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tv   Closing Bell  CNBC  March 7, 2019 3:00pm-5:00pm EST

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why are the transports doing so poorly really tanking here. he sees no real reason in the u.s. economy for that. >> maybe it's an issue for the problem solvers caucus to tackle. >> how many have they solved >> i'm sure many, ma. >> many, many, many. >> we want the answers. >> they'll solve some problems right now on "closing bell." ♪ welcome to "closing bell." i'm sara ieisen. >> i'm wilfred frost we have investor jerami grantham in a rare and exclusive interview to react to the news and tell us which areas of the market he likes and hates. >> dow is down, 1% decline stocks continuing selloff mode s&p 500 down 1%. the russell 2000 unlike previous
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sessions is down less than the other major averagesings still underperforming for the week down almost 4% today big story with the euro falling. we'll start there. the euro hitting fresh 2019 lows against the dollar today after a major policy reversal by the european central bank with new measures to stimulate the eurozone economy the policy includes a fresh program to stimulate bank lending and pushing back the timing of the first rate hike leaving many investors wondering could the u.s. federal reserve follow in the ecb's footsteps? janet yellen appeared on cnbc last month saying the likely to cut rates isn't so farfetched. listen >> would you say that it's possible the next move is a cut? by the fed. >> of course it's possible if global growth really weakens
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and spills over to the united states or financial conditions tighten more and we see a weakening in the u.s. economy, it's certainly possible that the next move is a cut but both outcomes are possible >> joining us now is someone who knows her very well, former federal reserve governor great to see you here at post nine welcome. >> happy to be here. >> people are wondering after the ecb move to ease further whether it's a preview for the fed. >> well, sara, it is a significant move and i think it took markets a little bit by surprise because historically the ecb actually has lagged other central bank moves and here you have mario draghi actually acting in a preem preemptry way and deciding to move ahead with a stimulative
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move so, yeah i think this is something that's significant and worth watching. >> i have so many questions on this so great to have you with us i think top of mind is does this make a difference? do the ltros change the course of direction for the economy or does he need to reinstate qe >> it's a great question and he indicated that qe is something that's still in that glass bottle yet to be broken. they're not starting qe again. but they are restarting the ltros and they have a mixed record in terms of being truly stimulative. in some instances, we have seen real accommodation coming from and then not such great accommodation but the point is he's done something here that is actually intended to surprise markets and to be accommodating. he is signaling in essence that
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demand is weak in the eurozone, that accommodation is necessary, that a pause really is not enough and that something else is necessary. >> he got a surprise whether the euro fell sharply, perhaps that was the desired effect but stocks also fell sharply and didn't usually embrace -- didn't embrace the stimulative efforts as they have in the past from central bank policy. why is that do you think >> you have to look, you know, at the immediate effect and then as the information is processed where, you know, sort of where the new trajectory is after sort of the news settles. typically this kind of news is stimulative. it does, of course, as you point out depend on what markets were expecting before but this is something that is more than just a neutral stance. this is something that goes beyond, in fact, what the fed did at its meeting where it essentially put interest rate hikes on a pause. >> you mentioned that he's done
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something that the market and we didn't expect and surprised everyone to what extent has he gone that far with this decision because he knows he's standing down in october and he fears there's someone more hawkish to come and a last chance to try and stimulate things again >> that's exactly right and he wants to get ahead of things it is important for central bankers to try to get ahead of where things are going my sense is that he is interpreting data that's coming in that shows demand pretty weak in the eurozone and he is saying we've got to take a stand against these headwinds. he may be looking at issues related to brexit. he may be looking at export numbers and seeing things essentially that is signaling to him it's better to take early action and what he's done. >> back to the original question on the fed, mario draghi is the first major central banker to respond to the global slowdown is it going to hit the u.s. as hard where the federal reserve
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will have to either take a cut or ease in the near future >> it is a great question, sara. i think just to set the table here we should be clear that the fed doesn't follow other central banks. it is going to do what it seems necessary to do to meet its dual mandate so essentially it doesn't necessarily follow all the time but it is in this case really interesting signal because, of course, the u.s. is experiencing these headwinds from weaker demand coming globally and mario draghi i think has seen it. the fed has seen it. and now the fed is, you know, going to take -- it will have to take on board the fact that the ecb has moved ahead, you know, jay powell, you know, is probably going to do in it a couple of steps. first by putting the rate hikes on a pause and then as janet
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yellen points out possibly determining whether we in the u.s. are moving into a more accommodative stance. >> one final question again on the ecb. do you think he made a mistake ending qe when he did or did he have to try with a short window as it turned out to be with better data to remove the stimulus >> it's always, you know, easier to look at things in hindsight and say maybe essentially if he kept it going further he wouldn't have need to do the action he did today. my own sense is that the ecb was interpreting the data it had at the time, that there were also, you know, particular pressures that it faced regarding keeping accommodation at the levels it had kept it at for as long as it had and he was probably eager to start reigning in his tools at the time to start to be prepared actually for the next slowdown which i think is what he's
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doing. >> it is depressing and feels like 0 interest rates and stimulus forever. >> he ends the tenure without ever hiking rates. >> can't get back to normal. >> thank you. i sat down earlier with jerami grantham, the legendary investor, co-founder of gmo and we got his take on the broader markets. >> i was really hoping there would be a magnificent bubble ending to this as there had been to the three great recent experiences which were the housing bust, 2000 tech bust and japan. they were all classic. they ended with euphoria and a rapidly accelerating stock market they're easy you know they will be followed by an abject decline this one i was hoping that would
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happen doesn't look like it will. and therefore, you're going to have a decline of a different nature i wrote a paper three years ago called not with a bang but a wimp whimper and which i suggested the pe line, a lot higher, is probably not going to go back the way the value managers would love it to in a hurry. it may move back slowly and steadily and i think it will move back perhaps two thirds of the way but it takes 20 years, not the usual five or six or seven years and so this will be limping along three steps down, two steps back it's not a typical experience but looks likely to me. >> when we see the fed pivoted and become relatively speaking more easy once again and the ecb did that, too, today does that make you think that u.s. equities are attractive for a couple of years again? >> no.
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i'm afraid not you can't get blood out of a stone. these prices, even the baz, bulls and everyone in between agree at gmo over 20 years u.s. market will be delivering 2% or 3% real and for the last 100 years we're used to it delivering perhaps 6% real so this is a fairly painful -- not the end of the world but it is going to break a lot of hearts when we're right 3% a year is going to seem terribly disappointing if you stay away from the u.s. which i absolutely would, in emerging markets, i suspect you can do better than 6%, maybe 7% or 8%. >> your five or six-year forecast for declines in u.s. equities is that right? >> i would think declines are more likely and if the market is up it's highly unlikely to be up a lot. that's the key thought. >> and the main reason what?
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valuations of those stocks >> valuations and the fact that the economic cycle will clearly not be in our favor. the reason we have done so well for ten years is we had an enormous pool of unemployed. this is not trend line growth. this is 1% a year almost out of the employed pool and sticking it into the marketplace. this economy does not have a trend line growth of 2.8 or 2.5. it is a trend line growth of 1.5 and we've been boosting it on a cyclical basis if you keep anything out for ten years in the market people think it's a trend line but it isn't. >> on the topic of the economy rather than the markets in the u.s., do you fear a recession? are there any signs you see that suggest one is on the horizon in a next year or so? >> i think people have been worried about recessions for two or three years i've taken the view that there's enough labor hiding in the
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participation rate we had frightened people away out of the workforce but on the numbers they were there lurking around somewhere and in the last two or three years we have drawn back about 1.5% people who were dismayed and not bothering. now registered and show up in the employed or the unemployed the point and a half could keep us going for another couple of years. or it could stop tomorrow. the point is what we cannot do is grow at the speed of the last ten years because the labor pool is simply not available and the underlying productivity has not been there for a long time. >> and what about the global growth outlook clearly fears about that had surfaced in the second half of last year. do you feel like they're adequately priced in now >> one of the problems is i like to think longer term than
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apparently anybody else. >> served you very well. >> can be inconvenient but the growth rate of the population of the developed world has gone to hell and the population eventually will start to decline in the next couple of decades everywhere in the developed world. you need 2.1% fertility rate to replace and the u.s. just announced 1.76 15% below that it's below in every developed country. this has an affect on the top line numbers and there's no way around that. it won't change ever i would guess. so we have lower workforce growth we have an aging population which doesn't help and the growth rate of the whole developed world is settling down, maybe the u.s maybe 1 in europe. much lower than people seem to get their brain around outside europe the population growth is i'm certain growth rate is also slowing and so
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generally speaking we can look at a world where the secular growth is getting slower that's the long-term picture over the next two or three years, i suppose the understatement is your guess is as good as mine. >> fair enough let's dive into europe a little bit more as we were discussing the ecb downgraded the growth forecast to 1.1% is there a bigger problem bubbling under the surface could they face another existential crisis like in 2011 to '12 any time soon >> the downgrading is close to what i think is long-term growth rate, about 1% no one else believes that but i'm confident they will eventually so they're going to have to learn to live with a low growth rate they have other probables of immigration which is rattling the cage so viciously for three or four years politically. that is highly unlikely to go
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away africa is the only place on the planet where the growth rate in population is prodigious and the u.n. says they produce an extra 3 billion people and the rest of the world will be declining now there won't be 3 billion extra africans but 1.5 billion or 2 billion and there will be immigration waves this make the recent experience look trivial i think that will be the biggest factor as they get stressed out it produces opportunities for the big players, russia, china, to misbehave or behave and increases uncertainty. >> jerema grantham who was founder of gmo we didn't give him sufficient billing at the top of the interview. managing over 100 billion and currently called the dotcom and the bubbles. >> bubbles what he is known for and the burst. >> i would stress how negative he was there on the u.s. he said i absolutely would stay
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away from u.s. equities. he said you can't get blood out of a stone and stocks more likely to decline in the next couple of years than rise and said it was harder to call the end of the bubble with various mitigating factors including the loose policy but the recent employment data does make him feel it is close but it is not an immediate popping of a bubble like the last couple. >> and it sounds like what he is focused on, you tell me, is more structural issues like population decline and lower fertility rates and longer term lower growth rates for the developed world than a move like today on the ecb. >> absolutely. you could have pointed at the factors of three years and absolutely fair pushback those are the views on the u.s. we'll have more coming from the interview later on in the show and on taxing the wealth and emerging markets bullish on the emerging markets and he explains the bull case a bit more detail which nations in
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particular to focus on. first, though, a news alert on facebook. julia boorstin with the story here julia? >> facebook announcing it's taking steps to combat vaccine information, anti-vaccine information on the platform saying if vaccine hoaxes appear on facebook, we'll take action against them we'll exclude the entire group or page from recommendations reduce the groups and pages distribution and news feed and search and reject ads with the misinformation youtube and pinterest have taken steps to stop the spread of anti-vaccine information this information from facebook after just this tuesday a senate committee held a hearing on how to prevent the outbreaks of preventable diseases a 18-year-old said that facebook was the sole source of his mother's anti-vaccine
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information. back over to you. >> julia, it's such a slippery slope when facebook goes down the rabbit holes a good for society i guess but how do they draw the line over which issues to crack down on and what's misinformation? >> well, i think, sara, we are really at a point right now if you see major outbreaks of things like measles an things that can -- things that have effectively been eradicated and it can be tied back to platforms such as pinterest and facebook supporting the communities where anti-vaccine information is shared, we are starting to hear a lot about it out of capitol hill this idea that these platforms need to be responsible if people's lives are at stake. >> julia, thank you. after the break, it's another down day for the airlines as the losing streak for all transports continues we'll talk with the ceo of alaska airlines about what is sending investors to the exits i think we have had every airline ceo on "closing bell." >> and some.
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>> except for american. y h tbe>>ouado watching it it was a long story. we're back in a couple this isn't just any moving day.
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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.
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the dow transports sector down again for a tenth day in a row now on pace for the worst week this year alaska airlines is dragged down along with it. dropping looks like almost 10% so far this week joining us now is phil lebeau with an exclusive with alaska airlines ceo phil tildan. >> she was talking about the stock performance for you and the airlines out there when you see this kind of negativity in the market, what is your reaction >> it's choppy but our job is to build a great airline and i don't think it's good for leaders of airlines like ours to be focused on the daily stock movements but think about is being a great company, a great place for our customers to fly, a great place for employees to wok and work and produce earnings over time and quite confident on 2019
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and beyond. >> main question that's out there for investors right now, is there a slowdown? for you, primarily a north american based airline, are you seeing any pockets of softness >> you know, i don't think -- it's hard. there's capacity we're putting into the marketplace and then what's happening with the underlying economy in terms of underlying economy, i see a lot of strength. we fly up and down the west coast in the united states there's -- last four or five years the industry put capacity in the market at higher than economic growth and i see opportunities to right size that but that's something that we compete and work it out and figure it out over time. >> you have a huge exposure out to hawaii. number of routes out there southwest starting in with their service here in the next week or so how much does that pressure margins? >> it is hard to say right now it's 1.5% of the seat models but it is -- hawaii in
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general is more than 10% of the route network but i don't think it's right for airline leaders to worry about that but worry about be safe, be on time, provide great service. figure out where we offer competitive advantage. in hawaii, for example, we are proud of the product we offer with first class and premium economy and meals and lowest fares for the last seven years so i think we've got to work on that competitive advantage we offer. >> but is there too much capacity out there now with southwest? is there enough demand >> the rooms question is a good one. we'll sort that out as we see. southwest talking about the southwest effect we'll see. you know this is what happens in the marketplace. we sort of put our uniforms on, they get dirty but we are very proud of our hawaii franchise. almost a billion dollars a year in revenue it is good business for us i think we have real competitive advantage and loyalty.
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we are optimistic on how that settles out over time. >> brad tilden here, a big day with the ceos talking despite the fact that the stocks are down, they're confident what they're seeing in the economy. >> phil, thanks. you know, on the loyalty competitiveness, i can't tell you how many people say they love the alaska airlines mileage program. even though they don't necessarily fly on their routes. they have great partnerships and a lot of bang for the buck. >> they have a quite unique thing not part of the big alliances and so they manage to cherry pick the partners so your home base is alaska you can sort of mix and match. you can cheat the alliances somewhat. >> it's pretty much flat but most of the airlines are lower today and on the week. coming up, shares of kroger getting slammed today on earnings what the ceo said about the today's results playing into the
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turnaround plan at kroger. about face turn with facebook mark zuckerberg posts a 3,000-word vision for the vision of the internet more prodly. we'll talk about a pivot to privacy and what it means for facebook
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we see homes staying cooler without the planet getting warmer. at emerson, when issues become inspiration, creating a better world isn't just a result, it's a responsibility. emerson. consider it solved.
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♪ welcome back to "closing bell." another selloff day on wall street dow's down 241 broader s&p 500 lower, as well you can see two groups, though,
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positive real estate and utilities. both a little defensive. higher yielding as we see lower treasury yields in the flight to safety consumer discretionary, materials, financials. >> the banks obviously hit hard in europe where, of course, rates are very negative but dragging down the yields and setting the banks here also time for a cnbc news update sue herera has it for us. >> i do, indeed. canadian prime minister trudeau has denied interfered in canada's judicial system he is not apologizing. >> what has become clear through the various testimonies is that over the past months there was an erosion of trust between my office and specifically my former principle secretary and the former minister of justice and attorney general i was not aware of that erosion
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of trust taiwan's military announcing it's made a request to buy a fleet of u.s. fighter jets to improve the air defense capability but the military is denying those figures. and if you are having trouble sleeping, you are not alone. researchers surveyed 11,000 adults in a dozen countries and 62% reported they slept somewhat well and nearly half felt that their sleep had worsened in the past five years. 80% would like to improve their quality of sleep who wouldn't that's the news update. >> who wouldn't? >> count me in on that, as well. back to you guys. >> thank you. still ahead, disney's ceo's pay package and it was the "star wars" news that made headlines
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after the break, more from legendary investor jerema grantham weighing on the issue he cares about most of all, climate change >> do you feel like enough industries are doing all that they can when you see the financial industry - >> no industry's doing all they can. nobody i just took a damn plane to chile and i have a guilty conscious. >> find out what he says eesinesses and governments nd to do to address the issue that's coming up next. it's about technology transforming every sector. ♪ at pgim, our bottom-up approach uses a technology lens to identify long-term winners. from energy... to real estate... to retail. finding such opportunities for alpha is the true value of active investing. and around the world, you have a partner in that pursuit. pgim: the global investment management businesses of prudential.
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welcome back top value investor gentlemen my grantham had a legendary career. grantham donated over 90% of the weltd wealth to the grantham foundation here's the conversation about his climate change fund. >> luckily, there is a massive amount of innovation that bears directly on battery storage, electric cars, electric planes and we will be able to change for the better almost every
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area, cement, steel, petro chemicals. can we do fast enough to prevent damage the answer is no we already have a lot of damage. we will undoubtedly have a lot more damage. can we protect enough of the agreeable planet for our grandchildren to have a decent life that i think is a 50/50 bet seen through my eyes. >> do you feel like enough industries are doing all that they can when you see the financial industry - >> no industry's doing all they can. nobody i just took a damn plane to chile and i have a guilty conscious and struggling with my wife as to whether we can take that many more jet flights we plant forests all over the place but still, it's a really tough ask of human beings to be as green as they could and should be. >> so what is the one thing that everyone could be doing more is it donating some more of their -- >> you have to have government
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this is a big scale, big problem. you have to have r&d and government the best thing that we can do as individuals islobby our politicians to be more sensible. let them be aware that the waof of our concern that's happening with that lovely swedish girl but people are responding more now that they were. and that's what we have to do, we have to get our senators and congressmen and lobby them in the hallways. >> you mentioned you took a flight and you felt guilty about that you drive -- you don't have to feel guilty in the car. >> not very guilty. >> do you like tesla stock >> i have nothing to do with tesla stock and never did. i'm not saying it won't do well. there are stocks like amazon have done splendidly well.
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i'm a value specialist and not my kind of stock but it is my kind of car. >> just to round off on the climate change issue you felt there's big progress in the u.s. in terms of people's understanding and backing of the cause. what do you think specifically about the latest development in the green new deal and do you fear that there is now a left versus right politicization of an issue that you believe is apolitical? >> there's certainly been left/right division in the u.s. for the last 15 years which is really sad because most of the good environmental work was done by republican presidents like teddy roosevelt and so on. and it's a real shame that that has happened and unnecessary because serving a beautiful planet would seem to be pretty conservative and it hasn't played out that way for
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complicated and perhaps random reasons. and i've forgotten the rest of the question. >> has it become too political to an extent that it will damage the cause? >> the new proposals are too -- are too extreme to expect it to actually translate into any chance of implementation however, when you have been drifting to the right for 50 years, it needs a good slap in the face to wake people up and begin the pendulum move back and one way to state it is to take a big jump. so this is really drawing attention to the fact that we have had a remarkable drift. we end up in a world where the environmental protection agency is run by coal lobbyists i mean, it is -- ten years ago you couldn't have written a novel of where things like that
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would have happened and so unbelievable horrific. >> some other progressive policies and announcements of recent weeks seen in different forms a call for more taxes to be paid by the wealthy where do you stand on that do you think that's something that should be done even if the exact mechanics of it are uncertain? >> i arrived in 1964 america was a fairly equal place and rapid mobility and since 1975 gotten stickier and now it's worse than the uk who would have imagined that in 1964 we have one of the most unequal countries in the developed world. we're not far short of the brazils and chiles and closing the gap. so we have a dreadfully unequal society where the average worker for an average hour's work has not made much increase in real income since the mid-1970s for heaven's sake and if you don't
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give the average worker a decent wage where is your growth going to come from you could quote henry ford how are they going to buy my cars unless i pay them a decent wage well, we're falling afoul of that you need to distribute the income more evenly and the concentration of income and wealth in particular in the top 1% has just alarmingly increased. it is amazingly economically ineffective. rich people don't spend their marginal dollars poor people spend them instantly. you get a healthier economy with it going to the poor than today. you have to tax the better off particularly the super rich. >> very open and honest comments there from jeremy grantham and we'll have more on the thoughts on china and which emerge markets he likes right now. >> he is not managing the main
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funds right now, is he is this how he's spending his time climate change >> where he dedicated over 90% of the personal welalth for his management. shares of kroger sinking after a big earnings miss. what executives told understand about t -- us about the numbers next on "closing bell. servicenow put our workflows in the cloud. this changes everything. you're right sir... everything. no not everything, i mean you're still blatantly sucking up to me gary. brilliantly observed, sir. always three steps ahead. six steps ahead. sixteen. so many steps. you done? a million steps ahead.
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welcome back shares of kroger sinking today after posting weaker than expected earnings. you spoke to the company. >> the takeaway and headlines were worse than expected and kroger slammed down 10% right now. it was a miss on the top and bottom line. weaker than expected guidance for the full year and weaker margins. sales in the quarter fell 12%. but it really was a story about the headline numbers because they were a bit light but the real problem around this stock is sentiment it is a company that's spending big right now and trying to transition its program in a program called restock kroger that last three years to become more digitally focused and invest in a british warehousing chain and other meal delivery
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companies and cutting costs and the market hasn't quite bought into it. here's ceo rodney mcmillan on the conference call this morning. >> the team here at kroger realizes that we have our work cut out for us as the market points out this morning. we realize business transformations are hard but i want to emphasize we are on track to deliver on our commitments. >> i can give you more color from speaking with the cfo this morning. he said, look, 2% comp store sales were better than the market estimated we have the momentum into 2019 and told me so far this quarter and the few weeks they have seen sales are strong as expected and as far as the reaction, the market's trading off headlines and doesn't dig into the numbers. margin weakness he said was partly due to pricing and also due to the heavy investments in digital and starting to pay off.
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digital sales grew 58% for kroger and not getting the same kind of reward as a target and walmart and the market is just assuming that because of the threats of a target and walmart and amazon going deeper into grocery that kroger is weaker and doesn't buy the fact they're going to try to compete on that level. >> on that note, what is the market saying today? saying that they're just a couple of years behind the transition and someone that walmart is through and will recover or that they really are just getting beaten structurally long term and not going to play catch up ever? >> not clear they're beaten instruct rally long term and i talked to him about the amazon threat the latest report that amazon's going to build grocery stores. he says it's a validation of the strategy we have got hundreds of grocery stores across the country. it is going to take them he says longer to build out a physical store front than for us to build a digital frame work and they
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think they're in the move and today's move says there's not a% 4 lot of room for error. and wall street hasn't bought into the idea that it -- they're spending billions of dollars to catch up to the level. there's also a lot of margin pressure with target and walmart on the pricing front for groceries and then beefing up investments on e-commerce. >> margin's competed on in that industry so kroger down 10% now, back to broader markets, the dow seeing the biggest drop since early jan. we hear what needs to happen to drive the market higher again. >> international women's day we have a great lineup of guests including the ceo of williams sonoma and many other powerful women in finance ♪
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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. ten minutes to go in today's session. let's talk about the markets with "closing bell" exchange joining us is tracy millan and rick santelli. as always. tracy, another down day. four in a row. >> yes. >> we are on track for the worst week of the year what does that tell you? >> so that's telling us that
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right now there are a lot of concerns in the markets and we are suggesting that the opportunity for risk and return is going to come very quickly here so we're suggesting that investors pair back their holdings in u.s. equities right now, move that into cash and we think that there may be an opportunity to deploy that cash later. >> when? >> bearish outlook then? >> not too bearish we're just pulling back on what was an overweight in u.s. large cap stocks and mid cap stocks and we are underweighting small caps but we still think by the end of the year we'll probably see prices where they are today and we think it's a good opportunity to take profits. >> you are looking over a couple months here and then see what? market recovery? >> probably in an inflection point here and markets could go higher if we see some resolution to the trade deal, if we see some resolution to this global
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soft patch and we think there's risk in the market right now so we would pair it back. >> will the ecb ever be able to raise rates? >> you know, i don't think that it's an opportunistic time to raise rates. i think some of the periods are in the rear-view mirror and somewhat depressing in the marketplace. you look at euro versus the dollar and dollar index, both 20-month extremes. boon yields, it's 6 basis points 28-month low do keep in mind, wilf, between about what was it? june and september '16 10-year boon yields were overweight. there's an impact on the sovereign drops and i know listening to tracie talk, that's part of when's playiat's playin
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psychology is watching the soft rates and discerning how much to divy up the slow growth, at this point, i think we are getting divied a large piece and a way to think about it for the future of the equity markets and some extent the fixed income markets, as well. >> i mean, to rick's point, euro's having the worst day today since last summer. this is a pretty big drop. are more central bank policy moves to combat the concerns you are talking about? global slowdown baked into the forecast for you. >> it's very possible in the ecb not so much here in the united states here in the united states, we think things will stabilize and that the fed may actually increase rates one more time this year. especially if the jobs market stays very strong here looking at the eurozone, though, we did reduce the gdp estimates for the eurozone down to 1.2% and in line with the ecb and more cautious there.
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>> in terms of what you like in the u.s., you like the financials they're having a tough day today because of this move in rates that rick just mentioned. >> that is right, yes. but we see rates moving higher by the end of the year anywhere from 2.75 to 3% on the 10-year so if we do move higher there that could be good for banks banks are also extremely well valued here so that's another reason for liking them. >> you think yields are going higher and now going lower. >> they are. >> what changes that trajectory? >> stability in the global market and here in the united states is stability here so we start to see some positive, you know, data coming through, the jobs numbers tomorrow we think are probably going to be fairly positive. so it's that consumer really that we are looking to to continue to drive the u.s. economy. >> thank you both very much for
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welcome back to the "closing bell." just over two minutes left to trade. intraday chart s&p 500 for you off the lows which came pretty much at the top of this hour but still fairly depressing looking chart as you can see opened lower and stayed in the red throughout the session similar picture across them all. what's been the big factor today? ecb. here's the euro intraday it's continued its selling really throughout the session. down over 1% the broader dollar index is down -- higher, sorry, by 0.8% itself 97.7 that strong dollar, of course, weighed on sentiment here. look at the move on the 10-year treasury note. european yields, lower dragging down the u.s. that's a week to date chart. just bringing in bob pisani with a look at the sectors.
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banks suffering. real estate in the green. >> those are the defensive sectors holding up much better in the last two weeks as banks an industrials, russell 2000, semiconductors, all down 3% or 4% still i think it's profit taking the numbers out of china and europe are not good. draghi signaled that so maybe there's broader thing going on first off, great job with jeremy grantham fascinating interviews. >> thank you. >> you've been doing great interviews as of late. >> very kind. >> household growth, u.s. is 1.8, very smart for him to point that out 1.3 in japan 1.4 in europe. 3.2 in -- i'm sorry, 2.3 in india. so it's very simple here you have to have more kids or more immigration or you get less growth and i thought brilliant
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for him to point that out. we don't talk about that enough. >> you mentioned india that's coming up in the next hour here's the bell closing out the first hour and we are lower pretty much for all the four indices. 201 points on the dow. that does it for the first hour of the "closing bell." sara, back to you. ♪ welcome to "closing bell." i'm sara eisen wilfred frost rejoining me in a moment along with mike santoli, cnbc senior markets commentator. the day on wall street, another down day fourth in a row. dow closing lower, 200 points. that's about .8 of 1%. most dow stocks finished in the red. s&p 500 closing lower. the only group to close positively was utilities consumer discretionary today was
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the hardest hit with financials, technologies, materials, all down sharply nasdaq down more than 1% biggest loser of the averages. russell 2000 didn't underperform as it has in recent days and still weak coming up, investor jeremy grantham explains why he is so bullish on emerging markets. here's the stories on the radar. u.s. household net worth plunging in q4 by the most since the financial crisis the federal reserve making big changes to the bank stress test and kroger plunging. joining us to talk about the market today, stephanie link, global research director we're also going to get costco earnings this hour mike, we are now in a losing streak. >> yes we have a pullback of some description. we don't know. 2% off the highs, closing highs for the s&p 500 set on friday.
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back down to a level we first got up to on this round, you know, three or four weeks ago and obviously very routine and benign looking and people say that's now the fourth time in the last six or eight month that is we failed to get above this particular level in the s&p that we have to rethink the global growth picture that to me the conversation we are having but i don't think it's changed the substance of what we have seen this year going into right now. >> fed, the fed pivot to dovish really helped markets. >> yes. >> why hasn't the ecbpivot don the same in. >> the fed pivot was the premise and i think general dovishness i think was already assumed for central banks. i think the problem is with the fed it seemed like it could be a very well timed handing of the baton or just sort of a let's wait and see opposed to a desperate measure for a central bank that doesn't know how to get growth moving. >> it's a good question, sort of the question of the day.
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a thing we talked about is maybe less efficacy -- >> absolutely. >> than a qe or something like that another theory is the ecb sharply cut the inflation targets, pretty weak acknowledgement of the eurozone and draghi said we're not heading into recession the numbers are pretty close. >> i think parts of europe are in a recession, for sure i think germany's front and center we know italy's problems and the uk brexit potential and germany to me is the big surprise how much it declined from growth in 2017 to .6% in the most recent fourth quarter so i mean, i think that that -- sara, you are right. the reason it didn't liftd -- draghi didn't lift the markets is because they did lower numbers and the reality is that they're very close to a recession. we might have been closer to a recession back in december but not nearly to the extent that
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europe is. they're in a funk and need a fiscal policy put in place and they just don't have a game plan it's all monetary policy. >> on the point of germany, clutches at straws of positive but the only positive is germans yield a lot of political power behind the stimulus this time and that was a debate last time around whether they're allowed to do it if the germans didn't want it. that's a small positive. i think the other point of note is this isn't full qe. it's a midway point and that has to be delivered through the banks. the banks over 20% of the stock 600 and negative rates doesn't help so that's again another reason you haven't seen a jump in the european markets it's interesting to see over the next week or two whether that changes around and you might see the sentiment carry over here. >> draghi is leaving in october so how much could they really do right? i think he put in enough to get passed through under his regime so maybe there's more to come down the road. we will have to see but for now
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it's the best we get. >> another one is that the euro lost almost a full percent of the value against the dollar helpful to turn around an economy. >> exactly silver lining for the real european economy and u.s. stock market sometimes doesn't love whether the dollar shoots higher but it would be on balance okay. the other answer i think to your question, wilf, is when investors were lobbying or throwing a tantrum to get the fed to back off they didn't think it was because u.s. growth was near zero but 3% without inflation is a wonderful world that the fed was going do interfere with and so therefore i think there's a sort of have cake and eat it too on the rally. >> they thought that powell was trigger happy, not acknowledging the weakness. >> they didn't say okay we're fine with the 1% the fed thinks we can get 2%. >> and now household net worth in the u.s. saw the biggest
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decline since the end of 2018, dow to 104.3 trillion. and 3.5% loss overall. much of it's attributed to the volatile stock market at the end of last year mike, what's your take on this i mean, net figures have been pretty good for most people's wealth over the last year. this is a -- >> coming off high levels. it is a snapshot effect. right? we decide to take a look at the end of a quarter because that's when the data is available and that was right after the huge plunge in the stock market and so, i do think it helps explain perhaps a little bit of the negative wealth effect response evident of high-end retail in december and the second half of december was a tough spot if you were trying to sell anything expensive. >> it does sort of raise a question, stephanie, of what the consumer will do this year and whether it can continue to carry us the u.s. is an outperformer in
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the world and thanks largely to the u.s. consumer. >> remember that we have had the best start into the markets first two months of this year since 1991 1991 that's a big, big number we're up 7% even with the 2% pullback up 17% from the december lows. that's got to do something for psyche and household net worth right? i think you will get a snapback and i was worried about the retail sales number in december. i think it's a one off and sales is a very highly revised number. one of the most from the government out of all the things they release jobs are good. wages are good see what they say tomorrow wages 3.3% analyzed rmt i think the consumer is just fine and blip was warranted given the selloff in the market and back on track. >> overall, therefore, do you increase the exposure to u.s.
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cyclicals if it's not getting worse like people thought it was? >> i have a very much of a cyclical bias to my portfolio and also been more exposure to the international markets, as well, as we see them recovering or at least stabilizing, particularly china and the em. but i do think that the data that we have been seeing even in this past week is a big encouraging. right? little bit better in terms of productivity, in terms of services and the new orders number in the services ism the best since 2005. these are good numbers so we got obviously the slowdown that we were all expecting and maybe we are just stabilizing here and getting bet we are an accommodative fed and central bank policy around the world that's good for risk assets. >> financials didn't do that well today and federal reserve said it will take out the quantitative test for u.s. banks this year for the stress test and looked at risk management or operational failures the fed said it was making the change because of improvements
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in capital planning made by the largest firms since the crisis is that a big deal for the banks? >> i think largely expected. confirmed, confirmation of something that people were looking for and what it does overall really is makes it highly unlikely any of the banks to fail any part of the stress test now because all they really face in pass/fail is quantitative parts some terms are harder they can gaet a mulligan and yo have ruled out the chance of the banks failing a stress test. that's big progress. not groundbreaking from like a year ago but it's definitely moving in the right direction for the banks on the regulatory front. >> and cuts back on the time to cut a c-car proposal in place. it's thousands of pages to putt together and getting this piece removed is a good thing. there usually is a white paper coming out maybe we'll get commentary about the balance sheet and that i
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think people were disappointed about. so let's see what they have to say but this is a step in the right direction, for sure. >> i think the broader thing which is not a development yesterday, it was sort of confirmed but we knew about it, under 250 billion in assets you don't face this now and that is the bullish call for those mid sized banks and a reason to merge like we saw. that's something we knew about smaller banksbenefitted more than the big banks. >> i don't know, mike. they had a bad day today not a single s&p sector bank higher than progressive corporation. >> auto insurance. about it because nobody outlawed car crashes. i think, look, there's a sort of global effect where it will weigh on u.s. banks and then the yield story. we have the pullback in yields and i think that for two weeks now the group has been on the
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slide after that big rebound. >> do you buy them, big u.s. banks, stephanie, here >> i think you are selective with them. like i own bank of america it's a cost cutting story, for sure i own american express i kind morph tech. mastercard and paypal and probably the lowest exposure of traditional big banks in a while and it's the yield curve and flattening and we want rates to rise and the curve to steepen. we have seen it steepen a little bit as central bankers are pulling back on these -- what was an aggressive policy measure. the banks could perform. i just want to be very specific and particular on the ones that i own and i feel very confident long material on bank of m america. >> not as bad as as it is in europe kroger reported weaker than expected fourth quarter
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earnings down 10% sara, as you sort of summing up earlier, the market is not giving it credit for its aterpts to invest in the newer growth stories. >> i think that's the story. the margins were down and investing in, for instance, a british warehouse chain saying that actually delivery and pickup is 90% of the stores which is big progress. but the market, i mean, the stock gone nowhere basically in the last year and so volatile ever since amazon got into the space really with whole foods and then all the trickled out news like "wall street journal" of building groceries and makes the market sense about this company and doesn't get the credit that a walmart or target get for growing digital sales more than 50% which it did this quarter. >> no because walmart's not lowering numbers by 10% each quarter. seems like you're constantly
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revisions for kroegger on the downside much more than upside and has to do with the gross margins and invest they're not seeing an operating leverage at all from these investments. walmart is seeing that you don't mind paying that multiple this deserves 11 times cheap but for a reason. >> i agree with the sort of market keeping the stock on a very short leash this is the only big supermarket play in the market right? p pure supermarket with a flare-up of anxiety of amazon. >> target, kroger. >> a proxy for it. >> that war is far from won. you know >> sure. >> online grocery. kroger said it has the stores and amazon doesn't. >> mike you were saying at the start of the year a stock picker's year and we have had that interesting set of numbers in q4 and stocks in all sorts of
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directions. >> retail is an area of hitting it right and the others don't and that's for sure. it is the case and there's been a lot of divergence within the market and the index level is calm. >> speaking of grocers and retail, costco is breaking we'll break down the numbers for you and whether the results to give the stock a pop, whether you should buy into this story. find out why investor jeremy grantham is very bullish on em 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?
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costco earnings are out. courtney reagan has the numbers at headquarters. >> this is for costco's fiscal second quarter a nice beat for sharings per share. turning in $2.01 per share the street was looking for $ isn't 69 revenues look a little bit right. $35.4 billion compared to consensus of $35.67 billion. comparable sales for the full quarter up 5.4%. the street had been looking for up 5.6%. costco reports those numbers monthly so we y'all but the
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final month for february the shares here up more than 2.5%, sara >> all right thank you. stephanie link still with us to talk about the results mike santoli, as well. getting a pop in the stock on an earnings beat and decent comps, right, stephanie >> i don't know the margins but beating on the bottom line and revenues in line they get operationing leverage and better results on the margin side this is such a wonderful company. right? they have a niche. they have 70% recurring revenue. membership fees are terrific traffic is good. the comp number, people would die for that comp number i feel like the only problem with this name is it trades at 28 times forward estimates it is expensive. it's a compounder and i think every time i try to trim it i regret it. i hold on to it and think they're doing a great job. >> 70% of roevenues from the
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membership fees is more protected from the threats of the industry. >> that's right and gets the high multiple. >> explains the valuation. >> exactly absolutely. >> company does not give earnings guidance so yes it's a big beat and i don't think people feel like the estimate is a tight number to guidance. >> stephanie, thank you. >> thanks. legendary investor jeremy grantham correctly called the dotcom bubble and the 2008 downturn he is bearish on the u.s. and told me exclusively about why he sees big opportunities in emerging markets >> i think emerging markets is the future they have the people and faster growth and increasingly they direct their efforts in a very intelligent way. china in particular has -- is cranking out their percentage of people taking engineering and
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hard science so they're now in total a much bigger country but if total massively outproducing the u.s. in the number of engineers and scientists and as that goes on it makes it difficult for them not to take the lead in one area after another in science and they're dedicating their resour resources to artificial intelligence they dominated the green energy, wind and solar in terms of manufacturing and installation so they're becoming formidable competition. india, too their fastest growing country in the world taking up the mantle of china the developed world with its miserable growth rates has to compare with india growing at over 6% a year. >> on the topic of china, given those huge leaps as you mentioned in science innovation is it evitable it will be bigger than the u.s. economy?
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>> yes completely what i should add about emerging is in the end after all these conversations it comes down to price and they are much -- they're always on average, on average they're a bit cheaper. much cheaper than normal and the currencies are cheaper than normal i'm a great believer in the crude economist judge of inflation. big mack index comparing effe effectively. it was a joke but now it's 40 years of data and 60, 80 countries and a pretty decent general idea of inflation and the currency comparative value and we have very fancy currency comparisons in our firm and 1,000 other firms, too i wouldn't hold my breath. i think the big mac index, a cost of big mac and french fries in the countries of the world, i wouldn't bet against that beating us and what that says is
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it's always been 25% cheaper to buy a big mac in an emerging company but now it's half price and that movement back is a 50% move. >> you mentioned that it's inevitable that the chinese economy will be bigger - >> one day in the very near future. >> how soon? >> matter of a handful of years. >> and so, what, therefore, is the motivation for the current u.s. trade war with china? and will it be successful? >> i have to take the fifth amendment on this or something like that. it's impossible to anticipate to guess what the motives are of the current administration. which is what you're asking. >> what would the effectiveness be then? it won't alter the balance of power? >> irritate them and dislocate a
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quarter or two and then forgotten and insignificant. that's did good news. >> i'm cure you're so bullish. china's demographics aren't as attractive as india. is that a concern for you? >> i have -- i consider a slowing growth in population our last best hope i think if you want to have a -- end up as a sustainable world where youprotect what's left o your bio diversity, you can't march irresistibly into the future with a growing population each of us eating more and using up more plastic toys it simply does not compute and so i welcome declining populations and india, too, will be declining in 50 years. >> wefz gone through your outlook of u.s. equities even where you see value, is a value investor, most famed value
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investor, do you still think that those value stocks within the s&p 500 will also underperform in the next 5 years? >> i think they'll do less badly. they're not cheap enough to do well and you have to be care fu with what you mean of value. crude measures of value pre-2000 won't necessarily work what edge they used to have which was decent has probably gone away and you have to be careful -- you have to have a broad and complicated and accurate value accurate measure of value. used to be you showed up for work and you won life was good. now you can't do that. >> i mean, overall, structural arguments for why he prefers emerging markets and you could
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have applied that three years ago and u.s. markets continued higher but the theme overall and he has a track record, called it right in the past, very much avoid developed world stocks including the u.s. and go for the em. >> if you have that kind of generational time horizon that's where the math takes you at this point. do you think that the u.s. will still have as big of a percentage of market cap in 20 years as today probably not so that would -- >> thinking a lot about valuations he mentioned it in the stock market conversation and here and the big mac index of currencies and purchasing power parity and the u.s. and the developing world is richly priced. >> he felt separately that the chinese economy bigger than the u.s., we'll have to see if that proves to be right jeremy grantham there, the founder of gmo. up next, investor risk appetite weakening recently.
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event brite sinking after hours. seema? >> big mover after hours reporting a miss on earnings a loss of 17 cents versus estimate of a loss of 14 cents
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its first quarter revenue guidance also lower than expected the company citing the acquisition of ticket fly saying that it has been complex and a time consuming integration process. the stock down 21% now in extended trade trading just around its all-time low. that is company that went public in september of 2018 shares at $25.69 sara, back to you. >> all right thank you. stocks are on pace for their worst week of the year and investors may be losing the appetite for risk. >> this is the ratio of high beta stocks to low volatility stocks they're the most leverage to any market move. so you see this is a one-year chart of this relationship so when this is going up,
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market's becoming more aggressive and risk seeking and this peaked right back in june and even as the market continued to make new highs here in october, it was already a defensive tone quality stocks outperforming and then you have the plunge and the big comeback to here and then seeing this in the last couple of weeks it's very much in tune with other indicators, with the transports actually lagging a little bit with small caps and a lot of those areas, semiconductors, that surged off the lows something to monitor also reminds me of another period, we talk about 2016 here's the five-year look at this relationship and if you look back to this was the early 2016 low in that february. we did an aggressive rebound and then chopped around a little what happened is treasury yields really low dividend stocks outperform and the overall market kind of held itself together through brexit and all the rest of it that year so that could be the way we go right now but a thing
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to keep on the dashboard to say is the market losing the nerve or not >> high beta index is self fulfilling index to be in. >> yes in fact, if this were big enough i guess to be the tail wagging the dog that is true it is rebalanced periodically. i guess there's a look back after a year to see which stocks now qualify as that and momentum flavor to it. >> very interesting, mike. we'll see if it repeats 2016 and would be bullish. time now for the cnbc news update sue has it for us. >> hello, everyone here's what's happening at this hour the justice department announcing a massive crackdown on those who prey on the elderly. attorney general william barr speaking about the department's largest-ever sweep of elder fraud scammers. >> it's despicable because the people involved are vulnerable and don't have the opportunity
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frequently to recover and the losses are devastating to them. hundreds of suspected isis members handing themselves over to the u.s.-backed syria democratic forces. the militants many of them foreigners arriving at a gathering point in syria which is the last remaining pocket under control of isis. and march 28th is the next court hearing for robert kraft in connection with his solicitation charges lodged in florida. a court notice issued to kraft requires him to appear in person and the attorney said that is not the case because it is a misdemeanor case we'll keep you posted on that one. that's the news update this hour back to you. >> sue, thank you. up next on the show, we'll discuss whether mark zuckerberg is making a business model blunder announcing facebook will become a privacy focused platform. bob iger revealing an opening date for the highly anticipated "star wars" land more on that when we come back
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let's take a look at how we finished the day on wall street.
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down for a fourth day in a row the dow losing about 200 points. not as bad as it was near the lows .8%. s&p 500 also down .8%. bigger declines at the nasdaq and russell 2000 down .8%, as well and the worst day for the s&p and the nasdaq since early february facebook stock took a dip today after the ceo spelled out his vision for a more privacy focused social media platform. in a blogpost of yesterday, zuckerberg said he believes the future of communication will increase bring shiftd to priva, encrypted communication and the content won't stick around forever. he says this is the future zuckerberg says the part of the plan is to make experiences on facebook feel more like a digital living room.
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joining us now to discuss how it impacts the company's bottom line is matt britton and mark scactovic. welcome to both of you. >> thank you for having us. >> what does this mean in terms of a change for facebook's business >> i think it is an evolution, not a revolution a slow change. i think from a consumer perspective you won't see much right away consumer using messenger, what's app for one on one communication and is this secure you know is this information to become leaked after the media coverage of russian hacking and sharing data this doesn't change the business model for a substantive way for facebook consumers go through the mobile news disease feed and ramp up the one to one communication versus one to many that most
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people know facebook as. >> what is the change here this is for individual private messages will no longer be read for advertising information purposes >> yes. >> public posts will still be. >> we really don't know exactly what it means but facebook scans to messages to see if you mention toyota and then message in toyota. consumers don't like that because they could be talking about personal things and don't want facebook to be looking at it even if it's artificial intelligence and i think he's saying they won't conduct that practice anymore and mind one to one communication. >> what does it mean for the earnings of the company? i guess they weren't doing that mining on what's app yet but does it make the prospects for what's app harder? >> to matt's point on the data, we don't know but i would say
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the data on messaging, the dialogue is not that much value if you will to advertisers it's monetized today but if you think about what's the most valuable data of facebook on the platform, it is purchasing data. it is not what we are talking about here so i don't really see this having much of an impact if any on its advertising profile obviously facebook continues to take dominant share of the ad market and this dynamic here is not going to be that impactful to the advertising revenue. >> what would be your read of exactly what prompted this what is the meaning of it coming to zuckerberg's statement? trying to get out in front of a conversation that's already been going on or might get worse for the company? >> yeah. i think it's a combination of a couple of things there's good pr here and beyond that, we look at it as what's -- there's two things here. when's good forusers and
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facebook in terms of users, encryption is good we are not -- facebook's not seeing your dialogue so that's a good thing that data loss to facebook is not that significant in terms of what's good for facebook here, i mean, this is classic network effect bring in the messaging apps together, stronger is one mentality. more i.d.s equals more advertising so that's ultimately it i think there's also a slight defensively move here on zuck's part and a fastest growing vector and the biggest threat if you will to somebody coming underneath them and using a messaging platform we have telegram with 300 million users which, you know, ironically is maybe not ironically is encrypted. but that's the biggest threat to facebook so getting in front of
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that - >> i would add snapchat. the stock didn't perform so well but gen-z, they're all over snapchat and a next generation and snapchat gained popularity due to the messaging and sharing information and not sticking with them forever. facebook tried to catch up with instagram stories but this is them going further in that direction with the stronghold of traditional -- >> i guess the big question to figure out is can they redefine the way people use social media or are they going to open up a space for a competitor >> i don't think one to one messaging is social media. you look at i message, i text you. it's a one on one piece of communication just like facebook messenger of what's app but another tentacle to the business this is a one to many communication and saying prominent and not have a substantial impact to the business.
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>> this move stops people from what's app to just use i message essentially? >> once you sort of bring this under one platform so we sort of instagram and facebook messenger, you have facebook messaging. not on facebook messaging and as that grows and i'm not there i need to join that platform so i don't necessarily think it's trying to necessarily move that direction but i think if i'm thinking about the way facebook looks at this is we'd rather see those sort of iphone messaging users sort of migrate to a platform that maybe they're not necessarily inclined to but the friends are there and globally it makes it very economical to do, as well. >> we'll lever it there. thank you both very much. >> pleasure. we have a news alert on tesla. seema mody tracking that story. >> tesla entering an agreement with lenders in china for $2.42
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billion to build a giga factory in shanghai. now china is seen as an untapped growth opportunity for tesla which ceo elon musk did reference in the company's latest earnings call back in january seeing shares up fractionally after hours back to you. >> all right thank you. movie star, rapper, entrepreneur ice cube is on our radar today because he soon may be adding tv sports mogul to the resume. disney with an annual shareholder meeting and the pay package of iger was a big debate that story coming up bring financial stress to work. if you're stressed out financially at home, you're going to be too worried to be able to do a good job. i want to be able to offer all of the benefits that keep them satisfied.
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welcome back here's the other stories on the "closing bell" radar today rent the runway is partnering with retailer west elm to expand beyond dresses and clothing and will allow you to rent a blanket or pillow and you'll be able to select from over two dozen bundles each with three to four items. typically you just been able to rent a dress for an occasion >> these don't sound like things to share with people i actually can get the idea of renting from west elm like a couch or a sofa because they're so expensive. >> right. >> a rental but not to then give it back. >> return relatively quickly >> according to research, you
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are not the target demo. they say that people in their late teens and 20s are the most likely to use this for apparel and other issues. >> to freshen up the backdrop of your instagram photos. my story, airways of nippon is betting big on airbus ana is reviving the jet for routes from japan to hawaii. it's been such a heavy airline week for us i couldn't let the story go and particularly with the route to hawaii from the other direction. but anyway, so a few new fresh orders for the a380. >> everyone's going to hawaii, huh? >> i guess someone has to be the last. >> i bet they get a discount. >> many in service, though.
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i'm looking at rapper actor ice cube shook up the basketball world with the big three league. now he's reportedly ready to rock the sports world again to buy 21 fox regional sports disney must sell them vultd of the merger with the 21st century fox assets. >> what does this pitt him against? >> that's the question i think it's not a heated bidding war and in fact the assumed price to get for them is down the yankees network is not part of it. >> 20 billion? >> they would raise equity and then leverage it big three, three on three basketball league with some former pros. you know how many players normally on a basketball what i'm kidding. five on five. >> okay. >> i knew i was going to be the one to know about this. >> that's how you picked that
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story. >> i'm glad you posed that question to sara i would have got it right but you didn't so there we go. up next, disney ceo bob iger looking to talk about the merger with 21st century fox today. there are some questioning his magic touch and how much he's paid. pnc top strategist says the bull market isn't over yet and will explain why he sees more highs ahead. that's why we go beyond the numbers. t. rowe price. invest with confidence. i'm off to college. i'm worried about my parents' retirement. don't worry. voya helps them to and through retirement... dealing with today's expenses ...while helping plan, invest and protect for the future. so they'll be okay? i think they'll be fine. voya. helping you to and through retirement.
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star wars and ceo compensation are the big topics as disney's shareholder meeting today. julia boorstin with all the
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details. hi, julia. >> sara, disney shareholders approving bob iger with 50% voting in favor of that plan this is a reversal from last year when 52% rejected disney's executive compensation plan. they have raised targets for iger to earn bonuses and this week cut his annual potential pay by $13.5 million here's what was said this morning when asked if iger is overpaid. >> i will say that if your ceo salary is at the 700, 600, 500 times your median worker's pay, there's nobody on earth, jesus christ himself isn't worth 500 times his median worker's pay. >> but programs the biggest news out of today's meeting, iger announcing that the park's star wars land will open earlier than expected at disneyland at the end of may and at disney world at the end of august
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iger saying he's enthusiastic about disney's motion picture library, a departure from only offering classic titles for a limited period of time every several years. guys, back over to you >> julia, the question on that, i guess, is when he has the flexibility particularly internationally where the partnerships last for quite a number of years from here. >> reporter: well, here's the key thing, wilf. there's this massive library which fans refer to as the vault. there are films like bambi and sleeping beauty and disney controls those entirely. they have had this model of releasing them on dvd for a limited period of time they make a big deal out of it and all the parents, like myself, rush to buy these films. now if you want to access these films, you can get them any time you want but only if you subscribe to the service so i think their library is much
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deeper and more accessible to iger and his team than you might suspect. >> julia, thank you very much for that julia boorstin. up next we will look at the stocks making big moves in after-hours trading. >> and don't miss the interview with softbank chairman and ceo tomorrow at 9:00 a.m. eastern on "squawk on the street. a must-watch interview we'll be back in a couple of minutes. 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 headlines making news after hours. costco is trading higher after a mixed quarter, beating on earnings, missing on the top line slightly. same-store sales just a hair short of estimates, up 5.4%. margins above 11%. they make you do the math on that one. eventbrite plunging. revenue guidance well below estimates. that stock down 23%. and semi conductor company marvell technology falling on earnings giving guidance below wall street estimates, that is down 3.5%. one other story to mention today, huawei is suing the u.s. over a law banning the company from selling its equipment to u.s. government agencies the chinese firm says that the
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law is unconstitutional. remember, huawei is also facing criminal charges from the department of justice, which is accusing it of stealing trade secrets, side-stepping sanctions from iran. this is an important story, mike, because huawei is fighting back against this onslaught of whether true or not bans from the u.s. government, chincludin this one they're saying they didn't have any due process proving that they should be punished or were guilty of anything i don't know how it factors into the trade war. it seems like a subplot around national security right now, but this deal is not done yet. >> right the deal is not done, it's been quiet. we haven't heard regular updates. you don't know what the exact terms are being haggled over right now, so i do think it has a factor, a little influence on the psychology of trying to handicap it. >> for the huawei stock price today and that jump, a lot of that because germany didn't ban it there was a new set of guidelines and rules today some people wondered whether
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they would or not and they didn't. >> the u.s. has been pressuring allies to do that. >> and just a couple of days ago a uk commenter said the uk was heading in that direction. two months ago you had a lot of european rhetoric suggesting we might get on board with this u.s. thing, we're investigating. now that they're coming away from it, it does make the u.s. stand alone a little bit. >> beyond constant speculation will we or won't be get a trade deal with china, we've got a jobs report and an s&p that closed below its 200-day moving average. >> on the defensive and it was a slow growth story line for the day the last couple of days. i do think if you were to figure out what the market wants, i think you probably wanti relatively strong data i think there's clearance because you've not going to have a very strong jobs number or wage number, starting the fed saying they're back in the game. so strong could be strong and
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good news could be good news. >> plug for tomorrow, don't miss our great international women's day lineup we're joined by some of the most successful women on wall street and corporate america tomorrow at 3:00 p.m. eastern on "closing bell." i'll let you guys join the show as well. >> we look forward to that thanks for watching today. that does it for "closing bell." >> "fast money" begins right now. "fast money" starts right now. live from the nasdaq market site overlooking new york city's time square, i'm melissa lee. tonight on "fast" check out shaz of costco jumping 4% after reporting earnings moments ago the conference call is kicking off right now and we'll bring you the latest details. we are going yield hunting the traders tell you the names they think have more room to run. first we start off with the market sell-off. stocks getting slammed, down more than 300 points, the market now on track for its worst week of the year. we are starting to see cracks in
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