Skip to main content

tv   Closing Bell  CNBC  June 11, 2019 3:00pm-5:00pm EDT

3:00 pm
papp is today going toned the seven-day win streak for the dow? what are you talking about on "fast money" >> we're hanging in the balance right now. we shall see the vix remains elevated that's been a tell on the markets recently >> look forward to watching and listening. >> thank you for watching "power lunch. great to have you here, brian. >> we'll see you tomorrow at 5:00 a.m "closing bell" starts right now. a very good afternoon to you. welcome to "the closing bell." i'm wilfred frost live from the stock exchange where the dow could break its six-day win streak markets have lost steam today. all four of the major indices pointing lower we have 59 minutes left to trade, and everything you need to know as an investor coming up >> i'm sara eisen. welcome, everyone. here's what's driving the action right now on wall street rally fatigue after six straight days of gains. anything can happen in this last hour uncertainty over a potential china trade deal and energy is one of the leading sectors in the market right now. joining us for the hour to break down the action, steve grasso
3:01 pm
from stewart frankel welcome, steve >> thank you >> are we going to end the six-day win streak here? >> if we did would it be a shock? and it's still plenty of time for us to turn around, turn green. we bounced about 6% off the lows but we are not overbought. so to your point, i don't think that we necessarily have toned today but it's a good stop to say let's take a breather, we're still above all the moving averages in the overall market about 10 handles lower in the s&p cash but i still think we're on good footing. >> is 2900 a tough footh for the s&p? >> it is because it's a big fat round number so i think the 2954, the all-time highs, that's the tough number you have to worry about, not the 2900 >> let's focus in on the big stories we are watching. bob pisani has what's driving today's market which of course has been up and down ylan mui is watching a tech antitrust hearing on capitol hill and phil lebeau is covering tesla's shareholders meeting bob, let's start with you. >> let's take a look what's
3:02 pm
going on it's very simple this is a littleability of fad tooeg. here's the highlight six days in a row we have essentially been on the up side and we have had a 6% rally it's pricey now. seven times forward earnings that's expensive for the market. we have a dovish fed priced in we have a china deal priced in none of this has happened. we haven't gotten any rate cuts or a china deal yet. tech stocks big move up. some of the big names like amd-a donee, paypal. microsoft's been up 10% in the last week or so. all coming down today. martin marietta and volkin all of a sudden they're done not a lot of big news. but that's interesting infrastructure deal. another one that hasn't happened yet. guys, back to you. >> all right, bob, thank you house judiciary committee holding a hearing today examining the dominance of big tech ylan mui with the story in washington
3:03 pm
yl ylan >> sara, democrats kicked off that hearing by calling for a top to bottom review of online marketplaces representative david cicilline, he is the committee's point person on antitrust. he called out google for its dominance in online advertising and facebook for its massive user base of nearly 3 billion people he said those are two areas of concern. >> the sheer dominance in some platforms has resulted in worse products and significantly less choice, leaving people without a competitive alternative to services that harvest their data, manipulate their behavior and monetize their attention >> this is a bipartisan effort but republicans say they have not agreed to single out any specific company or any specific tech ceo and banking republican doug collins of georgia cautioned that big is not necessarily bad. he said that proposals to break up big tech risk throwing out the baby with the bathwater.
3:04 pm
guys, this hearing got a little best a late start. so it is still going on. we will keep watching it and keep you posted. back over to you >> you this, ylan. we look forward to further updates. we're also keeping an eye on tesla as the company gets ready for its annual meeting in a couple hours ts time phil lebeau has a preview of what we should be watching phil >> whenever elon musk talks people listen. especially at the annual meeting. the three things people are looking for some indication from elon musk about in terms of test las business, let's start first off. autopilot. remember he had the analyst meeting and he talked about their plans for a million robo taxis next year? what does very to say about that also about the model y and the plans for that vehicle then there's the q2 delivery update will he give us any kind of guidance there remember, the street is expecting tesla to deliver just under 74,000 model 3s. that would be a substantial improvement from the first quarter as you take a look at shares of tesla. this is a stock, guys, that has rebounded in the last eight days it was trading down in the 178
3:05 pm
area now it's back up 215 that meeting starts in a couple of hours guys, back to you. >> phil, thank you steve, would you buy tesla on this sign of stabilization in the stock? >> no, i would not it's down 35%. and that's notwithstanding the 22% bounce that we've seen off the lows tesla originally was a tech company. they told tuesdays withn't a car company. didn't get a car valuation and now they want the tech valuation back again it's going to start getting a car company valuation. too much competition i would say sell the -- >> we might get your pick of which one to buy later, mr. grasso >> a little teaser in the industry >> a little teaser for the last chance trade, which of course is still a good 40 minutes or so to go we have 55 minutes left trade. we're down .2 of 1% for each of the major indices. the russell a little further down, half of 1% of course we opened higher so we've lost steam throughout the session. joining us now joe tanius for more on today's market moves why do you think we've lost
3:06 pm
steam intraday today >> i think you have to take a step back and realize that the s&p 500 or other risk assets broadly speaking have had a pretty spectacular year. the market's up roughly 15%. and this is happening at a time when global economic growth is clearly decelerating and the trade war if anything is intensifying last week's powerful rally i think was really sparked by the fed. and expectations for what the fed is going to do it's important we just teak a step back while this is welcomed we always like to see markets rally like this. we need to keep it all in perspective. >> so you're cautious? >> i think we're cautious. we look for opportunities into market strength to incrementally take risk off the table. ask yourself, to the extent this trade war improves, is the fed going to continue along this path of potentially cutting interest rates what happens if inflation actually starts to pick up that repricing in the market i think can be painful and we just have to be cognizant of that expect more volatility in the back half of the year.
3:07 pm
>> we talked about being 2% from the all-time highs on the s&p. what do you need to see to cross that level >> for me i don't think joe and i are on opposite ends of the spectrum but if you think about it the rate cuts are what caused the market to rally or the prospect for rate cuts caused the market to rally. so now you have the market that has a couple of rate cuts in their back pocket. chinese trade deal in the back pocket meaning that if it comes out it's a positive. we've already seen most of the negative would you agree with me, joseph, that most of the negativity on the trade war has been priced into the market at this point? >> i hope it has been. but you never know honestly with this trade negotiation where things are heading i guess i would ask how much more upside is left? after -- >> i think tremendous amount of upside because if we both agree that if the fed is -- >> we're 2% away from record highs. >> obviously you have to look at those levels where we were just at so 2722 in the s&p cash is where
3:08 pm
we bounced but that was pre powell coming out in a softer dovish stance. so somewhere midway between where we are now and 2722 is your down side which is better happen what it was just a handful of days or a week ago >> joseph, with your cautious optimism how are you positioning yourself what sectors >> broadly we want to be positioned toward the u.s. consumer i think from a regional perspective we continue to favor the u.s. not only does it look better infrom an opportunistic standpoint but it provides more defense in what we think is going to be a choppy environment. and with that being said, focusing on consumer discretionary, focusing on technology, but in particular those stocks that stand to benefit from a healthy consumer backdrop >> what do you think of those picks? it doesn't sound very -- it's not very cautious. it's not very taking risk off the table. but i guess you're looking for spots in the market that make sense. >> we're looking for spots in the market that make sense but at the same time when we think
3:09 pm
about risk for the vast majority of our clients it's really about thinking exposure to stocks versus exposure to bonds and within the equity exposure where do you want to be leaning? what region of the world there are also various low volatility equity strategies you can employ while at the same time keeping some exposure to those sectors -- >> let's think about where joseph's picks are those are v. led the market for the last five years. if the market goes up, those sectors will lead the market so it's a bet on more positive, more growth, a bullish stance on the market, even though joe is a self-exclaimed cautious in the overall market >> joe, are you concerned about potential antitrust action against those big tech companies? >> absolutely. it's something we're always concerned about. i would leave it to our portfolio managers and their due diligence in being careful with which company specifically they're looking to get exposure to >> how about energy? leading the market don't see that every single day. >> could you have scripted a more bullish backdrop for energy you have geopolitical concerns you have venezuela you have russian dirty oil comments coming from there
3:10 pm
you have everything in the world to be -- >> from the bear market. >> exactly to be bullish. so if it can't be bullish with that backdrop, in what scenario can it be bullish? the united states is outproducing saudi and russia now on an oil per day basis. that hasn't happened in quite some time. look for u.s. production to either maintain or increase. our foreign dependence on oil is over for all -- for the near-term future and i think it's in our hands now and opec has lost the power to control the price of oil. >> so do you want exposure maybe as well to some of the names where the yield as well, that can be travth at the moment or not? >> you have a real problem the same way i just said joseph's picks were technology and discretionary that have led the market for the last five years, energy has done nothing for the last five years. those large int graitd energy plays. grant, there's been a lot of plays within the energy complex that have rallied. but for everything joseph's
3:11 pm
worrying about and the market's worrying about slower growth you don't want to be in energy zblts interesting that energy stocks are outperforming today because crude oil's flat >> it's a bounce back. it's an overreaction the energy complex will trade with the overall commodity so you brought up a great point. i think it's more or less a short covering rally, maybe people got excited to the up side and are looking for bounces and where the bounces are going to be. the most depressed stocks. >> joe, thanks very much for joining us appreciate it. steve grasso is with us for the full hour. just to your point on oil, yesterday we saw the market end higher but off the highs of the day and oil started to sell off during the session the same happened today. oil was higher for most of the session, shoeld off in the last couple of hours and equities have come down with it and we're not down significantly, 22 points on the dow, but it's had an impact. >> slow fade >> coming up, we'll have much more on the big tech crackdown when we're joined by silicon valley congressman rokhanna. where he thinks raiths
3:12 pm
regulation is necessary. we'll speak with the jpmorgan analyst who sent shares unngoday after he downgraded the stock feel that? that's the beat of global markets, the rhythm of the world. but to us, it's the pace of tomorrow. with ingenuity, technologies, and markets expertise we create the possible. and when you do that, you don't chase the pace of tomorrow. you set it. nasdaq. rewrite tomorrow.
3:13 pm
3:14 pm
we like drip coffee, layovers- -and waiting on hold. what we don't like is relying on fancy technology for help. snail mail! we were invited to a y2k party... uh, didn't that happen, like, 20 years ago? oh, look, karolyn, we've got a mathematician on our hands! check it out! now you can schedule a callback or reschedule an appointment, even on nights and weekends. today's xfinity service. simple. easy. awesome. i'd rather not. 45 minutes left of trade
3:15 pm
dow down about 25 points let's send it to mike santoli for today's market dashboard mike, what are you looking at today? >> here's what we have fickle fed forecast. get to that in a minute. take a look at the treasury yield at the short end to see what it says about the fed beyond -- or before beyond meat we're going to take a look at some previous hot consumer ipos and how they did turning 29 again not plausible for me but maybe for the market the confidence gap different ceos at different size companies have very different views on things now. fickle fed forecast. really going to look at the yield on the two-year treasury note it has popped up to 1.93 this is a year to date chart so obviously this yield has collapsed as we've become concerned about the economy, more so about inflation, global growth, and also what the fed 1.78 last friday to 1.93 today after we got the producer price index today. nothing alarming but definitely on trend 2% core wholesale price
3:16 pm
inflation. it suggests that maybe there's room for the market to revise its best guess of what the fed does and when it does it 1.9 p% 2-year note and the 1-year's about 2.09 i think. it still say we're going to get lower than the fed funds rate which is 2 1/4 to 2 1/2. but maybe not much and not that soon i'm going to be watching this to see how those fed expectations developing as we are in a fed officials blackout window until next week's meeting, guys. >> i guess the theme as well for equities both yesterday and today is that generally whether it's the short end or the long end we have seen yields rise a little bit and there's still room for them to do so without it spooking equity markets >> right there is definitely a little best a runway there for yields to continue higher without stocks getting larmd stocks might take comfort with cyclicals leading. however, today's move in treasuries have been minimal just a few basis points on the short end has been the main story. >> how does the equity market
3:17 pm
react if the bond market is getting a little too overzealous about rate cuts and the fed doesn't follow through >> so what is on the chart and what people are looking for is a cut. if they don't get the cut what they're -- more importantly, it's unanimous that they're not getting a raise. so as long as you don't get a raise, as long as you're on that side of the boat where you have him in your back pocket, the fed, if you have that rate cut and you have a lot of the governors thinking that way with more dovish comments, more softer money comments, i think that's enough for the overall market to say hey, we have a backstop with the fed. but the two-year, five-year with the inversion that happened there, and mike knows this as well, that's what spooked the market that's what bankers -- everybody talks about the 2-10s. the 2-5s are what bankers are looking for. maybe even sometimes a three-month five-year. but when you look at the inversion between a 2-year and 5-year that's what's still weighing on environmentalist confidence >> mike, would you agree that perhaps because the market doesn't expect the cut to come
3:18 pm
in the next couple of months that the absence of a hike in those months will be enough to keep the markets supported from the fed perspective? >> i think the market has to get there. right now i still think implied in the treasury market, if the fed funds futures is something like 70% for july. that's the very end of july. so that's your window for when those expectations might be modified >> all right, mike, see you in a few minutes. 42 minutes to go before the close. take a look at the major averages dow down 29 points we've been negative two times today. we'll see what happens in the next 40 minutes or so. because we were positive really most of the day. shares of beyond meat are up more than 100% since jpmorgan initiated the stock as overweight last month. but today changing its tune. stock is reacting. we'll talk to the analyst behind the call >> and later, would you ride in a flying taxi? uber showing off its futuristic concept today. but when the company's costly moon shots ever actually pay off? we'll discuss that coming up.
3:19 pm
man: stand up if you are a first generation college student. stand up if you're a mother. if you are actively deployed, a veteran, or you're in a military family, please stand. the world in which we live equally distributes talent. but it doesn't equally distribute opportunity, and paths are not always the same. i'm so proud of you, dad! man: i will tell you this, southern new hampshire university can change the whole trajectory of your life.
3:20 pm
3:21 pm
welcome back let's check on the market. dow down 25 points markets, all the major indices just lower but 0.1% or so the russell down a little more,
3:22 pm
0.4% we were higher of course earlier in the session but lost steam during the course of today's trade. we have 40 minutes or so left. let's get to word on the street. moffett nathanson upgrading facebook to buy from neutral new revenue opportunities that could drive long-term growth the company's underlying fundamentals are proving they did downgrade the stock last september. they said the four concerns they had then have all answered themselves one way or another. the stock's up 1.7% on the news. lantech equities downgrading wells fargo. the ceo search is headwinds that could lead the bank to underperform its peers during the next 12 to 18 months the call also very much based on the interest rate moves we've seen of course wells fargo 90% revenue from the u.s. or plus 90% and very much focused on retail investing and yield curve links and the stock slightly lower. now to today's call of the day. beyond meat.
3:23 pm
so back on may 28 g9 jonk had the most bullish call on the stock, initiating it with an overweight $97 price target. here's analyst ken goldman on "power lunch" that day >> i think the most important thing to look at is the long-term potential. and the most important thing in the long-term potential is how big is this sector, alt meat, whatever we want to call, it plant-based meat going to be beyond meat will get whatever percentage of that it is but when you look at the numbers and how big plant-based dairy has become, it seems clear plant-based meat could be enormous >> then what happened the stock rallied 113% since the call as of yesterday's close, but that same analyst just downgraded beyond meat today to neutral saying it's purely based on valuation, the stock today is down 20% on the call ken goldman joins us now quite a setup. but you must be feeling good about the call after you got a lot of grief for initiating it at such a high price >> well done >> that's right. very good. i may use it or steal that if
3:24 pm
it's okay with you >> sounds like a good title for your next -- >> a rare compliment >> i'm actually really happy for ethan brown and team they've put together a tremendous product they have a great company. like you said, it's really just a valuation call still love the story i just had two beyond sausages for lunch. i'm still a big fan of the product myself just a stock at 168's a lot different than a stock at 100. >> i guess but that was always the question, even when you initiated the 100. people were saying you're nuts the price to sales ratio is just ridiculous when you compare it to any other food stock. so why now is it too expensive when it wasn't then? >> we want to stay disciplined with our discounted cash flow analysis our dcf said 120, 121-ish today is roughly the right number to use. i still believe that the stock when we were looking at this last week was 97, 98 now it went to 168 very simple call for us. >> are there other ways to play this theme the clip we just watched about
3:25 pm
the overall space as a whole are there other ways to play that that haven't appreciated as much as beyond meat? >> there are very different ways to play it there used to be a lot more. we used to have annie's as a public company we used to have white wave you can still play hain celesti celestial. that's not a pure play anymore it may eventually when they divest some operations but right now this is the purest way to play this >> what about the likes of tyson foods that used to have a stake, they sold out -- are those companies going to soo their share price react in a meaningful way or much like david solomon complaining that his stock doesn't get valued for marcus, is it irrelevant to their share price because it's going to be such a small part of the total? >> i don't think it necessarily is relevant in terms of fundamenta fundamentals in terms of sentiment for the stocks that could be different we could see stocks like tyson arise on the fact they're starting to sell more of their version of the beyond burger even if it's meaning less to the company on a fundamental basis >> what about all the short sellers in this name
3:26 pm
a lot of good call right now, good play? >> i think it's a little risky anyone who shorted the stock yesterday is doing pretty well today. i do believe the company will still have better earnings than what the street examines i think it's very difficult to short a stock like that and make a lot of money in the long run >> grasso, for a cult stock once it's had its big pullback is the writing on the wall, is it over? >> no, i don't think it's necessarily over to ken's point there's a lot of players in the space but there's not a lot of pure players in the space. so when you look at a company like tyson, tyson has an infrastructure already set up. tyson has a lot of levers to pull in this space it depends on what the next three to six months look like with the competition and how steeped and experienced those competitors are. let's remember, though, beyond never turned a profit. this is something where i think people already put on their sunglasses and say we're not worried about that usually we have tech stocks that don't turn profits that people
3:27 pm
get worried about. now we have something that is to your point a cult sector so this is going to be -- i have no doubt this is going to be a tremendous part of nutrition this is going to be a tremendous part of the food industry. but the problem is once we do a deeper dive there's a lot of preservatives, there's a lot of salt in here i'm waiting for those arguments that beef is actually more healthy than something like this to start raising their head. so i would play it with a diversified play more of a tyson versus a direct play >> i guess, ken, as we watch this stock did it prove anything when it released earnings and had a positive reception on wall street >> i think it did, sara. i think they had such a great -- i shouldn't say great. a good quarter very impressive guidance the tone was very strong with ethan saying they are going to be -- or they are very conservative with their numbers. i think they ill vaited that they have their act together, that they know what they're doing, and that they can provide conservative guidance such that people can still buy it and feel good the numbers will still get higher >> just quickly, ken, how easy is it to replicate what they've
3:28 pm
done if tyson foods is not really going to moffett needle on their earnings, what about a new startup that's seen how much this stock has grown, seen your predictions for how big the market's going to be how quickly could someone replicate that if they've got an amazing i.p. that's not easy to copy? >> they have some i.p. i think the true story for them is the r&d i think what you're going to see is more iterations in fact, beyond meat just came out with a new iteration or announced the iteration of the beyond burger 2.0, which is made with a little less pea protein, other ingredients to give it quote unquote marbling that's the r&d we'll see if someone wanted to copy the beyond burger 1.0 they could but someone could have a better burger going forward i don't think this is about i.p. but there are many winners in the future >> bubble or no bubble >> i'll let you guys decide that >> all else equal, what price target would you go back to buying again around the -- >> i feel very comfortable with my 121 price target. anything below that i feel very comfortable buying with.
3:29 pm
>> ken goldman, thanks very much for joining us beyond meat down 25% on his call let's send it to mike santoli for his second market dashboard. mike, over to you. >> playing right off of that going to go back, sort of a walk down memory lane to some other ipos in the consumer space that actually had tremendous debuts in the months after their ipo. first look at krispy kreme donuts from the year 2000 by the way, as the overall market was about to roll over into a bear market this is about a $10 to split adjusted price you went more than doubled in the first few months obviously just about tripled out before the year was up and you see these jagged moves this is what happens and i think the common factor with a beyond meat is it's a product that retail investors know, they believe that it basically has consumer viral opportunity. this one in particular was a regional concept that was expanding nationally people thought the market was tremendous for krispy kreme. it did not necessarily have a great run all the way through
3:30 pm
until it was acquired at roughly around i believe the ipo price years later. then look at gopro more dramatic example, a company that's still public, 2014. so this was -- the ipo i think was in the 20s this is a big 20% pop oft ipo price. then it went crazy somewhat similar to beyond meat then you start seeing these jagged legs down obviously the fundamentals didn't really come through longer term for gopro. so i'm not saying this is where beyond meat is going but any stock like beyond that could be down $40 in a day on a downgrade shows you that underneath that was a real big game of waiting for the next person to show up who's excited about the overall content as opposed to the actual business fundamentals just as a little bit of an example of what can happen when a name gets overheated in its first few months, guys >> mike, thank you very much for that what happened to krispy kreme's overall -- you can't really find them in new york more readily available in -- >> dunkin' donuts is a little
3:31 pm
more dominant here i grew up with krispy kreme as well i like it. >> i didn't grow up with it but once i got a taste for it i miss it >> and they probably had too many stores. they didn't protect the areas for these stores dunkin' donuts does a much better job -- >> and everyone went on a carb diet >> dunkin' donuts performed. >> true. but they have coffee >> i get it. but krispy kreme probably overfranchised the business and overstored their business and there was too many and they -- >> i'm hearing from one of our producers and donut aficionados that there's a new krispy kreme opening in times square apparently >> really? >> which is great news great news we have 29 minutes left of trade. things driving the action. rally fatigue. after six straight days of gains, uncertainty over a potential china trade deal and energy one of the leading sectors, oil prices have slipped and are flat at this stage. >> time to get a cnbc news update with sue herera hi, sue. >> hello,a hello, everyone. here's what's happening at this hour the pilot who died after
3:32 pm
crashing his helicopter on torch a new york city building was not licensed to fly in foul weather. the federal aviation administration says timothy mccormick lacked the required certificate allowing him to legally fly when visibility was less than three miles. proponents of an assault weapons ban in florida say they have obtained more than 100,000 signatures on petitions favoring such a law members of the group looking to place a proposed constitutional amendment on the ballot next year and they say the amount should be enough to trigger a state supreme court review the treasury department announcing it has sanctioned 16 individuals and entities associated with an international network benefiting the regime of syrian president assad among those being sanctioned, a syrian oligarch accused of profiting by building luxury developments on land stolen from assad opponents. here at home, new jersey has become the first state in the nation requiring hotels to
3:33 pm
provide workers with wearable panic buttons which they can press to summon help quickly in an emergency governor phil murphy signed the bill into law today in atlantic city you are up to date that's the news update guys, back to you. >> all right, sue. thank you. still to come, mortgage rates sitting near their lowest levels in a year and a half. we'll ask the ceo of brokerage firm redfin if that's translating into more home sales. later eurasia group's ian bremer says huawei may not survive this trade war he'll be here to tell us why later "osg ll onclinbe."
3:34 pm
3:35 pm
3:36 pm
acting white house chief of staff mick mulvaney making some comments to our own eamon javers about tariffs. let's bring in eamon with more >> that's right. i sat down with mulvaney at the peterson foundation's annual fiscal summit here in washington a short time ago i pressed him on the president's claim that it's the chinese who are paying the tariffs he's imposed. i asked mulvaney who's actually writing the checks on these tariffs? here's what he said. >> who's writing the checks on these tariffs? >> whoever imports them signs the checks >> so american companies >> right >> the people who are writing those checks are companies inside the united states >> no, no.
3:37 pm
the charge has always been this is a tax on the american people, that the individual consumers are paying this. right? that's always been the challenge, that prices will go up prices have not gone up. there's no inflation the proof is in the puddle >> so mulvaney there arguing ultimately, though, that the chinese have more to lose on the tariff front than the united states does even though he acknowledges that it's the american importers inside this country who are in fact paying the tariffs despite the president's comments on twitter that the chinese are paying the tariffs. mulvaney saying it is importers in the united states i also pressed him on the question of what's in that secret deal that the president held up a piece of paper on with mexico earlier today we saw the president saying there's an agreement that might become public at some time in the future mulvaney said that the agreement the president's talking about here may never become public because it's a backstop to the larger public agreement. the secret piece says is the consequences for both sides, what happens if they don't abide by the deal. he says if both sides abide by the deal we'll never see what's
3:38 pm
in the secret piece of the agreement because that will never be implemented so ultimately that secret agreement could stay a secret for some time to come, guys. back over to you and eamon, you almost wish it's t. had blown out of his haends and 50ud been able to catch it >> the photographers zoomed on it and it was backlit by the sun. there's great work by the photographers. there are some on twitter who have gotten reverse negative images of what was in the president's hand today >> well, maybe we'll never find out. but i guess possibly find out in time middle ground. not the consumer but not the chinese companies either stevens giving online real estate company redfin a double upgrade. changing its rating to outperform from underperform highlighting opportunities in e-commerce the company's stock is up around 20% so far this year joining us now is redfin ceo glenn kelman thanks so much for joining us, glenn. >> hi. >> i just want to start on that stephens note, actually.
3:39 pm
because as we've teased you, we've traded between calling you a brokerage or an e-commerce site and that was central to their upgrade saying originally they felt you were a traditional brokerage, now they do think you're more of an e-commerce company. where do you think you sit in that kind of definition? >> well, we're both. it's a consumer choice we let people hire a redfin agent to buy a house, but we also let people buy a house off a website. and it's really the consumer who chooses. that's the way it should be. >> are you seeing more growth in the website and is that coming at the expense of gross margin >> well, the demand on our website powers both businesses so even when you hire a redfin agent we use technology to make that agent three times more productive it's why we can charge half the price and still have a good gross margin and then for customers who don't need representation from an agent it's almost a purely digital business that business is much smaller.
3:40 pm
but it's the one that people are most excited about because in almost every country in the world people don't pay a buyer's agent and here we're giving consumers that choice. >> so we've seen a big drop in mortgage rates on the back of treasury yields in the last few weeks. blen, how would you characterize the health right now of buying activity in homes across the country? >> strong and getting stronger so earlier in the year the market was a b we really had a fairly sharp correction in the back half of 2018 but as soon as rates went down we saw buyers come back. the market was good in the first quarter. it's even better in the second quarter. i'm fairly confident about it. the only issue is as rates go down you still have low inventory. and that's going to limit sales. so prices are going to go up sales will not be as strong. >> are there any price points or regions you are concerned about? >> well, i'm concerned about all of them at level. but i think california's the one
3:41 pm
where we have to be the most careful. it's just a state where people have been migrating to that state for decades and now that has reversed people are leaving it has got an affordability crisis way capital a so that's the market we watch most carefully just because prices are on a knife's edge and that's why you see the whole industry so rate sensitive when rates go down, people flood into the market. when they go up they immediately pull back because they don't have the money to absorb the hit. and that just means it's going to be a wild ride in real estate a very volatile market >> i was going to ask about california and in particular the bay area and what you've seen, glenn, if anything as a result of all these hot tech ipos that have paraded onto wall street this year and whether there's been an effect on the housing market there >> well, there certainly has that market has always been crazy. just because you really can't peg it to income you have to peg it to the stock price of facebook and twitter and google and all the other
3:42 pm
tech companies in silicon valley and because there have been so many ipos we're just seeing an unprecedented number of bidding wars so 33 offers on a single house last week where we were involved almost all of them were all cash awful them well above the asking price. so it has become intense in san francisco again. but i do think you have to look at the migration there aren't many homes for sale 7 by 7 49 square miles in san francisco. there's nowhere for people to go and some of them are leaving as a result so i think the short-term trend is bidding wars. the long-term trend, less optimistic >> glenn kelman, thanks for joining us >> thanks for having me. >> 18 minutes to go. love that smile. >> i know. >> 18 minutes to go. here's where we stand in the markets. dow's actually just crossed over to the flat line it was down when we started the hour it's now flat. who's propelling it? caterpillar, apple, cisco. biggest winner, utx, disney, and
3:43 pm
boeing bringing up the rear. we'll see where we go. we're positive now s&p flat nasdaq, barely up. i mean, we're going for six days here, right? on the s&p >> seven days it would be for the dow. only one basis point still to cover. come on, we can do it. we can do it during the break which is going to be short and an tde yr stack withoula chcera
3:44 pm
3:45 pm
3:46 pm
15 minutes to go until the close. steve, last chance trade we should say the last time you gave us one it was match and the stock has done pretty well, up a few percent. >> we've had match up, we've had mcdonald's up. and mcdonald's, if you remember, i said buy it above that $200 level because that's been resistance it's above that level now. i think you use that as a floor support. >> what's now? >> incredible. so ford got hammered along with all the other automakers on the mexico tariff scare. and if we're hearing correctly that there's going to be no more mexican tariffs, then you have to be buyers of the automakers ford trading down about 10%. traded up about 7% i think you're good for probably another 2% to 5% from these levels you remember i'm a "fast money" trader that's what i'm looking to make. so if you look at it today, the market rallies even if ford doesn't rally with
3:47 pm
the overall market i think you're still in safe hands you have a floor below you >> is it just binary on the trade headlines? >> yeah. i think you get beat up. ford had the least exposure out of the automakers and traded down 10% so it sort of was basically free money. traded back up 7%. so those that aren't a little faint of heart could have grabbed it a couple of percent ago. but i think you have 2% to 5% upside from here >> steve, great to see you >> thanks, guys. >> steve grasso from stewart frankel. meanwhile the bond market. rick santelli's got that for us. hi, rick >> hi, wilf. we had a three-year note auction. solid auction. look at a two-year chart of three-year notes you see the way it's gradually moving up? today's close the highest close since may 30th we're closing in on two weeks. that indeed pulled the entire curve yields up. flattening as you see on 10s minus 2s moved from around 25 down to 21. the euro versus the dollar we could look at the dollar index but i think the biggest factor in 50% of valuation is
3:48 pm
the euro versus dollar the last high in mid march was around 1.15 plus many traders think that's the area to pay attention to wilf, back to you. >> thank you very much for that. we have 12 minutes left of trade. are we going to get the seventh straight day of gains for the dow? not at the moment. but we're covering it. >> highs were up 185 points. lows why wr down about 64 points it's been more than 30 days since uber's ipo early investors are having a hard time selling the stock. we will tell you why next. 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
3:49 pm
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.
3:50 pm
be go[ laughing ] gone.
3:51 pm
woo hoo. ♪ welcome to my house mmm, mmm, mmmmm. ball. ball. ball. awww, who's a good boy? it's me. me, me, me. yuck, that's gross. you got to get that under control. [ dogs howling ] seriously? embrace the mischief. say "get pets tickets" into your x1 voice remote to see it in theaters. welcome back let's check in on an individual market mover susquehanna upgrading lyft to positive from neutral. calling it a pure play on u.s. ride share adding with uber's ipo out of the way now's the time buy the strock. 2% it's not a huge upgrade to their fundamentals on lyft just a sort of relative call with uber and gaining 2% >> sticking with uber, the
3:52 pm
company making the case for its aerial taxi play investors are questioning the path to profitability. deirdre bosa has the story and leslie picker digging into another problem for uber investors, selling their shares. aerial taxis >> uber's ultimate value proposition is that it will have a piece of every mile traveled and that includes those in the air. so today the company showing off its latest flying taxi prototype on the outside looks similar to a helicopter on the inside a high-tech luxury cabin with automatic doors flying into the snelt. uber wants to make these aerial taxis commercially available to riders in 2023 that's not that far away and to get there it's partnering with some of the biggest names in aviation like nasa, boeing and -- today they announced another partnership with jaunt air mobility not long ago said that melbourne, australia would be its first uber air pilot city. of course there are a lot of other things like the economics
3:53 pm
of it all and regulations. they have to fall in place as well and the question is how much patience do investors have for uber's moon shots as it continues to struggle in public markets? back to you. >> deirdre, thanks very much looks cool >> expensive >> meantime, leslie picker has more on why early investors are having a hard time selling their stock. leslie >> that's right. the option to exercise what's known as the overallotment agreement has expired. that would have allowed a group of preipo investors to sell about a billion dollars worth of stock. the green shoe exists in all ipos in some cases it allows the issuer to raise even more money. in uber's case it was the venture backers that would have cashed out soft banc, benchmark and several uber co-founders were among the many investors looking to sell but underwriters won't typically exercise the greenshoe unless the stock is trading above the ipo price. uber's stock price wasn't able to do that in the 30-day window.
3:54 pm
guys >> up noex we're covering all the angles of this market close. our closing countdown dow down 25 we'll be right back. ♪
3:55 pm
3:56 pm
you should be mad they gave this guy a promotion. you should be mad at forced camaraderie. and you should be mad at tech that makes things worse. but you're not mad, because you have e*trade, who's tech makes life easier by automatically adding technical patterns on charts and helping you understand what they mean. don't get mad. get e*trade's simplified technical analysis. welcome back time for the closing countdown
3:57 pm
we're down just three points on the dow. i wonder if we can indeed get positive for the seventh straight session let's trade the close with kevin hincks of td ameritrade. what do you think has moved us intraday from the highs back to the lows and flat? >> these futures were up all night, wilfred, and then kind of lost their bid right after the open you know, the bonds were heavy all night. i think the markets were strong. and then the ppi number came t out, kind of showed no real inflation, and that made one of the bonds rally back town changed. and this market realized it was tired. >> tired is one way to put it, kevin. how else are you guys looking at it in terms of valuation now that we've had this comeback and positioning? >> i think everyone's got to -- i think the big decisions, we're late in earnings season. right? so those aren't going to move the markets. but tomorrow's ppi number i think is the biggest data point of the week. i think that's where everyone's
3:58 pm
going to -- the bond market will move tomorrow. and then we'll see what that does to stocks i think cpi is one of the bigger data points because of how in focus inflation is right now >> cpi out tomorrow morning. kevin hincks, thanks very much let's send it back to mike santoli for the third dashboard of the hour. mike >> yes and the s&p turning 29 again is it just a coincidence that yesterday and today the s&p 500 nosed above the 2900 level and then receded behind it it happens at a time as everyone's been saying that we're a little bit tired here is where we are and i think the significant piece of it is we've only spent about seven weeks ever above 2900 right here back last summer and of course right here, it suggests there's a little hesitation among buyers to pay up at these levels not the worst thing in the world for the market to go sideways for 16 months but until they break above those highs i think people are going to wonder whether we've seen two or three peaks in the last year and a
3:59 pm
half let's get up to the nasdaq with bertha >> i'm going to turn 29 once again this year and the year after that apple is one of the stocks of the day. even as we faded here. apple has held up. foxconn saying it's prepared to move some of its production for apple outside of china that's certainly giving a boost to fears about how tariffs would impact the phone maker but chinese tech today also today rising as well these are really beaten down stocks all of these are very much in bear market territory. take a look at fang. despite the fact we have worries about regulatory hearings, about how they might be broken up. today moffett nathanson upgrading facebook and fang overall is higher. bob, over to you >> bertha, we just ran out of steam here if you look at the major dow movers, we had big moves up in companies like visa recently just ran out of steam. 6% movement a week is a lot to expect for the markets pricey right now metals and mining stocks china announcing it's going
4:00 pm
o'help with some infrastructure spending over there. mining stocks went up. finally some of those infrastructure stocks, they were ou on the down side there's the dow jones industrial average break a six-day win streak down 18 points if you are just joining us, a very good afternoon to you welcome to clblt i'm wilfred frost. >> and i'm sara eisen along with mike santoli, senior cnbc markets commentator. we did break the winning streak. the dow ending lower just barely, though. down 13 points it was as high as 185 earlier today. looked like we were going to run seven days in a row. not so much. s&p 500 closing flat, which actually masks a lot of strength that we saw in the overall market certain groups, consumer
4:01 pm
staples, consumer discretionary. looks like financials even ticking into the dreen just in the last few moments of trade. russell down a third of a percent. >> financials kind of just flat but some of the bigger banks were higher. citigroup up over a percent. yesterday we saw yields rise, more of a risk on sentiment. today they were higher but not across the board and they didn't stay there also oil prices slipped again. two days in a row. as equity markets came off their highs. today that meant negative closes but only just, as you say. >> i would just also point out some strength in the communication services stocks today. especially a name like facebook. got a little analyst love. been beaten up so hard between facebook and google and antitrust concerns this has been one of the weaker stocks in the market in the last few weeks helped the nasdaq and helped actually the overall market as well >> industrials a bottom as well. later we'll hear from eurasia's ian bremmer. he says we're in a geopolitical
4:02 pm
recession. what that could mean for your money. we'll discuss with him >> joining us, lindsay bell is here, investment strategist at cfra research. barry knapp, director of research at ironside macro economics. and mike, we turn to you as always a lot of talk about being tired this market. what does that tell you? >> sprinting uphill for six day in a row you're going to get tired. i think this is the best way to end the streak i think you'd rather miss a streak by a few ticks than make a streak by a few ticks because all of a sudden the streak becomes the story rather than the overall position which is a really nice bounce after a decent little pullback in may. today had basically the same amount of stocks up and down the new york stock exchange. it was basically just kind of an even story to me the interesting part is obviously going to be how we kind of ingest the cpi news tomorrow and look ahead to the fed and decide exactly what's been priced into this market by the way, earnings -- i mean, they haven't really budged we haven't really talked about them they're kind of at a standstill
4:03 pm
in terms of forecasts simply because of the trade issues. >> let's talk about earnings forecasts. lindsay, what's the biggest swing factor for your forecast on s&p 500 earnings for the year ahead? fed expectations or the latest trade tweets >> i think for me it's the latest trade tweets really because the 25% up from 10% went into effect on may 10th and 90% of the s&p 500 had already reported results and guidance. so it hasn't been factored into the numbers and that might not be a huge impact but the things do escalate. we get bad news at the end of the month, the g20 doesn't go as investors have expected, then you could see numbers come down especially in the second half of the year quite sharply >> what are expectations right now? >> right now for the full year we're looking for 2.3% i think q2 is finally looking for a decline of 1.3%. that'll probably be fine but it's q3 and q4 .7% increase in q38% in q4 >> we could be talking about
4:04 pm
another earnings recession we talked about it last time it didn't happen but the numbers -- >> i think we should probably wait to talk about it until we get a negative quarter and then we can decide if it's going to be two negative quarters because i think flattish earnings is the story. right? flattish earnings, how much the market's willing to pay for flattish earnings. it's all about is it just going to be a lull or is it just going to be a rolling over of earnings that's going to last a while that's what's going to matter for the markets as opposed to whether we click for the quarter. >> regardless of what's happening on trade you're pleat relaxed about the domestic environment and think that could support gdp all the way. >> i think that's one of the interesting things that slipped through the cracks over the last couple of weeks. to begin with when you look at the various fed regional manufacturing surveys the capital spending plan six months forward held up remarkably well in may it had been rebounding in april. really good sign, capex expectations still look pretty good then yesterday's nfib, or today's actually nfib survey
4:05 pm
really confirm that both with capital spending plans and overall sentiment. furthermore, the jolt survey showed a big pickup in the turnover of the labor market this is one of my biggest pet peeves for overall finance and how people look at markets we had 75,000 jobs against 153 million job base that's less than five basis points yet if you take the quarterly turnover, the number of people getting a new job every quarter and leaving their job, that's 25% of that labor force. that turnover, and it's been picking back up again, is a sign of dynamism, corporate confidence improving that's a big driver of wage growth but not inflationary wage growth actually productivity going up so that improved as well so i was overall -- you know, when i look at the story in the labor market, the story in business confidence, it looks like we're recovering from an inventory destocking cycle that was a consequence of the qt
4:06 pm
stock market crash, the plunge in retail sales that took place in december. that's what we're covering it looks like domestic demand is pretty good, notwithstanding this trade policy uncertainty. overall, that looks like probably part of the reason why those earnings estimates don't get cut is companies or analysts just aren't getting that guidance from companies that things have gotten any worse >> and where are we tracking for gdp for q2 >> under 2% for the quarter. >> i'm saying for the year >> right but remember, we were at the exact same spot last quarter less than 1% we hadn't got the second retail sales number and by the time we got the print everything had changed a lot so friday's retail sales numbers probably the big one and then as you start getting a look at june, that will give you a much better picture for where these tracking estimates can be really misleading halfway through the quarter. >> you want to focus on domestic stocks only? >> oh, yeah. that's been our call for quite some time. we think there's a big secular
4:07 pm
trend toward much slower global trade. all the countries that have business models predicated upon globalization expanding, germany, japan, korea, china, they're in trouble irrespective of trade wars tlp there's going to be less global trade because companies are going to house manufacturing production where final demand is to the extent they can and that trend has materialized in much slower global trade. i think that's absolutely the way to be positioned through most of this business cycle i had that view. >> barry and lindsey, we're going to hit pause if that's all right. we're going to come back to discuss the markets after the next break but before we go to that pleased to say we're going to discuss tech house democrats began investigative hearings into the dominance of big tech today. youtube ceo weighed in on tech regulation last night at recode's code conference >> i think what we have seen is that a lot of times regulation is really well intended.
4:08 pm
people want to change society for the better but it has all these unintended consequences what i would say is really important is for us to be able to work closely with these different providers, different governments, and be able to explain how can we really implement it in a reasonable way, how to make sure our unintended consequences that they didn't think about. >> let's bring in congressman ro khanna, represents california's 17th district, which also includes silicon valley. congressman, good to see you again. since the last time we talked there have been all these official investigations launched by the doj and the ftc and state attorneys general and the senate judiciary committee. what should big tech be bracing for? >> well, sara, there's no doubt that tech needs to be held accountable. there needs to be better privacy. there needs to be antitrust enforcement. but it needs to be done in a precise way and not in a way
4:09 pm
that stifles growth or competition or that is ad hoc. so what i would advise tech to do is get ahead of the curve, to make sure their platforms aren't privileging their own products, to make sure they have strong privacy protections, and to show that they really are responding to people's fears and concerns >> is this an antitrust issue or is it different? is it privacy and some of those other terms you mentioned? >> well, it's both i had i there's a large concern on privacy and what people are going to do with their data. there's also a concern on antitrust. but i think the relevant example is the microsoft case. and microsoft, the company wasn't broken up but they weren't allowed to tie the internet explorer to their windows platform as a result we saw netscape, google, a lot of competition emerges. similarly, the current companies shouldn't be able to say that their own platforms have an advantage. and as long as they have neutral platforms that embrace competition i think you can
4:10 pm
solve this issue with smart regulation and enforcement without breaking up the companies. >> is there any movement toward that on capitol hill >> i think the process on capitol hill is just beginning but i think there are voice that's say let's do this thoughtfully, let's have well-crafted regulation, we do need to have oversight, but we need to do it informed about the technology and aware that we don't want china, we don't want alibaba, 10 cent, baidu to become the dominant players. so we want to make sure that america remains innovative and leading growth but doing it responsibly. >> congressman, some of the big ceos have changed their tune over the last 12 months. they now welcome regulation and in fact encourage it you interact with them what do you think their motivation to change their tune has been >> well, wilf, you're absolutely right. google had an op-ed calling for well crafted regulation.
4:11 pm
chevrolet sandberg has said that at facebook. tim cook has said that it would make it ease year if there were bright line rules do you remove a doctored video how do you protect a person's freedom of speech versus their privacy rights or their right not to have hate speech? so i think actually having well-crafted rules by congress may make their life easier secondly, they're responding to their constituents and their consumers. people want more privacy and they understand that what they want to make sure is that we don't do something rash that squelches competition and invaigs and that we're thought nfl how we do these regulations. >> do you find yourself conflicted at all now as the co-chairman of bernie sanders' campaign he rails against the top 1%. that's who we're talking about in many ways and hasn't it been exactly super friendly in his language toward big tech >> well, i call myself a progressive capitalist i think bernie sandters is right
4:12 pm
that there are communities that have been left out of the technology revolution, a lot of rural america, a lot of communities of color aren't participating. and one of the challenges for silicon valley is how do we distribute jobs, how do we distribute economic opportunity? every american is a consumer of technology everyone gets an amazon package or uses google search. but not everyone has a pathway for economic success so my view and my push has been to get technology to disperse the economic opportunity >> congressman, which of the big tech companies do you think is most ripe for regulation or has to make the most changes to avoid some heavy-handed action from congress? >> well, wilfred, i think facebook has to make changes i mean, for example, on instagram i was talking to a friend when i was back home and they said that their daughter was getting creepy friend requests from random people and that person was a techie, it
4:13 pm
took them ten minutes to be able to figure out the privacy settings to prevent his daughter from getting those requests. well, facebook needs to make that simpler they need to make sure people can con sentd before their data is being transferred and i say this recognizing that facebook has done a lot of good. they've allowed the me too movement to have a voice, the parkland kids to have a voice, black lives matter to have a voice, but they have a lot of work to do to improve consumer protection and privacy >> so facebook refused to take down a viral sort of doctored video of house speaker nancy pelosi there's a new report in the "washington post" that zuckerberg has tried to be in touch with speaker pelosi and she's not calling him back because she's not interested should she be calling him? >> sure, she should meet with him. but they should have taken out that doctored video. i reached out to them and i said take down the doctored video i say take down a doctored video of president trump if there's a doctored video the response, that they just want to diminish it in the news feed, would be as if rns said look, we're not going to show
4:14 pm
the doctored video in primetime, we're only going to show it in early morning hours. that would be completely unacceptable i think they made a mistake by not taking it out. i think the speaker should meet with them. but they need to take some concrete actions to show that they're acting in good faith >> congressman ro khanna, thanks for joining us >> wilfred and sara, thank you for having me on >> thank you very much youtube did take it down facebook and twitter, though, said it didn't violate their rules. they're having to violate this line between free speech and a safe place for people but also sort of censoring and making sure that -- >> tough line to walk. but the congressman, who often wants to defend silicon valley, was clear that facebook was the one that was most in the crosshairs let's get a news alert leslie picker has it back at hq for us >> pershing square's bill ackman now coming out against united technology's deal with raytheon. if you recall ackman had been an investor in united technologies
4:15 pm
but he urging the company to break apart and streamline its business a bit more. now ackman sending a letter to the company's ceo greg hayes early sunday morning after the journal reported on the deal this is according to a person familiar with the matter and he said he was concerned about the consummation of this combination between utx and raytheon now, pershing square declined to comment on the letter or the company's opposition to this deal but we will continue to report further and let you know what we learned. united technologies reacting slightly to this news, guys. >> leslie, thanks very much for that mike, the stock was down some 3%, 4% today it's down 7% over the last two days >> raytheon did poorly today as well >> yeah, exactly >> kind of surprising that it's up now for the back of this potential block on the deal. just a little bit. it's an all stock deal merge of equals. it's kind of amazing how much it
4:16 pm
has traded down -- >> this tells you it's actually utx buying raytheon. the utx shareholder does not get upset about a deal like this unless it's perceived as strategically they're overpaying for this asset raytheon's going down mostly because the currency they're going to get paid in is the utx -- this is implicitly going down i don't know that there will be any sway here. it's certainly not something that regulators seem like they're going to make too much focus on but it's interesting ackman -- who wanted the company to get more streamlined. is saying this isn't the way to do it. >> or raytheon is -- >> still ahead on "the closing bell," white house economic adviser larry kudlow giving his outlook on growth today despite some less than impressive recent economic reports we'll delve into his comments coming up. plus, eurasia group ceo ian bremner tells us why huawei may not survive this trade war but to us,
4:17 pm
it's the pace of tomorrow. with ingenuity, technologies, and markets expertise we create the possible. and when you do that, you don't chase the pace of tomorrow. you set it. nasdaq. rewrite tomorrow. who used expedia to book the vacation rental which led to the discovery that sometimes a little down time can lift you right up. expedia. everything you need to go.
4:18 pm
expedia. you guys be good. i'llshe's gone.ter. it's a dangerous world. [ screaming ] [ grunting ]
4:19 pm
woo hoo! [ screaming ] pops are your friends gonna die? pickles don't be so dramatic. but yes probably. there they are. aww! welcome back time for our closing market roundup. bob pisani's here at the stock exchange with a look at today's movers here and bertha coombs is standing by at the nasdaq. but bob, let's start with you. >> we ran out of steam the markets were too pricey. we'd been up 6% the last week. 17 times forward earnings. that's a lot we're pricing in a dovish fed
4:20 pm
and a china deal again, a lot to deal with for the market you just see this in some of the big movers visa was 156 a week ago. it moves up to 171 or so and you can see it just sort of ran out of steam even though throughout the day it came off of the lows. caterpillar's another one. 120 a week ago, seven days ago, went to 128. and you can see that stock just moved up right at the open was the high print. then moved down. and again came off the lows there. but ran out of steam eventually. guys, back to you. >> that was the theme, bob thanks let's head to the nasdaq for a look at today's biggest movers uptown bertha coombs has that for us. >> the nasdaq composite, the russell 2000, they were lower on the day, but the nasdaq 100, those are the biggest caps, managed to just eke out a sixth day of gains big reason why was apple also up six straight days. and with the move we've seen in those six days, 12%, it's now positive for the quarter take a look at some of the chip names they also have been up just about six days here
4:21 pm
it's a mixed bag advanced micro was down. that is one of the best performers it's off only about 5% from its recent 52-week highs compared to a lot of others that are in correction back over to you >> bertha, thank you very much for that xhgs economic council director larry kudlow and goldman sachs ceo david solomon weighing in on the state of the u.s. economy earlier on cnbc. >> the u.s. economy's very strong and i wouldn't put much stock in one month's jobs numbers i think we're in very good shape. and i think we're still going to maintain a 3% growth pace this year >> while the trajectory of growth may have slowed a little bit there's no question the economy's still growing. probably growing around trend. and the fact that we're sitting here and the market's now built in an expectation for a couple of rate cuts this year, you know, i'm not sure how that will play out but certainly if it's not going to happen at this point the
4:22 pm
fed's going to have to figure out how to walk the market back from that and that probably won't be good for risk assets if that's where we are. >> back with us, lindsey bell and barry knapp. mike, i'll come to you first of all. that david solomon comment was in response to a question from carl as to whether the market has got ahead of itself for pricing in a rate cut. i mean, clearly solomon thinks that's a fear. >> yes as do his economists think there probably won't be a rate cut how would the equity market react if we get to late summer and we haven't had one >> i think you have tofill in the rest of the context. i'm on board with the idea the equity market probably doesn't get every single thing on its wish list in terms of china trade deal, reacceleration of the economy, inflation's back to trend, stocks are at a record high, and you get a rate cut out of that? i'm not sure maybe something -- one of those things has to fall away. >> barry, which one falls away >> probably the rate cut in fact, i put a note out this morning to that very effect, that the market's way over its
4:23 pm
skis with thinking we're getting multiple rate cuts part of that's -- or part of that view is i think domestic 2ke78d demand is fine i also think ultimately the economic logic for china to cut a deal with us is so compelling. for example, two nights ago they reported their trade data. people cheered export growth sfablizing a little bit. but normal imports falling 8 1/2% last night they all righted auto sales down 12 1/2% china's domestic demand is really weak and ultimately they need i.p. protection for their own innovation they need to deemphasize s.o.e.s. they already had a hard landing in that sector so i think we will get the deal. if we do, you know, we're at equity market highs. the fact the fixed income market has overshot the economic outlook here is not surprising as i've said a couple of times even on the show that i think the equity market has been a much better leading indicator for economic activity than the bond market for two business
4:24 pm
cycles and i've been watching it for like five or so. giving away my age >> lindsey, your point earlier is the fed doesn't really impact s&p 500 earnings for the year ahead. >> right at cfra we do believe there's going to be no rate caught this year the economic data is not there it has to get a lot worse than last moss jobs report. and don't forget that the market really isn't an indicator the fed is watching too. at 2% going into today's trading period, 2% off the all-time highs in april, that doesn't indicate an atmosphere where they're going to want to cut rates. i think they're going to be data dependent as you expect. the market's really looking to find its footing there's a couple things coming up you've got the fed meeting next week jay powell having another conference call. the market's going to be hanging on to every single word he says. then you get to g20 at the end of the hon
4:25 pm
there's no guarantee there's going to be a deal coming out of that the commerce secretary was on cnbc earlier saying he's not so sure you're going to get a deal there either it's complicated and structural. then we get oin earnings season. there's a lot for us to get through. >> it seems like, mike, quet is is this fed more marked department dependent or data dependent? i would suggest in december it was data descendent and then it found some religion and it -- >> it prefers to be data dependent. but here's the thing that's the common view, right? powell learned his lesson, doesn't want to tick the market off, look what happened. but what did he learn from december to april? with words you can get the market back. he didn't change policy. he changed words changed the bias he didn't cut the rate my point is you can get it back quickly. you can get the market's favor back relatively -- i'm not saying he wants to disappoint. i'm not saying they're not going to cut this summer but they review it as a --
4:26 pm
>> i heard many talking about this insurance cut, which buys them the opportunity to cut even if the data's okay >> barry, quick final word >> i think they clearly are going to change the bias to ease at june and see if they can get away with that but if growth comes through and we get some sort of extension of the deals and no tariff, then we may never get there. and my expectation is we'll never actually get to that rate cut. and we shouldn't want to get to the rate cut because if we do as lindsey implied, things are significantly worse. >> brian knapp, lindsey bell, thank you very much for joining us good to see you both >> earnings alert. dave & buster's. leslie picker track hag one for us >> those shares plummeting in after hours trading due to a miss on both the top and bottom line for the company's first quarter earnings results you can see they're down almost 16% for these results. on the bottom line they missed by about a penny reporting $1.13 compared with $1.14 that the street was estimating and on the top line he had reported $364
4:27 pm
million for the quarter compared with $372 million that the street was estimating. now, they also missed on the comparable store sales, down ceo brian jenkins explaining in the press release today that the comparable store sales were about low expectations largely due to the easter shift, which proved unfavorable this year guys >> leslie, thank you very much for that big slide there. 16% lower. coming up here next on "closing bell," what the confidence gap buneesn small and big siss could mean for the economy and the market this is not a bed...
4:28 pm
4:29 pm
it's a revolution in sleep. the sleep number 360 smart bed now from $899... senses your movement and automatically adjusts on each side to keep you both comfortable. and snoring? how smart is that? smarter sleep. so you can come out swinging, maintain your inner focus, and wake up rested and ready for anything. only at a sleep number store, the queen sleep number 360 c2 smart bed is now only $899. plus, 0% interest for 48 months on most beds. only for a limited time.
4:30 pm
the market closed lower, breaking that winning streak dow down just are 14 points. let's send it back to mike s santo santoli, final dashboard of the break. >> the nfib, the national federation of independent business, the survey on optimism that came out this morning, barry knapp just mentioned, it has rebounded. it's very high this is very small businesses. all domestic, independent businesses this was the trump election bump you had further highs off of that and then this big decline, i get late last year early this year and now a rebound. so it's very high on a historical level this goes all the way back to 1986 that tells you domestic conditions look pretty good to these folks. they're looking to hire. business seems okay. look at the conference board's
4:31 pm
ceo confidence index this is the quarterly number it's not perfectly fresh but look at you're basically at lows pretty close to lows for this cycle and this goes back to 1980 this is obviously bigger companies, more global, more exposed to trade, more exposed o'global growth. this is through april i believe. i can't imagine it got much better in may but it does show you there's a bit of a split here whether you're domestic business, you're probably doing 5. nfib, it's very political. they really, really, really care about taxes and regulation and even what's said about tax and regulation, not necessarily conditions on the ground but it is kind of interesting and it shows you there's room perhaps if you get kind of trade progress for global exposed ceos to get into a better mood and maybe do some spending and investing >> thank you very much for that. time for a cnbc news update. sue herera's got it for us hi, sue. >> i do indeed hi, wilf former host of comedy central's "the daily show" jon stewart
4:32 pm
delivering fiery emotional testimony to a house judiciary subcommittee today stewart grilling members over the need to reauthorize funding for the 9/11 first responders compensation fund. >> your indifference costs these men and women their most valuable commodity time a lawsuit being filed in philadelphia over the grenfell tower fire in london which killed 72 people the lawsuit claims that faulty materials produced by two pennsylvania-based companies contributed to that blaze. and finally, amazing video of a police chase in central florida. a suspect driving a stolen mail truck led police on a dangerous pursuit, eventually ending in a crash. the suspect was then pulled from the truck along with a lot of packages that were in that truck as well. you're up to date. that's the news update this hour, guys i will send it back downtown to you. >> all right, sue, thanks.
4:33 pm
up next, eurasia's ian bremmer joins us we'll get his take on why he we're in a geopolitical recession and what that could mean for us. next on "closing bell.
4:34 pm
what do advisors look for in an etf? i tell clients, etfs can follow an index, but which ones target your goals? it's not about quantity. it's about quality. no trendy stuff. i want etfs backed by research. is it built for the long-term? my reputation depends on it. flexshares etfs are designed and managed around investor objectives. so you can advise with confidence. before investing, consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully.
4:35 pm
4:36 pm
welcome back national economic council director larry kudlow and commerce secretary wilbur ross appearing on cnbc earlier today expressing cautious optimism on u.s.-china trade talks resuming and the upcoming g20 summit. >> we were about 90% home on what we thought was a very promising potential deal when the chinese shocked everybody and started pulling back and reneging i'm hoping, and i think that's what president trump is suggesting, that in japan at the g20 when he and president xi meet we can pick up where we left off on achieving a really good deal. >> the g20 is not a place where anyone makes a definitive deal
4:37 pm
a trade deal is going to be thousands of pages at the g20 the most it will be is a 40,000-foot level some sort of agreement on a path forward. it's certainly not going to be a definitive agreement >> joining us now with his take is ian bremmer, president of the eurasia group. i think of you as a g20 expert, guru what do you think is realistic for investors to expect at this coming meeting >> well, let's be clear. i understand why both secretary ross and larry kudlow are saying what they are. but it's a very different perspective from china, which is that xi jinping was absolutely not prepared to come and meet with president trump until the deal was baked 100%. didn't want to negotiate didn't want the situation that kim jong un had where they talked in generalities and there is or is not something to sign now, what we just heard on that clip is if they meet at the g20 we're not going to have a deal for them to sign
4:38 pm
that the hope is they're going to move the ball during the meeting. the chinese don't want that. and it actually implies to me if you put that together with what we've seen from the americans with putting huawei on the restricted entity list over the last week, we're actually further from a deal right now than we were a few weeks ago larry kudlow's absolutely right. we were 90% there. the chinese did walk it back but since then it's actually gotten more challenging. >> so ian, despite that do you think that the effect on the economy has been a little bit less than what people expected so far whether we're talking u.s. economy or chinese economy does this matter as much as people had feared? >> again, economists will say it's starting to play into the numbers. certainly, i mean, i don't think you've seen massive impact on pricing in the united states and i do think that trump is going to be much more cautious before he goes after the remaining 325 billion that he's talked about putting additional tariffs on because those are things that americans will feel
4:39 pm
immediately in things they buy that's clothing. that's children's toys right? so i would be surprised if you came out of the g20 and trump said i'm going for those further tariffs. but again, i don't think we're actually very close to a breakthrough deal here and we were actually much closer about a month ago. >> so explain, ian, how huawei fits into all of this and why you think this company might not even survive >> it might not survive. right? and it's not because the europeans don't want to do business with them but as it stands right now, with huawei on this restricted entity list from the department of commerce, that means that they are not going to be able to source the components that they need to actually roll out software upgrades, to roll out 5g and that means that whether or not you are a partner of huawei
4:40 pm
you're not going to be able to do functional business with them going forward unless the americans back away, unless trump decides actually we're find with them, we'll have a workaround but huawei so far has not shown any inclination to come to a deal to compromise with the americans the way that zte, the china telecom firm, did over a year ago and trump so far, he has said, well, maybe if there's a deal then i would also include huawei as part of that. but again, we're not there yet so as it stands right now, i mean, the russians can say they want to do a 5g deal with the chinese. lots of other countries can. but you remember, when we pulled out of the iranian nuclear deal everyone complained but they're all now not buying the oil they were from the iranians they're listening to the americans because u.s. power through those sanctions actually speaks much more loudly. >> ian, you've written recently about a, quote, geopolitical recession. it's quite a sort of headline-grabbing phrase but how bad is that?
4:41 pm
how's it going to manifest you said with china maybe we don't get a deal but the next batch of tariffs is unlikely to be imposed what about other regions, other partners, are things about to get a lot worse? >> look, we know about economic recessions, they happen on average every six to seven years since world war ii geopolitical recessions don't happen as often. it's not often when a global order actually unwinds but that is what's happening now. and i think it plays out in the economy and in the market in two ways in principal ways. first is the tail risks become more likely. so whether it is the potential of trade confrontation between the u.s. and europe or japan or mexico or canada or china, whether it's conflict with iran, with north korea, even though none of these things by themselves are very likely, they're much more likely than they would usually be because we don't have the institutional strength, the global leadership or the certainty of the geopolitical order the more significant piece for the markets is that we don't have the resilience to respond
4:42 pm
to crises when they hit. i mean, after the 2008 financial crisis everyone came together, both in the united states domestically, with our allies, with the europeans the whole g20. right? was basically saying we need to work together to avoid a depression the next time we have a significant crisis, whether it's cyberattack against critical infrastructure or an emerging market debt crisis or the italians have issues and the europeans need to respond, you're not going to have that resilience you have massively more divisions inside governments themselves much more populism and nationalism backlash the trans-atlantic relationship is weaker. the chinese are building alternative architecture and the russians want to actually put their thumb farther on those divisions and i think that's the big concern about a geopolitical recession, is that we haven't had any international crisis of scale since this geopolitical recession started. it's unlikely that that's going
4:43 pm
to continue for much longer, and the response is not what we're used to. >> i mean, ian, you paint a pretty ugly scary picture of the world. and you know, you look at the markets and we're sitting like 2% off record highs in the u.s i wonder if according to investors it's a world now of winners and losers and relatively speaking the u.s. is coming out on top. >> well, two points to that. first is the united states in a geopolitical recession looks really good. we talk about our border crisis but we don't have the threats from migrants anywhere close to what you experience in south asia, the middle east, or of course europe. you know, we are the world's largest energy producer, the world's largest food producer. our neighbors canada and mexico and two bodies of water. when the world has more geopolitical crises, the united states feels like a much safer haven, like a much cleaner dirty shirt. so i think that's part of it but the second part is the economy is doing well. unemployment is low.
4:44 pm
wages rupp but i'm not an economist i'm a political scientist. and what i'm telling you is despite the economy doing reasonably well globally and quite well in the united states, all of the geopolitical trends are actually much worse. and even though those tail risks aren't very large and if you're concerned about the markets right now, you're more concerned about a u.s.-china trade confrontation than just about anything else macro on your plate. so the politics is what's worrying you but i think the biggest concerns are not the ones the markets are going to price in today. it's the response to that next crisis before the 2008 financial crisis the markets were not pricing in the 2008 financial crisis before 9/11 same thing but in the response the response was pretty robust. it was cohesive. i'm saying that response is really structurally not plausible in a geopolitical recession. >> yeah. and a lot of it was actually formulated at a g20. which brings us full circle.
4:45 pm
ian bremmer. thank you very much. of the eurasia group one of the most highly tipad chepts make its debut at the code conference we'll take you there live straight ahead dear tech, dear tech, let's talk. we have a pretty good relationship. you've done a lot of good for the world. but i feel like you have the potential to do so much more. are you working for all of us, or just a few of us? can we build ai without bias? ai that fights bias?
4:46 pm
ai that helps us see the bias in ourselves? we need tech that helps people understand each other. that understands my business. dear tech, dear tech, dear tech, dear tech, let's champion data rights as human rights. let's use blockchain to help reduce poverty. let's develop new solutions with the help of quantum technology. let's show girls that stem isn't just a boy's club. let's make a difference in people's lives. let's do it all. together. let's expect more from technology. let's put smart to work.
4:47 pm
the flexible class schedules d me tremendously. allowed me to go to work full time, run my catering business and be a mom and parent. when i reached this accomplishment, it was like, it's here, it's happening, it's now. we at southern new hampshire university are the ones who succeed. we are the ones who break through. welcome back the code conference kicking off in scottsdale's arizona this week venture capitalist mary mika taking the stage with her highly anticipated internet trends report and our own jon fortt is there with all the highlights. jon. >> well, wilf, i want to focus in on one particular part of this because this thing's more than 300 pages long.
4:48 pm
she's been doing it for years. one of those standout areas that meeker highlighted, delivery and fulfillment companies that are operating outside of the u.s. and are driven by data lots of countries here so okay, in china pinned wardrobe gives manufacturers data on what consumers want so those manufacturers can design new products that's doubled users to 443 million in just five quarters. may chuan xanping has doubled to 600 local merchants in two years, similarly working around logistics. in latin america rappi is a delivery and errand running platform that's seen orders double to 8 million in just four months tokopedia, trying to solve same-day delivery in indonesia with all the islands you can imagine how hard that is shopee is tackling shopping throughout southeast asia. and in india ji is trying to blend digital and online commerce kind of from a
4:49 pm
carrier's perspective. this is particularly interesting because as you know in the u.s. amazon is a very strong presence they're working on one-day delivery and other ways to really get items more quickly to people we see them kind of working in and out of different categories like food delivery across the world there are other players, smaller players that are innovating in ways that are relevant for just those local markets and it is causing explosive growth, guys >> jon, i wonder if any of those like flip become takeover targets. thank you very much, jon fortt still ahead leveling up. gaming's biggest show sunder way. we'll hear from a top video game company ceo and get his take on the industry, china, and the streaming wars that's next.
4:50 pm
4:51 pm
4:52 pm
e3, the video game industry's biggest show is under way right now in los angeles cnbc caught up with the take two interactive ceo earlier and got his take on streaming, china and more josh lipton is here with more. josh >> so, sarah, we are here at e3 and i did have a chance to catch up with strauss zelnick. we talked about one theme at the conference this year which is these new video game streaming services, so technology that will allow gamers to stream big, rich, complex games over the internet to their mobile devices. microsoft, google, reportedly amazon 2 all pursuing this market and zelnick thinks it is a potential, exciting opportunity for the industry >> if it's promoted that it's a different experience that allows you to keep consuming games wherever you are, i think that could be incredibly beneficial, so i think we'll have to adjust expectations from the consumer's point of view. again, this remains to be seen
4:53 pm
in the fullness of time i am convinced that these services will be great quality. >> i also did talk to zelnick about china and it's a big, important market about take two in the broader industry, they're approving titles including western ones and the approvals are back up and running and the titles are approved for the playstation 4 console. >> josh, thank you very much take two up 7% year to date. up, in, youralstre wl et look ahead and the key thing. with all that usaa offers why go with anybody else? we know their rates are good, we know that they're always going to take care of us. it was an instant savings and i should have changed a long time ago. it was funny because when we would call another insurance company, hey would say "oh we can't beat usaa" we're the webber family. we're the tenney's we're the hayles, and we're usaa members for life.
4:54 pm
♪ get your usaa auto insurance quote today. ♪ tthis is where i trades. and manage my portfolio. since i added futures, i have access to the oil markets. and gold markets. ok. i'm plugged into equities. trade confirmed. and i have global access 24/7. meaning, i can do what i need to do. then i can focus on what i want to do. visit your online broker today, to learn more.
4:55 pm
4:56 pm
welcome back now to our wall street look ahead and tesla's annual meeting is about to kick off in less than 30 minutes and phil lebeau has that and lululemon and sara will have more on that in just a moment phil, let's start with you what can we expect from tesla? >> you never know with elon musk, wilf this stock was flying high this was a company towards increasing its production and it's been a heck of a year if you look at shares of advertise la and they bounced over the 178 range over the last ten days and this stock is up
4:57 pm
35% in the last year and this i what people will be looking for. does elon musk say anything about deliveries in the second quarter? what's the cadence of deliveries and there is a big surge in the fourth quarter we know that the first quarter was slow relative to expectations and what do we hear about the expectations and that meeting starts in a half an hour and we'll see if elon musk sees about q2 deliveries. thank you very much for that and looking ahead to lululemon and sara's got a preview of that >> the always the question with lululemon is can it live up to very high expectations and this is a stock that's gone up 40% so far this year, way more than the market and here are three things to watch, same-store sales nobody in retail is posting 20% same-store sales growth and this time the expectation is moderated a bit and it's up 11.5
4:58 pm
same-store sales and it's been a huge growth driver for the company and ceo calvin mcdonald has planned to double the business in the next five years and the other biggie is international. the plan there is to quadruple international sales over five years, guys. there are a lot of great expectations and a lot of growth it is a company that's resonating and speaking to its consumer well, however, it really has to keep that up and in a competitive retail environment and competitive yoga and sportswear environment, so far the numbers have been outstanding. i also wonder how it plays and there's been softness in what you would define as luxury it's not clear that lulu plays into that necessarily, but 10% plus comps for the entire year and see when they say about guidance >> sarah, how long before they've captured the easy growth of men's and the two businesses of the same size it's going to be a while it's a much smaller portion and the knock against lulu, in the
4:59 pm
mind, it's still a women's brand. will it speak to men in the same way? abc pants very popular and showing a lot of growth. >> we'll have those numbers tomorrow at -- >> after the bell on "closing bell." i'll be covering it. what are you watching tomorrow >> cpi we get that in the morning again, we are not so fixated on macro news, but i do think it's something that matters now because we do need to see inflation stay contained if people want a fed rate cut and if we're not and back on trend the question gets re-opened, i think, as to what the fed might do it's not the defining moment from the fed, but it matters >> i just want to tell you about a piece of news that we're learning about on cnbc economist carl feldstein has died and such a sound voice on economics, conservative leaning
5:00 pm
and never, treatment and had all sorts of views on the fed. >> very authoritative. >> and he ran the bureau of economic research for many years. >> was a guest recently. >> very recently and very sad news our thoughts and prayer goes out to his family and loved ones on that somber note that does it for "closing bell. >> "fast money" begins right now. "fast money" starts right now live from the nasdaq marketsite overlooking new york city's time square i'm melissa lee. your traders on the desk are karen finerman and tesla is heating up and we're moments away from the company's shareholder meeting and we'll tell you what elon musk says is driving the stock and stocks are within striking distance of all-time highs one top technician says do not start this rally stocks sitting out this rally and nearly 50% of th

88 Views

info Stream Only

Uploaded by TV Archive on