which has held since the summer. tomorrow we have another crucial cabinet meeting. it would likely break between the 127 range now, italian yields also a sign of rising risk and that's as we approach the deadline to resubmit the budget proposal to brussels. although we have ten day highs a glance at the year to date shows
that it's elevated but not that much higher than it was about a month or so ago. i think it is a bigger factor today. yes, we are reaching to highest. highest level since 2016 >> the fact that the u.s. economy is out all of these factors drive money into the dollar guess what it hurts corporate earnings. it hurts earnings and tightens
conditions for the rest of the world. when you get the breakout levels it starts to weigh down. >> i think it is a great way of highlighting this. it does how many we have relative to what's priced in u.k. has one priced in >> right >> if you look at unemployment rates etcetera if they shake it off all of a sudden you focus on wage growth. >> yes >> and those will be caught short. >> right >> at the moment headline driven problem child as you put it.
>> yes >> we have keith here senior vice president good afternoon to you. jack, what are the key levels? can it continue further? >> i think that was a pivotal area it was very pivotal for the hedge fund community i think it will continue for the rest of the year you have all of this going on. we have been saying it now for the last few months. when you have a trillion and a half dollars it gets upwards on dollar swats
you're facing tens of billions of dollars you a hedge fund community that is panicking >> there are a lot of factors right now. apple has some specific issues what do you think is unnerving investors? >> the apple news and what's happening feathers into that quite nicely it is a little bit of selloff. nobody is absorbing the oil and using it you a day with veterans day celebratedtoday.
i think the broader weakness, you it that is playing in this week it is without 550. it is 2.8% s and p is 1.8%. you reverse your own bullish call last week why did we reverse it last week and did we pull back enough? >> we are to differentiate i was tactically bullish after the mid-october low. i felt there would be a performance chase. of course depending how much the market ran we would decide whether we would reverse that call or not. i felt it would really run its course might be a bit more of a chase but i think it's pretty much
done we moved very quickly rates are quite a bit higher especially on the short end. into the end of the year i think we could see at 280. it is a real -- it has a real impact on earnings >> not the prospect of presidential harassment causing the stock market headaches is that playing into this at all? >> i don't think so even when they had both houses of congress to kind of control things. didn't really impact the market all that much.
it is really about the economic situation around the globe that will dictate those >> thank you all for joining us this afternoon, peter, jack and keith. we have 45 minutes left before the close ge coo tryieo trying to calm fe. >> i think we put it to rest given the fact we have 20 billion of crash we have it here safety program and $40 billion. we only tapped two that gives us a foundation >> those comments though not reassuring investors today the stock down some 7%
up next two leading analysts weigh in on ge's featuruture. >> now in correction territory despite record setting cutting we'll take a look at stocks worts buying in this group you can always reach out to the show or send us an e-mail. we'll be back after a break. the dow is down. i don't know what's going on. i've done all sorts of research, read earnings reports,
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i believe the best technology should feel effortless. like magic. at comcast, it's my job to develop, apps and tools that simplify your experience. my name is mike, i'm in product development at comcast. we're working to make things simple, easy and awesome. frmgs welco welcome back to the closing bell the dow is down 524 points the session was 540 points nasdaq down 2.4% there are some gainers out
there. >> shares taking a big hit today lowest level since back in 2009. ge's new ceo sitting down today saying he feels quote urgency. listen >> whether it is an equity analyst, whether they witness the downgrades or what we send ourselves we ned to bring the leverage down. i think we have plenty of opportunities to do that in the last six weeks it marks six weeks on the job i have heard from lots of people across our markets people who have interest there ge assets. i think it's confirmation that we have quality franchises and that we have options joining us is brian. it looks like you cut your price
target today from $12 to $9 a share. is that after this interview >> it was after an interview i did watch it and i took away a few good points from it. there were three main points i took away. he said himself it's the challenge of a lifetime. you face factors where it's number one business. it's not even bottoms yet. >> we heard him say there's no higher priority now than bringing leverage levels down. >> we talk about their credit line they do need to bring that down. we want to see them bring it down from cash from operations rather than from accessing credit lines or from selling
assets it is rather than from tapping markets. >> so brian, your maintaining a position on this why what do you see that investors are not right now? >> it is about time, being a challenge of a lifetime. here was -- here is what i will submit to you. anything they would have said is right. they are at least as bad as being stated and power has not yet bottomed even if it is coming closer to a bottom. here is what's different about now versus 2009. in 2009 we were in the great
recession. it wasn't so great, right? now we are in a boom economy there is plenty of liquidity you want to be operations but we are not going to get that next year plenty of assets to sell if necessary. they are getting no credits right now. at the very top of this organization we are swapping out that is tell me what i want to hear let me blow smoke in my own face it isn't going to be fixed today. it is not going to be fixed tomorrow it isn't going to be fixed next year you believe in this guy because he will get it done.
he has been there done that. it is a big challenge. i like it when they have a bucket of water and nobody is counting on him. right now it is being driven down retail is one thing. institutional investors want and don't want to hold the pink sheets over the course of the year. >> as he mentioned there are assets that can be solved. it was discussed in the interview. it was the likes of health care divisions. did you suggest you don't want them to do that or would you be content if they did if it is to pay down the debt? >> i would love to see them retain some of health care which is a great run operation leadership does have strong assets in renewables there is going to be a time to
buy ge stock for sure. he is six weebs into the job it is an undertaking for him i don't see why i would put investors in when you can wait for them to prove themselves hit financial targets, beat expectations, show signs of restructuring turn around that is underway and hitting some traction and i might be more into looking at the stock as a buy. there is such a negative confidence spiral. >> they took down earnings guidance once they start setting some financial targets and hitting them, once we have a couple of quarters with no huge asset write downs, no big good will
write downs we will know the company is on the right track. >> another down day. jim and brian is here. >> thank you >> so we have 30 minutes to go here before the closing bell we are still looking at a big decline. the dow is down 467 points the nasdaq getting hit the hardest again. it is down2.25%. >> a strategist and what he says is driving this. the closing bell after a quick break.
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the battle being fought in the streets and a u.s. backed coaliti coalition shook residential neighborhoods throughout the day today. teachers taking to the streets in paris to protest job cuts in state and private schools across the country for the first time since 2011 all national education unions calling for strikes to protest the budget reforms set to be debated in parliment this week coast guard releasing video of a search for migrants reported missing the boat went down it is close to the greek island. hundreds of community leaders in chicago are rallying to keep the new obama presidential center from displacing low income families organizers say black families are being forced out of the
south side area where the center is set to open you're up to date. guys, i'll see you in about one hour from now. back to you. >> all right see you then >> thank you >> half hour to go in the session. bob has been in the middle of all of the action here mike has been analyzing this market selloff as well let's start with you and some of the movers you could see this as well as a bit ton tariff issues. all over the map so far this month. we were 150 earlier a month ago. we went to 115, all the way down and now we are back to 125 it is a good example of the confusion. what's the right multiple slowing global growth? we don't really know right now
another example is what's going on i wanted to show you exxon over here a lot of confusion the price of oil down dramatically in the last few weeks. exxon was $85 a little while ago. it goes down to $75 and now it's essentially at $80 what's the right multiple when you're facing potential and maybe demand issues? they don't know. they can't fill a model in right. we have banks down today goldman sachs has been down. there have been issues associated with this today about whether or not former ceo was involved in this government investment fund scandal. we know other banks are down as well issues as to how it will look in 2019 finally i want to know the defensive names. you heard this earlier
coca-cola, historic high again every day we are seeing a near historic high. it is those defensive names that are doing well back to you. >> thanks very much for that let's bring in mike here onset. big selloff today. i guess trying to look for the positives that we did have gains last week. >> we did. it is that post election rally it is well below that rally on wednesday. we are still kind of chopping around the same zone we first got down this in this general area in early october. a couple of rallies that went up, very common areas for the market to stall. that's what i think the market is contending with the bigger picture issues, the dollar up today to renew a 16 month high is a reminder of this global financial tightening
theme. the market is not sure how much it can handle of that. interestingly today is not real lay washout. i don't know if it's good or bad. you actually are seeing a thousand stocks up on each to new york and nasdaq today. that's about one-third of all stocks >> you want to see more. >>potentially. it's not as if to say some other action here. it is not really being able to anticipate what's going to resolve some of those bigger picture issues >> it is another factor. global financial tightening. there is a little bit of concern about general corporate jet level as well. it is specifically always about the dollar
i think in general there is a liquidity drain happening. it is something that is a slower moving issue it is underperforming. i think it's one of these general risks. >> i think of all of the things they look at whether they will moderate their tone on interest rate hikes, maybe it is not even the stock market the dollar is something on their radar. now we are at a 17 month high. it is the quickest way they tighten around the globe i wonder how extreme it will have to get before they look at that and think that. >> that is a good question you wonder if they will -- >> the rate of change. >> and the impact on the overall economy. that is for sure something they look at. stay with us we also want to check some individual market movers
sap buys qualtrics for $8 billion here is what they said about the merger this morning. >> we chose to be here it was going to take off everyone was saying this is the next 20 or $30 billion stand alone company but we want to win. this is what winning looks like. we'll reshape the entire industry >> the stock is down today on concerns over evaluation i think it is interesting we are getting mega deals i wonder how many more there are and what survey a lot are
looking. the reaction makes sense essentially because it has to be a huge knockout bid for a company to say forget about the idea we'll go with you >> whether it is a glimmer of hope for the likes of lyft and air bnb in the next 12 month or so it doesn't help the case for the evaluation it does if they get away with a lot of attraction because of growth rates >> the system remains. if you have a decent story now, if you're talking about uber they are much bigger numbers in terms of the evaluation they will be seeking. i don't know if it is a bidder that says they will take it off their hands it's not a bad thing. >> individual stocks, i'm watching goldman sachs today, it is 7% or so declined today
it should be put in perspective. investment down about 3% clearly it is still a 4% bigger decline. also over the last three trading sessions it is down 11.5 why more than the rest it does all relate to this ongoing scandal and selling $6.5 billion worth of funds for them it earned a $600 million fee for doing that even if they were to return all of that fee it would equate to 1% of assets or around about 5.5% or 6% if you feel it will cost them then it is overdone. clearly people think it could be worse. it centers around bl whether ort
it will be seen or bl there was culpability. it suggests it is pretty significant. and it's not a good day or moment when you democrats or the storm-type stuff >> i wonder what the market is trying to handicap here in the way of potential liability down the road >> and what is the connection? >> the bank says he was not at another meeting which may or may not have happened in 2013. wall street journal says it wasn't cnbc by our colleague robert frank suggests it wasn't we still have a very long way to
thanks for joiningus the rate of decline actually decelerated a bit in the second quarter. it reaccelerated in a third. whatever narrative was out there that said things are better turned out to be a bit of ahead fake it ant which youly continued to accelerate through the first three quarters of this year. >> is that what's driving these stocks we mentioned more than half of the sectors.
>> i'm not sure that it is in some ways i think with respect to the cable companies, obviously not for satellite companies but i think the discussion has moved on from video to broad band. i think most sophisticated investors know what happens with video subscribers isn't all that critical so there's no way to escape it. in comcast there was a lot of d dissatisfaction. charter was particularly ov over-joanover over-owned each one has a bit of a different narrative.
>> what do you make of disney's news last week that their own plans that we know a little more about them to launch director consumer products and whether it is a game clanger and for netflix in the opposite direction? >> this is where the market has been telling you they are going for a long time. >> it is where a given is all distributed and where it is all dependent on that in the same company. all of the cross selling from one to another dries up and remember, the whole value chain of the media business existed in order to syndicate risks for the studios. if you're going to reconcentrate
that risk in individual companies they have to be really large. so netflix made that clear first. they started the path for real scale. that's clearly what comcast wants to do. it's what disney has said they are going to do. it's still not entirely clear. netflix is way down from highs it's not entirely clear it will be a great business. i think it is clear that a business like disney is better positioned than are most. >> presidential treat. they are big problems with comcast which i should note. they say comcast violates anti
trust laws >> you just do a brief news search of the american cable association and it sounds like they have had problems with comcast forever and all of the big competitors because they represent a lot of smaller cable stations that's what they do. is there any indication it is real the fact that the president treated it, i'm not sure if it adds legitimacy to it or not >> i don't know what to make of the retweet but you're right the aca has always made clear it is going to be opposed to anything that potentially raises the right of content, whether it's nbc broadcast or whether
it's fees for universal content. they are worried they have the right to raise prices the same way they are arguing at&t has that it is all part of a piece. that argument is an economic argument but the edition is sort of bizarre. i don't know what to make of it. i don't know whether it has any particular import for investors in any way it is a bizarre thing to see >> okay. thank you very much for joining us today much appreciated >> oil falling below $59 we join us with details of that. hi >> we want to point out that the selloff in oil have accelerated.
yes, the broader market downturn but also the upward climb in the u.s. dollar which is trading at the highest level since june of 2017 president trump's tweet at around 1:30 p.m. eastern he said oil prices should be much lower based on supply oil has fallen deeper into bare market territory it is oil and gas exploration stocks it is down more than 20% from mid-july highs back to you. >> thank you 3% slide in oil having an impact today on the slide in the overall market dow is down 527 points we'll look at some of today's outperformers. we have details. >> all right beyond just the utilities and
the s & p 500 that are for some obvious reasons the more defensive ones outperforming today. we want to call your attention to a couple of hot spots one of them has been a downside laggard. one said it is the interflnet stocks it is down so far. it is off about 13% from the recent highs it is something we'll be watching on as well. the two places we are looking for that are outperforming a bit today are in tech and financials and elsewhere in the financial sector this is a far cry that is down around 13% from the recent highs as well it is something to watch as well there. one other outperformer, keep your eyes on shares of all of these construction related
stocks this particular share, u.s. home construction etf has lost about 23% so far over a one year basis. as we look at this home construction has been beaten up. they are outperforming and so are the regional banks back over to you >> we know you are >> thank you lower by 560 points. joining us now is jason, of the americas of global wealth management are you still feeling that way do you think it is an overreaction >> we are still positive on stocks if you look at the price action today there is a bunch of events
to stories that kind of spooked the markets in terms of good growth theater they are going to focus on the more negative where we kind of look at it friday versus a week ago. has it changed the growth outlook? the answer would be no there is still good fundamental growth it is until we get more consistent data to show it is not going to slow down too inseimuch >> what about china? how high up is it ton list of risks when you consider the global growth outlook and whether or not you might be wrong on that front? >> it is certainly one of the biggest concerns if china is slowing more you have seen for the past two weeks various policy announcements to try to stimulate growth we saw over the weekend they
want banks to lend about a third of assets to small businesses, private businesses so to me sit more a matter of time before it starts to have an impact it will start to kick in we need to see the downside and have stabilization to get more comfortable. >> down 600 points ton dow with under ten minutes to go. technology down 3.5% nasdaq getting hit the hardest >> one of the things that made them very attractive is they have been sort of secular growth
stories. it is related more to the stocks and not about the economy overall. >> they overshot a lot on the upside and there is still a lot of profits in the stocks it is still up substantially apple is in the 150s back in april. there is still a lot of kind of air underneath them. it doesn't mean you have to go back down. there is an instinct to turn them into cash on a short-term basis. the bond markets close today
>> in terms of your allocation roll if you're looking at it selling off further it does happen what's the best way to ddo that >> you mentioned the treasury markets are close today. i think there's areas you can buy government bonds that give you some of of that protection if it turns out to be a growth slow down it is like you'll see it back in you'll see rates fall a little bit. it will provide you some kind of offset the concern about that, i think if it turns out to be that then bonds will give you more of a protection where yields are and if losses are mitigated it becomes a
better port foal joe protection from the last year >> thanks so much for joining us amazon has bare market territory today. >> thank you you want to continue this discussion around tech selloff it is trading down 20 ppt 2% from the september highs that stock in today's trade down about 4.5% on the technical side of things amazon breaking below the 200 day and which are already trading in bare market you're seeing major moves not just across the cloud but these high growth tech names like amazon really seeing the brunt >> absolutely. amazon is down another 4.5%.
nasdaq down. it is getting hit the hardest right now. it is down all northeamost 3%. >> apple and amazon are here apple just barely above its 2000 day moving average and has been since october. it is the best fer former in that group with a reap through about supplies a lot of people reading through to apple it doesn't necessarily play out. it is at a new low after hitting an all time high back inmarch. this is being taken over and
also today nektar therapeutics and indications that their acquisitions could be approved by the eu eminently. it is really few and far between looking at the stocks that are moving to the outside today, guys >> it is an ohwise pretty down day. dow is down with under five minutes to go before the close >> hi. it is certainly looking ugly matt has stepped away fa his computer to join us into the close. talk us through what the sentiment is down here it is not as high a value youm as it should be. >> yaechlt we wish we were close today too.
i think when the bond market gets involves these really extend it is for the selloff right now. you expect the volatility and we are certainly getting it >> and what about the other ones out there? tech is selling off a lot. >> oil was the second half of the selloff. it was definitely apple and ge goldman sachs is another one the market was only down about 300. the market really turned after comments it reversed oil. oil had ten straight down days >> at one level you could say it shows that the u.s. growth outlook is better than the rest of the world this shows our economy is okay >> if you have to guess we are going to open down again
tomorrow >> i think you flushed the opening and maybe we can get balance after that >> okay. thanks very much for joining us. as always we have a few minutes left of trade. let's have a look. it is ugly we use that word a lot we open and we continue down throughout the morning really it is as we approach the close. you can see the leg down to the far right hand corner. what does it mean? the s&p is the outperformer. it is down about 2%. the dow is somewhere in between. s sector performance, not much to point to in terms of attractive spots. industrials down financials down. we have one positive sector at the top. it is utilities. consumer discretion towards the top. certainly the un -- sorry, real
estate at the top of that. it is just one that is positive half screen for you. it is showing how it slipped significantly. goldman sachs weighing on the dow today. >> if you stick with the two basics what is it going to look like in 2019 we don't know. that's part of the oil problem i know you were talking about it commodities have been terrible it is cooper the whole year. this is a global growth slow down question. the dollar plays into that as well you can't blame it all on apple. it is a takedown we are seeing in the high data tech stocks it is a sign they don't believe the 2019 growth numbers will be there. the economy numbers are good but
the market wants the fed to start slowing down they can't slow down or do anything until december. the economy is generally strong. this is a box they are in right now. >> thanks so much for that >> the bell started ringing 10 seconds late this here is let's win pancreatic cancer. the big board is here. that does it the dow closing down 2.3% just shy of 600 points. back over to you another rocky session on wall street. welcome to the closing bell. they will rejoin me. i'm here with mike there is how we finished up the day on wall street stocks got hammered today. it really picked up steam.
the dow going out with a loss of 600 points right here the low of the day the only to close higher was real estate. consumer discretionary down 2.3% energy industrials, financials all getting dragged in and sold hard tech stocks selling off again. later russ will skr more on that we have experts here to tell you
what to do we have bob always as the new york stock exchange. >> oil closed and moved down and weaker the bottom line is confusion over the global growth issue and the direction of the fed and interest rates keep those two things in mind and you won't get too lost i'll give you good examples. a good example is caterpillar. it has been all over the place this month >> exxon is another good example, the global growth in oil. it was $85 a little while ago. it goes to $75, back to $75.
goldman sachs a big issue with what's going on in the financial area coca-cola is a historic high back to you. >> as you said, back to you. let's get to nasdaq which closed down by nearly 3%. we have details. >> there is no secret that the dow and nasdaq were the biggest decliners today. it had to do with that decline in apple apple staying above the 200 a day moving average
they said it had lower orders. people cautioned, don't read through on one supplier warning because they have so many. nonetheless today we saw chips once again falling into bare market territory and amazon followed through there as the names continued to be under pressure in this quarter back to you guys >> thank you joining us to talk about the market day charlie is back biggest loser on the dow was goldman sachs. pg and e is the biggest on the s&p. pretty heavy selling to your point, goldman sachs took 100 points off the dow. big concerns >> right and it did seem as if pretty much at every point you found an
excuse to be able to be a little bit cautious whether it was a dollar going up. and then tech banks energy the market can't really absorb that the market remains under stress. it was kind of wounded last week's bounce is kind of gone >> nasdaq is lower now >> yeah. and we closed today on the s&p it is not so much to clang the complexion of the market they are trying to figure out if we are in the area of some kind of a low i don't think that you really should -- any follow through high conviction buying after that >> when you consider the sort of positive macro factors that have been out here does the s & p 500 look toosoft
clearly it came in that earnings would be strong. if anything it would be growing too fast the rest of the world kind of intervened there the trade stuff has been an overhang as well i don't know whether it is up enough people have a sense that if all of the good news we have this year got us 2% a lot of that falls away this year they want to raise and trade is not figured out. i think it explains where we are. >> when we have the brutal month of october would come out and say garden variety totally healthy. the u.s. economy is in great shape. do days like today reenforce
that or make it less of a possibility? >> no. today is consistent with a nasty correction but can be in the context of a relatively strong market we have had late january high. same thing we had a higher high and gave it all back really fast it is a higher valolatility. >> i would say it is a very company specific day and in
general the market as a whole. she asked are we disappointed given the level of good news we would answer, that, yes earnings have surprised to the upside we have had more than 20% growth in earnings. sure it is not going to happen next year. we have a very strong u.s. economy. so we think that the market has gotten cheaper the one part that hasn't are the techstocks so you're buying and not selling? >> yes i will point out one cautionary
tone i am very bullish on the economy. the auto sector has shown a little built of softness -- bit of softness. it is not as profitable. i'm not pounding the table but i'm generally directionally public >> and let's talk about the financials as well take goldman sachs today they were actually somewhere in the middle of the performance. >> yeah. they haven't really been at the center of what's been going on frankly for this entire correction it has been under performers coming into this phase we don't know what would have came in. you don't have an official kind of take on whether or not yields would have gotten compressed today. i think you could infer it might have happened. it made sense you had some softness there i think the overlay of credit concerns that are not urgent but
eventually down the road may become a little more is something that some of the names in the sector are going to run into >> so many people in the beginning of the year and if the you look at the market divere v jens and con consumer spending was great. tus market outperformed the rest of the world >> with actions like this and days like this does it mean we can decouple from the world? >> we are massively outperforming. it is not that interesting the average stock is about this here i would say, you know, you had almost more of a convergence still the u.s. does reflect that to some degree both when you look at the currency >> it is very -- >> flexion yenext year is a puza front. if you could have any conviction that it is going to glide down
to a nice 2.5 in the u.s. no hard landing in china. you put it all together and say that's what you have in six months, you know, charlie stocks, the housing would do really well. >> what else outside of those stocks are you buying that could play well given the evaluations and given the potential for u.s. economic outlook to continue to outperform the rest of the world? >> there are median names here that have been beaten up over concerns about changes in the media environment. there are some that are very well positioned. it is continuing to bring in money and earning. those are still very cheap we love it there are pockets. if i had to pick out one name for you today it is cvs. it goes from 5 something to 7
something. cvs is a great high quality name >> one quick question and he said it's the prospect of presidential harassment that's causing the stock market big headaches. do you think it's a big factor >> i don't know why it would be a factor today there was a headline about how they will be throwing subpoenas up to the white house. the president wants to make it seem as if not for the fed chairman, if not for a split congress that, yes, the market would be effortlessly up i don't think it is this kind of to the mark. i think it is one of those where we have to expect more noise >> and it is besides that. >> yeah. it is obviously kind of looking
for a little bit of a culprit there. >> we have a market flash there. we have details. hey. >> here is the story bloomberg reporting that the white house is said to be circulating a draft report on auto tariffs president trump is planning on auto meeting auto related stocks like gm, ford, european car maker taking a tumble into the close. the details are still very slim. we are not sure which companies would be heard by these but some strategists also saying it could be a negotiating tactic being used by president trump. remember, mexico and canada have yet to sign the u.s.mca deal auto stocks moving down. back to you guys >> thanks very much for that does it change your perspective in anyway?
>> it depends on the name. it is a company concentrated on power trains and lowering vehicle emissions. it is very well positioned around the world name by name you wouldn't probably own gm or ford here >> also the auto tariffs have been on the back burner far while now. we know that the president has flirted with this idea far long time it would be an economic story. >> it would. it is more of a remind their the president wants to remain on offense with the trade issue the first priority is not let's take the path to some kind of negotiated deal. >> and the chinese economy isn't that bad as well charlie, thanks for joining us we'll leave it there
up next dan niles tells us whether there's more pain ahead coming up in just a moment ge shares falling below $8 as new ceo was unable to calm fears about the company's future coming up we'll speak to shareholders about whether they meckk the stock can make a coba when we come back n the rig? what am i really being charged? and is it eating into my returns? is my advisor a fiduciary? is he always a fiduciary? a good place to start is with an independent registered investment advisor. as fiduciaries, they live by a simple rule: always act in the best interests of their clients. that's why charles schwab is proud to support more independent financial advisors and their clients than anyone else. visit findyourindependentadvisor.com
apple finishing after one of the facial recognition supplies. it is the outlook for the second quarter of 2019. sited a reduction in shipment requests apple isn't named in the support it is one of the larnlest customers accounting for 30% of the company's revenue. dan niles put a short call on apple siting concerns it would hit the company's refr knew between the short call in august and early nofr it fell about 1%. now reaffirmed a shart call after appearing back on squawk on the street.
the stock has fallen more than 12%. dan joining us now by phone. still seeing apple falling further? >> yeah. i do i don't see any reason why not to you're going into apple's most important quarter which is the fourth quarter that's when refr knews are up about 50% from september to december i think what you see coming out is that there's only so much you can continue to raise prices when you a lot of markets you're trying to sell into like china my belief is that it will be less than expected i think what you're seeing today with momentum cutting estimates just 11 days after an already lowered guide ans is that things are definitely running worse
apple. so that's a huge number and when you take about $3.50 per unit sold to apple it's about a $21 million unit shortfall so that's a pretty big deal when you consider they already cut numbers 11 days ago and now they are cutting them for the apple related business >> hey, dan, obviously when apple decided to stop giving specific numbers on iphone sales volumes they knew it wasn't going to stop this game of people trying to sniff out changes and inferring what it means for iphone do you think that the market though can get past this or maybe at a certain share price for apple it will be able to get past this intense focus thoon and sort of do what they say which is rely on the eco system and annuity tech and things like that >> yeah. i think the market shouldn't and quite honestly it is wrong
you have an eco system what is it built on? customers. what's the biggest product you sell iphones. what does it tell you how many people are buying iphones? so it is a lagging indicator it is in the a leading indicator. if you're selling that many less iphones you can't do services. i i think that's what people are not wrapping around. you have to remember what are the margins on those everybody is excited about apple launching a streaming service that competes with netflix how profitable is that going to be netflix has 140 million subscribers. they are losing 3 million and forecasted the lose 3 billion in cash next year it is not going to be good for apple's numbers even if they get that because apple is not going to start with 140 million sub
zri scribers on day one. they need to sit there and think about if units are going down by this percentage i can't sell services to people that don't have an phone. >> even if they have in the last week or so it is still up 15% dwre year to date there is still a lot of optimism and judging by all of the people that came out to defend this
there is still a lot in there. i guess what i'm looking at is i think it should be underperforming themarket so everybody that ships into apple, all of the suppliers, there will be a rim effect throughout the supply chain. the bigger issue is when they look at that, if you take it and add a nontrade receivables they
were up 30% year over year in september. revenues are guide today flattish for iphones and up only 3% for the totalcompany. >> so semi conductors is where i would be incredibly concerned if you're thinking about how to position your portfolio. >> thanks for joining us great to speak to you. >> we have a news alert on kellogg's. >> exploring a sale of cookies business including keebler brands and fruit snacks businesses to enable the company to bring a sharper focus to the
core businesses. the ceo of kellogg saying we think it would make it better focused on growing demands for our foods. it is worth knowing the stock is in correction territory for mid-september highs. it follows another move by one of the competitors which is also looking to sell some of its snack businesses i guess consolidation is a big trend here back to you. >> yeah. i mean these food companies need to do something. thank you very much. little change. you'll start to see more drastic moves like this from campbell's soup which is in the middle of turning itself around and selling assets people forget kellogg's also has pringles and chips >> i remember when they brought
keebler, but the question is who will be the buyer. you'll have a lot of integrated package food companies wanting to sell. you'll have to find somebody owl there willing to step in as a buyer of older brands which has not been what a lot of these companies want you can compare the soup and crackers >> it goes well. >> by the way, they are also consolidating into a single category focus organization comprising 80% of that >> the food stocks are under the most pressure. they haven't been able to grow >> carbs are not >> yeah. >> the center of the store not doing well >> up next we'll look at what the rotation of the technology stocks means for this market going forward and whether that trend will continue. >> retail stocks, we'll hear
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i'm not really a, i thought wall street guy.ns. what's the hesitation? eh, it just feels too complicated, you know? well sure, at first, but jj can help you with that. jj, will you break it down for this gentleman? hey, ian. you know, at td ameritrade, we can walk you through your options trades step by step until you're comfortable. i could be up for that. that's taking options trading from wall st. to main st. hey guys, wanna play some pool? eh, i'm not really a pool guy. what's the hesitation? it's just complicated. step-by-step options trading support from td ameritrade volatility with tech stocks selling off hard again it is more defensive and other
rotation going on. big tech and it is huge tech stocks this is divided by old economy bench mark if it is over 100 nasdaq but if it is outperforming. so here is january there is a huge momentum move. it keeps roaring back. really what you see is months ago is that this leadership profile started to get ambiguous and now this is the last coupleovcouple of months. it doesn't mean it is going to continue but if you're going to overshoot in terms of relative
performance it would suggest where to go. the reason this is fun is that it's almost an exact round trip. in one year it has gone from 100 back down to 100 it has given up the entire outperformance >> is it fair to call this tech versus nontech or not quite as pure as that >> it is largely tech. it is bio tech comcast is in the nasdaq so it's not purely tech but if you looked at apple, microsoft, alphabet, those stocks are something like 40%, just the top five >> and a point you made before when you consider the percentage waiting of those names and the s&p it means it is hard for the net performance of all sectors to be up >> it takes a lot of other stocks to be up for any weakness, absolutely >> thanks very much. let's take a look at how we finish the day on wall street.
the dow down 2.3%. the s&p down 2%. russell rounding things off down 2% we were in the red throughout the session. accelerated selling as well. time now for a cnbc news update >> hello here is what's happening at this hour everyone. israeli air strike hitting a tv station. the station went off the air after the strike and witnesses say the blast destroyed the entire building but it is not yet clear if there were any casualty the union ratcheting up on british prime minister that progress is being made in brexit negotiations at a meeting the brexit negotiator telling eu ministers that intense negotiating efforts but an agreement had not quite
been reached it is between retired nhl players over the league. more than 100 players accused the nhl of failing to better prevent head trauma. the financial terms not disclosed. britain releasing six new stamps featuring prince charles to mark his 70th birthday. the prince celebrates his birthday on wednesday. you're up to date. that's the news update at this hour i'll send it back downtown to you. >> very nice there >> absolutely. >> i guess not >> you can probably order them >> you can order them. >> it is -- >> yeah. a nice momento >> i'm sure if i'm offering that to you i must do it to her as well >> okay. i would love some next time. >> deal. >> thanks very much for that i want to pick up on the brexit point.
the news for today has been positive between the uk and the eu getting closer. >> but not inside the uk >> that's what is focusing on that a big move down despite some slightly more positive headlines between the eu and uk. coming up we'll be joined to discuss how he is navigating this volatile market >> but first we'll hear from a ge shareholder, find out if he can turn the stock around. we heard from him publicly we'll talk about it when we come back what do advisors look for in an etf? i tell clients, etfs can follow an index, but which ones target your goals? it's not about quantity. it's about quality. no trendy stuff. i want etfs backed by research. is it built for the long-term? my reputation depends on it. flexshares etfs are designed and managed around investor objectives. so you can advise with confidence.
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like magic. at comcast, it's my job to develop, apps and tools that simplify your experience. my name is mike, i'm in product development at comcast. we're working to make things simple, easy and awesome. general electric stock, the worst day since march 2009 ceo spoke to david this morning and defended some of the c controversial moves. >> i think if you step back from all of that and given the way the stocks traded we would make the same decisions today because those were the right decisions to make sure that the company is
facing forward in dealing with the fact that we do have a lot of leverage. i think we all agree in that regard but we have a number of options to bring that leverage down over time and the company is very committed to doing that. >> joining us now is peter, principal there. do you think that he is based on what he heard from the six weeks in charge including in his interview do you think he is the man to turn around this stock? >> to be fair it's too early to tell he hasn't said anything that makes me feel comfortable about o owning ge shares >> what did he not say >> well, there's one thing that's really concerning people which i think is liquidity position jp morgan said they have $100 million and zero free cash flow
i am wondering how they will know what they can do for investors to show they have ample coverage of their abilities going out for the next 20 or 30 years if they can do that all they need to do is prove they can resume double digit growth the company has shrunk at about 3.5% for the last five years there are plenty of other stocks you can invest in that have positive revenue growth. so why would anybody want to inves in general electric stock at this point? >> you're a stockholder, peter, right? >> yes >> as i said, it's a lottery ticket it's a lottery ticket on the possibility that he can turn around the company i am fortunate but at this point it is a bet he will figure out a way to turn around the company there are two things he needs to do one of them being able to solve the liquidity problems
>> peter, he actually tried to convey today i thought there is no immediate liquidity problem talking about $40 they have a methodical way the idea here is yes, the market didn't take it well but from his perspective he is trying to say we have have a relatively visible path >> relatively visible to him but there's so much detail you need to understand to know whether your liquidity decision is really solid i mean, you know, it's adding more debt if you start drawing down the bank line i'm looking at what cash do they have available and how much cash can they raise through reasonably priced asset sales to make sure they pay down their debt it is a lack of transparency here the thing that bothered me is in the statement he made the other
day he said ge is fundamentally sound. why isn't it just sound? what is it masking there is a lot of detail i would like to see. >> you know, 20 billion in cash is what they have on hand. there is also this feeling and i heard this that there are more skeletons in the closet. they didn't really say there with respect any other shoes that were going to drop there. >> not exactly what the kind of liability challenge is i think they are working through bigger issues >> yeah. lots of things >> thanks very much more joining us great market moving interview earlier today. markets taking another dive overall today. russ joins us next with where he
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russ is here thanks for joining us. selling today overdone >> well, i think the selling today is a continuation of what we have been in since october which is investors coming to grips with two facts, one of which is that global growth is slowing in china and financial conditions are tightening. i think we will get more volatility particularly until we have more clarity about the fed and price of money which right now is one of the biggest of volatility this year >> what kind of clarity do you mean >> well, the fact is that we have had a pretty clear message from the feds that they don't yet view either the developments in china or europe or paris or the market volatility for that matter as enough of an issue to diverge from their rate path rates are going up financial conditions are tightening it is a much tougher environment
for global equities than we experienced in the last several years. >> russ, if this period is just an adjustment period to perhaps a little bit of a slower growth phase and maybe stopping at some point just imagining that it is not necessarily kind of on the recession has the market created or generated a lot of value by really trashing a lot of stocks and segments here or do you think it's time to just kind of hunker down in some of the more stable parts of the market >> it is probably a combination. we have been luring our risks within the fund. we think you want to get a little more defensive and have more of a focus on quality that said there are parts that are on sale right now. to begin with outside of the u.s. stocks were not particularly expensive we started much cheaper now in places like japan and immerging
markets. closer to home we are finding good value in the energy sector. if the you look at energy stocks in the u.s. right now they are close to the lowest they have ever been relative to the market we are still in an environment where oil is at $60 a barrel so i think there are pockets of value in the market today that investors want to take a look at >> what about technology what do you tell people especially the stocks no longer so hot >> i think technology you have got to pick your spot. the good news is i never thought technology was going to bubble we have seen a fairly significant correction it doesn't look that bad i think there are parts of the market where we see value and technology some of the best tunopportuniti we see are outside the united states because the starting evaluations were lower and it has been punished even more. >> all right thank you for jumping on the
cnbc newsline and where there might be pockets of opportunity. >> thanks for having me. >> wild fires are still ravaging california we'll take you there next. macy's walmart and nordstrom, we'll join you with the key numbers to watch every investor should ask questions. is our money in the right place? what am i really being charged? and is it eating into my returns? is my advisor a fiduciary? is he always a fiduciary? a good place to start is with an independent registered investment advisor. as fiduciaries, they live by a simple rule: always act in the best interests of their clients. that's why charles schwab is proud to support more independent financial advisors and their clients than anyone else. visit findyourindependentadvisor.com if you're waiting patiently for a liver transplant,
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the wols woolsey fire. there have been 31 fatalities and beyond the tragedy of these deaths, we are also seeing a huge impact on markets as investors fear that california utilities might be held liable for some of these losses regulators are looking into pacific gas and electric and southern california edison owned by edison international after both companies reported malfunctions shortly before the fire started shares of both companies plunging by double digits today. pg & e is blamed for a number of fires in california as well. we're also seeing property loss projections. the total reconstruction value of more than 48,000 homes in extreme or high danger in the woolsey and camp fires is about $18 billion. villow reporting that 22,000 homes are threatened and those
have a combined value of $42.2 billion. the causes of all of these wildfires are still under investigation. guys, back to you. >> aditi roy, thank you for the update from california this afterno afternoon. a big selloff this afternoon. can retail earnings turn things around we'll discuss that next. kevin, meet your father. kevin kevin kevin kevin kevin kevin kevin kevin kevin kevin trusted advice for life. kevin, how's your mom? life well planned. see what a raymond james financial advisor can do for you. you're still here? we're voya! we stay with you to and through retirement. i get that voya is with me through retirement, i'm just surprised it means in my kitchen.
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big week for retail earnings home depot, macy's nordstrom some of the places reporting dana telsey joins me with what to expect. what looks good ahead of earnings >> i think ahead of earnings some of the names that look good, i think we're going to have a good quarter for nordstrom. i think kohl's with all the new brands they've been putting in their stores is certainly helping to drive traffic i think these stores like burlington, ross and t.j. are also going to continue to get the benefit from traffic the headwinds that we faced in the third quarter were warmer weather in the beginning of september and so i think people are going to want to hear that business has picked up since then and in october and perhaps quarter to date. and they're also going to want
to hear a little about tourist trends we heard from ralph lauren last week that tourist trends inched down a little bit in this current quarter. i think that could be a headwind for some of the companies. that needs to be offset with stronger local demand. >> where do you stand on the likes of walmart and target for example, walmart of course reporting later this week? >> i think what's interesting is the toys "r" us closures, 70% of the store closures overlap with toys "r" us with target. we can have a big benefit from target coming from some of those toy closures they should be able to garner some of those sales. everyone is out there looking to get those sales. i also think walmart's going to have a good quarter too. we heard from them at their investor day a couple weeks ago and the strength that they're seeing falls from supply chain, logistics i think has been enhanced i think the discounters are prepared to take advantage of a
skp consumer that's stronger they have more dollars in their wallet and more money to spend. >> dana, what's your sense in terms of how the marketing hap c -- handicapping, how strong sales will be across the board >> what i worry about is i worry about the first half of 2019 we just put out our holiday forecast today and we're looking for a 5.2% increase. it should be a strong holiday given the fact that consumer confidence, product innovation that's out there are rebounding and peril and apparel is coming on we're lapping wage benefits, tax benefits that we've seen we're also lapping perfect weather. so overall i think the group will surprise to the upside in order to drive some of these stocks significantly ea telsey,r joining us.
>> thank you. >> coming off a down 600 day on the do yw. what do we watch tomorrow? >> the market itself, whether it finds its footing at these levels we're closing the s&p where we were a week ago friday these balance attempts have not had followthrough. it doesn't mean it's not going to work one of these times there's a formation developing on the charts. some people think it looks like it could become a relatively decent bottom. >> markets open up having been closed today the guess is it's going to see a risk-off move. >> that's the indication for how the bond future is traded. essentially it would take some of the yield pressure away and in the immediate term. >> i wonder if we're in a place of negativity where something needs to happen, either the fed has to change its tone or development with xi and trump on trade talks. >> those are the two areas where you would say, yeah, that's likely where we're going to get
a bit of relief. >> keep an eye on goldman sachs tomorrow morning if it can find the bottom the dollar continues its strength today, still high from the close. >> which is startingto pressur equities that. >> that does it for "closing bell" today. "fast money" with joe kernan begins right now. >> yes, it does, live from the nasdaq market site overlooking new york's times square, i'm joe kernan in for melissa lee, feeling pretty comfortable here, pretty much at home. thank you, you lent us this desk for a while before we move downstairs on squawk box these guys are my friends, pete najarian, brian kelly and tim seymour. i wish there was a better reason for us to be together tonight but it's not once the market started selling today it didn't let up the dow sinking 600 points, closing near the