tv Closing Bell CNBC March 5, 2019 3:00pm-5:00pm EST
♪ thanks for watching "power lunch. that was fun. >> great hour. really good. "closing bell" starts right now. ♪ good afternoon welcome to "closing bell." i'm wilfred frost. >> i'm sara eisen. >> airline executives speaking out today. what southwest, delta and united have to say about global growth, u.s. growth, consumers, competition, oil prices and much more those exclusive interviews coming up. plus more chevron ceo michael wirth is here. we have had three different rally attempts up and down and up and down. higher right now dow as i mentioned positive, up
28 points. s&p 500 sort of flat tech outperforms the nasdaq up .25% >> and, you know, the start of the session, reversal of yesterday where we were worsening and now improved. >> better services numbers at the 10:00 hour and new home sales were better but revisions for the month of november, that's out there as well as the new chinese growth forecast. >> yeah. services number a tick up in yields and that hasn't dragged stocks down too much. retail is on pace for its best day of the year kour courtney reagan has a look at the biggest movers. >> kohl's and target shares up target's full-year earnings forecast in a range above the consensus. store traffic was up 4.5%. stores ultimately contributing
2.9% digital sales, though, for target up 31% in the quarter, con trintded 2.4% to comp sales. now you might remember in august that target said on cnbc that the u.s. consumer among the strongest he's ever seen six months later he still thinks the u.s. consumer is healthy but with an assessment less robust. >> still a very stable consumer environment. consumers are shopping you're seeing strong consumer confidence still and our outlook for next year is that we'll see consistent results across 2019, so certainly we're going to watch it carefully and it's going to eastbound and flow and right now i think we are seeing a pretty consistent consumer environment and that's certainly showing up in the january results >> kohl's beat for the fourth quarter. the department store also giving full-year earnings guidance in a range above estimates. and will close four
underperforming stores in april and open new smaller stores later in the year. the ceo said it's financially strong and the health in the business is positioning us well for continued success. back over to you, wilf and sara. >> court, this morning on "squawk box" with brian cornell, the comments of the difference of delivering from a logistics center to the home deliveries of stores do we get more color on that >> yeah. so, wilf, they held the investor day today, too it was a big day for target and they gave some really interesting color on some of that so target offers a number of programs one of them, of course, is the ship from store. so, yes, it is still shipping and the store in many cases is closer to that end consumer. as a result they said the cost is 40% lower from the store than it would be from a fulfillment center if it's a drive-up or an order pickup and order it online
and pick it up in the store, 90% lower than from the warehouse for target to fulfill and with the other programs like shipt put it altogether and it's lowered target's fulfillment costs by 20% so they really are using those stores as significant e-commerce hubs and saved them money. >> thanks for that target up 4. 7% today. transports lower for eight straight sessions and i saturday down for an exclusive interview with the delta ceo for the take on the current environment and the overall market sentiment >> i think the impact from the government shutdown weighed on the stocks a little bit within the quarter. but fundamentally the demand environment is healthy for us. we gave guidance today we are still anticipating growing our top line by somewhere between 5% and 6% in the quarter. and i think the investors want to see what's going to happen
with the industry kind of looking through and the first quarter for us is always our choppiest quarter of the year and a lot of noise in it. >> the government shutdown as you mention suicide ed is an ad. >> i think we are all affected the same level and not just the fact of less government traveling going on and just an unease about the environment and causes people to pull back a little bit, the corporate demand is growing 7% in the quarter clearly the change in sentiment on the macrooutlook is more focused on a slowdown globally than the u.s are you seeing that in your customers with the international travel >> a little bit of 2019 is not growing as fastas 2018 or 2017 grew. i think the transatlantic is one part of the business that's some of the most difficult headwinds and growing a lot and capacity
in the transatlantic the last couple of years so i think that's probably the weaker part of the business for the winter that said, our forward look on spring and summer travel is really robust. >> you'll cut fares for me when i go home? that would be nice touching on oil prices, clearly you have a boost in the fourth quarter. less so this quarter how are you feeling about that for the year ahead >> one of the things we are hoping this year is have some stability around pricing our non fuel costs are pretty flat they're up about 1% on the year and we expect to be able to hold that last year we saw a massive headwind on fuel prices for delta up $2 billion in the year so to the extent we can hold in that $60, $70, $75 range, that's actually a pretty good spot for us. >> i want to talk about airbus because they have canceled the a a380 and you launched with the
220. >> the newest product, i think the nicest domestic product in the sky, wide body bodies on a narrow body chassis, the more spacious the feel. entertainment that works, wi-fi that works, live tv and it's going to -- you will see that i think continue to step up from regional jets to the small narrow bodsdy in good number. >> on the topic of wi-fi, can customers expect that for free in the near future >> that is the plan. we don't have the transmission strength and working with gogo and transmission suppliers to find out how can we get better transmission capables brought to the aircraft that could sustain an offering of free in the cabin. we'll figure it out. it's coming. probably a couple of years away still. >> those recent stories saying that there were cameras installed in the screens that you have in the back of the seats on the planes. was that true?
why were they there? should they be there >> interestingly, that was news to us when that story broke. we never ordered the cameras it was something gnat e -- that the oem deployed we made certain they were disabled and they were that functionality had never been turned on and we will make certain we are not allowing new screens to come on with cameras. that's not our strategy. >> and in this age where people are very concerned about their own privacy, have you had pushback from customers in the last couple of weeks since the story broke? >> customers were curious as to why they were there. the fact that they'd never been operated, disabled, something that we are looking to permanently change out and make certain that there's no cameras on board and there's only on a select fleet types. >> internationally you mentioned that there was some pressure and competition transatlantic. what about the view to asia and
the extent to which that's been affected by the trade tensions >> you know, our business to china is okay. we haven't seen any negative implications, repercussions from the trade issues experienced with china we are growing double digits on a year over year basis our china business the volumes have been relatively healthy. >> the delta ceo there fascinating response about the cameras in the back of the screens on the back -- the screens on the back of the seats. >> caught off guard. >> they had no idea about that i think slightly worrying and making it known that they have made sure they won't be used and won't have that in the future. stock's up 2.6%. i think the fact that they reiterated the guidance, expect to grow 5% to 6% top line in the quarter ahead and saying coming into this, these stocks suffering five or six sessions and -- >> not just that underperformers over 12 months
and year to date not as much of a comeback as the broader market delta, pretty much flat for the year right in the middle of the pack. >> but i think the tone offsetting that negativity, particularly for delta we'll hear from southwest coming up and focused on the u.s. and the economy stronger than internationally and even delta reiterating their top line guidance 5% to 6% growth. >> we have to wait years for free wi-fi. >> but progress. >> at least he said it's coming. >> i think we'll see if others have to follow it. one of the premiumizations of delta. still to come in the show, exclusive interviews with southwest ceo and united's president. be sure to stick around for both of those. we've got breaking news right out of washington. kayla with the story >> reporter: sara, the commissioner out food and drug administration is expected to resign in about a month. that departure reported a few
moments ago by "the washington post" and cnbc confirmed it. gottlieb will have sempbed in the job for just less than two years when he resigns in about a month's time and overseen measles jou measles outbreaks in washington state to situations involving bad lettuce in the country and most notably sounding the alarm on the e-cigarette market with a series of retailers on notice and issued warnings about the market even as early as today on cnbc we are still awaiting comment from gottlieb himself but certainly this would be a ripple across the drug industry and certainly someone familiar to the business world being a venture capitalist or formally himself. we'll await comment from the white house on who they plan to replace him at the fda, sara. >> we don't know why, right? >> he was on "squawk box" this
morning. it's an odd one to say the least. >> reporter: we don't have that much in the way of detail of what is the catalyst of the resignation, whether he intended to only serve about two years in this role or whether there was something happening behind the scenes, a falling out of sorts or a disagreement. he was someone who was very comfortable telegraphing his own views to the market, to participants in the market and certainly we'll await news of the replacement, as well. >> apparently the tobacco stocks are popping on this news and he was pretty well liked and respected in his post. kayla, thank you. >> sure. >> this morning he was announcing the new initiative and what they were doing with it and talking about it very much as if it was going into action slowly but surely. i'm baffled that he would -- if he knew he was going to resign today to do that rather than change the date and come on in a different tone as a good-bye
departure. >> there's more of a backstory here. >> yeah. altria is up i'll check on walgreens and that's a company he was signaling out this morning hasn't really changed direction since this news. a surprise. >> for sure. let's get back to the broader market now see whether the rally holds into the final hour joining us, omar agular and our very own rick santelli omar, there's been a lot of good news priced into this market and people are sort of wondering what's next. if the fed pause priced in and a u.s./china trade deal is priced in, now what >> yeah. that's a great point i think obviously we have seen an amazing rally i just realized that on saturday we're actually going to come up with a ten-year anniversary of the big rally that started in 2009 but clearly the 2019 rally has been pretty more the fact that we have reduced the risk we
have beginning of this year and less about the data so i am very happy to see that the data starts to come on a little better but the data beforehand it hasn't been as strong as we woulds li would like and the pace of the rally is something that we cannot expect to continue. the three things is consumer, investors, china and the fed and those four things are things that were in an issue at the beginning of the year, a lot of the risk are mitigated with the government shutdown, especially. i think starting to just look and see what the investors can do do recover their confidence. >> rick, services data pretty strong the retailers out. pretty strong. is the fed going to change tack again in the middle of the year? >> i don't know that they'll change tacks but i continue to think that the fed still has
some tightenings left in the cycle. doesn't mean they have to be trigger happy. so, you know, we could view it as neutral but i think if you're monitoring the u.s. economy you can make a case of a point in the future or another quarter or two is going to be implemented by the fed but i don't look at it as a bad thing and i think jay powell will look at the data and how the market responds to the data you see, wilf, the dollar index always stalls around 97. that's strong but it does usually stall there. on interest rates, we can't seem to make a new high for tens. above 278 or so even though the 30-year has. i think we can make it simple. i think it's impossible to actually debate with any type of intellectual honesty how much of anything is built into the markets but i do believe within a handful of percentage points of all-time highs with the three major stock indices that should a trade deal get consummated and it looks like a good one that
will be the catalyst to bring our stock market to new highs and the way investors would receive the news and then embark on the marketplace and not just our service sector, a great number today, but looking at what's going on with the eu and china, they have had some various data points out and nothing horrible c-minus. that's fine considering we were worried about much lower grades. >> omar, rick brought up an interesting point 10-year yields while higher aren't breaking out of recent ranges is that in the positive for equities that in itself helpful for this market >> well, i think that just, you know, puts a confirmation that we are in a complete global slowdown and while the data and especially the u.s. economy is pretty stable and growing at a prety decent pace and comparing the growth of what we had last
year there's a clear, you know, deceleration happening on a probably best economy in the world that's the u.s when you look at china with the new target of 6, 6.5, europe, the different parts of bringing gdp growth around the world, we are just looking at the fact that our 10-year yield at 2.75 is best around the world for a yield of an economy of our size and it is a reflection of a global economic slowdown that basically goes into the natural part of the cycle that has been extended for many, many years. i do think, however, that provides a nice floor of what the market might do, a stock market for the remainder of the year and need to think of eps and earnings growth not as strong as last year and probably propel the market to a new high. just to remind that even with the rally today we're still not
at the same level as we were in september of last year you know we had a very difficult fourth quarter that we're still trying to recover so it's almost like a new start right now when you think what is going to happen for the next few months of this year >> okay. we'll leave it there, guys thank you both very much omar and rick. still to come here on the "closing bell," chevron stock up double digits sofar this year. we'll speak with the ceo michael wirth where he thinks oil prices could be heading. secretary of state mike pompeo with an update on chinese trade negotiations and a warning of what could happen if the right deal is not reached. we'll fill you in right after the break. ♪
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welcome back to "closing bell." secretary of state mike pompeo making some fresh comments about the ongoing trade talks with china. our kayla tausche is in washington following it. >> reporter: secretary of state pompeo is visiting iowa, kansas and texas playing diplomat to the farmland in nine interviews in iowa yesterday, from local radio to agricultural industry groups,
pompeo said that help is coming for u.s. farmers and new markets will be open as the end result of trade tensions. he said he is helpful for what he called a good outcome in the next few weeks and said that president trump is prepared to walk away if the deal isn't right just like last week in hanoi, vietnam, when talks were called off at pom ppeo's recommendation they believe it emboldens the white house with china and others suggest president trump needs a win and wants to get one on trade what is clear, though, is that beijing's economic footing is softening with officials saying it's a tough struggle ahead and growth forecasts getting slashed citing the trade war and one thing president xi and china doesn't have to worry about, guys, getting re-elected next year >> kayla, was the secretary sent to do this by the president do you think?
or, is it of his own oaccord >> reporter: there's speculation of future political ambitions of pompeo iowa is his home state and suggestions that he could run to replace senator pat roberts from kansas at some point in the future and denied that suggestion and certainly the fact he is going there is something that people are going to be making a lot of. but then you also just think about the impact, the brunt of this trade war that the farmers in this country have been bearing throughout this trade war and i think that he is right to go and shore up some support there among an industry group that's been pretty battered for several months. >> kayla, do you have any sense of whether the china hawks within the administration, we haven't heard from lately, navarro, i think lighthizer in that camp, are on board with the framework of the deal coming together is the enforcement mechanism strong enough? the policies to change, are they
strong enough for the members of the administration who the president sometimes listens to >> reporter: it depends on the set of china hawks within the administration they're careful not to disagree publicly with prumpb the china talks on capitol hill like senator marco rubio, senator tom cotton, many members of the republican party on the senate side, we started to hear them be very critical throughout this process of not getting strict enough concessions from china and then china hawks outside the administration, politico reporting that one is in touch with the white house and doesn't think that the president will agree to a quote/unquote soft deal and we'll see where the president himself comes around. >> okay. thank you very much for that still to come here on "closing bell," today's retail earnings surprising the street we'll see if that continues.
online pharma news pub preparing a story speck latting i'm leaving the fda. i want to be very clear. i'm not leaving. i look forward to sharing my 2019 strategic roadmap soon. he was on "squawk box" this morning. >> we didn't get that statement but certainly he was business as usual and no sign whatsoever that this was coming. >> very surprising for more, we're joined on the phone by jared holz from jeffries why do you think we're seeing the move in the stock, jared >> thank you for having me on. i think the timing here is very surprising as you mentioned. scott's been very visible with the street and with reporters, very lately. so i think really the timing is the key factor and then consider, you know, why i think there's been such a decent bid in the space aside from m&a and
gottlieb leaving today when very few expected it is the main driver and that's what has bio tech down about 1.5%, 2% intraday here. >> i guess also we have some tobacco stocks moving in opposite direction do you think that makes sense in your eyes, as well. >> i do a lot less work on the tobacco names and makes sense given the commentary around what he's trying to do. its's very high on his agenda for a past couple of years so i think based on what i know and what he said in the past that does make sense although i think most of the moves in these stocks are going to be pretty short lived. i think the question really is how does the fda change if and when scott does leave. >> right. >> we are of the view that not much changes near term. >> yeah. i mean, i wanted to go there the conversations i have had they've been extremely
complimentary of scott gottlieb and would hire him and there were concerns of whether he would be too friendly to the drug industry. do they like him because he's friendly to them or is it a respect thing? i mean, how's he actually made policy around some of these bio tech names >> i think everything you said, sara i think he's been very friendly to the industry, i think he is a good guy ingeneral or perceive to be that way i believe he is very accommodative and very accommodative of high science so these bio tech andpharma companies working on high-tech solutions in health care he's been a partner of rather than an opponent i think all of the things are why and yeah i can see him doing a variety of things i won't speculate where we think he's going to go but somewhere in the industry makes sense and don't have a view on what's going on the relationship between pharma and gottlieb is very strong and
been very, very accommodative in terms of new technologies. >> jared, with only policy issues either in the past or in the pipeline where it was expected that he might differ in opinion from the president and the rest of the administration that could have led to this or not? >> not that i'm aware of i don't believe so i think the one sort of ubiquitous topic we have been discussing for months and years is around drug pricing but from my perception is that the agency as well as cms and the president have been roughly on the same page with respect to drug pricing in any current -- over any current time period so there's nothing that stands out as far as one single issue that was maybe a dividing factor between the fda and the president or any other seat here. >> bottom line, jared, you see this move down as an overreaction in the stocks >> i think it's a small
overreaction because of the timing and uncertainty it creates. we don't know -- there's a lot we don't know as far as the next steps or how it impacts the approval process and really the main driver and i would expect the space to come back over the next few days. >> got it. jared, thank you. >> thank you now let's get a cnbc news update with contessa brewer. >> here's what's happening right now. during a senate committee of vaccinations and outbreaks, a hearing, a 19-year-old teenager from ohio testified about getting vaccinated as an adult defying his mother's anti-vaccine beliefs >> i think part of the issue is being able to inform people about how to find good information because with my mother it wasn't that she didn't have the information but manipulated and that's part of the attack of the cdc made out to be a fraud lentd group. extreme gusts of wind rocked a florida-bound cruise ship
causing injuries to passengers norwegian cruise line says the "escape" ran into winds estimated at 115 miles per hour. those are hurricane force winds late yesterday that caused the ship to tilt to its port side. french carmaker bugati unveiled the most expensive car it's named simply the black car. except it's in french. despite the price tag, luxury automakers say the niche car for the superrich is growing i wonder how you take it to a car wash just saying. >> well, carefully i think would be the way to do it contessa, thank you very much. up next, southwest airlines ceo gary kelly on the impact of the government shutdown. >> 800,000 people on furlough is a lot of people so you have to
welcome back southwest touts 60% market share in california and is tied with american airlines as the number one domestic airline by market share and i sat down with the southwest ceo gary kelly for his take on u.s. economic growth at the jpmorgan aviation conference earlier today. >> there seems to be a sentiment that the economy is slowing here in the first quarter we had a strong 2018, a strong fourth quarter and i think the expectations were pretty high coming into the year government shutdown did not help and i think a lot of us still trying to figure out what impact that had and, you know, the federal tax refunds are down and later this year. so that definitely will have some impact on consumer spendsing. so i suppose that those are the primarily factors feeding in oil prices have been pretty stable and seeing strong demand and although t's not as strong as what we thought end of
january, it's still very, very robust here for the first quarter. >> expand if you may about the government shutdown because it feels like the impact you felt on that was a bit bigger than the rivals. >> oh, i don't think so. i think actually initially the impact is perceived to be less but all of us have some mix of government business and then it's just the overall impact on the broader economy and consumer confidence when you have that kind of uncertainty. 800,000 people on furlough is a lot of people so you have to expect that there's some impact on travel demand but it's -- we're still expecting to see unit revenue growth of 3% to 4% in the first quarter which is very healthy and, you know, i'm overall pleased with the current
environment. >> let's talk about the new route to hawaii. >> yes. >> and how you're thinking about that i have seen some of the analysts say to have the big southwest effect of taking market share that prices are going to be so low to hurt the margins. what is your take? >> we're a growth company. you know and this is our 48th year. most of those 48 years we have added airplanes, wech added new routes and markets this is what we do we still have a very low cost structure. we planned to have paid marketing yesterday and we're sold out essentially with most of our flights in one day. so the demand is very high we do have a lower cost structure than all of our competitors that fly to hawaii so we'll absolutely have southwest effect i think the other thing that people are missing is our
customer base. we're the number one airline in california and the near 70% share. they are our frequent fliers they want to fly their favorite airline to hawaii. now we are going to give them that chance and so it's not all about prices obviously we'll want our prices to be low. and certainly to be competitive. but we already have a large customer base to build upon and yesterday's news is evidence of that so i think we are going to do very well and i think we'll do well there quickly. >> you spoke about new revenue enhancements can you give us color? >> not yet i think the main reason i wanted to share that is to let our investors know that we're not just sitting idly by that we'll want to continue to innovate and look for new revenue streams and they're not quite ready for prime time yet but i'm confident that we'll be able to deliver those in 2020 so later this year we'll share those details.
>> what are the prospects of going further afield across to different continents, whether that's europe or asia and the other direction? >> right now, it's a function of our technology our equipment. we fly the boeing 737. it will do the mission well from california to hawaii it will also do the mission from north america to the uk. that's not on our list at least our short list of expansion opportunities. but as we think about what we're good at, and where our strengths are, clearly it's the united states and we have opportunities to leverage within north america. and even as far south as south america so that will be our priority and there's not -- there's no effort under way to fly to europe or asia. the one thing i would quickly add is we are interested in
developing co-share relationships where we would fly a segment and then we would have an international partner serving those far international destinations but that is probably a couple years away. >> i thought that was interesting, although he said it's not clear and the international expansion perhaps a few years away clearly his pushback is firm on the hawaii side really leading to the demand side it led to and it has the question will be on margins and profitability. we saw hawaii's stock fall - >> hawaiian air. >> 49 bucks is a low price how quickly can they get it higher and the stock price flat today. >> it is a winner. >> been a winner. >> speculation about warren buffett, berkshire hathaway. >> we asked him and he was blunt that he couldn't talk about -- >> of course. >> i said do you speak regularly
♪ 15 minutes before the close. mini rally going on on wall street but we'll take it there's three attempts at a rally so far today the market's been all over the place. interestingly fang all out performing still ahead, democrats unveiling a bill that could make stock trades more expensive. details straight ahead. another read on retail with urban outfitters and ross stores "closing bell" back after this s to identify long-term winners. from energy... to real estate... to retail. finding such opportunities for alpha
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welcome back democrats unveiling a bill for a new fee on financial transactions ylan mui has more for us. >> reporter: the lawmakers say it's on scene rent taking and causing the big swings in the market the legislation would impose a tax of .1% on the value of transactions of stocks, bonds and derivatives and apply to any transaction in the u.s. or
involves u.s. firms or citizens. the only things exempted are initial issuances and short-term debt the sponsors are peter defaz owe in the house and van hollen and schatz in the senate aoc is a backer with gillibrand and getting cred from joe stiglitz the idea is around for a few years and the democrats feel it's a different moment with support of taxing the wealthy and projected to raise $777 billion over a decade so that could go a long way to pay for a green new deal or perhaps even medicare for all back over to you guys. >> ylan, thank you very much for that and this is -- been another area of debate across the spectrum. >> well, it feds into this idea of wealth taxes and some of
these economic theories coming out from the left. earlier we talked to larry summers. he wrote an op-ed today in "the washington post" criticizing the left's embrace of so-called modern monetary theory which basically assumes that the federal reserve can monetize debt taken on by the federal government and the federal government in aoc's plan, for instance, pays for the new green deal with a fed and lower interest rates and asked summers about this on "squawk on the street." >> whenever the next recession comes, we need a lot of fiscal stimulus but this modern monetary theory idea where we can guarantee jobs for everybody or have medicare for all, just rely on money printing to finance it, i think that's quite a dangerous approach and i'm sorry to see that it's gaining more adherence what my column points out is
that it's sort of a new voodoo economics. >> obviously, he's a notable voice on this issue because he was in democratic administrations and economists in the obama administration, in the clinton administration says these ideas that we're hearing from some of the members of the left of voodoo economics and the fed to print its way t out. >> he obviously outlines the fact that you could get hyper inflation, a much weaker currency and rising input costs. stepping back from the idea of mass printing of money to -- >> powell shot this down last week in testimony, too. >> no, exactly the other interesting point, though, is for last two decades it is very hard, almost all of the developed world, to shake off just a small steady increase in the national debt that's kind of become the norm so even if you're not going for the extreme example, we have to
ticked this up and maybe slowed the pace of the increase for a couple of years. but population's aging and not rushing to this situation of criticizing, we are ticking closer to it each year. >> that's an argument against him. deficits are ballooning again. back to trillion dollars the tax cuts for instance more than a trillion dollars that were just blowing a hole in the deaf silt and we have a 10-year yield below 3% reserve currency no freakout from the markets now if summers' response is we can't the reserve currency for granted and we asked about the various wealth tax proposals >> i'd sure rather tax carried interest and get rid of special benefits for real estate and sure rather collect tens of billions of dollars of taxes
owed but not paid and go after corporate tax shelters and seem like things to make the economy more efficient and would fit with everybody's concept of fairness and i think we ought to look to those sources first before we look to having whole new taxes. >> the takeaway here is when it comes to the economics on the left there's going to be a big split between the left that is proposing ideas of spending an also even wealth taxes which summers himself is not willing to get behind and much rather see it in the form of carried interest or buyback curbs so i think you will see a split in ideology. >> the fact of these -- whether it's loopholes or aspects like as gary cohn put it, nobody pays the inheritance tax and still areas that can be closed kind of beggars belief rather than a political debate do that first and then move on.
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bell." just over two minutes left to trade. we were trying to rally. you can see the s&p 500 intraday chart did just do that flooded. but it's pulled back and essentially flat you can see that we have got a little bit of a decline on the s&p. a little bit of a gain for the dow and nothing to speak of there. nasdaq slightly higher and the russell down .4% look at the sector performance, some of the tech names, some fang names doing well. communication services towards the top of the performance. and the bottom is industrials and materials and energy they're down about 0.4% each going to show you a snapshot with target. airlines gaining we have heard from southwest and delta. we'll hear from united after the bell chevron also gaining a little bit after its investor update. hearing from the ceo of chevron. also, bob pisani joins me. >> resistance, 2800.
market's pricey. trade deal priced in we need something new to get everybody excited. look at the market leadership in the year transports, weak last six or seven days russell 2000 weak. semiconductors on the weak side. as well as some of the industrials, a little bit on the -- not dropping dramatically and just flattish to slightly down moving sideways to slightly down, they need a new catalyst to move forward. what we have here, trade deal priced in. global economic slowdown is very real china came out overnight -- i think remarkable a new wave of tax cuts, a new wave of infrastructure spending on top of what they were announcing last year they're not acting like suddenly the trade deal is going to solve all their problems and they have deep problems. same thing in europe we have to figure out that global economic slowdown and
figure out how to turn that around and that will help raise the earnings estimates and raise the market. >> services, pmi in europe, uk, better than expected like they were in the usa. not as good but for the first time not a negative surprise there goes the bell. the dow and the s&p both just below the flat line and essentially flat same for nasdaq, as well russell, only real decliner down 0.4% sara, back to you. ♪ welcome to the "closing bell." i'm sara eisen wilfred frost rejoining me in a moment with make santoli, cnbc senior markets commentator pretty much where we started after ups and downs in the day dow positive four different times. couldn't quite close there down 12. the s&p 500 down about .1% there was some strength in the
market notably communications, shine, fang names up today. but industrials, energy, financials, materials all lagging behind the nasdaq flat with the russell 2000 underperforming again small caps down half a percent coming up, a trio of big interviews for you united president scott kirby talks airline. michael wirth here to discuss oil prices and patrick burke will talk banking. ge plunging on new cash flow fears. bio tech stocks falling on news that fda commissioner gottlieb is leaving and retailers targeting target rallying after better than expected earnings. joining us today, david ellison is back, portfolio manager nice the see you so, mike, market just sort of moved in place today despite a few swings up and down feels like in search of a catalyst. >> still in the pause i think.
you have a fairly valued market i guess you would say right around the average for the five-year pe multiple for the market i think sentiment is neutral i don't think it's overly enthusiastic right now credit is holding fine but it's not improving in the last couple of weeks and i think it comes together with the significant levels on the broad indexes as to say it makes sen for the market to flatten out here and not really an easy way to figure out if you have an edge to say whether we break higher after a rest or pull back more i don't think the market's giving clues on this. >> david, clearly we have had big macro positives like the market pivot what about the fundamentals in terms of earnings versus valuation? do stocks look well supported? >> it appears that way the market's up 10% for the year nasdaq up about 14 we have had a good move here and i think that can be a whole year
at times so i think for the market to sit here and wait and waiting for earnings, right at the end of the earnings season and they matter good numbers are going up and earnings matter. rates matter china matters. brexit matters they're floating out there the market's going to sit and wait for a while but again companies are in pretty good shape here you know maybe except for ge but most companies are in pretty good shape. >> we'll talk about that in a moment mike, we got a better services number we got a better new home sales number most current version of that the chinese growth forecast, took down the target 6%, to 6.5% i think pretty much expected how are the funds. ales lining up right now >> they're okay. but i also think a little bit conflicting because you have seen weakness on the manufacturing side i think earnings estimates not going down and most of it back
end loaded for the year and seems as if people are fine where we're at and the risk appetite bellweathers are flagging a bit right? russell 2000 is -- >> fang was up today. >> fang is quality to me that's more like these are dominant companies you don't have to have a super strong underlying economy for them to work and not about people saying things are wonderful. i'm going to buy facebook and netflix. >> let's talk ge because the stock did take a dive intraday after ceo culp led on that the turnaround has a way to go listen >> with respect to cash, you see we were at 4.5 billion last year coming into '19, for the year, we'll be in negative territory this will be a year where we'll have both operating and non operating pressures on our free cash. >> so, i guess this was a pretty
big surprise why? >> i don't know that it was a surprise in the sense that everyone thought there was massively positive free cash flow but a reminder after we had another one of these moves in the stock that people seem to be acting as if it was something of an all-clear and it was the finances cleaned up and they were selling, you know, part of the health care business to take care of the balance sheet for now and another reminder on an operating basis things are not fully figured out. i don't know if it's as if the street was blind sided by a reminder of an ongoing process of fixing this thing. >> david, to that point of whether the street was blindsided, clearly they turned a corner and a number of wins for the new ceo to point to including selling some of the health care business did he fail to inform analysts of the full facts or did they extrapolate too much from the other positives? >> i think it's a little bit of
both i think new guy comes in he talks pretty vaguely about the negative cash flow and the positive cash flow i mean, the economy is good. other similar companies are doing well and they're not. i want to know why i mean, they should be doing better than they are fundamentally. forget about the debt and the pension liabilities. forget about the goodwill. the business should be doing better in such a good economy and sounds like it's 2010 or 2009 here they're struggling to make money and doesn't make sense either they have bad long-term contracts or he really doesn't know the whole story yet. >> well, the power business is certainly been a long-term drag. he said that's taking years to clean up that's a way from the economy and something they knew about and the stock on a run up 40% on the last 3 months. >> 35% year to date even after this little dip today so i do think that's why positioning-wise, people were kind of loaded up and chased a
little bit in the short term. >> still a long way to go there. let's talk bio tech stocks because they also fell in the last hour of trading after news that commissioner scott gottlieb is leaving any word on that >> reporter: we have more details. the departure of fda commissioner is said to be ammicible. he informed the white house last night and submitted the resignation letter to secretary azar today and president trump tweeted about the commissioner's resignation saying this. saying scott gottlieb who's done a terrific job as commissioner of the fda plans to leave next mon month. he and his talents will be greatly missed in commission gottlieb's resignation liter he writes in the last two years the fda set out to advance major new
policies my colleagues and i achieved all of these goals and much more those policies included food safety measures, generic medicine approvals fighting opioid addiction and teen e-cigarette use and the official said the plan to ban flav flav flavored e-cigarettes is expected to go forward this morning, wilfred, you were hosting and commissioner gottlieb called out retailers for illegally silling cigarettes to minors. >> targeting corporate enltties. we have taken action against individual stores, more than a million inspections of individual stores with the states looking for violative sales. 22% of the stores of walgreens over 6,000 stores had violative sales to minors. >> reporter: commissioner gottlieb is one of the many members of this administration that commutes to washington.
the perm nentd home with wife and three young american in connecticut. and the administration official said that the commute just got to be too much and served for nearly two years and the departure is amicable. >> with that insight, excellent insight, it does sound like the reasons behind it as you have explained make it is appearance this morning now seem more like a sort of final parting shot at some of those individual companies that he hadn't perhaps been able to hit yet and maybe that was the sort of mentality behind it. >> reporter: potentially and key to note that the story in axios on friday about this plan that was delivered to the white house about these flavored e-cigarettes being banned as well as the letter that he sent yesterday warning retailers about undercover operations that the fda had that uncovered, you know, those illegal sales to minors, certainly seems like that was part of his activist
agenda to get it out there before this resignation is made public and sub mitted today and effective in about a month and for all i'm hearing it was planned. >> kayla, thank you very much for that. we'll move on and talk about retailers, a couple of earnings reports, of course, coming out after the close. courtney reagan has the details. >> urban outfitters, fourth quarter reporting earnings of 83 cents a share, that does beat expectations looking for 79 cents a share. that's a beat there. the revenues are what we knew previously when they gave it to us on february 7th and a slight miss for estimates of 1.13 billion. their comp sales again also given to us earlier up 3% for total. the ceo actually calls the year incredibly successful. so a key quote there and shares are higher by more than 4%
and then if we can move to ross stores, one of those often price retailers we speak about often beating on both the top and the bottom line with earnings of $1.20 compared to consensus. revenues 4.11 billion. the street looking for 4.05 billion. comps coming in at 4% and increase of 4% that's better than expected. the street expecting those to increase 2.3%. however, both the first quarter comp guidance is weak and so are the eps range of $1.05 to $1.11. an interesting quote from the ceo saying that while we hope to do better we continue to take a prudent approach to forecasting for 2019 although we're favorably positioned we face our own difficult sales and earnings comparison, a very difficult retail landscape and an uncertain macro economic and political environment. ross store shares bouncing
around and down now by 1%. back over to you. >> court, thank youvery much for that mike, considering all the numbers of earlier, target and kohl's very strong, these add to a good day of retail numbers. >> right being top line is basically the gauge of that. ross stores has been, you know, a very strong stock for a while. it is one of the more expensive ones because people love the offprice tori with tjx and makes sense to back off on softer guidance. >> i'm looking at the urban release. a strong comp number across the brands this stock hadn't been loved. >> it is off the highs it is up on a year over year basis and a huge run into the middle or late into last year and came well off of that and now it's bouncing and, you know, i think my household contributed to that urban beat. >> urban beat? sneakers
>> holiday time, the whole thing. all that teen, illy teen roup. >> you know something is right dave, how do you navigate the mixed picture, mixed bag out of retail >> well, i any, again, a lot of different companies. i think retail's better than i thought it was going to be i don't focus it closely but, boy, i tell you, the comp numbers 3% and 4%, better than the growth in the economy. i mean, they're walking down the outlook which sort of gives them upside at the second half of the year so i mean, given where we thought the economy was versus now i think the world came to an end in december and of course it didn't again and here -- again the companies are doing well and surprised that the numbers as good as they are given the competition on pricing and the different retail opportunities out there on the website and amazon and all the wannabes and amazing they can still grow.
>> for the retailers it is all about scale, isn't it? target, walmart, amazon, a couple of others but in terms of a meaningful turn around about scale. >> they rise up and again you have anthropology. $5 billion in revenue. not that much in total sales if they get the right niche and the right products like lue llulemo like that it works they control the me too products and the little guys to come up and create new products and really make a go at it so i think it's a healthy environment. competitive. margins low and making money and nobody in any sort of stress and sears able to survive despite the early death -- supposed to be deds five years ago and it is not and amazing the capital markets are open people can borrow money.
they can raise debt. this is just a product of a good capital market and a good economy. >> all right we'll leave the retail conversation there thank you, dave. we have a news alert now on the 2020 presidential race eamon javers with the latest. >> reporter: that's right. scratch a billionaire off the list for the 2020 presidential campaign former new york city mayor michael bloomberg now saying he will not be running as a democrat for the presidential nomination in that year. michael bloomberg saying that he has carefully assessed his odds and here's a stamtd from the former new york city mayor saying i know what it takes to run a winning campaign and every day when i read the news i grow more frustrated by the incompetence of the oval office. we can do better as a country and i believe i would defeat donald trump in a general election but i am clear-eyed about the difficulty of winning the democratic nomination in such a crowded field. of course, there are a score of democrats already announced for president in 2020. and michael bloomberg would have
filled a pro business moderate slot in that race. the question is here, what becomes of his fortune bloomberg suggesting he'll send a significant amount of money to defeet donald trump and could be a boon to whoever does get the democratic nomination and not much of a relief perhaps to the folks here in the white house who support president trump because while they won't be facing another billionaire in michael bloomberg they will face his money, guys. back over to you. >> thank you bloomberg writing the op-ed on the bloomberg web side pretty much making it clear he doesn't think he could win not unlike the reason he stepped out in the last election to do more good work putting the resources and his time to use instead of running in the next two years. >> yeah. >> adding to issues of carbon and gun violence. >> i sort of thought that the billionaire business person, of course, bloomberg can say he was
mayor of new york. complex and different than a self-made billionaire but that they really do care a lot about the odds of winning. >> he has all the data in the world. >> exactly >> he has the data and knows if he can do it he thinks he can defeet trump in a general election. >> but the party politics, the primary map and everything else. >> he's clear with the criticism of howard schultz and might have sounded due duplicitous. >> i think people on wall street would be disappointed including warren buffett he would like to see bloomberg. >> the other question is talking closely with some of his friends like mr. biden, for example, and this is an indication he knows that announcement might be coming and doesn't want to be too close to them. >> warning against a drift to the left to fit with a biden enforcement. up next, united airlines making a push into business
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welcome back united airlines announcing today the jpmorgan aviation conference sticking to the financial guidance for the year. the company also recently announced it's adding 1,600 new high-end seats in a cnbc exclusive we're joined by united president scott kirby. goorn to you thank you for joining us. >> good afternoon. thank you for having me. >> wanted to start with a macro question we have seen the dow transports now trade lower eight sessions in a row the airlines are a part of that over the last week or two. what do you think is driven that sort of negativity towards the sector in the last couple of weeks? >> yeah. there's been a lot of worry if you watch cnbc or read the newspaper, there's worry around the world geopolitical risk, worry about the economy. though at united we have seen solid demand really through the end of the fourth quarter and as we have come into the start of the year even with the government shutdown. enough good things happening to
overcome the headwinds. >> what was the start of this quarter softer than perhaps february and the start of march because of the government shutdown and other factors >> well, look. there's always something in the airlines that's going to be a bit of a headwind and the government shutdown, the polar vortex and -- but there's always things like that we are trying hard to deliver on the guidance evening when we know those kinds of things happen and anticipate that something unexpected will happen and so we're glad to be able to reaffirm the guidance today even though we had some of those headwinds in the quarter. >> scott, i'm curious what you see for business travel demand this year. it's been a big focus for you guys in an area of investment. >> yeah. we have seen -- we saw big increase in corporate demand in 2018 that's continued very strong as we have come in to 2019. really, an almost everywhere around the globe with the possible exception of brazil and argentina. we really see strong business demand and growing business
demand. >> and just what is your assessment right now of the promotional environment and capacity discipline in the industry or lack thereof it seems there's one thing that the market worries nabt about in a cycle. >> look, at united what we are doing is growing in a way that's goods for united we have uniquely uniteded opportunities to grow our hubs we have 4% to 6% growth for three years and really successful in 2018 off to a great start in 2019 so we feel really good about what is happening at united airlines and think there's uniquely united opportunities ahead. >> in your presentation at the jpmorgan conference earlier today you did keep citing united's potential relative to the industry what do you think by that?
what is your unique potential? >> well, there's a lot of things that are potential but at its core the biggest thing is the opportunity to grow hubs that are undersized our competitors have grown the hubs and at united particularly the mid continent hubs had undersized with a decade where united wasn't growing and the market was growing around us and the real opportunity at united is to make those into mature hubs, and we started that in 2018 an worked really well and 2019 is off to a great start but at the core that's a most important uniquely united growth advantage. >> talk about the fight you are in the middle of with expedia. we heard about fritd tit from t expedia report can you block expedia from uniteded fares >> well, look.
i wouldn't describe it as a fight. the world changed and at united we have an incredible app. we have the best app of anyone in the business. great ability to sell to our customers, to give our customers a great explanation of the pruktd, wheth product. and in that world we much rather have a direct relationship and told expedia we'll let the contract terminate end of september and we plan to move on without a relationship with expeeds yee expedia and the battle is whether expedia knowing we won't have a contract starting october 1st continue to sell tickets for travel after october 1st and the problem with that is if customers buy a ticket and then flying in christmas and weather and we will have a really hard time servicing that customer once we no longer have a relationship with expedia and made the decision to move on and the question is just about when
we stop letting tickets be sold. >> scott, want to ask quickly of a recent report saying cameras installed in the tv screens on the back of the seats in united aircraft was that true? why were they there? should they have been there? >> yeah. we bought, you know, sub standard off the shelf equipment or the contractor did. we are blocking the cameras even though they have never been turned on for peace of mind and we'll block the cameras on those airplanes that have them >> were you surprised when you learned that are there other possible areas of the equipment you have, whether things included you are not aware of >> i admit we were surprised when we found that out and we have been going through a process to make sure nothing else like that exists at united and sure it doesn't and i
suppose you never know what you don't know and again in this case the cameras were never turned on, not using the cameras and came standard on a piece of equipment that a vendor bought. >> scott, thank you very much for joining us today. >> thank you good talking to you. thank you. >> scott kirby, the president at united and tomorrow we'll have more exclusive coverage of the jpmorgan including union pacific ceo and csx ceo. >> the railroads in particular with a bearish signal in the market. oil prices soaring nearly 25% in year. chevron ian ceo is here to explain how that's impacting the company's bottom line and details his plans to ramp up u.s. fracking production. rk> later, hsbc's ceo of patrick bue for turning around the u.s. business.
shares of chevron slightly higher on the day. the company promising at its analyst meeting today to return more cash to shareholders and ramping up production in texas to double the output to more than 1 million barrels a day in 5 years. joining us is michael wirth, chairman and ceo of chevron. welcome. nice to see you. >> nice to see you, sara. >> a headline and also from the competitor today, exxon, is the production ramp in the basin
why are you so bullish on this area >> our message to investors is it is a good time to be chevron. our portfolio is stronger than it's ever been we're delivering strong production with low risk and disciplined spending leaving money to be returned to shareholders it is a goods story. >> what does it mean for some of the smaller oil companies, the exploration an production companies that have been so active in the permian to have chevron and exxon staking a claim there? >> i think there's room for everybody. it is a large area and, you know, we have over 2 million acre down there. about 10% of the basin the big thing i think changed is the shale game has become a scale game and people that can do things at large scale and bring the capabilities to bear that a company like chevron has are the ones that really can take this to the next level. >> to sara's point, you
increased from 650,000 barrels a day to 900,000 over 5 years s. that the technology is better than you realized? the site is? because exxon has done it, too some analysts wondering next year you increase it further. >> it is a little bit of all of the above. we have 20 rigs out there operating and another 7 to 10 in joint ventures and putting good engineering on a factory drilling operation like this doing the same thing over and over and over again we find lots of efficiencies. we have rigs that walk themselves from one drill site to the next and fracture multiple wells at one time improving the understanding of where to place the drill bit and using remote geo steering from houston to place the bit where we want to see it and working this more and more we find lots of things that add up to increases. >> you own most of your land outright in that area? does that allow you to be more
profitable even at lower oil prices than rivals in that area? >> it does our land position is largely land held for many decades and the cost basis is very low and we don't have to pay royalties much of the rest of the basin is operator pays up to 25% of the revenue to the royalty holder. we don't have drilling obligations and no royalty payments and if we're competitive in every aspect of the operation and best in class the royalty is really the icing on the cake to give us a very strong economic proposition. >> you mentioned having the resources to return cash to shareholders, you have a big repurchase stock authorization right now, a core part of the story. with the scrutiny of buybacks as a practice, give us some idea how you think about that right? you have to invest in the business and then you have presumably a set aside to buy back stocks and deliver a dividend. >> we have a longstandsing financial frame work dividend increases are a number
priority this is the 32nd year of per share increases and then reinvesting in the business for cash employee in the future and third is a strong balance sheet and then excess cash is returned to our shareholders. we have operated this way for a long time and share buybacks to us are a form of capital discipline to send a message to investors as we see stronger cash flows out of the business they will share in that and they can redeploy the capital into the economy as they see fit. >> oil's had a nice run so far in 2019 after a big slump last year where do you assume prices are headed for the rest of the year? >> it's a tricky thing to predict oil prices the market seems to be relatively in balance right now. we continue to see pretty strong demand growth despite some of the things you hear about the global economy demand growth looks to be firm supply was long late last year which is what led to price
softness opec has taken production off the market there's issues in places like vend and supply and demand is relatively matched and we are here in the kind of 60s for brent. we think that's a reasonable price but it's hard to say whether that price holds for the whole year. >> michael, a broader industry question for you there's talk at the moment that the u.s./china deal finessed to include a significant amount of export energy from the u.s in five or ten year's time what percentage of china's energy could be supplied from the u.s. or just a finessing around the edges of a trade deal or the start of something serious >> the u.s. is an energy superpower and talking about oil or gas we have production that will be in excess of domestic needs and the case of oil it is a mismatch with the refining capacity and gas is more than the economy needs and so the u.s. will be an export of both china tends to be an importer of both and you could see continued growth in trade and energy
between the two countries for years to come. >> finally, you have done a lot of work and investing a lot in trying to boost jengender equal in the industry. it's only second worst of construction why is that? how do you fix it? >> it is a technology and engineering heavy industry and its legacy of many of the jobs were filled by males we have made a lot of progress as a company in changing that. our board now is over 36% women. our senior executive team, top seven in the country 2010 was 11% today over 20% so we have made a lot of progress and we have also got a lot of work to do. we have partnered with catalyst, the leading organization and has been for decades that advocates for women in the workplace i'm honored to serve on the boards and working with them to develop more programs and
efforts to increase awareness and improve the environment for women not just within our company or industry but broadly within business. >> we are out of time sadly. thank you very much for joining us. >> a pleasure. time now for a cnbc news update with sue herera. >> hello, everyone her's what's happening at this hour president trump denouncing a democratic probe of his presidency house judiciary commit tee chairman nadler on monday said his panel was beginning the investigation into possible obstruction of justice by sending document requests to 81 people linked to the president >> work on china continues the fact is that i guess we got 81 letters there was no collusion that was a hoax. there was no anything. and they want to do that instead of getting legislation passed. three padded envelopes with explosives found near major
transportation hubs in london. police are investigating the packages as a linked series. all the devices were believed to have been sent with irish stamps police are helping police in that investigation and california's attorney general says he will not charge two sacramento police officers who shot and killed stephon clark, an unarmed black man last yeast. a protest was held monday evening after the county's district attorney saidthat the two officers would not face criminal charges. you're up to date. that's the news update this hour back downtown to you. >> sue, thank you very much for that. up next here on "closing bell," find out why history say this is rally to start the year could pull back a bit before heading higher. >> latter, how the trade dispute of the u.s. an china is impacting the financial inst we speak exclusive to patrick we speak exclusive to patrick burke.technology investing
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experienced deja vu. mike has more. are we seeing a repeat >>it's a close echo i think. starting late last year, sara, i was talking about the potential for this to be a re-run of the late 2015, early 2016 experience which was the fed squeezes in a controversial december rate hike, the market has kind of a pseudobear market. the global slowdown and the fed turned patient and here's this dramatic low so-called diamond bottom after months of correction, and you saw this sharp rebound we have an examine rated version and starting to flatten out and focus on right in here this area where we chopped around two to three months into the rebound and tried to see if it's more and then we rallied from there i don't think it's an exact repeat but the idea of coming off this recession scare and fed induced mistake scare and then having this sharp rally, you
have to consolidate it a little bit and why i think people are talking about this right now. >> thank you very much for that. still ahead, we'll talk to the u.s. ceo of hsbc about the spate of moves into fin tech. coming the branding, netflix might be a house of cards rn miaing to the new head of waered that story coming up on our radar. which didn't quite cover the steinway. but what if he'd met pure insurance? owned by members. he'd have met: lisa, your member advocate. who'd introduce him to gustav: leave it to me. a temporary address, temporary ivory, and help him get tickets to the mozart festival. excuse me, grant likes beethoven! uh, the beethoven festival.
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radar today. forbes saying kylie jenner is the youngest billionaire ever. she laumpled her makeup line in 2015 and prior to the new status, facebook founder was the youngest self-made billionaire at 23. she has him beat. the minor controversy comes over the phrase self-made. >> right. >> because she was born into the kardashian/jenner family of fame, fortune and social media prowess. >> the other question mark is forbes putting $900 million of billionaire status on her brand and -- >> said that's what it's valued at. >> based on reported revenues of $300 million not like definitive. she's somewhere there. >> owns 100%. >> yeah. amazing. >> self made or not? >> i think so. yes, of course her exposure came from the family and not if they created the cosmetics line.
>> again, another article we read today puts her sister only at -- only at $30 million and blown that out. >> kim k. >> congratulations automakers at the geneva auto show revealing they're wokking on new sounds to alert padreses of new electric cars and a sound for the vehicles with rock band lincoln park and mercedes benz with a humming noise for the eqc model loud enough to warn pedestrians and volkswagen with sound for its i.d. vehicle to roll out on 2020 this is -- they're a bit odd that the quietness to artificially create a sound is a step too far. i think people used to the quietness in due course i would hope. >> i think you need it. >> song choices are questionable. >> linkin park i think they're working on the sounds. >> ringtone for the car.
new hbo boss greenblatt with shots at netflix in an interview with nbc news he said the streaming company, quote, doesn't have a brands and it's just a place you go to get anything it's like encyclopedia britannia. remember the quote of becoming hbo before hbo becomes us? it is the fight. hbo clinging to the idea they represent a quality, narrower offering opposed to netflix dumping things out there. >> everybody's ganging up on netflix because it's winning reminds meof the spielberg stuff. booted from the oscars. >> i don't get brand for hbo "sopranos" is nothing like "game of thrones." >> quality. >> as much high quality on netflix and other stuff, too >> i think it's a filtering mechanism, a shortcut to say this is premium high production value. >> i don't think brand is the
right word not like marvel. we could debate for hours. up next, ceo patrick burke with the strategy for using thin tech to turnarounds the unit's performance. being the global norm, not the exception. we see homes staying cooler, without the planet getting warmer. at emerson, when issues become inspiration, focusing core strengths to create a better world isn't just a result, it's a responsibility. emerson. consider it solved.
welcome back to "closing bell." fin tech companies raised $35 billion from investors and hsbc usa has been partnering for several months joining us is pat burke, ceo of hsbc usa in terms of the u.s. business, you're in an interesting position because you've got all of the licenses here in the u.s. you've got all of the different business lines of the parent
company, but you don't have the footprint. so what's the plan are you going to chase the footprint or stay where you are? what's the plan ahead? >> i think for us the way we think about this is where the clients are. the great thing about the united states for hsbc is the united states has so many international prospects, true on the commercial side, also true on the retail side. you're right, we have a limited footprint so the idea of using fin techs to expand the channel and acquire more customers. >> you've bought bb&t, suntrust, you've got goldman sachs going after the -- getting customers, so you're going after the latter purely, is that right? >> we think about organic growth in the united states right now as an opportunity for us, we think it's quite big there are 16,000 companies in the united states that do at least $30 million of importing
or exporting, so we can help them banking in different parts of the world they want us in the banking group for that reason. interestingly enough there are 40 million people that live in the united states that basically came from one of the diasporas around the world. >> credit cards, are you seeing that competition pick up or are the margins still pretty good? >> actually the margins are good we're attracted to that business because we have a relatively light unsecured portfolio and that will be one of the things we emphasize this year especially is how do we grow the unsecured business and get the balance of the retail business to be more like you'd see in a typical bank. >> i know you run the u.s. business, but your bank is very global, among the biggest in europe it had some messy earnings out in the middle of february because of, i think, the financial turmoil we saw toward the end of last year how would you characterize the current environment, and have you guys seen an improvement
since the market rebounded >> i would characterize the earnings as actually been good for the year i think the particular hiccup we had which was not out of the norm for everybody in the industry was a tough markets environment in the fourth quarter. so those revenue misses hit us pretty significantly overall other than that, we had really good growth, particularly in our retail banking business, particularly in our commercial business, and even indeed the global banking and markets business had a good year, save that fourth quarter tumble in the trading business in particular. >> you have this window on trade-oriented small businesses here what is the latest take on how the trade conversation will go >> look, i would say the way we view this is if you talk to the clients, you're going to get something like around the world, you're going to get 75% of them believe that trade is going to be a very positive force for their business in the coming years. in the united states, it's
slightly higher percentage, it's actually 80% so i think everybody understands what trade does for growth and they'll continue to pursue it. what everybody is looking for is more certainty in the trade environment. some kind of a rules-based system that allows everybody to predict and understand how to invest. >> how much has the u.s./china trade actually fallen? when a deal is done, do we see a huge bounce-back or has the dropoff been relatively small from the numbers you see >> i would say the place it really comes out are some of the larger investments so you may have seep big commercial real estate transactions, for instance, where some of the chinese investors have sold out of those positions. interestingly enough, others around the world are actually taking up the slack. so i don't know if you'll see anything for the time being other than maybe just this state of caution, this state of what
everybody is waiting for to be an agreement and then i think it is very likely to see continued levels of trade, if we get a system that works and everybody can predict. it's very likely you'll see quite a significant level of growth simply because it's natural for the u.s. and china to be trading with each other. >> pat, thanks for joining us. it's great to see you. up next, we'll get a check on the stock making big moves in after-hours trading. ous. sometimes, they just drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group - how the world advances. ♪ ♪ ♪
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let's get a check on some of the headlines making news after hours. urban outfitters higher after a mixed quarter beating on earnings, missing on revenue same-store sales were up 3% in the quarter. ross stores trading lower despite beating top and bottom lines. first quarter guidance coming in a bit below estimates. and chinese tesla competitor neo plunging after a wider than expected loss. deliveries of its es-8 model could fall 50% in the first quarter versus the fourth quarter. that is down some 7% final thoughts, mike another lackluster session, but not declining sharply. >> kind of holding in there at these levels
it's been an incredibly tight range for the last six or eight training days. >> the jobs report. >> we have a jobs report friday. >> we will look forward to that and much more alale analysis to come. >> "fast money" begins right now. live from the nasdaq market site overlooking new york's times square, i'm scott wapner in for melissa lee tonight on "fast," stocks stalling out, but ubs's keith parker says don't worry, new highs are coming he'll tell you where to find the best bargains in the market. plus the ge shocker, the stock falling back below $10 a share. we'll tell you what the ceo said not that long ago that has investors so worried. first, we start with global growth fears weighing on the mind of investors. kyle bass just the latest to sound the