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

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sure if you asked him if he's the richest man in the world he would say no the i wonder when he started amazon he saw it going beyond books into all kinds of things >> i think so. didn't he register it would be the everything store he's fulfilled it. that's the comprehensive part. >> thanks for watching "power lunch" >> have a good weekend "closing bell" starts right now. welcome to "closing bell," everyone jobs numbers did have stocks selling off earlier today but they rallied we have 59 minutes left of trade. record all time closing highs are in play once again >> thank you, wilfred. here's what's driving the action strong jobs report sparking concerns fed will not cut rates this month the 10 year yield is above 2%. financials are leading join us for the hour to break down the action is sean cruz
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welcome to post-9. what do you think? we were down as much as 200 points on the dow earlier today. now we're down just 16 points. >> i think it really what we're getting a feel for here whether you thought there was a 50 basis point coming or 50 base point rate cut coming, i think it goes off the table. it hit bull the hardest which is that inflationary hedge. it pushed gold lower >> equities have recovered but the moves we saw in bonds and dollar haven't retraced steps. shows the resilience and risk on sentiment that investors have. >> that's what i was watching throughout the session when you saw equities lower and bonds lower you need one to break one way or the other we saw continued selling in bonds but a little bit of recovery in equities
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what we're seeing on the screens they really aren't down too much s&p futures down it's interesting to see what happens on monday when everybody comes back from the hampton. >> we only have one basis point decline for nasdaq any positive close for the main three indices would be a record all time closing high. let's get our reporters watching the big stories. >> reporter: everyone was surprised at how big this jobs number was including president trump who called it unexpectedly good but he told reporters there is still one thing missing from his economy, a compliant fed >> we're paying a lot of interest and it's unnecessary but we don't have a fed that knows what they are doing so it's one of those little things. if we had a fed that would lower rates you would have a rocket
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ship >> reporter: we learned today president trump spoke with fed chairman j. powell over the phone back in may for five minutes. no word on what they discussed trump isn't the only one who is worried that the fed won't cut rates. investors are wondering whether the strong jobs number will stay the fed's hand today the fed reiterated it will act as appropriate to sustain the expansion. that comes from the report to congress guys, powell will clearly have a lot to talk about when he was the on capitol hill next week. back to you. >> we know you'll be bringing us those headlines. treasury rates ticking higher on the back of that jobs number >> reporter: it all boils down to fed better than expected number. i have dr. ju at t judy sheltonn let's hear what she had to say >> when we're paying the banks
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not to invest including foreign owned banks, we have a problem in that we could be punished for our successful reforms because they are not doing it in europe. they are not making the hard policy choices that bring about authentic growth and to me it's unfair to punish our successful producers when we can recognize that europe is headed towards additional stimulus measures. >> reporter: there's a lot to be learned by what dr. judy shelton said, whether she's confirmed or not, because in the end let's look at our markets reacted. intraday of ten, yield moving up bunds, yields moving slowly. we want to pull away finally the dollar index really strong. really strong bad. the president doesn't seem to like it. in the end policy needs to be
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right and the economics really do matter. rick, there's some contradictions in that interview which was also by the way and we enjoyed watching it earlier. there's contradictions whether she wants stronger dollar and tighter monetary policy in the long term but looser in the short term the question is whether under serious examination in front of the senate if that leads to a difficulty of getting confirmed. >> reporter: i couldn't agree more i think sound money policy doesn't necessarily mean that you lower rates to ease the burden of a strong dollar on the multinationals however, if the fed wants to ease they have enough pillar reasons just looking at inflation. the real issue is trying to decide how much of an easing cycle takes away from the insurance of those nine quarter point increases when you consider that really there's not a big crisis on the horizon, at least not at this point in time.
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>> rick, thank you very much the $is up 0.5%. and new focus on huawei in the trade war with china >> reporter: huawei continues to be at the center of global supply train issues and global trade issues ahead of trade talks between the u.s. and china next week a hong kong newspaper is reporting the chinese commitment to buying farm products, part of that trade truce made last weekend that will depend on how the trump administration handles its supply ban on huawei another flash point could be the u.s. government's first public defense issued earlier this week of a law that bans government agencies from doing business with huawei citing national security concerns. there are more signs too that you had way's troubles continue to weigh on the global supply chain. today samsung warning its q2 profit declined on a slowing chip market. back to you.
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>> thank you what do you think about some of the most recent headlines we've gotten regarding the u.s.-china trade talks? i can't help think based on these comments whether it's huawei or tariffs had to be removed, chinese saying this in the last 24 hours for a deal to happen, that it sounds like -- it doesn't sound as positive to me >> really you want to go into these chip makers. if you look at huawei two chip makers had exposure. they had to come out and lower their estimates. they assumed that went down to zero what we're seeing look you can sell some stuff but not all the way. maybe it doesn't go to zero so we don't get that 6% or 7% hit so maybe a 3% or 4%. cirrus had no exposure to huawei so if you want to navigate the
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space, cirrus is a company that didn't have to make any revenue adjustments off the huawei ban >> now to the broader market as the major averages try to avoid snapping multi-day win streaks >> reporter: the market remains fixated on the fed's next move there was a strong bias by policymakers to ease but the unexpected strength we saw in the june jobs report, that puts the fed in a challenging position it also puts the attention to next week when we get data on inflation, consumer and producer prices, plus engineer roam powell's testimony on july 10th. strong jobs growth should give rides to more consumer spending. we see retailers get a bid at this hour. only a handful of gainers on the dow. energy on some new opec output data industrials, though, 3m, caterpillar and honeywell not
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holding up well. back to you. >> we've got just 51 minutes left of trade. stocks just lower. we're down bio.15% on the s&p. nasdaq down 0.1% briefly flirted with the flat line but not quite going positive any positive close for those would be record all time closing high let's bring in head of suntrust advisory service and vice president and director of economic studies at the brookings institution. very good afternoon to both. michael, you don't think there will be a rate cut in july >> i think it's a little too early to talk about rate cuts in july particularly since we didn't get the inflation data that's been mentioned here in the last few minutes it's just a little early for that >> your base case is no action for the rest of the year at all or just not necessarily this month? >> not necessarily in july we need to get a little bit more
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data the fed really is data dependent but that data dependency >> stephanie, where do you fall within this rate debate? >> i think i agree you know, the report was strong. it definitely showed some slowing in the economy this year relative to last year, but nothing that was unexpected given the growth last year was boosted by the tax cuts. and i think this alone certainly would not cause the fomc to lower rates. the bigger question is how concerned they are about their inflation target it's true there's always more data to come but certainly have been opinions voiced by some of the reserve bank presidents that they are worried about achieving their target and it's possible
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that they could do a 25% basis point cut in july just to show that they are very serious about it >> stephanie, i'm sure you're well aware the market was expecting 50 basis points cut in july now expect 25% basis points. your suggesting that the market is ahead of itself for expecting any cut at all >> i think it's certainly ahead of itself for expecting 50 basis points i think 25 basis points i wouldn't rule it out as i said because i think there are people on the fomc who are conservative about their inflation target >> are you surprised to see treasury yields move the way they did today >> it will be interesting to watch the economic data coming through the rest of july once they took the word patient out of the last statement i expect more volatility today was a little bit one there was the growth aspect of the high headline number
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then a little deflationary area. look, ism, new orders. consumer sentiment will be very important. i'm going to watch those throughout july and the fed will be paying attention to those as well >> financials have flirted with some positive momentum a number of times, they haven't held it they are up again spapt good buying opportune for them? >> you want to be selective when you go into the sector there's the flattening of the yield curve. you have longer rates. we're getting a little bit of a boost. it's not enough to save the banks in and of itself what i'll be looking for in these banks, is looking at loan growth and seeing how their loan books are doing. if they can get solid growth in their loan books that can offset some of the margins they might see with the floatening yield curve. >> michael, if you look over the past month, past three months, six months, small caps, russell
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2000 has underperformed. today, those right now at least they are fractionally higher do you think the tide is turning in terms of investor sentiment there? >> it does look like it's turning. in this case small caps have a tendency to say good news for the u.s. economy is good news for earnings for small caps. that looks to be what's happening. >> okay. we'll leave it there thank you all, michael and stephanie for joining us still ahead any close high for major averages we set another record. after the break we'll take a look what the bond market is signalling >> amazon is celebrating their 25th birthday. how the company is changing e th retail landscape with gerald storch
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welcome back the dow is bouncing back after being down 232 points at the low of the trading session right now. it's down 56 points. 2609 is your level there
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fractionally lower, down about .2 of a percent. similar situation across the major averages as well >> let's sintds over end it ove. >> up on the roof. we'll look at stocks and bonds near their highs under the boardwalk that's about earnings estimates then summer wind a calm breeze. look at the volatility index maybe some storms. see you in september this rate debate carries on after that jobs number. up on the roof, look at the two year chart of the s&p 500. this week's move last week's move in context. you're above the roof. this was the roof of the trading range. nosed above that even when we were pulling back this morning it didn't jeopardize this story. so this is encouraging i would also look at the tlt, long term treasury bond etf.
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also at two year highs look at that sharp move up that's bullish if you own bonds but also seemingly bullish if you want to own stocks because low yields are a premise of where stocks are trading right now. as a matter of fact around 10:45 this morning that's when the move up in yields halted and reversed a little bit. that's the moment when stocks bottomed and took off. these markets are still very tightly linked at least on a tactical trading basis >> if you went for bonds it would have been under the floor. >> that would be the next segment. under the boardwalk. >> we're going with a summer song theme, on a summer friday >> got to come up with something. >> i applaud your creativity >> i also wouldn't have guessed today. >> these are oldies. this is like my parent's generation >> there we go morgan is on it. mike, thank you. sean, what do you think about the correlation between
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equities and bonds >> if you're looking at the futures both are down today. so the correlation that's holding up to me the boston is vix come back off its high intraday and bonds continue to sell off so to what mike said this is pretty much a textbook sort of day where we're a little uncertain earlier on the session but as we moved through the day the correlations started to pick up equities moving higher bonds selling off. looks like a pretty orderly day for the markets. i was interested in seeing how it played out. on low volume days when you have a data point like jobs reports coming out you see some strange thing. >> $hanging on to the gains. the outlier. dollar is up 0.7% against the yen. decently higherer and held there. >> we got 40 minutes before the bell the dow is currently down 55
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points right now s&p is down .2 a%. dow composite down small caps trading higher. coming in to a week where we're poised for gains after the break there's one thing a number of high profile ipos this year have in common. they are all led by women. we'll explore what's behind that next >> later are prices up 30% so far this year but one person yshe's a significant head wind on the horizon.
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welcome back to the "closing bell". we're down 50 points on the dow but well off the session lows. 200 points or so at 10:30 a.m. down .2 for the dow. financials, yields have risen. not quite as much as they have done earlier but nonetheless are higher from that strong jobs number >> high-profile ipos have dominated the headlines and there's something that many of these companies have in common they are led by women. leslie picker is at headquarters >> reporter: in the first half of the year 13 women have been ceos of companies making their
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debuts on u.s. exchanges that represents 15% of the total ipos that may still seem like a fraction of the total deals the proportion of women ceos in 2019 is far higher than any year going back to at least 2014. that's woaccording to new data. so if this trend continues it could have the potential to boost the percentage of women running publicly traded companies across america, guys >> that's interesting because the numbers are still pretty low relative to other developed markets, 3100 or euro stock 600. take quite a few to get the numbers up and big enough poiz to make it into the s&p 500. >> exactly take a lot more time and size to get into some of these indexes as well as few of them have due
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all class structures but, it is a way of progression for women ceo. historically been very difficult from an entrepreneurial standpoint to receive funding. only about 2.3% of all the venture capital funding that went towards start ups last year went to women run founded businesses and so there are some hurdles there in terms of kind of increasing the number of women ceos that take companies public because as you know a lot of these companies that go public are the start ups that, you know, were founded in someone's garage and over time make it towards the public markets. >> leslie, picker thanks for the story. sean, in general it's been quite a year so far for ipos and these companies that are in the pipeline to go public. realreal is up another 3% in trading again today. tech companies something else. how do you think about some of these different names that are maybe reinventing older industries
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>> it's a tech company but has a strong tie into the consumer what you see is kind of a secular shift where consumer is being much more comfortable buying things online they wouldn't have been comfortable doing. when you think of airbnb who would want to stay in a stranger's hours people are comfortable about that not buying these higher priced goods. we saw something in the jobs report that indicates that trends that's something taken hold of the industry general merchandisers the employment in general merchandisers has been down month after month but transportation and warehousing actually pick up that's really the shift in the value chain from physical stores to shipping. >> what's the main interest from td clients particularly the retail clients in these new ipos do you fine there's undue interest in them when they are also consumers of the products that they want to get exposure to the stock >> we see td america clients go in they are more familiar they get what's behind the business model
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we see td america trade clients come out we also have some clients in a lot of our active wait for options to get listed and let derivatives trade these names. it's not unusual to see that action be one of the top traded derivative names >> some of these names, when we get these lock ups expiring in coming months. >> absolutely. >> 33 minutes up to close of trade. market are trying to get up. but we're just lower for the nasdaq, s&p and dow. russell which has underperformed for the week slightly higher president trump make being new comments on drug pricing why that could be bad news for biotech stocks >> chip makers falling on a big warning omfr samsung could this be a good buying
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>> whereby to "squawk box" sorry i was thinking about monday "closing bell" 30 minutes left until the closing bell
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we're only lower bio.13% the nasdaq is trying hard to go positive it's down six basis points here are three things. stronger than expected jobs report ten year yield back up over 2% financials are leading the market higher. >> that music we just played for you not just an ode to summer but foreshadowing santelli >> i never heard them. >> oh, my gosh you need to like cue it up and start mixing it up on spotify or apple music whatever you're using. >> i can hear it playing it was an old song. it was recorded when >> we'll move on to. time for a news update >> from the 1950s, will. here's what's happening at this hour police say that they now have found and identified the body of
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mckenzie that went missing after taking a lyft from salt lake city airport to hatch park a suspect has been charged with aggravated murder in that case an iranian official is making a big threat towards the united kingdom over a detained oil tanker british royal marines stormed the vessel which was believed to be carrying oil from iran to syria last week. in a tweet the official said iran now has a duty to reciprocate by seizing a british tanker record setting heat in alaska is fueling several wildfires. video from the seat's national guard show water drops from a black hawk helicopter over the montana creek fire which has now burned 247 acres and legos may be going green. the famous toys popular with kids are made of oil based plastic which emits carbon dioxide during production. lego says it's testing new methods and 2% of its bricks are now made with believe it or not
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sugar cane that's the news update this hour guys, back to you. i love that story. they've been working on this for a while. actually i think fun factoid the materials, the plastics they used to make their legos is the same in the auto industry. they've been affected by demand for all the new plastics that go into autos >> who knew you knew so much about legos. >> the toy fair from a couple of years back home. >> back home it doesn't have an s at the end, just known as lego >> unless you step on it in the middle of the night because your kids didn't clean it up. not so much fun. right? >> i can imagine >> see you next hour >> let's send it over to mike santelli who will be singing a song for us. >> it's being sung now
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morgan can tell you what the song is about. why i'm using under the boardwalk phrase is to look at earnings estimates the estimates for 2019 this is earnings growth forecast for the last several years you see each of these lines is a different year here's 2019. it has fallen underneath that boardwalk. that's 10% expected earnings growth started at 10% and decline close to the zero line not quite what's interesting is 2020 still holding up is that realist i can? maybe not. depending how the back half of the year goes. i go back to 2016, potential model for the way this year is going in a lot of respects look what happened in 2016 did you have a steep decline much like 2019 and then it flattened out. it plateaued the worst expected hoping the earnings plateau and not go off a cliff
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earnings reports next week >> valuation levels to support that are not too stretched at the moment >> very similar to 2016. about 17 times forward of course that pe is only as good as that e is. i would say it's not the reason you would buy stocks stocks are not cheap unless you're talking about relative to where bone yields are but certainly not particularly expensive relative to how they were in early 2018 either. >> another chart mike santelli that backs up the case you made about how similar this time period within the market is. >> other people are on this one. it's amazing how it keeps rhyming. >> mike santelli, thank you. >> biotech stocks tick a leg lower after president trump said he's preparing an executive order to bring down drug prices. >> years and years other nations pay less for drugs than we do sometimes by 60% we're working on it right now. we're working on a favored
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nations clause where we pay whatever the lowest nation's prices why should other nations like canada, why should other nations pay much less than us? >> let's get to meg terrell. >> reporter: it started to tick lower. in conversations i'm having in the world of biopharma they are spooked. not because the order will be enforceable but it could enamel the president is pushing to get something done the executive order trump said he's close to rolling out would introduce a favored nation clause where the u.s. would pay no more for drugs than the country that pays the least. one example is hepatitis c drug which costs $84,000 in the u.s. when it first hit the market and $900 in egypt. what i'm hearing it's more
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likely trump is trying to push forward an idea that would put the prices of certain drugs covered by medicare tied to an index by other developed countries. some companies most affected are showing it in their stock prices today. like regeneron and alexion >> i imagine the volumes sold in egypt is lower prices would get forced to rise in emerging markets. >> reporter: the president wants to see other countries not necessarily developing countries but wealthy countries pay more and for to us pay less what i'm hearing from folks in the bioindustry is these reference price ideas is making them reconsider whether they introduce new drugs into these markets if it comes into play. could lead to access problems around the world if these kinds
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of rules in the u.s. come in to place. >> meg terrell, thank you. sean, what do you think especially when you see it trading lower. every time the president comes out and make comments about reform to health care. >> it's a head wind many expected we're not getting pressure politically but pressure from health care providers to bring cost down. if you're looking at these drug companies that have drugs coming off patent they are trying to get more in the pipeline while you have pressure on revenue and potential for expenses to maintain stable or move higher it will be a hedge wind one thing companies are doing is giving more m and a into these biotech names. pfizer has done it merck has don't. rather than going out there trying to get these new drugs out there to market they are using more of an acquisition, buy versus build strategy. >> whether it's drug makers or
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other areas do you see opportunities? >> you might want to see and wait and see where this lands in terms of what the specifics of this proposal are. i will say if you are looking at biotech, when you see m and a come in to any sector it usually causes premiums and multiples to expand across that sector. could you see that provide a little bit of a bid in biotech look at the allergen deal. if some of these drug companies go out there and pursue m and a they will have to pay a similar multiple, maybe not as high as 45% but no less than 20% to acquire these biotech's. >> a key trend and one to keep watching energy the worst performer this week. up next we'll look at two stocks plus amazon celebrating its 25th birthday. gerald storch lays out the biggest threat to the retail
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welcome back to the "closing bell". opec oil output hitting a five
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year low in jun despite rise in saudi supply joining us now to talk about the sector, founding partner at again capital. great to have you here on friday thanks for joining us. >> happy to be here. thank you. >> it's been an up and down type of week, volatile week for krud whether lo -- crude, whether looking at brent or wti despite that opec meeting earlier. break this down for us >> the opec meeting was somewhat anti-climatic. they didn't cut deeper they did extend it for a full nine months rather than six. so we're sort of settling in the problem the oil market has is really the global economic set up right now the asian economy is struggling mightily and getting hit hard by
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the u.s. china trade it's plunging. that's the bread basket for crude oil. heart of the matter. heart of the analysis for the demand side of the equation. you have this terrific head wind you also have some support here about obviously what's going on vis-a-vis iran and what may go down there there was a couple of moments over the past couple of weeks where it was, you know, are we going to fight tonight type of situation. some reporting that's coming on, i was noticing about u.s. military assets moving around the persian gulf this is a very, very nervous market but being held down by economic headwinds >> your point about the lack of global demand and gdp. i guess a lot of people say opec lost its power, lost its ability compared to years or decades in the past are they doing a better job than
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people would realize on the surface as the price might suggest? >> i would say so. they have brought down global inventories. global inventories are close to their five year average. they are looking to play with that benchmark a bit but, yes very much so i think it's hard for maybe the average sort of american to understand this or get a grip on this because our economy is doing so much better we're an island of prosperity. the world sees do we get to import this illness that's out there. i'll tell the data out there, the way crude is reacting to it speaks volumes and to the extent that the fed is looking to do one of these preliminary or preemptive cuts the oil market willive you justification for that >> it begs the question if you're looking at equities are there opportunities here or do investors need to stay clear >> mostly need to stay clear you need to pick the right banana off the garbage mound
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energy isn't waiting in the s&p 500. it's fallen to 5%. incredibly overlooked. so here's the stocks to look at. bp is one. all the problems they had from the big spill still is a l laggard. the refiners are really the other area to look at. bolero, marathon we lost a refinery on the east coast. a big mick cup for the marine fuels part of the margin to push up margins again you have to see if the problem children can work their way out of their mess. octob occidental is the other one they are trying to consolidate they could emerge. end up being a great combination
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for those two companies particularly after o cc i sheds some non-overlapping assets that annodarken has >> what do you like >> td america clients gravitate towards diversified oil. exxon, chevron it will be interesting to see how td america clients trade the occidental deal. there's a lot of volatility. i think how td america clients trade that over the month will be interesting to see. they do gravitate towards diversified oil majors now anything can happen in these final minutes of trade 13 left to be precise.
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and we are lower but only slightly still possible we could get gains for the day. nasdaq is only down 0.14%. up next your last chance trade >> here are the leaders in the s&p for the week "closing bell" is after a quick break. and you should be mad your smart fridge is unnecessarily complicated. but you're not mad, because you have e*trade which isn't complicated. their tools make trading quicker and simpler. so you can take on the markets with confidence. don't get mad. get e*trade and start trading today.
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we got nine minutes left for trade. down 50 points on the dow. what's your last chance trade? >> i'm looking at the banks. within the banks i'm zeroing in on price to tangible book value. take book value, back out patents you gate good idea where these banks stand. if you look at jpmorgan trading up at two times. bank of america about 1.6 times. interesting valuation values in goldman sachs and citi both trading down closer to one. those could be some interesting names to look at from a pe standpoint they trade relatively around the same pe level of nine or ten >> what's the catalyst they've all been cheap for a while as a sector. citi and stanley morgan have been cheaper than jpmorgan
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>> across the banking spectrum that margin won't kaerp these banks. more of a drop in that number. it will have to come from loan growth and quality of those loans. >> that's not going to help goldman. >> goldman on the most recent fed review came in pretty good looks like they might kick in more shared buy backs. that's something that could push the stock higher if you want to get ahead of that this is an interesting valuation level. >> goldman is up 0.15% banks lead the charge. thanks so much for joining us. we're keeping an eye on the major averages, of course. seven and a half minutes left for trade. they could break multi-day win streaks if they close lower or record closing highs if they end higher we're lower bio.2% we'll have all the angles coming up >> as we head to break here are the winners and losers in the
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mark final thoughts going into this weekend? >> i think it's very resilient that the market rallied back from down 200 points this morning after european markets closed i think going forward something that we need to reassure ourselves is the fact that pull backs are healthy for the market particularly at these levels where we're at record highs. as the market pulls back tradesers are locking in profits. they can re-establish new positions. traders sitting on the sidelines that are cash heavy or in bonds can actually reestablish positions in the market as well offering support i think going forward everyone will be cueing in on what's going on with the fed rate cuts possibly at the end of this month. next week on tuesday the fed chairman will be speaking on wednesday. we'll get the fed minutes on thursday we'll get cpi data and on friday we'll get cpi data all of that will be closely watched. >> that's all fed, fed, fed related. what other key things are you
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focused on >> traders are also very closely watching negotiations with china going on today we saw a headline again that china is now insisting that if the negotiations are going to come to a conclusion that tariffs will have to be stripped away that's a major obstacle going forward. however, i think traders as long as the u.s. and china are speaking, perhaps tweeting, and there's open lines of communication going between them that's all they need for now as far as s&p 500 earnings are going on, earlier this week we had a dismal picture painted for s&p 500 earnings going forward so one thing i think trader will be looking at is forward looking guidance and what the rest of the end of the year looks like >> mark, thank you very much let's sends it over to mike santoli. >> the summer within internals of the market getting blown around
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i highlight this because it's still slightly to the negative, slightly more stocks down on the new york stock exchange today than up. where this started this morning it was about four to one, tleen and a half to one negative i do want to take a look at the volatility index as well this is a one year basis the volatility index this morning as the stock market hit its lowest at 11:00 a.m. this hit a high of 14 and a half. added from there but still maintaining a bid. there's suspends in the fed story. we have j. powell testifying next week. pulling against that is tendency in july for the volatility index to go to sleep see where it was last summer even back in april back to 12. there's this push pull in volatility going into the weekend a slight increase bid in there because we now have a little bit of a back and forth debate on the next fed move and what powell may say next week. let's see what the nasdaq has to
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say. >> we're coming off all time highs ahead of the holiday today the small caps outperformed fractionally. for the week they are the l laggards those software names have been on fire. you heard from meg about president trump's comments impacting biotech having a good week coming in today we gave up the week's gains and those are amongst the biggest losers the issue is whether he'll do international pricing as a reference or push for that lowest international price >> you can argue the fed was thrown a curve ball with that better than expected jobs report we have come off the lows. the dow closed down 54 points. s&p 500 at 2988, also halting its record breaking run here on wall street. what led turn turn was large cap
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tech, financials and telecom even with today's negative session the s&p 500 still on track to close higher for the week by 1% there's the "closing bell" s&p 500 at 2990. welcome to the "closing bell". i'm morgan brennan >> i'm wilfred ross. markets missed out on a record all time closing high but only down bio.15% on the dourks little bit more than that on the s&p less than that on the nasdaq this comes off the back of those record highs we're off the lows of the session.
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dollar significantly higher by half of 1% >> markets were the outperformers. only gained half a percent for the week today financials, communication service, energy and consumer discretionary all positive coming into the close here today. health care was the worst performer on those comments of a potential executive order of drug pricing from president trump. we gceo. chris johnson, director at johnson research group and jason furman welcome to all of you today on this friday afternoon. santoli, let's start with you. >> resilient performance what's interesting is the reflex response of the markets stronger than expected jobs numbers told us how people were leaning in the direction assuming it would be very weak we've been sitting here for weeks watching bond yields go
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down and stay low. may crow numbers coming in worst than expected. we got 60,000 more jobs than anticipated. that happens mono. that's not that extraordinary. the market was up for worse. couple a couple of hours later things didn't change that much bond yields didn't take off to the upside we didn't have to adjust too much right now it's a pretty resilient performance. jason the excuse would have been we may not now see a fed rate cut later this month. what was your assessment of the jobs number and how strong it was? >> look, anyone who last month thought we were head into a recession based on one number and now in a boom on one number need to recalibrate and out how to average over time last couple of months is
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consistent the thing that gives the fed a lot of space in this jobs report was the low wage growth number only 3.1% over the last year that's the reason if they want to cut rates in july they don't need to be worried about doing it >> jason, what do you make of the lower than expected wage growth number. we also saw labor force participation rates tick higher. saw unemployment rate tick slightly higher. is the takeaway there's more slack in the labor market? >> six months ago we were at nearly 3.5% wage growth. less slack now than six months ago. you expect wage growth to pick up instead it has fallen. part of this is what hot economy looks like in a world of low productivity growth. not getting productivity growth hard to get the wage gain even
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with the type of tight labor markets that we have now >> it is a holiday weekend it's amazing how well after today, when they looked at it they said on the average days one data point does not change the fed's mind there's lots of other signs ever weakness globally. now accepting interest rates or inflation is probably nine for the foreseeable future they don't have to worry about raising rates. however i wouldn't be surprised if we had a bit of a pause or pull back. you have rich valuation at 17 to 18 times we had somewhat positive encouraging trade news but nothing done and may not be for at that rolling multi-year process. you really have the fed cut in the market at this point the question then is what's next what's the trigger for up or down >> what do you think is next
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here sydney realize the major averages closed slightly lower today. in general coming off these record highs we saw earlier in the week, despite it's climbing what one could categorize as an on going wall of rates >> what's next scene,. we had a lot of companies who came and set the stage for expectations being lower go back to the trade situation right now. we heard the first rumblings after the g-20 summit. when you look at interest rates and whether or not fed will lower. i look at this from the progression of 15, 20 years. in 2000 the fed we had a lower target that was 6.5% in 20075.25% now we're 2.5% the fed has to think how much of that gun powder do they want to keep dry from 2.5 to zero is smaller. the fed is doing a good job ever
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trying to ease off expectations and that's why you got a market that will kind of jump when the earnings report or i'm sorry the jobs report is good. all of a sudden hey maybe they won't have to do anything. this will continue to be a traders market through the summer and earnings will be your next catalyst. >> earlier today federal reserve nominee judy shelton appeared on "squawk" alley and gave a warning about the fed's interest rate policy. >> when you consider that more than half of american households are invested through mutual funds or pension funds in this market, i don't want the fed to pull the rug out from under them by taking a position that is not conducive to further providing a liquidity for this growing economy. >> jason, what's your take on that as to how important a factor for broader economic liquidity the stock market is and do you feel like the fed is focusing too much on the stock market itself?
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>> look, the fed was assigned two jobs maximum employment and price stability. to add to them the highest possible stock market is just more than any one group can do and, in fact, if you want the stock market to do well, do well on your core job, which is maximum employment and price stability. i think it's really reckless to go out there and say the fed should be trying to boost the market, you know, create a bubble, you know, create financial instability and the like the fed needs to focus on its mandate. do what it thinks is best for employment and prices and ignore, you know, what the stock market wants it to do. >> do you think that the fed is doing that or do you think it has already started to focus too much on the stock market >> i think it's backed into a little bit of a corner and while i think a rate reduction is reasonable? i don't think it's super
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important, frankly at this stage. i think they've gotten nervous that with trade wars plus where the stock market is, plus southeast other uncertain global signals that maybe they need to supply some sort of put for the market and the economy as a whole. so i think they might be taking it into account a little bit too much look, they resisted the pressure to cut rates at the last meeting. i think they are looking at the macro data make being their choices and that's what they should be doing. >> barbara, do you agree >> yes, i doctor actually. it's interesting because judy's remarks to me she is focusing on the stock market as we know the president does or assume he does by various remarks in the past for investors that's a positive. it's a way reassuring they will step up whenever they need to. i agree with jason it's been about the trade wars and uncertainty and over a bit of a barrel not knowing what will happen. trump may be playing that knowing what he can do in trade and the fed will take up the
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slack and save the day >> it's interesting. you can really dial back and if you were able to ignore a lot of the commentary the fed's last move was to raise rates in december has done nothing for seven months >> a lot of jaw boning >> right a lot of talk some guess during in the way of easing let that moment pass when they can push back against the market's expectation of 25 basis point cut at least this month. the reason for that probably is that there's also this very long simmering inflation debate that's now come to a head. even though inflation hasn't changed that much in its trend it's risen to the surface because there's enough folks looking how we can proactively prevent this slow down deepening in to something worse. >> jason, i want to finish with a different type of question if the economy is roughly where it is today in 12 months time do you think it should be something that democrats focus on or not
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who will it fare well for them in their election campaign >> i hope whoever is running for president will explain what they will do to strengthen growth >> do you think it's something democrats should relegate lower down because it's strong >> absolutely not. you know, i think a lot of the growth we've had is cyclical growth we still have low potential growth we still have a lot of people left out there's a really important message, you know, what the democrats could do to strengthen the economy for people and i hope they focus on that. >> okay. jason, barbara and chris thank you very much for joining us up next, we will look at which chip stocks are still worth owning plus today is amazon's 25th birthday former toys "r" us ceo gerald storch will tell us how amazon
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changed the world of retail.
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>> welcome back. stocks selling off on concerns the fed may not cut interest rates in the wake of the strong june jobs report we look at the big movers here
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at the new york stock exchange and nasdaq >> reporter: stocks ending lower after today's surprisingly strong june jobs report raises uncertainty whether policymakers will ease at the july fed meeting. the july fed fund meeting shows rate cuts have come down bond proxy, utilitys, real estate, gold sold off in today's trade. banks did pretty well with a 10 year yield back up over 2% the question is can it stay there. focus will shift to powell's testimony, earnings and inflation data inflation data will be key if it comes in better than expected that conversation around whether the fed's next move includes a rate cut will likely get a lot more attention. back to you. >> gearing up to be a big week next week. tech stocks leading the nasdaq lower >> reporter: leading the nasdaq lower today but leading it to an all time high this week. for the week the nasdaq 100, largest cap best performers and
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really those mega caps that provided the biggest impact to the upside microsoft really helping to lead the software players to be the real stand out in tech this week that sector up 3% for the week as far as the biggest gainers on a percentage basis, symantec i have to take this call must be a robocall >> thank you have a lovely weekend. good luck on the call. samsung finishing lower. other chip stocks closing low on the warning include
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nvidia and micron. >> gentlemen, good afternoon to you. sam, i'll start with you are these worries that we've seen today in terms how the semis traded overblown right now? >> i think so. you know, there's certainly some pessimism going into second half 2019 but also green shoots. you saw optimism in microsoft's forecast applying materials, acquiring, some bet on recovery here but regardless whether the recovery starts in the second half 2019 or going into 2020, i think long term the demand is there, whether it's 5g, ai, rising demand on chips >> what's the relevant read across for the u.s. tech names from samsung this morning because, yes, things were down significantly year-over-year but
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revenue is only down 4% year-over-year both lines beat relative to where expectations had got so are things priced in to the u.s. stocks? >> i'm not sure there's a real broad reed through with u.s. technology certainly one can point to a couple of areas with memory chips what does that say about the supply chain and semiconductors and by extension u.s. stocks. we don't own any stocks that will be hurt in our portfolio. as we look at technology in the united states, these are more secular growth in nature some we're not subject to the secularity and less focused on the u.s.-china trade war which is the semiconductor stocks are right in the middle of that. i would be careful with the read thr throughs it's a samsung specific issue. so, jason, if you're looking for growth in tech but semis
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aren't the place where are you investing? >> really great question you can find some really good stocks in software you can see them in cloud. certainly in areas like internet, alphabet is a great stock that we own. secular growth in nature and trading 20 times forward earnings apple is still a nice relative value trading around 15 times earnings you know there's a lot of people too bearish on apple i think there's a real exciting story to be had. there are opportunities to be sure in areas outside of semiconductors that are more cyclical growth in nature. >> the fang names you like google >> yes, jason hit it on nose with alphabet. long term cyclical growth. reasonable expectation there's really not a lot not to like about that stock. >> give us some other names. >> one stock really bullish on
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is lumentum. they are best known for make the component of apple space technology there's bearishness there with the cell phone growth. there's opportunity to translate that technology into other cell phone makers, other applications and they are strong in the optical component sector for telecommunications, i think 5g is a big growth driver for them as well. >> yeah. might be short term pain or impact from this huawei u.s. china trade situation, could be a good long term play. coming up former toys "r" us u.s. ceo gerald storch gives you and outlook for the second half of the year. >> and why investors may have to wait until september for fed to cut rates. >> tell me you know this song.
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oh, wow. you two are going to have such a great trip. yeah, have fun! thanks to you, we will. aw, stop. this is why voya helps reach today's goals... ...all while helping you to and through retirement. um, you guys are just going for a week, right? yeah! that's right. can you help with these? oh... um, we're more of the plan, invest and protect kind of help... sorry, little paws, so. but have fun! send a postcard! voya. helping you to and through retirement. ♪ see you in september. "see you in september. rid century, summer love song, springs us to four out of four i don't think today's jobs number really did get rid of the
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possibility or probability of a july rate cut. but if you look at the internals of the employment situation you might think there's a debate to be had as whether they skip july and see if september is another choice we talked about some softness in the average hourly wage number yes that's true. it's off the highs there's not much to be said except if this trend remains higher it's above 3%, i don't think it's necessarily the reason why the fed was going to go, you know get tighter this year but certainly not calling out for easier policy. then look at the work week which is the number of hours worked that has been in a little bit of a down trend this chart suggests it leads gdp growth blue is gdp growth orange is the average weekly hours in the private-sector. this has said down here that suggests gdp is trending lower towards the very low single digits one note on this, look how many times it has gone down and the
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blue line didn't do much not a perfect one to one to show direction. doesn't show the absolute prediction of where gdp is going. something to keep in mind of the fed trying to stay ahead of any further erosion in the economy >> would the market even be spooked even over the next couple of weeks we don't gate dire set bank earnings or trade rhetoric getting markedly worse? >> you would have to have a little bit of an adjustment period you have to say okay are yields going up what's the dollar going to do? all these other things that have to move around because it's not clear to me that earnings expectations are low enough right now that they on their owner supporting the s&p at 3,000. that's what we have to see there's no telling it would be a game changer for the market if we didn't get a july cut >> thank you brilliant song choices i'll learn them this time next summer time for a cnbc news update. here's what's happening at
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this hour. a citizenship question may still end up on the 2020 census. lawyers for the justice department told a judge earlier today the administration is not giving up its fight despite last week's supreme court ruling blocking the question. pro bowler and former new england patriots leaderboard teddy brucy is in the hospital after suffering a stroke yesterday. his foundation teddy's team tweeted that he's recovering well it is his second stroke. the first happened when he was just 31 years old and still playing in the nfl officials in south carolina say this was not a planned fireworks show but rather an act of arson the fire which began just after dawn on july 4th appears to have been set in storage containers holding dozens of boxes of fireworks. and bon jur. after 13 months of wasting a zien paris welcomed this five foot tall baby giraffe earlier this week.
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and odds are he'll get much bigger 13 months of wait. average pregnancy is 13 months >> gestational period which makes you glad you're human and not a giraffe. >> especially since he's five feet tall already. >> he's so cute. >> what was the pronunciation of that >> baby. >> there we go >> that's the best i could do with french. my daughters speak it, i do not. i give it my best shot >> i thought it was great. it was perfect >> sue, thank you. have a lovely weekend. >> still ahead democratic presidential candidate beto o'rourke telling cnbc about his plans to finance veterans benefits by taxing americans who never served in the military >> plus president trump taking aim at the fed again ahead of next week's congressional testimony by chairman jay powell we'll have a preview later on "closing bell" for your heart...
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♪ ♪ teenage dream the way you tur me on ♪ ♪ i can't sleep ♪ let's run away >> i heard of this song. written in 1847. i heard of it. welcome back school may be out for summer but the teens aren't lining up for work like they used to >> reporter: that's right. teens these days have a lot more on their plate if you take a look at this chart, the labor force participation rate the share of teens who are either in the workforce or looking for work was about 40% the past few sirms, about ten years ago it was at 50%, ten years earlier in the late '90s it was up to 60% the shift has happened as the same time as summer courses has gone up from 10% in 1985 to 40% last summer in july. anthony bannon says he sees the shift in his business at ashbury
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park teens have more on their pilates and less availability. >> kids are scheduled. they are not playing basketball for four months a year they are in four basketball leagues in summer and aau. they are scheduled from january 1st to december 21st with s.a.t. prep, college interview prep, three different sports they are playing all year long. clubs. >> reporter: as a result he's actually worked to recruit even younger teens ages 114 to 15 with working papers here in new jersey mcdonald's partnered with the aarp to fill 250,000 seasonal summer jobs across the country this year as teens become less available they are looking to older workers. >> one of the best educations i got as a teenager was working in the service industry i can't say enough for having a summer job the fact that there's less supply in terms of some of these
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teenagers who are available to work these summer shifts what has it done to wages >> reporter: i will second your point. i learned a lot at dairy queen that was one of the jobs i worked at. wages have to be competitive for these teens. anthony told us he starts southeast workers who come back for a second summer at 50 cents higher than the minimum wage lawmakers in massachusetts are looking at a teen minimum wage of $11 an hour, $1 less than the state minimum wage through this proposal you can pay teens who work less than 90 days a little bit less some people don't want to pay that high wage on par with older workers for kids who are less experienced and may not wind up coming back. >> i love it were you generous with the toppings or not? >> heavy handed? >> reporter: you know, i had a few friends who lost jobs after being too heavy handed you got to be generous but also walk the line there.
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but, if you showed up and i was working depending, we could hook you up >> extra scoop of the candy in the blizzards. >> reporter: exactly >> knows how to turn them upside down >> thank you what was your teenage job? did you have one >> i was a farmer for three months i worked at a newspaper. my favorite i worked in the press office for two summers at my soccer club that i support. >> arsenal >> pretty dream position >> fancy >> i didn't earn anything. it was experience and fun, frankly. >> how about you >> mowing lawns. worked at burger king for a little while >> me too. my dad is a franchisee >> you had a record contract at one time >> yes that happened in my teen years and then there was restaurant jobs in between. >> pretty cool, though pretty cool either way
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>> very different kind of music industry up next amazon is 25 company celebrating its 25th year in business what could the next quarter century have in store and what could it mean for the retail sector >> we'll discuss with gerald storch (in dutch) it's happening..! just ok is not ok. especially when it comes to your network. at&t is america's best wireless network according to america's biggest test. now with 5g evolution. the first step to 5g. more for your thing. that's our thing.
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welcome back to the "closing bell". it's been 25 years, quarter century since jeff bezos filed paper work to create the company that would become amazon what could the next quarter of a century hold for the ecommerce fine we have a look at that >> amazon begins this next chapter as one of the biggest and most influential companies in the world and most controversial. during its first 25 years amazon disrupted a number of industries from publishing and retail it basically pioneered cloud executine i computing. the next 25 years they could shake up groceries, advertising, and brick-and-mortar whether it becomes a leader in these industries not a sure thing and with more scrutiny and criticism than ever it could
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face more challenges than ever take delivero. amazon invested after closing up its own food delivery business, the competition regulator put plans on hold. amazon is face antitrust backlash here as well which could make it difficult for amazon to grow as quickly as it has over the last few decades. could it turn the tables and disrupt amazon's own structure as lawmakers like senator elizabeth warren call for a break up of big tech guys, this really goes amazon strategy that we've seen merge over the years will it be able to do these m and a deals with the level we're seeing >> when you talk about being disruptive to its own structure the possibility that it breaks apart, keep parts of its business to realize greater value in the future. >> yep amazon said it wouldn't want to spin off something like aws but elizabeth warren calling for a
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break up of big tech companies it seems ripe for the picking. >> talk of 25 years real knives that driven the stock price to high as of late the bulk of the stock price is aws >> yeah. >> which i guess is a totally different field to what was originally founded >> i think you were making this analogy earlier with uber who hasn't found its aws maybe that's self-driving cars and maybe that's when uber becomes profitable that's what has done it for amazon investors have rewarded the company for it so you have to wonder if investors will continue to be patient for the next 25 years. amazon has proved itself once before finally created aws all on its own. in groceries or advertising which is on its way of doing >> another key question mark which wasn't in the rundown is the transportation logistics piece of this. we're talking about something like delivero and
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brick-and-mortar >> that's a very good point. i mentioned food delivery. who could challenge in this space. who has network? amazon has that network. they have this fleet of cars and motorcycles and bikes delivering packages across cities why couldn't they do that with food delivery ate tougher business than you would have thought >> here to discuss a little further gerald storch former ceo of toys "r" us and hudson bay. thanks for joining us. great to see you in term of your bread and butter in the retail industry, to what extent was amazon's growth in that area supported by their later innovations whether it be video online or aws? >> well, as a retailer, we had to make money. they were losing a lot of money. but, i had done deals with jeff bezos. i've been his partner. been his competitor. he's very fierce
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i would never under estimate amazon they have changed the world of arresting. even when they were smaller, everyone chased after them the net effect has been is that retailing is not the business it was back then. it requires far more capital investment to compete because you have to have both great stores better than ever which are very expensive and great internet in order to compete which is very expensive. meanwhile sales shift from the stores to online you have negative arbitrage in profitability. could you make as much as they do it's not very much they changed things. there are winners and lowers you have discount chains like walmart, $agadollar general, coo they can put on a good show. other companies where their basis for competition no longer works. the entire department store sector suspect what kind of model is it to offer goods available every
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where. it was good enough because humor than anyone. now don't. amazon has more than anyone. a lot of category kills in the same boat. used to compete by having the broadest assortment. now amazon has the broadest assortment i would never sell them short. it's not a matter of subsidizing what they've done online they've had pretty good cash flows. now they are shifting ecommerce model towards more profitable one where two-thirds is marketplace sellers where amazon makes money even if a seller loses money because it makes money as a percentage of their sales in that business so you see advertisement very high margin. highest share in search. i would not sell them short as we look to the future. >> we talk so much about the amazon effect and how much this company has disrupted and shook up everything in retail to its core but there have been some names both in retail and also within ecommerce that have been,
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you could say, amazon proof. how should we think about those names in the future and can they continue to have that mode >> you can still win here are three categories of winners. these are low cost competitors who offer a great price and made the investment in ecommerce where appropriate. walmart doing great. there are reports this week that they are losing a billion dollars a year on ecommerce but have finally drawn the line in the sand and making that investment and doing very well as a company overall the model is working walmart. target is doing fantastic. costco is just, you know, knocking the height off the ball they continue to do fantastic in their business tj maxx is worth far more than walmart. dollar general is lighting it up other winners are those that have differentiated product so that margin can't be auctioned away on the internet because you can only get it from them.
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nike, lululemon. chanel any ecommerce companies that focus on proprietary products you can only get from them finally, a category winner is the arms merchants those selling products those combatants in this vicious war that's taking place. certainly have people operating marketplaces beyond amazon who is the biggest one etsy, for example offering a marketplace. making money on the revenue side it's up to their ecommerce third-party operate orto figure out how to make money. other people giving services like google or amazon itself but like advertising or technology to the combatants. people like microsoft or apple technology to this great war they can win plenty of people can win every time when the department store numbers come out people go oh, my gosh retail is in trouble. retail is not terrible but you
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need a business model for the future not one of the past >> great to get your thoughts. thanks for joining us on this 25th birthday of the company still ahead, presidential hopeful beto o'rourke gives more details of his so-called war tax to help veterans that's coming up next. >> and coming up on "fast money" stocks are near record highs but carter worth says there's one name sitting out on the rally outo break out catch that at the top of the next hour. more "closing bell" still ahead. your daily dashboard from fidelity. a visual snapshot of your investments.
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welcome back the veteran unemployment rate hitting 3.2% representing the lowest rate in the month of june since back in 2001 meantime democratic 2020 candidate beto o'rourke has a plan to finance veterans benefits to tax those who haven't served in the military but economists have questions about the plan >> right now we've asked fewer than 1% of our fellow americans to serve in the wars since 9/11 and the financial cost, the economic cost of that we've placed on this country's credit card to be borne by this and future generations what i'm proposing is that the next time we decide to go to war we fully pay for all the costs of that war as we're waging that war including making sure that we made investments in the care for veterans who will have won the battle
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>> have you and economic advisors you're relying on thought through how you define what families are exempt and what are not >> here's a simple way -- >> is it just -- does your dad count or it is your kid? if you are a veteran, if you're an active duty service member, you're not going to pay into this veterans trust fund >> whenever you were a veteran >> yeah. an immediate family member in that household we know that when someone from the household serves this country and goes to war everybody in that household serves this country and goes to war. so your spouse is not subject to this tax so it ensures that those who have already paid the price are recognized for their service those who are currently paying it by being deployed have investment made to ensure we're there to meet them when they come back. we'll spare no expense, bear any
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burden but that the other americans who have been able to not have to bear the cost of these wars have to contribute something as well. >> guys, this is onlybet owe o' tax agenda many he also wants to reverse the trump tax cuts, take the top personal rate back up to 39.6% where it was under the obama administration, take the business tax rate up to 28%, tax dividends the same and increase taxation and not let people skate past the capital gains for assets they inherit. >> it is interesting to hear this proposal because when you look at the proposed fiscal 2020 budget it is a proposed 9 1/2% increase from fiscal 2019. it is one of the biggest budgets among the federal agencies i don't think there's anybody in this country that would argue
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that our veterans are not -- you know, could be better taken care of but i just wonder in terms of how popular this proposal would be or what the traction would be if so many dollars are already added or allocated to this issue. >> right i think the broader point he wants to make beyond the narrow question of funding services -- and obviously money is fungible. so any money raised by the tax, as he said in the interview, helps defray the cost of the wars we engage it of in. i think he wants to make the symbolic point about shared sacrifice and the fact we have such a narrow group of people who are drawn into military service or who volunteer for military service and bear so much of the costs and they bring that home with post-traumatic stress disorder and a lot of medical difficulties walter reed is full of people maimed as a result of their service. i think that's the broader point
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he wants to make, not so much only about the money itself. >> john, is it fair to say he is trying to frame himself as one of the more centrist candidates that is announced on the democratic side, but that the momentum is with the more progressive candidates at the moment >> well, wolf, i think that's exactly what he's trying to do i think it is interesting. it was a little bit of a mystery when he got the question at the debate last week, do you support 70% tax rate, as alexandria ocasio-cortez has supported, he would not answer the question. it made people wonder. he clarified in this interview, no, that's too high. i think the centrist lane in the race, it is a pretty powerful lane joe biden is leading the race, but he was hurt in that debate, and if he should falter there are people who might be positioning themselves in order to inherit support that he would lose, and beto o'rourke is one of those people. >> john harwood. great stuff. thanks for bringing it to us. >> you bet. >> he was hungry in this one
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bites in every clip. >> enchiladas, no less up next, your wall street look ahead ate key things you need to wch for as we head into a new trading week when "closing bell" returns. to a single defining moment...
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welcome back to the "closing bell". let's look at how we finished the day on wall street all of the major averages finishing in the red, though well off the lows of the session with the dow finishing down just under .2 of a percent. the nasdaq finishing down a tenth of a percent the russell 2000 small caps finishing higher keep in mind holiday, shortened trading week all major averages finishing higher wall street's look ahead to delta airlines look ahead next week phil lebeau has that for us next week. >> when delta reports q2 earnings the numbers will be strong remember, the company revised its guidance, telling investors it expects earnings to come in at the high end of its initial guidance that's in part because they had record traffic in june, and the revenue numbers, they will be strong so what is the focus when they
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report earnings next week? look at the international markets, in particular what is happening with china there has been some concern that that market might be slowing down, but overall expect strong numbers from delta when it reports earnings next week >> phil, thank you fed chair jay powell set to testify before congress next week el ylan mui with that >> reporter: like investors lawmakers will want to press powell on whether the fed will cut rates later on this month. given trump's persistent criticism of the fed, you can bet they will want assurances that the central bank is independent. powell probably will get questions about the previous undisclosed phone call from president trump from back in may. the second day of hearings also bears close watchings. investors may be able to pick up hints of what senators think of trump's new fed nominees during the conversation back to you.
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>> ylan, what has been the traditional reaction in d.c. to the nominations? >> reporter: not much of a reaction most lawmakers are back in home districts talking to constituents i suspect we will hear more once they come back to capitol hill and get to work. >> thank you very much for that. mike, on the testimony next week, will we expect a serious hint as to what they're thinking about for july >> i would expect he is going to reiterate the, "we are ready to act as appropriate," which was the language from the last fed meeting, which has been coded or interpreted as a message of, you know, our next move is to ease and we're listening to the market's expectations on that front. so i do think that today's job numbers threw a little bit of a curveball into this sense of absolute certainty of how the fed was going to act we'll see how he -- i doubt he wants to send an absolutely clear signal that the next several moves is already in hand i mean it really is they want to preserve optality. they want to stay patient if
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they can although it is interesting. here we are 3 1/2 weeks before the meeting and you have a persuasive case they don't have to move, a persuasive case for 25 basis points, some saying we might as well go a half point. it has not changed after the jobs number. >> it is amazing coming off a week with record highs for the major averages, a stronger-than-expected jobs report today i think the stakes are that much higher for what he has to say in front of congress. >> probably so, though interestingly the markets were priced for a scenario where we are likely to get some easing from the fed, but we're not -- not because we really need it. so the fed is not going to rescue anything, that's kind of the way things are shaping up right now. maybe investors can get lucky with this bet that you don't have to suffer all that much before getting at least a little help from the fed. >> mike, the all-time record closing high we got on wednesday, obviously broadened out, all three indices took part. >> yes. >> we have seen almost all of the sectors high for the week,
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only energy lower. do we need to see the russell start to take part as well >> it wouldn't hurt. in general hard to find fault with the nature how the market got to this point. there was some broadening out. you are seeing more new highs. obviously, sure, why not let's have the russell join the party, but it is not obviously that we need it. >> great stuff, mike thank you. that does it for "closing bell.." >> "fast money" begins right now "fast money" starts right now live from the nasdaq market spice overlooking new york city times square tonight on "fast" awarning fro samsung sending shoulders across the space today. the group down 10% from the highs. plus, stocks near records but one name is sitting out the rally that the chart master says is about to get a reboot hint, hint he will tell you what it is. we will start out with the markets putting on its own fireworks show and staging a reversal, the do

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