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tv   Power Lunch  CNBC  May 30, 2019 2:00pm-3:00pm EDT

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what can be interesting, the pentagon requesting new funds to go towards this production if you see the government get involved in that, that could be very interesting as well just from a national security standpoint >> i think with everything else going on, for sure, right? guys, thanks i'll leave you with the rhetorical question. morgan brennan and eugene, thank you. i'll join tyler and melissa for "power lunch" which begins right now. >> see you soon, kelly i'm melissa lee with tyler mathisen new at 2:00, china now accusing the u.s. of economic terrorism as the tit for tat escalates the trade war drags on, what's the biggest fear for investors right now? missing out on a rally or in the getting out ahead of a sell-off? we'll debate that and facebook kicking off its shareholder meeting at this hour protests, angry investors and a new threat from a presidential candidate. "power lunch" starts right now
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>> all righty. welcome, everybody, to "power lunch. i'm tyler mathisen markets slightly higher right now. not much of a rebound from the recent selling but the dow is still, i should point out, headed for the sixth straight week of losses and that has not happened, kelly, in a year. >> tyler, thanks markets are shrugging off the tough trade rhetoric from china so far today, bolstered in part by a vote in part from feds vice chair rich clairda seema mody with big movers and kayla tausche is following the latest on those trade tensions seema? >> reporter: hi, kelly fed chair downplaying concerns over tin verted yield curve and a rate cut could be under discussion if the economic outlook worsens. no real mention of trade and we are higher across the board. what's also helping lift markets today or balance markets, 10 year yields stabilizing around 2.24%, plus, among other econ
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experts, talking about how, yes, the yield curve is inverted but doesn't necessarily mean we're on the edge of a recession one specifically are rebounding across the board by 1% to 2% chinese down 4%, copper prices a proxy for growth as well as emerging markets down 7.5% and tonight, the china pmi down in focus. back to you. >> washington now for the latest on trade with kayla tausche. hi, kayla. >> reporter: tyler, as china lobs new threats at the u.s., the trump administration is planning its own censure on china's religious freedom and human rights records, according to two sources familiar with the matter vice president mike pence is planning a speech around the 20th anniversary of the
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tiananmen square massacre, a white house official concerns. estimates china detained up to 3 million muslims or ouighers in camp and whether that would be in conjunction with that speech. chinese state media called the u.s. arrogant, accused of naked economic terrorism and may cut off rare earth minerals from manufacturers. daily article saying, don't say we didn't warn you a reminder that china's retaliatory tariffs increase on saturday melissa? >> thank you, kayla. kayla tausche in washington. next is michael froman, u.s. representative thanks for coming back this june anniversary of tiananmen square seems like it could be important how do you think, if at all, it changes the chinese stance toward trying to make any sort of a deal with the u.s.?
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>> it's an important date in their history and all sort of domestic politics about nationalism and asserting themselves we see coming out but over the long run, we need to be looking at what's going to happen with the u.s. and chinese economies. are we going to continue to be interconnected as we have been and we see that playing out in the rare earth discussion or a decoupling in terms of trade and technology that's the bigger, probably more substantial issue than when we get a new trade agreement in the short run. >> that's an interesting point, michael. as the trade war goes on, working around for six months so as not to impact their first quarter results. do you foresee this decoupling becomes much more substantial and that power shifts away from
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china economically >> i think decoupling could accelerate and we could see factories moving from china to vietnam or malaysia and elsewhere. but i think the challenge in this tit for tat tariff situation, manufacturing exporters who stand to lose access to what is obviously a very important long-term market in china if we pull out, kept out of the market, those markets will be taken by our european or japanese or korean competitors and that, in the long run, difficult to get back into >> how much, if at all, the u.s. chinese domestic politics and the president's personal situation in respect to a trade? >> i think they follow it extremely closely. don't always read it correctly but care a lot about it. and trying to, you know, they understand that china has become a galvanizing force across the political spectrum and there's
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more of a bipartisan consensus on the importance of being tough with china now than perhaps ever before, but i think at the same time, they're trying to send the message that going down the path is going to hurt some very important constituencies across the country, particularly in the agricultural community but increasingly in the manufacturing community and in consumers. who end up paying 25% tax on the kinds of clothing and shoes and day-to-day goods they rely upon china for imports from >> you're the vice chair of mastercard i want to ask about that industry and what it could stand to gain should china open up, should there be a deal that was one of the great hopes that credit cards, third party processors, the $31 trillion market in china. that could open up when could it open up operations is it years out and in that amount of time, could dominant
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players in china like a union pay actually become more entrenched in that period? >> we've been involved for many, many years and we have a very robust cross border business but at the same time, obviously, we like to play a bigger role in the domestic market and continue to work with partners and regulators there to determine what the best way is, to be able to contribute more significantly to that market >> michael, thank you. >> thanks for having me. in the meantime, stocks slightly higher but dow on track for sixth straight week of losses so what's the bigger fear for investors right now? fomo fear of missing out or fongo, the fear of not getting out? art hogan, chief market strategist with national securities what are you hearing from clients? >> the same thing. two fears. equilibrium and they know that the market now moves so quickly, but the algorithms actually deciding initially whether or not you should get out or move
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ahead. it's nerve-wracking and one of the things clients have been doing though, very smart, is taking some profit from some of the winners, all along and then building up cash for when the market sells and volatility kicks in, so they can then go back in and start building up again. they also realize the headlines are so important in this particular market period. >> absolutely. to that point, you could be afraid of staying in the market and not getting out, because there's going to be, you know, worsening in the relationship, or you could get out and then be afraid of missing out if all of the sudden, you get one headline or one tweet or one comment and one report and things look like they're going the other way. >> kelly, i think it's amazing when we look at the basics of the psychology of what drives markets, it's always fear and greed, right it boils down to how much your sentiment changes when your prices change. at the beginning of the year, everybody felt like they missed out. december was terrible. out of the market and up 25% over the last three weeks.
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down 5%. markets are off and everyone is thinking, we have to get out of here that's exactly the point in time we're at right now when you look at the investor surveys and how bearish people are right now. you look at the fear and greed index and you see how, you know, nervous people are, that's probably a good thing on a counterintuitive basis to say i hope more people are nervous in this market. >> how worried are both of you about an economic slowdown >> that's becoming increasingly a concern, because you see some of the data here in the u.s. sloeing. not stalling but slowing but the data clearly have been slowing and we need to see unequivocally strong data to get this market, underpin this market and there's pockets that
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are fine just reclassify and allocate but need to see that data turning around it's weakening >> art >> i think there's a balance of good and bad data we've seen over the month of april into may, but i think everything is predicated on how long it takes for us to be in the trade war with china. >> if that were to resolve itself in the front half of this year or over the course of the summer, i think there would be less manifestation of bad economic data going forward. we're kind of stuck. it's not all natural business cycle. a lot has to do with the business and a great deal of uncertainty. i'm not going to make a lot of investment unless they know where i stand on trade with china. >> all right guys, thanks that's where we'll leave it. great to see you, thanks. up next, shares of facebook up 39% so far this year. amid all kinds of controversy. climbing higher today as the company's annual shareholder meeting gets under way amidst
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protests live to menlo park, california still ahead on "power lunch," uber earned itself a dubious honor. one of the four u.s. companies with a market cap of at least $50 billion that is losing money. it is set to report results after the bell today you may want to send your children to another room a look ahobathloest w d e ss could be, coming up. s why go with anybody else? we know their rates are good, we know that they're always going to take care of us. it was an instant savings and i should have changed a long time ago. we're the tenney's and we're usaa members for life. call usaa to start saving on insurance today. lower carbs. ♪ lower calories. ♪ higher expectations. the light beer you've been waiting for has arrived. corona premier.
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facebook holding the annual shareholder meeting where several proposals made to rein in mark zuckerberg's power leslie picker with the latest. leslie >> reporter: kelly, that's right. facebook's annual shareholder meeting beginning about ten minutes ago here at hotel nia here in menlo park, california so far, gone through the various shareholder proposals where they'll present various ideas to the other investors in attendance and mark zuckerberg is expected to give his remarks shortly. investors will vote on 12 items today. four of them proposed by the company, director elections with the auditor and those are expected to pass but there are also 8 proposals by shareholders. these include things like eradicating the dual share structure, appointing independent chairman not named mark zuckerberg and exploring a potential break-up or sale of assets within the company. so those are expected to get
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some shareholder support, especially outside of the insiders who hold the stock, but it's not expected to pass because mark zuckerberg holds a majority of the voting power of facebook stocks. so outside of the meeting, protesters were hoping for a little bit more influence with an angry inflatable emoji and various signs criticizing the company. guys >> leslie, thank you very much the other hot issue today in silicon valley more aggressive push to break up big tech. 2020 presidential candidate elizabeth warren put up a billboard in san francisco there you see it pressing for companies like facebook, amazon, and google to be broken up a columnist with "the new york times" and cnbc contributor and paul meeks is a facebook shareholder and portfolio manager of the wireless fund let me start with you, paul. the company, and let's just talk about facebook here a little bit. their shareholder meets going on a lot of criticism and i believe
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it was kara swisher or earlier in a column last weekend, saying this is the end of facebook as we know it and yet the stock is up 30-something percent this year what gives >> one of the things i would caution people to remember that this stock was $124 a share around christmas time of last year and so when you say it was down, yes, it's also climbed 50% off the bottom which is enormous, given that stocks on an average year do about 10% per year one of the things i think is important, in the most recently reported quarter, the business, despite all of the scandal, perceived or otherwise, has continued to perform nicely and mark zuckerberg made an indication and like to hear more going forward, about going from a model where we're screaming in the town square, 2.7 billion monthly active users, to something that is smaller groups, more private, probably
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less dependent on advertising revenue and more dependent on transactions and e-commerce revenue. so a transition to a new world for facebook is already in the mix with or without the public bashing. >> what do you think of what paul just said, ed do you think that turn of this big battleship is the thing that can turn its reputation in a more positive direction? >> i think i agree with paul if, you know, once that actually starts happening, i mean, this is something that mark zuckerberg has talked about as the newdirection for facebook, more private messaging, more group chatting, less public posts. i haven't seen that sort of action i know it's going to take time but back to the larger point, shareholders can vote all they like it comes down to, are you still on the service and doesn't seem like people are quite leaving and the stock is still up. paul, it doesn't look like he's selling his shares either. that's where the real votes come
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in the nuance, however, people aren't leaving facebook or still going to facebook. kelly, i saw you wrote something recently, it's hard as a new mom to not be on facebook, right even if you don't want to be, you're kind of almost forced to. >> they'll drag me kicking and screaming. >> in that way, i think elizabeth warren has a point to make are they too powerful? that requires a different look or interpretation of how we enforce that across the law and still far away from that a nice call to action but if you're an investor, what am i buying into? on facebook? what are they on for that's another question. >> what you might be buying into is what seems to be sort of teflon's sort of business. your shareholder, you say it's a hold at this point the stock has basically recovered from the cambridge analytica woes and business holding up as the latest earning report it's quaint they're having a shareholder meeting but mark
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zuckerberg could be in a room by himself and cast every vote he has and that could be it basically, they don't have to change anything they do whether washington or whoever wants or not, if they don't want to, right? >> the fact that mark zuckerberg does not have to do anything and no, he hasn't shown a plan to action, but at least talked about the broad strokes of a plan to change the company, i think, quite interesting, and you have to give zuckerberg some credit because, again, as you said, this is not a half-do. this is something he's doing because he sees the future >> thank you very much ed lee, paul meeks, we appreciate your time the world's largest vacation ownership and exchange company making a big bet on attracting millennials to properties. the windom destination coming up and then falling as trade tensions with china continue to
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simmer but iitea ts rdyo rebound? that is next man: stand up if you are a first generation college student. stand up if you're a mother. if you are actively deployed, a veteran, or you're in a military family, please stand. the world in which we live equally distributes talent. but it doesn't equally distribute opportunity, and paths are not always the same. i'm so proud of you, dad! man: i will tell you this, southern new hampshire university can change the whole trajectory of your life.
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we are 523 days away from the presidential election and the ownershpioid episode, healte for all, a hot button issue and that could be a head wind for stocks dominic chu with a close-up. >> reporter: according to analysts at goldman sacks, they looked over the course of the last four election cycles and turns out in the two years leading up to that election, health care stocks actually post on average a decline of 9% this is looking at the nyse pharmaceutical index that tracks global drug and pharma companies. look at this blue line this is where we curtly stand, or thereabouts average 9% decline going up to elections and minus 4% implying
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if on average, things work out the way they do for the rest of this election cycle, we could see further declines in pharmaceutical stocks. to put in further context, health care has been the worst performing sector in the s&p 500 overall, after becoming the best sector last year if you look at the health care sector, etf, ibb, the nasdaq biotech etf, all of those biotechs have underperformed whether or not, melissa, we could see more underperformance in some of these biotech and health care related stocks and especially as we lead up to that 2020 election. back over to you. >> 523 days away, apparently, dom, thank you dom chu. michael santoli for "trading nation." mike >> thank you, melissa. let's take a look today at 3m. it's the worst performer of the
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dow so far this quarter. matt maley, your "trading nation" team these are the conditions to ask, where it's so bad it could become good. how does that apply to 3m here >> not only stocked down 15% this month but down 25% since late april i mean, basically, they reported poor earnings. they were already having problems before the trade negotiations fell apart. so the stock is really in tough shape. on a technical basis, having said that, very oversold look at the daily chart, rsi down to a level usually followed by pretty sharp bounces. also at a 20 day discount, back to the moving average. you have to go back to the 2009 lows to see that kind of discount and weekly rsi chart, also very oversold back down to levels to see sharp
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bounl bounces. this is not a stock i want to be selling here if you want to buy it, it's a short-term flip, but i think you'll see a good enough bounce though so if you want to act on the sale side, you'll be able to do it at higher prices. >> at least the conditions maybe for a bounce so many years, considered a well managed company. 3.5% dividend yield. anything here tempt you as the long-term holding? >> 3m has been a disaster. even before the china trade talks. essentially no growth but absorb this big acquisition and really, the only question right now is evaluation play. and the question there is whether the dividend stream remains secure for now, it does remain relatively secure but no means a slam dunk. in my opinion, at best, this is kind of a trade where you want to maybe put a tow hold into the stock. i don't think it will be a serious bounce anytime soon. if you want to buy a long-term position at a good value
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proposition, probably the best way to do it is selling goods at a lower price than it is now. >> selling puts to get in 10% lower. thank you very much. for more "trading nation," head to our web site or follow us on twitter @tradingnation. >> ahead on "power lunch," a much needed pulse on the economy. we'll sit down for an exclusive with wynn ddham destination we head into june. and then key investors to watch for the first report all this when "power lunch" returns. >> and now, the latest from tradingnation.cnbc.com and a word from our sponsor. >> for entries into breakouts, some traders use buy stop limit orders placed above resistance levels unlike regular buy stops, buy stop limits turn into limit orders when the stop is triggered. thus if a stock closes below the
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stock price one day and opens far above the limit price the next, the trader will not buy the stock. i'm lee bohl and schwab is the better place for traders
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hello, everybody i'm sue herera with your cnbc news update at this hour vice president pence meeting with canadian prime minister trudeau to try and build momentum and get a new trade deal with kan canada and mexico pass coming after president trump removed steel and aluminum tariffs. it needs approval from all three countries. fighter jets flown with u.s. aircraft on maneuvers amid tensions between iran and the u.s. in the persian gulf the air force said the flight occurred on wednesday. hungarian police releasing footage of the sight-seeing boat with south korean tourists and a larger cruise ship crashed on the danube river 7 people killed and 21 still missing. rescue workers are scouring the river for the missing people back here at home, gavin newsom supporting a senate bill to give california horse racing board authority to quickly suspend a meet license to
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protect the health and safety of horses 26 horses died at santa anita racetrack since december 26. you are up to date that's the news update this hour back to you. >> sue, thank you very much. oil market closing for the day. rajel. >> losses accelerating into the close. below $57 a barrel and three factors driving the action too much supply. report showing crude stockpiles fell by 300,000 barrels last week much less than the 900,000 barrels that analysts expected and escalating tensions in the middle east. meeting in saudi arabia right now sending a strong signal to iran they will protect their economic interests in the region and finally, demand worry still in focus amid the escalating war of words with the u.s. and china, a senior chinese diplomat calling the naked economic terrorism
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adding china opposes a trade war but not afraid of it >> thank you very much economic indicators are hinting about a slowdown in the u.s. and trade tensions and weak european data paint an eager bleaker picture on the global economy. wy wyndham destinations and today, they're announcing a billion dollar investment in digital experiences. joining us in studio for a "power lunch" exclusive is wyndham destination ceo michael brown. welcome. >> great to be here. >> i had no idea how international you guys are, so what effects have you seen in terms of travel flows lately >> the headlines are very strong internationally but in global leisure travel, really no change and in our business, because our owners and members truly own their vacations, good times and bad, they'll go on vacation. >> fundamentally a timeshare company, correct spun off of wyndham hotels, but you allow people to kind of key into all different kinds of
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brands for timeshare experiences, right >> that's exactly right. a year ago marks the one year celebration, we became the world's leader of vacation ownership and vacation exchange. so our owners can either vacation in our 224 resorts, a lot of our new resorts are in urban destinations, or if we don't have a destination for you, you can go to our exchange company which is 110 destinations around the world. >> how much more complicated has the competition in your world become because of airbnb, vrbo, home away, and now marriott is getting into the game. >> that's actually the conversation a lot easier for us, because a decade ago, everyone said, i'll go to my 250, 350 square foot hotel room and maybe a space option airbnb and the other companies, they've really brought to the marketplace that people like and enjoy their vacations more with a little more elbow room in their own kitchen and apartment. the difference that we offer is
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we offer accommodation with a branded name that you know, because i don't think anyone likes surprises when they go on vacation, and especially if you're traveling with a family, you want those amenities a pool, an activity, a fitness room, and that's what we provide at wyndham des nations >> you're spending a lot of money to make timeshares cool again. what has become or sort of the sticking point been? the misconception that people have you're trying to battle a billion dollars is a lot of money. it must be a big thing you're trying to battle. >> it is a lot of money, but a lot of people's perception of timeshar timeshares, i'll go to the same location in the same unit at the same week every year and when the branded companies came in a decade ago, it changed maximum flexibility. so when we talk about changing the perception of timeshare, i bet you weren't aware that 60% of new owners are either gen xors or millennials and 20% of purchasers simply millennials.
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they're appreciating the space and more importantly, i think they're enjoying the urban destinations we're adding to our portfolio. >> i don't know exactly how the business works, at all, but let's say i buy a timeshare in orlando. i think i'm going to go there a lot and next year i decide, i want to go to la jolla and going to be in a more expensive property how does that work >> we tried to make it simple as possible by creating a currency that allows you to go to our 224 resorts around the world and that currency not only takes you to different geographies but if you say, this weekend i want to go to manhattan and spend two nights in a studio, you can use a portion of your points and then say, when it's ski season in park city or avon, colorado, i want a two bedroom to take my family or friends with me. we tried to, in the branded companies, wyndham included, has really tried to create flexibility and optionalty in your vacation options. >> the other question i have,
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which had been, i don't know whether it still is an issue in the timeshare world is if i want to get out, how easy do you make it or hard >> well, let's start with the fact that 700,000 of our 880,000 owners have already fully paid for their ownership. >> for life? >> for life. so every year, they choose to go on vacation for their annual maintenance of $800 to $1,000 because they're fully paid if they choose, because life does change, your circumstances, you want to leave your ownership? we developed a program in 2013 that allows you to exit in the way you want to exit >> what's the resale value like then >> it depends on the property. in park city, utah, myself, that will be different than a more regional destination so we provide the most options for the way that you want to exit your ownership. we just encourage you to call us >> they're thinking about it >> it's a very interesting concept. >> thank you very much good to see you. >> great to be here. ceo of wyndham destinations.
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coming up in today's tasting, bitcoin surging more than 65% in may alone. we'll debate whether there's more room to run but different story for stocks s&p 500 falling more than 5% this month first negative for all three major averages in seven years. will this summer bring relief? that's coming up
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welcome back to "power lunch. a taste of the other stories we're watching for you today bitcoin breaking above $9,000 before falling lower again this is a key milestone, a new 12 month high. krip toe currency up 6%, this is all very good for oz perlman
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on this chart, each started with theoretical $100 oz is now up, what is that 19%. >> we've turned them all, like, they're little etfs that you track. >> gave them theoretical tracking a percentage and give a dollar amount just so you can calculate that percent >> little tile there >> we have people trade them in and out as well, so the big one day, sell and go the next. >> for bitcoin, i mean, it's not, this market turmoil, global trade, global economic concerns and bitcoin has gone up. it is being viewed now as a hedge. >> are they saying it's the capital flight out of china? >> some people say part of it is that as well, using that as a way to get there j.p. morgan agreeing to pay the biggest ever settlement to resolve a parental leave discrimination claim the firm pays $5 million to a male employee who claimed the
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bank's parental leave is biassed against dads and pthers are the caregivers j.p. morgan does not admit little bit but will communicate the policy more clearly in the future i believe this father maintained and obviously got a settlement that would vindicate he was the primary caregiver and deserved four months of leave. >> they wanted some kind of proof. presumed you're not unless you can prove that you are, and now that has changed. >> the tricky thing apparently with this particular case, the wife is a schoolteacher or some sort, on summer break. so it's difficult to prove he was the primary -- exactly that was a twist. how about this, some good news on the health of "jeopardy" host alex trebek with his battle with stage 4 pancreatic cancer some of his tumors shrunk by 50%. doctors say he is in near remission. i asked if there was anything,
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we talked about some of the immunotherapy drugs. this is like a more traditional approach i'm not sure if anything involved, but for stage four pancreatic cancer, to have news like this is fabulous. >> it really is. major averages on track to post first negative may in seven years. next guest focuses on patterns in the market and strong starts to the year much like 2019 have pauses in may and usually followed by big gains. so we set up for a june boon as opposed to a june swoon? let's bring in jeff hirsch, chief market strategist of probabilities fund management. welcome. what do the charts tell you about the month of may, particularly, may in preelection years? >> it's been steeper this year mid month weakness in may.
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end of month strength. >> there's some reason for the sell in may and go away? >> there's a lot of reasons. people think that selling when you go away means may has to be down or may through october has to be negative the point is that most of the markets' gains made from november to april, whereas may through october, it goes flat with more chop, sideways action, and it's been going on for many years. >> the indication you've uncovered, after you had a big run-up for the first four months, then you have a down tick in may that june is a pretty good month and then the market reverts to that flattish phase. >> first four month gains when may was down, 7 of the 9 times was down, june was up pretty solidly and june also is a solid month in preelection years there's a lot of maneuvering that goes on with russell and nasdaq has a best 8 month with
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the tech stocks running deeper into june. while we've had our sell signal for the last six months, on may 1, the end of the 8 months, so we're still positioned with some of those. >> how does this change with the presidential election cycle? on top of this >> usually it's much stronger. you can see it with the four years. head and shoulders above and close to the nasdaq. >> average return? >> since 1950 or 49. 71 for the nasdaq but see that sideways chop and have weakness or flatness. we see a little more magnitude here, up a lot more this year than we normally do. returned a bit this is all in the cards and the yield stuff, very typical. stocks go down, bonds go up.
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already positioning ourselves with bonds and more since may one. >> exaggerated in certain pockets but any breaks in the patterns >>. >> much like 74 with december but it's been closer to normal than people are willing to admit. a little bit stronger than anticipated. if anything, more upside after the christmas eve crumble. normally get, the gains later in the year, but still good finishes in these type of years with preelection years >> average return for the dow or the s&p in a preelection year is >> 15.8%, if memory serves i think that's the dow maybe more for the s&p by a couple of points. >> thank you very much,
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appreciate it. shares of uber lower by more than 11% since going public. it's set to report the first quarterly result the key factors to listen for ulbecoans ssthe mpy'loes cod that's next. in an etf? 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, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully.
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set to release its first quarterly results as a public company after the bell, and wall street may not be buying the company's long-term vision raptors fan deirdre bosa joins us now to explain. deirdre. >> kelly, that's right not only are shares still trading well below their ipo price but short sellers, they have piled in over the last week in the leadup to these results now, according to data from s3 partners short interest in uber has surged to $1.7 billion as of yesterday. and that's about 23% of its float. meanwhile, the bears have backed off of lyft a little bit short interest is at $1.2 billion. but it represents about 55% of its float. but basically, what this is telling you is that there's not a lot of faith in the ride-sharing sector. these two companies uber and lyft are now the most shorted stocks in the sector uber ceo and ceo have their work cut out for them
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they need to reassure investors while facing questions about the massive losses that uber continues to rack up and how if ever it will be profitable we'll also see how much the executive team is willing to disclose lyft stopped reporting gross bookings that's the amount collected before payouts to drivers, which is really a selling point during the ipo and a way of judging them in the longer term. so what uber does or doesn't disclose will continue to set the tone for how investors, the entire public markets, are able to dodge this industry guys >> deirdre bosa. let's take a closer look at uber's upcoming results. i goal larunian he's got an outperform on uber with 65 bucks a share. thanks so much for joining us. you're saying we should really be focusing on the take rates and you're actually expecting take rates to contract pretty much across businesses, right? >> well, in the first quarter yes, that's what we're expecting. uber actually gave their unaudited results already in the first quarter and that is what
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we're he seeing, take rates compress what we're looking for is to see some improvement in that number over the course of the year. competitions really led to those take rates compressing we think they'll improve over time and we think that's a key area of focus for investors >> the quarter call indicated the u.s. rideshare market at least, in that market, in this market it seems things are getting a little more rational but uber is an international business so how can you extrapolate what lyft is saying about the u.s. market to uber's business and what they will be forecasting for the rest of the year >> obviously, the u.s. market is still really important for uber. it's 50%, around 50% of the overall bookings it's their most profitable market in terms of revenue generated per rider. it's a really key indicator of the health of the overall business it's true. they are a global business, international markets have varying levels of competition.
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so it's an important area to look at. but we think lyft, the way lyft's talked-b rationality in the u.s. market should be a positive indicator for rideshare over time on a global basis >> how can this company lose this much money quarter after quarter? how does it do it? >> well, they're investing for the future >> what are they investing in? >> they've been very clear about that they're investing in their platform they're investing in autonomous driving technologies they're building out their sales and marketing and all that yes. it's a big loss. it's a really important area to focus on investors are really focused on that we're going to need to see some improvement in it. it's gotten worse over the past couple of quarters in terms of -- in terms of the margin of the law loss and we're going to need to see that improve for investors to really get behind this in the shorm short term >> ygal, isn't it also fair to say they're basically investing
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in market share, and the question is will that pay off in the long run >> they're buying market share >> yeah. >> they're subsidizing every single dollar they take in, right? >> that's 100% true. that's exactly what you're seeing in the takeaway compression. that's them subsidizing market share, paying -- giving discounts. that's being driven by competitive factors. others driving discounting too and that's why focusing on what lyft said on their call about seeing rationality come into the market as a really important area to look at, we want to see that both in the u.s. and start to come through globally as well we do think that uber is best positioned because of its leadership across the globe and its global nature to work through some of these issues in the short term and be well positioned coming out of it in the long term. >> ygal, thanks for your time. >> thanks to be here >> check please is next.
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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. ♪
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. i have barely used uber in the last couple of years except to take -- to get my mother-in-law a trip to the train and back so she's given me a perfect sco score. >> i need to borrow her because my rating score is 4.73 and apparently i might be ready to be kicked off. >> treat drivers in their cars the way they expect to be treated themselves a positive attitude. that slice of pizza can wait, ladies and gentlemen that's what it says here they want to make sure everyone
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in their car is safe while your rating matters -- >> i actually think this isn't so much about kicking people off the platform because we know they need them they want all of us to behave better so the drivers have a better experience -- >> i want to know who downgraded me to 4.91 >> "closing bell" is next. >> they are gearing up for uber's first quarterly results as a public company. >> announcer: it was the ipo heard round the world. >> i want this day to go great but it's about what we build in the next three to five years >> uber priced 45. 32 million shares. opened at $42. >> uber crashing knits second day of trading the stock is now down a whopping 18% from its ipo price >> 8-year-old company, 9-year-old company they just waited too long. and there's nothing exciting about it >> and now we're less than an hour away from uber's first quarterly report the keys to watch from the release. plus, reacti

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