tv Closing Bell CNBC July 15, 2019 3:00pm-5:00pm EDT
whether it's amazon, the other 50% of their business is split between retail stores and internet, their own crocs.com. >> erin, we're going to leave it there. erin murphy, piper jaffery with that we leave you for "power lunch" on a monday. thanks for watching. closing bell starts right now. >> welcome to closing bell i'm wilfred cross. banks broadly under pressure ahead of earnings from goldman, from j.p. morgan, and from wells fargo. tomorrow morning a preview of that coming up with 59 minutes left of trade, everything you need to know as an investor is coming up >> and i'm morgan brennan in for sarah eisen. let's get to what's driving the action energy is dragging the markets you heard wills talk about that. stocks are hovering near records as we await more earnings this week joining us for this hour to break down the market action is
keith bliss. keith, welcome >> thank you very much, morgan good to be with you. >> mid averages did hit new records this morning but have drifted back down to the flat line, not really moving very much right now are you surprised by that? >> not at all. i'm a little suppliesed at trpre lack of action it seems they've hit their own food coma as we wait for earnings to come through we have 300 companies that are going to report next week. we are on fed watch, of course, waiting for the july 31st rate decision a bit like waiting and waiting markets are taking a breather right now. here in the u.s. and elsewhere around the globe, people are starting to go on their holiday so you have lack of participation. >> we're going to get into all of that a little more. secretary mnuchin's crackdown. wilfred is covering citi earnings dion is watching the debt ceiling debate let's begin with treasury secretary steven mnuchin's
comments on crypto moments ago eamon javers has that. >> the rarely used white house press briefing room these days, put a marker down on skepticism about this idea of cryptocurrency, and specifically about facebook's plan for its own cryptocurrency i asked the treasury secretary about where things stand on the regulatory side with the fed, and then also whether or not he ultimately wants facebook to be in this business at all. here's what he said. >> j. powell and i meet weekly and we talked about this extensively. there are these discussions going on they will continue to go on. again, to the extent that facebook can do this correctly and can have a payment system, you know, correctly with proper aml, that's fine they've got a lot of work to do to convince us to get to that place. >> so, more gone, the treasury secretary there saying facebook has a lot of work to do. the bar here in terms of
regulation is very high. there's been a lot of speculation the past hour. why was treasury secretary mnuchin doing this today what it was it about this day that brought him to the briefing room and what i'm told, in talking to some people around the white house, this is the treasury secretary very much responding to what the president wants here in terms of facebook this is not necessarily -- shouldn't necessarily be read as a response to regulatory agent azizirad around the world who are also making moves on cryptocurrency this is very much the treasury secretary and the president of the united states being on the same page here, morgan >> eamon, thank you very much. let's bring in julia boorstin with facebook's reaction to ma fluch mnuchin's news conference. >> they anticipated regulation from central bank and lawmakers around the world that's why they announced libra a year out from its anticipated creation so we could have those conversations. facebook pointing me to libra
chief marcus's post they will work with all relevant stakeholders in the prepared congressional remarks for tomorrow, he says libra will be regulated by the swiss government, and that libra as well as facebook's calibra wallet will comply with all u.s. laws back over to you and morgan. >> julia, thank you. we have facebook testifying on the hill tomorrow. you referenced that, julia keith, what do you think, what's your reaction to the treasury secretary's comments today and what does this do in terms of libra actually becoming a reality in the next year >> how cynical do you guys want me to be >> very. >> okay, fine. think about what monetary authorities do and what they do with the money supply and controlling the money supply, how it indicates on interest rates. and really, i think they sense cryptocurrency, not just the fed, but the ecb, bank of japan and bank of china has bitcoin has been ill legal sometime now. they sense some movement with cryptocurrencies where they will quickly lose control of money
supply and therefore their monetary authority and how they dictate economic policies and how it conveys to us if you read facebook's white paper which i have a copy of right here, libra white paper, what they are talking about is they have 2.7 billion monthly active users and a large majority of those overseas are unbanked or do have have access to financial services. this is giving them access to financial services not only being able to bank remitage sances, payments, but doing it in a very affordable way which the existing systems are controlled by one party or just a couple parties and therefore makes it very expensive and out of reach for people around the globe including people here. i think facebook is pushing back a little bit on this and probably be a stable coin, i think they'll get to the end game >> the question, of course, even if this is focused on emerging markets is whether they will proceed with it if the u.s. says they're going to be regulated maybe not quite as a bank with a bank charter but mnuchin saying they would have to have aml, money laundering work, would facebook
proceed with it. that would seem unlikely on the surface unless they think this is the future of the company as opposed to the broader social media aspect >> that's right. the bad knock that's happened is it is true that bitcoin was used for illicit activities when it first came out, when bad actors around the world figured out they could launder money or buy illicit drukz with it and use it as the currency of choice. you have to bear in mind if you have any bitcoin atm today, which there are several hundred in the u.s. and around the globe, you have to go through an amlkyc process, flow your antimoney laundering process before you can transact in that. the systems are in place again, if you read the libra white paper, facebook says out loud that they want to work with the regulators one of the problems with cryptocurrencies in the past, they tried to do it in the shad is owes of the banking system. they want to work with the regulators i think this is a way, again, based on the tweets of the president, steve mnuchin treasury secretary is saying they're going to get ahead of
this i think they'll get to a resolution at some point >> something we'll want to continue watching as this develops it is a big week for bank earnings, talking about financials, citigroup reporting this morning wolf has the highlights from that >> i do. l they both beat expectations but were flatter than expected with tax cost control. net interest margin fell to 2.67% lower than 2.71% forecast. that said, 3% loan growth and 5% deposit growth meant net income did grow and metrics were sound. their markets related businesses were down year over year but slightly better than expected. trading was down 5%. it was forecast down high single digit. investment banking was down 10%. it was forecast for down mid teens. reiteration of the return on equity, net interest income targets gave the shares support intraday they are also up 37% coming into this year to date.
i'd say the share price performance showing that this was a decent set of numbers because the rest of the banks are lower, yields have slipped as well which has hurt the banks to date. but it shows this is a show-me quarter for the banks. we were wondering whether the set up is cuff this shows it's a tough set up in the term, and they are going to have to beat resoundingly to get a pop and citi ending the day flat >> how did you think this sets us up for the earnings as the week unfolds >> the set up itself, going back to the point yields moving lower today has weighed broadly on the other banks as well. if you're looking for beats on this, it was slightly superficial. it wasn't resoundingly, interest rates moves, doesn't hurt us at all. margins 14ri7d a bit that's why you see banks down. see if they can reiterate guidance for the rest of the year which is what citi managed to do today. >> the other problem they're facing as well we'll see in the next few quarters, the net interest margin decreasing as the yield curve starts to come down but if a lot of people think
we're very long in the cycle and credit quality is going to start to hamper the banks, now you have two things working against them in their core franchise business, quite frankly what we're seeing in trading and investment banking from the last quarter is not going to be enough to make up. that's why you're seeing sideways moves on the banks. it will be interesting to see what the reports are tomorrow. >> in the meebantime the debates heating up over the debt ceiling. >> secretary mnuchin expressing conference congress will raise the debt ceiling before leaving for summer recess. he's been talking with not only house speaker nancy pelosi, but also minority leader kevin mccarl think and senate ma nort leader mitch mcconnell ideally they'll do a two-year deal and raise the federal spending caps. >> i think there is a preference on both parties to the extent we can agree on the debt ceiling and a budget deal, that that is the first choice and i think we're getting closer >> mnuchin said the deadline for
action could be the first week of september, and that's when treasury could run out of cash congress doesn't come back from recess until september 9th, guys, so there's not a lot of time left to reach that agreement. back over to you >> thank you all right. we have got 51 or i guess about 50 minutes left in the session right now the dow, s&p 500 and nasdaq, they all hit record highs earlier this the session, currently trading mixed, although just around the flat line now for more on today's moves let's bring in jim bianco from bianco research what do you think of the markets? >> they could be higher. thing that that's been driving them is the fed is easing. the prospects of negative earnings growth which is what we are projecting for the second quarter and the third quarter, that's the consensus projected negative earnings growth right now as long as the fed delivers and the rates stay down, that should be -- continue
to be a tail wind for the stock market >> do you think, keith, the short term >> we bought signals in the short term especially the russell 2000 which is an index that's been lagging large caps for a variety of reasons on that i agree with jim i think we can grind higher as i said a couple weeks ago. we could melt up through july. that was based primarily on the thesis they were going to cut rates on that. if we do have an earnings recession, we're going to have to have the rate cuts globally and ease money supply to keep the equity market growing. >> what s&p target are you looking at if the positives come through? >> we came in a little bit last week in the short term we could certainly see the s&p trade up to 3060, 3070 in our work. at that point we'd be overbought and we'd trade back down to the neutral point. but, listen, i don't see any reason why we couldn't run another 5 or 6% into the end of the year based upon what we see. >> james, i'm looking at notes from you you said trade is not a factor what do you mean by that >> i don't think that the trade talks with china has been a
factor in this market pretty much the whole year. i think that at the end of the day the market is looking through and seeing there's going to be a deal or there is going to be something that is not deleterious to the economy the market will have to reassess, but i know we hyperventilate over every tweet, every word about trade the market keeps going up. i don't see it being a major factor right now >> jim, thanks so much for joining us great to see you as always still ahead we'll have much more on bank earnings. j.p. morgan and goldman sachs get set to report results tomorrow morning the former wells fargo ceo will join us. his outlook ahead, maybe comments on who should fill the open spot there as ceo >> sounds like a little foreshadowing. plus we have shares of broad come and semantic moving in opposite directions as the merger talks between those two companies fall apart we're going to discuss what led to that break down in negotiations and as we head to break, here is a check on our closing
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welcome back to the closing bell amazon keeping off its longest ever prime day as other retailers offer sales of their own. courtney reagan has more at headquarters hey, court >> good afternoon. amazon's prime day event is a quarter of the way through we have quite a ways to go no word on how it's going from amazon or other retailers. price blink shows amazon branded or exclusive products, the fire tv stick, echo dot and echo show, they're getting the most attention again this year by page views nerd wallet said that's not surprising prices will are lower today than they were on black friday 2018 if they're amazon-owned products, it's amazon controlled pricing. amazon shares are up half a percent today. a analysis of the past four prime day events shows a month later 100% of the time, amazon shares are higher. by an average return of 5% perhaps foreshadowing what we'll see for amazon shares a month
from now back over to you >> court, thank you. meantime send it over to mike san toll i who is back with his market dashboard >> thanks. pick up on the amazon conversation, something i'm calling eating the competition they say you shouldn't go to the super market hungry. maybe that applies to titling charts, too. here's the theme kids feasting while parents starve, that's another kind of haves and have notes story starting to feel fool, market valuations soon. and a well-fed market. fed and markets, all together. so eating the competition. a look at this chart of amazon come cared to a couple industry met tricks, the standard etf, the xly the orange line in the middle and equal weighted consumer discretionary, what you'll see here is amazon at 23 or 24% of the s&p consumer discretionary sector right now has been dragging the entire thing up so if it were equal weighted, you'd see it is not at an all-time high.
it's 2% below its record high from a couple months ago obviously amazon tremendous weight, it's kind of getting more than its share of the growth of the valuation, of the investor dollars in here and i think what you could say is you can't look at the equal weighted version and say that must mean underlying consumer economy is weak. it's kind of afz secular situation here with who is in favor. so that's why it is not as much of an economic bellwether as it used to be housing, autos, other stuff in there besides retail but really does show you at a trillion dollars the force of amazon in the market guys >> mike, i'm digging the theme today and it certainly plays off of what keith said earlier, this idea that the market isn't a food com >> we've eaten too much. we're in a food coma >> you have this aws business, advertising business, octopus arms of amazon that hasn't to do
with e-commerce. what part doesn't do with discretionary? >> the majority of their business, even though aws is coming up to speed quickly jeff bezos is quoted as saying we're thinking of the next 100 things we're going to lose money at they're always looking to innovate if you look at amazon, i always tell people there's eye reason it calls amazon. there's a reason it goes from a to z with a smile on it. they're all things to all people while it remains a big part of their business, they'll drive customer etf >> after the break, bank of america raising a red flag about the state of the u.s. beer market hitting one name with a double downgrade we'll get the word on the street on that call next. >> plus pivotal research says one bank stock has a bigger regular tree overhang than the other names in the group and it's not facebook. we'll speak to the analyst behind that note coming up
victoria's secret brand may not see a turn around . the firm also says management will slow to meaningful change, and that culture norms, which value inclusivity, have shifted away from victoria's secret brand positioning. still l brands is up 1% right now. bank of america giving mole son coors from under perform to buy. the firm citing concerns the company would have to increase spending to stabilize market share. bank of america says core brands are declining faster than the overall beer category. canned wine, canned wine are more on trend. that stock is down 1%. have you tried either spiked cider or can wine? >> can wine if you're going to an event or something like that. i'm more of a beer drinker myself against the trends, but yeah >> i'm not a drinker so i pay attention, but i haven't tried any of the new offerings
>> i respect the bank of america analysts because i like to see a strong double downgrade, none of this wishy washi change price target tiny amount good to go buy to sell out right. pivotal inside notes today, highlighting signs of advertising acceleration for internet giants. let's bring in michael lavine. good afternoon to you. >> good afternoon. >> tell us about the advertising insight, a new deep kind of dive report you're doing, what's the headline take away >> so basically, a little background about the product itself the survey is about 55 large agencies and advertisers predominantly in the u.s my estimate is that it represents 4 to 4 1/2 billion dollar in annualized spend so pretty significant. and in our experience, having come from the buy side as well, typically there's 3 to 4 large search agencies, partners for facebook that the buy side will typically rely on. so i find this a much more comprehensive product than
something i've done for quite a long time. >> let's talk about digital advertising, the dominance of google, alphabet and facebook. is that still the case, or do you see other companies that are really starting to pick up market share right now >> i mean, we think that snap is doing fabulously we think there is a tender change in the business amazon we think is basically acceleration in advertising in both the second quarter. and as we saw in our survey in the third quarter as well. i think it's a bit of a different animal, though, people can sometimes misunderstand -- i think a lot of the advertiser base on amazon skews towards consumer package goods and retail because the beauty of it is that they're keeping the transaction on the amazon site itself so it's really a win/win for amazon as opposed to sending traffic away >> how much advertising revenue are they picking up relative to their size, relative to the rest of the company is it going to have a meaningful impact in q3 what you forecast >> it 's probably a
disproportionate profitability relative to income it's probably a $13 billion run rate for the year, which is impressive but it's still pretty small by way of comparison. >> what you're seeing at snap, do you think that is disproportionate to what the market has seen so far >> i think that snap really went through a lot of challenges in their, you know, their first six quarters as a public company there is a tender change that happened toward the end of last year snap brought in as chief business officer an unbelievably strong and powerful leader in jeremy gorman who basically was at amazon for a fairly long stint. actually it overlapped with her time at yahoo! what i hear from advertisers, folks who worked with her before, has been glowing there is a dynamic that happens in online advertising where when you have a change in the sales leadership and you bring in somebody as strong as jeremy into that role, you have this opportunity to go back to the advertiser community and say,
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hi, contessa >> hi, wolff president trump is responding to the furor over his weekend tweets he wrote four democratic congress women of color should go back to the broken and crime infested countries they came from >> if you're not happy here, then you can leave as far as i'm concerned, if you hate our country, if you're not happy here, you can leave. and that's what i say all the time that's what i said in a tweet, which i guess some people think is controversial a lot of people love it, by the way. >> environmental activists sought to cause chaos in five british cities including london. they're trying to force the government to act to help avert what they call a climate cataclysm. activists parked a blue boat and sat on the road doing yoga outside the royal courts of justice in central london. and mathematician alan turing who helped win world war ii with his code breaking skills
will appear on england's 50 pound note he had been dconvicted under las of sexuality now he is being honored for intelligence that's your cnbc update this hour i'll send it bark to you >> help all the allies of world war ii the 50 pound bank note is a rare and beautiful thing when you get your hands on one. i guess it's smaller in value than the $100 note you don't regularly see them people have them it's always a treat. it will be even more so now. >> you have to get your hands on one on your next trip home and bring it to the set so we can see it in person >> done. >> contessa, thank you let's send it to mike santoli for his second dashboard >> we're talking about drawing abundance in the market while the older generation suffers a little bit hungry. take a look at the bank's index compared to other financial related stocks that are not strictly speaking lenders, but
are in the orbit of financial payment and things like that so the bkx is the banks index at a one year basis, really steady. never been cheaper relative to the overall market as it is right now. but we see the new high list, the new all-time high list, mastercard, intuit, pfizer which services those banks, gives technologies to do things. pay pal, of course, which is new generation payments. it suggests at least on some level, part of the under performance of the bank stocks is they're considered a little bit of a disruptive group. or the growth happening, the innovation happening and finances happening away from the traditional banks. obviously this could also be the makings of some kind of coming together or catch up moves by the traditional banks as those numbers get good and their capital discipline and all the rest of it comes to the fore it's very stark the way you see the market is finding its plays on finance, guys >> mike, i mean, i guess you go out longer and you could argue a bit of yo-yoing in terms of which sectors are outperforming.
the point you're making does apply in general the difference is who has the earnings and who has the returns. and i guess the bank c.e.o.s, we've heard it quarter after quarter, interview after interview kind of lament the fact that their share prices are not rewarded despite delivering on roes and earnings, et cetera. >> the market, if you look more broadly outside of financial services, the market really wants very long-term growth stories that's going to be durable through various cycles and they're addressing a tremendous market that's yet untapped whereas the incumbent banks feel as if by regulation and circumstance are hemmed in in terms of really expanding their share of the overall economic -- i don't know that it's right, but that's the way the market right now seems to set up. >> mike, thanks very much. semantic following to levels not seen since 2018. on reports it's ceased negotiations with broad come cnbc's david faber broke that story and joins us now with more hey, david >> hey, wolf, nice to see you a
subway right away. it's interesting, wolf, you and i talk obviously about deals and oftentimes deals fall apart over price, but we never know about it and we never know about it because, of course, the deal talks were never made public but subsequently i might talk to some bankers who say yeah, ids something, it was pretty big, it was close, but we couldn't agree. or social issues, anything to real deals in the case of symantec, we've been following it closely since then we've been reporting on the 1.5 billion in synergies we've been reporting on the likelihood of a deal coming as soon as tomorrow but when they got to the final stages here, they were unable to agree on price, as we've been reporting, as we first reported this morning around 9:00 a.m., and the stock has suffered since then at least the stock of symantec broad comstock has been up i should add that initially upon sort of beginning their
negotiations, broadcom said $28.25 is an indication of interest we can give you subject to us doing our due diligence. they hadn't really begun that due diligence. subsequent to it, they said, no, we can't do 28.25. we can now do $27 a share. what those same sources tell me is that was unacceptable to symantec who had raised its ask rather than stay at the 28.25, the two sides sort of thought before they really embarked on other negotiations involving the deal they would kind of come down to. so it has fallen apart they put down their pencils as they say in deal land. it is unclear whether they will re-engage in talks you can see the stock has bumped up a bit since its lows on the day. in part on hopes somehow they would re-engage. the disparity is not that great, 27 is what they were willing to pay. 28.25, perhaps, would have gotten it done that said, the man who runs
broadcom, the man no stranger to doing deals, is price disciplined in a range it's not like he's cheap he pays fairly full prices in this case it does appear 27 was the top for him. will symantec come around? unwilling to accept 27, they have a number of significant shareholders whose average price is far lower they also have the activist firm starboard in there swas well. we'll see. it does appear mr. tan has decided to move on no significant move in the stock prices as you saw. wolf, back to you. >> david, based on symantec's ask for its company, is there any reason to think there would be other potential suitors out there now that the deal with broadk broadcom has fallen apart? >> i've heard from private equity firms this was a long shot for private equity given the size of the
deal, the equity check they would need, the need for at least two firms to get together to even write that check the lack of synergies. and so meeting a price anywhere near with symantec and interim ceo had in mind would be very difficult for private equity beyond broadcom on the strategic sense, i have not heard of any other interest >> david faber as always, thank you very much. >> sure thing. >> keith, what's your take on this do you think the price was a little too rich, reaction to broadcom they saw from the first leak >> i can't speak to the merits of the deal whether that transaction would have made for a better company what you're clearly seeing is there were no other bidders. i think once the news got out that symantec was in play, you would have seen those bidders come in. what you're seeing on the trade today is the unwinding of the treasure of the deal once it became public. that's what you see. when they set up a trade, they go short the acquiring company and go long the target
so and that's when they he think the deal is going to go through because the economics will eventually converge once the deal closes. if all of a sudden it doesn't happen for whatever reason, you see that trade unwind and the short sellers will then try to get ahead of the arbitrages because they held a position higher, and it becomes a full scale avalanche down that's what you're seeing with symantec >> we have 21 minutes left of trade. the dow in the red, nasdaq holding onto slight gains, which would be a record close, of course, for the nasdaq if it does stay in the green and now amazon's 5th annual prime day is underway, but could the real winners be other retailers? we'll discuss that angle next. >> and later earnings from j.b. hunt on the clock. we're going to break those numbers down as soon as they cross. stay with us
welcome back to the closing bell amazon kicking off its 5th annual prime day event this year's two-day event is expected to bring in $5.8 billion in sales. according to core site research. some amazon competitors are taking advantage of this year's excitement with big deals of their own. for more let's bring in liz dunn from pro forma and d.a. davidson and company. good afternoon to you both liz, i'll start with you we know this is a big focus for amazon, but the other retailers that are jumping into the action this week, pros or cons for them how does this play out >> i think it's great for them 250 is the number that's been thrown about, 250 retailers are participating in some way, shape or form. they're finding unique ways to do it. ebay highlighting a crash sale which is a joke because last year amazon's site went down you have black friday in july. i think target is out there saying no membership required.
and so i think people are finding ways to amplify their own message. listen, retail needs a little boost in the middle of july. it's good news in that regard. >> liz, is there a summer discount, like there's better than the holiday period where you might have seen a lot of spending anyway? >> yeah, i mean, i think getting people to buy back to school early, back to school is an important category it's kind of like the next thing. and sometimes it drags out in a way retailers can't really kind of coalesce and have a very big marketing message around so i think it's important to kick the back to school season off strong and if discounts are required to gain market share, it's probably an important time to do that >> tom, what's riding on this for amazon, especially given the fact this is a company that is now investing more resources towards one-day shipping for prime members? >> so, the big opportunity for amazon in 2019 is to re-accelerate u.s. revenue
growth so if you look at what you just touched upon, the fact that they now have prime as a one-day effort instead of two-day, now couple that with their 5th annual prime day sale, you could see an acceleration of u.s. sales for amazon in the second half of this year. and you have seen a stalling there given amazon's size. so the way to think about amazon is they need $2.3 billion of revenue to generate 100 basis points of sales growth and it's only going to get more difficult. 50% harder three years from now, 75% harder ten years from now. so basically this could be an opportunity to reaccelerate sales growth for amazon. >> tom, how do you think about prime day in the very long term? is there a hope that it will, in fact, go away and be a thing of the past eventually? a means as an end to something that is going to be there in perpetuity every year? >> so, a, it's a great question. b, the way that i think about prime day, it's essentially a dress rehearsal for black friday and cyber monday
so it gives amazon an opportunity to stress test the system as liz pointed out, last year i think consumers saw more pictures of the dogs of amazon than they did products on amazon to see it. it's just about stress testing their first party delivery efforts. it's also about stress testing their technology infrastructure. so i think from that vantage point as a dress rehearsal for black friday, cyber monday, prime day is here to stay. >> keith, from a stock perspective, amazon versus the retailers, what looks attractive right now? >> i still go with amazon all the time we talked about that before. they innovate, create, not just around retail merchandise and pushing things out, but other business lines as well one of the things i look at for prime day is the points that liz and tom have pointed out dress rehearsal, getting market share, moving merchandise that may be sitting on the shelves that they ordinarily wouldn't do but they are also acquiring more prime members. that's one thing they have diminishing marginal returns on acquiring prime
members. this is a way for people to get a look and peer inside i don't know about anybody else, but in my house every day is prime day, as we buy so much on amazon >> it's true they make it very easy shares of amazon are up half a percent right now. liz dunn and tom forte, thanks for joining us >> thank you >> we have 14 minutes before the bell any close higher on the dow, s&p or the nasdaq would be a record. up next, we've got your last chance trade >> and as we head to break, here's a check on boeing srehas under pressure we're back in a couple minutes and you should be mad your smart fridge is unnecessarily complicated. but you're not mad, because you have e*trade which isn't complicated. their tools make trading quicker and simpler. so you can take on the markets with confidence.
welcome back let's check in on some individual market movers gillead is investing $5.1 billion to increase its stake in galapagos from 3% to 12.3%. it will work with the belgian dutch firm to commercialize treatments for a ten-year period both stocks up, gillead up 2.6%. callon petroleum buying an all stock and gas. deal expected to close in the fourth quarter and will bolster its presence in the shale basin.
callon down. >> ten minutes left to go until the close here, what's the last chance trade >> my last chance trade today is the iwm. the russell 2000 etf i have four main tenets why i think it's a good trade. small caps have been lagging large caps the s&p 500 is up 25% while the russell 2000 is up only 15%. over the course of 50 years, the small caps generally outperform the larger caps by 2 to 1 own an average annual basis same thing, the u.s. economy still remains strong and the market is starting to reflect that typically when you think -- when investors think the u.s. economy is going into recession, you'll see sectors such as utilities and health care and consumer staples outperform we're not saying it is a reversal year to date, we're seeing consumer discretionary, communication services and
technology out perform nobody thinks a recession is coming third thing is we have very good strong fundamentals inside the interest rate environment. that will allow smaller companies to service their debt as well as have access to more capital to expand and grow their business and the last point that i bring up is that the small business optimism indexes are riding at multi-month highs. even though they dipped a little bit. so even if you look at the trade today in the iwm, it's starting to come off a bit. we got it as overbought july 1st. we expected to have a trade down if it hits the 153 level the way the technical charts read right now, i think you'll see it accelerate to the up side, so i think that's a pretty good trade going into the end of the year >> all right we're going to keep an eye on that as you mention, russell 2000 is under performing today keith bliss, did you for joining us >> my pleasure as always thank you. >> we are still on record close watch despite a lackluster session off the back of three record closes on friday and with just higher again on the dow, the nasdaq remains higher, too, the s&p just lower as we stand we'll have all of the angles
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welcome back just under 5 minutes left of trade. time for the closing count down. let's close the trade with mike. good afternoon to you. what's your take on what citi might spell for the rest of earnings season, beat on both lines, but the bank broadly selling off? >> very good afternoon, guys i think for the banks it's going to be -- we're in an environment i think should be good enough. there's not a lot of people who own the banks given what the fed has been doing, what the repercussions of the flat curve mean i think even lackluster earnings from the banks can result in mixed to slightly positive behavior, although the group is not telling you that now it's obviously down pretty hard. i think the more important thing to watch for earnings really is when we start getting into the heart of earnings season which is a week, week-and-a-half from now, we get the industrials and chemicals names. given what we knew last week, when we had the world's largest
chemical company that touches every aspect of the economy, come and give their forward guidance and cut their numbers, it's a warning signal for sure so i think that that's really something that we're going to be focused on and looking forward to see how investors react to that when these earnings do start coming through >> certainly some key names to watch there. mike lewis, thanks for joining us today we're going to send it over to mike santoli for his third dashboard. mike >> morgan, record highs on the indexes, earnings rush is about to start good time to look at a snapshot of market valuation and ask if that valuation is starting to feel a bit -- this is a ten year look at the forward price earnings multiple. bull markets, you get multiple expansion. couple things to note. here was the high in 2018. this dotted line is 17.7 times why that's there, because the earnings estimates over the course of last year went up so much that the actual earnings for 2018 were so much higher
than expected in january, that was the real forward expectation -- that was the real forward multiple at that point, 17.7 what does it mean at 17.2? there is room to the up side if the forward earnings come through. we're starting to get into the upper register where we traded for the bull market. there's nothing that says it can't actually kind of build on from here, especially if this is just a lull in earnings growth and not the end and a cliff in terms of how corporate earnings come through, guys let's get out to rick santelli in chicago and look at the bond market rick >> thanks, mike. with bank earnings everybody seems to be "page six" attention to the yield curve if that's your variable to monitor profitability down the road of banks, well, it continues to flatten a bit today. look at a may 1st chart, third of july we had a nice bounce look at a two-day 30s. they're giving it up, down 5 two-year note is down 2. if you look overseas, a match with our ten year down 4 basis points, bund yields deteriorated down 4 points.
the nasdaq is up a 5th of a's percent leading the pack bertha, how strong is it looking going into the last few minutes? >> it's the strongest of the day, and it's really built from the move up that we're seeing today in biotech and in chips. they're both up about 1% when you look at the biggest names in those sectors. and amd, texas instruments among the new highs among the chips, gillead leading on that deal with galapagos that has not necessarily been always the leadership. the fang names not contributing all that much. apple is apple is on pace to close at its highest since may 6, but you're not seeing that much heavy lifting from the other big guns. on over to bob pisani. >> bertha, a mixed day at nyc. after powell's testimony last week, everyone is gearing up for earnings season to begin watch j.b. hunt after the bell, largest inter modal, they have a lot to say about shipping.
pricing has been soft. here at the nyse, new highs expanding, dow components, procter & gamble, home depot, walmart and consumer names like chipotle, yum brands the closing bell, dow jones industrials just eking into positive territory another record here, up 19 points s&p 500 flat we'll see if that ends positive. >> if you're just joining us, good afternoon welcome to t welco welcome to the closing bell. i'm wilfred frost. >> i'm morgan. let's look at how we finished the day on wall street as stocks settle now, a new closing high for the dow finished up 25 points or so. 27,357 right there fresh highs for the s&p 500 and the nasdaq composite, although
fractionally, 3014 is your level in the s&p small caps russell 2000 were the big under performer today, down half a percent >> pop into the close, drag the s&p as well as the others into positive territory three record all-time closing highs, once again for the major indices. sector performance was a little confused utilities, defensive sector topped, followed by technology, consumer discretionary, the stand out is financials partly off the back of citi earnings. that net interest margin compression. i'd also point out we did see a slight reversal, morgan, of the steepening of the yield curve we've seen of late so broadly the sector selling off because of that as opposed to just because of the first set of earnings we got from citi >> well, joining us to talk about the market day, tom dignin head of u.s. intrinsic value equity at ubs. first let's start with mike santoli. how would you categorize the market do you have another food analogy for us >> not a food analogy, but
digesting, very pleasantly so. the market had stood still most of the day, which means they kind of declined, excuses to go down such as most bank stocks down it seemed as if we he had to kind of ask the question ahead of earnings if the market had already priced in a lot of the good that's expected to come, which would be companies beating earnings forecast as they always do at a rate of about 70%. and, of course, the fed picture with yields anchored pretty low. i think today you could say it was a push the bulls and the bears more or less at a stand still. when you're at record highs, that's a net positive. >> another, mike, day where we rallied into the close >> sometimes they call it a procrastinator's rally some people want the market to come in, give them a chance to buy at a slightly lower price. it probably also reflects that this rally has taken most people by surprise somewhat, and people maybe feel a little bit under invested because sentiment has been somewhat cautious i would say subdued given the
fact that this rally has carried on to a record >> tom, the fact we closed at fresh new highs for all the major averages, what do you think of markets at these levels >> well, let's put it in perspective. we close at new highs, though we close at new highs in most years, so right now we're at highs in the absolute level. we're not highs in terms of multiple when you look at relative -- the ten year at 2.1%, if that's a real rate, if that's the true ten year rate, multiples should actually be much higher than they are i think there are true bargains in the market. and i think people are going to -- they're going to wish they weren't on the side line we've been saying with the market at new highs for seven years in a row >> what do you mean, tom, if that's the true rate i mean, it is the rate do you mean if it stays where it is for a long period of time >> i'm glad you clarified. it is the rate, but equity investors are not treating it as though it is right now we've got the ten year treasury trading close to a ten year multiple.
people are worried about the s&p trading 17 times if the earnings yield on stocks is over twice what it is on, you know, bonds, then it's hard to be arguing that the market is too high of a level. >> tom, we've been, you know, hearing repeatedly for weeks now that it's been a federally we have earnings kicking off this week in ernest. what happens if we have a recession, an earnings recession versus the numbers coming in better than expected >> well, i think people right now, you can see the price in negative earnings, we'll probably get flat earnings the second quarter people are already getting cautious on earnings i think the fed is inducing a rally here, but the other thing you have to look at is even without the fed, it's the global market place that's driving longer term rates down so whatever the fed does, whether they stay steady or probably lower rates, we're going to have a ten year in the low 2s which adds fuel to the
market >> kevin o'leary is now able to join us from osha etf. good afternoon to you. what's your take on what we were discussing, the traction of bonds -- sorry, equities relative to bonds? >> you know, absolutely correct because i don't care whether you look at sovereign debtor whether you look at credit spreads right now. it's very hard to make a case that you would go on the balance sheet of a company versus its equity when yields are close to 2.5%, which is almost what you're getting on triple b 5-year paper, does it make sense to buy the debt why don't you stay in the equity we're in an extraordinary time here you know, 15 years from now, will, when we look at the credit spreads, because i'm a credit guy. i'm on a balance sheet all the time i think we're going to ask ourselves, what were we thinking buying triple bs at 3 and 3.2%, when the real intrinsic yield should be north of 6 and this is why we're in an
extraordinary time i'm still an equity guy. i can't get to the credit market i think the value is horrific there. and i think we're in a perverse situation where markets are being driven by sovereign, you know, policy that's crazy. i mean, money is free. that's basically it. >> or greek debt at 2% let's move forward and talk about earnings, second quarter earnings, of course, officially kicked off last week citigroup picked up the running today. it beat on both the eps and revenue line before the open, albeit some one offs in there. despite citi's broadly positive results, many expecting the earnings to disappoint, companies in the s&p 500 issuing guidance, it hit the highest level in the third quarter since 2016 according to data mike, the question is that low enough to beat and the snapshot on citi was not quite enough perhaps? >> exactly i think it's going to be very hard to generalize obviously in
many situations the expectations would have been lowered enough in others not. the cyclicals where we wrote the outlook, dicey, the stocks have been beaten down more than others i think they have a decent chance if there is a lot of news expected in general earnings season, it tends to be a lot of these off-setting responses. the indexes themselves maybe don't be tell the story because it's about the themes that are emerging in the sector i think that we'll give the market a little bit of a pass because nobody is expecting very much out of the second quarter but, you know, the second half is still expected to show earnings growth. so i think that you don't want to get into a point where you're a week or two into earnings season and the dominant thrust is everybody lowering guidance >> yeah, to that point, tom, when you do dig through the different sectors, you dig through the different industry groups, where are you most bullish and where should investors on the flip side of that maybe be more cautious? >> well, i'll tell you, where i'm most cautious is where people goer for safety, and
that's utilities when you look at it, people are trading utilities like bonds that's probably why they're overpriced, trading 20 times earnings banks are like utilities, and they're trading at ten times earnings i think that differential is pretty dramatic. and if you want to off esketami set something with the banks, financials are a charles payne area it's a great time, you know, to be opportunistic in the market place. >> kevin if earnings season disappoints overall and leads to the market pulling back, would you use that as a buying opportunity? do you think things are supportive otherwisebecause of the feds stepping in >> i don't think the earnings are going to disappoint. i think there's been a lot of bad news baked in already. we may have some up side surprise where i'm finding value right now is i'm looking at the russell 2000 which has trailed dramatically, and the discounts on ps there, anywhere from 20 to 30%, this has been left behind in a bull market
yes, it's light cycle, but the russell 2000 hasn't overturned on assets as an index. within those 2000 stocks are 3 or 400 that have return on assets that are highly interesting in terms of yield that actually pay dividends, and they're incredibly cheap and they sell domestically there's no china issue with them so i'm tiptoeing through the russell 2000 yes, i'm using an index put up by ftse russell, they're talking my book because i helped design t. that's where i'm buying more now because i'm holding my nose at p/e ratios except for small caps where people have not been dipping anything in because they've just been trading the larger cap stocks right up to the full p/es right now. what about 20, 30% on p/es what about our home grown companies? we've forgotten about them >> kevin, what about transports?
they've also been lagging. >> yeah, that's always a bad signal, though when you see transports, tropical storm tembi transports, it's always been a leading cater because of recession. because we have trade wars, i'd like to think ports are slowing down and shipping stuff to china right now. maybe it's an unusual situation. maybe i'm trying to tell a good story about an index i don't like to see soften when transports slow down, it's never good news. >> kevin's russell, you're transports, my banks, they're all lagging. what's happened? i hope it's not saying anything about us anyway, kevin and tom, thank you very much for joining us >> thank you >> we've got an earnings alert it's on trucking company j.b. hunt frank has the details for us >> speaking of transports. >> yes, speaking of transports, morgan, j.p. hunt shares up almost 4% right now. fluctuating wildly since the company reported earnings. a big miss on eps, 12 cents below estimates, but revenues that were in line. the most profitable segment inter modal.
the company cited its transcontinental business declining by 5%. also softer rates for grefreigh. those rates are low 50%, almost all segments seeing -- reporting below estimates overall. the company, we're looking to get more insight on what is going on on the earnings call coming up at 5:30. just not too long now. again, watching it right now j.b. hunt shares up now about a percent and a half back over to you >> frank holland, thank you. mike santoli, your thoughts on this j.b. hunt has been one of the worst performing names in transports, but also in general, when you look across the different data sets for freight, they've been rolling over. so maybe not that much of a surprise >> not much that of a surprise in terms of the numbers. you look at the market response and it suggests the weakness you've seen for a full, you know, several months matter of fact, the stock back to where it traded in late 2016 shows you that at least the market wasn't braced for too much better for the moment
>> we have a market flash meantime on buyer. seema mody has the details >> this is the abr on a report the chemical giant may have gotten the verdict reduced to $25.3 million from $80 million to a california man involved in the round up cancer case where the company was accused of acting negligently by failing to warn a judge was expected to rule today on the request to reduce the jury verdict we have reached out to buyer and are awaiting response. meantime shares up nearly 3% in after hours. will, back to you. >> seema, thank you. up next, former wells fargo ceo discusses the outlook for the bank's earnings and whether he sees more industry consolidation on the horizon >> plus amazon is holding its 5th annual prime day but warehouse employees in minnesota are walking off the job to protest working conditions we will hear from one employee on strike later on the clong be llsi
biggest movers from the stock go change bertha coombs is doing the same from the nasdaq. bob, to you. >> we barely squeaked through. another record, we have nice expansion of new highs today, even on the dow same thing procter & gamble, nice diverse group highs, american express, home depot has been on for a while, and walmart for some reason they're loving restaurants these days we have a whole bunch of new highs with darden , a couple others, chipotle, yum brands also hitting 52 week highs guys, back to you. >> bob pisani, thank you the nasdaq also closing at record levels. and bertha coombs has a look at the movers there, bertha >> it was a big nasdaq 100 move today. the 5th straight day where we saw record close and/or intraday high for the nasdaq 100, and nearly 1 1/2 dozen new highs within that group, including amd, the texas instruments, all-time highs for pay pal, starbucks, and microsoft as well, though microsoft closed absolutely flat on the day among the big cap names overall,
not that much of a big move to the outside. apple was the stand out. amazon getting that much of a lift i guess they're on sale for prime day. back to you. >> thank you, bertha, for that now citigroup kicked off banks earnings this morning. beat estimates what can we expect from the other banks due to report this week let's bring in former wells fargo and ceo. dick, good afternoon thanks for joining us. >> thank you >> what was your snapshot take away from citi >> i think it's pretty much as expected i think banks, the overall s&p analysts are forecasting to be actually lower net income and eps. i think banks are going to do better than that, but i don't think they're going to be robust earnings margins are declining and there are lone increases, positive earnings from banks, but not robust >> that said, dick, we saw roe
at 11.9%, they reiterated guidance next year for 13.5% it's still trading below book value. does that surprise you whether it's citi or the broader sector when you see the level of roes relative to price to book values >> well, it does but if the whole industry is that way, it is surprising to me you know, the p/e ratios are 60% of the market. they have high yields. when they're announced, dividend increases come in, all of them won't be 3%. they're not loved at the moment. >> i want to get your thoughts on the sector. we had news today charles schwab is in business to buy segments of usaa. in general looking across financials, do you expect we're going to see more deal making? >> i do. any time you have high
regulations in any industry, you get concentration. and banks are cheap. so if you're going to acquire, this is the time to acquire financial institutions >> do you think the big banks will be involved, the biggest banks? >> no, they can't. i mean, they're not going to be allowed to i think you may, you know, get another merger of equals or something, but i don't think -- there won't be many of those, if any. i think you're talking more in the under 10 billion consolidating with over 10 billion asset banks and/or within those categories. i think that's where the major action is going to be. >> what's your take, dick, on who is likely to be the next ceo at your old shop >> i have no idea. i haven't been ceo since 2007 -- >> are you surprised -- are you surprised it's taken so long and letting tim sloan retire, searching for a replacement --
you know, taking quite a long time over it >> yes, i don't understand why it should take so long i think that's not a good idea i would hope that they can make a decision soon because, you know, you have to have -- you have to know who your leader is and what that leader wants to do so they're kind of in a very difficult position at the moment, and i hope some sort of decision happens quickly >> if it was alan parker, the interim ceo who is a lawyer by training, would that be a disappointment to you? a risk >> no, i don't think so. i don't know alan well at all, but he's highly respected both inside and outside the industry. and one of the most important things that has to happen at wells is that they meet regulatory requirements. and, you know, this is an area that he is very steeped in, and i think it would be a good choice if -- if indeed they
can't find someone that they think is a lot better. and it seems like there must be some difficulty in hat, so i think he's certainly a strong possibility. >> dick, thanks so much for joining us >> my pleasure >> tomorrow we will break down wells fargo's earnings in a first on cnbc interview were the cfo john slewsberry. that's tomorrow. >> such a busy week ahead of you. >> i do. fun week >> yes up next we will break down the charts to see how much credit the federal reserve should be getting for this year's market rally. >> and later big tech will come under fire during capitol hill antitrust hearing tomorrow fi o wt eec nduthatoxpt.sign an agreement that created the stock exchange. just the right elements coming together. it started when scores more people came together,
just down the street and traded bonds that helped pay for the revolution, and the nation it created. it started in an office on the corner where the right people witnessed the telegraph and brought information and humanity together forever. it started with the markets, bringing together steel and buildings and silicon and medicine and rockets. we believe the possibilities of life and investing are greater when we come together. it's why for eighty years we've connected ideas with technology, data with inspiration, investors with solutions. so that every day together, it all starts again. ♪
welcome back to the closeding bell let's take a look at how we finished the day on wall street. new record closing highs for all of the major averages. though just barely the dow finishing the day up 27 points, or 27359 was the low there. the s&p 500 just barely closing higher, but again a new high the nasdaq also closing higher, up about 2/10 of a percent the russell 2000, small caps, were the under performer finishing the day down half a percent. >> we'll send it over to mike for the final installment of the dashboard. mike >> wolf, calling this a well-fed market we've been talking about how what the outlook of the fed is going to do or probably going to do this month or the months to
come, has a lot to do with how the market has done. here's a chart from renaissance macro research that attempts to quantify how many points of the s&p 500 on a daily basis is attributable to fed news now, of course, this is art plus science. nobody says this is exactly why the market moved in a given day, but it does get to the attribution, what people thought was at work when you had this type of news so what you see is through the course of last year, it was a net negative -- net negative pin r input. much more on up days we've gotten it all back this is a running tally of daily point moves in the s&p 500 not percentage moves so right now obviously especially in the last few weeks, it is very much been all about at least what we think of is all about the fed now, what's the market up this year, about 500 s&p points you can't say this is all about the fed because also, by the way since 2015 the fed has raised rates five times
it's not what the market always needs, but in this moment with earnings flat, with the growth picture stalling globally, it seems as if investors are clinging to this idea the fed is bolstering things right now, at least by going on hold and by promising something down the road >> we talk so much about this idea that good news is bad news, bad news is good news. >> yeah. >> where the fed and data, for example the monthly job reports are concerned. this chart kind of captures that right through. >> it does capture it to some degree here's what i would say. if there is going to be bad news out there, an accommodative fed can compensate for that. it's not as if we're rooting forbad news, but in the face of bad news they want to see a responsive fed that's not going to be dogmatic about raising rates into it. >> mike, thank you it's time now for cnbc news update with contessa brewer. contessa >> hi, morgan. here's what's happening now. there does appear to be a crackdown nationwide president trump said immigration raids are indeed happening >> the i.c.e. raids were very
successful people came in to our country illegally, illegally many were felons many were convicted of crimes. many, many were taken out on sunday you just didn't know about it. >> the biden cancer initiative is suspending operations the nonprofit foundation was set up by the democratic presidential candidate to motivate the medical world to speed a cure for cancer. biden and his wife, joe biden left the board as an ethics precaution before he launched his presidential campaign. without the bidens, the organization struggled to fund raise and maintain visibility. the united autoworkers are in contract talks with the auto makers a ceremonial handshake kickoff took place at detroit's headquarters among the issues, plant closures, discrepancies in labor costs and health insurance premiums and that's not just at ford that's the cnbc news update this hour will, i'll send it back to you
>> contessa, thank you amazon racking up sales on prime day. the online retail giant is facing employee backlash overworking conditions we'll hear from one worker who is currently on strike that straight ahead. >> plus find out just how valuable prime member is to amazon sales we've got thatft t bak aerhere (soft music) - when i see obstacles, i create opportunities. - when i see adversity, i find a way.
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let's have a look at how we finished the day here on wall street it was the three-record all-time closing highs once again thanks to a late rally into the close as you can see on the intraday chart but the gains today small, just two basis points, the s&p, 10 for the dow, the nasdaq up 0.2%. but it was enough for record closes >> certainly was up next, the fda is reportedly ready to accelerate the review of e-cigarettes. find out what the ceo of juul is saying about the glowirowing nu of teens hooked on vaping. plus we'll preview banks and j.p. morgan, goldman sachs
thankfully, the breakthrough in prevagen helps your brain and actually improves memory. the secret is an ingredient originally discovered... in jellyfish. in clinical trials, prevagen has been shown to improve short-term memory. prevagen. healthier brain. better life. well, let's take a look at how we finished the day on wall street record closes for all three of the major averages with the dow finishing up 27 points, the s&p finishing higher, 3014 and the nasdaq also finishing the day higher to another record close, up about 2/10 of a percent. small caps were the lagger today. in terms of what led us to those records for the s&p, for example, utilities, consumer discretionary and tech stocks. those sectors were the leaders >> amazon prime day kicking off this morning as the online retail giant hopes to top last
year's sales courtney reagan has the details. hey, court >> there's a lot of discussion, of course, about the amount of sales that prime day generates for amazon, but really it's only part of the goal for the bigger event. the bigger goal is to recruit and retain valuable prime members. in his 2018 letter to shareholders, jeff bezos said they had more than 100 million prime members worldwide. that's the first time the number has been disclosed they said added prime members than any other day in its history. cowan and company estimates there are 363 million household that are prime members its survey revealed ha% or 28348 households plan to buy something on prime day and that 10% of non-prime households in the u.s. would sign up to be able to shop since you have to be a member to get the event discounts. those numbers are very valuable. consumer intelligence research partners says amazon shoppers that are prime members spend $1,400 a year on average compared to $600 for non-prime
amazon shoppers. the key, of course, convincing consumers to convert the free trial to a paid $119 annual membership and nearly two-thirds of the time, it happens and then once oyou're a member you stay 93% continue the prime membership after one year. 98% stay after two years meantime, amazon competitor walmart hasbeen working hard, spending billions to catch up to amazon or even get closer. ceo doug mcmillan speaking at the tech conference today addressing just that >> yeah, we fell behind and have been playing catch up and having been doing a number of things to accelerate that progress and learning along the way and getting better as it relates to the customer experience. >> mcmillan has admitted that walmart has fallen behind. we don't know the actual market share, but e. marketer estimates walmart is about number three when it comes to e-market share. walmart number three, amazon is number one at 47%, walmart has
under 5% share, ebay squeezing in between at number two back over to you >> i know there's no hard data on this, might be a slightly unfair question for which i apologize, but is there any sense that we get from analysts in the company as to which costs more and which retains prime customers better, the money they spend on tv content or the money they spend on free one-day shipping and prime days and things like that >> yeah, i wish we had more data, but we really don't know amazon doesn't really break that down for us. i think it is -- most analysts believe that most people sign up because of the shopping benefits however, now that you've got other retailers that are offering very fast shipping without memberships, i think amazon realizes that they really have to make that $119 a year membership worth it. and so then they add on other things, like the music subscriptions and the ability to watch the different television and movie content there. so i think that's sort of a retention vehicle.
but often the reason that you sign up is to get the shipping benefits >> yeah, court, the fact that you do have, you know, a number of other retailers that are taking advantage of this prime week and basically rolling out their own deals as well, who could be the potential winners and losers here other than amazon >> so -- >> walmart, for that matter. >> we know last year target did end up telling us, hey, the day that was prime day, that ended up being one much our biggest digital days of the year and target did something very similar with their competing deals this year. so i would imagine if it worked well last year, it could work well again this year walmart, too, also offering those competing deals. and i know we don't talk an awful lot about ebay, but ebay really does come in number two when it comes to e-commerce market share to amazon we shouldn't discount them either initially i think everyone thinks of ebay as sort of secondhand items or items that have previously been used, but they actually have many, many, many items that are brand-new items and they're working on
faster shipping with all of their sellers as well. >> courtney, you've been covering and others, that pulling back to school spending putting in front of people's face is a big part of this or a significant chunk of it. what happens in the used to be school shopping season, are we doing halloween already? how does this treadmill work >> that is so interesting. so, it turns out that the shoppers that actually spend back to school shopping earlier end up spending less than those that wait, which is kind of funny. if you're a retailer, do you want your consumer to spend lessor do you want them to spend more by waiting? so when you're buying supplies, you may just be pulling those sales forward. however, it's really hard to get your kids to go try on fall clothes in the middle of july. and so those kind of sales, the shoes, the clothes, even maybe the book bags, those get pushed off into the fall. it kind of just stretches the season and/or breaks it into two
when you're talking about the categories of spend. >> court, thank you. >> yep >> up next, treasury secretary steven mnuchin says he has serious concerns about cryptocurrencies echoing president trump's attacks. find out if this cryptoclash could be big trouble straight ahead. >> coming up on fast money, one top strategist says you want to buy the laggers in this maetrk% we'll give you his topics. ♪ ♪♪
kevin burnes on teen addiction to e-cigarettes. >> if we did this tour with a parent of a teen who had been using or who had been addicted, how would you sort of defend all this, all this scale all this production, all this growth >> first of all, i'd tell them i'm sorry that their child is using the product. it is not intended for them. i hope there was nothing that we did that made it appealing to them as a parent to the 16-year-old, i'm sorry for them and i have empathy for them in terms of what the challenges they're going through. >> burnes hopes juuling turns out to be less risky than smoking but it admits there are real concerns about the impact of chronic vaping. >> frankly, we don't know today. we have not done the long-term longitudinal clinical testing we will need to do. >> carl joins us now with more on america's e-cigarette --
>> it's weird. >> thanks for joining us all the clips all day have been awesome. looking forward to the full thing 10:00 p.m. tonight some of the clips earlier showed the other side, where you speak to people who have been addicted to cigarettes for decades and this has been their savior >> it's true and we should say, kevin burnes is not a co-founder. it wasn't his idea he didn't design the product he's a manufacturing guy he's been brought in to get it to scale but he's having to answer for a lot of practices that they had in the old days that served hyper growth, those included marketing that critics say got kids interested, with music and bling and social media and all of that. so he's having to get this thing going as an adult in the room and answer for a lot of past practices. that's why this is sort of a pivot for them >> you know, there are investors in juul, right clearly they have in mind a total addressable market size, assumptions about adoption rates, how early people are going to do it, how long they're going to continue and i wonder how that plays into the idea
they're saying, look, it's not intended to for younger people >> the fear is people end up not quitting the cigarettes and just juuling when they're indoors, juuling when they're in a non-smoking zone one of the numbers he gets every day, every friday i think it is, is the nielsen rolling tobacco sales in the u.s., which if you look at a chart is literally going off a cliff in the double digits territory people are sticking with it may be because flavors keep them interested and eventually stop having to light up >> does the science, the research caught up with the actual phenomenon? i ask as we get the headlines from the dow jones the fda commissioner is ready to accelerate the review of e-cigarettes and other tobacco products how much do we actually know >> we need time for some of these long-term studies. i thought the fda headlines today were interesting because we thought they were going guns blazing, we're going to take this industry to task. gottleib resigns seemingly out of nowhere and it kind of was
left unresolved. so if they really are sort of back in the market of pushing forward deadlines, saying, look, if you want to sell, we need to see your approval requests, that's going to be a bit of a gut check for the industry >> and, carl, remind us, where are we globally on this? the title of course is america's e-cigarette addiction. he traveled elsewhere. is this a factor that applies in other countries? >> europe, we talked about made some headway india, china are sort of -- that's the pot at the end of the rainbow. if you can crack that market, that's going to be a game changer. but those are still very early days if they can sort of massage this public policy gauntlet here, change some minds domestically, then we'll start talking about it more as an international story. >> carl, great stuff congrats we look forward to the full documentary, vaporized, america's e cigarette addiction. 10:00 p.m. eastern on cnbc treasury secretary steven mnuchin holding a news
conference earlier today expressing his concerns over facebook and cryptocurrency. >> i'm not comfortable today so let me be careful as i said, they and others have a lot of work to do before they get us comfortable. i'm not going to publicly speculate how long i think it will take them to get to the point where we're comfortable with it, but they are a long way away from -- and again, part of it, there's been a lot of public interest in this that's why i wanted to give the public the assurance but before they or anyone else does this, that we're going to make sure the financial system is protected and as i said, there's a lot of illicit activity that we'll be shutting down for people who are using cryptocurrencies forbad purposes >> let's bring in karen petro from federal financial an lit is karen, thanks for joining us today. what do you think of the comments from the treasury secretary and also the timing? >> oh, i think you've got to admit that this is about the world's worst product launch
ever, to bring out president trump, chairwoman maxine waters and now the treasury secretary along with the bank of england, the head of the federal reserve board, and many other top policy makers to tell facebook that they don't feel good about this. it's sending a real message. >> karen, what about the young banks? in their original white paper it was clear one of the thought processes behind this was to help those that don't even have a bank account in emerging markets that might have a facebook account could that still go ahead even if the likes of the u.s., the u.k., europe don't get behind it >> i doubt it. partly because i think facebook has to have a product that works with the bank as well as the unbanked because the profit motive, the whole structure of the product is, if not threatened, it's far more complicated. one of the reasons people are unbanked, guess what, they don't have money they aren't engaged in payments. but one of the most important
aspects of libra and, indeed, a lot of technology flying under the financial inclusion flag is that you cannot lose poor people's money this is not like a pair of sneakers that gets lost in the mail this is people's livelihood. and i think you will see many other nations, including those where there are significant numbers of where people view this with a lot of caution >> karen, do you think the scrutiny we're seeing here specifically around facebook and libra, this is specific to that company, given all of the woes we've seen around facebook in general over the past year or do you think it throws cold water on the whole notion of digital coins more broadly >> i think it depends on what you think about digital currency one of the reasons i think facebook's product launch has gone so badly is that they just skipped over a whole lot of issues, including the money laundering and national
securities concerns secretary mnuchin mentioned. there are some very successful digital currency ventures in more limited areas, with less ambitions, with much better attention to regulatory risk but if you want from day from do do what facebook wants to do which is get rid of currency and take over the payment system, you're asking a lot from a completely untested digital currency >> thanks for joining us today >> thank you. >> up next, we'll speak with one amazon worker who is protesting 'rba rhtft ts prime day event. wee ckig aerhi break. break. ♪ ooo! ♪ ♪ and protect it all. customer records, our financials, they better be secured. but i also need easy access, to manage data across my clouds - no matter where it lives. ♪ ♪ so if an auditor shows up, i can be a step ahead.
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so you can save big. get a no-fee personal loan up to $100k. welcome back, a group of amazon workers in the u.s. and across the dploglobe are protesg prime day. joining us william salts an amazon warehouse worker in shakopee, minnesota who is participating in the strike. very good afternoon to you, william. thanks for joining us. >> good to be with you >> i just wanted to start, william, by asking if i may how long have you been working for an amazon and in what role >> just over two years aye been a picker, the
merchandise is on these storage pods and i have to put the items and send it to the packing area. >> i wanted to read to you a little bit of a statement that we got from amazon, if you don't mind, and they say. >> go for it. >> the groups that you are part of today, the protesters, they say this, these groups are conjuring misinformation to work in their favor when in fact we already offer the things they purport to be their cause, industry leading pay of $15 an hour, benefits and a safe workplace for our employees. we can only conclude that the people are not informed. what is your response to that statement by your employer >> so workers out here today were asking for like lower speeds that we have to work, lead to less injuries, job security for the temporary workers, and, yeah, and doing
something to provide safe reliable jobs here at amazon you know, it's funny, like amazon like inside the warehouse the managers will say, oh, we want to hear your concerns, bring that stuff to us, but like you know when they're -- it seems like when they're talking to the outside world they're much more inflammatory and dismissive of what workers are asking for >> william, how optimistic are you that some of these changes that you're calling for, that you could actually see them implemented, and if so, what specifically would you want to see implemented? >> sure, so i mean, amazon has the means to do so much more for all of its employees, and you know, like i said, we would like to see the -- you know, less physically and mentally, you know, draining jobs. we would like to see, you know, workers have, you know, better
job security, better treatment for those who are injured, bring back some of the benefits and bonuses that we used to have. >> you mentioned, william, that there's a pace that you have to work at. >> right. >> whether explicitly or impolice s impolice police sit -- implicitly are there certain targets or speeds that you are forced to meet that wput you in harm's way is that what you're implying. >> i've -- you know, i've, for the past two years i've made my rate all weeks except for -- except for one, and so like i can make my rate, but it is still like very physically exhausting, and i've seen friends who have gotten injured doing the same job i'm doing and seeing the same kind of injuries, shoulder injuries, wrists, knee problems. >> william stoltz thanks for joining us today on this day one
of amazon prime day. time for our wall street look ahead. earnings from jpmorgan, wells fargo and united will keep investors very busy tomorrow there's a big tech antitrust hearing on tap let's start with will who has a preview of the rest of the big bank earnings we can expect. >> what do we learn from citi? the big take away is pressure on net interest margin. citi offset that with loan growth, asset quality and stock control. the stock recovered intraday in part because they reiterated their guidance going forward wells fargo and jpmorgan closed down over 1% and they were down throughout the session they need to reiterate their guidance tomorrow, all eyes on that for goldman sachs, that kind of era that interest margin matters less, but for both them and jpmorgan there's other trading groups within that fixed income was better than equities which may
play a little bit to goldman sac sachs. and investment banking was down 10%. also a little better than expected that could help jpmorgan and goldman sachs. either way what's clearly the case this quarter is the show me quarter. the banks need to deliver before share prices will respond positively, hence citi outperforming the others today. >> let's get a check on what to expect from united's earnings. phil lebeau has the details. >> a big focus will be on passenger revenue. the earnings come out after the bell tomorrow and on wednesday morning we'll hear from united's ceo oscar munoz. the focus will be on the revenue growth strategy. it has been very successful over the last year, and yes, there will be questions as well about the 737 max, expect for those to come up. wu lo but look, if you go back all the way over to the last year, united has outperformed all of the legacy airline stocks, and it's easily outperformed the index. the numbers come in after the bell tomorrow. guys, back to you.
>> phil lebeau, thank you. big tech companies will be in the hot seat in washington tomorrow >> morgan, we get a doubleheader actually tomorrow. in the morning it's facebook under fire as the senate banking committee holds a hearing on libra. already we've heard from the treasury secretary on his very serious concerns facebook says it will take the time to get this right then in the afternoon google, amazon, apple and facebook will testify in the second hearing of the antitrust investigation that is underway in the house the focus is on whether the company's stifle innovation and entrepreneurship, have they simply gotten too big to beat, guys back over to you. >> ylan thank you very much for that 30 seconds left, mike. take away from today small gains but enough for record closing, and we did close very close to the session highs. >> we're at one of those points where the bull case is hey, the market's at a new high with everything going on and the bear case is hey, the markets's at a
new high it's always the way it is. the big tech stuff is interesting. the peter thiel comments had no effect on alphabet watch to see if there's any stock reaction the banks, citi's the most loved big bank by the analysts and maybe that was a headwind to its performance today. >> it was up 37%. >> coming into today's results we're out of time. that does it for "closing bell." fast money starts right now. overlooking new york city ice times square, traders on the desk are carter worth, brian kelly, steve gra sew and guy ada adami. stocks at record highs he'll be here to explain why health care and energy could be your best bets plus, check out shares of jp hunt, the trucking stock soaring on earnings release moments ago. what it means for the transports as we bring you all the latest headlines. we start off with a big ckrnings report, citigroup