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tv   Closing Bell  CNBC  March 25, 2019 3:00pm-5:00pm EDT

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bank fraud >> embezzlement, bank fraud, tax fraud, filing false returns in order to get loans that he clearly thought he needed. pa busy day. they'll carry on with the "closing bell" in just a moment. >> thanks for watching "power lunch" >> the "closing bell" will start right about now. >> it is the final hour of trade. apple announcing its move into streaming. that stock is down, but the likes of roku up we'll explain why. and with the mueller report in the rearview mirror, what happens to president trump's economic agenda? plus, stormy daniels' former attorney arrested for allegedly trying to extort millions of dollars from nike. we've got the latest details the "closing bell" starts right now. ♪ welcome to "closing bell." i'm sara eisen here with wilfred frost, checking out the markets. we've been all over the map today. dow is lower at this moment. it's sort of a mini sell-off,
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down 18% it got as low as down to 130 at this point it was as high as up 100 check out the russell 200 index, small cap outperforming, up 1% the s&p 500 is pretty much flat. groups that are strong all day, consumer discretionary, some of the discretionary, like reits okay but technology not having a great day and the banks are down >> and the ten-year is at 2.41 at the moment. we should also mention the action in asia overnight down 3% for the nikc nikkei. all of that in mind, the u.s. is resilient. >> you've still got that gloomy mood around global growth concerns and it's very prominent right now in the bond market, for sure >> absolutely is only a slight decline in the equity markets coming up, former discovery president john ford will tell us whether he thinks apple has what it takes to make it as a media
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company. >> we'll start with the event in apple. by the way, apple shares are still under pressure, down 2%. let's go to cupertino, california where julia boorstin is standing by what do we know at this point, julia? >> reporter: the event has wrapped and apple ceo tim cook has unveiled four new services, three of them focused on premium streaming exclusive content. he announced appletv plus. this is the exclusive video content. he says it will launch in 100 countries this fall. >> we partnered with the most thoughtful, accomplished and award-winning group of creative visionaries who have ever come together in one place to create a new service, unlike anything that's been done before. appletv plus >> no word yet on pricing yet for this subscription service. bit will be entirely exclusive original content
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that means no library, back catalog, and the names of the content creators, a lot of them were paraded out on stage, including oprah winfrey, reece witherspoon and jason mamoa. they're also redoing team tv app, including incorporating access to your paid tv bundles as well as offering the ability to subscribe to other a la carte apps such as hbo were showtime, and starz. tim cook also announcing a premium news service, apple news plus, which will cost $10 a month for 300 publications, access to entire magazines, plus "the wall street journal," "l.a. times," and various digital subscription services. another subscription service, apple arcade is for video games with 100 exclusive games that will launch this fall no word on pricing yet for that one. and apples also announcing a big move into the financial services business with a credit card which is partnering on with mastercard as well as goldman
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sachs. executives from both of those companies here this is going to be a new product with lower interest rates, it says also, tools to enable consumers to track their spending and have a better sense of their finances apple stressing throughout this, but especially with the credit card, that it's all about protecting user's privacy. it's not tracking what you're doing. it's also not tracking what you're doing in terms of advertising. guys, that seems like, to me, quite a dig at facebook. but really stressing privacy and the exclusivity of its content guys, back over to you >> julia, on the tv offering, you mentioned that these are some of the biggest names in hollywood. of course, there are lots and lots of other big names in hollywood out there. so what is actually unique about the tv offering? >> reporter: well, what i think is sort of notable, if you look at the folks that were on stage here, it was steven spielberg, oprah winfrey, reece witherspoon, jennifer aniston. a lot of these are movie stars these are people who have not done a lot of tv and even if they have done tv, they really haven't done a lot of streaming. so what's amazing about these
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folks is the shows that they're producing, the movies they're making, j.j. abrams, you're not going to be able to watch them anywhere else. weapon saw apple succeed with the music business, they have their apple music subscription service, but music is really a commoditized business. everyone is pretty much offering the same thing, whether it's spotify or apple music it's really about the interface. but when it comes to this appletv plus service, you're not going to be able to find these show anywhere else it will be interesting to see how much they charge for this, but they're going to be launching worldwide, all around the world at the same time so unlike netflix, which really started here in the u.s. and then scaled globally, this is going to be an international launch and oprah winfrey was talking about, she really likes the fact that she's going to be able to reach so many people through this service so this is going to be an additional subscription tier and we'll see how many people sign up for it. >> julia, thank you very much. let's bring in our panel for reaction russ gerber, kevin landis, and
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dan raeburraeburn, very good afn to you all kevin, if i start with you, do you think anything you saw today is game changing for the company? >> well, you know, we've all been waiting for apple to really kind of get into this game for a number of years now. i mean, the term appletv has been around for a long time, but we really thought they were going to blow us away, and still hoping that they do that so, you know, i'm struck that they have a lot of really famous names there, but you don't know great content until you see it so we'll just have to see if they've really got their version of "game of thrones" that they can offer us >> so, dan, why didn't they give us a price i mean, that was going to be the big question mark that would allow everyone to compare it with some of the other streaming offerings out there. >> yeah, i think the key is that, you know, apple is trying to figure out, obviously, what they can sell this to and how much they can sell it for. and because they're going to go global, you have to think about
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that, as well. if you think about the services and the market today, between $10 and $15, i'm guessing apple is going to come out probably around $14 for this. we don't know for sure the other thing we don't know is how many hours of content they're going to have at launch either, and that's something that matters >> russ, what's your take about how this has been structured, in particular the fact that appletv and appletv plus will be available across multiple platforms. one of the great selling points for apple for most of the last decade has been the ecosystem. and that doesn't apply to the tv service. >> they have effectively killed the appletv box, which in a way has almost no purpose anymore. and giving credit to roku and amazon but they're trying to sell services, so they have to do this but we think the service is free, that's what my sources in hollywood are telling me they only have so many shows people aren't going to pay money for like a five-show library so what they're going to do is what they're trying to do is
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give cable operators and content people who have to pay the apple tax some more benefit for being a part of the apple ecosystem. so appletv, to me, isn't about making money anymore they're already making it's about controlling the tv experience and giving away in content, so that you have sort of a touchy-feely happiness with apple. but there's no "game of thrones" content being made at apple. this is all touchy-feely content that probably, i'm guessing will only have a limited audience but the real game changer today was the apple card >> why is that a game changer? >> well, getting into financial services is an incredibly lucrative business you think about a billion people using apple pay, if they all used it, and then basically having their finances on apple, where you can trust them with privacy or supposedly trust them, they can build out these services into all kinds of other
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areas, like investing. you know, we kind of at my firm are like, boy, we should pitch apple on providing financial services to their customers. so we see this as a very lucrative business for them. and i'm really happy with what they're doing with it. eliminating fees, doing stuff for the consumer, cash back instantly, really giving you a rebate for a lot of the fees that they're charging. they're taking less margin this is going to put a lot of pressure on the banks like chase and the other players. >> i agree with that it's going to be interesting to see what it does for margins in that payment and card space. d dan, which companies out there should feel the most threatened from today's announcements from apple? >> i certainly don't think it's netflix. we've had the media going on talking about this being a netflix killer, but that's never what apple intended. i think people forget that apple owns the hardware, the ecosystem, the entire ecosystem, the os, the browser, the store, apple pay. apple is creating content and service, whether it's news, whether it's gaming, whether
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it's video to drive services and other things, including apple hardware so it was never supposed to be a netflix killer so netflix is not who it's targeting. i think the key thing here that we all have to remember, though, is we all have a limited amount of time that we can all watch video every day. so whether that's apple, netflix, hulu, amazon, whoever it may be, apple is trying to get our eyeballs, like every other content owner and distributor out there. so i think it's a threat to some of the other companies that are offering similar services from a cu curation standpoint. so i don't know that it's a direct threat to any one company. you certainly have disney plus, you have warner media coming out later this year, as well but it's just another service in a market the key difference being, apple owns the ecosystem >> yeah, on the disney plus side of things, kevin, you know, bob iger is on apple's board, the name of this whole service is apple plus
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isn't it a direct competitor now to disney plus, with a very similar name and shared board member >> well, anytime you move into content, you're moving towards disney's turf, right but it's a big world out there, and there's a lot of content that people want to see. so, certainly, if apple had remained just a pc company, you wouldn't have this conflict. and now there's a little bit more but, you know, the way this goes, is it's kind of murky, kind of fuzzy when you're opening up new markets, whether you're directly competing or just kind of jostling each other. i would say this is more just kind of bumping up, elbowing ooemp each other a little bit, but not really going head-to-head. >> what do you do with apple's stock? >> i think this is an opportunity to buy apple is going all in on four service areas that are all great areas to grow from and this gaming platform, especially for all the kids who play on ipads, this is a wonderful solution to pay ten
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bucks a month and get a hundred games so my kids aren't being -- they're just abused by these ad companies and the in-app ad purchases. so gaming, news, television, and finance are definitely where apple should be. i feel a little bit more confident about their future and i think if they play this right, apple is going to be here in 30 years, you know, in the same place they were 30 years ago. and i think this is a great move for tim. so obviously, we're not sellers here and this stock is relatively cheap compared to microsoft, google, or anybody else. so we love apple it's one of our top holdings, and certainly, if you don't own apple, i would have it in a portfolio. certainly a safe enough investment, i think. >> so dan, bottom line, we have four new services. apple's revenues right now are, what, 15% of total services. obviously, it's a lot bigger chunk of the growth. where does that number need to get to for apple to get a
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valuation, like some of those services companies ross mentioned. >> it's hard to know until we know the price point of what they're coming out, where they're going to launch it, what markets and how quickly, we have to see how fast they can scale this but then again, this is apple. they scale things pretty quickly into other countries, as well. i think if it's at 15% now, like you're talking about, i think you probably have to be in the 23 to 25% range. and i think they can get there we have seen some ridiculous estimates that some people on the street have put out, saying apple could get 150 million subscribers in the next year or two. that's certainly not going to happen but apple can definitely get tens of millions of subscribers for this, i think within two years. i don't think that's hard at all. >> guys, we'll leave you there thank you very much. ross gerber, kevin landis, and dan raeburn. former stormy daniels attorney michael avenatti being accused of trying to extort $20 million from nike. nike has just put out a statement and sara's got it for us >> i can share with you, comments from nike
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nike says, nike will not be extorted or hide information that is relevant to a government investigation. nike has been cooperating with the government's investigation into ncaa basketball for over a year when nike became aware of this matter, nike immediately reported it to federal prosecutors and mr. avenatti attempted to extort nike over this matter. nike with the assistance of outside counsel ataided the investigation. they concluded, nike believes in fair play in both business and ports and will continue to assist the prosecutor. a little bit more clarity over the sequence of events that led nike to the federal prosecutors to eventually charge michael avenatti with going after nike for extortion. let's bring. eric shemy to the conversation he's been following story and some of these news conferences, eric, from the authorities what else do we know >> that's right. a lot of things are going on here all of these events, basically, they just happened last week this was a very short turnaround in terms of when avenatti first
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reached out to nike and its lawyers and said, hey, look, i want $1.5 million for my client, who's a former coach that coach's youth program had been sponsored by nike, but was no longer sponsored by nike, and that's why the coach reached out to avenatti looking to get some payment, it looks like and mr. avenatti said, i want $20 million for myself, whether that's to conduct an internal investigation or just buy my silence and i'll go away so this $20 million number, that's what nike clearly didn't want to pay. they reached out to federal authorities with their lawyers and within a matter of days, they're first meeting was just last tuesday, avenatti was actually arrested in midtown manhattan this afternoon at 12:30, where today's meeting was supposed to take place it seemed to be the last step. it was going to be the last meeting that they were going to have, to either figure out from avenatti's point of view, was he going to get the money or not? that's why he said he was scheduling that press conference for tomorrow >> and eric, the timeline you
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said, a matter of days from last week, but a matter of minutes today, in terms of what it did to the stock price, because avenatti tweeting, first of all, and getting arrested about an hour or so later, in the time in between nike's stock suffered, but not at the moment. it's basically flat on the day >> it was 14 minutes he tweeted at 12:16, he was arrested at 12:30. so when you go back and look at your intra-day chart, look at that little 14-day range >> did you read that chart there were some accusations of what avenatti and that coach was going to make against nike in this investigation so, are -- they're not fully out of the woods, are they, eric what happens there >> it's really interesting, right? because they wanted that 1.5 million for the coach. then avenatti wanted $20 million. he kept changing the number, depending on exactly what nike was willing to do, that he thought he might actually get paid his point to nike was, look, you guys are going to lose $10 billion in market cap. so if you want to pay me $20 million, that's not that much
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money. it's better for you. you guys would lose a lot more if you don't do it he would originally actually trying to schedule his press conference for last week, centered around their quarterly earnings call and the ncaa tournament i guess he thought that would be a bigger market cap drop for them >> i guess what i was asking was, does nike have any fault here i mean, because if you read some of the charges, it looks like they are still being blamed for paying families in this whole college basketball scandal so where does that go? >> that's a good point as we know, these shoe companies have been investigated and there have been indictments for paying college players. this is now taking it a step further saying, we have evidence that you're paying high school players, which could be an even bigger problem that doesn't go away so that evidence may still be true the matter in which avenatti and this coach went about doing this extortion, that may be bad but the true evidence may still be true. >> yeah. well, nike shares have come back from their lows. that's for sure. eric, thanks >> you got it.
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still ahead here on the "closing bell," much more on today's big apple announcements. john ford will join us to discuss whether apple will be successful with its original content amims. at> plus, we'll take a look at wh the outcome of the mueller report means for president trump's agenda this isn't just any moving day.
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the mueller investigation is over, but the debate over the special counsel's findings and how much of his report will be made public is raging on in washington eamon javers joins us now with the latest eamon? >> yeah, wilfred, that's right there's a real sense of victory here at the white house among the staffers i've been talking to today the president has been basking in that sense of victory, tweeting out news headlines during the course of the day and offering some comments of his own during several appearances here at the white house on unrelated matters. here's what the special counsel found, according to the letter that we got yesterday from the attorney general a four-page summary of the underlying mueller report. he says that mueller did not establish that there was collusion between the trump campaign and the russian government and also that mueller did not come to a conclusion on the issue of obstruction of justice. ultimately, though, the attorney general, william barr, weighing in with his own view here, concluding that obstruction of justice, the evidence there is
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not sufficient to conclude that the president committed any sort of obstruction of justice crime. so barr is now saying that he'll release as much of this report as he can release, as soon as he can release it, but there are some issues there with grand jury secrecy and also with classified information so we'll have to see how soon that can bhappen no word yet on when the rest of us will see that report. the president today was asked whether he thought that robert mueller behaved honorably during the course of this investigation. remember, the president has criticized and lambasted robert mueller and his team over the past two years of this investigation. today, though, he said, yes, he does believe that robert mueller, the special counsel, behaved honorably. wilfred. >> all right, eamon, we'll let you get back to it joining us to discuss what this means for president trump's agenda going forward, ed mills is with us, washington policy analyst and managing director at raymond james. ed, what did you tell investors today? >> we told them that this was a
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major political victory for president trump, a modest impact to the market, but to remember that the legal jeopardy for the president and those around him is not completely gone away. he still has the southern district of new york he still has congressional investigations to deal with. and he still has the attorney general of the state of new york ultimately, we will see a pivot towards other issues, now that the mueller investigation has concluded and barr has given us a report and that's what investors should focus on, what comes next with china. what comes next with the political agenda here in d.c >> what rough percentage, edw d edward, of the legal pressure on the president has varevaporated given that mr. mueller had full subpoena powers and still did not find sufficient information to bring any charges >> i think it's a significant decrease and i think one of the things that we are looking at is the relatively low risk that the
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president was going to be removed from office via impeachment significantly was further reduced from here. so you have to look at the regulations that he has put into place, or the deregulatory agenda that the president has pursued, during his administration and you have to think that that is probably stickier now than it was prior to this. you look at his re-election chances. this arguably increases those chances. so those, once again, are stickier ultimately, what we'll will looking towards is the end of the year, we need to come up with a budget deal and does the lack of kind of full, robust congressional attention on this give time for lawmakers to get more of a domestic agenda done and does that give us things that is further fiscal stimulus, further infrastructure spending. some sort of bipartisan that comes out sw, so that democrats don't just be seen as only investigating the president after they won control
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>> you think that's realistic? i mean, that's a very glass half full way to look at it, that the democrats are just going to go onboard with the trump growth agenda and start making legislation. you really think that's going to happen >> i don't think that it's going to be a kumbaya moment by any stretch of the imagination coming out of d.c. and the hill and the democrats in the house absolutely are going to continue to investigate this president. but what i look at is, come the end of the fiscal year, september 30th, we have a debt ceiling to deal with we have the budget control act or the sequester still in place. so we have to deal with the budget there's a strong desire to do something on infrastructure. so in d.c., things seem impossible right up to the moment they're inevitable. with all of those things coming together, there are a lot of members of congress who want to run on something when they face the voters once again next year. only investigating the president for a lot of the democrats from purple areas of this country is
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going to be a strong detriment to them. that might give us the formula for that surprise bipartisan compromise >> edward, does it make the president stronger, more powerful in negotiations with other foreign countries, in particular, china? >> yeah, so the china question is, you know, it could go either way. so there was a lot of thought that trump basically needed whatever deal he could get, coming out of china, because he really needed a win. now, he got his win. does that embolden him as he seeks a deal with president xi or does he want to kind of put together a series of wins in trying to really get his administration and his agenda back on track. and say, look, i beat the mueller investigation. now i get this trade deal with china. i've already given you tax cuts, that he is continuing on that pace i think it's a little bit of a wild card. our bet is that we still get a small short-term deal, that potentially breaks down in the enforcement phase.
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but this here absolutely does embolden him in the next several rounds of negotiations with china. >> ed, backlash is piling up for president trump's latest pick for the federal reserve. that would be steven moore, including from some republican very prominent economists like greg mankiw. is there any chance it's not going to get confirmed in the senate >> there is a chance president trump put up two picks last year that did not get confirmed by the senate. that was marvin goodfriend, an economist who had a track record that was dubious in terms of his predictions and what they were the outcome. and nelly yang he had four other picks that were confirmed you look at the picks too date that were confirmed. those were all probably the businessman side of the trump. the populist pick like a marvin goodfriend, now with steven moore, those are now in question i look at the vast majority of his picks and s and say those picks much more down the middle,
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something that the federal reserve absolutely has a history of doing i'm not willing to say he's in or out just yet. i just look at the senate and they have had some discretion as it relates to his picks to the fed board of governors so far. >> ed mills, thank you >> thank you still ahead here on the "closing bell," lyft drivers protesting outside of a road show event in san francisco today ahead of the company's highly anticipated ipo we'll head there for the latest, coming up. i consulted with your grandmother's doctor.
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dow is back in positive territory, up 12 let's get to cnbc news update with sue herrera hi, sue. >> hello, everyone here's what's happening at this hour vice president mike pence blasting the gaza rocket attack on israel, which is causing israeli prime minister netanyahu to shut short his visit in the u.s. here. this during a speech this morning before the american israel public affairs committee in washington. >> today's rocket attack by hamas proves that hamas is not a partner for peace. hamas is a terrorist organization that seeks the destruction of israel and the united states will never negotiate with terrorist hamas >> chinese president xi jinping and his wife arriving and greeted by french president macron and his wife. the two leaders are expected to hold talks and attend a
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presidential state dinner at the elise palace patients of plastic surgeons and the makers of the breast implants are all participating in the fda meeting today as well as tomorrow. you are up to date that's the news update this hour >> sue, thank you very much for that coming up, the dow coming off its worst session since early january, following friday's yield curve inversion a top technician tells us what the treasury moves could mean for the market going forward and today, tim cook summing up today's apple announcements in one sentence. >> from everything we've shared with you, you can see how important these services are for us and for all the ways they extend the experiences of our customers, even further. >> after the break, we will have plbull/bear debate whether ape's pivot to provide a long-term boost to the stock will pay off measure up?
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apple stock under pressure today as the company just wrapped up its big event in cupertino. apple announcing a major push into services including a news subscription service, a gaming platform, a new credit card, and
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a tv streaming service joining us now to discuss what this means for the stock is tom forte at d. davidson and company and ed snyder with charter equity research. very good afternoon to you both. tom, which of these announcements, if any, is the most important or is a game changer in your eyes >> sure, in my mind, the two most important words for today are privacy and advertising. basically, the way i see it, if you look at the $9.99 a month news service, apple is telling you, we'll give you news from trusted sources and yes, there'll be advertising on it, but we're not going to scrape your data when you use our service. and i think that is very important. and second, what they're doing with financial service, with the credit card, which is, trust us with your financial services and again, we're not going to use you for data i think that's big news from apple. >> big news and really important, tom, but for a company that is so large and needs to find growth at a time where its core products, the
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phones, the tablets, you know, some of the other products are stagnating, is it enough to move revenues >> so excellent question if you look at their last completed fiscal year, 60% of their sales were still from the smartphone and this is going to be a multi-year process but i do think that especially when it comes to advertising and essentially offering consumers an opt-in model, in this case, at $9.99 a month, that can be a needle mover over time, but it's going to take a period of transition to move away from the smartphone >> ed, what's your take on these announcements? underwomen e underwhelmed or overwhelmed? >> i'm underwhelmed. i think it's laudable they're trying to diversify their services revenue it's not a bad idea. as sara pointed out, it's going to be a massive hurdle given how large the company is in iphone and 80% of the revenue service are from tie d-dye phone so a vast amount of their earnings and profit are tied to
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iphone and if that product stagnates, and it has, you've got a long-term problem, just as we said last summer ahead of the launch >> but, services are growing very rapidly i think it's 40% of overall growth and if they can increase the chunk and the offerings available there, then, you know, they can win investors >> well, that's true, but the problem you're facing is so much of that is tied to iphone. apple care, a lot of the entire portals. apple has said repeatedly that the iphone is the gateway into all apple products and so, what you have to be concerned about here, as the iphone sales slow and if that trend continues to the next three to four years and they start to decline in terms of subscribers leaving, then you've got the opposite true. it's a gateway in, but also a gateway out. so the services revenue that's growing, largely on the back of iphone, will start to decline. you've got a core problem that you've got to address and it isn't services it's iphone.
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>> tom, you singled out the positives of apple news offering and the credit card offering were you underwhelmed by the tv offering >> i think we have to look at appletv plus as a work in process. and i think a lot of times we look at netflix and we think of some of their very popular shows, "house of cards," "orange is the new black," and we forget that their first original content was "lil'enheimer. they have steven spielberg and oprah winfrey, but the tv plus they announced, it will take some time. first you have to sign up the people to make the content, then they have to make it but i think it's underestimating to think that that won't be much bigger in the future >> all right tom forte, ed snyder, thanks for the debate >> thank you up next, we'll take a look at what falling bond yields mean for stocks >> and later, one market tractionist explains why the energy market uld cosee big declines in earnings this quarter.
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we're back after this.
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the spread between the three-month treasury bill and the ten-year yield falling below zero for the first time since 2007 on friday, creating a lot
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of angst about what that yield curve is telling us for stocks and for the overall economy. for a look at the sectors to watch in the coming months on this bond move, let's go now to jeff degraf from renaissance macro research he's at the telestrator. so what can you tell us about what the bond move means for stock? >> what the inversion means for stocks generally is more weakness than strength, certainly something we like to look at or one of the sectors that are most important, what's going to perform well, what's going to perform poorly. this takes us back to 1960 reits are the worse. info te infotech, which is something that people wouldn't expect are the worst. and i think more of what people would come to believe. consumer discretionary, financials, and come services, which are obviously telecom now. >> and what's important here, is it the fact that ten-year to three-month is inverted, but what about the fact that we've now got to part of the curve versus, but not the 30-year part of the curve >> to us, if you look back
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historically, the best data is from the three-month to the ten-year if we're looking for sample sizes, as much history as we can possibly get is good, clean data the three-month from the ten-year is the most important >> what performs well? reque >> if you take a look here, what you're going to find which isn't that unusual, you'll find things like energy does well, materials do well, because they traditionally are very, very late cycle the curve is inverting because fed is becoming more aggressive, because inflation is a little bit more out of control. that's not happening today so the way we look at it are things like utilities, they're working. things like consumer staples are working. and the one that we like a lot is health care, because we have big bases, big breakouts, they look fantastic >> and an individual stock you've picked out for us that does well? >> because i know there's some defense of defensive characteristics for people like that one of the things we like about verizon are these huge formation. it's just breaking out of this
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large base it's a 4% dividend yield the data is about three quarters of that of the s&p in our view, this is a great way to own something that's actually got relative performance, has a dividend to it relative bond surrogate. and actually a great chart that's now breaking out. >> are you looking back at data immediately after the inversion of the three-month and the ten-year because what happens immediately is not what happens in the longer term, when there actually is recession >> sara, you're right. what we do is we look at the data and say, hey, look, what happens for the next six months, for the s&p? on average, there are 16 occurrences, nine of those have been negative. 7 have been positive historically, the market is up roughly 65% of the time, over a six-month period so this clearly is a signal that something different than what you would expect historically. >> okay. jeff, thanks very much for that. very helpful, indeed jeff degraf. we have a market flash that relates to apple's credit card announcement seema mody's got the details of that seema. >> hello, wilfred.
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green dot jumping on the apple card announcements an analyst is maintaining their buy rating saying this new apple card announced today could be a potential $100 million a year revenue opportunity for green dot over time. now, g dot, as it's known, powers a peer-to-peer function within the apple pay app and you can see the stock is moving just off its highs, but still up about 3.5% back to you >> seema, thanks very much for that we've also just seen an internal memo that solomon sent out to his employees. he was at cupertino in the event and was partnering with apple on that credit card he said, we're excited to partner with apple on the card, which is designed to be truly on the side of the customer this partnership is a major step in the growth of our franchise, furthering our vision to create the leading digital platform the one thing that jumped out to me, sara, when they were announcing that part of today's announcement and moved on to, if you don't
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pay with your phone and you want to pay with a card, here's the new platinum card. it only had the apple logo on it, not the goldman sachs logo but for david solomon saying here, for furthering our consumer franchise, remains to be seen how many end users will be aware that goldman sachs is powering this and whether it really alters that branding to the consumer but nonetheless, a big development for them >> i guess they're going to get a cut? so when he calls out marcus, he congratulates team marcus at the end of this e-mail >> and ting interesting thing on the card overall is up-front, there's no late fees it's going to give 2% cash back if you pay on the apple pay, 1% if you pay on it but immediately that day on the app, and pure cash it's not points airlines or points for something else. what i imagine this will do and shake out in time, because it's going to be so clear how much they're giving back that other credit cards will have to at least match that amount of value
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of cash back and perhaps also offer pure cash rather than points, which some due already. but no one does it so quickly, the same day, on the app so it's easy to track. so it will just increase what is already a very competitive market nor credit cards. >> also, no late fees. by the way, goldman sachs is lower, but doing better than some of the other financials >> not much move in the banks today. apple is the one that's interestingly low while netflix is up. when we come back, three names a top strategist says to buy in this market, next [leaf blower] you should be mad at leaf blowers. [beep] you should be mad your neighbor always wants to hang out. and you should be mad your smart fridge is unnecessarily complicated. but you're not mad, because you have e*trade which isn't complicated. their tools make trading quicker and simpler. so you can take on the markets with confidence.
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don't get mad. want more from your entejust say teach me more. into your xfinice remote to discover all sorts of tips and tricks in x1. can i find my wifi password? just ask. [ ding ] show me my wifi password.
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hey now! [ ding ] you can even troubleshoot, learn new voice commands and much more. clean my daughter's room. [ ding ] oh, it won't do that. welp, someone should. just say "teach me more" into your voice remote and see how you can have an even better x1 experience. simple. easy. awesome. nine minutes to go in today's trading session. joining our "closing bell" exchange, oliver persia and cnbc's rick santelli rick, we'll start with you big headline ten-year yield falls below 2.4 what do we make of that? >> well, you know, there was a lot of spread between where we're at now and the low yields on the day and i think that merits discussing right off the get-go. so we had a 237 low in tens, you're right, it's now 241 a second ago it was at 242 and as it sits, it's down three. but if you look at the short end
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at two-year, it's hovering now down seven and not at its worst level. at its worst level, it was down nine why do we bring this up? because the three-month bill hasn't really moved much, but the rest of the curve is so as two-year note yields keep going down, it exaggerates the conversions on the short end, but steepens the two to tens curve, which have moved a little bit higher the last couple of sessions so if you're nervous about the yield curve, you really have to pick where you're spreading your anxieties, because the curve has all types of wiggles the best way to summarize, sara, is this. many say, oh, forget the yield curve. it's distorted by all the foreigners that have negative interstates that are enamored with our positive yields here in the states but that doesn't dismiss the negativity of it it might explain part of the curve. we still have a global economy that's slowing and that is represented by a lot of foreign buying coming in, pushing our rates down and that is contagious into the u.s. so i think the ongoing issues will remain the same
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but i do have one thing to say that's positive. this mid-230s area could prove to be a good support level i call it the reconnection if treasuries start to find places to hold, even with the big drops. a week ago, we were at 260s in 10st, that the treasury complex would send a much more positive signal to equities, even though rates are lower, even though they stop falling. >> oliver, does this move in yields that rick has just gone through make you cautious to own u.s. equities? >> we still like u.s. equities over foreign equities. but, yes, we're generally cautious we don't think that the market is going anywhere in the next month or two i think you've got to get through earnings season. french quarter earnings are expected to be relatively weak year over year down about 4% but underlying economic data continues to be fairly strong. so the analysts could be wrong here and if we see a lot of good upside surprises in spite of what fedex did a couple of weeks
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ago, then you could see another rally. but i think right now, it's wait and see. and certainly, the bond market is not saying anything positive about equities >> jeff degraf moments ago looking at the charts was talking about the positives for verizon in this kind of environment. you like it for the fundamentals, as well? >> yeah, we like it. if you're going to sit somewhere, there's no reason to sell to communications services. it's relatively undervalued. verizon has a great dividend so you can earn 4%, which is significantly above the ten-year treasury for the rest of the year, with probably, you know, very little downside in terms of where markets sit, because right now, we're somewhere around fairly valued. >> so are your other picks as defensive? >> they're a little bit more defensive, actually. cost coast co is a stiock we liy much it's a recession-proof company if things do slow down, that's the type of stock that is going to potentially perform well and has done well in slowing, but non-recessionary environments.
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so that's done well. and dollar tree is almost like the worst-case scenario type of pick, that if things really slow down and, you know, the pessimists are right, then that's the type of stock that obviously does well, because sales grease sbrooincrease in t types of markets >> thank you both for joining us, oliver and rick. still to come, we will have the close with five minutes left to trade >> after the bell, can apple compete in a competitive media world? former discovery president john ford will be here wghn. longel will be back after a quick break.
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don't get mad. get e*trade, dawg. welcome back to the "closing bell." two minutes left of trade. a big day for apple. lots of announcements. what's it done to the stock price? down 1.5%. but it's a fantastic start to the day, a fantastic last couple of weeks interesting seeing netflix up, though, 1.5% perhaps not as much of a threat to them as people feared as for the broader markets, essentially, we're flat. it's been up and down, but not too big a spread up a hundred, down a hundred on the dow as we approach the close. we are up slightly on the dow, s&p is just lower, as is the -- nasdaq is now flat as well so nothing too much happening there. ten-year treasury yield, that's the big mover, down below 2.4%
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about an hour ago. just above that level now. below 2.4 is the trough. 2.63 was the high interestingly over that two weeks hasn't done quite as much as the yield and as i bring in bob pisani, i bring in the sector. albeit, we're around flat. >> you're going to hear a lot about that high dollar when we get into earnings season in a couple of weeks. but to show you how obsessed the markets are with interest rates today. as treasury yields moved down in the middle of the day afternoon eastern time, the market moved down and as treasury yields moved up late in the day, a little after 2:00 eastern time, the markets started to recover look at that chart that's a very -- where do you see that kind of correlation with the yields and the stock markets? >> strong correlation, but the size of the move in yields is much bigger than the size of the yields -- >> you get my point here the market is watching interest rates above all else >> financial banks had another weak day jpmorgan, most of the region banks were down somewhere close to 1%. by the way, i thought it was
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interesting with apple credit card, we saw even some weakness in the credit card companies, sink r all down about 1%. >> and the knnikkei down. we are down around about five basis points on the s&p. up about that mmt on the dow the nasdaq essentially flat. so ending the day right in the middle that does it for us. sara, back to you. welcome to "closing bell." i'm sara eisen wilfred frost rejoining me in just a moment along with mike santoli. here's how we finish up the day on wall street quite an indecisive day. up and down, certainly for the dow. closed up, by just about 15 points higher. by the way, apple did close off the worst levels of the session. boeing, interestingly, the
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biggest winner and point contributor. s&p 500 ending pretty much flattish you had some strength all day in goods like consumer discretionary and industrials, even utilities and real estate, but technology, financials, communication services, all lag. the nasdaq also flat and the russell 2000 index of small caps outperformed actually good for gaining almost half a percent on the day. by the way, we're in the last trade weak of the month of march. everybody's up except for dow. tech and utilities, an unlikely pairing as top sectors this year and now unveiling new services for news and video stereaming. we'll talk about all of that katherine vera at voltek capital markets. first, mike santoli, flat on the major averages what stood out to you underneath the surface? >> the market a little on edge i agree with bob, very fixated
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on treasury yields what did rise to the surface was the fact that bank stocks finished pretty flat on the day. i think we have to be alert for this idea that maybe treasury yields are getting stretched to the downside bullish sentiment towards treasuries is pretty high right now. it seems as if we're ripe for a little bit of a reversal in a dynamic for now. otherwise, though, s&p, trying to hang around this 2,800 level and see if that's going to be a little bit of a support point on the downside, the way it was so sticky on the upside >> outperformed the rest of the world today, as well, mike and yes, a big fall in yields, but that didn't spook markets to the same extent that we were talking about it last week >> it seems as if prfriday in particular, there was such a concentration in particular over this inversion in the yield curve, i think it's a matter of, okay, there's no real new information. it's not as if it's telling us something new about the economy. obviously, the bond market seems to be wanting to price in a rate cut this year, but i think, if
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you look back five months at how the bond market was positioned, and you had the ten-year at 2.3, and you had the spread between the three-month and ten-year at 90 basis points, was that telling us the economy was going to be really strong in the next five months? not necessarily. i think you have to kind of rethink exactly what the coherent message of the bond market is. >> and therefore how to position in stocks, katherine last fall, the question we were asking all of our guests was how do you position for a world of rising rates now, how do you position for a world of falling rates >> that's true and i tend to agree with mike's analysis i think that u.s. treasuries potentially did see an overreaction if that's the case, financials do look cheap right now on a tactical play. the market seems to be positioning itself in favor of utilities. let's see for a second, let's think if the fed doesn't cut and economic growth does pick up or even stay pretty good, then we
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will get u.s. ten-year yields rising and financials outperforming. so look, i think there's a lot of guys looking to reposition their portfolios, defend their profits, you know, the market has rallied in a tremendous way since december when we recommended our clients go long. at this point, what we're recommending now, sara, is really protecting your profits and really getting more defensive. >> speaking of defensive in utilities, despite faltering at the end of last year, tech stocks has had a massive run-up with f.a.n.g. names like microsoft all seeing double-digit gains mike, you've been looking at the unlikely winners in this market, tech and utilities, you don't usually think of them in the same sort of psychology around the market >> it's a little counterintuitive, but tech, in this case, megacap tech serves as a little bit of a defensive function what i read it as, the market is searching and rewarding stable clothes, long-term assets that are going to deliver a stream of clothes, that does mean
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utilities, that does mean real estate investment trust, and it does mean these big-tech platform companies the question to me is whether, again, we've kind of overemphasized that theme and now it's a rate reversal and it's saying, while we have lack of clarity about the pace of the economy and about trade, maybe we can kind of hide here for aed by and have the tape hold together on some of these yield plays and strong cash flow plays. that seems to be what the message is for now i just don't know how much we can extrapolate this out in a few months >> katherine, what do you make of that slightly odd balance of defensive, that there's some growthy, speexpensively valued c names in there and what are some of your preferences for that defensive-likistic >> it's a really interesting piece the one that mike wrote on cnbc it's an interesting dichotomy between the outperformance in tech and utilities and i think it comes down to,
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where does the market feel comfortable? where do they see cash flow going out in the future. at some point, we are going to get that recession, whether it be in six months or two years from now where their money is safe. so that's where we're seeing, we're seeing the likes of the bond proxies, really outperforming. and i think that's a smart play over the long-term, over the year, two-year time frame, positioning one's self for that downturn but in the meantime, we don't want to miss the upside. we don't want to fall into that trap where we say, u.s. recession is around the corner, when, in fact, it's not. you have to be careful about how you interpret the yield curve inversion and the role that the fed's hand has played in that. so i like the tactical position of looking at financials right now, valuations are extremely practical, while protecting your portfolio with low correlation asset purchases, with buying the vix, puts on the s&ps
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these are ways you can defend a portfolio. >> let's move on and talk about apple announcing several new services today, including a video streaming service. j josh lipton joins us now with his take >> reporter: so, wilf, tim cook took the stage right behind me at the steve jobs theater. but his focus was not on his bread and butter iphone or hardware, but his focus was on that faster growing higher margin services business and the star of the show, wilf, certainly had to be that new video streaming service that apple launched today it's called appletv plus, featuring original shows, movies, and documentaries from hollywood a-listers that were here today, talking about new shows like steven spielberg, reece witherspoon and jennifer aniston, jason mamoa and oprah pricing will be available later this fall. additionally, apple debuted an all-new appletv app. that's coming in may, where
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users can subscribe to channels like hbo, showtime, and starz. apple also announced apple news plus this is a news subscription service. it's going to bring together over 300 magazines and leading newspapers like "the wall street journal" for $9.99 and apple card, which apple bills as a new kind of credit card, built into the apple wallet app on the iphone, as well as an actual physical credit card designed to work where apple pay is not accepted. finally, apple teasing a new series towards gamers, too they call this apple arcade. this is a subscription service that will feature over 100 new and exclusive games launching in the fall of course, all of this coming as we know apple's core iphone franchise has been under some pressure iphone revenue fell 15% in the holiday quarter. so apple has been touting services as a kind of bright spot, as services revenue did jump 19% and nearly $11 billion in that same holiday quarter guys, back to you. >> josh, stick around. we want to also bring in julia
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boorstin and kevin delaney who's editor in chief. julia, if i start with you, what's the big wow factor from the media world with the announcements today or any of the big surprises? >> well, look within i think, wilf, that there is certainly a lot of wow factor around these big celebrities, who are on stage. but it was notable that apple did not give any pricing, just saying that the service would launch in over a hundred countries this fall. so definitely, when you have names like steven spielberg and oprah winfrey together on stage, that does seem meaningful. i do think that perhaps what's even more interesting is this idea that apple wants to be the base of your bundle. they're offering subscription services they're going to take a cut of that revenue but they also want to be an aggregator for everything that you pay for, when it comes to content, including old-fashion paid tv or the streaming skinny bundles. so certainly an interesting opportunity for apple to be the destination for all that content there. >> i mean, kevin, there was a
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lot of disappointment around the fact that they did not announce the price. that was going to be the big surprise going in. did anything else surprise >> yeah, i think there are still a lot of details to be determined and what they did announce today makes a lot of sense for apple but it's what's people have been expecting for years. basically, appletv plus is like a smaller netflix and the apple channel is very similar to the amazon prime cable bundle, which would let you buy tv channels a la carte and so they had steven spielberg, they had big bird don't forget big bird and oprah and some others there. but i don't think there are a lot of surprises in terms of their television offerings >> on that point, amazon prime has it, hulu offers its ability through an app to get these type of channels. is this a game changer, therefore, on the tv side, or not? >> i don't think it is a game changer. i think you can around underestimate apple. what apple has done, time and time again, is actually copy services that other people have offered, do them better, bring more design and more integrated
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experience and succeed with them but i didn't see anything today that i thought fundamentally changed the game that we didn't know a few weeks or a month ago. >> i guess the edge for apple is that they have 1.4 billion people already using their phones, which gives them a big leap against a company like an amazon or a netflix or whoever they're competing against. >> exactly no other competitor has that many customer relationships. it's a bit of a head start they're going to deliver to you maybe in a smarter way things you already use and need and take up your time and money on devices. and that makes a lot of sense. it's a very long game. and what i also think gets lost sometimes, people saying, is it enough to go up against netflix? netflix last year had 6% of apple's revenue. so none of this is make or break for apple. and even if you look at mastercard and visa -- [ inaudible ] >> to come to you, yes, they've got a massive already in-store
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user base, but when it comes to the tv service, does that make a difference, given that this is going to be an app that's available on roku or on smart tvs, et cetera >> i think it's critical -- >> i'm sorry, go ahead >> i'm sorry >> i think it's critical that this is being allowed to be streamed on non-apple devices. the 1.4 billion, that's a tremendous distribution channel, but the fact is, this is video content. apple needs to differentiate itself and it's facing a ton of competition. you have disney launchi ining l this year and netflix investing $15 billion a alone this year and you have amazon prime and spotify. you have a lot of competition in the space. and i think that apple needs to really offer this to the smart tvs, to the competition, samsung, to really get in the game my question, is this really going to be a netflix killer, like they're saying it could be? >> josh, just to come to you, final word, same question in terms of the install base, but also your take on some of those
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other announcements like the credit card? >> eah, the credit card was certainly interesting. that got some oohs and ahs in the audience that titanium credit card. it will be interesting, certainly maybe oopt revenue stream for apple i think there are skeptics who question, is that what people want right now do people want to carry around another credit card? i think taking a step back, you guys mentioned the install base. and i think this is what it really is about, if you want to get a 30,000 foot view it's an install base of 1.3 billion active device out there. and tim cook knows he's got to offer new products and services to keep these people happy, loyal, and engaged if he does that, it limits or discourage them from hopping to a new platform it also, if this content is really as compelling as steven spielberg is hinting at, and the price is right, maybe down the line, that gives people another reason to buy those iphones, too. guys >> i just wanted to get your thoughts on the news feature, in particular because you were at "wall street journal".com and now you're part
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of this business, of course. is this revolutionary? the more i read about it, it's not going to be the full "wall street journal." we still have to pay for that if we want to read the finance, i guess, and business stories? it's more of a general -- >> that's what's being reported, is that the business news, the core offering that there's a journal memo internally sent out saying it's not included in the bundle i think that the news offering today is a big deal. and i think you see "the wall street journal" only putting part of its offering in there. you see "the new york times" sending it out you see "the washington post" sitting it out and that i think publishers are concerned that apple is going to spotify them that apple is going to have all of the customer relationship and they're going to lose the power with regard to their brands and with regards to their users. >> we're going to have to leave it there, guys fascinating debate and conversation katherine rooney vera, kevin, josh lipton, thank you all very much a roller coaster day for nike stock shares, sharply declining when attorney michael avenatti tweeted method evidence
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nike madeimproper payments to high school baseball players avenatti was formerly the lawyer for porn star stormy daniels who claimed she had an affair with president trump. but nike shares quickly rebounded when moments later federal prosecutors in new york charged avenatti for trying to extort nike for $20 million. nike responding to us in the last hour saying, quote, nike will not be extorted or hide information that is relevant to a government investigation nike has been cooperating with the government's investigation into ncaa basketball for over a year when nike became aware of this matter, nike immediately reported it to federal prosecutors. when mr. avenatti attempted to extort nike over this matter, nike with the assistance of outside counsel at boies schiller flexner aided the investigation. boy, mike, was that a wild hour of news. >> it was a quick 180. >> i guess the upshot for nike is, it doesn't mean much if it's coming from avenatti, who is now charged by new york and l.a. federal prosecutors. >> it doesn't mean much.
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i think, also, the market probably said, well, if nike was this quick to go to the authorities on this, they clearly are not afraid of kind of opening up the lid on some revelations about their dealings with athletes that they would be ashamed to have out there, right? i think that's another takeaway. because a lot of people initially said, well, even if he was extorting the company, maybe there's something at the root. but the company said, no, we have to get above board and go to the authorities on this, maybe there's less to worry about. >> the stock steeg theeing that intra-day dip, but extending >> kind of a bonus for the president, as well between avenatti and mueller >> some tweeting coming from his family members, not yet from the president. >> don junior is celebrating still to come, much more on apple's move into the media industry we'll discuss whether apple can be one of the new winners in the increasingly crowded video streaming industry >> but first, lyft drivers striking outside the investor road show in san francisco
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welcome back hosting an investor road show in san francisco today, even as some of its drivers go on strike, right outside of that
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location deirdre bosa has the details for us hey, dee >> reporter: you said it inside this hotel, lyft is continuing its ipo road show, meeting with potential investors to sell them on the company ahead of its anticipated debut, widely expected at the end of this week. outside, though, it was a very different picture. not long ago, there was a group of about 50 uber and lyft drivers all protesting the company's policies >> then we need to be paid a fair wage in order to be able to afford those things on our own >> what do you want? higher wages benefits >> transparency. we want to know if our -- if next week we're going to get paid 20% less than we got paid last week. >> to expose, to protest, to stand up for a living wage, a voice in our work. some transparency in the app regarding its treatment of drivers. and some simple benefits or a path to those simple benefits. >> a gentlemen with a loud speaker was chanting "meet us
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outside instead of taking the back door in." he was referring to the investors inside who are trying to figure out how to value the company. now, some of the prfotesters did acknowledge that lyft has treated its drivers better than uber one driver telling me that at least lyft was willing to meet with them face-to-face and uber was not. another, rebecca, said there is no difference between it she said that lyft is uber in a pink sweater with better pr. this is a story that is going to play out over the next week leading up to lyft's ipo and the next few weeks leading up to uber's anticipated ipo because the drivers, even if they are allowed to some of them participate in the ipo by buying some shares. they have contributed to the rise of the platforms and some have argued that they just have not been able to share in the wealth guys >> deirdre bosa, thank you up next, we will head to the telestrator and break down the charts to see -- >> will we all of us?
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>> i think it's a santoli thing. he's going to look at whether this month's chart decline this fr treasury yields is flashing a warning sign for the markets excuse me, not we. >> the telestrator legend, mike santoli will and tesla shares under pressure after concerns about the model 3. details, coming up 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. the global investment management what do advisors look for don't just track an index, help me meet a client's need. is the fund built to sell or built to last? etfs are only part of a portfolio. so make it easy to explain. give me a quality fund
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fears of a global slowdown continue to weigh on the minds of investors as the dow comes off its third negative week in four weeks
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some market watchers believe the recent slump is just a soft patch that will soon firm up while some believe the markets are looking at more profound trouble ahead. mike santoli at the telestrator with more. which is it? >> you know, which is it well, which is correct, right? the stock market actually, by this rendering, is telling perhaps a more worrisome story this is from morgan stanley, mike wilson over at morgan stanley. the blue line is pretty clear. ten-year treasury yield. the orange line is the ratio of defensive stock sectors, cyclical stock sectors to defensive. in other words, as this line goes down, the market is growing more risk averse, huddling towards those safety srveectors the stock market seems to be leading bonds in this respect and maybe that means that perhaps the slowdown theme will stay around or get more intense, because you do have this gap right here i'm not necessarily sure that that matters, because we are at such low levels in the ten-year treasury yield it's hard to know if that's going to link up specifically.
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but there's no doubt that the market for some time has been huddling in this direction and it's done this in the past, where we've had this kind of earnings trough or flat lining of earnings. the rest of the world is slowing down the market goes for these types of stocks and the bond market gets a bid and it just sort of waits to see if it gets those estimates going back up. that to me is the suspense in the market right now, how that happens? >> how do they define cyclical versus -- >> it's not just sectors it's those stocks that require a better economy to have their earnings leverages pick up or vice versa >> here's the things about bond yields yes, it reflects the global slowdown but maybe it more reflects all the central bank action. last year, we had a whole story about global slowdown, as well that was when china really started to meaningfully slow it wasn't until this year that we started wringing our hands over inversions. >> very true no doubt that there was some role played in that.
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and the fact that there's $10 trillion of negative yielding bonds in the world and it drags everything in that direction and that central banks failed to get inflation rolling. and that could just be what the bond market's message is, really >> the other point today, the move in the ten-year was not led by international yields. the german ten-year went negative briefly on friday it's still there or thereabouts, but a big, big move lower in the u.s. relative to the rest of the world. >> i think there are a lot of folks that say there's a technical target at 235 for the ten-year and it seems to be just extending this move right now, and we'll see if it settles out anytime soon >> time now for a cnbc update. sue herrera has a first for us >> here's what's happening at this hour. israeli air strikes destroyed a number of buildings in gaza city in response to a long-range missile fired from gaza that hit a house in central israel the israeli military said the building was a secret headquarters of the hamas terror organization all of hamas leaders went into
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hiding before the israeli air strikes. new zealand's prime minister announcing a top-level inquiry into the circumstances surrounding the massacre of 50 people in two mosques earlier this month >> but questions, of course, need to be answered around whether or not this was the activities of an individual that we cou we could or should have known about. and the agencies are welcoming independent oversight or investigation into that very question >> back here at home, the father of a sandy hook elementary school victim has died of an apparent suicide this morning. police say dr. jeremy ricman was found dead at his office his 6-year-old daughter was killed along with 19 other children at that school in december of 2012 you are up to date that's the news update this hour sara, wilf, i'll send it back downtown to you. >> sue, thank you. we have some knew to tell you on peloton
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d diana olick. >> last week, peloton was sued for a number of small publishers with copyright infringement on the music it streams live during its peloton classes. and a note just went out to members today. i happened to get it because i am a peloton user. and by the way, comcast, nbc universal is an investor in peloton, let me just get that off first. but it's from john foley, the ceo and founder of peloton i want says, members, as i'm sure you've heard and are aware, a complaint was recently filed against peloton by a small group of music publishers. it's important that you hear directly from me on this peloton respects the rights of all artists including performing song writers and the filing is disappointing after it appeared what appeared to be fruitful discussions. we have decided to remove classes that feature songs that were identified by these publishers many of those were very big names, names like katy perry and others like that so, again, he also says that the
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fee for peloton will not change, regardless of these songs and these artists being removed. as a lot of you know who may use a peloton or the peloton treadmill, that music is a big part of the experience, the live streaming classes. you can also get them on-demand with the music they've also got, you know, favorite play lists, as well, and they do feature the music, showing what song comes up during each ride so the peloton lawsuit, i guess, continues. but that was the message from john foley, the ceo and founder. back to you guys >> diana, thanks it's interesting to see, might be a small publish eveer, but s some high-profile names that they won't be able to feature in these classes. my question is, do they have existing agreements with the other publishers if they do, it sort of implies some wrongdoing with this particular publisher, not least the fact that they've taken action, even though around an abundance of caution to take the music off. >> i don't know if you can say that it implies that obviously, this case will go to court. but peloton has agreements in
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place with all of what are known as the major publishers, record labels and performing rights ofr organizations. these agreements provide licenses to a broad catalog of music that our instructors can choose from to program great classes for you. so they do have agreements in place, but obviously this lawsuit will be ongoing. >> diana, thank you. up next, apple getting into the fairly crowded streaming video space. we'll look at whether apple can succeed against companies with a big head start in that market place. and a new horror film scaring up record results at the box office details later on "closing bell."
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apple unveiling its new streaming service appletv plus in a star-studded presentation today, featuring oscar-winning director, steven spielberg, actresses there, jennifer aniston and reece witherspoon, and of course, the one and only oprah winfrey. so with a lineup like this, can apple make a dent in the competitive streaming landscape? let's bring in john ford, former president of discovery, and vincent cordero, former executive at hbo, fox, and
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univision, and cofounder and ceo at one road media ventures gentlemen, thank you both for joining us so john, what are your expectations for apple in this space? >> well, three things that occurred to me when i watched the announcement today one is that they're sprgenterina very competitive space and somewhat late to the game with netflix with a substantial lead, hulu, amazon prime, disney plus going to launch and warner media as well, cbs all-access, and some others. that's a lot of people grasping for money from our pocketbook. and we don't have an endless supply of that the other thing is, it's expensive. reece witherspoon, steven spielberg, oprah, jennifer aniston are not cheap. and my sense is apple is probably overpaying a little bit right now in order to get a jump and a big splash but at soim point, they're going to have to look at the bottom line and paying for these productions and the costs of the talent andover seeing them, they become a network production company as well now, is going to be incredibly expensive. so they have a lot of oversight and a lot of staff ahead of
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them finally, it's complicated, because a lot of people they'll be competing against with appletv plus and the other service are their partners in content distribution so how do their relationships with cbs, warner media, and the other big content companies work out going forward? so i think it's an interesting thing. i'm glad they're doing it. it's great for production companies have somebody else making really good tv, but i'm a little concerned about how their profit margin will be hit. i look at netflix's profit margin, gross margin is 27%. apple's is 38% i think that this business will trend more toward the 27 than the 38 and that can hurt their overall profit margin. >> vincent, as john said, there's going to be aspects of this, the tv plus part in particular that's expensive for apple. therefore, is the appletv part the central area to watch various other bits of content in an easy-to use way
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is that the more important part? >> i think you look at them both if conjunction the other advice i would give would be, long-term, strategically, if the question is, can apple be successful, absolutely, for four reasons first i would tell you, apple is the richest company in the world. 250 billion on hand, $60 billion in net income last year. second reason, global, 1.4 billion devices worldwide. with regards to that globality, you look at china, it's the number of one app store in china. also, it represents a quarter of all mobile devices in china. third, they have a proven track record of selling subscriptions. to their own apps as well as third party apps and 50 million of them, of that 300 million that are active currently, 50 million of them are for apple music, which launched seven years after spotify in 2015. and lastly, i would go back to china. they give a hint when they talk about their content being family friendly very much in line with being able to play globally,
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particularly in china. and the reason why that's important, clearly is we know the market place in china is huge and also, from a point of differentiation, amazon is not in china, netflix is not in china, and disney currently does not have a branded media service in china which is also a very strong point of competitive advantage for apple. so i would say apple long-term, strategically, is in a very strong position to compete globally in the media, entertainment, and content space. >> john, you mentioned how competitive it looks and how crowded, perhaps, and expensive. but is there a way that down the road, everyone seems to say, well, somebody needs to knit all of this together and rebundle all of these apps and services that apple could be one of those players? >> i agree with vincent that long-term, the strategic play is good it was necessary i've never seen it happen before now. i'm just conservative about smochb the costs that go into it however, when you look at the possibility of simplifying the
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television/video experience for consumers, apple could hit a home run there right now it's complicated it's getting more complicated with all the apps and channels of devices and set-top boxes and and they're becoming the set-top box with the app and offering you a network, appletv plus, and a suite of apps and other things think of them like a big distribution company with all of these connections to people via phones and the ability to use somebody else's pipe, the ability to get the cable signal into the house, to get what, in effect, is a miniature set-top box that sits on your phone, your tv, your mac, and your ipad i think it's a really interesting development, they're going to change the ecosystem and long-term it's going to be great, but watch their margin with this launch >> we will john ford, thanks. and vincent cordero, thanks, too, as well >> thank you major changes. that is what boeing is planning this week for its grounded 737 max 8 jets in the wake of those two deadly crashes recently. we'll tell you what exactly
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they've got in store, coming up. uber making a key acquisition before its expected ipo. the details on our radar segment. that's next. they have the investment expertise to unlock opportunities other advisers might not see. learn what a cfa charterholder can do for you, at dear tech... you've been making headlines. smart tech is everywhere. but is that enough? i need tech that understands my business. i need tech that works at scale. dear tech... dear tech... dear tech... we're exploring quantum to develop next generation energy. we're using blockchain to help make sure food stays fresh. we're using ai to help create more accessible health care. we're using iot to create new kinds of digital wallets. let's see some more headlines about that. let's expect more from technology. let's put smart to work.
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does your wealth a cfa charterholder does. they have the investment expertise you need for the ambitions you have for your wealth. learn what a cfa charterholder can do for you, at welcome back here are some stories on the "closing bell" radar today i've got one a new report says uber is planning to buy its dubai competitor for $38 billion they have 33 million registered users.
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after as of october, the company was valued around $2 billion the potential deal comes as skpooush rival lyft prepare for highly anticipated ipos. annoying annoyingly, we don't have a look at ca careem's investors includ daimler, the parent company of mercedes and it shows that aspect that uber, versus lyft, the global player economies of scale, can it take on the rest of the world it shows they're having to buy a rival in the region rather than having to take it on organically. >> that might be an easier way of policy issues and regulations that they face >> and proper padding their membership numbers before an ipo. >> which might be the right way to do it, but it does show it doesn't necessarily mean that uber has been able to take over the world organically. and some of those region have really interesting dynamics for ride sharing because car ownership is much lower already. and so, as they kind of take this on, it might grow much
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quicker. >> two snack brands to tell you about, frero and hostess brand front-runners according to the company is putting in their final offers for the brands on thursday a deal could value those brands at $1.5 billion. however, people familiar with the matter say a potential deal still more than a week away. kudos to the team for continuing to reporting on these incremental deals from consumer staples, as they try to get rid of some of the brands they destroyed. i mean, we went back to the -- >> the year 2000 >> 2000, you know, this was a huge acquisition of keebler, for $4.4 billion and now they're going to spin it off as part of a package with -- for $1.5 >> yeah. >> about a third of it >> it shows you those legacy >> and nobody's keeblers anymore. keebler elves are not even a thing. >> not really. not a thing, right >> i don't know. i haven't had them >> jordan peele's new movie "us" snagging the third best debut
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for a horror movie ever. the movie brought in $70 billion compared to earlier estimates of $50 billion. "us" comes in right behind "it" which brought in $134 million and "halloween." obviously one lesson, "us" and "it," name it after a pronoun, scary movie. i did see it -- we saw it, they loved it it's truly scary and violent very well made, it's got a lot to say their brave, except for the younger one, who couldn't sleep in her own bed so i was on the couch last night >> well, either way, they make a lot of money, these movies. >> and people still want to go to the theater and see them. >> they're not expensive to make and make a fortune, but not for me i don't get it i don't get it why put yourself through the -- >> people like it. >> you're a little bit of a wimp >> i am. >> up next, find out whether -- find out whether president trump's win from the mueller report could embolden his negotiations with china on a trade deal what do you look for when you trade? i want free access to research.
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president trump claiming victory after attorney general william barr said the mueller report does not conclude the president committed a crime. eamon javers has the latest for us in d.c. eamon? >> yeah, wilfried, that's right. there's a real buoyant sense among staffers here at the white house. they've had a big political victory here and they know it. the president even went out of his way to answer a question from a reporter earlier today about robert mueller, asked if he believed that mueller behaved honorably during the course of this investigation the president said, i do believe that that's a real turnaround here for a president who has otherwise lambasted mueller and his team as a disgrace, as 13 angry democrats during the course of the investigation. today, though, a different tone
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from this president. but the president did take a sort of ominous tone when talking about the people who supported the russia investigation, using strong language to suggest that he might take some measure against people that he didn't name here's what the president had to say. >> there are a lot of people out there that have done some very, very evil things, very bad things i would say treasonous things against our country. we've gone through a period of really bad things happening. those people will certainly be looked at. >> reporter: so the president there saying people have done evil and treasonous things in the pursuit of the russia investigation and saying that they should be looked at not saying specifically who he's talking about there. and not suggesting what measures he's prepared to take against them, but the president venting a little bit on some of the people he feels supported this investigation, which he has said never should have happened in the first place, guys. back over to you >> eamon, thank you.
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so how will the mueller report impact china trade negotiations? let's bring in our own kayla tausche, who has been covering that part of the story kayla? >> well, sara, certainly, you have a few schools of thought here on one hand, you have people like dan potentially may feel the heat to get a deal quicker because they realize president trump is going to be on the other side of the table from them for at least two but potentially six more years after this but then there are a few other forces that are converging you have the looming campaign season ahead of which the president wants to see a record stock market and wants to see trade issues resolved and the white house wanting to move on to start selling the u.s./mexico/canada trade agreement. that will be president trump's signature trade treaty then this global slowdown, a foot in the market, certainly something that is being dragged on potentially by uncertainty about trade and that's at least one lever that could move in favor of the markets if, in fact, it does get done a few different things happening
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at at once you could have china saying we need to get a deal now the president, president emboldened >> okay, thank you so much kayla tausche in washington. more tough times for tesla as sales drop and analysts forecast t nbe'll tell youheumrs all to come. you should be mad at forced camaraderie. and you should be mad at tech that makes things worse. but you're not mad, because you have e*trade, who's tech makes life easier by automatically adding technical patterns on charts and helping you understand what they mean. don't get mad. get e*trade's simplified technical analysis. frstill, we never stoppedss wamaking it stronger..
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boeing, the best performing dow stock as they try to recover from the grounding of its 737 max planes, phil lebeau with the latest. >> a big week for boeing in part because they'll show pilots, their customers some of the fixes they have been designing for the 737 max so let me bring you up to speed in terms of where boeing is. they showed pilots from southwest, american and united, the pilot, they showed them that over the weekend and have yet to submit it to the faa for formal review and certification which is expected to take a week or two. 200 pilots and regulators will be briefed on the software updates and pilot training changes. that will happen on wednesday. meanwhile, out with a note today
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saying the max technical issues look fixable with the u.s. or grounding i should say lift possible in 6 to 12 weeks. they won't go away but get pushed back. keep in mind this is a company that right now is slowing down work at the plant and adding buffer days and airbus announced a massive order today, 300 airplanes, book value about $34 million. now, look, that's ultimately not what it will be, there are heavy scoupes with huge orders but a big one china placed with airbus today. >> what was the plane in particular was it a rival. >> yeah. it doesn't say which ones could be the a-320 neoor a321. that's a massive order, will >> and back to the point, 6 to 12 weeks you said that analyst
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said when it could be fixed. is that their take on just boeing saying we fixed this or when also the faria lia lifts i grounding. >> they submit it for the software fix that will take a week or two for them to look at. they've been in communication and likely certify it but then that does not mean that the grounding is lifted. then the faa considers lifting the grounding. that's likely to take well into april if not foo may and then you've got some of the foreign entities whether it's europe, china, canada, they want to look at the fixes and consider for themselves if they lift grounding of 937 max. >> and there might be need for pr to get customers back on board. let's talk tesla under pressure after a price target cut what can you tell us about the reasons behind that? >> yeah this, is from rbc capital. they're saying what a lot of analysts have been talking about and heard others put them out
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similar to this. they lowered their price target for tesla dropping it down to 210. it was 245 cutting estimates in terms of q1 and full year earnings and the q1 delivery estimate have cut it by 10%. essentially saying, look, they've had a lot of issues whether with shipping vehicles overseas or the pricing on the model 3. you no longer or you don't have the tax credit so you will have fewer deliveries in the u.s. all of that coming together along with tighter margins it just has them saying let's pump the brakes a bit on tesla and that's why they've cut their price target. >> you know, i mean the tesla share price move is so interesting, phil. some of the reasons you laid out, they've been plaguing tesla for years, even throughout the run-up in the stock. deliveries and production problems and getting the pricing right. maybe not to lower the price what has changed psychologically
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because it's in a pretty big downturn. >> the model y unveil did not have much of the buzz that we've seen in the past with other tesla vehicles when elon musk has rolled them out and i think there's the realization, maybe not with wall street because they've talked about this for awhile but maybe with the broader investing public that the margins are going to be pressured at tesla and this is going to be a tough year, a lumpy year in terms of deliveries and all of that combined has taken the bloom off the rose so to speak for tesla's shares >> okay, phil, thank you so much for joining us nothing groundbreaking and new. >> what's new, they've been profitable >> right it's almost as if, yes, these were the same long-term issues but i do think the stakes are higher as they get to this point where they're really supposed to be operating at scale and proving they can sell a fair number of these vehicles at the cost that they were saving they could. the stock, though, you mentioned, it's very sloppy.
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it's been in this nasty downturn at the low of its year and a half rank and did bottom right around here around 260 two or three times in the last year so i think a lot of people are looking at this and saying, look, previous times it looked like it was in freefall and recovered from here and stayed in the rank, 260 to 320. >> if we pivot, interesting not so much that apple ended down but netflix was up and netflix was up later on in the day once they started making the announcements about apple tv and i guess it wasn't something that everyone came and -- >> it seems like apple will participate. they're going to do some of their own originals. not necessarily some magic key that apple has that's going to unlock, you know, the subscriptions of the world for their products so i do think it makes sense and the world is big enough for multiple of these things and as i was saying before, it's not make or break for apple. they can play the long game, be in the markets and see how it develops with their customer relationships. >> another one to watch, after all the drama and back and
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forth, nike closed the day higher after that sharp drop on the avenatti tweet before he was taken into custody. what a weird story. >> that does it for today. thanks for watching. >> "fast money" begins right now. "fast money" starts right now live from the nasdaq market site in new york city's times square i'm scott wapner in for melissa lee. tim seymour, steve grasso, dan nathan and guy adami ahead on "fast," financials under fire the group sinking deeper into correction as the ten-year yield hits its lowest level since 2017 and the top technician says there's more pain coming and what to buy instead. the dow on track for its first down month of the year more volatility, guy says this stock right here could be about to break out but we start where else, apple. hosting a star-s


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