Skip to main content

tv   Closing Bell  CNBC  April 18, 2019 3:00pm-5:00pm EDT

3:00 pm
they're way down from where they debuted. zoom is profitable, unlike many of these marquee name that's have gone public pinterest has a roadmap to get there. >> it's a lot still to watch with these guys. quickly, i bring up if you haven't watched ten days stram, james has almost $700,000. it's incredible! >> have a "power lunch." >> have a great weekend, everybody. "closing bell" starts now. it is the final hour of trade. pinterest and zoom soaring on their first day of trading will these guys hold their gains beyond game one? >> and new details from the mueller report but how this news could impact the trump administration's economic agenda >> today is a key deadline in the sec versus elon musk case. we'll have all of the details for you. "closing bell" starts right now.
3:01 pm
good afternoon, welcome to "closing bell. just one hour left of trade for the day for the week we just touched the sessions highs a moment ago the nasdaq flat, s&p up .04%. >> all of the major u.s. averages are higher for the week except for the russell 2000. coming up, charles schaub's liz ann sonders tells us what concerns her most about the market right now but let's start with the wild ipo action, john ford is at hq watching imaging company zoom and we also have what else is in the pipeline with julia. let's start with you. >> pinterest under the ticker pin began its first day of
3:02 pm
trading on the new york stock change at $23.75 that is 25% higher than its ipo price of $19 a share and that price is $2 above the top of the original price rank for the stock. now pinterest's investors are betting on the platform's ability to expand internationally. here are the different types of advertisers to make it easier for customers to make purchases through the platform >> really the cool thing about advertising on pinterest is people are there to get inspiration and do things and that often means buying. so over the last couple of years and for the foreseeable future we're going to work on bridging that gap between seeing something inspirational and buying a product from a retailer you trust at a price that makes sense for you. >> ceo ben silbermann also made a point to distinguish the company from facebook and its issues around privacy manipulation saying that pinterest is not a social network but rather about users and their aspirations. back to you. >> yes, julia, i mean it's
3:03 pm
amazing. you have 265 million users for pinterest, two-thirds female, including 43% of internet users in the u.s 8-10 moms it would seem, based on those comments from silbermann and also the way the stock is trading and distance it's giving itself from this idea of being a social media platform but investors latching on to the idea they can continue to monetize the user base they have and maybe continue to bridge that gap between interactions and purchases. >> absolutely, morgan. i think pinterest has an inherent advantage in that people go there to plan things and to find things and to get inspiration for whether it's a purchase or a house redesign or wedding. so they already go there with intention to buy and that puts it at such an advantage over a platform like facebook, which is really about sharing and is now shifting to be more about communication between people so people want to hear from brands and pinterest users elect to follow specific brands, and that sets it up so nicely for those
3:04 pm
brands to send sponsor messages, ie ads, to their followers so i think that's the advantage here and the real question is how scalable that is internationally and also the ability to add more opportunities to make a purchase we will see whether pinterest ever takes a cut from that but i think it's interesting as of now pinterest wants to make it easy for users to click to buy but they're not taking any percentage of that e-commerce revenue. they just want to make it such a valuable platform for e-commerce, they're going to occur more advertising as a result of that. >> certainly an interesting distinction and one to watch as it evolves julia, thank you turning to zoom, really soaring its first day of trading. john fortt has more. >> two years ago zoom was valued at less than $2 million and now it's trading as $16 billion, more than pinterest. i asked ceo eric yuan if he was
3:05 pm
surprised his valuation zoomed up that much in a year. >> yes, i'm surprised. i knew our hard work would pay off but i never thought about this is the price. again, we will focus on execution and the price is out of our control. >> lots of people thinking about it now why the surge? zoom has a trifecta, growths, profits and culture. sales more than doubles the last two years in a row zoom's already profitability and employees rank the company high on glass door, saying it can compete against the giants in silicon valley and that matters because they compete head to head with sisco, microsoft, google among others it has plenty of room to run but when i spoke to ceo eric yuan this morning he was conscious of the challenges will he face as a public company priced for growth. he point out he could have grown the company faster in the past, but he was conscious of the
3:06 pm
dangers of expanding the employee base too quickly. investors now betting he's going to figure it out, guys. >> john, a lot of focus on the fact relative to the other tech ipos this one is profitable and that's a stand-out feature and the market likes that. is there an added feature that it's more easy to compare to some companies than perhaps lyft was being the first ridesharing company? >>sy think if wanted that comparison, compare to ring central, which is a partner of zoom's, that's more in the telephony specific space so they have a meeting product that's zoom white labeled but ring central's revenues are twice zoom's, but its valuation now considerably less. ring central not profitable yet, but still, this is a healthy, healthy amount of public currency that zoom has been given today. >> certainly is, john. thank you very much for that
3:07 pm
what do today's ipos mean in other companies waiting in the wings to go public leslie has a look at the pipeline. >> there's a little ipo rule of thumb to follow, successful ipos bee g beget more ipos. when investors are making money and so far there's more than $1 billion in paper gains today, they're going to be more atp to seek allocation in the next ipo and the greater the demand the next ipo, the higher they can price that and the more money they raise, the bigger the debut pops and it continues until the recent ipo starts failing or lower-quality deals start coming out and investors lose interest or the market plummets and the environment gets worse so far it appears the conditions are still ripe for a multitude of wing holders. uber could begin its road show process this month sources say the company is targeting $10 billion in that deal that requires a lot of investors to come to the table
3:08 pm
there's also more, postmates, posh mark, peloton all on the here rison slack is targeting a direct listing similar to an ipo but without underwriters we have a lot to look forward to now. >> we do indeed. when do we mark whether these ipos are successful or not after one day, one week, one month? >> that's a good question. i think the way we should mark these things is how investors are feeling by the time the next one comes out. lyft is an obvious comparable to uber because their ipos are so close together and core business is very similar. we can arguably say what happens with lyft's ipo will ultimately affect the investor demand for uber. >> okay. sorry. >> what's amazing is so many of these companies are mature, as we know and we've been covering as they come to market, and it would appear for them to have successful ipos, it would set the stage for more companies to come to market, maybe potentially sooner i wonder what all of this means to the retail investor
3:09 pm
i know i have been a dog with a bone with this with you in recent conversations but we spoke to new york stock exchange president stacey cunningham about this topic earlier today and i just want to play this sot and get your reaction. >> the growth curve is certainly happening earlier in their life cycle. that's the steepest and getting the greatest benefits so we want to see companies come public earlier. i can think of a private platform at the new york stock exchange but i think that's the is wrong answer for investors and contributes to the bifurcation of wealth when the most dynamic, fastest-growing companies are left to large investors with access to the private markets. >> i guess that's the key question in light of those comments right now is after the lyft ipo that started off strong and then we've seen it fall, down like 20% since that first day of trading, is how important is it in these coming days from a retail investor perspective, especially when you do look at the pipeline in the future
3:10 pm
>> i think if we just wanted to look at the two ipos that went public today as a case study, zoom was founded in 2011 and pinterest founded a decade ago zoom is clearly if you look at the financials still in the really strong growth phase of the cycle. pinterest does have very decent topline growth of about 60% but you can see it kind of slowing down so we make a lot of the fact zoom is profitable but it's also still a much newer company and it's still in kind upswing of its growth cycle so people requecan, at least the investor mindset in this current market environment, is if you can hit an ipo when it's in that upswing of its growth and life cycle, then you might be able to do better at least in this market than you might with a more mature business. >> leslie, thank you very much we will see you later in the show meantime broader stock markets near session highs as we approach the finals with 45 minutes of trade
3:11 pm
0 .5% on the dow can this ipo rush keep pushing markets high we will take you to steve grasso how do you take these ipos today? >> i heard what you asked leslie, how do you judge a successful one you have to wait until the lock-up. >> you listened. >> i couldn't help it. you have such an authoritative voice over there you have to say when the lock up occurs, where is the stock insiders get a chance to sell it when the lock-up expires but i will tell you out of the whole pool of ipos this is the highest percentage of nonprofit companies historically we have ever seen, over 80%. >> the fact they're giving their ipos away bullish or bearish >> i can make a case for both. i can say top of the market they want to cash in on valuation orky say the invest-- i can saye investor demand for growth is risk on so it's bullish. >> your hunch is which
3:12 pm
>> it's somewhere in the middle. we are topping and none of these companies are making money they are, to your point, mature companies. if they can't make money, when will they make money how often do you get a pass this long >> the flip side to that, paul hickey, is many of these names are growing and growing fast you do have once again low interest rate environment which is just incentivizing the growth here where do you fall in this discussion >> i think when you look at the ipos, you have to look at it in comparison to prior years. right now even after the two ipos today, we're just about where we were last year as far as ipos and there have been periods throughout the cycle where we have seen more ipo activity just in the last ten years. it doesn't even hold a candle to 1999, 2000 to steve's point you have to look at the quality of the ipos. some companies are not profitable judging the success of an ipo on whether we can get more ipos, i don't think you need to focus on
3:13 pm
specific ipo performance it's the market. you look at last year ipo activity was highest when the market was doing well. if you think the market is going to continue to do well, you will continue to see these ipos come in they're at net negative for the market, any time you add supply, it lowers prices i think we need to focus on the broader picture for the market and that remains pretty strong here. >> steve, when you see a name like zoom that's trading up 75% right now, around $63.21 a share, it priced $36 last night after the range was boosted and boosted again. does that valuation sound -- >> tremendous -- >> even though it's profitable >> you know how much is profitable it made under $8 million their revenues are $350 million and they're making $8 million. that doesn't sound like a good spread if you were to show that business plan to anyone in your family, what would they tell
3:14 pm
you? you're not being efficient but i'm a growth company i can get it i can play both sides of it. i don't think it's efficient but they're showing growth and they can turn on the spigots a la amazon, i'm not comparing the two, but that's what jeff bezos did. he was able to show profitability whenever he wanted to show profitability. >> stepping away from the ipo market, a couple factors that make you think market momentum is constructive, can go higher >> yes, we're always looking at the pros and cons towards the market a couple of ones that look interesting right now that are pertinent, you look at the outperformance of the semis, which relative strength and new high for a year just this week on the back of the qualcomm settlement but the semis have been leading the market for the last six years. any time you see a big decline in the market, it's been spre preceded by a roll-over in the semis. semis bottomed relatively late
3:15 pm
last year and market rallied right towards the end of the year that's something to focus on there. and as far as the negative side of things, the market right now and health of the ipo window is how the market does. the market is pricing in still a greater chance of a fed cut between now and january, then no change in rights and zero chance of a rate hike look at what we saw today, jobless claims came in 50-year low and we have seen gas prices increase for a record 65 straight days. so the fed focuses on the economy, which jobless claims can show to be doing pretty well and inflation, well, inflation numbers are contained right now but with gas prices going up nonstop, that's something to keep in mind so i think as we get towards later in the year, the market will have to start pricing in not necessarily fed hiking but at least the chances of a cut
3:16 pm
seem a lot less likely >> steven, closes up 1.29 on s&p and for a long time we were worrying about 2800. is this kind of bullish about that level >> you have to be bullish. all-time high is 2940 on the s&p cash i would say you're bullish until the next catalyst, which is the trade war ending if you get that trade deal, you can either say let's sell off the fak now, we bought off the rumor. until then remains to be seen. until then extremely bullish and awe-inspiring in the coming months. >> you don't think earnings are a catalyst >> earnings are a catalyst because everyone said we're going to have an earnings recession. so are the market already absorbed that, priced it and said you know what, that's all you can throw at us, we're going to buy this market higher and higher and now historic highs >> thank you, steven grasso. still to come -- much more on today's ipo action.
3:17 pm
why one valuation expert thinks pinterest is overpriced even before today's bounce. and after the break the mueller report is out but what does it mean for your money? was ahead of its time.
3:18 pm
still, we never stopped making it stronger. faster. smarter. because to be the best, is to never ever stop making it better. there's never been a better time to become part of the mercedes-benz family. visit the mercedes-benz spring event before april 30th for exceptional lease and financing offers on the 2019 c 300.
3:19 pm
3:20 pm
we head to the "closing bell." higher by half a percent or so, s&p and nasdaq just behind that. here are the s&p winners, united rentals up healthy 8%. un area pacific, constellation brands round out the top four. >> the justice department, meanwhile, releasing the redacted mueller report earlier today. 430 pages. ayman javers has the latest. >> the president has been reveling in the moment today saying this backs up what he's saying all along, which is there's no collusion between his campaign and russians and no obstruction by himself he's even tweeting out triumphant images over the course of the day today. but below the headlines here there's a portrait emerging of a president who was deeply concerned about this investigation as was going on. here's what the special counsel writes in the report about the idea of a special counsel being appointed in the first place they say the that president trump reacted negatively to the
3:21 pm
special counsel's appointment. he told advisers it was the end of his presidency, sought to have attorney general jeff sessions unrecused from the special investigation and have the special counsel removed. in engaged to efforts to curtail the special counsel's investigation and prevent the disclosure of evidence to it, including through public and private contacts with potential witnesses. despite all of that though, ultimately robert mueller was not able to conclude this amounted to obstruction of justice by the president the attorney general william barr suggests ultimately it does not amount to obstruction of justice by the president does that mean the president is entirely out of the woods? there are a number of references inside this report to matters that are ongoing, ongoing investigations not clear who is implicated in those investigations that are ongoing, although a lot of them do seem to center on roger stone, the former presidential campaign adviser and then there's the interesting notation in the report that we didn't know about before which says the fbi actually embedded
3:22 pm
intelligence and counterintelligence agents signed the special counsel's office and they were receiving that type of information on foreign intelligence in realtime and passing that on to the fbi headquarters and to different fbi bureaus around the country so presumably there was intelligence and counterintelligence information generated by this investigation that was passed on to other parts of the fbi, and special counsel says not all of that information made its way into this report ultimately, guys. >> but, aymon, i guess the fact for me after a two-year investigation with full powers, lots of president's allies flipping, the fact what you just listed and a couple comments on the earlier shows is the worst can you draw from this report, net-net, this is a day of victory for the president, isn't it >> this is a huge political win, absolutely i don't think you can paint it in any different light ultimately the president said
3:23 pm
there was no collusion what did the attorney general say this morning he said the phrase no collusion several times. the reports doesn't show any individual with the trump campaign or president himself conspireing with any russians. so that's a big political win for the president. we will see how it all plays out as more details emerge from what's in the report you're right these are lower level, lower headline details people are focusing on inside this report because the broader conclusions have been known for a couple weeks now. >> are we perhaps glossing over the fact this also said the russian government interfered with the 2016 presidential election in a sweeping and estimate att systematic fashion are we ignoring that and does that have repercussions between the u.s. and russia? >> this is fascinating about how the story unfolded over the years. if you read this report for the first time today and knew nothing about what happened, it would be astonishing that the russians interfered in the u.s.
3:24 pm
election, that the gru, russian intelligence service, stole emails, leaked them. there was a systemic social media effort out there to influence the election there were actual rallies with hundreds of americans taking place that were organized by russian intelligence agents in russia during the 2016 campaign. all of that is astonishing and yet we've known it all for a year, year and a half. it sinks in over time and when you see it all in one place in writing like this, it doesn't have the shock value it would have if you're learning it for the first time because this dribbled out over the past year, i think it doesn't have the exclamation point behind it, it might otherwise have. >> thank you, especially on this day when i'm sure you've been doing a lot of heavy duty speed reading. we appreciate it >> and it annoyed me it didn't have the control-f function on the download. >> but that means everybody has to read it in context. >> that's true what impact did the mueller
3:25 pm
report have on the economic agenda thank you for joining us, chris. what is the impact here for the market we're close to session highs for the dow, up 145 points is the way investors are treating this as the worst is over and now the focus can go to other areas like, for example, trade talks? >> yeah, but what's interesting historically is some of the worst days of the mueller investigation when you saw charges against people like flynn and manafort, the market ended up responding in a positive way so it hasn't really had a big impact on the market what i look at is not necessarily what will this report do but what will the result lead to next? what is congress' response to this report going to be? republicans will say it exonerates the president democrats will say there are ten potential instance where's the president may have obstructed or attempted to obstruct justice, and we need to investigate that more and we're going see a ramp-up in congressional investigations and what concerns me the most is
3:26 pm
there are certain instances where we thought maybe there could be some bipartisan agreement s. but with this, we think it's only going to elevate the divide between the democratic house and the president, and as a result of that, you may not see infrastructure there are certain trade deals we need congress to vote on like nafta 2.0. and what will happen with the debt ceilings and and caps coming at the end of sneeptember so this probably results in more dysfunction, not just put it behind us and move on. >> not necessarily great for americans or the public but from a market standpoint, the flip side of that is if you do have an impasse, then you sort of know what's going to happen or not happen from an equity or bond perspective, right? wouldn't that potentially be good for investors for now >> yeah, i think overall good for investors until they get to the point where they start
3:27 pm
talking about the debt ceiling and spending caps that are going to go into effect. i think in the near term there's no question between now and the end of september that things can be really positive because we understand what to expect. in addition, we have reiterated because there doesn't appear to be any major -- doesn't appear to be any major smoking gun here that could threaten the presidency of president trump, he's going to be there in his agenda, which is rolling back regulations on business, has been positive for the stock market over the last two years. >> chris meakens, thank you for putting this all in perspective for us coming up -- what's in a name apparently a lot we'll tell you about the mitcx-p that led to a pop in one little-known stock cfa institute.
3:28 pm
tthis is where i trades. and manage my portfolio. since i added futures, i have access to the oil markets. and gold markets. ok. i'm plugged into equities. trade confirmed. and i have global access 24/7. meaning, i can do what i need to do. then i can focus on what i want to do. visit your online broker today, to learn more. your daily dashboard from fidelity.
3:29 pm
a visual snapshot of your investments. key portfolio events. all in one place. because when it's decision time... you need decision tech. only from fidelity. you need decision tech. let's stop talking and actually be more diverse. as investment management professionals, let's measure up. cfa institute.
3:30 pm
welcome back time for a cnbc update with contessa brewer. >> here's what's happening, senate majority leader mitch mcconnell said president trump has every right to feel good about the mueller report release but mcconnell blasted democrats who criticized attorney general william barr's oversight of the report >> i trust bill barr i think it's rather laughable considering turning the guns on him. but that's all they have now, quite frankly, go after him. paris firefighter who risked their lives to douse the flames at notre dame cathedral were awarded a golden medal by french
3:31 pm
president emmanuel macron. france is paying a day-long tribute to the firefighters who saved the cathedral from collapse and rescued its treasures. bmw is adding nearly 185,000 vehicles in the united states to a 2017 recall for possible engine fires the recall covers a dozen 3 series, 5 series and z4 models from the 2006 model year that's your cnbc news update at this hour. back to you, morgan. >> contessa, thank you see you next hour. >> let's head down to the floor of the nyse and bob has a look at the earning movers driving is the market hey, bob. >> i want to show you the companies that reported today are all trading up with good reason big beef in nubsz here particularly dover reaffirmed their numbers. honeywell, raised their earnings and their revenue guidance all of these stocks trading up .key issue here, earnings beats, by very large margins.
3:32 pm
dover, for example, 12%, united rentals 9%, travelers 3% these are bigger beats than expected and shows a lot of analysts cut their numbers too much in december on fear of china melting down and it hasn't happened you will notice big annual banks, keycorp and suntrust, they were below expectations and are not going anywhere today. >> bob pisani, thank you very much for that. see you in 20 minutes. still ahead, citibank saying we could be ahead for volatility the playbook is coming up. plus, will elon musk and sec reach an agreement >> do you think you can work with the sec over the next two weeks? >> today marks the deadline for the two parties to resolve their dispute. we will bring you the latest details next
3:33 pm
dear tech, let's talk. you blaze trails... but you have the power to do so much more. let's not just develop apps, let's develop apps that help save lives. let's make open source software the standard. let's create new plastics that are highly recyclable. it's going to take input from everyone.
3:34 pm
so let's do it all, together. ♪ ♪ let's expect more from technology. let's put smart to work. ♪ ♪
3:35 pm
welcome back the "closing bell." we're near session highs for averages right now dow up 42, s&p up 6. in terms of what's leading
3:36 pm
everything higher is industrial stocks better-than-expects earnings in that sector and real estate, and financials and energy. >> it's been two weeks since tesla ceo elon musk appeared in a court. the judge giving the sec and musk a two-week deadline to come to an agreement on their dispute. cnbc's phil lebeau has the latest. >> we're waiting and wondering if we will get something in terms of the two sides issuing a joint letter, which is what the judge asked them to do two weeks ago in her courtroom here's where things stand twin the sec and elon musk's attorneys. the deadline is today for the two sides to issue a joint lesht letter in terms of what negotiation settlement they might come to in terms of the communication policy for elon musk remember, this all goes back to the original agreement that was struck late last year and the beginning of this year about how he will communicate pertant market-moving information from tesla. and we're still waiting to see what happens it could be, guys, as you look
3:37 pm
at the board of tessla, ultimately they say they're still discussing things. nothing has been filed at this point. all of this comes as we eagerly anticipate who we might hear from tesla next week next week is a huge week on monday they have an an ton muss day analysts and large shareholder event in northern california and then sttesla's first quarte earnings wednesday afternoon it will be interesting to see whether or not the sec and elon musk's attorneys can work out an agreement prior to that. guys, back to you. >> phil, you were in the courtroom two weeks ago. what was your reading of how the judge would react if they came back asking for more time or -- the judge was critical of both sides last time around >> the judge doesn't want to be put in a position where she has to lay down the law and say this is how it's going to be from here on out.
3:38 pm
she basically said to both sides, come on, sit down and talk this through. let's see if you can come to an agreement here they both said look, we would like a couple more weeks to see if we can come to some agreement, i'm sure they would be happier with that than issuing a joint letter saying the other side is not cooperating at all then the judge made it clear, look, she will get involved but she would rather they put on their reasonableness pants, as she said, and basically work it out on their own. >> phil lebeau, thank you. shifting gears in transportation union pacific hitting an all-time high on the heels of earnings. we will talk about keeping the rail carrier on course next. later, ptestinre and zoom surging. we will look where stocks stand.
3:39 pm
when you retire will you or will you just be you, without the constraints of a full time job? you can grow your retirement savings with pacific life and create the future that's most meaningful to you. which means you can retire, without retiring from life. having the flexibility to retire on your terms. that's the power of pacific. ask your financial professional about pacific life today.
3:40 pm
wake up! there's a lot that needs to get done today. small things. big things. too hard to do alone things. day after day, you need to get it all done. and here to listen and help you through it all is bank of america. with the expertise and know-how you need to reach that blissful state of done-ness. so let's get after it. ♪ everything is all right what would you like the power to do?® ♪ all right
3:41 pm
♪ it's the first trade for pinterest and zoom, and where they stand as we get closer to the close. pinterest up healthy 30% that's improved steadily throughout the day zoom just jumped 73% high as we approach the close 19 minutes left to trade let's check in on other individual market movers
3:42 pm
unilever heading up with first quarter solid sales growth the goods giant was wuk ssuccesl passing costs on to consumers. and rival nestle also topped estimates on improved pricing power. both up 2% for unilever, 0.4% for nestle s here the the european trade closed unilever up 3% and nestle up 1%. the organic growth is what people are focusing on that was up 3.4% but came in up 20% year to date unilever was up 1.5% in terms of growth but only up 20% so hence the relative reaction. but these are the results for both of these guys. >> it's interesting to hear some of the companies that are more consumer facing able to raise prices and absorb that in the marketplace. you're seeing a similar thing with the some of the industrial
3:43 pm
names as well, raising prices in recent months. again, also, showing better-than-expected results on earnings one case in point is actually union pacific that i am watching today >> great transition. >> almost as good as the music we started the segment with. but moving higher after beating earnings so revenue was a bit light. telling me this morning on "squawk on the street" they expect shareholder returns, improved operating efficiency as they continue to implement precisioned scheduled railroading, among all of the rage among the railroads right now. hitting an all-time high in the trading session today and reflecting what we've seen from some of the other freight railroads that reported earnings so far this week this idea the u.s. economy is continuing to grow they're continuing to see areas of strength. maybe some of that strength slowing but overall pretty positive the big question mark and asterisks and chris brought this up in that interview is trade,
3:44 pm
what happens with the usmca and what happens with china? >> on which another, another transition, we have a news alert. kayla has the details for us >> we're just getting a report out from the independent international trade commission on the economic impact of the u.s. smca if it were to be put in effect. the i.t. finding it would boost u.s. in trade and add about a third to 1% on gdp over the next five years and also create about 176,000 jobs in the u.s. the report also said the manufacturing sector would be the biggest beneficiary of this deal, although it does note that the new rules that would apply to the automotive sector would penlly increase prices for u.s. consumers and decrease sales and consumption of cars as a result. the itc also finds the deal would increase trilateral trade, trade between the u.s., mexico and canada
3:45 pm
it finds roughly exports from the u.s. to canada would increase 6%. exposhts exports to mexico about 7% and slightly more for into the u.s but certainly seems like good data to support the administration's push to get this deal across the finish line members of congress in both chambers have said they wanted to see this report before they scheduled hearings on the deal and before they decide the how they would vote on this deal because they wanted to know what the impact would be. and certainly this would support the administration's message it would ultimately be good for the economy. >> that number plus 0.35% to gdp, that is relative to the current status quo, not relative to if nafta was ripped off >> correct it is operating as if this is essentially a layer placed on top of nafta there are many material changes in this deal but it is not operating as if the deal were to go away and this would be the alternative to
3:46 pm
that that being said, this report itself is 379 pages. we're dealing with a lot of literature here in this d.c. that are hundreds of pages long. we will is to go through and bring you the specifics in this report but the headlines and summary conclusions do appear to be positive. >> kayla, thank you so much. coming with upgrades from other investment banks from the gdp forecast today if that came as well, you could be looking closer to above 3% for the year not insignificant adding 0.35% growth ahead -- the area of the market investors should avoid. and later black stone announcing a big structural stain that would allow more people to buy the stock. >> we can sell to 4.5 trillion out of 12. but if we make this change to be a corporation, which is like every other corporation, then we can double the number of people.
3:47 pm
>> we will break down those details coming up. ♪
3:48 pm
♪ don't get mad, put your money to work with e*trade's easy-to-use investing tools.
3:49 pm
3:50 pm
bell." we're up by 124 points, just off the highs. bad week for health care continues. pfizer and merck at the bottom, goldman sachs suffering along with johnson & johnson, another health care company. we have ten minutes to do in today's session. dow up 122 points. joining our "closing bell" exchange, the head of capital market and rick is in chicago. good thursday afternoon to you both kristin,ly sta kristin i'll start with you. we have major averages closing in on all-time highs now can this rally continue? >> we believe there's still room for it to continue a lot of the major headwinds we had going into the beginning of the year such as the fed, trade tension and global growth, two of them have been removed, right? so there's still concerns about growth but when we look at overall u.s. equities, even with the current version that we saw p. following
3:51 pm
that curve inversion, the equities returned another 12% per anna so we believe there's room to go and our investors should stay invested. >> rick, i wanted ask you about the dollar's move today and that international data we got. clearly the u.s. data we focused on all day very strong but more signs in japan and europe, at least -- maybe not china from yesterday -- the stimulus isn't working. so we have to get more stimulus in japan and europe? >> well, i think actually trade might be the hidden stimulus that's the gift that keeps on giving you look at germany in their export economy, you look at some of the relationships in trade that go on between asia, china, europe, it could make a big difference i'm not saying that's the only issue preventing ueurope from getting on board to a bullish economic scenario but it's certainly a start. i think the best way to think about that is just to think
3:52 pm
about the u.s. at the end of last year, everybody was fairly convinced that this was the beginning of a downfall and indeed it was. now in hind sight, 1.6 headline retail sales, 1.2 in gas, control number up 1%, what it's looking like was that there was a nervousness and pause, whether it's the fed or the economy, and it seems to be getting back on track. i think you take that analogy on a domestic level and ramp it up on the global level. i still would worry about the japanese economy but then again, their stock market was close to 40,000 in 1989 and they don't seem very worried. i do think europe can make a comeback, and i think next week, friday, we get our first look at first quarter gdp and it certainly is looking a whole lot juicier than anyone anticipated just a month ago. >> to that point, kristen, the fact some of the data is better than expected or on more solid
3:53 pm
footing, earnings seem to be off to a decent start as well. does this change fed policy for the second half of this year are we in a better place potentially than anybody was anticipating even just a couple of days or a couple weeks ago? >> i think we're in a better place. that being said i don't think it changes fed policy i think the fed u-turn we saw in january, they remain fiercely committed to growth. so we're not forecasting any change from here on out. actually, we like global portfolios as well so what rick was saying, we're looking for globally diversified equity port portfolios em asia is particularly interesting. the question there is there a trade revolution already priced in when you look at what u.s. equities have done, yes, we're touching all-time highs but markets have not seen that yesterday. they're trading 16% to 17% off 28-year highs so we don't believe it's fully priced in
3:54 pm
yet. >> the shanghai market had a great rally so far. >> absolutely. >> what about protection, where there's a need for protection, how do you get your clients to achieve that 1234. >> this is what i go back to saying confidentially invested if anyone made a mistake, it's not actually believing in this rally. our equity strategist wrote a piece how everybody loves a comeback story but maybe not in equities an interesting thing you can do, volatility is low. it's around 12, 13 when volatility is low, it means you can buy downsized protection at very cheap levels u.s. equities averaged around 25% from december lows buying protection is now around 70% cheaper than it was in december. >> rick, just going back to the gdp number, what number do you think we -- what's the gage for where the number hits as far as whether it forces the fed to hike again >> well, you know, i think we pay a whole lot more attention to the fed at this point than we
3:55 pm
need to. i think that the major area is the two handle 2% or higher would be very impressive to investors for the first quarter. but i think j p.o.w. is in a pause. i believe their next action, my opinion all along, may be a tightening but i think we have a lot of fairway before we have to consider that action >> rick, thanks very much. have a lovely easter and our thanks to kristin bitterly from citiprivate bank up next, we will be back with the closing countdown and after that our swarlz schaub cheev analyst liz ann sonders. [knocking]
3:56 pm
♪ ♪ memories. what we deliver by delivering.
3:57 pm
it's the first day of school. yeah, he's so nervous. tom is letting him know it will be alright. i know, it's a big day. i'm so proud of him. gotta go. ♪ good luck on your first day. just as we help companies advance in the digital era, cognizant is helping people do the same, by investing in skills training in communities nationwide. ♪ you should be mad they gave this guy a promotion. you should be mad at forced camaraderie. and you should be mad at tech that makes things worse.
3:58 pm
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. welcome back to the "closing bell." less than two minutes left of trade. as we approach the close, s&p up just fractionally. the dow leads the charge, and the russell is thin negative territory. let's look at the sector performance. real estate towards the top and energy and health care towards the bottom it's been a torrid week for health care. you have financials down a quarter of 1%. health care is actually
3:59 pm
improved, my apologies, it's in the green. let's have a look at pinterest and zoom whether they have a lift or trade down later the dollar is up about half a percent. back above 97. most of that is the euro and pound, euro in particular slipping after poor pmi out of germany and france and the sectors for a week as a whole, health care coming back for the week for the week it's been down. >> great numbers out of honeywell. we hit 52-week highs a lot of industrials up today, all of the railroads, union pacific, honeywell great guidance, deer 52-week highs consumer names, a lot of new highs at pepsi, hershey's, kimberly clark as well
4:00 pm
52-week highs. just the name pinterest, 90 million shares exchanged that's a successful ipo. >> thank you very much have a lovely weekend. the s&p is up by 0 .2% at the close. dow is up 113 points high was 150 but still 0.4% gain that's the first hour of the "closing bell. morgan, back to you. welcome to the "closing bell." i'm morgan brennan in for sarah eisen today. along with mike dan thole, cnbc senior market commentator. here's how we're finishing the day on wall street as stocks settle the dow finishing up .4% for 111 points, 26,560 the level there s&p up a fracture as well,
4:01 pm
2,905. nasdaq around the flat line of 7,998. russell 2000, small caps underperforming finishing the day down slightly. given the fact this is the last trading day of this holiday week, the dow, the that's dak, all finishinasdaq all finishing higher here's a story for investors, health care stocks suffering the worst week and the redacted mueller report is officially out. it's been quite a day. joining us to talk about the market today, our global equities research director and portfolio manager at nuvy, tiaa company. but first, mike santelli, let's start with you s&p finishing the week around the flat line but we're still closing in at all-time highs. >> right we're hovering around the all-time highs it's remarkable is s&p closing
4:02 pm
within a few points, up or down the last five days what does that mean? it means the market is obviously taking a pause after a 15% year-to-date rally under the surface there's a big rotation into more cyclical sectors and a sort of capital coming out of defensive. so it's netting out to be not much of anything going on at the s&p. the things to be alert for is has the consensus become more comfortable with the idea we're in a low and slowing environment, even as we get better than expected gdp estimates and the rest of it maybe that's for tomorrow. but right now the margaret wants to kind of hang in there and wait for, i'm not sure what, to be honest with you the earnings themselves are not moving broad benchmarks. >> staying above .35500 four, fe sessions in a row, does that make a difference? >> i think it's better than not to hold levels when there are excuses to pull back
4:03 pm
it's getting a little ragged and tired below the surface so the question is the market churning and using up energy just treading water or essentially gathering up more energy for the next move? i don't know we can say that except to say the benefit of the doubt is with the people saying the margaret is in decent shape. we are in good shape for the year. >> stephanie, i know you pay a lot of attention to industrials. better-than-expects or in some case good enough members, united p. honeywell were concerns how do you think the season is shaping up so far? >> the earning season i feel pretty encouraged. it wasn't just the industrials, although they were very important. listening to what those companies had to say that business and the economy was still good all of them said it's slower than last year but this is already reflected in the numbers and also in the valuation. i think this is a very under-owned group so you saw these stocks rally hard. we also have good earnings from american express and travelers
4:04 pm
i was very encouraged by american express' conference call they said the economy is solid they said it was very consistent in terms of the action from the consumer all throughout the quarter. so wasn't really soft in january, really strong in march. but that it was -- leaned a little bit that way but they did see activity in january, which was good and that brings me back to what i thought was the most important driver today, retail sales, nice rebound. we talked in february when the january number came out, it was a really glum number, right. and i knew it would pick up but it was a nice pickup 2.6% analyzed versus .7% on a quarter over quarter basis that's a nice pickup. >> it does make you feel good u.s. equities is the place to be as well. when you offset it with some of the international numbers. >> i think the u.s. is one place to be but emerging markets in china is certainly a place also to be. you have seen those markets do quite well it's not undiscovered. they had a nice run here to
4:05 pm
date but general wealth, we are seeing the global central bankers being very accommodative and that's very good for risk assets the data points coming out of china are are very encouraging and that's good for the global growth. >> let's talk about investment worries over medicare for all proposals by democratic leaders. it's the worst performing sector this week and to date down nearly 5%. politics, fundamentals or earnings, which is it? >> i think it's mostly politics in the thakt there was basically a crowd in trading coming into the year in health care. for one thing, i don't think it's all about medicare for all and therefore it's a binary call to see either medicare for all happens or these stocks go down or it doesn't happen and they rally a lot more i think the policy debate is all about let's look at this huge swath of companies in the middle of our health care system that are essentially profiting and
4:06 pm
kind of creating these very opaque payment and rebate schemes. maybe that isn't the idea wait to set up the system, whether we go full public or not. i think they're very, very stretched to the downside in the short term these stocks had a hard time i don't know how much further they can get pushed in the immediate term now and the rotation out of the sector is it's coming at the expense of health care. >> you think it's overdone in terms of the sell-off of big health names >> some of is overdone to the term as it's very stretched from the downside but you have 18 months of rhetoric ahead of us while it's not likely single pay actually happens, it's just the discussion about it. and the popularity of it, which is surprising, obviously, to wall street. the big tell to me this week is when united, they reported an excellent earnings number. great quality. they bought back 3 billion in shares out of a 4.5 billion program for the whole year they bought 3 billion in one q
4:07 pm
alone because they saw value the stock rallied 3% and then fell hard on that news if you can't get something like this to rally, you know the senment is certainly there. >> does this mean it no longer trades with the other defensive sectors? >> it seems to me at least in the short term, yes. first of all, within health care, some of it is really defensive and some of it is not. the health care service areas, insurers, that's the epicenter of the pain right now. >> shifting to another big story today, invest mt people firm blackstone is becoming a corporation. shifting from its current stratus as publicly traded partnership and leslie picker joins us now with what that means and why the stock is popping. keeping you so busily today, leslie >> that's true this is a notable move because it could bring in hordes of investors that were unable to invest previously in blackstone. that's why you're seeing that
4:08 pm
stock up jump about 8% today blackstone will welcome other investors who were previously prohibited from investing in their publicly traded partnership. now chairman and ceo steve schwartzman said on squawk box this should bode well for the company's stock price, one he has long believed to be undervalue. >> if you look at the ability to have people buy your stock, double the number and it will grow to more, and that's just in the u.s. there are people non-u.s. and in attorney countries, they can't buy us either. so this kind of change should result in very large increases >> there's a tradeoff though, of course in exchange for potential stock price depreciation, blackstone said it will likely pay higher taxes, schwartzman expects the company to go 5u% in the next five years and higher after that but bringing down the corporate
4:09 pm
tax rate has made them more tenable than previously. kkr in area management last year made similar moves kkr is up about 10% since its decision about a year ago in lined with broader market performance. and half of the s&p. one can argue blackstone has a slightly more diversified mix of the latter of those two. >> we can come back to corporate tax rate in a moment, and this is still incredibly low. but whether this benefits the stock price, it's been a longtime bear for stock prices this is a one-off jump as more people can buy the stock. >> they have not become a c-corps yet. this move today upwards was more just buy on the news of anticipation of more investors being able to get into this structure than they were before. i don't know if it will be an automatic thing where we can one
4:10 pm
day see all of these connections start buying shares of blackstone and all of the mutual funds that were previously unable to do so. it could be a more long, kbrad ul increase as a result. and it may not work. we saw the stock price changes from kkr and aires they have not been dramatic since they made that move. >> that was exactly the question i was going to ask you, this is a discussion that's been kicking around on want really ever since we had the tax reform pushed through. and we had some companies go ahead do it last year. the question was what's been the result thus far? >> it's interesting because one can argue if you're increasing your tax base, that is a cost on your balance sheet you didn't actually have before but i think a lot of these private equity firms and investment management are seeing the currency of potential stock price and potential capital associated with that is outweighing additional costs it's interesting clearly the market agrees with that motive. >> and talk about placing the
4:11 pm
tax burden on the company as opposed to investors who get very complex tax issues. by the way, if you don't have index funds in your stock, you're foregoing like 10%, 15% of who owns the stock market. >> mike, the other point i guess for the longer-term bear, the short term stock is undervalued, is people thinking this is basically exposure to the private investment market, which is kind of tough or at least people fear it is, we will apply a little discount. the other fear that applies is i guess they've just gotten so big, they've had great returns from their funds can that continue? >> you've done nothing is raise bigger numbers and what can be expected on returns? that's legitimate. plus, the blast cycle with 2007 ipo, i don't know what that means for today but keep it in mind. >> great to see you again. surgicals just reported their numbers. hi, kate >> looking like a mixed q1
4:12 pm
the surgical company that makes robotic pm surgical products including da vinci compared to $2.70, revenue is in line of $174 million for the quarter. the company said worldwide da vinci procedures were up 18% year on year they also shipped 235 da vinci systems, compared to estimates of 212 for the quarter the stock right now down about 6 na 1/2% for the year it was up about 10%. i hieard you discussing medicare for all and that's something earlier in the week hit the stock. back to you. >> going back to our conversation about health care. >> that's not going to help but this one has been a darling for a very long time there's been a sweet spot of where you want to be in health care i worry they just reported inline, a little disappointing on results, because there's more
4:13 pm
competition coming from johnson & johnson. they just made an acquisition. and others in the field. it's a high multiple stock nice run i understand people will take profits. it would be one if it falls a lot, i would be looking to buy let's go to politics and the justice department releasing the redacted mueller report earlier today. eamon javers joins us with more. >> we're getting a lot more detail signed the mueller report about just what happened after the special counsel was appointed and the president's reaction against the special counsel. it turns out the iron kwlier y e president's own aides protected him from himself the report laying down a sequence of events in which the president first orders don mcgahn, his white house counsel, to fire robert mueller, the special counsel. don mcgahn simply ignores that order, doesn't do it and then later the president puts some pressure on jeff sessions, the attorney general, to restrict ultimately the special counsel's mission, not
4:14 pm
to look backwards at 2016 but to look forward at future russian interference in elections. here's what the special counsel says about that. ultimately concluding that substantial evidence indicates that the president ace efforts to have sessions limit the scope of the special counsel's investigation to future election interference was intended to prevent further investigative scrutiny of the president's and his campaign's conduct so with the special counsel saying here is that by trying to narrow the special counsel's mission to the future, the president was trying to take the focus off any actions ever him or his campaign in the past. nonetheless here, robert mueller not coming up with any finding definitively that this was obstruction of justice in the criminal sense and william barr, the attorney general, suggesting that ultimately it wasn't obstruction of justice that makes today a big political win for the president and largely in part because of the president's own staffers who
4:15 pm
refused to carry out his orders. >> ayman, on top of that, what do you think voters care more about, is it the question of collusion or is it the possibility that there was obstruction of justice >> well, collusion clearly what voters want to know, we know that the russians interfered in the 2016 election. they had the social media campaign they stole the email, leaked them through wikileaks we know that the question on voters' minds was did trump or anyone around him help in that process what mueller is saying here is no, they didn't coordinate any conspiracy directly with the russian government there's a lot of detail about people communicating with wikileaks and communications with other russians. but what he's saying it doesn't amount to a criminal sfr and conspiracy and that was the big question on the minds of voters going into 2020. >> eamon, thank you very much. i think voters care about
4:16 pm
the economy. is this another big question mark >> i think if we heard nothing, and we had not been bathed in a lot of the outlines of this story for two years. today would have been a tremendous blockbuster revelation and the market probably would have taken it as an excuse to worry about it. but really all it did was fill out some of the details of the outlines in the story we've known for a while. so i don't think it has forward-going implications i think it's a little too early for the market to get too keyed about handicapping 2020 results yet. we just don't know so, therefore, there's not a removal from office or anything like that given the way the senate is set up so, no, i don't think there's a takeaway to offset what is keeping the market higher, which is good economy and low interest rates and fed that looks like it wants to keep it that way. >> stephanie, i want to ask you about a broader-market topic ipos, does that make you feel bullish about stocks
4:17 pm
>> i feel better than say lyft if we had all of these companies we're all excited about totally aggressive marketing growth, if they all were sinking on the first day and reactions there after, i would be really worried about it and not only technology, investment banks as well so i feel better today for sure. but i'm going back to earnings let's focus on earnings. we'll learn a lot of stuff next week i'm really interested to hear what facebook does that's the name i'm watching out for. >> amongst many. stephanie, thank you very much. >> great minds here. >> yes, happy easter. >> happy easter. up next, we will discuss ipo mania in more detail pinterest, pop shares surging on its debut but can momentum continue we'll debate it. plus, zooming higher yes we did zoom soaring today up 72% we will discuss what these major moves can mean for the landscape when the "closing bell" comes back
4:18 pm
through the at&t network, edge-to-edge intelligence gives you the power to see every corne of your growing business. from managing inventory... to detecting and preventing threats.... to scalingup your production. giving you a nice big edge over your competition. that's the power of edge-to-edge intelligence.
4:19 pm
4:20 pm
the latest inisn't just a store.ty it's a save more with a new kind of wireless network store. it's a look what your wifi can do now store. a get your questions answered by awesome experts store. it's a now there's one store that connects your life like never before store. the xfinity store is here. and it's simple, easy, awesome.
4:21 pm
bell." pinterest and zoom finishing their first trading days in the green, undouble-digit percentages hitting the public market with much investor fanfare. pinterest ceo and cofounder ben silbermann appeared on cnbc earlier today and talked about how he will operate as a ceo now that pinterest is a publicly tlad traded company. >> our goal is focusing on making the product great over the long term. we also want to make sure we have a good relationship with our investors and they understand where we're headed. i think we will both be on the same side and it will be a win-win for everyone. >> joining us now the ceo of rapid ratings and the co-founder of stageworks and brian hamilton foundation, which advocates entrepreneurship very good afternoon to you both. james, let me start with you, pinterest and your financial health ratings scores you do ahead of the ipos, how did it rate and are you surprised by the jump we've seen on day one >> i think it's been great
4:22 pm
very good jump into the overall ipo market, getting us out of the doldrums, the lyft aftermath after its pricing. but we rate pinterest as 48 out of 100 on the scale, and that's right in the middle of the pack. that means it has a reasonably low default risk but 18 core meeting its medium-term prospects. really need to improve over the medium haul. >> were you surprised by zoom? it priced higher than its rank, which had already been listed and finished the day up more than 70% today >> it's a great start for sure but indicative of a couple of things it's an enterprise play, not a residential one, if you can. but the rating is 64, which is very high with the 38 core that combination is probably the strongest of any of the tech ipos we've seen in a long time so it's a smaller company and a little overlooked coming into
4:23 pm
today. the bottom line is it's extremely strong and i think it showed that, and the investor reaction was there accordingly. >> which adviser do you think has had an overdone jump on day one? >> really interesting. first to james' point i will be the grumpy guy here and set it up front, i don't give these guys a great rating. i really don't not negative 48 but not that high here's why they're still losing tons of money. we have to look at the reality i was a tech entrepreneur for 20 years. guys like me were getting a pass all the time we could lose tons of money but growing well the bottom line is i don't think the performance is good at the financial level. we have to look at that. >> which one are we talking about there, brian both >> both of them. that's a good point. i will say, it's a good question, zoom is at least making money it's great but remember they're trading at 24 times trailing sales. unbelievable to give you a benchmark, when a
4:24 pm
little unknown company called microsoft went out, they traded at four times trailing sales so just think about that scale so zoom, i like them better, great question, but i still think these guys are way overpriced i really do. >> how do you think this sets us up for the big boy that's coming probably next month, which is uber which expects to be valued at $100 billion >> to brian's point, the quality of the company and the actual trading level and the dow market cap are pretty separated there's a lot of sentiment and momentum for investors to push these up uber is the one everyone's waiting for and i think it will get a fair amount of attention but from the financial health perspective, it's worse than the other two we were just talking about. >> better than lyft? >> from a financial health perspective, it's almost identical to lyft once you adjust for benefits of sales in asia and russia. >> brian, what's your take on
4:25 pm
uber >> again, good company good business model. sales aren't great but they're losing tons of money that's the dead cat in the room. we have to look at this with any tech company it's been going on a number of years right now. to james' point the ipo market tracks real well with the overall markets so to your question, i think these guys are going to do okay but if you look at it like lyft, they went down. i think they were overvalued so i think uber is overvalued, losing tons of money, good company. my question is around valuation, really, that's basically it. and remember 80% of these guys going public right now are losing money and that worries me because in a down economy, things that go up, do go down, those companies will get punished very quickly. >> mike, just quickly, is there enough money now with all of these slated ipos to take enough attention away from the big fan names that, of course, are slightly comparable? >> not yet we're talking about, you know,
4:26 pm
$2 billion today raised in these two ipos we have $3 trillion or something like that in fang-plus so i don't think that's really a straight supply/demand story but if you get marginal deals that get very aggressive valuations, it could tip sentiment more broadly i do think there's an ongoing question about whether private company financials and maps and priorities are going to clash with what the public wants to hear maybe it will just be on a name-by-name basis. >> okay, we will leave it there. thanks, guys up next -- a pop and drop. it's no secret tech stocks have been on a tear but health care's relative performance is a real story here and mike san thole will head to the telestrator to break it down. and major market risks, what net res yr esthattoou moy? what do you see? we see breakthrough medicines getting to patients in record time.
4:27 pm
we see harnessing natural gas unleashing the promise of clean energy. we see engineers simulating the future to improve today. at emerson, when issues become inspiration, focusing core strengths to create a better world isn't just a result, it's a responsibility. emerson. consider it solved.
4:28 pm
craftsmanship and technology that have made the rx the leading luxury suv of all time. lease the 2019 rx 350 for $409 a month for 36 months. experience amazing at your lexus dealer. ...when a plan stops being a plan and gets set into motion.
4:29 pm
today's merrill can help you get there with the people, tools, and personalized advice to help turn your ambitions into action. what would you like the power to do? welcome back let's take a look at how we finished the day on wall street. as you see the dow higher by 110 points, high today was 150 up 0.4%. s&p up slightly. nasdaq up a couple of basis points for the week as a whole, s&p just lower a pop, nasdaq up 0 .2%. the tech sector has been on its head while the health care is not getting much lower. it is the only sector lower for the year and make santoli is at the
4:30 pm
telestrator to explain what these moves mean. >> yeah, sometimes you have to look at a chart just because of the dramatic appearance of it. look how tech versus health care this is a ratio chart. this is the xlk tech etf against health care and it's gone vertical this is a two-year chart you see it oscillates around the flat line dependiline, dependinn what's going on. these used to somehow operate in tune with one another, not necessarily contrast both with growth aspects and insulated largely from the broader economy. obviously we talked about the concern with health care and health care providers in jeopardy the rush into tech is just crowding with anything with reliable growth and tech in particular i say the takeaway here is this relationship has gotten quite stretched at least at the moment would you expect even if you thought structurally health care was in a downward trend against the rest of the market, this looks like maybe it's prime for a little bit of gaa giveback at
4:31 pm
least in the shorm terms. >> does getting closer to 2020 affect it because of the vis, the view health care is more in the political spotlight? >> you would think we're in this for a year nafr until we get to the election on the other hand coming into this year, it was the regulatory risk attached to big tech we thought would be the story >> it's interesting because last year in the final quarter when the markets were more broadly tanksing, investors were piling into health care calling it the new tech sector. you see the relation shship you see it almost goes from one to another. >> if you look at medical in health care, devices and equipment and things like that, that are not about payment streams of insurance, have done really well. pharmaceuticals not as well. i think you have to be more granular but there are times when the market decides i'm afraid of the overall economy and recession risk, let me crowd into health care that would be something that would probably have this
4:32 pm
relationship back up a little bit too. >> mike, thanks very much. time for a cnbc news update with contessa brewer here's what's happening now. the democratic chairman of the house judiciary committee, congressman jer yeah nadler, lashed out at attorney general william barr for what nadler called misleading comments about the mueller report >> your report concluded there was substantial evidence, in quotes, that president trump attempted to prevent an investigation into his campaign and his own conduct. that is why i had formally requested special counsel mueller testify before the house judiciary committee as soon as possible the drink pg watter in paradise, california, is contaminated with cancer-causing chemical benzine paradise is the site of the worst wildfire in state history. now the few remaining residents have been told not to drink or use the water. it's expected to take two years and up to $300 million before that water is safe
4:33 pm
egypt has announced the discovery of two ancient tombs in the southern city of luxor. they date back about 3,500 years. there's hope this discovery will reboot the country's struggling tourism sector back to you. >> contessa, thank you very much the market continues its climb higher dow up about 14% year to date. s&p up 16% and nasdaq 20% higher our next guest says there are risks to the market. joining us now is ann sonders from charles schaub. great to have you with us. thank you for joining us. >> thank you for having me. >> the sentiment in particular of late is something that's given you a cause for concern, is that right? >> it is and actually it's just in the last few weeks one of the things i think made the early part of this rally look so healthy was not just the conditions that were very, very strong, technical underpinnings but you saw a lot of scepticism
4:34 pm
the first few months of the rally. really only in the last few weeks have you seen many bee hanker and attitudele measures of sentiment shoot into what might be the extreme optimism territory. that would be the one potential rub here in an otherwise good momentum and to some degree improving fundamental story. >> given the rebounds, liz ann, that we have seen both u.s. equities and a number of other major exchanges around the world right now, where should investors be looking for opportunities? >> well, u.s. equities, which is my bailiwick, we for the past year and a half now we've been at what we call a neutral stance, which is a message to our clients to stay at your normal long-term asset allocation to u.s. equities but within that we've had a strong bias towards large cap over or at the expense of small cap. so i still think that kind of trade, if you want to call it that, being overweight u.s.
4:35 pm
large cap versus small cap is probably the most important sub message inside of this otherwise neutral positioning. and that's due to better fundamentals forbe the large caps, much higher percentage of companies, even with no profitability or very high levels of debt in the small cap areas. some of the changes to the tax law from an interest expensing standpoint that proportionately hurts small cap. so i think that's kind of a bet want to continue to press looking in the near term at least. >> liz ann, it seems one of the things that probably is encouraging a lot of people towards that sense of optimism you cited before is this idea we're in some kind of sweet spot, right? growth is not falling apart in the u.s. in fact it's firmed up and the fed seems sidelined. so you have this almost perfect picture, soft landing that may not be that much of a landing. how much longer do you think that can last? in other words, is the fed truly sidelined? we're getting upward revisions of first quarter gdp already.
4:36 pm
>> that is the tricky part it's interesting like you asked with the term sweet spot, which is what i have been talking about quite a bit as it relates to the fed early in the cycle when the fed starts raising interest rates, not just this cycle but any cycle, the diameter of the sweet spot tends to be fairly wide they're tightening into usually not a big inflation problem. there's no risk of them tightening too far or the economy really overheating i do think the diameter around the sweet spot has narrowed a little bit you have risks i think in both directions there is the risk that inflation, which is so much complacency around inflation is dead and buried. if the labor market continues to be tight, you start to see some translation into wage gains, into more traditional price inflation, i don't think that's built into expectations. conversely, i think if this boost we seem to be seeing in overall economic growth turns into a story opposite of what
4:37 pm
you normally would expect to see, which is a weaker first quarter, stronger secretary quarter, it may be a bit the opposite this time so we are, i agree, in a sweet spot right now i just think the diameter is a bit narrower than say a couple years ago. >> what's your top sector pick at the moment in the u.s.? >> we're in a quiet period now because we're discussing some sector rating changes. so i can't talk about sectors right now. >> do you fear the dollar weighing more broadly on the u.s. equity market, given some of that that softer data we got internationally and the jump in the dollar above 97? >> not only do i think the dollar will be important, it was a factor in why the export side of the economy as well as corporate earnings was weaker last year is because of the strength of the dollar in fact, if you look at, and it's still early in earnings season, of course, but if you look at the company conference calls and you rank the issues or the factors that companies are saying represent a risk factor
4:38 pm
looking forward, trading tariffs has actually kind of moved down the list but foreign exchange is now the number one factor being cited by companies that have reported so far as a risk factor so companies are telling you it's something that they're keeping a close eye on so i think investors need to as well. >> liz ann sonders, thank you very much for joining us today still ahead, riding the ipo wave zoom shooting higher on its public debut but it turns out another stock is benefiting in a big way and it's all thanks to investor error we will explain that plus, the sears saga continues. the iconic retailer dragging its one-time leader to court a business owner always goes beyond what people expect. that's why we built the nation's largest gig-speed network along with complete reliability. then went beyond. beyond clumsy dials-in's and pins. to one-touch conference calls.
4:39 pm
beyond traditional tv. to tv on any device. beyond low-res surveillance video. to crystal clear hd video monitoring from anywhere. gig-fueled apps that exceed expectations. comcast business. beyond fast. lower carbs. ♪ lower calories. ♪ higher expectations. the light beer you've been waiting for has arrived.
4:40 pm
corona premier.
4:41 pm
up next, a shake-up, mcdonald's is pulling an entire line of burgers from its menu and the reason may surprise you. and lyft lawsuits. the ride hailing company being sued by investors and it's all thanks to its poor pfoanerrmce since its ipo.
4:42 pm
so, you're open all day, that's what 24/7 means, sugar. kind of like how you get 24/7 access to licensed agents with geico. hmm? yeah, you just go online, or give them a call anytime. you don't say. yep. now what will it take to get 24/7 access to that lemon meringue pie? pie! pie's coming! that's what it takes, baby. geico®. great service from licensed agents, 24/7.
4:43 pm
onmillionth order.r. ♪ there goes our first big order. ♪ 44, 45, 46... how many of these did they order? ooh, that's hot. ♪ you know, we could sell these. nah. ♪ we don't bake. ♪ opportunity. what we deliver by delivering. what do you look for i want free access to research. yep, td ameritrade's got that. free access to every platform.
4:44 pm
yeah, that too. i don't want any trade minimums. yeah, i totally agree, they don't have any of those. i want to know what i'm paying upfront. yes, absolutely. do you just say yes to everything? hm. well i say no to kale. mm. yeah, they say if you blanch it it's better, but that seems like a lot of work. no hidden fees. no platform fees. no trade minimums. and yes, it's all at one low price. td ameritrade. ♪ welcome back here are other closing story on the radar today. mcdonald's getting rid of signature crafted burgers after two years on the menu. the company said it took too much time to put the burgers together which led to a slowdown in its service time. they plan to shift focus back to popular quarter pounders, big macs, that have been there for ages that and the french did not buy into it. they're saying not because of customer take but it should be
4:45 pm
who would go to mcdonald's for something really premium you go for the staple burgers you know and love and fries. don and i always talk about the fries. >> fries are undisputed. >> you know what they cause a quarter pounder with cheese in paris? >> royale with cheese. >> i knew you would get it. >> everyone has seen that movie. >> and big mac >> big mac. >> john travolta told us that. >> you know what they call it in the uk >> no. >> quarter pounder with cheese stop here. >> that's great. we're going to move on investors in lyft suing the company over its poor performance since going public last month investors say lyft exaggerated its claims of having a 39% market share in the u.s. the stock is down 19% since its ipo. guys, i do think this is really notable, given the fact that when we did get that filing from uber ahead of its ipo, their numbers were in conflict with lyft's numbers
4:46 pm
it good seem there was very different data points in measurements being used here which is something analysts have called into question recently. >> on the headline numbers, all of the footnotes sort of clarify that these ipo prospectuses have so many sort of legal disclaimers, we might never make money, i think they're on thin ice, this lawsuit, attempting to go after it maybe if there's some outright lie in there but i don't think there is not with what they're aelleging anyway. >> one reason why companies don't want to be public is you're subject to these lawsuits but you massage the numbers and it's a concern of what you can and can't do see how it plays. >> speaking of massaging numbers. sears filing a lawsuit against former ceo eddie lampert and board members including treasury secretary steven mnuchin. the retailers is accusing them the disproportionately benefiting while lampert was ceo. this comes months after sears filed for bankruptcy
4:47 pm
this was, obviously, a long-standing krit sim of lampert's reign at series as so many transaction spin-offs, lending money to seriars from hs own fund and in the end owning more than half the shares that went to zero it's not as if he had no skin in the game but i'm not sure where this will go not unusual to see litigation out of a bankruptcy process either. >> doesn't reflect brill anticipate thely on for secretary mnuchin either on the board. >> and old friend of lampert and on the board, exactly. still ahead here on the "closing bell," red hot stocks going higher, scoring a major billion dollar deal. all of the details next. internet that puts you in charge.
4:48 pm
alright boys, time to eat. that handles anything. [ crowd cheering ] that protects what's important. and reaches everywhere. this is beyond wifi. this is xfi.
4:49 pm
4:50 pm
welcome back to "closing bell." shares of canopy growth higher today. to acreage holdings >> this is a very unique deal and the first of its kind deal and you mentioned acquiring. technically, canopy has the right to acquire acreage and there is a trigger clause when that deal will actually happen and that's because right now exchanges don't permit companies to acquire businesses that are federally illegal such as cannabis here in the united states, but the structure that we have here is basically a workaround and could open the door for much more m & a and here are the mechanics of the deal that amount to $3.4 billion and part of the deal an up-front cash payment and acreage stock will be paid to canopy and each acreage share will be at .5818,
4:51 pm
a natural acquisition is triggered over federal legalization of cannabis in the united states or upon exchange acceptance for instance, if the new york stock exchange decides to change the rule and say you know what listed companies can participate in businesses in the u.s. that are federally illegal. a couple of reasons why this deal is so important, this gives acreage currency in the canopy stock to go shopping in the united states for other targets. acreage gets a head start to do other deals because other operators don't have access to banking. the cannabis is federally owned in the united states so banks can't do business with these companies which limits their access to capital. i did get off the phone with both ceos and acreage is eyeing targets in arizona and pennsylvania remember, consolation has a major stage in canopy. yes, think about this. a u.s. publicly traded company has now found a way to invest in u.s. cannabis which would have been prohibited if not for the structure of this deal and presumably this could serve as a
4:52 pm
template for other companies whether they be consumer products companies, big pharma, tobacco to also get a piece of the action of u.s. cannabis. so it's a very exciting deal for the space and we saw the stocks react accordingly and particularly the stocks of the multi-state operator, those operators within the united states, they had been trading at a discount to their canadian beth r brethren because of their lack of access and they could also embark in this sort of deal and effectively have access to capital to do other deals. we should note that canopy growth and acreage ceos will join us in the next hour on "fast money. we'll find out about the deal and the targets that they're looking at right now. >> we certainly should note that, melissa. absolutely great bookings, that is. going back to the consolation brands point, were they a driving force behind this deal or just a sort of fortunate, quiet passenger in it? >> that is a little bit unknown at this point, wilf.
4:53 pm
technically, they can't participate in this sort of deal, so i would venture a guess to say that they didn't officially participate in this deal, but obviously being a major stake holder in canopy, they must have known this was happening. we'll get some more details on that from the ceos when they do join us. that is a great question i'm not really sure how much they can actually be a driving force in any sort of deal like this just from a legal standpoint >> in terms of a federal legalization of marijuana here in the u.s., do these ceos have an expected timeline in terms of when they can actually see this deal officially come to fruition >> a lot of people say it's not a matter of if, it's a matter of when, but i'll tell you all of the ceos say it doesn't matter if federal legalization happens or not they'll operate here in the united states the way the multi-state operators are working right now, they've got a set of regulations and they're working in states where they know what the rules are and they like it that way and it creates a barrier to entry for those
4:54 pm
businesses and they're at an advantage in terms of trying to buy licenses in other states and they know how that game works. once you federally legalize it it opens up the door to other competitors that might be more deep pocketed and can operate more broadly and efficiently so right now this is sort of a goldilocks period for a lot of these multi-state operators in the united states, the u.s. cannabis companies. >> melissa, thank you very much. we look forward to "fast money" as always coming up in six minutes' time. after the break on "closing bell," corporate confusion we'll tell you about the name mixup giving a boost to one little-known stock today. plus, we have all of your enll street look ahead, the key evts every investor needs to watch next week. stay with us "closing bell" will be right back walking around here in their hundreds. so how do you stay financially well for all those extra years? well, you have to start planning as early as possible. we all need to plan, for 18 years or more, of retirement.
4:55 pm
i don't have a whole lot saved up, but i'm working on it now. i will do whatever i need to do. plan your financial life with prudential. bring your challenges.
4:56 pm
...when a plan stops being a plan and gets set into motion. today's merrill can help you get there with the people, tools, and personalized advice to help turn your ambitions into action. what would you like the power to do?
4:57 pm
shares of zoom video up 72% on ipo day, but another company also getting a boost today as investors may have bought the wrong stock. zoom video trades under the ticker symbol zm >> what do we call it here again? >> zm. the chinese wireless communications company with a $14 million market cap and that's 1-4 has the ticker
4:58 pm
z-o-o-m. at one point it was trading 100% intraday and it close as a small-cap stock and any interest would move it sufficiently, kind of hilarious this story. >> unless you're someone who mistakenly invested there. >> at the top. >> shows how haphazard it can be part of it is to think maybe someone has algorithm missed program for key words. this has happened for a period of time. i can remember in the '90s being in news wire and following the random moves in very small stocks and john malone's company, telecommunications ink known as tci and they were going to be in a deal with at&t and a company with the symbol tci roared higher and tweeter was a home electronics chain that was in bankruptcy and when twitter filed its ipo in tweet, that stock rose higher.
4:59 pm
people trade first and confirm later, unfortunately. >> think ahead of the next one. >> that's an interesting question some people have wondered if you have inside information about one deal that was going to happen would you be able to buy the unrelated, but similar-sounding stock legally >> anyway, an amusing story, obviously, hopefully no one lost money in that. >> here's a look at what's coming up next week on the closing bell calendar. the busiest week of earnings season kicks off monday, reports from kimberly-clark and whirlpool, tuesday, lockheed, twitter and snap and wells fargo holds its shareholder meeting. >> on wednesday, we'll get facebook, tesla, at&t, microsoft, chipotle and many more and we'll look for headlines from lululemon's analyst day and bank of america's annual meeting and more big earnings on thursday, as well from amazon, ford, intel, starbucks, 3m and more and on friday we'll get earnings from chevron and exxonmobil. woo! i'm getting tired just reading all of these names and at&t
5:00 pm
hosts its annual meeting and avenger, endgame finally hits theaters and it's been breaking some of the pre-sale records. >> it has, indeed, and a big, big list of earnings the likes of facebook. morgan, as always, thanks for filling in >> happy easter, happy passover. >> happy easter and that does it for "closing bell "qwest. >> "fast money" begins right now. >> fast money begins right now live from the nasdaq marketsite overlooking new york city's times square i'm melissa lee. tim seymour, steve grasso and guy adami. pinterest and zoom soaring in their trading debuts and we'll bring you the latest on those stocks, plus a dope pot deal canopy buying acreage holdings for $3.4 billion and we broke the story last night on the show and we'll sit down in an exclusive with both ceos this hour and we start with earnings excitement as we head into the busiest week of the season and nearly half of the dow will be


info Stream Only

Uploaded by TV Archive on