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tv   Closing Bell  CNBC  March 27, 2019 3:00pm-5:00pm EDT

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itchy. >> get antsy you do not check your phone all that much. neither do i. >> correct but we're not on social media. >> meyer fingers don't itch. >> i'll know there are articles piling up but i can always push those off till later thanks for watching "power lunch. >> thanks. and you know what's coming up next "closing bell. >> what was that oh, sorry. hbo brain drain could affect apple. and lulu lemon, will it derail the rally? "closing bell" starts right now.
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>> i'm sara eisen. looking at the markets, we were down 232, up 100 the attention continues to be on the flattening yield curve, ten-year going back below that uh-oh point. nasdaq heavy down, .75%. >> i do feel like it's thursday or friday already. it's not. >> been a long week. spoke had new information saying we already knew the last hour of trade was the most important march has been different than january and february because in march, there's been selling into the close. january and february, there was a bias toward buying into the close. we'll see if that continues and whether it signals some sort of turning point into the markets.
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>> >> coming up, when's the right person for the job and the impact he could have on the market. >> making policy he wants to cut rates told "the new york times." >> right. >> boeing, two developments surrounding the grounding of its 737 max planes at this hour. ylan man-to-man ui is in washington, d.c. where a meeting is getting under way phil lebeau is in washington state where boeing is working on a fix for the max. ylan, let's start with you. >> reporter: there's a lot of criticism that the agency relied too heavily on the manufacturers themselves to vouch for aircraft safety and that the relationship between the faa and boeing in particular was too cozy. but prepared testimony will say it takes collaboration between the faa and airlines community and that approach enhances the knowledge of enhancements and
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risks. the 737 max will return to service only after the faa's analyst of the facts and technical data indicate it is appropriate. an agency spokesman has said the faa has not yet granted provisional approval for the boeing 737 max 8 upgrade that was announced today. also more than a dozen prominent democratic senators sent a letter to ceo questioning its safety features and accusing the company of charging extra for things like backup fire extinguishers and oxygen masks the letter says, quote, safety not a luxury upsell that manufacturers should be allowed to leverage for additional revenue. several senators who wrote that letter will also be questioning elwell at this hearing we'll keep you posted on how that goes. back to you. >> what are we expecting the overall tone to be, ylan one of general inquiry as opposed to outright criticism at this stage >> reporter: i think there will
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be outright criticism, perhaps from both sides of the aisle ted cruz, chairman of that subcommittee was on this morning with a lot of questions for both the company and for the agency that oversees it i suspect that that's the tone we're going to hear throughout the next few hours. >> okay. ylan, thank you very much. as lawmakers discuss regulation, boeing is giving new details about its software fix for the 737 max. phil lebeau has details for us in washington state. hey, phil. >> hi, wilf. pilots, regulators, executives at the company's 737 facility. here are the changes of the 737 max. a lot of these have to do with the mcas, that pushed the nose of the plane down in certain situations sensors will be giving data. if they disagree by more than 5 1/2 degrees, mcas system is
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disabled there will also be an indicator on the panel in the cockpit to alert pilots that was not mandatory it was an upgrade airlines would have to pay for. that will be standard and the crew will have manual control over mcas if there is an issue vice president of boeing is talking about his belief that these changes make the 737 maxine safer. >> the 737 is a safe airplane. the 737 family is a safe airplane family. and the 737 max builds on that tremendous history of safety that we've seen for the last almost 50 years. >> so what's next for the 737 max? faa will get this software fix as well as enhanced pilot training that boeing is highlighting, by the end of the week it will take a week or two weeks to do certification of those fixes. even after that, guys, lifting
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the groundings not only here in the united states but around the world, that's going to take several weeks. take a look at shares of boeing, while citi is out, reiterating its buy rating on the stock, saying as long as the production schedules don't change the cost will be occurred over time but not lost don't expect to see the 737 max up in the air, carrying passengers any time soon we're looking at something several weeks away back to you. >> phil, thank you stay with us, if you would we want to bring scott bremner into the situation scott, in terms of what you're expecting from the hearing going on at this hour, it's really focused on the regulatory oversight, safety precautions of the faa and ntsb take. what's going to be the toughest question for them to answer? >> i think the toughest question for the members asking the question is why are you proposing fixes when we don't even know what the cause of these crashes were we still have the ethiopians and indonesians to yet have shared
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the data of the black boxes with any civil aviation authority that the u.s. has a relationship with it seems kind of odd to me that we're already proposing fixes when we don't know what we're fixing secondly, i would also argue that the certification process has a pretty good record we've had almost 100 million commercial flights in the last ten years with one fatality. that's a pretty good strong record to run on, i believe. >> is the focus, do you think, scott of this hearing in the original approval process or also included the fact that the planes are not grounded as quickly as other aviation authorities around the world did? >> i think there will be a lot of platitudes. nobody really understands a certification process. people have to remember the faa does not build aircraft. the faa certifies aircraft they don't build cars or trains.
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they put up safety standards, certification standards that the manufacturers have to meet folks have to understand that. i'm not really sure people on the hill do. >> phil, what are you hope iingo learn? >> i just hope -- sorry, go ahead. >> phil lebeau, that was to you. >> sure. well, i want to echo what he was saying, in that i think we all want to hear more about how the faa tries to ensure, as much as possible, that there is stringent oversight of boeing engineers, when they're doing self certification and i think that's the concern that everybody has, is that over time as someone with the faa is working with someone from boeing, maybe over five, six, seven years, you get to know that person. and if joe at boeing says trust us, the data matches up, it's not that they're lying, it's just that perhaps that the faa administrator or someone with the faa may not be as stringent
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as they should be in terms of double-checking what boeing is telling them i think that's what people would like to learn more about. >> phil, is boeing nervous about these hearings should they be nervous >> i think boeing is nervous about anything that could alter the process that they're in the midst of in terms of manufacturing aircraft look, do we think that the max will be flying, perhaps, five, six, eight weeks from now? it probably will be. the faa will probably sign off on a certification and get it back in the air, as will foreign governments. but at some point boeing will have to address the issue that do the changes that might be coming out of washington, tighter regulation, does that make it tougher as they're developing aircraft in the future >> scott, it doesn't seem too preliminary to ask the question that phil just laid out, which is what exactly is the faa's relationship with boeing how cozy does it get what happens when these planes get certificated to fly, given the fact that boeing is largely
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responsible on its engineers for that process and the faa signs off on that? >> i think the question -- the answer was very good, that it's always good to re-examine those relationships. it is a relationship where boeing has the resources to do a lot of testing, to do a lot of research that the faa just cannot do. the faa relies on all manufacturers to come to them with a product that's ready to be looked at and to be examined. only when it meets certain criteria that the faa has clearly laid out do they then certify the aircraft this cooperation that is going on certainly helps the manufacturer from getting any surprises at the end of the line when all of a sudden the faa says oh, you didn't meet this standard and they have to go back to the drawing board on a product. >> scott and phil, thank you both for joining us. >> thanks, guys. >> wall street seeing big swings today with the dow giving up an early triple-digit gain.
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bob pisani has the latest on those moves. hey, bob. >> reporter: and the global growth worries are still a concern for the stock market another leg when we dropped below 2800 on the s&p, but up and above that several times the last few weeks, that's a technical sign market leaders for this quarter, semi conductors, energy stocks were all lagging today boeing popped at 2:00 p.m., word they're rolling out a fix for the 737 max jets that helped out the dow a little bit. no headlines on trade from robert lighthizer. theresa may may step down if a brexit vote it delivered before close. we need bond yields to stop falling and global growth data to get better. wilf, the market came off its
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lows once the drop stopped. >> thank you so much see you later in the hour. former apple ceo john sculley weighs in and why apple could double down on health care. insurer centene buying rival wellcare for $15 billion as the debate over the future of obamacare heats up in washington. reach out to the show on twitter, facebook or send us an e-mail "closing bell" will be right back
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centene confirms it will buy wellcare health. the merger comes with health care companies facing possible
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changes. a sizeable chunk of their business, making them vulnerable to any policy change will we be seeing more deals like this going forward? raymond james research analysis and former health and human services deputy secretary chris mea krc meekins. good afternoon. >> good afternoon. i think as insurers are looking to diversify across the spect m spectrum, centene needed additional play in the medicaid space as well as in medicare part d plans and so wellcare made a lot of sense for them. >> it really creates one of the biggest government-funded health care institutions. they're exposing -- increasing exposure, as you said, to medicaid and the affordable care act. is that where insurers are going? they were going in the opposite direction. >> i think they're looking at
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gathering any lives that they possibly can while they're in the affordable care act exchanges, which i think, despite what the trump administration attempted to do yesterday, there will not be a ai ruling or elimination of the affordable care act. they see what the house democrats did yesterday, which was not taking steps to move toward a medicare for all proposal or single payer proposal but instead move toward shoring up and building on the affordable care act. so if that's where things are going, a deal like this that allows exposure in the medicaid space as you're seeing additional lives and additional states move to medicaid managed care if we look at additional individuals going into the affordable care act exchanges, if the presidency changes hands in 2020 and as you see growth in an aging population of medicare, it makes sense to diversify in this way. >> so, chris, with that in mind, if that is indeed the case, do you think we see more mergers of this type coming >> i do. i think you will see some additional mergers
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i think the obvious people up today with many of the other managed care names are down are malina, magellan health. if you were to see something like a medicare buy-in, which the presidential candidates on the democrat side have been p proposing at age 50 or 55, that would create a whole influx of individuals into the medicare advantage potential market, huge for a company like humana. >> how big of a player does that come in the benefits management space? where does it fit in there >> pharmacy benefit management space has an issue from the hhs drug rebate rule and i think that rebate rule probably going to get done this year, which some people think it may get kicked out longer. that would change the rebate system fundamentally for the government-run health care systems. so you would see revenue
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decreases on the pbm side. you saw a slight pullback in united and some of the other major players like cigna in the end, they may make up for it pbms are alarmingly a wash from a revenue standpoint like wellcare for the stand-alone pbms, they're a dangerous place to be with the proposed rule, especially if that could move into the commercial market and not just government plans, which is something that congress is proposing. you have a big pharmacy benefit manager hearing coming up beginning of april before the senate finance committee and that's something we will watch. >> for the likes of centene, do you think the doj decision will be much more important than 2020 or is 2020 a big swing factor? >> i think largely speaking, doj, they should have this wrapped up before the election while there's some overlap in states like kentucky, they
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should be able to divest enough to get through the reviews that are necessary and not have major issues with the battle here. they'll be able to divest. 2020 election over the longer term will determine what the future of a lot of this is regardless of who wins the presidency, commercial insurers and medicaid managed care names are still a good place to be, despite what we've seen in the market this quarter. >> this quarter has been such a blockbuster quarter for mega deals in the health care industry, beyond just insurance, bristol-myers, selgene what's driving this trend? can it continue at this kind of pace >> i think we've seen consolidation in health care the last few years the reason you would look to move sooner than later is that you might have a slightly more favorable justice department than you would have depending who the next president will be if you have bernie sanders or elizabeth warren you don't know
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the anti-trust officials at doj may look like. if you're thinking about making a deal, now is the time to do it you give enough lead time for doj to work through what they need to work through before the next presidential election i think we'll continue to see some over the next six to nine months after that, it might be a little more uncertain, leading into the election but for the next six or nine months, i wouldn't be surprised if we see a few more big deals come through. >> chris meekins, thank you. >> thanks so much. on "mad money," jim cramer has an exclusive interview with centene's ceo. don't miss it. the dow is trading lower, 47 points we were down a lot lower, 232 at the lows of the day. bob pisani said bond yields stabilized stocks took their cues as seeing that as a good sign. s&p 500 is lower, down half a percent. industrials were the only group trading up right now
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a few weeks away from tax day. americans are weighing in on whether they're seeing a bump from the trump tax cuts. the results of our cnbc all-america survey coming up. two retail names with ffferent returns gearing upor earnings lulu lemon and pbh as soon as they hit go after it the same way, chasing after short-term returns? instead if getting caught up with the crowd, the investment managers at pgim take a long term view. uncovering opportunities for alpha across public and private markets, while anticipating unforeseen risk, has powered our rise to a top ten global asset manager. partner with pgim. the global investment management businesses of prudential financial, inc.
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former ceo john sculley says the big opportunity could be in health care.
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welcome back to "closing bell." you're seeing a few pockets of green in the minor sell-off for markets. materials just popped into positive territory, though health care, energy, utilities, technologies, all pretty much having a weak day. >> time now for a cnbc news update with the one and only sue herera hi, sue. >> hi, wilf. on capitol hill, house speaker nancy pelosi joining key democrats to announce legislation aimed at reducing carbon emissions and keeping the u.s. in the paris climate agreement. >> the bill, this is about jobs. it's about good-paying, green jobs it's about advancing our economy and our global preeminence and green technology it's about health. it's about how public health and clean air and clean water for
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our children it's about defending our national security. >> south africa's military dropping food over cyclone-hit mozambiq mozambique 3,000 metric tons are needed to feed 2 million people in need of urgent assistance. putin says he wants russian athletes to play by anti-doping rules ahead of next year's olympics in a televised statement he said every effort should be made so they don't gi. >> we'll believe it when we see it. >> the proof is in the pudding as they say. a fifth industry that former apple ceo john sculley believes the company should be breaking into health care.
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current chief marketing officer of a cloud-based pharmaciy benefit manager. welcome back, john good to see you. >> thank you, sara. >> apple is going pretty deep in health care when it comes to the watch and when it talks about what it has planned for that what else do you have in mind? >> well, the iphone is about share of market but consumer wearables, sara, is about share of growth. and there are estimates that the apple watch and the air pod are going to be foundational for a next generation of various types of health tech products. sensors and algorithms are getting better and smarter we can expect to see real innovations the next couple of years. and the game change is not just the devices. it's the subscription services and health, which can be incredibly profitable and really big growth gainers for apple not just apple amazon is out there as well.
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>> john, as you said, this could be a game changer for the next generation of technology when it comes to you how far away are we from this being a game changer >> well, i think it's already starting, wilfred. we've seen that the trackers that have been tracking fitness -- i'm talking fit bit, apple, are now starting to pivot over to health tech. so, apple has already put in the ability to track your ekg and your afib from a heart standpoint we'll see glue close monitoring that's noninvasive the ability to get accurate data and transmit that data across networks going out to physicians, and consumers trust their physicians and doing that with privacy, an apple hallmark, is totally real. this will be happening not only with apple but amazon, with their amazon prime health and with their alexa health is going to be in that game as well.
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>> so it's interesting our reporter for has a piece up about how the new announcement around apple's credit card brings it deeper into financial services. we know it's going down the health care route. it sort of speculates and cites some industry folks about whether apple could get into the business of serve f solving the problem of health care billing, combining services with health care data. is that something that you think is realistic >> i think it's totally realistic. it's taken a few years for apple pay to really get traction, but it's highly respected today. the deal that was put together by the apple pay and being able to come out with a new credit card, i think, is a very significant deal with goldman sachs. >> so much of all of these new announcements, including health care, which you're so positive on, relate to services do you think apple has lost its
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previous edge in hardware? >> i don't think it's lost its edge but i think in high-tech, wilfred, you see things build on things now that there's an install base of incredible size with the iphone, you're seeing apple move into other related services. but i think with consumer wearables, we're just at the early days of something that could be extremely important it may be the biggest gainer of share of growth out of anything that apple has not the largest share of market but share of growth and probably very profitable share of growth with subscription services for health. >> yeah. some people on social media during the whole apple presentation were musing about what steve jobs would have said about the big pivot to services and the flashy announcements around some of the new services. how would you answer that question you knew him better than most. >> well, i knew steve well and steve always had incredibly strong opinions until someone
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gave him evidence that it was time to change to another strong opinion. and so i think in this era, steve would see that the incredible success of the iphone say flat form of share of market he would see the share of growth opportunities are clearly in services that can build on those great innovations that he was a part of for the hardware products. >> john, what's your take, overall, on apple tv mr. jobs himself spoke about that well over a decade ago. and the reboot wasn't transformational in terms of something that we haven't seen before, whether from apple itself, with apple tv as a hardware box, or on other rival apps like netflix or amazon. >> i really don't have a point of view in that. i didn't watch the introduction of the apple tv plus there's an incredible amount of quality content that is going over the top these days.
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it's a logical place for apple to find a role the reality is that there's a lot more competition that apple has to deal with in the video market than there is the health market and so i think in health you may well have something like the cola wars, amazon and apple vying for who is going to be the big winner amazon on the one hand has 100 million amazon prime users a subset of those will be amazon prime health, alexa health they have to figure out how are they going to compete in consumer wearables with great competitors like amazon? both companyies, i think, will b very successful. >> john, thank you very much for joining us we appreciate it. >> pleasure. thank you. >> still to come along the closing bell, are all the bad times over for papa john's one analyst thinks so.
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we'll tell you why. and lulu lemon and pvm, we'll get those earnings next. ♪ ♪ move to the enterprise-grade cloud that's built to handle all your apps. ♪ ♪ the ibm cloud. the cloud for smarter business.
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the dow is flat with 22 minutes left of trade. the spread for the day was up 100, down 232. s&p down a third of a percent. nasdaq down around .5% i'm watching a pair of home builders, lennar and kb home, revenue fell short of analysts' expectations lennar and kb home, boosted by falling mortgage rates, decent margins as well. the interesting one was the turnaround today for lennar. kb was up. initially lennar was down. and guidance calls about the optimism that lower rates can lead to improvement going forward. >> i think a lot of it was the tone, right? >> yeah. >> executives on the calls and positive message that things might be turning and bottoming spring selling season.
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fueling that trade shares of papa john's getting a nice pop after stifel upgraded the stock, saying they entered a turn around face since ousting john schneider a newly engaged board of directors which does include basketball legend, entrepreneur shaquille o'neill. remember, we spoke to shaq on cnbc last week and asked why he chose to join the board of papa john's. >> it's a great opportunity. we want to create a culture there now where people are loved, welcomed and accepted we don't want to have any problems everyone knows shaquille o'neal. they know i'm in the fun business and we want to get this thing back on track. >> this has really been a hot trade. up almost 30% this year after getting slammed last year. interestingly, it's also sort of a hope trade that things are turning around and getting better with some of the moves around the board and the
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business last we heard from the company, sales are down big hard to get clarity on when that would actually turn around. >> this 30% year to date is even before the shaqeronis have arrived. >> we don't know if they have arrived. he broke it on air i know you're excited, you like pepperoni, extra large. >> extra cheese. hopefully for a reasonable price. we look forward to that. that's up 3%. up next, top asset management tells us one milestone she's watching that could impact the market. >> later kay koplovitz is here to talk about the changing media landscape. why she says there will be more than one winner. "closing bell" will be right back hey mercedes,
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walmart, chevron boeing, travelers, apple are having a good day as well as disney balancing out. and you've got a dow down only five points. coming back here toward the close. >> we have carrie pfizer, and rick santelli at the cme in chicago. rick, i'll start with you. i thought the yield was on pause, was done. >> market isn't closed yet, wilf if you're considering a process of how markets trade let's look at it from a different vantage point. monday, intra-day low closed at 230. today 130, 235 a couple of times. we're at 238 let's see where it closes. i think the process is more about the market duking it out with bids and offers versus only
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bids where yields fall and then just go sideways it's been a much more two-way trade. i can't totally disagree i think the process has begun. it still doesn't mean we're in the right zip code that the ultimate low yield before that occurs is in, but i would watch closings, especially the friday close. if we're going to point fingers, you know, what's going on in europe, germany, with the auction and negative bund yields, these are big deals because the bid to cover how many bids are out there for how many securities for sale in germany, in europe in general, they're much smaller than the u.s. not for today's bund auction why would there be such demand for a negative yield they believe yield also getmor negative and if you really have to pick a macro reason why our markets are acting the way it is, that would be it.
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>> lower yields, negative yields to stocks right now. >> it's a challenging environment for equities. >> bad for equities. ten-year bond yield, rick was mentioning 235 today, it's the type of thing that you don't always know where it's right but you know where it's wrong. 235 seems wrong to me in an environment where, you know, i don't think recession risk is actively meaningfully higher than it was before and where the u.s. economy is trunlding along a trend. not spectacular, but also not contractionary all of those piling on to low bond yields which i'm not sure you bet on all those factors persisting that said i think you learn something very important about what markets are telling us
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here one is that, to your point, as markets reprice growth concerns and recession risk it's going to create a lot of volatility for equities, reducing a sharp ratio for the asset class and make it less compelling. secondly, i think here is the key. as recession risk is priced in, we saw massive rallyies. what does your insurance policy against end of cycle concerns? it's sitting right in front of the treasury market. >> carrie, what's your take about what this all means for u.s. equities? are you optimistic as well about earning season could that be an important factor >> one of the important factors when we look at the ten-year yield is that competition to own bonds is significantly been reduced. the market is only selling for 16 times earnings this year, less than 15 times next year we've got a bond yield that's
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not competitive. in november, when we were at 3.2%, you could say that investors could choose between stocks and bonds and feel comfortable getting a 3% yield now they can't to the extent that the market is thinking about earnings growth slowing, you had the offsetting trend where the competition from fixed income has gone down, which is positive for stocks you asked me about earnings. and i think that the expectations are very low for this quarter everyone thinks that they're going to be down versus last year the dollar headwind is very strong so it's conceivable that earnings will be better than expected for the first quarter we'll have some positive surprises and that could be -- that could play well through the next month or so you know, we've been treading water here market had the sharp move up, 19% from the bottom. now it's having trouble pushing through. so we'll wait and see, i guess the market wants to see what happens from some of the big cap
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companies and what their guidance will be for the next few quarters. >> okay. everyone, sit with us. we have some breaking news to eamon jarvis on google. >> meeting between president trump and the ceo google, sundar pichai president just tweeted out, just met with sundar pichai, ceo of go google who is obviously doing quite well he stated strongly that he is totally committed to the u.s. military not the chinese military he is the ceo of google not the president of google as the president tweeted. also discussed political fairness and various things that google can do for our country. working with the chinese government, sundar pichai was in town, met with the marine general, chairman of the joint
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chiefs over at the pentagon. cnbc' amanda mavis has been covering that aspect of the ceo's visit today. in effect, suggesting that the company, by working with chinese entities and chinese government was helping the chinese government advance technologic l technologically, arguing that's not a good thing for the president of the united states the president layering on to that a political argument here, conservatives have alleged in washington that google and some of the other technology companies, in various ways, put their fingers on the scale in terms of the conservative versus liberal debate online. the president suggesting in this tweet that he raised that issue with the google ceo as well. we'll try to get more information about this meeting it was not on the official white house schedule the president tweeted it a couple of moments ago. and that is the first we are learning of it this is something that they did not do in front of accuracy and things like that
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clearly, very high-level meeting at the white house today, wilf back to you. >> interesting eamon thank you. >> you bet. >> google shares down 1% carrie, are you a google shareholderer? if you are or aren't, is this the sort of thing you like to see? >> i think it's a positive if you have the president tweeting out good things about a company thathistorically in his tenure he hasn't liked. we do own google it's trading for, i think, a price that is not giving it sufficient belief in its growth rate, which we expect will be much greater than the markets. so we like it right here and i think if the president wants to be positive, maybe there are a few more buyers. >> going back to the broader markets, what's your topic outside the u.s. country wise? >> all men are of interest
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between trade war, brexit, you name it. >> like any country, is that what you're saying >> i thought you meant what are the topics >> top picks my bad. >> he's hard to understand. >> outside of the u.s., i think we look at emerging markets, a lot of the things that could go right over the next few quarters if we do get a negotiated solution between the u.s. and china, even if it's a narrow one, that's incrementally favorable. you can see the spillovers from what the fed did over the course of the first quarter in the rest of the world part of it is europe part of it is elsewhere. the main effect is in emerging markets where you've seen a tightening cycle turn into an easing cycle and so all of those reinforce what could be upside in emerging markets. again, within the context of a broadly cautious overall risk view that's one area that we like. >> thanks, everybody
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ben, carrie and rick we're continuing to monitor that senate hearing on airline safety let's get the latest from ylan mui in washington. ylan >> faa head facing pointed questions from senators on pilot training, independence of the certification process. daniel elwell also acknowledging that the agency still has a lot of unanswered questions. >> we're data driven organization and we make our organizations based on the data collected. we still have a lot of data to collect, sir. >> in addition the inspector general of the transportation department says he realizes that confidence in the faa has been shaken as the gold standard for safety around the world. he says that he hopes he can restore that by conducting an internal audit of what happened in this case back over to you. >> ylan, thank you very much no doubt we'll be back to you for more in the next hour or so.
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five minutes tloest trade. >> after the bell, a read on athleisure when lulu lemon reports earnings the future of technology investing lies beyond the tech sector. 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 ifor another 150 years.ement the fire going ♪ to inspire confidence through style. ♪ i'm working to make connections of a different kind. ♪ i'm working for beauty that begins with nature. ♪
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close. bertha coombs with the market movers bertha >> today is the day when tech is really a drag. apple is the out liar. it's higher today after that big presentation up nearly 9% for the month and 19% year to date very strong quarter. fang names also lagging, facebook, netflix and google chips continue to be the l laggards as well micron, concerns about pricing in the chip space. interestingly today, although tech has been so strong all month, today it's ex-tech, nasdaq that is doing well, retailers in particular, new highs for dollar tree there, urban outfitters and lulu lemon
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set to report after the bell wilf >> bertha, thank you for that. lot of red there bad first couple of hours of trading and steadily improving we're still down .5% dow is the relative outperformer of the big indices all of these were down a lot more earlier in trade, albeit red across the screens ten-year treasury note, as i bring in bob pisani, has been a factor, rick santelli was saying as we touch 235, 238 less than 2.4. >> ten-year and yields about 12:00 noon, and that's when the markets stopped going down i know this sounds crazy, but there is this bond market is smacking the stock market around every day. there it is. you see the bottom was just about 12:00. that's when the stock market
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itself bottomed out here we need answers on where is the bottom in yields and where is the bottom on the global economy? maybe we'll get news on theresa may. >> we will lot of moving parts there. haven't got enough time to go through them there's the bell down .04% on the dow sara, back to you. welcome to "closing bell." i'm sara eisen wilfred frost rejoining me shortly as well as mike santoli. lower on wall street but certainly off the worst levels of the session one point dow was down 232 points, closed lower by 31 points walmart the biggest drag there s&p 500 lost half a percent.
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most sectors closed negative industrials the only winning group. health care, energy, utilities, technology faring poorly ru russell 2000 down .4%. bonds rosed. key factor as bob mentioned. stood in the way as an earlier market rally founder of usa networks is here to tell us if they should be concerned about a brain drain. centene buying wellcare in a $15 billion deal latest company to explore an ipo and we are waiting earnings any moment from lulu lemon barry app is back, ironside macroeconomics welcome back, barry. first, mike, stocks and bonds seem to be front and center. >> for sure. obviously this gravitational pull that yields have on stocks
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is effective, i guess, on a short-term basis although it's interesting today because the sectors didn't behave the way you would expect based on that. just looking at a chart, this moving yield seems pretty far along. i do think if anybody had some kind of bullish objective for buying ten-year treasuries, you're pretty much on it right now. as the quarter comes to an end, you're starting to see some unwind of trades, so it's hard to know if that's something we can extrapolate beyond today but we keep fighting the same battle at the same level the entire month of march was at 2800, plus or minus a few.s. >> they weren't down as much as you might expect. >> depends which sector index you're looking at. >> barry, by the way, banks you think are an opportunity at the moment and have been weighed down too much by this flatter yield curve discussion >> that's exactly right. my core thesis on the banks is that they would have a big asset
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mix change as a function of regulatory policy and the fed starting to unwind their balance sheet. you actually saw that at the beginning of the fed balance sheet contraction securities holdings were rising by 6% they were down in 2018 whereas private sector lending, commercial and industrial in particular was up very, very sharply through the course of the year that boosted return on assets and return on equity and you saw that in the fourth quarter numbers. and that's why the group did so well in january and february the market got concerned about flattening yield curve the best example i could find of why that doesn't really work was 1995 after a very aggressive ted -- fred -- fed, easy for me to say, rate cycle when they took their yield curve from 1.8% to zero, the bank stocks went up, financial sector went up 60% in
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1995, the second best performing group after the tech sector and it was because loan growth was strong it's asset growth that drives them over time, not just net interest margin thing is a minor distraction. >> just because the yield curve has inverted you're saying it doesn't necessarily mean it's a big problem for the banks? >> no, it's not. i think that return on assets and return on equity will stay high because of higher spread income, because they're now investing in private sector loans instead of government securities and that's the real driver of earnings growth. in the short run, it matters for the stock price. we'll call that artificially intelligent algorithmic traders. asset mix change. >> whether we're talking about the banks or other countries we're not that far from earnest season kicking off again in earnest. >> right. >> lower yields could come in to view as a positive
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the multiples are more supportive. >> it's a structure of yields is fine if it's not telling you that the cycle is winding down right? and i think that's the same story with the financial stocks. if the financial stocks are not handicapping the fact that credit cost also start going up and all the rest, i think that's correct, that earnings could be supported. at least going through the year. maybe not the first quarter numbers, because we don't really know if those are going to be -- if we had enough time to regroup and had that kind of growth. no i think we're definitely going to be in earnings mode in a little while the big debate really is that analysts overcorrecting for being too bullish, are they too low now and what's the set-up in terms of where the stocks are heading into >> i wonder if we'll hear more commentary on ceos this season about whether or not they see a recession on the horizon, how much of a slowdown they're seeing there and how much we should put in an indicator like this, about what happens to the
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economy next. >> indicator like this, meaning yield curve? >> also ten-year yield hitting the lowest level since december 2017 that's what's so spooky about that, right? what does that say about the economy? >> when i came into the business in the '80s and through the '90s as modern portfolio became accepted and the only desk was the dierivative desk bond market has better information about what's going on with the economy than the stock market that's not been true since 2003. the reason i say that is that if you look at the relationship between nominal growth and ten-year treasury yields from post world war ii through the early 2000s, nominal yields were always above nominal growth. that broke through with the global savings and conundrum 2.0 when central banks have
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intervened they still move in the same direction but the signals don't have nearly the efficacy that they did in the '80s, '90s or early 2000s. absolute levels of rates are low. there's no debt in any sector of the u.s. economy that's approaching the sort of tipping point level other than the federal government the household sectors have been deleveraging through this whole business cycle what's the trigger that causes growth to slow government is the only vulnerable sector. >> let's move on and talk about the big health care merger today. centene buying wellcare health in a deal worth more than $15 billion. centene was lower most of the day. doj reigniting its challenge to the affordable care act will we
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be seeing more consolidation in this space mike, either way there's been a lot of consolidation already do we expect that to continue? and do you think it can get rushed through >> seems like the players have been maneuvering for a couple of things the payment chain of health care services and drug delivery services this idea of vertically integrating, having the insurance company, so yes, i think two things are happening that will probably continue to happen, which is try to figure out how you would get scale to partner up and also stocks are going to trade on legal and policy headlines in a way that they did before when there was suspense about obamacare. >> we do have lulu lemon earnings just out. seema mody has that. seema? >> earnings of $1.85 adjusted much higher than $1.74
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estimated. $1.67 billion xwebeating consen of $1.15 billion on the back of strong holiday sales. the company announcing a $500 million buyback. comp sales are in line with estimates up 16% you're seeing the stock up nearly 9% in extended trade. analysts were cautious about whether the company could beat expectations just given the big run-up we've seen in shares of lulu lemon, outpacing the s&p 500 and the broader retail sector conference call starts at 4:30 p.m. eastern we'll be on it, try to get more details around this loyalty program. growth in traditional sportswear after signing quarterback nick foles as its first men's ambassador, seeing the stock up now 8.5%. >> it's amazing. they set the bar so high, continuing to raise guidance it's been a winning stock.
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let's bring in oppe oppenheimr & company's brian total comps up 18% what is driving this kind of strength >> look, first off, those numbers are absolutely fantastic. and i follow a large number of retailers and brands out there we're just not seeing this type of growth anywhere another fantastic report from lulu lemon what's driving it? there's a positive sector tail wind here. i talk a will the about the athleisure space as being one of the better demand areas. lulu is benefiting from that beyond that, where they're doing well is innovating, within their core product and you're seeing it wasn't that long ago that lululemon was a yoga brand, focused on women we're seeing a bigger portion to men's, bigger portion outside the united states and canada,
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taking this amazing innovation. >> broin, by the way, has the easy lifting already been done for this company >> easing lifting? no look, let me say it this way i think the growth trajectory, we're still early in that. i think we'll see outsized growth for a long time easy lifting, lulu has the product right now. but this is a competitive space. and they've got to continue to innovate as great as they've been, they've got to continue to innovate just because there are other really strong companies out there. >> i mean, it seems like outerwear was a big winner for them we had a colder winter, that helped, and the men's business remains such a point of growth how much of an opportunity is there still? >> those three were really key think about, when you talk about outerwear and the bra business,
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what it does is taking lululemon, i would say, to a regular type clothing as opposed to something specialized for yoga it's clothing that people consider live in when we think about that and the men's business there's a big opportunity for lulu lemon to continue to grow its brand beyond this core. >> i think it's also impressive that the brand continues to micro margin steadily. this brand does not discount that much. >> right. >> it's hard to find promotions and when they have it -- >> the growth is pretty much in the direct sales channel, right? comp store sales within stores was relatively strong for the space. they have this marketing engine online that drives kind of repeat buying and full-priced buying and all the rest of t one question i have, it's not a big part of the investment story but announcing a buyback, maybe it's signaling, hey, we'll be careful
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with our cash and we're not going to plow it into hundreds of stores we don't need. it's still an interesting -- it's an interesting decision to make at this point. >> any thoughts on that? maybe you could also wrap up your thoughts on that premium valuation and how much higher it can go, versus some of its peers. >> i agree with mike we're seeing high-quality companies out there that are growing rapidly. they're generating buyback stock. there are companies that buy back a lot of stock. they view it as expensive. i don't think lulu is doing that they're saying they have excess capital, why not buy back the stock? as far as valuation goes, i have this debate with our clients yes, lulu trade at one of the highest multiples out there. no question. but this market or this tape has taught us for a while now is to pay up for quality and these higher-quality companies like lulu lemon trade at higher multiples, the stock still works.
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when you see a cheap stock, it's cheap for a reason and those stocks tend to outperform for a while. >> my last question, brian, is about management they have a relatively newer ceo in there the last ceo set the seeds for this it went a long time without a ceo and they performed like this have you met with the new management if so, what's new about the direction they're taking the company in, or is it just stick to the formula because it's working? >> i have met new management calvin came through here in new york earlier in the last year. i met him for the first time seems very, very good. has a good background in building brands. i think your point is correct. the seeds were sort of, say, laid here with prior management and now it's a matter of continuing this process going forward. >> brian, thanks for joining us. much appreciated. >> thanks for having me. >> we have the latest news on tesla. hello, sue. >> hello, wilf
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tesla and elon musk trying to clarify their in-store strategy. in february they said they would only do online sales and close their stores now in the second e-mail, elon musk says tesla stores with high foot traffic and sales will remain open. it also now says that it will open more stores if it thinks it can increase sales in that way the memo said customers will still have to buy a car through their phone or through a computer, even if you're in the retail store space it is a change from what they announced in february, apparently high-volume stores will remain open back to you guys. >> sue, thanks very much for that the interesting line here is the clarifying line at the end saying what is meant by all sales will be online is the act of purchasing tesla will be done by a phone or computer, even if you're in the store. it's an odd way to backtrack and that's sort of always the plan.
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>> another example of the company announcing a certain set of measures and backing way from them, yeah obviously, i don't think it will do anything to prevent people from thinking that this is a management -- strategic situation that's in flux they seem to be in a bit of a scramble to figure out best how to promote demand and accommodate that demand. >> you like the banks. you're not afraid of the yield-curve inversion. what other sectors look good to you ahead of earnings? >> the industrial sector will probably perform pretty well in particular because the outlook should improve as asian trade gets better. i do have one, though, that we didn't count on, which is the health care sector i went through an analysis of corporate profit margins and where there's pressure, where there's productivity drags, if you will the health care sector, those margins have been in secular down trends for some time. merging is a way to get
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synergies as one approach. you haven't really had the innovation adoption technology in that sector than you've had in a number of other sectors even in the consumer patch to me that's one sector that mike was absolutely right. there will be a discount policy on that, particularly when you get into the debate season which shockingly begins this summer. furthermore, you've got some real problems there where they haven't adopted innovation, haven't really driven productivity gains through the sector you can merge but the core fundamental momentum is probably amongst the poorest of the major sectors, in my view. >> amazon and apple blows them out of the water possibly then >> it's possible you have to innovate. >> your talking health care? >> people like the predictability of it. >> big, long secular headwind
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story, aging the population. people like that tail wind the fact is that these companies haven't executed for quite a long time. >> barry napp, thank you. google just releasing a statement, following ceo sundar pichai's meeting with the president today. josh lipton has the details. josh >> that's right, sara. here is what google says we were pleased to have productive conversations with the president about investing in the future of the american workforce, the growth of emerging technologies and our ongoing commitment to working with the u.s. government of course, president trump, as you guys know, tweeted about that meeting that he had with google ceo sundar pichai as well, talking about the company's dealings in china. meeting ended very well, the president said the ceo is not just meeting with president trump but also the chairman of joint chiefs of staff. general dunford criticized
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google before lawmaker, saying they're working with and benefiting the chinese military. google came back is said they don't work with the chinese military they do work with the dod. chinese -- google has a big presence in china, 700 employees, patent licensing deals and this ai research center in beijing. reportedly that's what the general is concerned about when those two meet we'll see if we get any details about that meeting as well. back to you. >> josh, thank you up next, president trump presumed nominee for fed governor steven moore wants the central bank to cut interest rates by half a percentage int. up next, a debate on whether he is a good choice for the job
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welcome back another alert on pvh kate has the numbers. >> owns tommy hilfiger, calvin klein. $1.84 adjusted estimates of $1.76. revenues $2.4 billion compared to the street's estimate for $2.40 billion. the company also upping its
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current fiscal year outlook from $10.30 to $10.40 compared to about $10.31 they also called out strength in tommy hilfiger in particular and calvin klein but said some of that was offset by weaker trends in the company's heritage businesses that's what they sell at outlet and discounted retailers also a little more color on tommy hilfiger and the strength in that brand up five percent and 16%, both of those numbers far surpassing expectation the stock is up 7% right now back to you. >> thank you so much for that. don't miss jim cramer's interview with ceo manny chirico tonight on "mad money" at 6:00 p busy show, as always, coming up there. >> steven moore making headlines today, telling "the new york times" he believes that the fed should cut rates by 50 points.
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critics saying he doesn't have the qualifications. >> the washington post with a pair of harsh op-ed headlines saying moore could inflict more long-term damage and that trump nominated a hack to the fed. but he has had support from a number of senate republicans and john fund who joins us now with jimmy pethoukokas. jimmy, i imagine, is much more critical john, first to you why are you out in support of stephen moore for the fed? >> oif known steve and worked with him for many years. he has a very sound record on things that would concern your viewers, tax cuts, deregulation, a concern about the engine of growth in our economy and how to boost that ten years after the great recession. and in addition as to whether or not he's qualified, most of the
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criticism is that he doesn't have a phd in economics. the chairman of the fed, jerome powe powell, doesn't have a phd in economics and most of the chairmen haven't had a phd in economics. one voice at the table i think the fed is self confident enough and probably has enough of an institutional ego that it can take one house critic inside its building who might say, you might be doing something wrong. remember, the fed in december, you know, finally admitted we made the mistake about interest rates. they had scheduled two interest rate increases in 2019 those are all gone the fed needs to be watched and criticized and audited. >> jimmy, do you think the reaction has been overdone >> he makes a strong case for steve to join larry kudlow at the nec or treasury department
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as assistant deputy for public relations. those would be perfectly fine jobs the president, when thinking about the fed, should approach it as he does with the supreme court. he looks for highly qualified jurists. the federal reserve should be exactly the same thing highly qualified economists and people with deep financial and business backgrounds i think that's the path to go. i think steve is a great guy i like steve i think this is not the right job for him. and, you know, i think if they want to come up with, i don't know, ken rogoff, if you're looking for conservatives on the dovish side, neil kashkari another possibility. there are other options. >> so, john i think that the criticism isn't about any of this i get that people are poking holes in his background. he doesn't have monetary policy degree, doesn't have a phd, as you said not the intellect gravitas
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but the real concern here, why people are outraged about it, is the independence of the federal resouth of you don't usually appoint someone who has political views or is so outspokenly in support of the president he wrote a book called "trump-enomics" and how trump's plan has been so beneficial for this economy having someone like that on the federal reserve does xloms its credibility and independence. >> the federal reserve has been around over 100 years. i can assure you, there have been many, many board members with strong political views. that doesn't mean they aren't independent. and i think steve has given interviews saying look, i may have been too harsh on the fed in the past. i'm willing to work with chairman powell. he has opposed president trump
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on his tariff policies at times. he has expressed concern about trump going too far in cutting back immigration yes, he has certainly written a book called trump-onomics to be to say we only want mice and people who don't comment on the federal reserve. that's a mistake, too. the federal resouth of is not just for economists and bankers. it should be for people who understand the broader economic matrix. >> jimmy, what do you think all of this says about how much the president wants to see possible further change, including at the top, whether or not that's possible >> from the president's perspective, he would like a far more compliant fed the history of populous politicians and populous governments, pardon me, are ones that want the central banks to
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bend to the will of the preside president. it's a good way to ruin your economy and the currency this is just the beginning from now on we'll have more pundits and activists on the federal reserve. i hope john would be fine that president bernie sanders would want to put, i don't know, ezra klein on the federal reserve other liberals jim. >> that absolutely opens the door for them. >> jim, the federal reserve has had a pretty poor track regard even alan greenspan admitted he made many mistakes. >> do you want to go back to the gold standard, john? do you want to go back to the gold standard? >> the recession was, in large part -- >> do you believe in the federal reserve? >> i'm answering your question the 2008 recession was in part -- >> but is your argument that since 1913 you've been making a mistake? >> we can't have a discussion if you're interpreting. i'm sorry. >> go ahead, john. >> what is your general perspective? >> the federal reserve has a very muksed track record
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they have one voice on the fed out of 10 to 12 members, one voice, one vote out of 10 to 12 is not going to break the fed's independence the fed can work just fine with one person at the table questioning some of the decisions they made. >> that already exists, john. >> which now have -- >> it exists. >> tell me the challenges -- >> that exists. >> tell me who challenges the chairman directly and in public. kneel who. >> i think, john, there are -- >> tell me. >> i think they're proud to actually have a lot of different opinions around the table. and when the fed chairman presents the decision, it's a consensus. >> you want to -- >> in the interest of transparency. >> it doesn't count. >> the fed should have more open and rigorous debate. i don't think that's happening now. >> you want it in public. >> name a person that openly challenges the chairman. >> you want a public confrontation? >> no. i want transparency. you're the one who supports the
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fed's secrecy and the regime, which is very, very deep. >> what's to say it would be a public confrontation if he was confirmed what's to say he would make his points internally in a way that most other members of the board do? >> listen, i think the more hysterical opposition that steve is a hack, that he's going to destroy the federal reserve -- listen, i think that's ridiculous john's right. >> good. i agree. >> he is just one voice. that's great but lots of other people who are more qualified for this job, who certainly would confront the fed that they could pick there are great jobs in the administration for steve this just doesn't happen to be one of them. >> you don't think, john, there's any risk to having someone on the fed board where the president can call up and say look, i want you to cut rates, this isn't working for me, having a strong dollar i'm fighting a trade war i need an easier policy. >> how does one -- >> one vote matters. >> one person out of 12
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people -- >> votes matter. who is to say that it stops at one person >> how >> it's a precedent. i think that's part of the point. >> let me make you relax donald trump -- i looked at the vacancy that donald trump will have you can't make any of those counts get up to a fed board while president trump is president first or second term. >> why do you want him to apply the same criteria that he does to the supreme court why should it be a different, lesser criteria to the federal reserve when some would argue it's equally as important? >> later this week i understand a group of distinguished former fed members will be endorsing steve's appointment. steve has been congressional
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economic committee, has worked as the chief economist for heritage foundation, one of washington's ven herbal think tanks. steve is qualified for this medieval gild mentality where only economists and bankers with a phd get to serve on the fed has not served us well the fed has a very mixed track record ask all the people who were sunk by the recession in 2008. >> last word, jimmy. >> if you don't think the central bank could have a far worse record if we're just going to begin to put people who are pundits, activists and people who agree with the president look very closely at pop lous governments and other countries that take that kind of approach where they want the central bank to be compliant. that is my concern it sets a very worrisome precedent. >> there must be something going on behind the feds doors where they're not willing to have one house critic inside, questioning what's going on and perhaps
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trying to open up transparency. >> you act like it's -- >> the level of hysteria here. >> secrets of the temple argument. >> to serve on the board. >> it's like a secrets of the -- >> hey, guys, it's a good debate you both made your points. >> okay. >> we thank you. >> you bet. >> john fund and jimmy pethou pethoukokis. this is decision tech. it's screening technology that helps you find a stock based on what's trending or an investing goal. it's real-time insights and information, in your own customized view of the market. it's smarter trading technology, for smarter trading decisions. and it's only from fidelity.
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>> ylan mui has an update. >> this is a very tall order for us, as sooim sure you can appreciate we have a highly skilled team of aviation auditors who we'll all turn to. if we can meet ten months, i would optimistically say great it may well be some months after that. >> there was also some dramatic questioning by senator dick blumenthal who said the faa was trying to do safety on the cheap, which resulted in it neither being safe nor cheap
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and also slammed the administration for outsourcing of the process it would cost $1.8 billion and take 10,000 additional employees to bring that process fully in-house. >> 10,000? >> 10,000. >> wow >> a lot of money. i don't think congress is going to give it to them. >> not any time soon. that's very interesting. thank you very much, ylan. i know you will continue to monitor that for us. time for a cnbc update sue herera has it for us. >> i do, indeed. thank you, wilf. senator lindsey graham says congress could get the mueller report by next month as attorney general barr looks to remove classified information before releasing it. >> the attorney general is going through the report now to take out grand jury information that can't be disclosed, per law. he wants to make sure that there's nothing released to the public or congress that would hurt -- is classified information that would hurt sources and methods.
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syria's ambassador to the united nations denouncing president trump's recognition of israel's sovereignty over the occupied golan heights in the meeting of a u.n. security council. jake patterson, wisconsin man charged in the kidnapping of 13-year-old jaymie klaus facing two life sentences that's the update. i'll see you tomorrow. >> sue, thank you. the percentage of americans who feel they have more money in their wallets thanks to president trump's tax cuts is declining. new details in a moment.
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the percentage of americans that feel they have more in their wallets is declining steve liesman joins me steve? >> most of the respondents are
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probably wrong in their answer not once, but twice we asked americans for the second time, do you have more take-home pay due to the tax cuts? back in june 2018, only 34% said they had and we thought, you know what? maybe they just hadn't had enough time to see it. we asked again in our recent poll here. went down. 31% said they hadn't seen it 49% in june said they hadn't seen that. there is a large percentage here who don't know maybe that's part of it. given the way we understand the taxes that a large percentage of americans got a tax cut. we asked them who benefited from the trump tax cuts -- sorry, one other thing i want to show you, it's not all that partisan of course, it still -- it's partisan but only 50% of republicans think they got a tax cut, too we'll take a look at who americans think benefited.
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66% said large corporations, 52% said the wealthy, and only 21% said me personally -- not me personally but them personally and looking at this by party, 8% of democrats, just 35% of republicans said they personally benefited. how about support for tax measures tax on the wealthy that seems to go pretty well 61% of americans favor taxing wealth greater than $50 million and 58% say they support a 70% income tax on assets greater than $10 million, sara. >> steve liesman, thank you very much feeling on taxing the wealthy and not getting as much from the tax cuts. nasa may have made one small step for man when it landed on the moon, but an all-female spacewalk, that story is on our radar next. how the brain drain of media
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as expected, $70 to $72. we'll get actual pricing top lyft shares are expected to debut on the nasdaq on friday. back over to you. >> deirdre, thank you very much for that mike, we were expecting some increase >> yeah. >> roughly as she suggested. >> it's a pretty good bump of course, it could always be priced in or above that range if demand comes through it's definitely a favorable sign for lyft and maybe vindicating its idea it should get out there first. >> one question we've been asking is is it because not just the ride-sharing policies, striving so much demand? is there going to be a supply problem down the road or -- >> this is how you know. maybe down the road. i do think that lyft is in that category so many investors feel like, look, we at least have to participate in it right now and throw a few orders in it. >> we're not going to see if any of the other big tech companies
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slow down their plans. >> it goes until it breaks. >> exactly so price increase in the range for lyft, exact pricing tomorrow and likely to list in trade. at&t has shaken up the executive ranks in the wake of its takeover as the video streaming wars begin to heat up, departures could hurt up next, brain drain on media. e to unlock opportunities other advisers might not see. learn what a cfa charterholder can do for you, at 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 that helps me get clients closer to their goals. flexshares etfs are designed and managed around investor objectives. so you can advise with confidence. before investing, consider the fund's investment objectives,
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hbo losing another executive today. what does this mean for the media company and its parent, at&t julia boorstin in l.a. with a look hey, julia. >> reporter: hbo under the new ownership of at&t just lost its fourth major executive, raising
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questions about the future of the premium content powerhouse simon sutton last month, the co-head of drama, david levine both announced they're leaving with bernadette aulestia announcing her departure last week now david levy these departures due to the consolidation and the new hierarchy in place hbo and turner now both report to former nbc entertainment chairman bob greenblatt. hereports to john stanke randall stevenson responding saying the company is on track for distributing content directly to consumers. >> i don't know, if richard plepler versus bob greenblatt a brain drain? this is a very talented
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executive so i feel pretty good about that. >> reporter: the reorganization of warner media is very much under way. just today at&t offering buyouts to all turnpike e turner execut the age of 55 with more than ten years of experience. now, in terms of hbo, the team that's departing did put in place the pipeline of the shows for the next year or two we'll have to see whether at&t can attract new talent or hold on to the talent it has. back to you. >> julia, stick with us. mike, lots of announcements this week on the streaming side of things the focus tends to be on do you have the right content and do you have that brand image. at&t doesn't have that brand image in the space but it's got the hbo brand. >> well, it has the advantages in terms of what's established already but also the orientation of at&t has always been about
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pushing what content they have in a relatively novel way through their network to their subscribers. it's a little bit of a different equation obviously they still wanting to sell hbo but i think the priorities is to make it about getting to people on their devices, make ad-supported networks work in that fashion with the data that it comes with. >> i'm noticing the chart with at&t it's been quietly creeping higher and i wonder if that's because yields have fallen or there's some sort of you >> it had a very bad run after the deal closed and there were concerns about the balance sheet. i think at&t between the yields going down and the stock becoming more in favor and their assurances that they can achieve their debt leveraging probably has been helping the stock. >> julia, do you think in the next couple of months we'll look at all these departures and see them as small developments >> reporter: well, look, i think there are two types of departures here.
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one departure is due to redundancies based on consolidation. they're combining a lot of different divisions. you no longer need two different executives selling turner and hbo to different distribution platforms say overseas someone like richard plepler who had been running a very successful content business for many years, he probably didn't want to have to report to so many different levels of executives above him there are a lot of executives at those companies who were used to being able to do their own thing creatively and now there may be more oversight from at&t randall stephenson made the point he didn't know what was happening in "game of thrones," he didn't get to see content early, making the point he's not micromanaging, so we'll see how that goes. >> or, they're just so careful to keep it so quiet because everyone is obsessed with it li tnk you. up next, we'll have more on lululemon's surge after hours. whenever we're about to get on a stage for a huge audience,
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estimates. full year guidance coming in ahead of expectations. executives saying on the earnings call they're seeing strong success across china, putting some numbers on that just from the call here. the lulu executives saying market growth in asia over the fourth quarter over 70%, europe grew nearly 60%. i'll give you some perspective, though, these were tiny businesses they really had just started their international growth expansion in the last year or two, so coming off a small base but obviously having great success and helping drive growth overall. >> it's still an investor base that's consumed with is the rest of the world going to drag down u.s. earnings for multi nationals. >> mike, i guess the key thing again on yields. >> we'll see if there's any break. we're getting closer to the end of the quarter there is some maneuvering that's reinforcing these market moves we've had and stocks being
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capped we've only had a 2% pullback in the stock market it's not as if they have fallen apart. >> always keeping it in perspective. tomorrow don't miss an exclusive interview with margaret vestager, she just fined google for the third time, going after big tech again. >> we look forward to that we also look forward to "fast money" which starts right now. "fast money" begins now. live from the nasdaq market site in times square, i'm scott wapner for in melissa lee. ahead on "fast," the s&p on track for its best quarter in years and a handful of stocks have gone parabolic. we'll tell you which ones have more room to run. check out lululemon soaring after its earnings report tonight. that stock up more than 100% over the past year we've got those details coming up we start with a big reversal for stocks today the dow swinging more than 300 points as the bond marke


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