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tv   Closing Bell  CNBC  August 13, 2019 3:00pm-5:00pm EDT

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morning that the 10% tariffs scheduled to go into effect on september 1 were going to be postponed on many items until december, look at how the s&p responded. right now we're up one and two-thirds percent. >> wish that the yield curve looks the same way. >> barely moving on the back of this thanks for watching "power lunch." >> "closing bell" right now. good afternoon, i'm wilfred frost. welcome to "closing bell." we've got apple tech and the broader markets surging as the latest round of tariffs have been largely delayed at one point 7% on the s&p as we enter the final hour of trade. >> and i'm morganbrennan in fo sara eisen let's look at what is driving the action today, tariffs front and center, a phone call with china's vice premiere. also in china, a dramatic day of protests in hong kong as riot police enter the airport and yields rise. gold slips as the market's risk
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appetite reverses the trend we've seen of late joining us, steven weis, managing partner of weis managing partners. thanks for being here. >> thanks for having me. >> i like the no tie look. i do that on a friday. >> he's, i guess, getting the positive sentiment going here. >> absolutely. >> even though it's only tuesday. when you look at what's really leading the s&p higher today, it's tech stocks it's the semiconductor names what do you think right now? >> so, i own smash which is semiindex, ctf i owned it coming in today, bought more immediately when the news hit it's not something i typically do i sold some in the last half-hour. i'm not sure this momentum is going to continue. it's highly volatile, and when you have profits and positions that aren't core positions, take them, be happy look at where the market is. the market is no further than where it was -- actually, it's
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lower than where it was. go back a year and a half, it's basically flat core positions you don't necessarily touch unless the fundamentals change, but take profits when you can that's what i did with smash i didn't want to look back tomorrow in case another headline hits and say i should have done that also, look, you've got china amassing troops on the border. that's serious stuff that's going to hit the markets. i'm not sure if demand -- and we'll talk about this later -- that's driven apple is so much a sellthrough -- there's so much demand i think there are lots of issues that are unanswered. it's a very uncertain time and if you have any experience in the market as we all do, you know what's going on is not normal, not natural, and there's no playbook for it. >> basically it's not just that you're questioning this rally we're seeing in semis today. it's the rally in stocks more broadly. >> absolutely. >> we're going to dig into more of that as the hour unfolds. let's focus on the big stories
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we're watching today in general. kayla has the latest on trade. bob is watching what's driving this market rally. sue has been monitoring the latest on the protests in hong kong and wilfred is looking at the impact on banks. kayla, let's start with you. >> a phone call between the u.s. and chinese trade principles has thawed relations for now but they set up a few key dates to watch in the coming weeks and months for potential escalation or deescalation. negotiators will speak just before the september 1st deadline the white house has invited the china delegation to the white house for talks. don't know whether that's confirmed by the chinese october 1st is a key holiday celebrating the creation of the china's people's republic. two months later tariffs on remaining consumer goods could go into effect, so certainly a busy fall. while the market likes what they saw today, plenty of opportunities for flash points in the future.
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>> is this a sign that some of the president's less hawkish advisers have convinced him to change his mind or just the fact that the stock market has pulled back has convinced him to change his mind >> i think you have not only the free trade advocates within the white house that are advising the company but also companies, ceos that have been lobbying this administration to dial back this threat that caught everyone by surprise and had some outside allies of the president calling it a miscalculation a few weeks ago. i think they were worried that if there are cracks in the economy, that that could really play out later this year when consumer spending is so important in the fourth quarter and they wanted to make sure that that didn't happen. we're still waiting to confirm who initiated this call. chinese state television says it was washington, which tells you a little about who wants this more >> kayla, thank you very much. let's get to bob for more reaction from the markets throughout today bob. >> it was very clear right from the get-go trade-related names,
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particularly in technology, moved. today big movers percentage-wise, apple and intel, microsoft, but some not all of the industrial names, caterpillar which has been beaten down note flee, nike, and finally the banks moved up as the ten-year yield moved up. markets moving in lockstep with the ten-year yield retailers also did very well today. the toy companies were very happy. tariffs were delayed on the toys the head of hasbro thanked the administration for listening to our concerns that's their comments there. typical august day on volume but very heavy volume in the big etfs associated with trade that's technology, financials, industrials, all of these have had unusually heavy volume today and that's clearly related to the statements made earlier today. guys, back to you. >> bob, thank you very much. the protests in hong kong turning violent today and sue herrera has the latest.
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>> indeed they were violent. for the second day running protestors shut down one of the world's busiest airports, the hong kong international airport, which we should note is a crown jewel really for that area of the country. basically what happened today were there were two key statements that came out, and they're important because they came from the chinese government one, china's u.n. mission basically condemned the protestors and said they used lethal weapons showing a tendency of resorting to terrorism. the tendency of resorting to terrorism is the key phrase. then china's central government came out and strongly supported hong kong chief executive kerry lamb and her government in discharging their duties and basically earlier on china had said that the protestors had the sprouts of terrorism about them. so that's two times in as many days that we've heard the word terrorism. if indeed they are formally labored, the protestors by the
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chinese government, as terrorists, that opens up a whole other level of authority for carrie lamb, the ceo of hong kong, and the powers that she would have to move against the protestors so that's the two key developments after another difficult day in hong kong, guys. >> the power of words, sue thank you for bringing us the latest on this developing situation. sglchblt wilfred, you've been looking at how the bangs are dealing with this. >> the head count for them in hong kong tends to be around about a few thousand there's precise head counts for you. i've spoken to senior sources at a number of u.s. investment banks and they all paint a similar picture. first, they're putting employee safety first on top of the list. they're not taking sides on the issue. they're very concerned and they're all micommitted to hong kong in the long term. other than that i was a little
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surprised to hear how much typical business is still continuing one senior hong kong-based executive said, quote, clearly not business as usual in hong kong the situation is anything but usual, but commercial operations are continuing very close to normal they say markets are open. clients are transacting. volumes for august are pretty typical, certainly not lower because of any inability to function that may not be the case for construction firms, for exampl . they said, but for banks it's fine the airport shutdown has definitely elevated things but if that's only a short-term factor it doesn't really alter the business throw for a bang. i was surprised to hear that essentially they're saying most business functions are continuing normally. >> i think one of the reasons for that -- i ran a global research department and we had an office in hong kong we had asian offices the reason why business is
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normal, there's not much business there for u.s. investment banks it's picking up and the hope was alibaba with an additional listingin the hong kong exchange was going to elevate the stock as you dem okay ties the ability for investors to get involved in it i don't think you would second guess those plans but the timing may be uncertain on that but that's going to be the next big lift there but you have issues here which are continuing to force u.s. companies to rethink their investment there, not just from trade but now from unrest. so that's another reason why i think you've got to take a second look at your exposure and also, your bond exposure, this isn't going to drive yields higher in the u.s., it will drive them lower as you increase that run, that dash to safety in treasuries. >> i definitely -- clearly the banks would always say we're not going to take sides and we're committed to hong kong in the long term. on the record or off the record i wasn't expecting them to say
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otherwise so that's not not guiltily indicative of huge long-term commitment i would say they all need exposure to china and if hong kong does decline a little bit in the long term as an axis point to china, i think they would be moving to shanghai as much as singapore. if china is going to allow hong kong to decline as a financial center, it would only do so if they know shanghai is ready to pick up the slack as opposed to losing business to the region. >> that's right but they have to open their markets a little bit. the markets are still very closed, still very restrictive, and you want to -- you've got to be prepared to really open the kimono to the chinese authorities, the regulators, and i'm not sure the banks are ready to do that just yet. >> the other other thing i'd say, general point, and this is from broader conversations of people based in hong kong as opposed to the banks, i'd say the likelihood of the pla actually coming in a little lower than perhaps is being framed in the press here
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clearly that's a big swing factor as to whether this escalates and hurts global markets. say the base case is that's still less likely to happen than perhaps people are here thinking. >> meantime, stocks are trading higher with 15 minutes left until the close. we'll bring in tony dispirito, portfolio manager for black rock's equity development fund thanks for being here. >> good to be here. >> what do you make of this unrest in hong kong and how markets are thinking about this and i guess also the risk around the possibility of the pla getting involved >> i think we're in a volatile market and it will continue and it's not just about hong kong. it's about the fact that we're in the later innings of an economic cycle, the fact that we have a trade war or squirmish going on finally, we're in a political cycle, election cycle. all that with geopolitical risks on top creates volatility. our message is stay invested
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because equities are still attractively priced but be prudent in how you approach equities. >> what's the yield on the fund and have you seen much more interest in flows into it in the last six months or six weeks even as yields have fallen >> we have we have a current yield of about 2.7% think about that in the context of where interest rates are. the ten-year treasury, about 1.7%, that's a significant yield premium. in fact, we're at a really anomalous point in time where you can get more income from stocks than from bonds >> a lot of people talk about utilities, the obvious sectors with the yield are those the ones you're putting money to work in or are there others out there >> we're much more focused on the growth in income as opposed to the current yield our current yield is certainly competitive but we really focus on companies that can grow their dividends over the course of the cycle. we're actually underweight some
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of the more traditional bonds. i actually think there's risk in those sectors. they've been bid up in this low interest rate environment to high levels and to me the high valuations there is a risk. >> don't you have companies in your target that can grow their yield because part of it is how the underlying business does >> yes, we look for companies with really positive risk/reward skews where there's more upside than downside. we think about things like underappreciated quality and underappreciated dividend gro h growth that's the key to success. >> something like defense companies then, defense primes, would that be attractive >> they're a very attractive sector they grow with the economy, with gdp. we're in a period of heightened geopolitics and i think they can grow their dividends over time and their valuations are pretty
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modest. >> steve, back to the broader markets and the turnaround we've seen today do you not see that as a signal that the president isn't going to let the trade issue itself get markets more than 5%, 6% from their highs >> i don't know what his mood is going to be tomorrow so, you know, what happened today should not give you any greater confidence in the market it should continue the narrative of the uncertainty think about how that decision was made to put the 10% tariffs on we knew christmas was still coming up in december, right now all of a sudden we're going back and saying, wait, we've got christmas, i'll give them some relief so that was a knee-jerk reaction if anything, you're a ceo saying i can't deploy cap x in this market this doubles down on the uncertainty that you're facing and as a steward of your company's capital for shareholders, it's almost your response to go out with full spending plans
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so tomorrow it may be another story, the market could be down 400, 500 i think part of the market selling off right now is people are recognizing that could be the case it's not a safe environment to invest in. there's no reliability on the message from d.c. >> steve is with us for the full hour tony, thanks for joining us. >> thank you. we are high by 373 points with 45 minutes left to go more on the massive rally. stocks off their highs but plenty of time left. plus, apple is the top performer on the dow today, surging on the back of the delay in tariffs but are there other fundamental reasons to be bullish on that stock? we have new research that argues that's the case. as we head to break, here's a check on our data tracker. ugly german economic data overnight. the zoo sentiment disappointed here in the u.s., the consumer price index is broadly in line
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with estimates coming in at 3% you should be mad at airports. excuse me, where is gate 87? you should be mad at non-seasoned travelers. and they took my toothpaste away. and you should be mad at people who take unnecessary risks. how dare you, he's my emotional support snake. but you're not mad, because you have e*trade, whose tech helps you understand the risk and reward potential on an options trade it's a paste. it's not liquid or a gel. and even explore what-if scenarios. where's gate 87? don't get mad. get e*trade and start trading today. - stand up if you are first stand up if you're a mother. if you are actively deployed, a veteran, or you're in a military family, please stand. i will tell you this, southern new hampshire university can change the whole trajectory of your life.
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. welcome back to "closing bell." a long awaited, long rumored
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deal is finally official cbs and viacom announcing their merger championed by vice chair and controlling shareholder sherry redstone. bob backish will become chief of the company. sumner redstone split it apart more than a decade ago it's all about size and scale, negotiating with cable distributors and tech companies but now the key question, do they need even more size and scale, and who could they buy or be acquired by for that let's bring in alex sherman who's been reporting all the details around this deal and it is looking at whether we could see another wave of k consolidation. >> we've been able to stew over this merger for about an hour now so it's time to think about what the next one is the fact of the matter is if you put both of these companies together, cbs and viacom, you still end up with a company that is dwarfed in size by the
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biggest players in the content industry these days. our parent company, comcast or at&t that bought time warner or disney, these companies are much bigger throw in google, amazon, netflix, apple, obviously they're still way bigger than even a combined cbs viacom sherry redstone has been fairly explicit, sources tell me, in saying we want to go out and try to buy up another company or maybe additional companies to try to get ourselves to a position where we can really compete on content, particularly for sports rights such as the nfl. cbs's deal with the nfl runs out in 2022 so they're probably going to be looking for companies to buy between now and then >> not just absolute size they're dwarfed by, alex, but valuation as well. this merger itself sort of worked because both cbs and
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viacom traded at such low multiples. how are they going to stretch their balance sheet when both traded about 8 times p, unless of course we see once the merger is fully closed, a big rally in the stock price. they don't have much ammunition, do they? >> no. they can do another stock deal potentially to try to avoid this leverage question that you're hinting at then they can also look at companies that don't trade at very high multiples. so what are we talking about here on the larger end of things you can look at, say, discovery, trades higher than 7 or 8 times. but discovery is about a $15 million market cap company, enterprise $40 million that's on the high end of companies they may look at on the lower end, companies like lion's gate. cbs has talked about potentially buying starz now that this deal is coming there's new management there so we'll have to see if the new ceo
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is as interested in buying staz as joe ionella who is no longer going to be the ceo. he has been the ceo of cbs that's another one they could potentially look atme they could try to do a deal with sony pictures. there may have to do a stock exchange sherry redstone would theory et lick ha icily give up her shares and we don't even know if they're interested in selling sony pictures those are the things that sherry redstone is thinking about going into the next year it would probably take three or four months for this deal to close. >> so this was a deal then out of necessity because as you pointed out, you need size to be able to compete. but they're still undersized and you're still taking two companies that were run by the people, the redstones, that allowed these assets to be
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squandered and wasted. viacom hasn't moved in 20 years so it's done nothing for shareholders i don't really see that changing if you're going to be in this space, be with market leaders, netflix, comcast, itaat&t or amn prime. it's way too competitive and if they're looking to fill the void with sports rights, they have a long way to go the nfl, you have many more competitors bidders in the process right now so i'd take a hard pass on this deal >> don't miss a cnbc interview with bob backish tomorrow at 8:40 a.m. eastern on "squawk on the street." check out alex sherman's reporting on let's send it over to dom back at hq alas today we get the rhyming link but not the man in person dom. >> you'll see me on friday again but to the point of charts an
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the story they tell, cbs and viacom a big deal today but it's those major mega cap companies that are the driving forces behind the dip buying that has been occurring over the course of the past week what i'm showing you is a chart over the past trading week of microsoft, apple, amazon, google, parent company alphabet and then facebook. as you can see here, the reason why they're up there, they are the five biggest companies in the s&p 500, and while the s&p has gained about 1.5 or so percent over this past week on that kind of mentality, look at the gains that we're seeing here microsoft, huge. two and three-quarters percent apple as you can see here today, a massive move higher on trade headlines. then amazon up 2%. google up over 2%. facebook 2% as well. these are the driving forces behind a lot of that move higher that we've seen in the markets over the past week, so as you're looking for some of these shopping list items that have been on there, it has been mega cap technology and mega cap communication services and media
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as well. those are the names to focus on because if there's a deeper pullback hypothetically, those may be the ones traders and investors look for more of those buying opportunities. up next, we'll look at a few places to find value in this market. plus a stock surge we'll talk about tariff swings, trade relations hong kong protests john chambers will joiusn later on this afternoon on "closing bell."
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welcome back to "closing bell." time to get to our word on the street apple's surging. quick reactions to today's tariff delays are incrementally positive for the company separately, jpmorgan sees headwinds abating, citing supply revenue growth for the fifth straight month however, the firm warming about aggressive local competition and deeper structural challenges for the company. sun trust initiating buying rating on horton, holm group
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stronger tail winds could drive command. piper jaffray initiating kronos with a buy rating at $18 price target they could provide access to retail outlets piper jaffray also seeing potential growth of cbd products in the u.s. don't miss our exclusive interview with brendan kennedy coming up. back to the word on the street, lots of action today, steve, on apple for obvious reasons but quite interesting to see, regardless of this improvement and tone of tariffs on them, iphone head winds might be moving aside whether you're talking china or the u.s. >> i don't think they are so we don't know what's really driving it there's been so much advanced buying of components and of iphones because you don't know when the tariffs take effect you could be building inventory that's not going to get sold
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down so you shouldn't own apple for this quarter or the next quarter. i own it i bought more at about the 193 level because it got oversold. you should own it for 5g because that's when you're going to truly see -- unlike the iphone x, you'll truly seeing a -- i'm not buying it here based upon this we've known this is an unanalyzable company you can do as many channel checks as you want with as many suppliers as you want. at the end of the day you just don't know so don't buy it based upon those notes because i guarantee you they don't know. you can buy a huawei phone for $300 that does the same thing as an iphone in china for over $1,000, and particularly with their currency getting weaker, the phones got more expensive so they'll have to cut prices again. so don't buy into it sounds like i'm negative on apple. i'm not but i'm saying this is
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not the buy signal. >> what price, even if we didn't get those tariffs, the 190 level is a buy signal for you? >> it's a bigger question if there were no tariffs. here you could buy it -- well, a little lower 193 just worked because sentiment was so, so negative. so i look at more of a sentiment buy signal than an analyst report. >> some buyers are up 4% on apple. tariffs front and center, delays of tariffs on key imports from china and a phone call from china's vice premiere in china we have violence in hong kong and protestors and yields rise as the risk appetite reverses the recent trend, about 378 on the dow. time for an update with sue herera. >> here's what's happening at this hour. the warden at the new york federal prison where jeffrey epstein apparently committed
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suicide has been temporarily reassigned in addition, the two guards assigned to watch epstein the night that he apparently killed himself have been placed on leave. house democrats continue to press senate majority leader mitch mcconnell to pass gun legislation and called on mcconnell to let his chamber vote on a house passed mesh asu for background checks on nearly all gun purchases. >> is it the solution to all this violence? it is not. but 95% of americans support it because they believe it is a significant and important step to take in the face of this violence >> the los angeles opera says it will investigate sex abuse allegations against placido domingo, in response to an associated press story that he was a serial sexual harasser spanning three decades eight singers and a dancer told
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the ap they were sexually harassed by the 78-year-old tenor. guys, back downtown to you >> sue, thank you very much. we'll see you again in an hour still to come, your last chance trade before the market closes 27 minutes left of this session. plus how is the business community reacting to the delay in some of these tariffs and the broar addiutdetre spe with china? we'll ask tom donohue next
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welcome back stocks surging on wall street today after the united states trade representative announced it will delay the latest round of tariffs on chinese goods until december 15th. the usdr is also removing certain consumer items from the list including cell phones, video game consoles and some clothing items joining us, tom donohue, ceo of the u.s. chamber of commerce good afternoon to you. >> glad to be back >> tom, what do you make of this delay and exclusion of certain items? are you celebrating? >> i think it's a very positive move forward the markets were upset the traders, goods, were trying
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to figure out what they do between now and september 1st, and now we know. the goods that are covered by tariff have been separated and the really high end ones, all the electronics, all the things that would be good christmas gifts and all of that is being delayed until the end of december the others will go forward on september 1st unless there are some other adjustments made. i think what you're going to see here are a lot of adjustments. let me give you the reason i think this is all happening. we have a lot of worry about the economy, and there are two things that will really move it in the right direction we passed a very strong nafta bill there are the votes in the congress and we have to get a few things adjusted. next month we're going to be able to vote that forward. everybody has been watching u.s.-china relations
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this deal will work going forward because the u.s. needs very important things and china does and if we can make these adjustments with tariffs and begin to let everybody see us moving in the right direction, the economy will be stronger, the future will be brighter, and i think we'll all be better off. >> tom, i think that's a key point right there. we're talking about delays on some tariffs and there are other tariffs that will go into effect, and yet there are other tariffs that won't happen at all but we're not talking about an overall freeze and i think it begs the question, how much is this really about the actual talks between the u.s. and china versus giving businesses, american businesses and american consumers more time to get adjusted to the reality that we could see more tariffs put in place down the road? >> well, i think it's very common for the way we've seen the administration work, set up a difficult objective, make adjustments going on further
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based on the way people operate and react, and more important, how the markets and the political process works. remember, nobody wants to run for president on either party in the middle of a recession. i think taking these steps keep that from happening. i don't care why it happens, i'm really positive about it is happening because it will have a positive effect on the economy and it will begin to help people in need. remember, it's american companies, not anybody else, and american consumers that are paying for these tariffs i believe that we're moving in the right direction and i applaud it i applaud the actions by the trade representatives. i think lighthouse is doing a great job and i think the white house is recognizing what reality is for them.
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i think we're doing better than we were yesterday. >> tom, a key question here. the fact that we do have more time for american companies to make plans accordingly, do you expect to see a pull forward in inventories like we've seen in previous rounds of tariff talks and the timing around those as well >> well, some of your guests today were talking about the fact that there is already a pretty well stocked inventory and what's going to happen, depending on how much we're buying and selling in the immediate future, is who's left with a lot of inventory. but if you talk to companies and you talk to the people that have to make their living in this circumstance, they'd certainly rather have too much inventory than not enough. it's all about can you deliver the customer's wants so that somebody else doesn't do it for you, and i think we're going to be all right on the inventory.
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>> tom donohue, thank you for joining us today. >> pleased to be here. >> we could well be doing better than yesterday but who knows about tomorrow, as opposed to jumping on the positives there. >> his take was interesting. set a very high bar and then crush the markets, then say, oh, it's not that bad. i come from a school that's underpromise and overdeliver that's how i prefer it if you had that as most of the great companies we've seen that always beat the guidance, you'll have a much higher market. doing it this way is really a losing strategy. >> steve very clear with his views. we are just off the highs of the session. 384 on the dow the high was over 500. it's been around the 400 mark for most of the afternoon session. >> we've got 19 minutes until the closing bell up next, we'll discuss how boeing's july order numbers are impacting stock. and after the bell earnings
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reports. only 6% of analysts on a sell rating on til ray. we'll break down the numbers as soon as they come out. tomorrow, will better ross at 8:00 a.m you don't want to miss that.
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we have 15 minutes until the close. boeing out with july delivery numbers today. not a pretty picture phillip has the details. >> not a lot of surprises, morgan we did not expect them to announce any new firm orders for the 737 max and that in fact was the case when they announced their orders, it is the fifth straight month that boeing has not recorded a single new order for the 737 max. in terms of overall orders, i think they have 31 in terms of commercial orders for the month. in terms of cancellations, the good news is there were zero max cancellations. i get this question a lot, where is the backlog between boeing and airbus boeing actually grew by 12 airplanes in the month of july, stands at over 5500 planes, air plus 7200. july delivers, boeing delivered
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19 airbus, 67 >> that 7200 backlog for airbus, is that a record high? >> no, it's been higher. you go back to a year ago, it was about 7450 look, these guys are completely maxed out both in terms of boeing as well as with airbus which is why you hear people say, why don't airlines cancel their order for the max and go to airbus. they can't they're going to be at the end of the line. if you want an a 320 right now, you're waiting several years sure, you might move up a little bit but you're not going to get it right away. >> phil, thank you steph stephen, what do you think of boeing right now is this a situation where there's no surprises and that's seen as good news? >> i own boeing. i bought a little this morning and i said what am i, an idiot they're going to announce numbers that aren't going to surprise the upside.
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if anything it will be to the downside, so i sold it everybody makes mistakes lately i'm making more than most look, i still think you want to own the stock. the question is, how much longer are you going to wait to get paid clearly it's not going to be this year. we have a new head of the faa. he's going to take a fresh look. that may extend it, may not. right now the companies are holding onto the november 3rd date so i like it can it go lower, absolutely it can go lower i've been wrong before could very much break 300. as i look out a year, two, three years, it's a two-horse race, boeing and airbus. now, the danger is of course that they, like apple, are ground zero for the china tariff wars they say we're not buying anymore boeing, what are going to fly china airline they crash, the planes they make, more often than a max. >> how many more lives do you think will the management team
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have >> that's a great question i wouldn't like to see a change now. going forward maybe after this is done, but i don't necessarily think it's mullinburg's fault. not that long ago he was regarded as an incredible ceo. these things happen unfortunately. after the first plane went down we were saying why are they still flying these things? that was a major mistake we don't know what the impact will be but that's going to be a noncash charge. >> the other thing boeing has is a very robust defense business that's actually growing right now which creates a buffer. >> yeah. 40%, a big business. >> we're up by 346 in the dow, slipping in the last 20 minutes but still of course healthy. up next, your last chance trade, plus we'll talk to rmfoer sysco ceo john chambers. don't go anywhere. excuse me, where is gate 87?
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you should be mad at non-seasoned travelers. and they took my toothpaste away. and you should be mad at people who take unnecessary risks. how dare you, he's my emotional support snake. but you're not mad, because you have e*trade, whose tech helps you understand the risk and reward potential on an options trade it's a paste. it's not liquid or a gel. and even explore what-if scenarios. where's gate 87? don't get mad. get e*trade and start trading today.
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welcome back to "closing bell." let's check in on some individual market movers reporting better than expected quarterly revenue and it's trading up 13% right now.
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shares of general election are higher today after an sec filing shows ceo larry culp bought more than 330 shares of purchase valued at nearly $3 million. that stock is also trading up 3.5% as well. >> i don't know if he was covering the short or -- i'm only kidding. >> ge executives have a long history of buying into the stock, right >> yeah. >> i can't help but think there's china trade optimism. >> the upside to him is worth so much more than the $3 million he's putting into it. >> we've got eight minutes left. steve, what's your last chance trade? >> zogenics. it's for pediatric epilepsy. this one will work in any environment and they're going to go back to the fda in september and file it again. i like this quite a bit. could go quite higher from here. >> you've been a holder for how long >> i've been a holder about eight months or so.
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>> topping out at the current levels >> i bought some a little lower. it's had a run year term but i'd buy more >> we have got seven minutes left to go and right now the dow is up 377 points up next, we're covering all of the angles of the market in our closing countdown. stay tuned ♪
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just four minutes left to go in today's session and it is time now for the closing countdown. let's trade the close with kevin hinks, senior equity strategist at tb ameritrade what are you watching today? >> morgan, other than watching the entire market and the nice relief rally we're having here, we're going to watch macy's. it's got earnings -- remember, this stock was 1740 a year and a half ago, rallied up into the 40s, now down under $20 again. they expect to move around 9% on this stock we're going to see if the recovery in some of the these retail stocks, if we get a nice move here from macy's. that's the one mainly that we're watching today walmart, john deere later in the week but surely today macy's >> kevin, what do you think about the size of the rebound following the change in tune on
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trade tariffs and in particular sectors like technology? >> wilfred, you and i were talking about 24 hours ago about what would be the catalyst that changed the narrative on this selloff, and sure enough, a little strength in the nfib number, a little warmth in the cpi data, and then ka-boom, we get some improvement in u.s.-china trade and then this is really just a nice relief rally because the pressure that was on this market because of all this is just starting to unwind here. i think this market has a little room here. >> kevin, thank you. as always, great to see you. let's send it down to dom at hq. what are you looking at? >> i'm watching right now for the market ninternals because we have a nice rally going the past couple of days if you look at the nyse overall, a more than two to one ratio of advancers to decliners
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2100 advancers, 900 decliners and 83 unchanged seemingly pretty good. as for the volume side of things, again maybe no surprise here, a strong move higher in terms of up volume versus down value. about 2.4 billion shares advancing right now so far according to this and then the stats, 971 million shares moving to the down side the internals still shaking out a bit right now but of course stocks are not the only part of the story here interest rates in focus with the yield curve as well, and for that we send things out to chicago at the cme floor with rick santelli. over to you. >> thanks, dom you're indeed correct. if you look at 30-year bonds, it's barely up on the session. it traded below what had been its lowest close at 210. back to that ten-year, hovering just above yesterday's close the low going back to september
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2016 ten-year notes up three. you can see dom is correct, we came very close to zero on that spread finally, dollar index up almost a half a cent, hovering within three-quarters of its july 31st high the nasdaq, what a nice change of pace from yesterday. >> apple definitely helping provide a big lift, seeing its best one-day begins since may 1st before all of the trade tariff tantrums and movements that we've seen. it's up since then not so for sectors like chips today, also moving higher on very strong volume we're seeing pretty good growth there, still very much in correction, and the china names today very strong as well. let's move on over to bob pisani >> 400 points in 15 minutes. walmart, caller pillar, nike, jpmorgan all strong moving in lockstep with the ten-year we peaked at around 10:30. one trading note, from 143 to
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155 the major indices including the dow and s&p appear not to have been calculating values we're checking that out. does not appear to have affected trading. a little odd i've asked s&p for an explanation and i'll pass that on if i get anything dow jones industrial average closing up 374 points. s&p up 43. welcome to "closing bell." i'm morgan brennan. >> i'm wilfred frost let's check at where the markets closed 1.1% on the dow. we were up as much as 530 at one point. s&p up 1.3 nasdaq led the charge, indicative of the fact that technology was the best performing sector on the s&p apple added the most to the do you, around 60 points.
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the one thing i would say is while we did see yields tick up as well, we didn't see the curve steep steepen. remains very close to inversion and essentially flat. >> key point there, every sector in the s&p in the green today. transpor transports, small caps finishing higher we're on earnings results, awaiting rilesults from tilray. >> the ceo will join us in an exclusive interview coming up in just a few minutes. joining us now to talk about the market day charlie, dave, and stephen, back with us for the top of the hour. david, i'll start with you taking a look at the rally we've seen in stocks today in the markets, what do you think is this the start of something bigger, or are there still headline risks out there that make you really skeptical and i guess concerned about how much volatility is at play? >> well, i think it shows again
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that trade matters so i think the market went down because trade went away and now trade's coming back all driven by this tweet thing we have going out of the white house. that's going to be a factor. i think at the end of the day the earnings season was decent i think the economy slowed a bit. the bond market is telling you that so i think the market's going to sit here for a while and have to figure out what the bond market is saying and how the economy develops between now and let's say the first quarter of next year >> i want to clarify, the dow is at 323 points at the close, as if it had lost about 40 points in that final 30 seconds in fact, the close now looks to be 367, so more in line with where it had been before the final half-an-hour of trade and with the other indices 1.5% of gains for the dow and s&p. charlie, let me come to you in this big rebound in markets because of the change in tone on tariffs even if the china trade
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deal has not been struck in full do you think legitimate bounce or good things turn around in the opposite direction as soon as the next week comes >> i think we've had some bad news on trade pretty consistently for three or four weeks, and this was the first good news we've had on trade in a while. so i don't expect this tone should change overnight. obviously if the chinese army invades hong kong tomorrow and the rest of the world reacts badly, that could change, but i don't think it's going to be tweets out of the white house. i think we had a very strong inflation number today that's gotten lost a little bit in the other headlines 2.2% in energy over the last year everybody's talking about no inflation. 2.2 is above that target that matters and i think the earnings are better than okay. the earnings have been good. >> let's dive in a little deeper on all of today's trade news kayla has that for us. >> that last batch of tariffs on the remaining chinese imports
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will be effectively split in two. on september 1st, the 10% tariff will hit $112 billion in goods that first trench includes food, musical instruments and sporting goods. then on december 15th, an additional $160 billion in goods, including electronics and toys those will see 10% tariffs too the delay taking place after outreach from effected companies and a call between tus and chinese officials this morning there's another call scheduled before the september 1st deadline no word on whether china has confirmed in person talks after that >> kayla, thank you very much for that steve, coming back to the headline point here, are there some of those subsectors that have been excluded that you can buy? is there a signal that those are going to be excluded for good now because they have more of a direct impact on the consumer,
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something that's too political toxic for the president to be hitting up >> to me it's stage right, stage left you've got to reprieve you have an appropriate reaction in the market today but it wouldn't be appropriate for the market to trade up into the next phone call because you still have the narrative of a global slowdown, potentially a slowdown in the u.s yes, 2.2% inflation is good, not great, and it's one data point so i think it's safe to put money to work but not all your money. don't empty the war chest just yet because the market always gives you opportunity. >> david, what do you think happens with the fed we get that cpi number today, the fact that some of these tariffs have been put off until september. does that give the fed a little more leeway in terms of whether cuts are in september or to the end of the year or not >> if you're i portfolio bank you hope so because you're
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seeing the troublesome margin compression ahead of you if we don't get any relief on rates and slow the process down. i think the fed is unfortunately worried more about the market than it is about inflation we saw that in december and i was on your show on christmas eve and saw that happen the next couple weeks i think the reality is the market is going to determine where rates go and the fed may raise them but the market is going to lower them if they want it the market wants a trade deal and they want lower rates, and i think that's what they're ultimately going to get. now, that's not going to be good for the portfolio banks. what those banks need is a rate to go up and have a real recession where you can actually benefit from the companies that make loans better than the others but i don't think the fed is going to allow that i think the fed is going to keep pressure on making the economy grow, use their balance sheet, use lower rates and keep this economy going as long as they can because they don't want to
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be responsible for the downturn. nobody does. >> that's a really interesting question because spent futures -- and i didn't look at them today but they were predicting an absolute fed move at the september meeting so if we do get another phone call scheduled in two weeks, maybe a meeting, if the dialogue seems to be positive with china, will the fed futures disappoint the market i personally don't think that lowering rates is going to do anything for anybody it's just a sentiment move but that's the next battleground >> david, just one more question on the banks though. if we do get to negative rate environments in the u.s., are all the bank stocks for sale or are certain ones of them prepared for that or is the sector broadly because it's so cheap relative to the s&p 500 actually prepared for it already? >> well, if you look at the portfolio banks, meaning the
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lenders and the deposit takers in this country, versus let's say japan or europe where rates are negative, they're trading about twice the valuation and in some cases three times the valuation based on book because obviously the earnings returns are a lot lower as rates go into negative territory if that's where we're headed you do not want to own the portfolio banks. you want to own the processors like visa, master card and paypal but i still like the big u.s. banks. i think they have the profitability and the understanding that they need to prepare for lower rates in the future i just don't think the economy can handle higher rates that we all think we want to have because of the level of debt that's in the system so if rates are going to be lower, you have to accept lower margins. now, i'd say welcome to the club if you look at what happened to the mutual fund industry and what happened to the brokers,
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it's no big deal if their margins go from three to two, they'll be fine. they just need to prepare for it and that's i think what ultimately is going to happen. >> let's pivot to the deal of the day. we have more breaking news on the cbs/viacom merger and alex sherman has the details for us. >> both ceos, joe yeianniello a bob bakish writing internal memos to employees they do acknowledge that there will be job losses from this merger as expected from any merger where there's going to be synergy. they both allude to this and also say the deal should close in three to four months. that's a shortened amount of time mostly driven from the fact that both of these two companies have the same controlling shareholder, national amusements owned by the redstone family that shortens the length of time that the deal should take to close. they also allude to more deals coming up in the future. i want to throw in one nugget that i picked up not in the letters but just from being on
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the phone over the last few minutes talking to people involved in the deal one thing that struck me is that cbs is the buyer in this deal and come away with more of the company but the company is called viacom/cbs. 00 i was asking the reason for naming it viacom/cbs they said cbs is more of the consumer brand, one brand within what they hope will be an ever growing media company with various different brands in here so it will be interesting if this company does, in fact, do other deals. if we actually see that cbs lop off over time and have the whole company called viacom in the months or years to come. >> or if they keep adding the words on the end with no spaces or hyphens. >> yes, viacom, cbs, roku, sony would be great
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thanks very much charlie, you've been a bull on these two stocks, awaiting this merger for a while what's your take on all the action today >> glad to see it finally happened it was a week late we wanted it to happen on my birthday but we'll take it look, we think they're seeing $500 million in synergies. we think they could be closer to 750. these two stocks are very, very cheap, seven, eight times forward earnings after the 500 million in synergies we're going to have growth next year in earnings we think the stocks are way too cheap and there's a lot of talk today about how this combined company might make acquisitions. we think frankly it's a very good acquisition target, that this combined company is real scale for somebody to acquire. we love the deal i don't personally love the name i wish they had gone cbs-viacom. we like everything about this but not so much the name. >> are there names that you
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think would be in the market for this newly combined company? >> yeah, i don't want to do that today but i think there are a lot of people. i think obviously a lot of the telecommunication companies, the link between telecommunications and media is continuing to get tighter. there were rumors in the past -- i don't want to go down that road but i do think this company has more negotiating power than it used to people were worried that viacom didn't have the ability to negotiate with the distributors. the combined company has much better negotiating power and we're going to have real earnings growth. don't sleep on the political spin that's going to happen next year which is going to drive very strong earnings growth at this combined company. >> charlie, thank you for that perspective. another perspective of course tomorrow morning, the ceo of the combined cbs-viacom -- viacom-cbs on cnbc tomorrow at 8:40 a.m. on "squawk on the
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street." shares of tilray are down about 3% right now at the moment the revenues, it was a beat, 45.9 million versus 41.1 million that analysts had modelled however, on the bottom line there was the company reporting an adjusted loss of 32 cents versus a loss expected of 25 cents. the company says that as far as the top line growth that was driven by the manitoba harvest acquisition. the legalization of the canadian adult use market and we know that adult use has increased in canada due to more stores online as well as the growth of international markets. as far as other metrics, kilo sold more than triple and gross margins increased from 23 to 27%. the company says the increase in growth margins was impacted by increased costs with the ramping up of cultivation facilities in
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canada and portugal and acquiring third party supplies so some investment costs there putting some pressure on the margins. also the company says under business highlights, signed letter of intent with private holdings to extend lockup for up to two years and provide for orderly release of 75 million tilray shares held by private tier the total float is 97 million shares outstanding as of the end of june. back to you. >> thank you for that. we will be speaking to brendan, the ceo of the company, in just a moment first let's quickly get the numbers from real real. >> it does look like a beat for both earnings for share. although in this case it is a loss of 28 cents the street had been looking for a loss of 33 cents revenues coming in slightly stronger, 71 million compared with just over 70 million for the estimate also stronger gmv, that gross merchandise value, than
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expected 228.5 million, up 40% year over year take rate is 36.6%, that's 110 basis points higher than last year as well as higher than the quarter in martha we heard the details about during the ipo lastly, if you look at the third quarter guidance for the gmv, the company is suggesting a range of 233 to 239 and the street had been estimating 230 million. you shares of shares bounced around we are slightly positive however, trading is quite light here in after hours in real real back over to you. >> courtney, thank you stephen, what do you think these are both two names that give you a read on the consumer. cannabis, certainly the fact that they had kilo sold tripled certainly an eye-popping number but the increase in costs, where are we at in terms of this cannabis cycle >> we don't know if we'll ever
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be able to make money on these stocks we don't know that the federal government will ever okay banks to bank them you've had bipartisan support for a bill that would allow them to be banked in the u.s. but no movement let's face it, there are much higher priorities to go through there. even the positive analyst report that came out today they're talking about oversupply in canada governments look at this as tax opportunities, so i think it behooves the government to give out more and more licenses if we ever legalized here, not just recreational so i don't know. however, i think there's a place for it in the speculative part of the portfolio these are not core holdings. we don't know if they'll make money. >> speculative only, we'll put that to the ceo in just a moment thank you for joining us, stephen weis, charlie and david,
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a great panel to open the second hour of the show let's get to tilray shares and check in after they beat on the top line, slight miss on the bottom line. shares coming for you in a moment it's down 3% joining us now is ceo brendan kennedy. thanks for joining us. >> thanks for having me. >> let's just kick off on this headline revenue number. in particular, the growth over 300%, 371% year over year. what's your forecast for the next two or three years? is that sort of percentage top line growth to continue or even accelerate >> we expect to see continued growth in the coming quarters and years. i tell my team all the time that this is day one in this industry all this excitement is about two countries in the world that have legalized for adult use and 41 that have legalized for medical and we expect both numbers to increase significantly i expect the global medical
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market to more than double in terms of countries that legalize over the next three years. so it's a global growth opportunity. currently we export to 13 countries and i expect that number to continue to grow in the following quarters >> i think one of the key questions, brendan, for investors right now is growth at what cost, especially when you see numbers like kilo sold tripled but also you see increased costs playing out in your quarterly earnings and pressuring margins what should investors expect nearer term and longer term in terms of this rollout of faciliti facilities, rollout of infrastructure and being able to capture that growth? >> i think the way we look at this is it's early days. we're continuing to invest to build long-term value for our shareholders if we looked at individual countries like canada for instance, we could be profitable there within two quarters, but
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when we look at one of the larger markets such as europe, it's still an opportune time to invest we have a facility in portugal i was there last week. we have about 60 acres outdoor and a large greenhouse that's been built currently we are looking to export within the eu from that facility portugal's great because it has ideal weather. we have tariff access to the eu so we will in coming quarters begin to export from portugal to places such as germany and the u.k. >> brendan, would you welcome a democratic president like bernie sanders, someone who has talked and proposed legalizing things much more fully and quickly in the united states? >> i think whoever -- whoever is president in 2020, we're going
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to see cannabis legalized in the u.s. both medically and for adult use. a majority of congress now comes from a district where cannabis is legal either medically or for adult use. i think we're likely to see six to nine red states legalize medically in 2020. so i think that the tide has turned and it doesn't really matter who's president in terms of cannabis legalization it's really one of the few issues that has bipartisan support in washington d.c. >> how about cbd which seems to be getting more scrutiny these days you have the former fda chair coming out not that long ago penning an op-ed in "the washington post" saying the cbd craze is getting out of hand and the fda needs to act are you expecting to see more scrutiny or more regulatory oversight of that part of the cannabis industry? >> we're hoping for more
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regulatory clarity obviously with certain pharmaceutical drugs that we distribute in other countries around the world and are distributed here in the u.s., i think we need a clear distinction between pure cbd pharmaceutical grade products and broad spectrum hemp extract which is legal under the farm bill i'm fairly hopeful that we'll get clarity from the fda before the end of the year on which formulations and which limits are allowed and i think overall that will be a very beneficial thing for not only tilray but other companies in the industry. >> brendan kennedy, thanks for joining us on the heels of earnings for tilray. stock's down 2% in after hours trade. still ahead, former sysco ceo john chambers tells us how delaying new china tariffs on
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consumer products will impact the tech sector. and oil and gold have been on very different paths over the next months. up next, head of global commodities research gives us his opinions we're back in a couple minutes - [spokesman] if you've tried college but never finished,
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stocks soaring on wall street after the white house announced it was delaying china tariffs until september. bob pisani is at the new york stock exchange having a look at the big movers bertha is at the nasdaq. >> big dow movers, trade stocks, walmart, caterpillar and nike oon that the dow flat lined it does not appear to have been calculating the values same with the s&p 500, same with the dow utilities. i talked to the nyse and they told me everything is operating fine i called s&p because it's s&p that actually calculate the values of these indexes. they said they were aware of this and were looking into it but i don't have an answer for you about why. it is a little odd that the
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values don't calculate for that 12-minute period one reason i can think of is that there is no data going in if there's no data going in you don't have any data to report on i don't know if that's the case, but again, the second day is a little bit of oddities in the trading and i'm trying to figure it out as soon as i find out i'll let you know. >> thank you. the nasdaq outperforming the broader market today >> apple was really the stock of the day, best gain since may 1st. but in this push me-pull me headlines, apple is still down for the month. it did help lead tech higher and the pockets where we saw the most strength and the most volume were chinese tech with but also chips as well. both of those sectors up about 3% on the day. back over to you guys. >> thanks very much. we've got a news alert on
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qualco qualcomm the company is announcing it named mark mclaughlin as its new chairman of the board. he replaces jeff henderson who's been at the role since march of 2018 the u.s. announced it would delay 10% tariffs on some chinese goods until december 15th let's bring in jeff curry from goldman sachs. welcome. >> thanks for having me. >> what do you think about the rally in crude today short lived or could it sustain itself >> let's think about the announcement coming out of the trump administration i view this more as a tactical retreat than any type of strategic maneuver one of the key reasons, nothing's really changed in the longer term outlook of the trade war. however, it does demonstrate a sensitivity of the administration to the u.s. consumer, but speaking of sensitivities, i think the size of this move in oil shows you how short these markets are in terms of selling off of macro
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concerns i think that rebound is really showing you how you have any positive news in this, the market is going to respond. >> should we be talking more about the spread between brent and wti right now because it has narrowed considerably. >> it was our base case view that it would narrow once you had the pipes come online in the u.s. think about this, you had the constraints of the pipes, brent could trade higher and higher. now that cactus is coming online, you debottle neck the perm yan, you should have a narrowing of differentials i view that as being more consistent with the fundamental picture. the fact of the matter is you look at wti and brent, they've been trading that same macro if you look at the micro fundamentals of oil and any of these commodity markets, they're all trading consistent with the economics of these individual sectors but they're correlated with what's going on in the macro which is what's happening today. >> let's get to gold up 80%
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year-to-date more to go in that what's the key factor you're watching >> obviously the macro sentiment has been a big driver of that but if you look at the fundamental picture, it's supportive of it first of all, central bank buying has been substantial. you had 100 tons out of the polish central bank, the chinese central bank continues to buy at 10 tons a month. big central bank buying is part of that de-dollarization story the other factor really is the etf demand i think that what we're going to see is diversion occasion from both institutional as well as retail investors into more gold. it's much more of a tactical defense strategy than anything else you put that together and we're comfortable with our $1600 target we're $1500 and change right now. >> i think you raised some eyebrows today with a bullish note on iron ore lay out your case.
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>> the pullback that we saw, we got down into the 90s. it was 120 and we were down to 91, 92 and we're off those lows as of today. part of that is fundamental. you did have steel inventories build in china more recently but i'm going to chalk a lot of that to the macro basically you had a very long market, concerns over the trade war, sold off sharply, rebounded somewhat more recently fundamentally we look at the supply picture you had bali, problems with deliveries out of australia, the bali meaning that dam episode earlier this year. we just don't see the elasticity of the supply able to respond. that really brings us to the third point on iron ore which is the steel production in china and that's where we get most of the pushback we would argue you have to get an outright decline in steel demand and steel production to get negative
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that's why we stick with our $115 target in fourth quarter this year but we see it moderating to 85 next year. >> quickly on some of the ag commodities which are down over the last six, seven weeks, is that mainly because of china or domestic issues? >> clearly there are big concerns about the soy bean demand i would argue the sensitivity of the trump administration to this trade war is because the lack of demand for soy beans and other agriculture products and that's part of what created the recent tensions in terms of thinking about the upside here, you do need to have that export demand our view is when we think about what's going on globally, you do need to see a rebound in trade, deal or no deal, just because we've seen so much substantial de-stocking in consuming regions around the world and a buildup of inventories everybody is holding onto their supply waiting for a deal to be done and they start to supply again.
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this can't go on forever we would argue that ags themselves are on the low side i'd be cautious. it doesn't have a strong fundamental picture like oil or gold. >> thanks for joining us >> thanks for having me. on august 1st, american apparel and food wear ceo said right here that the president's china tariffs would slam the retail industry. >> you're caught between a rock and a hard place do you try and eat it? there goes your margin or do you raise your prices and then when you raise your prices people stop buying so either way you do it, you're cooked you're absolutely cooked . coming up rick will tell us whether retailer are still ok a thi house has moved to delay some of those tariffs until december
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hello, everyone, here's what's happening at this hour russia state television releasing video showing a russian fighter jet warding off a nato war plane that approached a passenger plane and that plane was carrying russia's defense minister a huge fire broke out on an unmanned cruise ship on the vulga river. gray smoke poured into the sky there were no casualties and the cause is under investigation. federal prosecutors have
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released new information about an ohio teen who was arrested last week. they say 18-year-old justin olsen was arrested at a youngstown home that was filled with 10,000 rounds of ammunition and 25 guns. he's being charged with making online threats against federal agents he also allegedly wrote about supporting mass shootings. and united airlines is setting an earlier cutoff time when pilots must stop drinking before flights they must obtain from alcohol for 12 hours before flights, up from a previous ban lasting 8 hours. this after two united pilots were arrested in scotland on charges of being under the influence. you are up to date that's the news update this hour wilfred, back downtown to you. >> 12 hours, i didn't know, a, that -- that definitely should be 12 hours but i didn't know it was up to the airlines i would have thought that was an fda requirement rule -- faa, sorry. >> i would have thought the same
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thing but not. every airline has their own individual policy. i'm all for 12 hours. >> i'm going to check what they all are now. 12 hours sounds good 8 would be scary thank you very much. up next, former sysco ceo john chambers weighs in on the delay of tariffs to china and how it will impact the tech sector what about him? let's do it. ♪ come on. this summer, add a new member to the family. hurry in and lease the glc 300 suv for just $419 a month with credit toward your first month's payment at the mercedes-benz summer event. going on now.
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welcome back the united states delaying its latest round of tariffs on chinese goods until december 15th this as protests continue in hong kong. demonstrators shutting down hong kong international airport for the second day former sysco ceo john chambers joins us now in a first on cnbc interview. great to have you on thanks for joining us. >> it's a pleasure to be back with you all >> let's talk about these protests in hong kong. they've been going on for weeks now but the tensions certainly seem to be rising. how concerned are you about this, and how concerned do you think companies that are doing business in hong kong or could be exposed to flows, transportation flows in and out of that hub are concerned?
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>> well, i think on the big picture you'll find that the u.s. and china will work through our issues over the next several months and i'm probably an optimist on that it's in both countries' best interest to make that happen in terms of the protests in hong kong, i think the chinese government is showing good restraint and i encourage them to continue to do that in terms of allowing this to come to a very peaceful conclusion in terms of business, any time there's uncertainty, it causes people to hesitate and we remember economic slowdown is nothing more than consumer and business behavior. so the quicker we can get resolution on those issues, i think we all understand the economic positives that will happen >> john, on trade, do you feel like all of this will -- you're optimistic but do you feel like all of this will prove to have been a waste of time do we get a sign today that the president is more likely to back down than the chinese side of this bargain, in which case we
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piet n might not get the deal that was hoped for? >> i'm more the optimist here. i start with the big picture and the big picture is the trade imbalance between the u.s. and china was unacceptable the imbalance was doubling every five years in terms of how much we export from them and how much they export from us. so, it had to be addressed the industrial espionage, the appropriate protection, so it was a right thing and it was good that finally somebody stepped up to it now both sides i think are willing to move. let's find a quick resolution to it and i think it will be a fair result in the end if i had to predict the outcome. that would be what i'd bet on. >> the fact that in the coming days the short-term exemptions on huawei and suppliers, that dynamic between the u.s. and china is set to expire would you expect to see that extended or do you think it will expire, and if so, what does it do to the global tech supply
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chain? >> i think theglobal chain is so interdependent, it is very important that they get predictability in it the issues with huawei are unique it has to do with security and with potential bugs in the software, et cetera that cause the products not to be as protected as you need if you're going to run your national infrastructure, your business off of it. as they resolve, i'd look for us to work through those issues as well. >> john, let's talk about your latest investment from j c2 venues, a company called una for which is the forefront of customer service i have to say, i like speaking to a person when you've got issues you're dealing with so why is this the future >> well, the future will be that you'll completely change how customer experience occurs it's a $350 billion market grown at 9% per year what they do so uniquely is use
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conversational ai to help the agents respond properly to the consumer when you place a call into your bank or place a call into a retail chain you bought something from, you want somebody who can address your issues and address it effectively. why it's so important to the market is two-thirds of millennials have switched brands this year because of a poor consumer contact experience. so i think the companies who do this right will have a great future in front of them but what you're seeing, back to the bigger picture, is startups will be the primarily creator of jobs going forward. you're seeing that in china. you're seeing it in the u.s. we're a company that now is in the u.s., has increased their head count from zero to 20 already this year, probably 20 to 60 by next year and it's an example of when the u.s. and countries like india work tightly together, how both sides win. >> john chambers, thanks for joining us great to see you. >> my pleasure as always you all have a great day >> you too don't miss tomorrow first on
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cnbc interview, commerce secretary wilbur ross 8:00 a.m. eastern on "squawk on the street." up next, wall street awaiting we works pricing but there's one question on everyone's mind, can it turn a profit we're going to discuss that next
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we works is expected to unveil its ipo filing as early as this week here's a look at what we can
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expect >> morgan, expect another disruptive but money losing start-up to reveal more of its finances and tell prospective investors how it eventually gets to profitability now, with $1.9 billion in red ink last year, it will likely be compared to the other big money losing ipos that have not faired well in public markets so far. uber and lyft of course. we works will have to make the case to investors that it's different in how its business model signing long-term leases and subleasing them on a shorter term would survive a recession to do that it will likely highlight its enterprise members, the likes of amazon, microsoft, ubs and sprint. guys. >> thank you very much still to come on "closing bell," cooked or starting to cool the ceo of the american apparel and footwear association said that president trump's tariffs on china were bad news for retail we'll get his take on today's tariff timeout that's next.
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welcome back retail stocks getting a major boost today as the u.s. plans to delay some of its new tariffs on chinese imports including certain clothing and footwear products retail has been under pressure since the start of the month when president trump announced the additional tariffs on chinese imports. american apparel and footwear association association president rick helfenbein called in to the show on the day it was announced painting a bleak picture. >> you are caught between a rock and a hard place you try to receipt ieat it and e your margin or you raise your prices and then people stop buying either way you do it, you are cooked we are so upset. there's no halfway here.
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>> rick joins us rick, we now on ice, cool, calm, ready for record profits again in the retail industry >> oh, i would love that so very, very much, but we now have gone from cooked to significantly half baked, you know i am in las vegas for the semi annual magic trade show. 90,000 people that come into town for this show, buyers, sellers, brands. and you know what? they're buying and they're crying because this is not good. this morning we woke up, 6:00 a.m. in las vegas, and what's the news looks like the grinch did not steal christmas. but later in the day as the list started to evolve, it kept getting worse and worse. now we're looking at 77% approximately of our items will
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be hit as was scheduled september 1st, the 23% comes 12/15. so it looked like it was going to be great, but great didn't happen for us. this is not the way to run a business every 12 days we get a tweet, the market goes down 700, up 400. you have to ask yourself seriously, is this anyway to run a business clearly not. >> so, rick, how are the companies that your association represents running their businesses in light of this deadline are we going to see a pull forward in terms of air freight and inventories getting taken -- you know, shipped out of china to try to beat the deadline? how does it play out >> yes, there's going to be mass congestion because people are airing goods, they're boating goods, they're bringing goods in as early as they can we clearly anticipate getting hit with this 10%, and as i mentioned before, we don't have a lot of choices as to places
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where we can go. 42% of all apparel, 69% of all footwear, 84% of all accessories including backpacks and handbags come from china. we don't have a lot of choices here you know, when the administration goes onthe air, and it is almost like a comedy act, saying that, you know, china is going to pay for the tariffs. i have real, live members here who are taking loans to pay off these tariffs. it is nice, you know, that maybe the interest rate is going down, but that's not helping at all. sales are going to drop. people are buying less. >> but here is the thing, rick we had tax reform here in this country. we've had deregulation we had a strong economy, and we're still seeing economic growth yes, you can argue it is slowing and by how much is certainly up for debate, but the consumer continues to be strong here in the u.s. can't either the companies or even potentially consumers absorb a 10% tariff? >> you know, we're going to try. everybody is going to try.
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the retailers are going to work at it. you know, the manufacturers, everybody is trying to work through it, but why create a problem that doesn't exist you know, we're creating our own misery here. the government is supposed to be the one helping us they're not helping us they're hurting us you know, it was just yesterday on the news everybody was fearful of a recession we're fearful of it. we see it coming because we buy goods six to nine months in advance. like i said, we don't have a lot of choices, so we went from cooked now to half baked, and we're really worried about the economy. we wish the administration good luck we think that, you know, the idea of getting china to the table and talking is win/win for everybody, but don't tax us. this will end up being one of the largest tax increases ever imposed on the american public it is just bad. >> yes. >> it is not a good way to solve the problem. >> all right
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well, thank you, rick, for joining us from las vegas. enjoy the magic. >> good luck. >> thank you >> good luck. >> thank you up next, your wall street look ahead the key things to tch waas we head into the new trading day. ♪ (father) kids... ...change of plans! (vo) defy the laws of human nature... the summer of audi sales event get exceptional offers now! you should be mad that this is your daily commute. you should be mad at people who forget they're in public. and you should be mad at simple things that are unnecessarily complicated. but you're not mad, because you're trading with e*trade, which isn't complicated.
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welcome back macy ease reporting results tomorrow morning courtney reagan has a preview of that for us. >> causing relief rally for macy's and other retails we talked about, still, investors will want to know what macy's will do if and when tariffs are levied last quarter the ceo told me it is tough to find a scenario where tariffs on the merchandise couldn't be passed to consumers. comparable sales will be the key number to watch. the department store has not seen negative comps in six quarters earnings are expected to fall about 35% to $0.45 per share on a slight decrease in revenues year over year that revenue number expected to come in at $5.54 billion back over to you. >> thank you we will be keeping an eye out for that tomorrow. of course, walmart as welcoming later in the week is another one to watch as are the border markets, ended off the highs but healthily high led by
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trade-affected services so tech and communication services interesting to see yield rebond. >> we almost in the dow made up all of the losses we saw yesterday. the nasdaq was the outperformer, closing up about 2%. we will see what happens with all of the macro stories that create the headlines moving markets. >> we will indeed. that does it for the "closing bell". "fast money" begins right now. live from the nasdaq market site overlooking new york city's times square, this is "fast money" i'm melissa lee. our traders on the desk are tim seymour, mark stafford, chris berhe reason and dan nathan. break out the eggnog president trump saved christmas, stocks soaring after tariffs were delayed ahead of the christmas shopping season. everything rejoicing as video games, toys and clothes get a pass but wait oh th


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