tv Power Lunch CNBC July 2, 2019 2:00pm-3:00pm EDT
i'll join tyler and melissa for "power lunch" which begins right now. >> thank you very much we'll see you back over here in a few seconds. i'm tyler mathisen welcome, everybody, along with melissa lee. new alt 2:00 today, president trump's trade hawk, peter navarro, on cnbc, sounding bullish on talks with china. he also took aim at the fed, the fallout is ahead plus, this is now the longest u.s. economic expansion in history but two pillars holding up the markets are showing signs of weakness we'll explain that one >> and finally, manhattan real estate sales surging for the first time in more than a year, but is the rebound for real? we'll explore that and more on "power lunch" for a tuesday. >> and welcome to "power lunch." i'm melissa lee. stocks have been struggling at this hour, but off the session lows the s&p 500 has been in a tight 14-point range for much of the
session. it's been a flight to safety defensive sectors including real estate and utilities are leading the market, and gold is higher and rates moving lower rates falling below 2% once again. >> thanks. we begin with optimism on trade talks with china president trump's trade adviser peter navarro on cnbc earlier said we're headed in the right direction as the u.s. plans more tariffs on europe in the meanwhile. >> peter navarro is the white house's fire brand on china, so it was notable this morning after attending that u.s./china meeting that produced the weekend's truce, he said it's all good >> we're re-engaged. we're talking on the phone already. probably be visits it's all good. i think it was a pause that was necessary at the time, but this is very bullish for the markets. lower uncertainty in terms of the whole thing. we're headed in a very good direction. >> next up is figuring out how
to slice up huawei along national security lines. the white house and the commerce department are today hosting a meeting to discuss options, according to a senior administration official. i asked navarro about that meeting before his appearance, and he refused any questions other than what he was asked on air. there are some deadlines up ahead we should look at. the white house has until just before labor day to decide how to proceed with huawei when temporary licenses for the company and its 68 affiliates are set to expire. while president trump announced this truce would be open-ended, there are two other dates you should watch a meeting between president trump and president xi is expected to take place at the apec summit in november in chile, and the first election primaries in the u.s. in february tyler. >> all right, thank you very much >> so peter navarro saying we're headed in the right direction on trade talks with china, but are we really getting any closer to a deal andy rothman is an investment strategist with matthews asia,
and derrick scissors is asia economist with the america enterprise institute derrick, as i listen to mr. navarro, who is often a very skeptical voice about the possibility of getting a deal with china, it sounds like somebody talked to him and said hey, we need a positive spin here are we literally closer to a deal, or are we merely back to where we were in early may in. >> i think we're back to where we were in early may with a possible variance on what's going on with north korea. yes, peter definitely sounded like his main point was stock markets should be happy. we didn't get a date for new talks. we didn't gehow much the china are going to buy, we didn't get any details, but stock markets should be happy. >> andy, how do you see this does this mean a deal is closer? it sounds as though the huawei issue is being ameliorated if not taken off the table. >> well, remember that secretary mnuchin claimed that back in may, before things blew up, they
were 90% close to a deal so that's back on track, and i take peter navarro's words as a very optimistic approach to that, but more importantly, for me, was what the president had to say over the last few days about his meeting with xi. he talked about a strateging partnership. he talked about welcomic chinese students back. he talked about allowing american companies to sell to huawei so i think he really kind of threw his national security team under the bus here by emphasizing the trade relationships and engagement rather than a confrontational approach to china. that's a very positive change from just a week ago >> it seems that way, derek, at the same time, what is going on in hong kong, i'm wondering how that factors in at all president xi is a nationalist at heart. he believes in the power of the communist party and consolidating that power, and what's going on in hong kong may threaten that power. i wonder if he could be taking a harder line in the weeks to come because of that backdrop
>> i agree that president xi, i would call him a brutal dictator beyond being a nationalist i do think hong kong is a potential threat to u.s./china talks. the rallies in hong kong have lasted longer thani expected, at least, and the chinese have been, from their standpoint, patient. i don't expect xi jinping to be patient forever. there is a wild card, i mentioned the wild card being north korea. on the positive side on the negative side for the talks, hong kong could be a negative card. >> what are the opportunities right now stock wise, investment wise, if you believe there's a deal on the horizon? >> well, i think that hasn't changed. china remains the world's best consumer story you have retail sales in real terms growing at over 6% you have income growing in real terms at over 8% it's a fantastic consumer story with a middle-class that's now as big as america's middle class, and that's where we're looking for opportunities for
our clients. >> so more along the domestically facing chinese companies as opposed to manufacturers or state-owned enterprises. >> that's right. chinese companies selling goods and services not just internet companies but names that might be less familiar for your viewers, but any chinese company selling goods and services to chinese consumers. >> thank you very much andy rothman, derek scissors, we appreciate your time today well, despite all the trade fears, this is now officially the longest u.s. economic expansion in history two pillars holding up the markets are showing signs of weakness share buybacks contracted for the first time in seven quarters, and companies are warning earnings are going to be brutal, more than 75% of companies issuing pre-announcements saying profits will miss expectations let's brin in lisa ericson, and jack avalon, cio with crescent capital. thanks to you both for being with us.
lisa, it sounds like you're relatively conservative, although you're advising clients to stick with their long-term stock allocation what does that mean in terms of how you might change that allocation even at the fringes in terms of what you're allocated to, even though your total equity allocation may remain the same? >> well, right now, we're actually advising our clients to stand pat on their equity allocations, and as far as regional exposure, we think it's good to continue to have a diversified exposure across the u.s., efa, and emerging markets. the reason why is if you look globally, we're still expecting moderate growth, both in terms of the macro outlook as well as the earnings outlook there is some slowing in the earnings picture, overall, our indicators would show that the fundamentals are still looking okay going forward >> what's amazing, jack, you read the stats 77% of companies have preannounced so far for the second quarter, yet we're
sitting basically at record highs. is that sort of a good thing, we sort of worked our way through that concern and the markets may be reflecting it already >> it could be i mean, the fact is you're right. analysts are expecting a 2.5% earnings decline year over year through the second quarter, but keep in mind that analysts have expected a similar decline in the first quarter. and companies were able to beat and get that earnings growth positive so i think that investors are looking at that, saying look, you know, one quarter, maybe it's negative, maybe it's flat, but as we start looking out into q3 and q4, we start to see earnings growth expectations ramp up. >> what do you expect from the fed, jack? >> well, you know, what i think the fed should do and what i think the fed will do are probably two different things. one is i don't think the fed needs to reduce rates to ease
economic tension or to continue to grow the economy. i think the fact is we're on a 2% to 2.5% growth path we should be able to do that without the help of the fed. but as melissa mentioned earlier, buybacks are starting to run dry, and i do think that we do need help from the fed to keep the stock market going. and if you look back over the last five years, earnings per share has doubled the pace of net income, largely because we're reducing the denominator of that equation, shares outstanding. >> lisa, i wanted to ask about what is gaining in today's session, what has gained in past sessions that's the safety trade. utilities, for instance, are up today. if a client came up and said i want safety and i still want to be allocated to stocks with stocks close to record highs, is it worth paying 20 times current earnings for utilities which is a premium to the s&p 500 or for some staple stocks, for
instance how do you navigate that >> well, our favorite sector is actually more growth oriented. the reason why is we believe in a more moderate growth environment. ultimately, investors are going to benefit from the extra ounce they can get with sectors such as technology or consumer discretionary. what we're really favoring are those industries where, again, some of the top down changes we're seeing in terms of more movement to cloud computing, demand for robotics, really should benefit some individual companies and names in those areas. and we agree with you, as well, that with the flight to safety, some of those valuations in the more defensive sectors are less attractive >> lisa and jack, same question for both of you. and i think i know the answer. jack, your year end target for the s&p 500 is 3,000 lisa, yours is 2,970 we're at 2,965 right now if i'm sticking around to eke out 5 or 35 more points,
shouldn't i just go to cash? >> i can tackle that obviously, we're taxpayers we're not, you know, and given that the market is up nearly 300% since the financial crisis, there's a huge potential tax burden so one of the things we have to do is weigh the consequence of paying a 20% capital gains tax against, you know, dry powder and trying to get cute and get back in. we only own equities with a minimum seven-year time horizon from here. so it really will take a lot for us to kind of move us off that longer term trajectory >> quick answer, lisa. jack's is good one >> yeah, i think your point on maybe the flat to the moderate outlook does raise the question of really should you be going underweight equities, but we're again recommending a more neutral position, staying at your long-term strategic position simply because if you look at the alternatives,
really, bonds are not very attractive either in terms of their valuation. when we look at the alternatives, we think more diversified exposure makes sense in terms of weighing off the fundamentals, the sentiment, and the technicals >> thank you so much coming up, three stocks we're watching delta getting a lift as it raises guidance. anheuser-busch planning the year's biggest ipo forget uber, and can tesla deliver when it reports develiry numbers? all that and more coming up on "power lunch." ♪
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shares of delta airlines up at this hour but off session highs. phil lebeau joins us from chicago with the details >> this comes a week before delta will give us the q2 numbers but it's clear from the new guidance today they're expecting a strong second quarter, certainly stronger than what many people might have been expecting. here's the guidance from delta released this morning. it is giving sears a bit of a prop eps, up 20 cents now between 225 and 235 a share for the quarter. revenue, now 8% to 8.5%. and the total revenue per available seat mile, that will now be up 3.5% before they said, it might only be up 1% to 3% they had record passenger levels in june. that is a key metric that is going to get some attention. the record passenger levels in
june, along with the pricing being relatively strong is the reason that you've got total revenue per available seat mile being up 3.5%, at least that's the expectation. as you look at shares of delta, remember they will be reporting earnings neck week we're going to talk with ed bastion all about the quarter and what he's seeing with the economy overall and demand for air travel >> and phil, delta hasn't been exposed to the max maybe that's an advantage. we're seeing american airlines down about 2.4%. they canceled some routes because of that. >> at least one between oakland and dallas, and that is because, look, they are canceling about 115 flights daily because they don't have the full complement of aircraft. and as much as they can, they're trying to say okay, where can we pull back where we have to pull back, because we don't have as many aircraft as we originally planned. and this is one of those instances. >> wow phil, thanks meanwhile, the world's biggest beer company is planning the year's biggest ipo
frank holland has those details. >> it's been a big year for ipos this one is even bigger. this could raise as much as 9.8 billion dollars for ab, given budweiser asia a market cap of nearly $64 billion the shares will be offered, asia pacific generated about 18% of revenues last quarter with nearly 8% growth in china compared to 1% here in the u.s the chinese market is also more than twice the size. in asia, they sell corona and guinness as well as budweiser, marketing the imports as premium, quote/unquote according to estimates, they control 46% of that premium segment in china the ipo could also reduce debt for the company. it is aiming to reduce its net debt to below four times by the end of 2020. was at 4.6 times at the end of 2018, and that wasn't enough,
this could also lead to acquisitions in asia the ceo telling the financial times, the number one reason to do the listing is to have a platform in the region that is seen as closer to those markets and connected to what the region will do since that's something that can be attractive to local groups i spoke to analysts. they agree having shares of a local company to offer potential sellers would actually be more attractive if the company decides to do more accusations >> they must have been breathing a sigh of relief over the trade truce. >> they're an international company, so they're not as sensitive to the trade truce i talked to a couple other shippers, dhl. they said we're not as shaken up because we don't have to deal with the same restrictions that holded the same for them. >> european leaders have nominated imf chief christine lagarde as the next president of the central bank if confirmed, she'll take over when mario draghi's term comes to an end in october
he's played a huge role in the economic recovery. leguard has led the imf since 2011 she's a trained lawyer, just like powell. she's not a trained economist. you could say she's a trained politician, which might be effective for this role. >> sara eisen points out she would be the first woman head of the ecb, so this could be historic in many ways. >> jerome powell isn't an economist per se he made his career in investment banking. very interesting >> she's no stranger, christine lagar lagarde, to the international stage or bankers >> shares of tesla soaring in the past month they're up more than 20%, can the run continue when the company reports delivery numbers? trading nation is next, and nike putting its foot into another controversy. pulling sneakers, it's reported, with the betsy ross american flag, reportedly after colin kaepernick intervened. chorontry to explain the story
investors await second quarter delivery numbers which could drop any day now those losses more pain for the stock already on track for its worst year ever. craig johnson of piper jaffray, and quinn are your trading nation team today. craig, this stock, tesla has, has had a decent rebound offer a pretty overstretched condition at the lows. but still, most of its trading range in the last two years is above it how do you see the stock right now? >> you know, mike, you're right. the stock is up 20% over the last month, but you're still down about 33% year to date. when you look at the chart, you'll see this is a stock that had broken below a multihp year consolidation range channel. it's having a nice relief rally in here, but unless the stock can recapture the lower end around 240, i suspect the stock is perhaps going to stall here if it does, look for a whole other leg lower. while our analyst alex potter likes the stock with a $396
price target, technically, we look at this chart with a little bit more of a cautious perspective. as we haven't recaptured the trading range, and it still looks like just a relief for us. >> still some more to prove for the bulls, i guess suspense around the delivery numbers. it's a $40 billion company, we go every three months how much product they manage to make and sell how do you see the company fundamentally here >> cloudy. it's very, very difficult. there's really no financials to speak of you have a company that is going to need, i mean, they have even discussed, they're going to continue to hit the capital markets to raise equity. capital through equity and debt. i think you have to really, i have to defer to craig on this one and trade it from a technical perspective. if you want to own a company like this, you believe elon musk, as i do, and i have owned it in the past, you're owning, you know, belief in the
entrepreneur, the optimism surrounding the technology, but you can't own it on a fundamental reason at all. no reason to be a buy here or quite frankly until they get the financial numbers figured out and we know where the company stands >> i guess if you think electric vehicles are going to be taking over market share wise, you would figure they would participate, but it's a wait and see on that front as well. thank you very much. for more trading nation, head to our website or follow us on twitter. back over to you >> ahead on "power lunch," nike under fire the athletic jiebt caught up in a new controversy over one of its sneakers >> plus, manhattan's barrage real estate sales soaring once again, but should you trust the rebound. and the fate of the fangs. where the stocks should go in the second half, all of this when "power lunch" returns and now, the latest from tradingnation.cnbc.com and a word from our sponsor. >> some people refer to the vix
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welcome back, everyone i'm sue herera here's your cnbc news update at this hour. the widow of john mccain attending a change of command ceremony aboard the warship which bears his name cindy mccain unveiled her late husband's portrait and gratefully accepted a commissioning pennant. >> i am especially pleased today to unveil my husband's portrait, and to accept on his behalf and behalf of the mccains, the commissioner pennant, which meant so much and such a great deal to john >> chinese president xi meeting with turkish president erdogan in beijing both leaders expressing their willingness to strengthen relationships between the two countries. and take a look at this. a father captured video of a shark swimming dangerously close to his children as they swam off
florida's laeatlantic coast dan watson said he was flying a drone to take pictures of his kids when he spotted the shark and yelled for his wife to get the kids out of the water, which thankfully, she did. some scary stuff, though that's the news update this hour >> wait, let's get this clear here >> videoing it >> this manly man is busy flying his drone with sharks in the water with his children, and he says - >> honey, get the kids >> get the kids and rescue them from the shark >> right, exactly. >> man >> father of the year. >> you cannot make that up >> father of the year. right there. get him another drone. i love that. >> exactly >> that's just really wonderful. >> i know. >> thank you, sue. >> you got it. oil markets closing for the day. let's get to rahel >> i don't know how i follow that drone story, but a big sell off in crude even after yesterday's announcement that
opec and russia agree to extend until next march wti dropping 4% to 56.33 a barrel crude down 4% to 62.49 a barrel. these moves come in part due to weak manufacturing data, but has invesers worried about slowing demand for oil oil and gas stocks among the worst performing groups in the s&p 500 today. >> thank you very much >> while the broader market has rallied strongly this year, retail stocks as a group are up only slightly. here's courtney reagan with a look at the issues facing retail in the second half of '19. >> the first half of 2019 has been rough for retail. but with back to school and the holidays, the second half matters more and the unknowns are piling up first, tariffs and trade many retailers have been working for years to move manufacturing out of china but it's still the number one sourcing location for u.s.-bound clothing and shoes
if a new round of tariffs hits those categories, shoppers may face even higher prices at retailers like macy's american eagle, and steve madden just in time for christmas second, shipping wars. walmart, amazon, and target are all racing to deliver faster amazon spending $800 million in just one quarter to get closer to one-day shipping for prime members. walmart is expanding one-day free shipping without a membership to more cities as the time goes on, and target is offering same day shipping for $10. third, store closures. around 7,000 store closures have been announced this year, outpacing all of 2018. core sight research projects total closures could hit 12,000 by the end of the year, opening up opportunity for those left. >> that's courtney reagan. let's take a closer look at the second half of the year for retail and talk about the nike story everybody is talking about. joining us now are liz dunn, and simien siegel.
so liz, just starting with you, i mean, we have seen a ton of closures again this year, even though the economy is still growing and some retailers are doing great. where would you be putting your money? >> there's a bifurcation happening between the haves and have nots. shopping is moving away from malls and towards the largest retailers. if you look at the largest retailers in america, they're growing better than the average consumer spending growth in the country, so that's kind of an interesting dynamic for the smaller guys for the most part, i would avoid anything in the mall and avoid department stores and really focus on those retailers that are setting themselves up for winning lawner term. >> walmart, target, they're putting up their best numbers in a decade costco, tj maxx. everybody likes tj maxx. what about some of the new, the bargain discounters? the alis, the five belows? are those big enough yet to be exciting to you. >> i agree with liz where the big get bigger i don't know if it has to be a
size conversation. it's a market share taking conversation anybody who has seen this shift from the department store, it's value, cool to shop cheap. that's what tj is showing us it's not cheap clothing. it's expensive clothing cheap. and if we want to get more exciting and dirtier, i think some of these brands have been oversold so call it capri, which owns michael kors tapestry, which owns coach, they have been sold far enough, if you're looking for the alpha, you're willing to dig a little bit, you're on the barbell >> are they caught up in the china trade war? >> which is why they knocked it down >> so they fully discounted that >> no such thing as fully. the reality is i think we have seen a lot of complacency in the u.s., a lot of fear around the multinationals all things considering, especially the capri which has bought jimmy choo, versace, luxury brands priced for zero. >> what does tjx do so well that others haven't figured out
my wife took me over the weekend to home sense, which i have never heard of >> better than home goods? >> more furniture focus. >> more furniture and furnishings than home goods. >> it was fantastic. i bought a pillow because i always need more pillows and i think they are just tremendous at buying, tremendous at building stores, profitable stores, and i don't think it's necessarily all off pricers are, you know, poised for greatness i think tj is by far, i think they're one of the best if not the best retailer in america >> they do it really well. >> what's interesting about home goods and home sense is they attract i think a higher end customer there are a lot of friends i have that wouldn't step foot in a marshall's or tj, but they go to home goods and home sense for decorative pillows and the like. they're a tremendous retailer. >> ironically, they're the anti-amazon. amazon, you know you can get what you need.
at tj, you have no idea. if you don't grab it now, it's gone there's that impulse, that treasure hunt, which is what shopping used to be that we just don't have anymore they still force you to do it. >> let's talk nike the company has pulled the betsy ross flag sneaker due to complaints it was set to launch with july 4th holiday coming up. the "wall street journal" has reported colin kaepernick behind the scenes exerted influence on the decision, saying he and others found that flag image offensive. what's your reaction to this especially with nike being one of your picks here >> so, listen, they're obviously incredible sensitivities around this i would venture to guess many people -- >> did you know that before this story? >> that's what i would say i would venture a lot of people woke up today realizing or being informed this is offensive >> offensive because the symbol has been co-opted by some -- >> white supremacists. >> white supremacist fascist groups not because there's a native
rejection of the idea this was the first american flag? or a little of both? >> this is above my pay grade and i think we're all learning that to figure out what makes it offensive, what made colin kaepernick make that decision, it seems like a few things coming out, but that's the point where last night we didn't know it, today wedid. what is interesting is how fast nike reacted for better or worse. >> from the analyst point of view, this kind of fits with the most important thing to nike is being young, being hip, you know, being relevant, et cetera. what if they stood up and said we reject that this categorization by this fringe movement, no, this is not what this flag represents this is not our intention. would that have harmed their brand image? i mean, or are they going to be in a worst situation now with people who are upset that they kowtowed >> maybe this is the harshest thing i can say. i don't know if it will matter for nike we spoke, we were on, whenever kaepernick made the first comment, we spoke on this program about how negative or positive it was going to be, and
it was irrelevant. >> hook how they have done since they tied their brand image a bit to kaepernick. i think that they have obviously been performing, and i think they realize that their customer base is very tied in to the idea of being woke. we were talking about it a little bit in the green room, and i frankly hadn't considered the flag as an offensive symbol, and i didn't know about this link to white nationalism. however, as a black person, it took me 2.5 seconds to figure it out. i mean, this is a time, points back to a time when that flag was not -- it didn't mean independence for my ancestors. i think that's what it's about >> for retailers now, it becomes a slippery slope does any symbol of that period, which was a long period in this country, could be co-opted by a handful of white supremacists and become taboo and become a major pitfall if you go near it.
>> i think for better or worse, nike is in a different conversation because they thrive on headlines, good or bad. this is a separate conversation because this is a purely profit stock focused conversation nike has had controversy after controversy after controversy this year alone, and sales have rocketed forward >> i would be interested if they had said, again, as all of this was coming out and as this discussion is going to stand up and say that's not what we think it represents nor should it. could they change what all of us are going to walk away from today with that narrative in our minds about. this is now a story about every retailer in the country that sells a product like this. the philadelphia 76ers and their uniforms they're wearing going forward, do we have to go down this path? >> it's a conversation for every retailer and every brand nike has already decided where they stand on this conversation. in partnering with colin kaepernick and making him the face of the brand in a certain sense and deciding they're going to be on a certain side of the argument, i think they have to enter into that conversation with him, and if he says, you
know, this is what the conversations are happening behind the scenes about this symbol, and you don't want to tie your brand to it, i'm sure this drop wasn't like a major driver for them. and it might have been a different conversation if it had been >> yeah, and now, of course, it has more attention than ver. >> by the way, it's already massive premium on the resale market not sure where people got the shoes but -- >> they theoretically got their hands on them somewhere. >> collectors, of which there's a robust trade >> appreciate it very much real estate sales in the big apple soared last quarter. some experts saying it's a good sign for the market, but others think the reason behind the surge could be a big red flag. we'll explain after the break. how do you gauge the greatness of an suv?
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soaring in the second quarter. prices hitting an all-time record our wealth editor robert frank is here with more on what is behind the numbers and the little turnaround. >> not quite as good as it looks. manhattan real estate posting the first gains in over a year and a half sales jumping 13% in the second quarter. the median price of an apartment in new york city hit an all-time record of $1.2 million many brokers and developers cheering what could finally be a recovery for this market that has seen falling prices in six straight quarters of declines. a closer look suggests maybe another reason, taxes. buyers rushed to close deals in the second quarter to avoid the new tax on real estate sales over $2 million in new york city, that's called the mansion tax. that tax was probably the main reason because the strength in the quarter came mainly from sales over $2 million. homes selling between $2 million and $5 million jumped 37%. the big question now, how bad would the fall off be the rest of the year?
inventory at the highest level in seven years sellers of existing apartments offered their biggest price discounts in nine years. it was a bit of a mirage we pushed demand from the third and fourth quartner to the second >> stick around. we'll talk more about the state of the luxury real estate market with us is noble black welcome back good to see you. what is going to happen, what do you think? >> that's the billion dollar question, right? everyone is waiting to see if that was the man that was pulled forward from the third quarter certainly, there was a lot of that, but there are a lot of deals i think all of us are doing. last week, i did five deals and that was definitely four of the five were people who were racing to close the mansion tax that said, prices have been declining for the last 18 months we are starting to get to a place where sellers are getting more realistic interest rates are better than they were last year. there's a lot of external factors besides just the mansion tax. >> how big is the mansion tax?
>> considerable. 1% on anything above $1 million. now it's going to be 1% to 4%. it's considerable, particularly if you're looking at something that's $25 million, $50 million. >> who pays it >> the buyer has always paid it. what i think is going to happen now is you're going to negotiate it split it or maybe the seller takes it but that's all still better than what we were looking at. that's kind of the bright side what was floated was this tax -- >> who owns the tax, the seller? >> the buyer owns the tax. >> up to 4%, wow >> it's up to 4% yeah, so you think about some of the headline deals and that's a huge chunk of change >> bezos saved over $2 million by doing that deal before july 1st. >> if you close before july 1st, you don't have to pay it some of the headline deals, that's huge. >> the big question is we have over 2,000 new condo units coming online this year. the population of new york city is declining how is this market going to strengthen is there any catalyst that could
make it go higher or at least stabilize in the next six months >> i would imagine foreign buyers have left, a lot of them have left. bl we still have a lot of foreign buyers >> the chinese >> they're less than what they were, but if you look at the numbers for last quarter, half of the deals were co-ops, half were condo of the condos, probably half or less were new dement, and a fraction of that is foreign buyers and a fraction of that is chinese. they made headline deals but it's a small fraction of what supports the market and what we all see. >> why are people leaving, robert >> population decline? >> it's affordability, right that's the issue we talk about the rich people leaving for taxes. the real reason is mainly with people with incomes of $50,000 or less or $100,000 or less moving to more affordable states >> i think it's a bit of both. you have at the higher level, a lot of people are changing their residency. if they can, they're moving to palm beach, moving wherever for
residency, but that doesn't mean from a real estate perspective they're not owning something in manhattan. and maybe the population is declining but you still have a lot of wealthy people that for business or pleasure have to or want to be in new york so i'm stillbullish in terms o new york long term for -- >> you have to be. otherwise you're moving. >> exactly >> noble, good to see you. and robert, thank you as well. >> here's what's on the tasting menu today d y sunscreen is being banned, anare pizza and beer a threat to national security we'll be right back. so ...how are you feeling?
on a scale of one to five? one to five? it's more like five million. there's everything from happy to extremely happy. there's also angry. i'm really angry clive! actually, really angry. thank you. but what if your business could understand what your customers are feeling... and then do something about it. turn problems into opportunities. thanks drone. customers into fanatics change the whole experience. alright who wants to go again? i do! i do! i have a really good feeling about this.
welcome back time for our tasting menu. are pizza and beer a tourette to national security? the u.s. military considering putting s.e.a.l.s on the keto diet it may enhance military performance. let's hope it does more than hinder it. >> they say that you're able to hold on to oxygen, stay under water for longer if you are on the keto diet. there's an issue as to whether or not they can tell people what to eat what diet to keep at awe times >> we don't want doughy s.e.a.l.s. >> yes - >> they cannot be doughy look at the training, there's flow wno way they can be doughy >> not at their expenditure of
calories if you travel the virgin islands next year check the ingredient of your sunscreen the commonwealth senate has passed and the governor is expected to sign this month a ban on sun protection products containing what supporters call the toxic three os, oxeybenzon, octrocryline it takes effect march 30th of next year and aims at reducing the loss of coral from chemical and other damage the ban goes into hawaii and key west selected products from j&j's neutrogena and bayer's coppertone >> what happens if you fly with it >> you will have it con ifesisc and they will not allow it to be sold >> these are common chemicals? >> they are in many if not most of the readily available commercial brands. but most of the manufacturers
i'm told have brands that do not have those chemicals >> better have a big label so they know if it's okay on the island >> and it may be that carriers like -- like the cruise lines and the airlines will warn you on your ticket check your sunscreens before you board. >> many things to think about. on fire in the first half of yee ar should you sink your teeth into these stocks in the second half?
erchlts technology, consumer discretionary and during services were the top performing sectors in the first half of the year as you see on the graphic tech leading with a 26% gain through the first six months of 2019 look at the key names in those sectors. the f.a.n.g.s posting double digit gains except alphabet. it clocked in at a 4% gain so will the f.a.n.g. rally continue in the second half? let's bring in rbc capital markets analyst mark mahaney, he is bullish across the board. got outperform ratings on all four of those f.a.n.g.ers. mark why are you so bullish, and which of the four do you like the most >> okay. let's go here. facebook first, netflix second, and actually we're going to go off the beaten path a little i like snapchat and spotify. of the f.a.n.g. numbers, facebook, netflix, amazon, and google what you want to say is can these companies all of whom pretty much had revenue growth
desellrations in the march quarter, are there reasons they will stabilize and improve in the back half of the year. facebook has easing comps, they're rolling out modernization church as the explorer tab on instagram, better monetization of instagram and facebook stories and we think we're through most of the biggest, theti negative heat when it comes to regulatory issues netflix, we think they have a successful price increase going on and an extremely strong content slate in the back half of the year. we are three days from "stranger things 3," season three. there's a slew of other programs with that we think we'll see revenue growth acceleration march in expansion amazon, what we're waiting to see is whether the prime one day, the switch to one day guaranteed delivery, whether that has a positive impact i think it will. i don't know how long it will take to play out finally, there's google. most regulatory overhang of all of these stocks. and then this revenue mishap in the march quarter and the question is whether it's -- how many quarters it's going to take to correct that.
that's an unknown. that's the we'll go f-n-a-g >> fnag. >> yes >> for flicks, i was wondering -- for netflix, i was wondering i read the nielsen release super data in how much "fortnite" made in may and it was down year on year i know that was something that reed hastings mentioned specifically on a conference call that the competition rivals exists everywhere including "fortnite. is that a good sign? is that too small an impact for you? >> i don't know. it's a good point. reed is right, but he's also a little tongue-in-cheek i guess in that case, netflix competes with anything that takes our -- our eyes away from the screen, whatever screen that is i think the big pitch behind netflix is this content slate is super strong, this company's got $15 billion in spend that's coming out they're swamping the amount of spend at any other ott, new ott
offering's going to come out with that's why i think there's an overhang on the stock related to the disney launches. but i think they'll power through it because of that content slate. we're seeing more and more traction and more and more international markets now. particularly in western europe we're still waiting to see how successful they can possibly be in markets like india. that's really where the story on netflix is this is all international now. 85% of the software comes from outside the united states. >> the reasoning behind down grading roku i assume because it hit your price target and it's where you like it. >> we downgraded tradedesk, roku, and lending tree the three fastest, best-performing stocks in the mid, small-cap space to date they hit the price targets, they reached intrinsically high multiples and peak in roku you better have revenue growth acceleration to rerate it more we don't think we see that so we stepped to the sidelines they're good assets, we prefer to buy lower >> thank you so much you jam it in. >> thank you, tyler. >> i love that thank you so much.
all right. here we are. markets are sort of in a grind -- >> here we are i'm still trying to get over the guy with the drone we saw the sharks with the kids and said to his wife, go get the kids out >> that's the best story of the day. >> i love it okay >> something to leave you to think about. thanks for watching. >> "closing bell" starts right now. no drones. how do you know that welcome, everyone, to "closing bell." i'm down here at the nike post shares under pressure today as the company continues to deal with the fallout of a decision to cancel a line of sneakers featuring an early version of the american flag. the company has a new response i'll get that to you and tell you what it means for investors. and good afternoon to you. let's look at what's driving market action. despite a choppy session, we're on record close watch still for the s&p 500. any positive close today would set a new record currently just on the flat line. oil prices also plunging as opec wraps up its meeting in vienna an