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tv   Closing Bell  CNBC  February 22, 2019 3:00pm-5:00pm EST

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heinz fallout. buffett's letter tomorrow and then hearing from him monday and people upset about what's happening to the iconic brands and point the finger at 3g and berkshire and ask about what happened. >> why have they been in on the stock for three years on the decline? >> for sure. >> thank you for watching. >> "closing bell" right now. ♪ good afternoon happy friday welcome to the "closing bell." i'm wilfred frost. >> i'm morgan brennan in for sara eisen might be a holiday week but it's felt busy and long right? >> four long days because they have been action packed as will the next couple of hours be. >> yes we pick it up there. the federal reserve releasing the monetary policy today. we'll break it down. president trump meeting with the vice premier of china right now. we have got the headlines that are moving the markets from that
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full playback, as well, in moments of what they have been saying to each other but what does it mean for the markets? for the moment, the middle of the range up about a third of 1% the high of the dow for the day 202. the low up 55. currently up about 100 points and those are similar returns for the week, as well. we were sort of flat coming into the day for the week and should end the week in positive territory. >> both the dow and the nasdaq on pace for the ninth straight weekly gains which is really saying something when you think about how rocky it was in december, the beginning of december. >> the final week of last year and all eight weeks so far of 2019 higher. let's get to the latest on trade. eamon javers is at the white house. eamon, getting the headlines out of this meeting? >> reporter: that's right. the president in the oval office right now an getting reports of reporters in the room including kayla tausche.
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we'll see the tape when the reporters come out of the oval office but just to update you on the newsier items from the folks in the room, one is the president was asked about that tariff deadline of march 1st saying i set it at march 1st if i see substantial progress being made it would not be inappropriate to extend that deadline another hint from the president that that march 1st deadline for new tariffs on china is softer than the administration suggested at the outset of these talks. the president saying if we are doing well i could see extending that the secretary mnuchin said in the meeting the expectation is to conclude this quickly the president saying he's recommending a meeting with xi jinping in march also, the president here is asked whether -- what the chances are that a deal might happen the president says it's more likely that a deal does happen now that vice premier of chin liu he also in the room for the meeting say that is from china we believe it is very likely
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that it will happen. the chinese side is ready. says liu he in the oval office so optimistic rhetoric on the chinese trade negotiations president asked by reporters in the room about the prostitution charges including robert kraft of the new england patriots. he says i'm surprised to see it. he has denied it that will get attention, as well, guys. >> eamon, for the trade talks ongoing, been in there over half an hour. the tone between the both sides, very warm and does suggest now that these likely comments of a deal happening are accurate. >> reporter: yeah. when you see liu he say the chinese side is ready, that seems like a favorable indication all the rhetoric seems positive. this is the way the white house would have wanted this meeting to go with an elaborate presentation of a letter from xi jinping to the president of the united states. the president enjoying letters as a tool of diplomacy over the
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past several months with a number of foreign counterparts and bodes well the trick is that the devil is in the details with these things and whether they can get the deal over the top is another question entirely. we' we'll wait to see what happens now that the chinese said they're extending the trip here in the united states can they come up with s substantive agreements to put the signatures to in a couple week's time? >> eamon, thank you. we'll be back with you later in the show. let's dig in, mark hannah is with us on set, john rutledge advised the white house on the topic also with us john, let me start with you because recently you took a meeting, i believe, correct me if i'm wrong, with larry kudlow, mcmulvaney, robert lighthizer and ivanka trump on this topic what was your advice in that
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meeting? >> can't say names but it was a private briefing with the cabinet and what i told the group was that you have to understand that china is not kansas there is institutions different. politics is different and so forth but i really think that it's possible for trade deal to get done right now both sides need it and chinese economy in particular is very weak. and they have a credit crisis under way that's really causing damage to the private firms. so if you're gong do get something done, this is right time to do it. i think very high probability march 1st deadline goes away and that what we're likely to see is a package that includes easy things like buy a bunch more soybeans, harder things like fix ip but the chinese want to fix ip, too. we won't see is give up industrial policy, abandon the soes and so forth. and, you know, they have a
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constructive discussion i think about zte, huawei, telecom and 5g and interesting to talk about. >> john, you mentioned it was a wide range of trump administration officials maybe not naming them and that you wouldn't mention specifically what they told you but can i ask this were they united in their individual views of what they saw as the best way forward? and/or does that not matter anymore given that this sounds like it's between the two presidents to get over the line? >> you know, i think that it is up to the teams to do this and that the presidents will meet in march for a photo-op, not for a deal one of the impressions i walked away with is the u.s. team is very, very cohesive. gets along well. has similar views on many of these topics i didn't get any friction ideas. of course, my old friend -- the only person in the white house who would probably not agree with me is peter navarro and
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doesn't like these things. we had a long conversation about the chinese currency and it's very obvious to me that china has been propping up the currency, not pushing it down. and that efforts to try to get them to stabilize the currency actually help them, not hurt them >> mark, i want do get your thoughts on this because say we do actually get some sort of an initial deal here or at least that deadline pushes back as we get closer to in these deal talks, what happens to the actual 10% tariffs in place and you have the met altar i haves and when you start to talk about an enforcement mechanism, how i guess plausible is it for threats of tariffs >> as long as peter thnavarro is in the white house, i'm a foreign policy analyst and seen the markets respond ambivalently i don't think that's surprising when you see the inconsistencies of the white house, the sort of
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walking back this march 1st deadline but i just recently did a study and the sort of tracking americans' foreign policy views and how different from people of positions of power and shocked to see that global economic integration, free trade were seen as drivers of peace, prerequisites of peace and stability among a broad bipartisan group including democrats so i think actually shifting a little bit to looking at the political liabilities for this president if he does not reach a deal, if tariffs do come back, they're pretty significant as that's going to be a line for the 2020 dems. >> mark, clearly a few months ago it didn't look like a deal was possible an now it looks likely and while it takes two to tango which of the two sides softened the position more to get us to where we are now >> there needs to be -- neither if i may say so. there's a way in which xi
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jinping is focused on the sort of chinese system of government and then we have donald trump not looking to cede much in the way of doing business, american style. right? we are not going to give too much away on the ip front, for example. so there's a sort of a lack of empathy or realism on what the other side's position is frankly, these -- the china/u.s. relationship isn't that of strategic competitors as the white house would like us to think but as long as the trump administration kind of rattles its saber around the sort of strategic competitor narrative it's not going to incentivize or intwi entice china. >> we look to rebuild and modernize the military, a piece of the u.s. policy not tucked about very much.
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and sort of to that point, john, how much do the talks between the u.s. and china this week feed into or help shape what are going to be talks between the u.s. and north korea at that summit next week >> well, you know, that's not a bad subject. china has enormous influence over north korea and the -- if we're going do get any progress there would have to be with chinese cooperation. for all my sins, i spent quite a bit of time in pyongyang trying to reach an agreement about ten years ago and this young man is very difficult i don't think we're going do get them to give up nukes. they would very much like to have economic assistance and that would help a lot. there's starving children and old people there cross our fingers but i wouldn't expect an awful lot there and as mark was saying, you know, it is important for both guys on negotiation to go back home and say they won the positive thing we have got going for us here is that most
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americans don't speak chinese so trump and xi can both have press releases in their own homes that don't flow to the other side so china and the u.s. can both represent this as wins i think there will be a deal here >> well, china certainly can they control the state media i guess the question would be willing the economy delivers better living standards. we have to leave it there. thank you both very much >> thank you. joining our "closing bell" exchange today, sat yeah, ceo, and maryann montain and rick santelli at the cme. good afternoon to all of you maryann, in terms of the commentary and i guess some of the mood that seems to be coming out with the headlines as the u.s. and china meet right now, the tickaway for markets >> well, i think it's actually
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in line with what we have been thinking about the trade deal that it would not be, you know, a drop date of march 1st or what have you with everything tied up into a neat bow. but rather, there will be some progress announced around that time and probably, you know, other issues will take longer periods of time and we would expect to see things dribble out over the course of some time so this is really in keeping with what we have been thinking that being said, there are some stocks that have, you know, run up in anticipation of a great deal, you know, for their particular situation boeing being one of them where we think it just might take a little more time to play out >> sat yeya, what is your view t the moment more cautious? >> yeah. we have basically put out a note that suggested to focus on a visible earnings backdrop. you have the russell 2000 up 17%
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in about 7 weeks and you have the s&p up about 11%. basically, the market's forecasting good news here one of our key indicators have gone very negative again suggesting that basically on the institutional side it's polarization on average, what we are seeing is people are pig piling into the same names multiples are off the scales right now so what it's telling us is that we want to become more defensive the trend is not going to be your friend. focus more on earnings visibility as this profit cycle continues to slow. >> and, satya, i mean, as you mentioned with small caps up as much as they are, s&p up as much as that is, doesit make sense for investors to take profit here and convert more to cash and sit on the sidelines and see how all of these macro uncertainties play out or rotate into more defensive stocks, bonds, et cetera
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>> yeah. that's a great qualifier the current interest rate backdrop, earnings profitability, the estimates pulled back down it does suggest equities are attractive. the risk we see is that you have certain pockets in the equity market that's very extreme and outlined a few aerospace one you mentioned an the multiples at 20, 30-year highs. in addition to that, it looks to us that a lot of growth managers are hiding out in what we would call chicken tech. the i.t. data processing companies and then finally in health care, we think that medical devices, life sciences firms, those multiples trafficking in levels we haven't seen in decades. so, there is quite a bit of extremes that's in the equity market same time, the interest rate backdrop is favorable and so we expect the equity market to be good i think it's more defensive
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equities rather than high octane growth here. >> rick, we always talk, of course, about the fed pivot and got an update on their thinking today. have we misframed that in recent weeks and months and the case the fed has more flexibility >> well, i think i have always thought they have a lot more flexibility than any other central bank around the world with nine quarter point tightenings under the belt and balance sheet reduction and means in the event of something unforeseen they have some ammunition i think that's a big positive. i think what everybody seems to be missing is that we have the vix at 13. the risk parody boys are packing the portfolios again interest rates have been very stable stable you know we are 60 points off the highs of last year in 10s. over 50 points off the highs in the short end from last year and the stock market likes that,
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especially with all of that going on and the fed that has the white flag of flexibility up this is a green light to build momentum there's always something to worry about down the road on earnings but yet none of these analysts have any idea what happens to the global economies when we start clicking all those big circuit boxes and turn on global trade again i'm not saying that's a barn burner immediately but i think that starts to over time inleuns things we have been holding down capital spending, plants across t the globe. domestic growth. i don't look for trouble i think right now the biggest worry is watching corporate spreads. over the next three to four years, over 3 trillion of corporate securities investment grade maturing and the lock and load process of businesses will be a good sign to watch. if you're supposed to vacate the
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equities zone. >> yeah. and quickly, marianne, in the s&p so far year to date it is industrials up 17.5% s. that where you would continue to be putting money? >> well, again, we have to take apart the industrials so, morgan, we saw that bioing is a big part of that xli the etf that's market cap weighted and that's really been leading the group. and then, also, you can look at just small cap in general being very strong and so some small cap industrials have done extremely well as rick was saying with the lower interest rates it really gives a green light to equities but near term we would say the small caps have run very quickly and parts of the industrials have run quickly and where we would be trimming back in here but we like the utx and the united technologies, the lockheed martin. we like a couple of airlines
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which are delta and alaska air so we're really being very picky about what's going into the portfolios right now and just in general the part that hasn't participated yet this year is the value side of things so those large cap names with good dividend yields haven't been moving and so that's an area that we would be looking to buy in here. >> okay, guys. leave it there thank you all very much. still to come, shares of kraft heinz tanking today on a triple dose of negative news including an s.e.c. subpoena what to do with the stock after the 30% drop. we are awaiting video of president trump's trade meeting with the chinese vice premier in the oval office and bringing you comments as soon as we have them stay with us we'll be back right after this break. ♪
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all of you. how you live, what you love. that's what inspired us to create america's most advanced internet. internet that puts you in charge. that protects what's important. it handles everything, and reaches everywhere. this is beyond wifi, this is xfi. simple. easy. awesome. xfinity, the future of awesome. welcome back to the "closing bell." billionaire patriots owner robert kraft facing charges of soliciting prostitution in florida. eric chemi with the details.
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>> that's right. charged by local authorities in palm beach county, florida, two misdemeanor counts of solicitation the more problematic side of this is the workers at the jupiter, florida, day spa allegedly held against the will as part of a human trafficking ring a statement from the patriots says kraft denies he did anything illegal the nfl also with a statement saying that they're monitoring the situation. in the 25-year run, as patriots owner, his teams have played in ten super bowls winning 6 of them, the best on field performance in the league during that span. he bought the team for less than $200 million it's now worth an estimated $4 billion. the league has many possible actions it could choose to take including suspensions, fines or even removing him as team owner. more developments are to come. espn is reporting there are bigger names, bigger than kraft still to be announced and charged. remember the next two super bowls, they're in florida. maybe he'll avoid the state
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because of those charges pressing back to you guys. >> eric, in terms of the factor that is led to removals of owners in the past, what are some of those factors? >> the most recent example was jerry richardson, owner of the panthers he was alleged to have been harassing people, this during the me too movement. so they didn't technically remove him but they basically said you need to sell the team he did that's why david tepper is the recent owner >> eric, and i think based on some of the releases we saw it's something like 200 people that were involved or found in this. >> i want to jump in my apologies we have the president with the vice premier of china. >> that is not a consideration that is not one of the things on the table. >> what is on the table? >> oh, you really want me to
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discuss that now >> i do. >> everything is on the table. everything. >> mr. president, do you have any concerns about the labor secretary -- >> i really don't know too much about it i know he's done a great job as labor secretary. and that seems like a long time ago but i know he's been a fantastic labor secretary. that's all i can tell you about. that's all i know about. >> what about the charges against bob kraft? he is a friend of yours. >> it is very sad. i was surprised to see it. he's proclaimed innocence totally and i'm very surprised to see it. >> release of the mueller report -- >> i have not. >> you have said nothing do you expect to >> some point i'll be talking about it but, you know, the nice part, there was no collusion there was no obstruction there was no anything. that's the nice part no phone calls no nothing we have a -- i want to -- you know why i won the race? i was a better candidate and nothing to do with russia and everybody knows it's a hoax.
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one of the greatest hoaxes ever perpetrated on this country so i look forward to seeing the report if it's an honest report it will say that if it's not an honest report it won't. go ahead. >> you have been at this, the teams at this trade deal for a long time. not a long time considering it's the biggest deal ever made. >> seems like it is close to the finish line. do you believe it's more likely that a deal does happen or a deal doesn't happen? >> well, i think i can speak for the united states. the question is an interesting one. is it more likely that a deal happens or doesn't happen? speaking for the united states, i would say it's probably more likely that a deal does happen but that doesn't mean it's going to happen. speaking for china, if you would like to answer that question, you can. but i would say that it's more likely that a deal will happen the fact that they're staying. this is a very high delegation this is a man who is revered all throughout china as the vice premier.
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so the fact that they're willing to stay for quite a bit longer period, doubling up the time, that means something i think there's a good chance that it happens. go ahead would you like to answer that question would you like to answer that question >> thank you >> yes please chinese and you'll speak loud >> okay. i will so from china we believe it is that - >> you have to speak louder. i'm sorry. >> from china we believe that it is very likely that it will happen and we hope that ultimately we will have a deal and the chinese side is ready to make our uttermost effort. >> i think we both feel that way, that there's a good chance the deal will happen. >> on troops in syria, why are you reversing course >> i am not.
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i have done something that nobody else has been able to do and another short period of time like hours, you will be hearing -- hours and days, the caliphate. 100% defeated. nobody's been able to say that that doesn't mean there aren't some very bad people walking around and strapping on bombs and all of these things but we have done a job that nobody else is able to do. i heard lindsey graham congratulating me. frankly, i'm getting a lot of congratulations. at the same time, we can leave a small force along with others in the force, whether it's nato troops or whoever it might be so it doesn't start up again. it's a small, tiny fraction of the people and i'm open to ideas but the 2,500 people that we have had there will be going to different parts of the world may be going over to iraq where we have a very powerful base a base that cost millions of
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dollars to build and will be using. but we have had tremendous success in defeating the call freight and now everybody's admitting. i did more in the last three or four weeks than people have done in years and it's been very successful but we want to make sure it stays that way yes, please. >> tech transfers, the trade deal, we have heard you haven't made a lot of progress >> do you want to talk about the transfer of tech >> the answer is, yes. a structural issue has to be done properly and made progress whoever told you we didn't, didn't know what they were talking about. >> why did you condemn the north carolina election fraud, a big story, the republican candidate calling for a new election why have you not condemned that? >> i condemn any election fraud and looking at what happened in california with did votes, as you know, there was a case where they found a million fraudulent votes. when i look at what's happened
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in texas -- excuse me. excuse me. when i look at what happened in texas, when i look at that catastrophe in florida, where the republican candidates kept getting less and less and less and less and unfortunately rick scott and ron won their election and disgraceful what happened there and i look at a lot of different places across the country. i condemn any voter fraud, whether it's democrat or republican but whether you look at the things that happened in california, in particular, when you look at what's happened in texas with all of those vote this is they recently found were not exactly properly done, i condemn all of it, including north carolina if anything, you know, i guess they will be doing a final report any form of election fraud i condemn. >> mr. president - >> the meeting with president xi and do you expect to have that at mar-a-lago? >> probably. probably fairly soon
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during the month of march. bob, you have a date steve, do you have a date? >> we are planning it with your schedulers. >> we have two schedules we'll be planning them with the schedule. >> do you have - >> michael cohen's testimony >> no, no, in. >> mr. president - >> lawyer/client he's taking his own chances. >> where do things stand with huawei and zte >> zte paid a big fine of $1.2 billion and nobody's ever heard of before and we want everybody to compete and i guess it will be some what of a subject we talk about here, bob we'll be talking about it. we may or may not include that in this deal. >> indude what >> the huawei and zte. >> would you drop criminal charges against huawei >> we are going to be discussing all of that during the course of the next couple of weeks and we'll be talking to the u.s. attorneys, the attorney general. but we'll be making that decision right now it's not something that we're discussing. >> have you -- >> the republicans will stick
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with you on the emergency declaration and vote - >> i think they'll stick everybody knows we need border security, it's a bad subject for democrats. we have apprehended many more people than in many years. with a wall we would haven't to apprehend them and costing us money. we have a lot of military there. we have tremendous border control and border security there. we have -- i tell you what the people of border security, people of i.c.e., the law enforcement generally speaking, have done an incredible job at the border we have caravans heading up and head them out. if we had the wall it would be much easier and frankly it would be a job that would be perfecto and it would cost ultimately a lot less money. >> you don't think that -- >> okay. thank you. >> mr. president - >> what? >> what is your --
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>> china bill. >> the u.s. would not block out -- more advanced technology. what do you mean >> i'd like to have all companies be able to compete i don't want to artificially block people out based on excuses or based on security i don't want to have a security problem. >> do you -- >> wait. i'm talking about everybody. really including. i'm talking about everybody. i don't want to use artificial blocking we want to have great 5g ultimately that's going to be 6g and probably 6g will be obsolete in two months the way that whole world moves but 60 at some point in the future will be obsolete i want to have competition with china, fair competition. i don't want to block out anybody if we can help it. now, if there's a security reason or something we have no choice but that's one of the things we'll be discussing today. we want to have open competition. we have done very well in open competition. go ahead.
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>> mr. president, your officials mentioned a deal on currency. >> well, we'll let you know at the appropriate time we have a deal on currency and currency manipulation. >> will you veto that resolution to block your national emergency declaration? >> will i veto it? 100% 100% we have too many smart people that want border security so i can't imagine it can survive a veto i will veto it, yes. yeah >> last year -- on u.s. -- to pakistan >> no. i stopped paying pakistan the $1.3 billion we were paying. meantime, we may set up meetings with pakistan. pakistan was taking very strong advantage of the united states under other presidents and paying pakistan 1.3 billion a year i ended that payment to pakistan because they weren't helping us. in a way that they should have and honestly, we have had -- we have developed a much better
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relationship with pakistan over the short period of time than we had but i ended the payment. we were paying pakistan 1.3 billion a year i ended that about nine months ago. a lot of people don't know that. i ended it nine months ago >> from pakistan -- afghanistan -- >> but what are you talking about? what are you trying to refer to? you have to speak up i can't hear you >> from pakistan - >> yeah. >> attack -- >> that's right. no, it's a terrible thing between pakistan and india is a very, very bad situation and it's a very dangerous situation of the two countries and we would like to see it stop a lot of people were just killed we want do see it stopped. we are very much involved that if that's what you're referring to. >> self defense. >> india is looking at something very strong. lost almost 50 people. and with an attack
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so i can understand that, also but we're talking and a lot of people are talking but it is a very, very delicate balance going on right now there's a lot of problems between india and pakistan because of what just happened. >> do you have - >> in kashmir. are you talking about kashmir? yeah very dangerous yes, please? >> mr. president - >> wait. >> on huawei, a ollow-up, are you making an expeecutive order? >> we may or may not put that in the trade agreement. discussing it. in conjunction with the attorney general of the united states because that's a matter that is outside of what we are doing and do that with the attorney general if we do anything. and i guess there's a question of whether or not that's being included in the agreement. yeah, go ahead. >> mr. president, we haven't got your response of amazon pulling out of new york city. >> i think it's a big loss for new york city. if you look at the deal, the
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deal was not a great deal from the standpoint of they could have made a better deal than that a much better deal but still i think it's a loss for new york city. and the $3 billion wasn't a check. it was a form of taxes over a period of time that now they'll never see because, you know, they were going to take in a lot of jobs, taxes so i think it's a big loss for new york city. it's a kind of thinking that our country's going to on the left, on the radical left. ultimately it is not good for jobs and not good for the economy. but i think it was a big loss for new york city. i come from new york city. i love new york city i think it was a big loss for new york city. >> when were you briefed on the coast guard member arrested? >> i'm getting a final brief and complete briefing in about two hours after this. >> do you have any thoughts on the man? >> i think it is a shame, yeah it's a very sad thing. a thing like that happens. i've expressed that and i'm getting a very complete briefing
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in about two hours. >> do you think that you bear any responsibility for your language for that? >> no. i think my language is very nice yes? >> on -- >> from china, from china. >> trade conflict one year now negotiations going on. what do you think? >> who are you with in china >> people's daily. >> people's daily? >> okay. >> what do you think solution - >> great cooperation we have great cooperation. both ways. with china and a lot of good things are happening. i think you see that so many people every day, they are going to make a deal they aren't going to make a deal it's fake news do they have fake news in china? i think so it is a question are they going to make a deal? i think we have a good chance of making a deal. both parties want to make it a meaningful deal. i can speak for the vice premier. i can speak for president xi,
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for myself both parties want to make this a real deal, a meaningful deal not a deal that's done and doesn't mean anything. we want to make this a deal to last for many, many years and going to be good for both countries. but we want to make it meaningful now, with that being said, china has the advantage of having many years of tremendous success at the expense of the united states so they understand that. and i never blamed china for that i blamed our past leaders. our leader did a lousy job with trade. our country lost $800 billion last year generally. vice premier understands that. so this same agreement should have been made 20 years ago. not now. because for 20 years the united states has been really taken advantage of and i'm not blaming china. we should have done the same thing to them but we didn't do that we had presidents that didn't do their job. you want to know the truth
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we had president that is did not do their j.b. >> will the -- long-term deal? >> i think the mou is very short term no we expect to go -- to me they don't mean anything. i was never -- never a fan of an mou. >> it's a contract it is the way trade agreements are generally viewed people refer to it like it's a term sheet it is not. it is an actual contract between the two parties. a memorandum of understanding is a binding agreement of two people and that's what we're talking about. it is detailed, covers everything in great detail just called a memorandum of understanding, that's a legal term it is a contract. >> would you think that's a very long-term deal, sir. >> contracts last while they lost there's no term. they last while they last. >> mr. president, on north korea -- >> i disagree.
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i think a memorandum of understanding is not a contract to the extent we want. we're going a memorandum of understandingin understanding. that will be in a final contract that's the thing i think you mean that, too it means something a memorandum of understanding is that a memorandum of what our understanding is to me, the contract is -- the real question is, bob, so we do a memorandum of understanding which, frankly, you could do or not do i don't care it doesn't mean very much. if you do a memorandum, how long will it take to put it in a final, binding contract? >> for now we're not using the word of memorandum of understanding anymore. it will be a trade agreement no more. never use the term -- we'll have the same document. it's a trade deal. never going to use mou again. >> are they going to put that into another azbleemt. >> we have a trade agreement assuming you decide on an
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agreement, signed, a trade agreement of the united states and china. >> good, good. >> not using. >> i like that term much better. >> agreed. >> i wouldn't go into a memorandum i would go right into a trade agreement. make a deal or not to have the other agreements doesn't mean anything. they're not a meaningful in my opinion. i like that much better. >> what do you think needs to be done after the meeting >> on what >> meeting between pakistan -- >> it's great. i can tell you new york city housing authority, the mayor of new york has done a terrible job with public housing. we are trying to help them but the mayor of the city of new york did a terrible job with respect to public housing. it is a disgrace how badly new york city handles its public housing. >> on trade -- >> go ahead. >> go ahead. >> do you have any thoughts on -- >> well, i think he has to learn how to run new york city before he starts running the country.
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he hasn't done a good job, including, by the way, with amazon. >> with your administration officials saying that kim jong-un has not decided yet whether he wants to denuclearize how can you meet with him? >> we have had a great relationship and china helped us a lot with north korea, with kim jong-un, since i got to office if i were not elected president you would have been in a war with north korea we now have a situation where the relationships are good, where there's been no nuclear testing, no missiles, no rockets. we got our hostages back we have many of the remains back and coming back rapidly. the remains of our great warriors of many, many years ago and the families are so thrilled an so happy. we have had a great relationship the singapore was a tremendous success, only the fake news likes to portray it otherwise. we would have been -- been at a war with north korea in my opinion had i not been elected
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thank you very much, everybody >> one ally -- >> thank you we'll see how it goes. i think it will be successful. >> do you think -- >> you have to speak up. >> run again for congress. >> i don't know anything about the situation. when did he announce that? >> today. >> i have not seen it. he hasn't told me anything we have to take a look. >> do you have - >> i haven't spoken to him in a long time. i have not been involved that. thank you very much, everybody >> thank you, mr. president. >> the president there just moments ago, the headline being that he said a deal with china is more likely to happen than not happen and the chinese counterpart also saying a deal very likely. >> yeah. it was wide ranging in terms of comments everything from commenting on amazon out of new york city to the wall, to bob kraft with those charges today. of course, the mueller report. but, kayla was in the room, in
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the oval office for the meeting. kayla, what was the sentiment? what was the mood as all of this stuff was being discussed? >> reporter: insofar as a trade deal is discussed, you hit the headline both the president of the united states and the chinese vice premier say a deal is more likely to happen than not. to get that very clear point of agreement on the record is -- is very substantial at this point but this is more of a weigh station rather than a culmination of the talks the president stopped short of saying he would extend that march 1st deadline he said there are certain chapters of this deal that are finished notably the currency chapter currency manipulation. but that the chinese del station is staying for two more days to continue hashing out the issues and the president's advisers in a couple of days will be making a recommendation to him on that front. so, certainly, interesting to see the optimism both from the u.s. and china but we do not get the hard
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agreements on the extension of the deadline or of those commitments from china we reported earlier those things are still being discussed behind the scenes and appears that the deal is not ready for prime time quiet both sides need several more weeks to hash this out. >> it won't be finalized until both presidents sign on the dotted line. what did we learn about when that could happen? >> reporter: we reported both sides discussing a late march summit for presidents trump and xi at mar-a-lago and president trump essentially confirm third degree and didn't say what the date one an he and president xi will be making the bigger decisions and i asked him if dropping criminal charges against huawei is part of the deal and he said it wasn't discussed as of yet and expected to be discussing it with discussions with the u.s. attorneys that are involved in the case and the attorney
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general at the department of justice so that is something definitely to watch for some movement at the presidential level. as a deal comes closer into view. >> and the document, kayla, will it be a memorandum of understanding? >> reporter: well, certainly, the president -- >> the trade agreement, wilf. >> reporter: certainly an mou in the real estate industry is different than an mou written by trade attorneys and certainly the interaction between the president and his top official on trade was very telling and ambassador lighthizer said we won't use that term anymore an just call it a trade agreement so, we'll see whether the structure of this gets changed from those memorandums of understanding as they have been discussing behind the scenes for a couple of days, whether it becomes a different type of deal an one thing that the advisers in the u.s. wanted to avoid here is something that has to go to congress treaty that would need to be ratified by congress that is not route to take here
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>> kayla, thank you very much. of course, all jokes aside, it was an interesting insight of the president with ambassador lighthizer mark hannah and john rutledge both with us john, is that it deal's done. >> i think so. you know i think as i said earlier, i'm quite sure there's going to be a deal and march 1st is no longer an interesting date. the interesting thing is they talked about today is mentioning huawei and the criminal complaints that locks like that might be on the table. the currency announcement is easy to make we'll make our currency stable doesn't really mean very much at the end of the day but i think this is very positive thing and we're going to see more of it in the next day or two. >> yeah. mark, your takeaway from those
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comments just now? zte, huawei stuff seems interesting with the idea of president trump saying i want fair competition an that i want open competition coming to building out 5g in the u.s. >> yeah, absolutely. i think the only deal is a decision not to reach a deal quiet and this is a -- prolonging the discussions and that's a positive sign that they both felt comfortable expressing as much optimism as they did but this is -- these are thorny subjects of -- your viewers don't need to be reminded, all kinds of issues and nuance of the deals to be hammered out but it's important to say i think the other guest, you know, if sort of wishing would make it so right? the devil's in the details and it will be interesting to see where the trump administration and what are some -- what are some of the sticking points of the trump administration and xi's china. >> gentlemen, thank you for
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sticking around for this with us mark and john. >> should say as well the dow up 0.6% with 12 minutes left to trade and off the highs. improved on the headlines from that press conference but not too significantly. meantime, the fed released a review of the monetary policy frame work ylan >> reporter: wilfred, that is the semiannual monetary policy report to congress and that report emphasized that the fed will remain patient in further rate increases particularly amid what it said is a softer global economic and financial environment. on the fed's watch list include ongoing trade discussions of china, no inflation it said driven down by lower energy prices and decreased market appetite for risk. still, the fed said that economic growth is solid, the labor market remains strong and that wage growth is picking up now, i'm also here at the u.s. monetary policy forum where there was a lot of discussion
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today about how all of those things could be true at the same time how can we have low inflation despite the fact of unemployment also low and wages picking up? perhaps problems of measuring inflation and don't understand the data fully and the idea that perhaps the connection between wages and unemployment remains intact but that's not trance latting through into higher price increases because of a variety of practical issues. now, that could lead to a broader rethink by the fed of its framework going forward. new york fed president john said this the risk of inflation expects slipping to the shore calls for a targeting. the fred plans undertake that assessment over the next year or so the fed said it will make the results of that comprehensive review public in the first half of next year, guys back over to you.
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>> ylan, thank you. joining us to discuss more is tom porcelli. tom, thank you for joining us today. a thing that jumps out to me perhaps most notably is the headlines of an idea of adjusting or at least reexamining the framework for inflation. how would you expect that to play out >> yeah. i don't expect it to play out. >> oh. >> the fed goes through the exercise with some regularity over recent years in particular so i think it's great they talk about it and they taub abolk about the different path and i don't think it gains traction of results of changing the process but again it is an exercise they seem to go through once a year or so. >> tom, could the fed get much more dovish than it has done in recent months without the data getting suddenly much worse? in which case, of course, the outcome for markets would be a net negative rather than a
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positive. >> yeah, wilf. i think you just sort of nailed a really important point i don't know how you become more dovish from here if anything, i think with the minutes drove home from the other day is that there's really more of a two-sided conversation going on within the fed. if you were to just listen to powell at either that january 4th speech or the fmoc presser, he sounded much more, you know, sort of dovish or even down right negative toward the backdrop and the minutes drove home that's not the conversation that's happening sort of around the table and i think clearer speech of the next day that was really important, and i think sometimes overlooked and drove home that the fed didn't make any u-turn and still hold a constructive view of the backdrop and this u-turn i think people talk about is wrong in fact, what the fed did is basically went from sort of wanting to continue to raise rates to simply pausing. so i think that, again, driving
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home an important idea that the fed is wrong for looking for - >> let's bring in chrisner joining us now what is your take on the last couple of days, fed minutes or the testimony and comments today from the fed, was that already priced in do you feel to markets because of the amount we have talked about, that pivot in recent weeks >> i think a fair amount of it was priced in. now, going into the fed minutes, expectations were so max dovish you could see things that felt a tiny bit more hawkish relative to those super dovish expectations you know, the sense that they would obviously have to reconsider patient when and if they got clarity on the downside risks but i don't think there's anything wrong with reading this fed as one that intends to be very patient for some period of time but also starting to look at these longer range questions
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about how do we keep inflation expectations from drifting down in this kind of world with low inflation and zero bound that binds on rates quite often the tone today at the conference i have been attending from fed officials was really quite focused on stopping inflation from going too low. >> what happens if we get a trade deal with china or a trade deal with some of the other partners like europe that we are currently negotiating with, as well rick stan telly was on the air and made a key point say we get the deals that could turbo charge the u.s. economy and with it u.s. markets what then in terms of policy for the fed? >> so you're absolutely right if we get a comprehensive resolution of trade and these policy uncertainties that would be a real boost to the economy, take away the cloud of uncertainty paralyzing decision making here and abroad and we need to be realistic we won't get quick resolution
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across the trade front we may get good news onchina and then escalation with europe, for instance suppose things get better. then i think the question of the fed to judge is do you start kicking in rate increases straightaway or take a hard look at the inflation side here and say, look, inflation is below the goal, we need to make sure we get back to 2% durably finally finish the job and provide rationale for underreacting to better data >> okay, guys. thank you both very much up nt, texhe close five minutes away don't go anywhere. was ahead of its time.
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don't get mad. get e*trade, dawg. welcome back to "closing bell." two minutes left to trade for the day and the week whether it's a trade press conference or not, we see buying right at the highs of the day. up 0.6% on the s&p you can see they're all up there and thereabouts at that amount sectors for you today. it's chopped and changed around in different parts of the day. tech and communication services doing well near the top. we have seen health care and industrials do well. industrials also off the back of the trade news what does it mean for the week
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we are positive playing catch up with the rest of the world starting the week well china up 4% and europe ending up half a percent one minute left to trade, bob, your main takeaways. >> the president made the statement. a deal with china is more likely than not what else do you want? this is the statement. no speculation here. there's hard to parse that any way but positive the market off the lows and not far from the highs of the day an plays to the idea a very large part of the gains -- >> priced in already. >> priced in already we didn't have a spike up here there's no boom here that worries me a little bit because that tells me that the upside is fairly limited here and the fed's already essentially on the side of the market. the trade deal's on the side of the market an now deal with the global slowdown. volume dropped dramatically in
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two weeks. vix below 140 today. there's very little panic. there's very little heavy buying volume of two weeks. >> there goes the bell we are up 0.6% on the s&p. more than that for the dow and the nasdaq, the russell up a healthy 0.9% positive returns for the day and the week, as well. that does it for the first half of "closing bell." morgan, back to you. ♪ welcome to the "closing bell." i'm morgan brennan wi fred frost will rejoin me in a moment michael santoli has the day off. here's how we finish the day on wall street. as stocks settle, the dow finishing up about 180 points. closer to the highs of the day, 202 earlier. that is a gain of .7%. it is also higher for the week and just a factoid, first time
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since 1964 that the dow has risen in each of the first eight weeks to start a calendar year the s&p finishing up higher. 2792 with the nasdaq up .9%. 7527 the russell 2000 also finishing the day up .9% here are the stories on the radar for investors. we have got kayla covering the big trade meeting between president trump and china's vice premier and ylan mui with concerns of fed inflation and two key stories driving the market action. first, let's get a look at today's market rally joining us is dave ellison dave, in terms of the day, in terms of the week, in terms of the move or maybe i should say not that much of a move on the u.s./china headlines, specifically more likely that a deal does happen, is the market
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already pricinging in the fact that we do get one >> well, i think we have had two significant things happen in the last, you know, four or five weeks. the fed backed off an looks like they back off more and rates will be flat to down opposed to flat to up and the trade deal, i think we'll get a deal you know nobody wants to be responsible for a recession or market downturn and the fed was getting that tag around christmastime and into early january they backed off. now it is the trade problem. so i think we'll get a deal on trade, whether it's something that in the details will be not be that meaningful and the market will move higher. >> tony crishengi is joining us. your take on the market action in the end, the positive end to the week up 0.6%. >> i attended a forum in midtown new york and many officials were there and you could see this idea of patience in terms of
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monetary policy showing through. the fed is looking at different means of getting the inflation rate up, a good thing for equity investors, this idea that they want prices to move up that's what you want as an equity investor, of course stock prices moving up it's the patience that's a key driver of equities now and risk taking more general. >> interest rates in the u.s. are now, how would you assess that >> we could sum it up going around the globe in 30 seconds europe, the highest we expect to put the policy rate any time next five years around zero. same for the bank of japan for the fed. probably going to stop somewhere in the zone. one could say that interest rates stay low for several years. more than likely unless the inflation rate accelerates. >> dave, as we get through the rest of earnings season, pretty much there, how do you frame it
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in particularly the guidance of the year ahead bearing in mind the valuations we have for u.s. equity markets >> well, i think that, you know, the earnings were good but the guidance was okay. and i think that's why the fed is backed off. and they're seeing the numbers, responding to the market and so i think the only way you get inflation i think from here is to have a stronger economy and a stronger economy means higher stock prices and all kinds of feeds into itself. going back two months, the fed to raise rates forever and the balance sheet to shrink now for a long period of time an now completely reversed and been significant change the most important thing that's happening now an concernedabou is the five-year t-bill and one-month t-bill are roughly the same the curve is flattening and dramatically in the last couple of months. not the long but the short end and that to me is something i'm watching pretty carefully.
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>> meantime, of course, trade talks between the u.s. and china ongoing at the white house today. kayla tausche was there in the room and has the latest summary of what took place >> reporter: after two days of cabinet-level negotiations and one week before the deadline on trade, president trump and the chinese vice premier both said a deal is very likely. >> i would say that it's more likely that a deal will happen the fact that they're staying -- this is a very high delegation this is a man who's revered all throughout china as the vice premier. so the fact that they're willing to stay for quite a bit longer period, doubling up the time, that means something i think there's a good chance that it happens. >> reporter: despite optimism, the deal is not finished and not ready for prime time quiet the chinese delegation staying in washington for two more days and president trump said at least one more round of talks before he meets with the chinese
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president likely in march to hash out what he calls the bigger decisions on the table. as for issues that have been discussed, we know that currency has been finished. that agreement has been reached according to the treasury secretary and according to the trade representative the issue of forced technology transfer has made progress despite sources suggesting potentially otherwise. so we'll see exactly where this deal shakes out and what else could possibly come into play as we near the end of the negotiation. the president suggested that he would be willing to consider dropping criminal charges against chinese telecom company huawei and discussing the matter with u.s. attorneys and the attorney general in the coming weeks but that an executive order banning chinese companies of 5g builds in the united states is off the table for now. guys >> kayla, thank you for bringing us the headlines it is a busy day for you tony, i mean, when you look at
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equities right now since the start of the year, you have the dow and s&p up 11%, the nasdaq up 13%, the russell's up 17, almost 18% i mean, is there more room to run in terms of where investors should be putting the money and putting the money in equities right now? >> well, one adage in investing that made sense and helped people over the years is to be liquidity provider and not a taker. to be a liquidity provider means to sell when others are buying simple way to think about it it's a good time to derisk portfolio. what are the odds that the equity market continues this performance considering the valuation? s&p 500. typically the multiples somewhere between 14 and 16. to be at the upper side of that range is high earnings momentum. these days momentum is more to the low side and to rely upon earnings multiple expansion this late in the cycle entering the 11th year
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in june is not something that an investor should be thinking about. being a provider and not a taker, not cleatly, but to reduce risk is a good way to invest that. >> dave, bob pisani mentioned it at the close that he was a little concerned we didn't see a more pronounced jump when both sides of the negotiating table suggested a deal was likely. what is your take? do you think all of the positivity on trade is priced in >> oh, i think the trade deal's going to -- you know, no, i don't think so rates stay low and there isn't much of a -- there isn't a place for the money to go otherwise. remember, the economy is very good companies are making money employment is high people are making money. paying taxes saving money money is moving in the system pretty rapidly and that's got to go some place. and i think if the fed is telling you rates will be low for an extended period of time,
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then there's no other place to go than equities to get a respectable return and so i think that's what we're in right now is that kind of market we have been there before. and so i think that's where it's going to be for the foreseeable future >> and that is the perfect opening for the next topic which is fed officials raising fresh concerns that inflation is low ylan mui is in new york with the details. >> reporter: that is a central question that the fed looks at as it conducts a review of the monetary policy framework and strategy fed vice chair clarida laid out what the fed is looking at in a speech today saying the results will be public in the first half of 2020 an this review to focus on three big questions and the first is whether the fed should be making up for all of the years that inflation has run below its 2% inflation target. he said that the fed is going to be looking at alternatives such as targeting average levels of
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inflation over a number of years and possibly price level targeting. however he said there's problems with that including the issue of time consistency you know, are the years that you would need to let inflation overshoot the years that you want to let inflation overshoot and whether or not they could explain this policy to the public and have a credible commitment to carrying it out. the second big question he said they'll look at is whether the fed needs to expand the toolkit saying a thing they're looking at is whether to pre-announce a floor price for longer treasury securities and could create a ceiling on yields effective if the fed is faced with a zero lower bound. another question is whether it needs to reassess the communications strategy and better coordinate the policy tools and also to determine if there's a way to look at the interplay of policy and financial stability. the fed did emphasize that the
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review doesn't mean it's unhappy or dissatisfied with the frame work but really taking this chance while the economy is strong to step back, take a look at the strategy for the future and see if it can come up with more e fektdive ways effective n with this crisis. >> what was there something new learned from that, the confirmation of the balance sheet runoff to be done or paused by the end of the year? was that a new piece of information? >> it wasn't new i saw my former colleague there and didn't see anything new said seems that the fed are so-called doubting thomases now about old theories about the relationship between growth an inflation. since 1958, when the so-called phillips curve was introduced, the idea that stronger growth would lead to inflation, economists believed that
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eventually it would and now they're doubting it citing japan, for example trying to push the inflation rate above the target and not having any result whatsoever so the federal reserve is looking prudently at the future to do if the economy were to slow down an raise the inflation rate because it's better to have an inflation rate more stable near 2% than a lower one. >> is it possible the frame work is the thing that needs to be reviewed i think if you go out on main street america and ask them if they're paying more for goods, more at whole foods, diapers, health care, rent, they say they're feelinglike inflation is alive and real even if the data of the fed doesn't say it. >> especially in big cities because there does tend to be higher inflation rate in cities than rural areas and the surveys done there and there are higher prices it is just that they're
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not as high as the fed and central banks would like them and the fed looking at what to do to push the policy rate down to zero. it's about half of where it would be in a tight monetary policy situation and can get back to zero and facing the question of now what do we do about the economy to improve the prospects? >> dave, what is your view on where the fed has got to already? it feels like there's a big pivot and the market priced that in on another level they have plenty of room to cut if necessary. >> well, i think it sounds like and i wasn't there today, it sounds like almost entering a new phase here we have done qe1, qe2, raised rates and not working with no inflation and now change the rules here again, i think today or the last couple of weeks realizing that rates aren't going do go up. and that's the fed is just not going to allow that or doesn't see that because there isn't any
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inflation, no slowdown and now talking about adding more stuff to the toolkit. right? do this and that my big kind of, you know, tongue in cheek is when's the next thing? buy equities to get the market up so we have inflation? so again, they do it in japan, in other central banks so it's like they're setting up to say we need a higher market and stronger economy to get inflation and we're going to help you do that and they're telling you that now. that they're not going to be anything but accommodative going forward. >> what are you watching out for next week most of all? >> well, jpmorgan has an investor conference on tuesday and i think that's a significant -- to me it is sniffing what they say not about margins or credit but what they're investing in and how they view what the company looks like the next five years and to me it's sort of a future here it is not the immediate next 12
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months >> i will be looking at that, as well indeed, will be there. thank you both very much tony and david >> thank you very much. up next, kraft heinz shares crushed after revealing an s.e.c. probe into the accounting an find out how long it could take for the food giant to recover. plus hearing from a netflix shareholder on what best possible w aosr nsint cawi for "romo" could mean for the stock.
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welcome back to the "closing bell." kraft heinz getting crushed today after the company announced a write down an announced an s.e.c. subpoena finishing the day down 27.5% the stock finishing the day at an all-time low since kraft split from mondelez in 2012. let's bring in scott mushkin and jeff robards to discuss what is next for kraft heinz gentlemen, thank you for joining us today jeff, i'll start with you. my en, this really seemed like
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quite a kitchen sink in terms of earnings report. what do you think was the most damning here >> well, i think it's just a growth issue they have focused on cutting costs and that was the real strategy behind the merger of kraft heinz five years ago that they sacrificed innovation, they sacrificed growth, investing behind their brands, and you're seeing the results the stock has taken a bath and the old brands, you can reinvest in them and create value through those old brands you can do that. it's just to me a little bit of poor management and ill-thought strategy. >> scott, what is your take on that management point in particular given the writedowns and whether this should have been done more sort of periodically before? >> yeah. i think the challenge is actually i'll disagree with what was said i think the management team with
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the label of the 3g cut costs and suck out the life of a company but as we look at kraft heinz they have done a lot of innovating and renovating, particularly in the meat category with oscar mayer. so i think the challenge is well beyond one company situation it goes to what's going on with food producers here in the u.s.? we think the environment is just awful. we have very little population growth we got birthrates falling and families drive consumption we have the pure foods trend which is alive and well. meatless mondays i think more and more popular so just a lot of, a lot of challenges, not to mention private label. so the company faces enormous challenges they have reinvested in their brands but not working and maybe even worse because it's not working than if they were just cutting costs and not reinvesting. >> scott, if this is a broader issue and trend for everybody
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across the board, does consolidation, more m&a make sense? >> it really does. a lot of the companies are actually pretty small. when you compare them next to walmart which is, you know, four, five, six times bigger than a lot of the companies. we just had kcagney conference n florida and we need consolidation and let's hope we get some because we need it in the space. >> so, jeff, you disagree slightly and think they have been doing too much cost cutting. what is the strategy from here in your eyes that can get them back on the right track? >> yeah. i guess i would agree a little bit with scott in that there is this family ownership structure with a lot of big food companies but the reality is if you put these big companiestogether if
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they have the right strategy for growth they'll be able to connect with the consumer and take advantage of these trends that scott talked about. the reality is it's an inability to address the excuse me consumh consumer wants it is a little bit of not being able to get out of your own way and old way of doing business and opposed to focusing on innovation and to me the way toward discuss and growth in the food sector is to invest in innovation, put your finger on the pulse of the consumer and figure out how to address those trends there's still overall growth in the food sector but a little entrepreneurial companys that are growing right now, not the big food companies because they just aren't close enough to the consumer to figure these things out an you see efforts by all of the companies to try to do that but i think the problem is
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it's -- they can't effectively get out of their historical way of doing business in order to tap into the trends and all that growth. >> so, i'm going to ask a question to both of you. jeff, you rating on the stock and in light of the numbers after the bell last night, does that change? >> i think kraft has to do something. they have to do something to as i said reconnect with the consumer you know, clearly they're positioning themselves for another major transaction but to just merge with another big company to try and create more cost saving opportunity doesn't seem to make sense to me if they can do that and innovate and take the power and the muscle of putting big companies together and creating a true innovation strategy, a true consumer facing strategy then i think that's going to be the way towards success. so, you know, if you ask me for
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a rating on the stock, doing more of the same i'd say the rating would be a sell i'm not a stock analyst. i'm an m&a banker but that's how i would put that. >> i'll put the same question to you, scott you have an outperform rating here will you stick with that >> obviously everything is always under review and had the biggest bearish call on the industry egg on our face trying to pick a relati relative winner here with kraft having a hard time today and falls on con agra reporting, kellogg and mccormick as a spice company and i think jeff hit on something important. they have to reinvent themselves another trend we talked about is craft beer trend and go to peanut butter, it used to be jiff and skippy and now so many different brands and the question is can large package food companies tap into some of
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these trends or are they going to have to merge and merge and cut costs? i think it's a combination of both and kraft believe it or not has better mouse trap. they can do things more efficiently but the categories are just terrible and they have to get into better categories. >> okay. we'll leave it there scott and jeff, thank you very both very much for that. on monday we will be having an expert weigh in, as well another expert weigh in. warren buffett joining "squawk box" on monday 6:00 to 9:00 a.m. no doubt he will have a very clear opinion on what best to happen next there. >> yeah. the #ask warren. tweet your questions i will be. >> absolutely. well, up next, we will ask a netflix shareholder whether an oscar win for netflix in weekend could be a game changing moment for the streaming company and hollywood overall. >> later, we look at whether the nike shoe fail that injured a
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welcome back netflix is making a huge bet that a best picture oscar win this weekend for its film "romo" could be a game changing moment for hollywood. julia boorstin is live from the red carpet with the details. hey, julia. >> reporter: well, morgan, after investing billions of dollars in
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content, netflix is finally heading into the oscars with its first-ever best picture nomination for "romo" with total of ten nominations it is tied for the most nominations of any single movie this year with "the favorite." the academy heaping on acclaim despite beating the rules. it rented out theaters to distribute the movie itself and no transparency into what the box office take is and then released the movie for streaming three weeks later. theater chains, the big ones, boycotted netflix not showing it in the oscar showcases netflix is spending $25 million to market the movie with an oscar campaign this is marketing it really specifically for the voters. in addition to bill boards all over los angeles, netflix has spent big on glossy coffee table books and chocolates for the academy members.
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this for a movie costing a reported $15 million to produce. so why is netflix making a big investment hoping to use oscars attention to help draw top talent and make the most of the content investment especially as disney and warner brothers pull content for their own rival services rbc said the wins would be a mod it positive for netflix and benefit subscriber growth and retention. piper jaf piper jaffray say it could raise the profile and we will have to see what happens on sunday but many people say with the nominations netflix is really already won. back over to you. >> julia, i'm curious what would happen to the movie theater companies and those stocks, whether it's amc or regal if netflix wins you just kind of touched on it,
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the fact it could set the stage and change how releases are done in the future. >> reporter: the reason why netflix was able to do this and have just a three-week window between the theatrical and at-home release because netflix doesn't need the theaters at all. right now, you have two major studios, warner brothers and universal, who have said they would be interested in shortening the window. there will still probably be a long window for the big releases so the big tentpole films, a fast and furious or a super hero movie, those are the one it is studios want to have in theaters but we are going to start to see is pressure from the studios to have a shorter window, a smaller amount of time between when you can see a movie at home and in theaters an i'm hearing that three weeks is considered that potential silver bullet number that we could be moving towards here but i think that romo is a
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movie never going to have a big theatrical audience and no surprise they didn't tell us how many tickets they sold and using it for prestige rather than box office. >> thank you very much for that. julia boorstin let's discuss further this year's possible oscar wins for netflix and what it means for investors. ross gerber joins us do you think awards core late with subscriber growth for netflix? >> not at all. nobody on netflix watched "romo. i did a poll 85% have not watched it. this is the advertised movie that nobody's seen in the history of film probably. >> how many people did you poll? >> i think several hundred that answered the twitter poll an all young people and went through the office and i couldn't get anybody except the 58-year-old that watched it. it is like, you know, i get what netflix is trying to do. they want the prestige and prove that they're a legislate gnat player we this is a very
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expensive way to do it >> but, ross, i mean, hold on a second the subscriber growth is outstanding and that's been from them investing in original content and they have got to sort of slightly change that content that is. >> incredibles is what's trending on netflix right now. tv shows are trending right now. you know, romo is not trending on netflix right now and so, you know, netflix is hugely successful as aal termtive to cable with the collection and there are so many great shows from many different producers, not just netflix and what they're really trying to do now is say, look, you know, we haven't been successful in movies. we can be successful in movies and hollow because it's a movie that in the real world nobody really cared about or saw. >> i don't think you can say that - >> did you see it? >> great, now your poll up from
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80 to 81 people. >> you didn't see it that's my point. >> so what >> because nobody saw it. >> you're not a film critic and you don't speak for thousands and thousands of people. but anyway - >> that's true i don't. i'm saying thatnot a scientific poll i'm a film critic and criticize every film i watch but, you know, the reality is there's great movies out here for the oscars this could be the most disappointing night in netflix history or prove with enough money and enough pushing they could get their first academy award but it's not really material in the future of netflix which is really the international markets. >> yeah. to that point, ross, you're a shareholder in netflix the fact that the company is spending more to promote the movie ahead of oscars versus how much they spent on the movie, that's empty dollars or maybe potentially a vanity project
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here. >> right. >> what do you see as a next big driver for the stock if not this >> for us netflix is wildly overvalued unless two things one, they need to have advertising on the platform somewhere somehow. they need ad dollars they have so many eyeballs and so much demographic information it's a very valuable company for that amazon is proven to be successful now growing their ad business sec, they have do go back to the theaters making good with them because films need to be in a theater to really make the economics work and that's why disney has the advantage here when it comes to making films and putting it on the streamer because if i can make 400 million, 500 million domestic on "black panther" and then put it on my streamer, it is like a double whammy and if netflix makes a movie and no
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th th theatrical note. >> what should i see next? >> "bohemian rhapsody. you know, i haven't seen "a star is born. my wife is begging me. i liked "black panther." they're all good movies including "roma" to some degree. >> thank you for solving my weekend plans for me ross gerber. joining us. >> add "roma" to the list. >> exactly good luck getting through it. >> i haven't seen it either. >> nobody has! >> okay. anyway, let's move on. leslie picker? >> i have seen "roma." here's what's happening at this hour chicago prosecutors have charged r&b star r.kelly with ten counts of aggravated sexual abuse after years of allegations directed at kelly accusing the now 52-year-old of sexual misconduct
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of women an underaged girls. he has consistently denied the charges. hundreds of southwest airlines flights have been delayed as the carrier deals with winter weather and a computer outage. the outage of earlier today and grounded flights for nearly an hour. new york governor cuomo said amazon's headquarters pullout is the greatest tragedy he has seen since he's been in government. commenting on a public radio station he said losing the deal makes him sick to his stomach. he blamed fellow democrats who control the state senate. guys, we are not yet done with flu season. the cdc says 48 states and puerto rico still reporting widespread activity. nearly 8,000 people have been hospitalized this season 41 children have died from flu-related complications. that's the cnbc news update at this hour. back over to you guys. >> okay. thank you very much for that. up next here on "closing bell," the dow riding a nine-week win streak we'll ask a top financial
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planner how those on main street make it on wall street. and spacex launching the second rocket of the year with a spacecraft containing the first privately funded lue mar lander. we have details later on "closing bell. i don't know what's going on. i've done all sorts of research, read earnings reports, looked at chart patterns. i've even built my own historic trading model. and you're still not sure if you want to make the trade? exactly. sounds like a case of analysis paralysis. is there a cure? td ameritrade's trade desk. they can help gut check your strategies and answer all your toughest questions. sounds perfect. see, your stress level was here and i got you down to here, i've done my job. call for a strategy gut check with td ameritrade. ♪ itin 30,000 precision parts.
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welcome back to the "closing bell." cnbc launched invest in you: ready, set, grow it is all part of a new partnership with acorns. the saving and investing app getting started with investing requires a good strategy joining us is wayne smalls and demont hicks, avery johnson and joining the conversation. >> wayne, so you're a retail investor yourself. you like to trade stocks as part of our financial education initiative we are trying to open up investing for a new generation what prompted you to get into investing despite not being a professional investor? >> well, when i first started,
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my first job after college, they offered -- put out something i never heard of before. it was called the 401(k) saying you can have a portion of your income put into a basket that either tracks the stock market or the bonds or government bonds, and, you know, i looked an said, you know, it's -- i don't know how to buy stocks and saw the returns on some years of that 401(k) invested in a basket of the s&p 500 an i jumped in and had a portion of my salary contributing that particular basket after a few years i said, look, that's going well. let me try something on my own so my first move was a mutual fund it was a little boring so i said, look let's just try and do what people who become millionaires do, buy and sell stocks. so i opened up an account and, you know, me and a couple of co-workers started doing a lot of day trading and then saw what worked for us and basically how
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it all started for me. >> there are a lot of resources and vehicles for investing out there. can be a little daunting if you're just getting started. what did you turn to >> i actually went and got the acorn app first. didn't know anything about acorn but it was an app to use to show me how to use and made it easier to read stocks an it was a first app i used and i did a lot of research i did a lot of reading and i did a lot of following certain people who did well in trades so that's how -- that's what got me motivated to go into trading and needed to supplement the income and so i took my money and i tried to make my money work for me and that's how i got into trading. >> ivory, if i bring you into the conversation as a financial adviser you are, what is your top do and don't when giving advice to people that haven't
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invested before? >> well, the first thing i'd say is there are always people saying i can't do this anymore and retire and ran the numbers 20 years ago and people wake up and say i can't do it for 20 straight years and never ran the numbers an not just investing the money. it is also knowing where am i trying to go what will i do once i retire and make that happen so you have a goal the other thing i'd say is get professional advice. you're not just with the investment piece but estate planning, taxes. some of the don'ts is don't make knee-jerk reactions. money is very emotional. you need headlines, the trade risk the president and they make immediate decisions. another problem is investors will stop investing. and when they stop investing, all of a sudden that money burns a hole in the pocket you're developing bad habits and then miss some of the tax benefits of many uninto a retirement plan and one last
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thing is people tend to listen to their friends and you have to be careful about that because your friends will tell you they own amazon 15 years ago but not tell you that they had general electric for ten years, as well. do your own independent research and sounds like they are doing that right now. >> and, wayne, obviously, in the last couple of months we see a dramatic pickup in volatility. major losses for the major stock averages in the last months, major gains this year. how are you approaching that as an investor? >> well, about six, five or six months ago i decided to up my contributions to the 401(k) higher than i have ever done it's 25% i did that because i knew that stocks were going to probably go down further because of the, you know, numerous issues, you know. potential for trade war. the interest rate hikes and so forth and i knew that that would be a temporary situation and
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buying into the 401(k) of the s&p 500 and buy as much as you can buy as it dips so that when it comes back up you will be -- i would be able to see a significant gain so that's pretty much the strategy that i took it also allowed me to keep -- lower my taxable income for last year and put me in a position where i wouldn't have owed as much as i could have. >> okay. guys, we will have to leave it there. we are out of time thank you all very much for joining us. >> thank you >> we should note nbc universal are investors in acorn. lyft may be the least of rival uber's headaches but the ride sharing service is facing brand new competition of two of the biggest names in the auto world anth ionurad nt.d ats o rarex i consulted with your grandmother's doctor.
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welcome back here's some of the stories on "closing bell's" radar today take a look at spacex's falcon-9 rocket, a launch thursday night taking off from cape canaveral in florida it was the company's second launch so far this year. it was the third time this specific rocket booster was launched and then relanded the booster carried total of three payloads with a privately funded israeli lunar lander which if successful to make israel just the fourth quarter to land on the moon and it would be the first time that we had a privately funded spacecraft to land on the moon separately, virgin galactic
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today sent the first test passenger to the edge of space that happened just a short while ago. the craft called unity reached three times the speed of sound an it traveled to the edge of space, wilf, as space startup m closer and closer to being able to take paying passengers to the edge of space. ticket price $250,000, by the way. >> both these stories, both these videos totally epic. made even more epic was that music. >> wasn't it, though >> we needed that music again. anyway. >> it was great. maybe like "rocket man" by elton john. >> why not now, i've gone for two rival automakers which are teaming up to take on a shared foe, uber. daimler the owner of mercedes and bmw both based in germany announcing a $1.1 billion partnership to build up a ride-sharing operation capable of competing with tech giants like uber or china's dd. the partnership will merge the existing ride-sharing services into a single platform which
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will include automated cars that can charge and park themselves this is $1.1 billion compared to the market cap of lyft and uber, way, way bigger so it's small investment we can talk about the odd partnership between these two rival german companies, but i think the interesting thing is what this implies for the ipos coming up of lyft and uber they're both loss making and have so much competition is there that samedemand for - from investors for those loss making companies it's different than if we ha netflix today with these rivals. they got their ipo when they were the only one. i wonder whether these big ipos for the likes of uber will be harder to get away. >> and with lyft likely to hit the public market first, that's going set the stage for if and when uber decides to do so later this year too. >> certainly surprising to see mercedes and bmw partnering up like that. >> obility it's like the next big thing in tech well, up next we've got
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twitter announcing a change to its board of directors there's the music again! >> it makes any story epic >> it does we're back in a couple will it feel like the wheend of a journey?p working, or the beginning of something even better? when you prepare for retirement with pacific life, you can create a lifelong income... so you have the freedom to keep doing whatever is most meaningful to you.
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this is moving day with the best in-home wifi experience and millions of wifi hotspots to help you stay connected. and this is moving day with reliable service appointments in a two-hour window so you're up and running in no time. show me decorating shows. this is staying connected with xfinity to make moving... simple. easy. awesome. stay connected while you move with the best wifi experience and two-hour appointment windows. click, call or visit a store today. we have a news alert on twitter. seema mody has the details. >> hey, morgan evan williams stepping down as a member of twitter's board of directors by the end of the month. not only was williams a co-founder of twitter but at one point he was ceo he stepped down from that post in 2010. certainly someone who played an instrumental role. evan williams stepping down from the board. back to you, wilf. >> seema, thank you very much for that. up next on "the closing
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bell" many more companies will report earnings next week. we'll run through the big names and what to expect after the break. ♪ (butcher) we both know you're not just looking for pork chops. you're searching for something more... right this way. you thirst for adrenaline, you hunger for raw power. well, you've come to the right place. the road is yours, dig in.
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let's get a check on the key events we are watching next week it will be another big week for earnings shake shack, etsy, tenet health care kicking things off on monday tuesday january new home sales, february consumer confidence, earnings from home depot, macy's, papa john's and mylan. >> on wednesday we have durable goods sales and earnings from lowe's, best buy, square, booking holdings and campbell's soup we'll get the weekly jobless claims and the second reading of fourth quarter gdp on thursday along with results from dell, gap, nordstrom, abi and keurig dr. pepper and the week wraps up on friday with the ism manufacturing report and consumer sentiment as well as earnings from foot locker and tribune media lots on the docket i'll add another thing to that as well, which is -- >> only one? >> just one to begin with, which is what dave ellison mentioned, jpmorgan investors on tuesday. we'll hear from all of the business heads but jamie dimon
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always interesting to get his take and outlook for the year. >> we have the second summit with north korea next week in vietnam. we have the humphrey hawkins testimony, two days of testimony in congress for the fed chair powell the one thing we don't have next week is a jobs report on friday. that is pushed back to march 8th, but we have all this other data no dearth of market-moving news i suspect. of course the gains today pretty much equate to the gains for the week up 0.6% on the s&p. we were flat coming into today so the week-to-date performance up 0.6%. that's nine weeks of gains in a row for the dow and the nasdaq pretty impressive momentum, even if the gains in total this week are only half a percent. >> it's also worth noting we've seen some of the commodities rallying crude, copper, also semi conductors some of these different sectors and some of these different asset classes that would be tied to a u.s./china trade deal.
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the best performing sector of the week as a hole as utilities, so a little bit defensive in that nature, but materials and tech following close behind suggesting, of course, there was some positive beat, stocks doing well. we're out of time. morgan, thanks for joining us again today. that does it for "closing bell." >> have a great weekend. "fast money" starts right now. live from the nasdaq market site overlooking new york city's times square, i'm melissa lee. tonight on "fast," a number of big retailers reporting earnings next week from macy's to home depot and lowe's, but the chart master sees trouble brewing in the charts. plus check out shares of intel soaring on an upgrade from morgan stanley is the old-school chip stock about to go parabolic? first, the dow surging up nearly 200 points. the dow and nasdaq locking in a nine-week winning streak as the u.s. and chi


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