Skip to main content

tv   Closing Bell  CNBC  July 9, 2019 3:00pm-5:00pm EDT

3:00 pm
foxconn deal tell us what you think >> your first clue was keep your lips sealed or something like that, now it's this. i don't know we can't wait until tomorrow thank you, scott cohn. thank you for watching "power lunch," thank you scott for boin joining us today welcome to the closing bell, i'm will frost 3m is down 2.5%. where they got a downgrade from an analyst we have everything you need to know that call and all the other broader action movements with 59 minutes left of trade. >> let's get to what is driving the action in the final hour, lower for the market mainly, investors are await powell's testimony tomorrow fang strengths and transports are weak joining us is ian winer.
3:01 pm
welcome to you you and i were chatting about the new space spot that we're going to talk about. how is that indicative to risk in this market. >> you have a spak, which people doing it as long as i have they know the history but it's essentially a blank check to merge with a company that's going to take people to space. >> what does that have to do with the fed >> it has to do with the risk mentality of people out there. if the fed is going to drive rates down to the negative, people are going to go out and try to find investment opportunities and i think this is the perfect metaphor what we saw in the markets the facts we're talking about stocks like chewy shows the mentality here of how people are thinking. >> lots to discuss over the next
3:02 pm
hour welcome back. >> great to be back. wouldn't miss a pepsi earning day. mike doesn't hear it's an important company. >> the word he used is "improper" hp his words not mine morgan brennan has galactic's plan to go public. susan has details on a trade rift between president trump and india. morgan, let's start with you. >> you laid the ground work with the chitchat about space so virgin galactic and sophie are merging to form the first publically traded human space flight company, sch will invest about $800 million for a 40% stake. so virgin galactic charging $250,000 to take tourists to the edge of space. this is a service that expects to offer in a year
3:03 pm
over 600 people signed up. this will be one of the big new industries of the future >> the market is enormous, the amount of people that would love to go to space is enormous once we have a lot of spaceships, it'll enable to build a lot of space ships, the price will come down and that will increase the market more. >> they're also invisioning hyper sonic travel around the world. meantime, expect this company to be profitable on an analyzed basis by august of 2021. >> are they ahead of jeff bezos and elon musk? >> everybody focussing on space tourism in a different way i would say they're ahead of blue origin, which is the most direct comparison, tourist flights to space, to the edge or past the edge of space, because they have done two of these with
3:04 pm
people on board. whereas blue origin has not yet done its crude test of its vehicle, they're expecting to do it by the end of the year. more or less, you'll see both of the companies if all goes according to plan beginning to bring paying customers to the edge of space. spacex is the orbatable side of thing, so is boeing. both of those companies got the green light from nasa to bring private astronauts to the international space station as soon as next year. turning to boeing. new numbers out for the month of june phil >> we did not see a good month in terms of orders for the 737 max, which has been grounded since the middle of the march, in june no new orders for 737 max. that means three straight months
3:05 pm
with zero orders for the plane the bag log has dropped by three planes that's the order side of the business on the delivery side, look at thousand things have slowed down just 113, 737s were built. their deliveries way off compared to last year in the first half of 2017 why is that important? look at shares of boeing versus air bus. air bus out with order and delivery numbers today, air bus is on pace for the first time in seven years to deliver more commercial airplanes than boeing and that partially explains the split between the two stocks there in the last month and a half >> thank you we're watching two stories in the food space, pepsi co and general mills. what can you tell us >> i can tell you folks are ingui indulging in snacks and sugary
3:06 pm
drinks just smaller portions. pepsi co highlighted 4.5%. and people are buying smaller stacks, which means pepsi gets more out of the growth pepsi is growing led by small cans and new flavors and quaker oats saw growth this year not so much the oatmeal but other pantry items we talked to the cfo, he said most of the portfolio of snacks and drinks is working well in most corners of the globe right now. listen. >> it is really broad based. we're seeing terrific results out of the frito-lay north vision beverages doing better and international businesses
3:07 pm
doing well, growing and emerging markets. >> check out the stock, the market has caught the story. pepsi is up 20% so far this year outrunning coca-cola, its arch rivals general mills has done better. they have their investor day the company's ceo stopped by for an interview to tell us what he's doing to drive growth in that food company. >> we want cereals that taste good americans are snacking more than ever and we have great cereals so we're doing well. >> do you think it comes back to its glory days >> it's improved eight quarters in a row it takes responding to consumer deman, that's why we've been able to grow it because we responded to consumer demand better than the competition. >> he did call out execution problems in the snacks business last quarter there was a drop in the stock
3:08 pm
missing key friends on breakfast bars i think the key take away is the companies are highly valued. it was years ago all about cost cutting. now the focus is on growth it's going to come from innovation, seeing it in pepsi, general mills, talked about the cinnam cinnamon toast crunch krture ro. it shows you don't have to make everything healthy and full of protein, there are other ways to do it. >> they're bullish about bubbly. what is bubbly is that a health play? >> it's a health play, it's a trend play this is the sparkling water brand announced by pepsi just in early 2018 it was basically nothing now the call, the ceo said can be a billion dollar brand soon and beyond that, national beverage, stock has been on a one way ticket lower and a lot of the
3:09 pm
focus has been because pepsi, through bubbly, and coca-cola through dasani and some brands are growing. and sparkling water is growing 20%. >> and pepsi stock today, what's happening there? initially it was strong. >> expectations was going to be good you saw the stocks so far into the numbers. i think people are shifting out of stuff that's safe and moving into risk assets so pepsi is not exactly the most exciting story they're saying health care premiums are never going down, basically. we will be discussing pepsi again later in the show. but let's turn to trade as the president sets his sights on a new target, india. >> there's another trade war brewing in asia, this time it is with india following what seemed to be a constructive meeting between the president and
3:10 pm
india's prime minister at the g 20 in japan. the latest tweet from president trump this morning suggests the u.s./india trade talks has stalled. trump tweeting india has long had a field day putting tariffs on u.s. products this comes as they put tariffs on 28 products in june with india taking a more protectionist turn, tensions are not expected to die any time soon. >> white house counsel economic director larry kudlow sitting down with kelly evans today giving his take on whether the fed should remain independent. >> let me say, i personally believe the fed should be independent. but that word "independent," it doesn't mean they operate from another planet and as arthur said, the fed
3:11 pm
reports to congress, and that's in the constitution. and the fed is appointed -- or the governors are appointed by the president. so i think in a day-to-day sense certainly they're independent. but that doesn't mean that they shouldn't listen to advice from their elders >> trump and kudlow both in their 70s, j powell in his 60s bob, as a market participant what do your clients make of president trump just hammering powell over and over again, but then larry kudlow coming out today and saying he's safe >> let's start with the kudlow comments i think that larry said it right. there are checks and balances in our system the fed is appointed by the president but then they report to congress. i love that listen to your
3:12 pm
elders you could reads it different ways i listen to my elders, they have wisdom from time to time sometimes they have wisdom, sometimes they don't i think that's how the fed would proceed. meanwhile the president loves to bash the drum on the feds as often as they can. i hope they stay independent in their minds. >> do you think they are independent. >> no. i would say every day it gets worse. he would have to be inhuman not to feel the effects of what's going on inside him. the president made it clear, he's jealous of countries that can press the button on monetary policies >> the president is incorrect when he says the other countries do that. so what exactly is powell falling under pressure on? do you think he fears he's going to be fired? >> i think he fears he's going to be fired, but more importantly i think there's a perception around him if the
3:13 pm
economy fails it's going to be the fed's fault and you can continue to see this picture being painted from everyone around the fed so i think there's a huge amount of pressure to retain the expansion, which means we're going to put our foot on the gas and press it more as we get closer to the election. >> if the fed lowers rates at the next meeting do you think those questions heat up? >> certainly the questions will be asked, why did they do this my view is the data will determine things they said that, i believe them the data says maybe we should take the december increase and take it back in lower rates. forget the independence decision, the question will be how weak is the economy then we have to worry about earnings once is fine, two or three times we have weaker earnings than most of us think. >> what do you think about
3:14 pm
equity markets in general at the moment >> i think equities are full one of our predictions this year was revenue and earning growth was too strong in the forecast for this year and next, it's come down a bunch this year i'm still concerned about next year analysts have earnings up 11% next year. my guess is it's going to be half that. i think we're moving into the earnings part of it. we talked about the fed and trade and that's not going to go away but earnings are going to matter in the next few weeks and i think they'll be mediocre. >> bob, thanks for joining us. >> thank you. still ahead we'll discuss virgin galactic's plan to launch into the market with tom farley. >> runs a spak of his own. >> he does >> levi set to report after the bell, second report since going public as we head to break, here's a check on our closing bell data
3:15 pm
tracker. the june small business optimum index came ahead of indications, 103.3. and job fell 7.3 in may. we're back after a break [ dogs barking ] what about him? let's do it. [ sniffing ] come on. this summer, add a new member to the family.
3:16 pm
hurry into the mercedes-benz summer event today for exceptional offers. lease the glc 300 suv for just $419 a month at the mercedes-benz summer event. going on now.
3:17 pm
3:18 pm
42 minutes left of trade here's a check on the dow. down 74. it got as high as down 58. unhp&g taking down the dow jones industrial average let's look at today's market dash boards. i miss these when i'm off. >> here's the lineup for today fan favorites is what we're going to start with. analysts are getting more excited about the potential upside for individual stocks hate the player, love the game that's the reverse of the typical saying but in this case i'll tell you why it makes sense when it comes to wall street
3:19 pm
hit lg for the cycle maybe a perking up of cyclical stocks and bonds looking juiced first fan favorites. facts that keeps track of the implied s&p 500 target if all the individual stock price targets among all analysts were reached if you look at the consensus right now, boil it down, each stock target if they got to that target, what would the s&p be at right now. this is the red line it would be at 3218. so it's about an 8% upside move from here. relatively aggressive but not extremely so this is overly optimistic, sometimes it's a couple percent down below that. one takeaway i have is it's flattened out, as the market has gone up that's the implied forecast in one year over the last couple months, so it's not gone up much it's not up much from here which would have been effectively one
3:20 pm
year ago back in the fall. so i think some optimism is perking up, but it's not yet quite to a point you'd say everybody is so bold up, an 8% move in the s&p it would be hard to argue with in either direction. but i would keep track of it to see if it gets more exuberant as we go on >> does it usually act as an indicator over the long-term >> not so much the magnitude of it it typically stays ahead of the market and is always a few percentage points above. on a one year basis it's a little bit more than 2% over optimistic but wide variation around that. if the market goes down 10% and this doesn't budge muches it looks like the analysts are saying we're having a huge snap back. >> analysts caution does that make you bullish >> not really i don't think they have an idea what's going on
3:21 pm
right now. i think it's an example how the multiple will expand or contract on the in number based on where the fed is, the china trade issues are. >> nobody noknows. >> nobody knows. but the more the fed tells you we're taking rates lower that expands. after the break, a downgrade for components, a tortilla problem for one chain. check out today's move in the peso falling off the dollar after mexico's finance minister resigned
3:22 pm
it all started under this buttonwood tree. twenty-four people came together to sign an agreement that created the stock exchange. just the right elements coming together. it started when scores more people came together, just down the street and traded bonds that helped pay for the revolution, and the nation it created. it started in an office on the corner where the right people witnessed the telegraph and brought information and humanity together forever. it started with the markets,
3:23 pm
bringing together steel and buildings and silicon and medicine and rockets. we believe the possibilities of life and investing are greater when we come together. it's why for eighty years we've connected ideas with technology, data with inspiration, investors with solutions. so that every day together, it all starts again. ♪
3:24 pm
//////////////////////////////// //////////////////////////////// /////// //////// virgin galactic is planning to go public. >> it's an exciting time >> aviation began in a similar way. it was wealthy people wanting to go for a joyride >> basically it's about capitalizing something that will do space tourism to hyper sonic air travel. >> we're the only company whose space ship is shaped like an airplane welcome back to the closing bell bank of america putting out a note, a 10 inch tortilla
3:25 pm
shortage could be a near term headwind for taco bell >> it's retail. >> the firm maintains a neutral rating on yum and raised its pricely slightly. >> chewy, the pet food retailer, j.p. morgan, ubs, bank of america wells fargo all out with a stock. and then there's the downgrade of rbc 3m. the firm citing macro pressures, cuts, and persistent litigation. and their reputation as a high quality industrial is eroding. having a market impact on top of what's been a rough ride for 3m the question is what does that say about the market
3:26 pm
environment. it used to be a leader and a tell is that still the case >> it's still the case, it's a diversified industrial, a big company. to me it sounds like the analyst is behind the curve. i don't think there's anything surprising there. >> the analyst is playing catch up rather than this being a leader indicator. >> they said things aren't good, said it a few times. then they're saying it's time to get off the story. to me it looks like it maybe time to buy it. >> on chewy two of the three price initiatives come at 40 bucks. do you like chewy? >> i like it because i can make up numbers like everybody else does they create an addressable market pr pets out there and next thing stocks are 40, 45 because how do you refute the numbers. that's why it's dangerous to short the stocks too early. >> you don't think it's a fu
3:27 pm
fundamental? >> no. this is a business that amazon or someone else will put price pressure on and the story rolls over. >> i was reading about the 10-inch tortilla shortage, i didn't know that that's what's driving their breakfast. >> they have 6 and 12-inch as well and they're managing the short fall by managing the size of tortilla they want the 10 inch to be for breakfast because it's an important part of their menu, apparently. >> i enjoyed reading that as well still to come, we have your last chance trade and todayit' a stock that gained 40% this year plus pharma stocks on a key ruling regarding drug price disclosur disclosures. dow is down about 83 with about half an hour till the close.
3:28 pm
3:29 pm
3:30 pm
welcome back 30 minutes left of trade at the moment the s&p just flat, dow is down 80 points. here are three things driving the action investors are waiting chair powell's testimony tomorrow. fang stocks are showing
3:31 pm
strengths and transports are weaker. time to get a news update. >> hello, everyone, here's what's happening at this hour. president trump welcoming the emir of cutter to the white house. during the photo opportunity the president was asked if if he still supported labor secretary alex acosta's handling of a sex trafficking case involving jeopardy epstein. >> i know he's been a really great secretary of labor the rest of it we have to look at, look at it very carefully, you're talking about a long time ago. it was a decision made, i think not by him but by a lot of people. uber is letting passengers tell their drivers inadvance that they'd like a little less conversation and more regular room only if they're willing to pay. the company launching a comfort ride and nikki minaj is pulling out
3:32 pm
of a concert in saudi arrabia that's your news highlight. >> is uber saying you have to pay to have less conversation? >> apparently yes. i think you could close your eyes. >> put the headphones on, even though they're not playing any music on. >> you've been in a an uber with me when i did that, i think. just teasing. >> ouch. fair play. >> not directed at you >> well, anyway. either way sue, as always great to see you, see you next hour. meantime, let's send it to mike for the second dash board. i think i worked this out. >> have you? >> it's a cricket theme. >> close cricket will have to translate for you later. hate the player, love the game what am i getting at here? look at this group of stocks
3:33 pm
some of them are traditional brokerage firms and trading and market making firms others are more exchanges this week we got the news that piper was buying sandler o'neill. also deutsche bank exiting global equity sales and trading. what you see is a sharp divergence this is piper i can't hajaffreye more the traditional client facing brokerage and trading firms. this is what happened, they lagged the market. the market likes ice, the parent company of the new york stock exchange and nasdaq and they've all outperformed these guys get a credit of being data networks, high throughput almost payment time systems where it's hard to make money on the trading side, either getting
3:34 pm
an edge or giving clients access to it. this seems like a trend that might continue for a while. >> thank you very much i look forward to more cricket special. lesl leslie >> carlyle looking to change its structure to a cooperation they decided to convert to a c corp carlyle did not respond to our request seeking comment. in making this move, carlyle would follow kkr, blackstone, apollo ares, it may mean paying more in taxes but also means more in investors and etfs can own the stocks the conversions were largely triggered by the reduction of the corporate tax rate to 21%
3:35 pm
from 35% karl ly carlyle is up about 4.2%. >> kkl went first right? >> i think ares predated kkr, but they were neck in neck announcing the decisions so everyone was waiting on carlyle as the sole big hold out making that conversion they said they were seriously considering it now it appears they followed the pack into the c corp. world. >> the share price of blackstone gives them every reason to follow suit. >> they just finalized the conversion on july 1st so it's still new, received a big bump once they announced the move, a $55 billion company now. >> thank you a federal judge has blocked a white house initiative on prescription drug costs. meg has the story. >> that had to do with including tv ads -- prices in tv ads
3:36 pm
the impact i'm seeing has generally been positives investors are interpreting this ruling to mean if the trump administration can't get this done, it won't enact measures to tamp down on prices. wells fargo points out there have been 83 drug price increases already in july versus 8 in the month of july 2018 in the companies they track some caution this could go the other way, losing the ruling could cause trump to push harder on harder measures that could be bad for drug stocks. what's your take in terms of the general political risk within health care and whether you want exposure in the sector. >> i think it's very, very little he tweeted out most favored nation last week, which took people off guard but for the bluster, the pharma
3:37 pm
industry is too powerful. >> even when you see the democratic debate and i'd say the pharma industry took most of the flack, even more than tech and wall street. >> it's unlikely anybody throwing that flack on the pharm industry is going to win >> if you want to put a million people out of work good luck >> so they're a buy. >> i think they're a buy they're certainly not a sell on this, let's put it that way. >> more to come with ian we've got 23 minutes left of trade coming up we'll have a preview of what to expect from levi's earnings. here's a check on the british pound trading near two-year low. thank you very much. below 125 haven't seen that for nearly two years down another third of 1% back in a couple minutes - hello, i'm brad castillo.
3:38 pm
did you know that americans who bought gold in the year 2005 quadrupled their money by 2012? even now, experts all across america predict the real gold rush is just beginning. - [announcer] us money reserve is the only precious metals company led by a former director of the united states mint, and as one of the largest us gold coin distributors in the country, us money reserve has proudly served hundreds of thousands of clients worldwide. there may have never been a better time to start diversifying your assets with physical gold and silver, and right now, it's easy to get started. just pick up the phone and call toll free to require the complete guide to buying gold, with hundreds of pages of important information. it takes one phone call to get started. don't put it off another day, call now. - and you're buying gold, gold has protected me. i always think, and i laugh about it. when i'm sleeping, my gold is working for me.
3:39 pm
it's still making money, and it won't do anything else but make money. of all my years involvement with buying gold, it's only gotten better in my faith in the company. us money reserve, that's the company i do business with, and i don't see doing business with anyone else. - [announcer] don't wait until the next crisis, get started securing your financial future today. call and request your copy of the complete guide to buying gold, absolutely free. if you have bought gold in the past, or you would like to learn more about why physical gold should be an important part of your portfolio, simply call to receive the complete guide to buying gold, filled with new and exclusive information including the official precious metals guidebook, the diversification strategy guidebook, and perfecting gold ownership, which will provide you important, never seen before facts and information you should know about making any gold, silver or platinum purchase. - with over a quarter of a million clients worldwide,
3:40 pm
we're one of the most dependable gold distributors in america, give us a call today to get started. just under 20 minutes of left here's where we stand, the dow down 61 points not far from the high of the session. 3m has been weighing on that index. the s&p flat nasdaq is high by 0.4% amazon and facebook all doing
3:41 pm
well there up next we have your last chance trade. >> virgin galactic set to become the first tourism space company to go public we'll talk with tom farley about that move. >> the star walk as well >> he gets the perp walk you should be mad at airports. excuse me, where is gate 87? you should be mad at non-seasoned travelers. and they took my toothpaste away. and you should be mad at people who take unnecessary risks. how dare you, he's my emotional support snake. but you're not mad, because you have e*trade, whose tech helps you understand the risk and reward potential on an options trade it's a paste. it's not liquid or a gel. and even explore what-if scenarios. where's gate 87? don't get mad. get e*trade and start trading today. i felt completely helpless. trashed online. my entire career and business were in jeopardy. i called reputation defender.
3:42 pm
they were able to restore my good name. if you are under attack, i recommend calling reputation defender. vo: there's more negativity online than ever. reputation defender ensures that when people check you out, they'll find more of the truth, not trash. if you have search results that are wrong or unfair, visit or call 1-877-866-8555.
3:43 pm
3:44 pm
richard branson's virgin galactic is set to be the first space tourism company to go public with the special purpose accusation company or spac, the company expects to turn a profit by 2021. he was on squawk box talking about the deal. >> what i'll tell you is i generally don't put my own principle capital on the table unless i think there's a compelling risk reward and i'm doing that here. >> let's bring in tom farley, former president of the new york sto stock exchange he's a spac expert good afternoon. >> good afternoon. >> he runs a spac. >> i hope i'm a spac expert. i raised a spac and run a spac as chairman and ceo.
3:45 pm
>> talk us through this process in terms of getting this company public by this route and what you think of it versus an i.p.o. process. >> congrats to social capital. i was here with him when he had the i.p.o., he said i'm going to go and find something splashy, people were thinking could it be uber and virgin galactic is certainly splashy. this is going public transaction. there's two -- broadly speaking two ways to do it, a traditional i.p.o. or via spac there's many more spacs today than five years ago. why do it via spac, as opposed to an i.p.o., number one it's a merger, not an i.p.o., you can spend more time with investors that's different than a 35-minute road show meeting on an i.p.o also you can share more information. if your viewers go through and look at the deck on the internet, the sales document, it
3:46 pm
has a financial plan that extends out three, four years into the future. you can't do that with an i.p.o. you can really help investors understand the business. and finally, importantly, you saw that richard branson and other equity chashareholders to money off the table. that's off limits in the i.p.o.s in the u.s if you look over the last couple years, the secondary component, the component of taking money off the table they've performed terribly. >> if virgin, other investors wanting their money out, is this a good signal? >> it's a good signal where you don't want an overhang the company is between a billion and 2 billion. you want a big enough free float, enough shares trading that aren't in a single investor's hands when i read through and saw it
3:47 pm
was 300 or 400 million paid out to selling shareholders my reaction was that's smart. to richard branson, is that life changing i don't think so but the way they were thinking about the capital structure going forward made sense. >> concerned at all about the timing of the spacs coming now given the fact the markets are high and you're competing against private equity and corporate? is that a concern? seems like there's a lot of spacs and more money coming in is that a concern at all >> on an absolute basis evaluations are high because the s&p is at all time highs today what spacs are really trying to find is deals that make sense for a spac in other words, if something just makes sense as a traditional i.p.o., i'm not chasing it if something makes sense selling it to kkr for 100% cash i'm not selling it but if someone wants to take money off the table and roll a
3:48 pm
significant stake and ride it in the public market i'm not concerned at all you're seeing terrific deals there was one that closed about two years ago, analytics traded up about 40% the deal today up about 8% from the initial raise of $10 per share. i think it's a smart vehicle. >> what do you think about the world's first publically traded space tourism company. i'm thinking uber and lyft getting into completely new industries that are flashy and exciting. >> beyond me >> i know nothing about space tourism, if mywife were here w she say that never stops you on any other topic. i think it's crazy enough it could work if you look at the economic model, it's simple they take people to space and charge for it. >> it's a software company. >> that's ridiculous, but he's a
3:49 pm
marketer, he compared himself to michael jordan and came back to his investors and did what he said he was going to do and came back with an interesting deal. >> didn't he have to >> he had a two-year window, it may have extended to 27 months but this doesn't feel like a forced deal whatsoever, and he had time left on his calendar. >> tom, stay with us you're an expert on many things we want to hear about. we're going to keep you around through the bell meanwhile, we have about 10 minutes to go before the bell. last chance trade, ian, what would you choose >> buy netflix, i was on the jet way coming in from laech and th were four kids asking their parents to watch "stranger things" no exposure to a trade war, antitrust >> not worried about the new entrants, lower price points >> friends
3:50 pm
>> my daughter only uses netflix for friends, the only thing she watches, and it's gone are you worried about that >> i'm not they have some of the greatest content ever when you look at people cutting away from things i don't think it's netflix >> good to see you here in person. >> thanks for having me. we have just about 10 minutes left of trade. and, of course, after the bell, earnings from levi strauss courtney has key things to watch in that. >> it's the second earnings report for levi strauss since going public in march. 13 cents per share on revenues of 1.3 billion investors are expecting strength international to continue. looking for 8% sales growth in europe, that will be the stronger region if that comes true, it also comes with currency complications gu again hiem expects the negative drag to improve in the
3:51 pm
back half of the year. they want to know the nondenim lines, are those growing well? shares of levi up about 2% up about 39% since its public debut. far outperforming the broader retail sector. nasdaq looking to snap a two day losing streak. up next we're covering all the angles of our markets. >> here are the winners and losers in the dow. we'll be right back. for your heart... your joints... or your digestion... so why wouldn't you take something for the most important part of you... your brain. with an ingredient originally discovered in jellyfish, prevagen has been shown in clinical trials to improve short-term memory.
3:52 pm
prevagen. healthier brain. better life.
3:53 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
3:54 pm
and helping you understand what they mean. don't get mad. get e*trade's simplified technical analysis. time for the closing countdown. let's trade this close kevin hipks join us from td ameritrade nasdaq has performed well. what are you watching? >> i like the action today, too, because we were down a lot because of the foreign market softness overnight but a lot of the stocks, the fang stocks have made a nice recovery, boeing made a nice recovery, the next two days the theme is jerome powell all about what he says.
3:55 pm
but as earnings trickle out we have wednesday night after the bell, we have bed, bath and beyond thursday morning we have delta airlines earnings are starting to trickle out but make no mistake it's all about jerome powell. and then thursday's cpi data, that's the second biggest data point of the month that's going to tell a lot about interest rates that's what we're looking at >> kevin we still have the small caps lagging behind. is that something your clients are focussed on? >> i tell you what, there's some headsation here in some of the stocks but i think the fact that the fang stocks and the nasdaq is leading this market not a bad sign but there is hesitation here at these levels with so much data news coming out and, you know, geopolitical news coming out in the next couple days so there's hesitation out there for sure you see that in the vick still holding strong here. >> what about the industrials
3:56 pm
under pressure, 3m downgraded, transports lagging behind. what signals are you getting from those groups? >> you're getting a lot of down and upgrades apple was downgraded yesterday, upgraded today so you're getting analysts making moves ahead of earnings season which in our opinion it starts on the 16th and 17th with the banks. so you're going to see a lot of this, a lot of positioning as we go into earning season. that's right proper companies reporting next week quick final point. materials sliding today partly because of the bsf warning in europe when you see a european company warn like that, should we look past that? is it region specific? >> i don't know how much u.s. and american investors are looking at european companies like that. i think they're focussed on what you're watching today, the boeings, and the fang stocks i think that and interest rates and what it's going to do to the
3:57 pm
u.s. dollar and commodities. until the time being, when earning season gets under way, that's what american investors are looking at. >> you said powell is the biggest risk we have two days of testimony. what language will you be looking for or messages will you be keying into as far as market? >> this is not going to be a prepared statement he's going to do that and then answer questions he's different than janet yellen in he makes headlines. i think traders will be parsing every sentence he says >> kevin, thank you very much. let's send it to mike santoly for his third dashboard installment. >> this is hit for the cycle we've been tracking the cyclical more aggressive stocks and defensive ones
3:58 pm
in recent weeks we've seen signs of a turn. this is the ratio of global cyclicals against global defensive, so when this is going up the market is cyclicly geared so here's a couple things. you have this nice bottom here toward the end of last year coming into this year. a bit of a stutter step and picking up again once again we have one of these residences with early 2016 you had the turn higher and that was another face when the investors were getting more confident about the cyclical outlook you talk about how the industrials and transports have not really responded but other areas more cyclicly gears are acting in a subtle way nasdaq has been an outperformer today. let's hear more about it. >> love the baseball them today. not an out of the park home run
3:59 pm
for big tech but getting a bounce today apple down for the week. facebook and amazon are up for the week that's lifting the overall market bio tech strong today. the strongest bounce back we're seeing after the judge ruled that the trump administration can't force companies to list their list prices in their tv ads. another trump related boost today in health care as well, caredx, a company that does diagnostics for transplants expecting to announce kidney transplant news tomorrow and that stock is flying in anticipation of that news. we're down three days in a row just about flat right now. we're waiting for news right now, waiting to see if the fed needs to cut rates as aggressively as the market wants them to. waiting for earning season to find out if earnings estimates for the second half are way too high good news, the low print was right at the open, taiwan had a
4:00 pm
good day 3m slipping on a downgrade from rbc. there's the closing bell rally going into the close the s&p ending positive, dow done 23 points welcome back everyone to closing bell cnbc markets commentator, let's check in on markets finishing the dow low by 20 points dragged down by 3m s&p up .1% nasdaq led the charge up .5% including stocks like amazon and facebook doing well. encouraging to see the cyclical stocks at the top of the list. >> the strength in fang names today we haven't talked about
4:01 pm
them in a while but looking for indications that risk sentiment is on, facebook, amazon, netflix, google all higher today. amazon one of the best performers in the s&p 500. we're also waiting results from levi strauss this hour we'll bring you them as soon as we get them. first to talk about the market today barry math is here welcome barry. tom farley still here chairman and ceo of far point llc mike, what about you, had an interesting mix of sector performance today, materials not so hot, real estate doing well, but financials and tech. >> exactly mostly financials and tech consumer remains pretty much leadership across the board. so i think that's been pretty consistent we were talking yesterday about how this calming down of the market after highs last wednesday looked innocuous was a little overheated.
4:02 pm
i would imagine tomorrow with powell and the next day, it's a two-way risk could say something the market could relax and move to the upside as well as potentially taking back talk about a fed rate cut seems like it makes sense. the open this morning the s&p was just barely below friday's morning low, after the jobs report and picked up from there. the tape still acts pretty well you have to say. >> do you expect the fed chair tomorrow to give a clear indication of what he's thinking about for the end of the month >> doubtful. actually, there was a serious change in trend during the trend where powell, if you're going to signal, you signal in a speech at the economics club, you don't signal in the congressional testimony. and he's been very -- paid a lot of deference to the committee in the process. so this early in his chairmanship i doubt he would precommit the committee to a
4:03 pm
decision in july there's also quite a bit of important data between now and then i think one, the consumers come back very strongly, mike cited how strong the stocks have been but you can see it in the sales numbers, collapsed in the wake of the qt stock market crash but now retails are running at 9% a year. we're likely to have strong consumption in q 2, comes out right before gdp probably be fine but you're also likely to see the manufacturing surveys strengthening through the course of the month as well by the time we get to july 31st, the case may have weakened significantly on the economic side to do it. so why give away all the optionalty. >> almost too much time between now and then. >> i feel you're not a fan of the fed cuts rates in this economy, do you feel your case is stronger in the last few weeks? >> the reason my case has been
4:04 pm
made stronger because it continues to be politicized to a greater extent no president wants to see higher rates. we want the fed to not be politicized so really smart economists are making long-term decisions, half a generation out in time, a full generation out in time. so yes, i have more concern. >> monetary policies never half a generation type decision maybe not monthly or quarterly but a five year decision. >> or in this case a year and a half. >> fine. >> decision. >> but it's never that long term. >> it should be. half a generation in economic cycle. right now, i'm on the front lines looking at what is the practical implications i'm looking at deals, these companies are levered, five, six, seven, eight, nine times cash flow is a business i looked at that's fine. keep lowering rates it goes high erand higher my concern, there's a shock, yo
4:05 pm
see rates double and we could have a problem on our hands. >> what would the market do if powell puts the easing case in doubt tomorrow we have a strong jobs report, stock market record high, what if he puts a dent in that? >> if the he's seen as pushing back against this implied 100% chance the market has of a rate cut, i think the market would have a little bit of a gut check. if he says we stand ready to act as appropriate, essentially reiterate what they said after the june meeting that probably leaves us where we are no guarantee but also not trying to pull something away from the market. >> barry, there's been a lot of criticism from various people about the full independence of the fed. you have a tiny bit of sympathy with the appointed bureaucratic institutions have been so much power chl power. >> that's right. the idea that you can have agencies running completely
4:06 pm
independent and if you think about the legislation that's been passed recently, dodd frank and obamacare being first and foremost they legislated a law that gave power to the administrative state. that's an issue. in this case, tom made a good point. there have been periods of time, like the '90s, for example, where if you had an '80s mentality you would have been tightening but allen greenspan thought there was a mentality going on so he let it go i think you're onto something, just easing now in response to low inflation, which has nothing to do be monetary policy, labor market slack or lack thereof, does risk, you know, more leverage loan issue.
4:07 pm
while i don't think there's a near term risk, the longer term risks are significant. and the fact of the matter is, the market didn't sell off because of the last rate hike. it didn't. it sold off because the combination of the fed ecb bought $2 million worth of bonds in 2017, zero in 2018. it had more to do with the ecb and boj than the fed. >> how do you know >> ecb cut their purchases in many half on october1st, fed met the caps on october 1st. there was a provision in the tax bill on september 15th that you could have contributed to your pension plan at the 35% rate, all those things happened simultaneously >> and the rate hike came in december. >> right it was identical to what
4:08 pm
happened in january, by the way. >> let's throw another voice in this debate. larry kudlow speaking earlier today. >> when the jobs number bunched up as you said and beat all the expectations, which made the president very happy when i gave him the news, made me happy. i love people working. more people working is joyous, july 4th weekend, it was a fabulous number. pursuit with life, liberty, and the pursuit of happiness is fulfilled in america, it is not inflationary, and should not be crushed by central banks so i discard all that stuff. >> what's your take as to when you look abroad and see what other central banks are doing and whether or not that increases the pressure on the fed? >> can i react to larry's video. i think larry is doing a great job in the white house and i'm
4:09 pm
glad he's there. but i think he's saying, look, if the fed doesn't cut, he's not coming out and saying it, if it doesn't cut significantly, we're going to have an issue and deflati deflation? i'm not sure what he's trying to say. >> he's saying the low inflation should suggest they should cut it. >> nobody agrees what causes inflation, what's the impact of wages, impact of wage growth but pretty much everyone aagrees those 23factors, low unemployme, increasing wages, a hot economy create an environment you can see inflation. my concern is a cut, let alone a double incremental cut, aren't we going to be in an environment ripe for inflation >> i don't know. it hasn't happened in the last few years. you could argue it's an asset
4:10 pm
cry si crisis and in other pockets of the economy. but haven't seen inflation. >> i think that's right. i agree with larry in the sense that what happened last year, the bump in growth was not in consumer spending. it was capital investment, particularly in software, research and development that boosted productivity in part labor market boosted productivity so it was growth without inflation. i totally disagree with the remedy for all this. there is no remedy, we have stable inflation around 1.5% make a little point here in the 60s inflation was stable around 1.5% we had 9% growth in capital investment through the entire business cycle in the '90s inflation stable around 3.5%. it's stable growth we have it, don't do anything. >> people are going to be sending you and i nasty tweets on twitter. we have levi's numbers out
4:11 pm
>> we have levi's second quarter results this is the second quarter we're getting for levi as a public company. reporting earnings of 7 cents it's not clear if it's comparable to what the analysts were looking for revenues slightly better direct to consumer business up 9% wholesale up 3%. when it comes to geography europe was the strongest region, up 9%. followed by asia up 6% levi under pressure down about 4% looking at some of the net revenue numbers as well. in the americas up 3%. 9% in europe, and 6% in asia doesn't look like it's cutting >> the market is taking it as a miss no matter what. i'm looking at earnings before interest and taxes, it was down 4% from a year ago
4:12 pm
that should strip out anything extraordinary right there. it seems as if it's a soft number in a stock that's built in a bit of a premium since it's i.p.o. >> that's tough when you miss your first quarter or two -- >> second. >> second quarter after an i.p.o., the market reacts in a punitive fashion. >> it's an odd one it's a mature company, way back, it was public already. it's not as if these guys are new to the financial reporting game in terms of serving it up for public investors. >> disclose investors before the i.p.o., they've been preparing for this, so they'll right the ship but it's not good to miss your first or second quarter. >> still showing growth. how do you look at the i.p.o. landscape now that we've had so many test cases to look at, the ones that have done well, ones that haven't how do you sum it? >> it's been great, but a couple
4:13 pm
of the big names, usain bober at haven't performed well tech i.p.o. up over 20%. a year record year, not quite a record year but a near record year. >> do you look at that as potential excess in the system, potential bubble blowing by the central banks? had. >> i think there's two things going on, one a cluster of companies that didn't go public and they all got ready to go public at the same time. secondly, people are looking at the valuations saying now is a good time to get out i.p.o. prices are as good as it's been. so you did see a number of people rushing to get to the window i joke with my old colleagues it's going to be boring from here on out, there's only a couple companies we'll see in the next 12 months. we saw carlyle group change
4:14 pm
ownership today. and goldman sachs doing more, is that a strategic decision from the companies? >> it's a sign it worked for the other guys what you're seeing is really just a convergence where there's fewer players and the bigger players are getting bigger and bigger there's really kind of this cream rising to the top element. i don't think pe is growing at a rapid of a rate, it's just the big guys are. >> bank earnings coming up next week are you still bullish on those stocks >> i am. i think they reached the level of deregulatory policy and cash assets are down 20% year on year roa is well above or at least at prior cycle levels and roe gone through 10%. at the point where they're actually adding capital, not destroying it. and it looks like it continued this quarter as well
4:15 pm
loan growth looks fine and i think the banks, as we know every time they reported, they reported in january, the stocks roared until people got concerned about the curve. in april they reported, stocks ripped for two months and people got concerned about the curve. up next we'll have more analysis of levi's earnings whether you should buy the stocks on the tip. >> and virgin galactic said to become the first space travel ndutheerto go public fi o wth space is the new place to be for investors.
4:16 pm
4:17 pm
4:18 pm
the dow falling for a third straight day s&p and nasdaq snapping a two day losing streak. bob, let's start with you in the run down. >> nice rally in the close, positive on the s&p. but not much of a rally in the transports again, the fed ex, upss of the world. they're going nowhere since september. of course, we have trade concerns and we have global slow down weighing on them. look at the transport index. it hit the historic high in
4:19 pm
september and really has had a hard time recovering since then. >> the nasdaq snapped a two day losing streak. explain how. >> we saw fang names and bio tech lower that's what reversed course. bio tech still down for the week same with the fang names except facebook and amazon which were strong netflix did pretty well as well. reporting big numbers for streaming on "stranger things" small caps continued to underperform the russell 2000 just inching in and among the big names were the consumer names in the small caps. levie reporting earnings moments ago stock under pressure, looks like a miss on earnings joining us to break down the numbers, jay niffen. welcome. what do you make of the preliminary glance here at the
4:20 pm
levi numbers seeing growth but looks like net income was a disappointment. >> the top numbers were what we expected, up 3% in the u.s., we thought that would be the case we thought 5% growth is what they would see -- we thought 4 might be good and 5 is where they might come in the real number they missed was the gross margin line we wanted to see them pull up 100 points but we knew sg mnta was going to be a problem, costs were going to rise. that's what happened here. if they pulled a better margin number, 7 cents would have been 13 and we would have been happier. to me this looks like levi is still winning. you're getting the growth, and internationally, they'll get the growth line fixed. the sg&a is going to take care
4:21 pm
of itself. i'm not concerned at all i was going to be happy with top line of 4%, they got 5 i was happy with 100 points of gross margin improvement, they didn't get it. i think they'll just fix it as we go along. it takes a while to get everything working just right and they're continuing to work towards that it's a great brand, moving online, doing the right things, getting good international growth, exposure in china, extremely low, not going to get hurt on tariffs. i'm a big fan. >> why not affected by the trade war? because they're predominantly u.s. exposure versus your point they're getting good international growth >> reporter: they're getting good international growth, where it comes from from international, you don't get tariffs on, and only 8% of what they're bringing into the states is coming out of china that will drop dramatically over the next several months and drop more over the next year. so i don't think it's big enough to matter.
4:22 pm
i think what matters here is can they continue to drive top line? can the brand continue to carry its weight it looks like the top line is doing fine and now it's just some of the internal tweaks you have to do to get the rest of the numbers to flow the right way. i don't see the stock being under real pressure here they were sitting at 23.5 bucks, most of the world thinks they're a $26 stock, do i think people think that's different because of today's release i doubt it. >> down 7% let's go big picture here. love your research notes you say retail is not lousy, some retailers are lousy. so how do you now, as an investor distinguish between the winners and losers is it a category thing where it's target and walmart doing better than department stores or an execution issue >> if you're off price, off mall, rental or resale, you're
4:23 pm
winning. if you're on mall, full price, you're losing. so you can sort on them out that way for starters after that you want them to be well capitalized and you want them to be strong with the consumer as far as the name, like walmart, great name, target we all know people are shopping there. so you need to have them be well capitalized, maximum tax payers, you want them to be off mall and you want them to be reinvesting heavily in the business of growing online and the people that aren't, are losing you also don't really want to be playing with the mall guys unless you got really strong feelings about the business in particular because the mall-based businesses in general are seeing significant reductions in traffic at the malls. if you look at the 1100 malls they're probably going to be down in traffic 7% or something this year. if you're not playing in the top
4:24 pm
280 malls, that's a real problem. it's easy to look at them and say off-mall guys wins walmart wins, target wins. rental one when we saw with the runway become a unicorn and resale won when we saw the i.p.o. for the real real go well the other guys had a great i.p.o. was revolve they're basically online only. so that part of the world is winning the old traditional full price mall base is just not winning. >> thank you for joining us. we see levi down 6% or so after hours. we'll break down the charts to explain why the recent surge in po eery would gstp. >>owell testifies before congress tomorrow and see why he could signal an interest rate cut later on closing bell. it's not about quantity.
4:25 pm
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 for a prospectus containing this information. read it carefully.
4:26 pm
4:27 pm
hour and a half into the show and we just got if theme. >> you just got it. >> for mike's dashboards today baseball >> it's the all-star game tonight, as you know, in cleveland. this i'm calling bonds are they looking juiced extra credit if you get that
4:28 pm
referenced treasury bonds investors rushed into them. the question now being are we set for some kind of reversal. look at the flows into fixed income funds, global bond funds. year today $230 billion, $150 billion some. people are chasing yield, is it overheated, not in the absolute yield move but look at the chart. bank stocks relative to treasury yield. they have moved in sync over the last few years as you can see here but the orange is the bank stock index. you can see it's been flat, it did not chase this last move down is that the equity market saying that yield is an overshoot, not going to assume that's the new level for yields perhaps, at least it shows that it's the treasury yield did have an acceleration downward
4:29 pm
all this to say maybe the push in yields above 2%, even just to get back towards its trend. >> i'm surprised at the extent of that divergence that was a theme everyone was aware of but it was stark the way it held up. >> exactly this is kind of a fitted chart it's meant to be linked up at certain parts and not at others. without a doubt. look at where treasury yield started here, where they got to, and the bank stock index has been more or less sways at that period. >> i didn't get the last -- >> barry bonds, right? >> i'm not making an allegation. i'm saying thing to be has been out there about barry bonds for a long time. >> now time for sue with another news update. >> here's what's happening at this hour. british secretary jeremy hunt and his rival boris johnson
4:30 pm
debating on live tv in their attempt to become the next prime minister of the uk they were asked about president trump and his recent spat with ambassador kim. >> i think it's vital that the advice that civil servants give to ministers should not be leaked by ministers and should not be commented on by ministers if civil servants are going to feel free to give that advice that they want. >> who chooses our ambassadors is a matter for the united kingdom government and prime minister so i have made it clear that will -- if i am our next prime minister, the ambassador in washington stays because it's our decision >> thank you and back here at home, jay-z is partnering with a california cannabis company entering a deal with the company, his role will
4:31 pm
consistent of driving creative direction, outreach efforts and strategy for the brand you are up to date, that's the news update this hour. back to you. it was an interesting debate >> i wonder if we get a third day of play on that. it's angered both sides quite significantly. >> i think it has. >> it made it to the debate. >> as we say here, it has legs, staying power. the administration is not giving up on their opinion and obviously you heard what the two candidates said in that debate so i think we're going to be talking about this for a while. >> seems like a bunch of name calling. >> it is i think the thing that took it a step further was the president criticizing the prime minister as well who didn't need to be brought into this, i think that's elevated it somewhat. >> it did ratchet it up. >> sue, thank you. >> you got it guys >> up next we'll discover whether virgin galactic's move to go public is an out of this world opportunity to invest in
4:32 pm
the fast growing space industry. -driverless cars... -all ground personnel... ...or trips to mars. $4.95. delivery drones or the latest phones. $4.95. no matter what you trade, at fidelity it's just $4.95 per online u.s. equity trade.
4:33 pm
4:34 pm
♪ if you want to fly
4:35 pm
♪ come and take a ride into space with the cowboy ♪ ♪ if you want to fly ♪ come and take a ride, take a space ride ♪ >> richard branson's virgin galactic is preparing for lift off as a publically traded company. here is leslie picker. >> virgin galactic taking a back door route to the public markets through a special purpose accusation vehicle, otherwise known as a spac. the spac was pitched as an alternative route to an i.p.o. it works, the spac two years ago raised about $600 million, a blank check written by investors and then met with 200 companies deciding which to acquire landing on virgin galactic this type of spac plus the direct listing are two of the newest alternatives to the i.p.o. process, the process used
4:36 pm
by spotify and slack aims to make it cheep cheaper and easier for start ups to make their debuts. >> in terms of the selling down by the founder is that something people are going to get concerned about but it's offset on the other side with money in. >> typically with the spac you see majority control, you don't see the 49% level. you see over 50% level that the spac owners would fully acquire majority control of the company. so it was surprising to see, especially people familiar with the spac universe, that he's taking 49%, so not obtaining control. i think he has a special, you know, a special qualification as the leader of the spac that's why so many people put money behind him because he is an entrepreneur himself, a venture capitalist but richard branson does bring unique aspects to the
4:37 pm
table. >> earlier richard branson discussed the i.p.o. and interest in the space sector more broadly. >> it's a very, very exciting time for space with virgin galactic, with elon is doing, what jeff bezos is doing, boeing are doing. and the investment community are beginning to take a lot of interest in it and beginning to do analyst reports on the space industry and, you know, we believe it will be one of the big new industries >> let's bring in lauren grush, senior science reporter. thanks for joining us. >> thanks for having me. >> how much interest are we expecting in this? this is the first way people get exposure by the public markets. >> it remains to be seen how much interest we see in the company because their projections are very ambitious at the moment. this was a valuation based on
4:38 pm
revenue of i believe hundreds of millions of dollars by 2023 with, you know, hundreds of flights in that year with over 1500 passengers. that's a lot considering the fact that virgin galactic just went to space for the very first time in december and has only been to space twice. still a big deal but also it's -- they got a long way to go to get to the projections they sold the merger on. >> it's a young industry still what's the business model? >> it's a small pool of companies focussed on space travel and human space fight we're talking about virgin galactic, blue origin and spacex those are the ones focussed solely on this endeavor. with spacex and blue origin, they don't need that kind of investment right now because we have elon musk who's been successful raising capital for the company. and blue origin you have jeff bezos at the helm, he's got
4:39 pm
enough money for the time being. >> the way chumat and branson talk about the business model, it's flipping a switch, we have the demand, the deposits, the cash balances. it's a joyride business, an amusement business, it's not as if you have to sign up commercial clients what are the hurdles >> i think it's determining who wants these kind of rides in terms of the people who have put down deposits, it's 1%ers, famous people with a lot of money to burn. $250,000 would be a great e downpayment for a house, i don't think people want to spend that on a joyride to space. determining who wants to continue these rides, are people going to wants multiple rides? if you've gone once, do you want to go again? that remains to be seen. it's earlier to have the projections. >> you have a question for
4:40 pm
lauren >> i was curious about valuation in and of itself you see wide disparity looking at a $1.5 billion value, spacex is valued at $33 billion, it'll be interesting to see how they value these companies and it was said it was akin to a software model. these things are intensive, it costs a lot to build one of these companies, right >> right when it comes to space, there's a very long development time it takes a lot of upfront money you have to raise, hundreds of millions of dollars, and there's no room for error, right if you mess up your rocket blows up and that's a visible problem that investors will see and people will see and can affect your business. >> i think it's interesting, the money, because this was actually supposed to be saudi money, right? >> yes. >> originally didn't sir richard branson pull the -- what was it, a billion dollars? >> it was a billion dollars but they pulled out of the
4:41 pm
investment with the saudi arabia fund because of the murder of jamal a shkhashoggi. on sidewalk bquawk box early hyped, called it air travel. that sounds like a more commercial franchise than space travel. >> i think that's why you've seen spacex pitch that idea with their new starship vehicle that would send people tochina in half an hour or an hour. they need to find a way to appeal to a commercial market to use the vehicles over and over again for something that is a need that people want. i think that's why the hypersonic travel is being pitched because maybe a joyride to space for 20 minutes is not a need >> how important are these endeavors for jeff bezos, musk
4:42 pm
and branson? >> that's the key question a lot of people for blue origin, in jeff bezos's case, almost funded entirely by him, selling a billion dollars of amazon stock each year starting in many 2017 i think they're looking for return on investment spacex was valued more at tesla. it goes to show all three of these gentlemen see these projects as not just hobbies they do on the side but they take them seriously and appears they're expecting a decent return on investment. >> bezos says that blue orsigin is the most important thing he's doing. >> i liked the exchange at the end about how much of this is ego and he dialled it back significantly and came back with a little bit at the end, of course, he's pleased he's first. >> first to the public market. there's ways to measure who's
4:43 pm
first -- >> i know. you can still tell -- >> sir richard doesn't have a tremendous amount to prove anymore. >> plenty of people will go before he flies. >> none of them have anything to prove to us. it's fun to see. >> you're not wrong. >> lauren,le leslie, thank you both for joining us. the stars of sun valley all gathering for the company's annual conference. the high profile guest list is next. powell on the hill, testifying before the house committee tomorrow, we'll tell you what to watch. shares of levis remain under rangsure in afterhours tdi down 6%. we're back in a couple minutes so are you feeling?
4:44 pm
on a scale of one to five? one to five? it's more like five million. there's everything from happy to extremely happy. there's also angry. i'm really angry clive! actually, really angry. thank you. but what if your business could understand what your customers are feeling... and then do something about it. turn problems into opportunities. thanks drone. customers into fanatics change the whole experience. alright who wants to go again? i do! i do! i have a really good feeling about this.
4:45 pm
4:46 pm
sun valley gearing up to welcome some of the most powerful names in media and technology julia is there what are the themes you're watching this year >> deals are always in focus here in sun valley on the heels of the mega mergers over the last year. we're watching for the next round of mergers with sherry redstone closing to announcing a cbs via come deal. and both the media and tech companies that are expected to attend are all competing for the same content with netflix and
4:47 pm
amazon ramping up spending, disney and apple, brian roberts just arrived now, all prepping to launch their new services but mark zuckerberg, cheryl sandberg and jeff bezos are all expected to attend here. and now they're facing a potential regulatory crack down with scrutiny of a number of issues over the fact they're so big and powerful in addition to regulation, secretary of state mike pompeo is expected to speak here so we expect geo politics to be a subject in focus back to you. what was the last big deal to come out of sun valley. >> julia would know better than i because of the origins of the deals. >> a lot of conversations start here you can look at jeff bezos starting the conversations to buy "the washington post." and you can look back -- if you go historically, you can go youtube which was acquired here, cap city, those are some of the
4:48 pm
bigger deals but more recently the partnerships snap was here the same time as the nbc universal folks. you have to wonder what conversations started here look at the next round of startups here, which giants might be interested in investing in them? >> a different angle how big and important allen and company in this world still, just this conference and throughout the rest of the year? >> it's pretty remarkable how powerful the people are who gather here for this event if you look across both finance, we saw ken arrive downstairs to the media space, you have bob iger expected as well as the ceos of the other media giants look at technology, they bring together leaders from across the spectrum what that means is when these companies are looking to make
4:49 pm
acquisitions or to merge, they're looking to go down and facilitate those deals we' when you look at the some of the smaller media players, they're looking at how to position themselves so you have to ask who is david zazlof talking to? another thing worth noting, i heard there's a panel of all the big sports commissioners, nba, nfl, nba, major league baseball represented here now the powerful attendees here, these guys are all interested in the next round of sports rights. that's something else we've seen allen and co be valuable in facilita facilitating. >> thank you, you have to do a lot of spying while there in that beautiful backdrop.
4:50 pm
up next the year of the big deal the stakes are high in wisconsin where the foxconn deal has taken center stage you'll hear from the governor on whether that deal was worth doing. straight ahead
4:51 pm
4:52 pm
we are getting ready to unveil our 13th annualrankings of america's top states for business if you want to know what is at stake in the war between states and business, jobs, just look at some of the massive economic development deals being signed between companies and states scott cohn is in our mystery top state with exclusive new details on the biggest deal of all scott. >> yes, that's right you know, we talk about this every year we have been for 13 years. it really is coming to fore with some of the big deals, and the
4:53 pm
biggest deal of all, the biggest subsidy ever to a foreign company to locate in the u.s. is that foxconn deal, $4 billion at stake. but right now in the badger state they are filled with remorse. it is not what was advertised. >> this is the eighth wonder of the world. >> a $10 billion factory building giant video displays, employing 13,000 people. a year later, still no plant and a tiny fraction of the jobs. governor tony evers, elected last year as part of the backlash, is trying to adjust the state to the new reality. >> we now have clarity, exactly what this first phase is going to look like. >> reporter: in his first national interview about the project, evers says he and the company have now reached an understanding. >> they're going to be making smaller items, probably tablets, glass for cabinet -- tablets and phones and things like that. they're looking at, i think it was, 1,500 employees, which certainly is less than they
4:54 pm
originally thought. >> 15 -- 1,500 is a far cry from 13,000. >> we'll take one step at a time. >> reporter: foxconn says they'll keep their promise eventually. >> i talked to corporate and they reiterated we're committed to 13,000 jobs. >> reporter: if it doesn't hire all of the workers but it doesn't get all of the money, but close to a billion is already spent on infrastructure and land kim mahoney's house is the last one standing. >> the homeowners didn't know we would be directly impacted until the day of the public announcement. >> reporter: are you comfortable with how this was done >> well, no, i never have been it became part of the campaign frankly. you know, donald trump coming and saying it is the eighth wonder of the world, all of that stuff. i think -- i think it set people up for expectations that probably could have been handled differently. >> reporter: case in point, 1,500 people, the governor says, to be employed at foxconn next year if and when they begin production that is, again, short of
4:55 pm
foxconn's threshold for collecting on some of those incentives so we will see what happens. we have a lot more including our full interview with governor evers, a lot more about state competitiveness. you can see how we do our study at where am i here is your last diabolical hint don't fear the reaper. we reveal where i am, america's top state for business and you can see where your state stacks up tomorrow morning on "squawk box. >> scott, the other point just to check is that interview was not necessarily recorded today, of course, as well >> reporter: the interview with governor evers >> exactly. >> reporter: no, it was not recorded today. >> okay. good. >> reporter: it doesn't mean i'm not in wisconsin. >> doesn't exactly not necessarily. >> reporter: it was a nice try though that was good. >> scott, thank you. >> are you in a shed >> a shed, i know. behind-the-scenes tweet from harriet taylor as well. >> don't you guess what is your guess >> i did not get it last year.
4:56 pm
i got one of the finals. >> do you have a guess >> my process was thrown off, but i have a chance -- >> no clue >> he reveals tomorrow morning. >> reporter: still on come on "closing bell", the wall street look ahead the number one event every investor needs to be watching. fed chair's testimony on the hill, we'll preview that coming up is where people first gathered to form the stock exchangeee, which brought people together to invest in all the things that move us forward. every day, invesco combines ideas with technology,
4:57 pm
data with inspiration, investors with solutions. because the possibilities of life and investing are greater when we come together. ♪
4:58 pm
4:59 pm
jay powell is headed to testify on the hill tomorrow ylan has a preview for us. >> reporter: will friend, that testimony will be public at 8:30 a.m. tomorrow. i expect he will say the fed will continue to act as appropriate to sustain the expansion. that's the same language used in the monetary policy report submitted to congress ahead of the hearing, and it leaves a rate cut on the table. i will be looking to see if and how he responds to the big june jobs number and the drum beat of criticism coming from the white house, larry kudlow said this morning there's are no plans to remove powell at the present time guys, lawmakers will want assurances there are no future plans either back to you. >> ylan, thanks. we have a news alert on facebook julia boorstin with the details. >> reporter: facebook has
5:00 pm
responded. david marcus, the one who runs the division, saying they are eager to work with regulators, saying they want and need government central banks, regulators, nonprofits and stakeholders at the table and value the feedback they've received it is the beginning before we hear some testimony about libra next week. guys, back to you. >> thank you for that. we're out of time. that does it for "closing bell." >> "fast money" begins right now "fast money" starts right now. overlooking times square i'm melissa leer pete gentleman a jairan, tim seymour and guy adami are here shareholders have been left in the dust we have got the details. plus, boeing anding the day in the green despite deliveries dropping 37% for the first half of the year. is all of the bad news already priced into the stock? technician explains why he says buy boeing now first we start off with the make or break moments for


info Stream Only

Uploaded by TV Archive on