tv Closing Bell CNBC July 11, 2019 3:00pm-5:00pm EDT
hit by competitive pressure now, but they have a lot coming at them. >> indeed. >> folks -- >> we're going to finish off these tie dye -- >> 100% sugar drink from starbucks. >> thanks for watching "power lunch." >> get yourself a tie dye cream frappuccino. "closing bell" starts now. >> good afternoon. welcome to the "closing bell." i'm wilfred frost. goldman sachs, that stock up nearly 3%, one of the big leaders on the dow that crossed 27,000, on pace for a closing high 59 minutes of trade left and everything you need to know as an investor is coming you. >> welcome i'm sara eisen to what's driving the action higher today health care stocks rallying after president trump's reversal on drug rebates. fed members this afternoon, williams and bostic saying the u.s. economy looks pretty good, but fed chair powell in his second day of testimony says there's room to cut interest rates. joining us, stephanie from
nevine we could go with all three drivers, but if you are looking at the dow on track to close at a record a lot of health insurance stocks are helping take us there. >> absolutely incredible the moves happening in these stocks. they've all really underperformed all year long because of all of what is going on in washington the rebate rule dismissal is really a very, very big deal because it would have made pbms extinct in the medicare world. >> are you a buyer >> i am. i have been buying united health care because the stock had fallen something like 25% from its december high, but even now down 13% from its highs. trades at about 18 times forward system the real name to own, the levered one would be cigna, trading at a 40% discount to anthem, absurd, and they have the express skrip as a pbm the stocks are attractive, though and very under owned that's the real key here. >> big moves in yields, ten year
at 211 lots with stephanie to come over the next hour. focus in on the big stories, bob is on record watch at the exchange, steve liesman has highlights, elon moye, kayla tausche big technology and josh lipton news on microsoft >> dow at a record high, let's not quibble. s&p and nasdaq knocking on the door dow, january we hit, now at 27,000 the three stocks that mattered, biggest contributor visa the dow is a price weighted index. the price moves what is moves the index. visa contributed 420 points of the dow's 1,000 point rise since then the other second most important one, microsoft, contributed 350 points of the move in the dow jones industrial average since january 19th, when it hit 26,000 3m and the industrials, tough
time, down 30% this year that cost the dow nearly 600 points believe it or not huge move to the downside for them. back to you. >> bob, thank you. fed pachair jerome powell wrappg up testimony and other fed officials making appearances steve liesman with the highlights of a busy day steve? >> didn't take long to hear from other fed officials. you know what fed chair jay powell signaling the rate cut coming at the end of july. talk about what some of the other folks have been saying got off the stage at the bipartisan policy center with fed vice chair for bank supervision and he largely agreed, he's upbeat on the economy but concerned. >> i'm an optimist to where the u.s. economy can go and where it is most likely to go as i said, at the current juncture, there are also these issues that i don't think are going to swamp that long-term trend, but that we do have to
take into account with respect to how will we in the short term respond to what maybe disruptions globally >> and then there was john williams who spoke also, in albany speaking about weak economic global growth along with declining manufacturing here in the united states. finally raphael bostic from atlanta the odd-man out here speaking about inflation, saying he doesn't see inflation being below the fed's target in measures he's using and doesn't seed see a need for the federal reserve to respond sara, here's the deal. we get the chairman lays down the marker, everything that happens, there's the comment from raphael bostic, i'm not seeing the storm clouds generate a storm yet, he does add, so the chairman lays down the marker, anything said by any fed official has to be judged against that not a lot of opposition from his committee. raphael bostic maybe just one. we'll have to listen to others to see if other folks are more
hawkish than the fed chairman as you know signalled a rate cut in july and kind of led the market to think maybe more is to come after that >> steve, kwaurls doesn't get double salary, you confirmed. >> i thought that was funny, actually, although i made the joke yeah, the idea that he's the bank supervisor and he's also full monetary policy responsibility, it's really interesting right now, wilf, as you know the question of should the federal reserve act to steepen the yield curve to boost net interest margin. this is in your wheelhouse, mr. frost, covering the banks as you do along with sara, of course. this idea he said no, not necessarily, but he did say there are sort of reasons why the federal reserve might want a steeper yield curve. >> we're going to get to hear more about net interest margin next week when they report, the banks. thank you very much. >> very important. sure. >> it is very important.
don't be sarcastic turning now to tech and the social media summit taking place inside the white house with notable names, not making the list, elan moye has more for us. >> big tech a big swipe left facebook, google and twitter not there. president trump is convening conservatives who claim the platforms are biased against them, outside groups like heritage are there, trump's campaign manager is attending and lawmakers critical of big tech today trump tweeted the focus will be on dishonesty and discrimination and said we will not let them get away with it much longer. trump supposed to drop in on the summit at about 3:45 see what he says irl, tbd. >> very good >> wait. what is irl. >> i knew someone would ask that in real life irl. >> okay. >> tbd i got. >> lol is old. >> yeah. >> a bunch more since then
>> lol i know. >> thank you sticking with tech, france passing a new tax aimed at biggest firms. kayla tausche with the details. >> the french government aproved a 3% tax on companies thatmake more than 25 million euros there, 30 companies qualify, including google, facebook, amazon, apple, the companies for which the proposal is named. u.s. trade representative robert lighthizer says american companies are being targeted for being global leaders and usdr is looking into a response that could include new tariffs. now the deal was defended by the french finance minister today and still must be signed by french president emmanuel macron president trump spoke with macron by phone on monday but the official white house read out said the two only discussed iran back to you. >> thank you sara, my favorite of the shorthands are it's the one, seriously, when they take all of the vowels out of it.
>> not really an acronym. >> you're right. but it's a social media -- seriously. >> you only get a certain number of twitter characters. >> anyway. >> i like the in case you missed it one. >> that's a good one. >> you know who knows all of these, tech expert josh lipton has the latest on microsoft for us >> yeah. wilf, news here microsoft remember, does have an answer to slack. it's called teams and it's just now making news delivering new stats showing its traction saying that team service now reaches more than 13 million daily active users and that would be ahead of slack's last reported number 10 million in the three months ended on january 31st microsoft also released this chart suggesting that teams is actually growing faster than slack. slack, of course, made its debut on the nyse back on june 20th, surged about 50% on its first day. even before the news down about 10% since then guys, back to you. >> all right
josh, thanks we've got about 52 minutes left in today's trading session. with the nasdaq off of its earlier highs around record levels, washington regulation is looming. could techs run be in jeopardy bring in john friedman it's been the best performing group of the market up more than 20% this year. is it price for perfection into another earnings season? >> i think big tech is fine outside of the regulatory risks. these businesses are doing very, very well and i don't think that valuation is really a concern for those companies, at least relative to their growth prospects. >> john, how big an impact might these foreign taxes or foreign regulation have, the france example the latest and the one at the forefront >> right i think this is -- this one was
kind of sort of unnecessarily arbitrary and targeted at tech and they're taking advantage of the fact that facebook and google are really in the cross hairs here in the states almost as if they think they can get away with it it's not that big of a deal right now, but it's emblematic of what could be a problematic trend. anticipate not calling that right now. i think it's not even signed yet and there's room for, you know, room for flexibility and so forth i think in negotiation >> when you say reasonable valuations, john, what part of technology specifically are you looking at goldman sachs recently just sounded the alarm on software stocks for high valuations they've been darlings of the market. >> right. >> when you say reasonable what do you mean? >> okay. so like i said, relative to growth but -- and i would take issue with their call on software stocks, particularly
software as a service stock or cloud stocks a lot of them, there may be some -- there may be a couple that are overvalued and i think they stand out, but i think what's understand appreciated here is the tremendous amount of operating leverage that these businesses have inherently when they want to start turning a profit they can and so i think that's -- that skews the valuation argument a little bit because people are looking at projected earnings which i think are, you know, long term might be under represented what they can really do when they, you know, when they start to mature five years down the road. >> stephanie, is regulatory risk priced in these stocks >> i don't know actually maybe not. but i think that regulation is going to take a long time to filter through and to see the results. look, i think in terms of technology in general, there are the haves and have nots. software you talked about it and
i understand why you want to own some software. software as a service. but they do trade at 30 to 50 times forward earnings they do have operating leverage and recurring revenue. that's why they trade where they do expectations are high and it's a very crowded space the better value would be in the semiconductor space and even the f.a.a.n.g. because they have been dragged down on regulation, but in terms of semis, you really do need some of the end markets to stabilize i think your risk/reward on semis and semi cap equipment is better than software. >> wonder if there's a way to play the high growth trend, high margin, secular growth, strong story, without getting caught up in trade, semis or political risks and some of the social media stocks. >> you can do security i mean, because everyone needs security the problem is, they're also very expensive and also done quite well look at fireeye, pal low o alto they're not cheap. >> thank you very much >> after the break, a bullish
call on snapchat to a slew of big box retail initiations the word on the biggest analyst calls. >> we will drill down on the fed's next moves with randy kroszner and gerald dris coll. our data tracker, consumer price inflation posting its biggest gains since january 2018, rising 0.3%, with a gain of 0.2%. good weekly jobless claim numbers, to a total of 209,000 we've got about 45 minutes, little more than that, left of osecd on track for a dow ror cle. we'll be right back.
welcome back just under 45 minutes left of trade. the dow crossed the 27,000 mark for the first time ever and remains on pace for a record close. over to mike santoli for today's market dashboard >> what could possibly go wrong. a mystery chart we will get to then current mood, check in on sentiment. name, more iconic duo than what
i'm going to show you at the back half of this hour keep calm and carry on markets are in a calm mode right now. here's a mystery chart not going to ask you to guess what it is, but i would ask you look at the shape of this chart and say, would i want to buy this thing, own it, bet that the trend is going to continue is it perhaps a little bit overheated in the short term i would point out a couple things one, this vertical move right there, this vertical move right there, and you see when it starts to accelerate, maybe it's time to bet it's going to calm down a little bit. it's a ratio of the nasdaq 100 to the russell 2,000 the fact that it started at 100 might be a hint it's a relative chart. over the past five years the nasdaq 100 has outperformed the russell by more than 50 percentage points. you would say the trend looks good hard to say it's going to lose steam, except it has become extreme and arguably stretched in the very short term, guys it really just shows you what this market is about
it's about large cap growth, about the big stable companies, as opposed to the small cyclical ones maybe that's going to change maybe that means something for the fate of the bull market. historically it's not necessarily the case because small stocks aren't working somehow it's game over i would keep an eye on this relationship for a while. >> it's also a little bit about tech versus banks. >> for sure. without a doubt. techs versus financials. today very slight reversal in that dynamic with financials doing fine and tech taking a break. absolutely there's a lot of sector kind of sector impetus here too. >> good thing you didn't make us guess that. >> no. i would never do that you know. >> you could have planted the answer with me, actually next time. >> i usually pass his tests. that one i would have failed thank you. time for word on the street, bank of america raising its price target on snap to $17 from $12 a share maintaining a neutral rating the firm cited a spike in app downloads after snap introduced its new gender face swap filter.
sensing more optimism on company innovation there. >> wedbushup upgrade abercrombie & fitch. the firm saying search trends signaling positive inflection and consumer demand for pay later installment options. goldman sachs initiating specialty hardline retailers adding target to its conviction buy list and giving buy ratings to costco, home depot lowe's and others driving strong results for market share games and income growth. >> that's beloved costco in that list. >> but this is really u.s. consumer based of 13 initiations, ten are buys, only three sells. it is quite broad. they focus on the big box retailers for the ones they like, those invested in supply chain. the upside on target because of the valuation relative to walmart and costco which they like a lot as well. >> you hit on it perfectly the companies have been
investing heavily for the last five years and now just starting to see some momentum stocks are actually very cheap the product assortment is getting better, mix, private label, that's happening at target and the digitization, costco is a compounder, special situation story. i tell you every time i trim it and take profits i always regret it it keeps going up and up last night the same-store sales, crazy. walmart has upped the inflection as well and a fairly new position but we have upside there. >> bank of america the snap upgrade, and wedbush abercrombie upgrade, stay at neutral, bringing the target prices to where the stock got to, a bit behind the curve >> snap up 185% year to date raising numbers because user growth getting better. >> i didn't know about the gender face swap thing. >> check it ut. >> i haven't been on snap in a
while. >> we'll do a face swap. 40 minutes left of straight before the bell. the dow we're watching on track for a record close after breaking 27,000 for the first time ever. we're sitting above that level right now, up 175 on the dow nasdaq and the russell leg, the s&p around the 3,000 level after the break heading out to sun valley for an interview with academy award winning producer brian grazer his take on the content wars. >> health care stocks on the move as the white house abandons a drug rebate initiative the winners and losers on the news -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.
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welcome back if you can't access your twitter account right now, looks like the service is having some technical issues we got the statement from twitter, we are currently investigating issues people are having access twitter. we will keep you updated on what's happening interesting timing as the white house is hosting its social media summit right now. >> clever way so they can stop the president tweeting about the summit. >> i don't know. >> i doubt that. >> twitter and facebook are not at the social media summit. >> technology and media giants are gathering for the allen and
company media conference julia boorstin is there with academy award winning producer grazer take it away. >> brian grazer, thank you for joining us today. >> for sure. happy to be here. >> here in sun valley hearing talk about the streaming wars, announcement about hbo max and there's so many new services, disney, nbc universal, preparing to launch over the next year what does it mean for you as a content creator to have all these new services out there >> for me, i mean multiple things first, it would mean that i have many different possibilities, many different ways to materialize, make a movie or television show or short form content or documentary, so it gives you an opportunity to make more content, but then that's both good and bad. the bad part of it is that it becomes an oversaturation of content and you say how do i actually accomplish the dream that i always had when i started
making movies beginning with the mermaid. that means like how do you differentiate your content from all the other content. that is your primary task, to think about what is the subject, what is the way you're going to differentiate your television show or your movie from all of the other product that's out there. all the other product is being birthed primarily from the console dated companies, disney, absorbing fox, at&t, and you know the -- >> and how is the consolidation changed the business does that mean that the content itself is changing we've seen the box office decline by 8% so far this year we're seeing fewer hits. how does that change things for content creators is this. >> i mean, the most necessary ingredient to a good project of any type of narrative form is a good writer.
and so all of the -- these companies, of course, are -- they believe that there's a finite talent pool of these great writers and there will be ten big brands of writers but there's thousands of other writers, and many of them are very, very qualified for these top ten, they pay, you know, very big number for these 10 or 15 writers that will theoretically make hits in differentiating movies or television shows >> you're working on an incubator -- >> seems to be a scarcity of talent what ron howard and i did, we decided we would finance a content accelerator called impact and we call it impact because any time ron and i ever do speeches over these 30, 35 years, we both say we're in the feelings business. that's all these, you know, that scripts and kopts is designed to
do, designed to ignite memorable feelings within the customers customer or the audience if you fail at ignites feelings, emotion, you're not being -- you're not registering with people optimally you want to ignite weight going to become their best memory of their life. so with movies and television shows, which are about stories, because stories are everything, they're everything here in sun valley for that matter, these giant tech companies are all built on a story, so being really clear on your story is essential. >> wilf, you want to jump in here. >> i do. brian, wilfred frost here. i wanted to ask about feature films and whether you have a preference when they're released whether they go straight to the small screen like netflix is doing on the platform or whether you would like to see them on the big screen first would you like to see the likes
of netflix be a little more flexible on that >> i don't think i want it try to push netflix to do something they think is not within their culture, but because i'll tell you, for multiple reasons, but one, i think there's some movies that are best suited going directly to a streaming platform like certain dramas are best suited to go directly to a streamer because they're very hard to market to the consumer in a theatrical exhibition, and it's very expensive to do that streamers can identify their customer and does this customer want an emotional experience we're making hill billy -- bigger event movies are for theatrical like matching those things up. >> sara? >> brian, yeah, it's sara eisen. you know you guys are talking about how many new options are
coming as far as streaming and i'm wondering based on all your knowledge and study over the years of our viewing habits, just whether we're getting saturated? how many services am i going to be willing to pay 6 to $20 per month for to watch tv? >> not many more i think customers will have to pick the platform that is delivering to them, but i think they can't -- there's going to be a saturation, an over saturation point, if there isn't already, so it's just about getting, you know, reaching creating something that's shockingp, something that's different, finding a subject that's relatable but having a perspective, an entry point that is different than anybody else then, of course, with modern cinema now, you can make things look very different. make -- you can make an experience to be quite palpable sin ne matically like you couldn't have done before. you need great writers and
that's why we're having a content accelerator, a global platform, that enables voices from all over the world to enter it we had a kid from zimbabwe created an animated movie in eight weeks that sold for a record amount of money i think there's originals voices all over the world that have to be heard to make these platforms better >> more questions? >> well, if there's time for one more, i would love to hear you were talking about the streamers and the movie business, do you think that the rise of streaming, these options, things you can watch at home, will end up killing the movie business and the decline at the box office will continue >> it might kill the theatrical exhibition business. there's one or two companies that are exceptional at theatrical exhibition because they have content, i mean, for example, disney, is exceptional at that because they have these
movies that make billions of dollars -- >> we're out of time thank you so much,sara, back over to you. >> we were done. >> we were done. >> great having brian. >> little bonus. >> julia boorstin, brian grazer, he's done many, many amazing films and tv maybe my favorite is this movie called "frost nixon". >> i haven't heard of it. >> genius. >> no. great producer ron howard great director as well enjoyed that american gangster probably my favorite. >> we've got -- >> a new show. >> 28 minutes left of trade. here are the things driving the action financials and industrials the top performing sectors john and raphael making positive comments about the state of the economy and fed chair powell signalling a rate cut is coming. up 177 points. >> time to get a news update with sue her raera. >> iranian foreign minister
mohammad zarif saying america's role in world politics has ended and said the u.s. has failed to form an international consensus against iran's nuclear capabilities and made the speech in tehran. microsoft opened its first european retail store in london, minutes away from apple's original london store that includes gaming lounge, augmented reality experience and an area for business technology. amazon says it's going to retain about a third of its u.s. workforce in order to better compete in a changing economy. it will involve about 100,000 workers and enable them to transition into software engineering positions and other technical role. it's a robot umpire. he called his first baseball game last night. it happened at the atlantic league all-star game in york, pennsylvania the robot uses radar tracking technology to determine the location of the ball as it
crosses home plate it then relays that info to the home base umpire via an ear phone connected to an iphone seems like a lot of work, but it's pretty cool back to you guys. >> pretty cool >> the other thing i was going to say, microsoft, i don't get the point of a retail store. i know they've got the surface now, but you're not going to go in and sign up for cloud computing in a physical store. >> there are those who say they want a more is haveble footprint with the consumer. >> sure. >> the augmented reality thing is a big hit. >> sue, thank you very much. >> see you next hour. after the break, charles schwab says there's one key thing that could determine how long the economic expansion lasts. edd it's not the f she'll be here to explain next - stand up if you are first generation college student.
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a check on sentiment this in particular, this measure is a monthly reading on the national association of active investment managers. their equity exposure. this is a percentage it's essentially saying exactly how aggressive these investment advisors who run very active tactical portfolios are. you see there's been a big pick up since the may lows. may a lot of traders and investors got defensive. one of the reasons to expect a rebound. it has come up but it is below where it was in april. that's probably a positive that people are not as over aggressive as they were in april. still at the upper end of what i would consider the bullish range over the last couple of years, we've had some spikes above that when it really got extreme right ahead of that early 2018 pop right now i think you would have to say, you know, the speculative sap is rising, seeing option traders get a little aggressive playing the upside, but in general even though at new highs it's hard to say that people are over bullish, over confident just yet. >> mike, thank you very much
let's discuss this a little further, joining us now is ann saundsers from charles schwab. thank you for joining us are you guys getting cautious as we push to the new highs >> not necessarily increasingly cautious we became a little bit more cautious about two years ago we had had an overweight recommendation on u.s. equities from a tactical perspective for the entire bull market and felt like we didn't want our investors to get out over their skis went to neutral, stay at your normal long-term allocation. we've had an overweight to large cap stocks in the u.s. at the expense of small caps. no changes to that in the last couple years. >> i feel like, you've been more on the cautious side warning about the risks piling up in the economy and in the markets. and yet here we are, notching three major milestones on the major averages on hopes of what looks to be a sure thing, another federal reserve cut, here we go again. >> i think that a fed cut is
obviously positive for risk assets we have -- we've seen that in the last few weeks i'm not sure it's the elixir to what ailes the u.s. economy. that manufacturing recession we appear to be, the recession in the u.s., i don't think what caused that was interest rates being too high i'm not sure a quarter point or 50 basis points cut is the answer to pull us out of this sort of slump in spirits which i think is trade related that's why we continue to think trade holds the key. still a lot of uncertainty with that this is not the right time for investors to take excess risk beyond their normal strategic allocations. >> stephanie, where do you stand on that if we get a rate cut, do you think that gives another leg to the equity market or is it priced in. >> well, i think it is starting to get priced in at these levels for sure i'm in the agreement with her, i
don't know what a quarter basis points cut or 50 basis points cut will do to the economy what it will do is continue to weaken the dollar and that is good for multinational companies. >> maybe everybody else is easing too. >> yeah, but i think on a relative basis, the dollar has hung in so strong so i think that to the extent that the dollar weakens and it helps multinationals because we know the s&p 500 companies have a large exposure overseas, that will help earnings it helps corporate earnings, i don't know if it helps u.s. economy. >> thank you for joining us. good to see you. >> thanks. you too. >> from charles schwab >> health insurers are jumping >> fed pair jay powell says concerns are weighing on the outlook. two former fed officials coming up how do you gauge the greatness of an suv?
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you're seeing stocks of cigna, cvs and united health rising today. distributors are up because if rebates went away the list prices of drugs could fall and they are paid based on list price. what's down, the pharma industry liked the rule because it could have lowered prices for patients at the pharmacy counter without affecting profits and broader concern the trump administration will soon roll out stronger measures affecting their pricing power. back over to you. >> thank you do you think the political focus shifts within the subsectors of health care? >> absolutely. you're seeing the pharmaceutical stocks down 3, 4, 5% these are big moves for these companies an they're already cheap. they haven't out performed and they're down anyway. any time the government gets involved and politics get involved, as a headline, it's sell first, ask questions later. the same thing happened to hmos a couple months ago when this started to kind of come -- >> just to be clear, what we're
saying is, this was a big effort by the trump administration to try to say we are going to lower your drug prices, get rid of the rebates, second thought this will cost the government too much money and come up with something else you're saying pharma is -- >> he'll go after pharma and it will be international price controls and that could really be -- that could be quite negative i don't know if he will get it but the rhetoric is going to increase. >> we are on record close watch for the dow because united health is up 5%, tops the dow, which is up 190 points it leads the major averages and is still above 27,000 and still above what we'd count as a record close the other indices flat with the russell lags. >> up next, last chance trade with stephanie link.
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how'd he get out?! a camera might figure it out. that was easy! glad i could help. at xfinity, we're here to make life simple. easy. awesome. so come ask, shop, discover at your xfinity store today. welcome back just 1 minutes left of trade the dow likely to have an all-time high. the s&p just in that territory, 2997 the level it needs is 2995.8 we could have two record closes on our hands >> stephanie, your last chance trade made it a sexy, exciting stock. >> i did this for you, sara.
totally. treehouse foods. no one is going to know it it's like a $3 billion market cap company but it trades well in terms of volume you know i like restructuring stories. new management teams that have proven track records this fits that fill. good, private label brands and they have a very good customer list the private label data points we're getting in the industry showing volumes of private label are doing better, pricing is stronger the real interesting part of the story is operating margins at like 4%. prior peak was 9.5%. if you can get that to 7%, your earnings power for the company is 4 a share analysts have 275 for next year. very cheap a turnaround story. >> they sold their snacks business. >> that was a positive surprise. >> they didn't get much for it. >> they shouldn't, but they sold it and focus on what they have. >> private label packaged foods. >> there we go
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companies. the new rules could cut the fee income of companies like grubhub to 10% of the takeout order from the current 15 to 30%. it's trading down 4% >> does that mean we pay less? >> sounds like the -- i'm not sure i'm sure they'll still charge high prices. >> they are expensive. american eagle going to sell cbd products the teen retailer striking a deal with green growth brands. sales expected to begin in october. the stock is up less than half a percent. we've got just over five minutes, 5:30 left of trade time before the closing countdown we're up 207 points on the dow all track for record closing high to mike. >> barely in record territory, calling this an even more iconic duo. look at the figures for today.
new york stock exchange advancing versus declining you see it slipping here to the negative it's been this way all day more or less even for a flatish market it's something to keep an eye on, which brings us to the duo, which is the s&p 500 along with the cumulative advanced decline line a measure of a tracking of -- it's been positive, right, the orange line has supported this move in the index itself, but at the very tail end of it, this is from bespoke, you see slippage right there a lot of what you're seeing is rotation, yield stocks have backed off, the banks taking, you have to keep an eye on it to make sure the rally does not narrow too much. that's what some of the technical folks are looking at it's been hard to find fault with the character and the rhythm of this rally this is one of the things, a day like today see if it carries over into tomorrow you might have to keep a lookout for subtle selling pressure entering the market to rick santelli for a check of
the bond market. >> thanks, mike. tell you what if you're a real market aficionado, the last three days, monitoring fixed income, interest rates, foreign exchange it's been wild. today a 30 year bond auction that was "d" as in dog and we have jay powell, two days, not challenging the notion of what the market has built in, which means we're likely getting an ease at the end of the month major rise in rates. three day chart of ten year note yields, now at one month highs tens minus twos, a spread, supposed to be slow moving, a three-day chart, moved a dozen basis points unheard of. and finally, this is a june 1st start to bunds, have gone from the minus mid 40s to close to minus 20 they've been in one month, also one month high 30 year bonds six-week high. what's going on? yield curve steepening and maybe the stimulus of our fed with
global stimulus will get horsepower back into the marketplace. bertha, nasdaq melted a bit, going to try to get to unchanged in a few minutes left? >> we'll see, rick we did get an all-time for the nasdaq dak 100 but has faded tech is muted today except when it comes to some of the software names that have been powering the move higher. some of the cloud names today hitting new all-time highs, workday and microsoft, of course, which has really powered the move above 8200 for the nasdaq biopharma, biotech the losers today, down nearly 2% as the trump administration has pivoted away from those drug rebates to talking more about drug price itself being the regulatory target let's move over to bob pisani. >> hello and the important thing about today we have new highs on the dow and looks like we're going to have new highs on the s&p 500. nice rally just in the last couple minutes standing here we had a little bit of a blip in the middle of the day.
a disappointing bond auction about 1:00 eastern time. interest rate sense stive stocks moved around a boost up in bank stocks. yields move up a little bit. the utilities moved down, reits down a little bit. that was a short-term blip overall the market turned around later in the middle of the day about 300 new highs down here at the new york stock exchange. couple dow new highs, walmart we've seen new high list, visa, an absolute rocket since the last time the dow hit a big round number, 26,000 that was in january of 2018. visa is the big mover there. mcdonald's also a 52-week high if you want to look at the last time we were at 26,000 to 27,000, visa is the single most important factor in why the dow moved up that thousand points. almost 400 points of the 1,000 point gain in the dounl dow jones was due to visa and that shows you with what happens with
the big technology companies visa is a fin tech company mastercard and the s&p 500 also a major factor in moving the markets forward. as far as the s&p 500 goes, we moved from let's pick 2,000, that was 2014, five years ago, again, technology names like microsoft, apple, amazon, all were the major factors this is the point we keep making over and over as people keep buying the indexes through etfs, and people who are considered in just buying the indexes these big names, the top 10 companies in the s&p 500, are the ones that really move the index if you look at these stocks like amazon, for example, microsoft, those top ten companies accounted for about 35% of the gains in the s&p 500 in the last five years the other 490 companies were the other 65%. the big keep getting bigger. when those ten companies move, they move all of the indexes
because of the victory of etfs and indexing this is a lot more important than it used we're going near the close right now. the s&p 500 closing in record territory, the dow jones industrial average also closing in record territory. that is a double record high close. welcome to "closing bell." i'm sara eisen. >> i'm wilfred frost, mike santoli, market commentator, the dow above 27,000 for the first time today, closing at that level, a record all-time closing high the s&p 500 was back above 3,000 during the session, but closed just shy of it but nonetheless a record closing high slight decline for the nasdaq. the russell lags further one of the reasons the russell lagged was, of course, some
small cap under performers the financials for once out performing today, yields rose significantly above 2.1% on the ten-year that helped the bank stocks. the dow flattered by the likes of united health. >> all three major averages are sitting basically at record highs. who would have thought after a year when the market was already up coming into the second half of the year, more than 15%, you would climb to new records that is the power of an easy federal reserve. jay powell, just cementing twice on capitol hill, had a chance to walk it back today and didn't do so and the ufor rick reaction on wall street. we can talk about the fact that small caps are back in correction and transports being weak, but the dow, s&p, and nasdaq all at record highs. >> nasdaq still six points shy but very close to it. >> hit it yesterday. >> also say, intraday, the dow
recovered to close at its high, s&p just shy of its high for the day. relatively volatile session, but ending strong the last 10 or 15 minutes, taking the s&p into its record close. >> talk about the market today stephanie link is here, portfolio manager, richard bernstein, ceo, and tobias, chief strategist at citi joins the conversation mike, to you, there were individual stories out there, like health care, which certainly drove both the dow and the s&p higher, but overall, generally a bullish response sh. >> yeah. to pick on what you said you have to respect the fact that the market has gotten to this point. i do think it's slowed down in the past couple days kind of interesting. i wouldn't call it a sell the news response after we got powell's testimony but it definitely was a hey, we figured this out already, this was going to be the way it is. by the way, you think maybe somebody is sitting there with a sell stop at s&p 3,000 as it put a lid on the market.
we have to see what's actually going on here in terms of underlying demand at this level at this moment going into earnings season for stocks, but in general, yes, i do think that the rally is kind of acquitted itself pretty well so far. >> tobias, what's your take as to the levels we're at, the valuations we're seeing relative to likely interest rate levels >> let's start with the valuation question if you wthink about inflation rates going back over the last 60 years, 18 multiple on trailings earnings is about right. we take the bond yield story out of it in case anybody is worried about quantitative easing distorting where the bond yield might be inflation, qe doesn't distort that on the issue of earnings expectations, things like that, they've examine down pretty markedly and that's given the market the ability to kind of set up for what we think is actually a decent earnings season we thought markets would trade above 3,000, around that aspect.
the real question is can it hold it >> our concerns are that you could see earnings estimates kind of falling off later this year and they kind of call it september, october time frame and that might pull markets back a bit. we did see the 3,000 or better move in the s&p, but we are still sticking with our 2850 for year end >> richard bernstein, what's your level of enthusiasm as we hit these new milestones in the market >> i think, sara, i want to put my comments in proper perspective. still slightly overweight equities in our portfolios for our clients. now that i've said that, let me rain on the parade a little bit. i think people are way too optimistic about the fed's ability to really stimulate the market on an ongoing basis i think tobias pointed out, yes estimates have come down, we don't think they've come down enough and there's serious earnings issues for the second half of the year and it's funny how we're entering an earnings period here but the talk is all
about the fed, not about earnings and i think, you know, to be prudent here, i think people should be a little cautious in terms of what's going on here. because i think investors have gotten much more bullish over the past year and a half >> but richard, can the fed not stimulate the markets even if it doesn't necessarily stimulate the economy? >> well, that's called a bubble. i mean we're not in early cycle environment, wilf. it's not like we're at depressed levels in the economy, depressed levels of earnings, depressed levels of investor sentiment, depressed levels of liquidity. if we were that's the beginning of a cycle unfortunately none of those are true right now we're in a late cycle environment. for the fed to be easing in a late cycle environment risks financial bubbles. >> in honor of this double record closing high day, we're going to go early to the telestrator. mike santoli. >> in honor of being 0.09 away
from 3,000 a 12 year chart of the s&p it captures the high in the market before the financial crisis and then the rebound after it it so happened it was just over 1500 it's eesssentially about a doub. we didn't spend that much time under 1,000 in the crisis, but highlight about 2014 is when you got to 2,000, up 50% over the last five years and did chop around in the range for a little while. it's not the case that round number gets you there but it shows you we did hit the peak in 2018 and have had to fight our way up there the market is up year to date. since september 20th of last year only up 3%. you can spin that and say we spent a lot of time going sideways and maybe gathered up energy there and let the fundamentals catch up as we get the rate cuts and the rest of it
to throw at the market as well one final point, not to be scary, but just to point out funny coincidences, the s&p hit 30 in 1929 first hit 300 in 1987. >> oh, no. >> here we go. but it was early '87 and went up a lot from there. >> what a downer. >> thank you very much. >> stephanie, do you think there are significants of hitting these levels, whether not 3,000, the fact that we are breaking out from the resistance levels that mike pointed to that we had been at since early 2018. >> it's nice to have the round numbers and the press and media and the individual investor will be excited about the numbers, but honestly doesn't mean a lot from an institutional point of view that chart that mike just had just tells me the power of dollar cost average, right you just dollar cost average because you can't time it and you're going to have ups and downs. i would say today i don't think that we gave a lot of credit to the very strong economic data. we have some data to get through over the coming weeks, we have ppi tomorrow, we have retail
sales on tuesday we're going to kind of be hostage to those numbers because if they come in a little bit stronger like today, this is why the bond market sold off shelter costs were very strong. >> although i feel like jay powell precommitted and backed himself into a corner. doesn't matter what the data shows. >> what if it's a one and done that i don't think is priced into the market at this point. i'm positive on the market and looking forward to earnings. it's going to be a better than expected earnings season but you have to be a little bit cautious given that we have a lot of important economic data to get through in the coming days >> i mean tobias, how critical is that, half of interest rates, beyond a july cut, going to be in terms of determining the market's direction for the rest of the year? >> look, i think earnings matter a whole lot. we were all sitting here talking seven, eight months ago that fed raising rates four times and then saw people a month ago talk about them cutting rates four times. these things can swing around. i have a lot if you like empathy for stephanie's comments about is this a one or done type of
environment. will they have to go again in september or whatever. i think everybody, including all three of us, are talking about a little bit more caution here, don't necessarily chase. that is the tendency of most investors. four weeks ago our model was still in panic. people were positioned defensive and being reluctantly tragds dragds into the market as it hits new highs the issue around i think earnings will be okay in the second quarter release, but where are we going to be talking about earnings in september. that's way more critical the thing with the fed was basically we went back to the idea of type tina, no alternatives to equities or should we be focused on earnings. >> another acronym the snap generation. >> i'm sure that's not the hottest. >> we know what it means. >> just wanted richard, to round off on the broader market chat, you're fairly skeptical about
how much the fed can stimulate that presumably means you're skeptical about what the ecb can stimulate. does that mean you rush into gold >> well, we do have gold in our portfolio, about 6 to 8% of our portfolio are in gold largely because of the uncertainty out there. gold is more a hedge against volatility, a hedge against uncertainty. there are many measures, not subject, but like real measures of uncertainty that are not only at highs, but unprecedented periods. never seen anything like this before in terms of the small business uncertainty in terms of trade uncertainty measured by the imf. all these things out there i think gold is worthwhile to have in a portfolio if for nothing else just to balance all the uncertainty looming out there. >> breaking news now on boeing phil lebeau stepping in with the details. >> sara, what we have is a shakeup in the 737 leadership. the people who oversee the 737 programs that includes the 737
max. eric lindblatt who has been in charge of the program roughly 12 months, he is retiring and in a note from the head of boeing commercial airplanes, he says that he is stepping down taking his place will be mark james, in charge of the 737 program, a boeing veteran, the charge of that as well as the company's new middle market plane that they are developing and mike senate who has been in the headlines when it comes to the 737, earlier this year when they had the briefing on changes that were going to be made to the max, changes planned at that time, it was mike senate who gave that briefing and explained a lot of what was happening with the max. he is going to be moving into a role as well in terms of product development with the new middle market plane again, a shakeup when it comes to the 737 max that plane has been grounded since the middle of march and boeing has said it's at least to the september time frame before they believe all of the fixes will be done and then they can perhaps apply for recertification. back to you.
>> phil, forgive me if you said this in the report, do you know how old lindblatt is >> he's been there 34 years. >> retirement is a fair way to frame this or him being forced out to take responsibility >> i haven't done enough reporting to tell you if he's being forced out they are using the term retirement in the memo that comes from kevin mcalister, in charge of boeing commercial airplanes. and that he's been there 34 years. but look, the last -- he's been in charge of this program the last 12 months how many have we been since march. half has been extremely trying to say the least. >> and phil, just so he, kevin mcalister is above him. >> yeah. >> to the ceo? >> yes. >> is this suggesting that it won't go higher in terms of the people that have to take responsibility >> i get no indication that kevin mcalister's job is in jeopardy or indication that dennis millionberg as ceo of boeing is in jeopardy.
i'm hearing back from people in boeing, not a widespread hey, let's find somebody and take them out behind the woodshed this is a case where they're trying to as much as possible, correct what's wrong with the max get it back in the air that's the priority right now. >> thank you >> you bet >> steph, you still hold boeing? >> i do. had a good day. >> it's been an adventure. that's for sure. i think this stock is in a trading rangeuntil they get th fixes in place and plane back in the air. i think they will and i think that next year will be a much better free cash flow story, return to that story, that you have to have patience in the near term and i do we're long term. >> we should mention industrials the best performing group in the market, boeing and some of its competitors, despite the fact that we did get a trump tweet that said that china is not holding up its end of the bargain on the trade truce and buying agricultural products seems like it's got a little dip on that and then back to powell cutting rates.
>> i think that was taken as a gesture i have the farmer's back. >> we have far from a done deal. >> i think the industries were caught up in yields going up, defensive group selling off, transports and industrials and the banks getting picked up. >> fastenal and nsc had terrible quarters and group able to rally. >> thank you all very much for joining us >> thanks. >> thank you up next, former fed governor randy kroszner and former dallas etr y , ident gerry o'driscoll whhejapowell has backed himself into a corner on cutting rates. ♪♪ ♪♪ ♪♪
welcome back the dow and s&p 500 closed at record highs the nasdaq just missed out, about 5 or 6 points from its own record high. bob has been in the middle of the action as he always is and bertha coombs in the middle of the action of the nasdaq which didn't make it bob, start with you. >> important thing here is we hit new highs on the dow and s&p 500. modest expansion of new highs down here, almost 300 at the new york stock exchange. visa has been a monster for the
dow and s&p since 2000 the s&p the biggest mover in the last five years. mcdonald's also 52-week high didn't close there, though movement on the health care front. we heard, of course, about how the administration has withdrawn its proposal to eliminate rebates from the government drug plans that helps the hmos and hurts the drug companies, pfizer and merck to the downside. interesting reversalal in the last couple months banks and many of the industrials have underperformed today we saw banks doing better. yields a little higher, disappointing government auction. 3m and caterpillar nice rally today, but they have under performed the broader market back to you. >> thank you as we mentioned nasdaq did under perform the major averages bertha coombs with the details on the movers there. >> the nasdaq 100 hit an intraday record high in large part because of microsoft today. hitting yet another record high.
although the other f.a.a.n.g. names today were fairly weak to the downside as bob mentioned biotech was a drag a big drag on the small caps, though the large caps were hit on that potential news that we'll see more emphasis on medicare drug price regulation after the pbm was reversed also one of the things that helps the small caps are regional banks and they were better today, not enough to offset the drag from biotechs. back to you. >> federal reserve chair jerome powell signaling a rate cut could be likely but a fair of fed presidents spoke positively about the economy. john williams saying the economy is in a good place and richmond fred tom barkin doesn't see a case for rate cuts. >> let's bring in randy kroszner, professor at the university of chicago school, and former fed governor gerry
o'driscoll, cato institute and former vice president of the dallas fed good afternoon to you both randy, start with you, should we still be fearing this sort of spector of deflation in the same way that people did for a lot of the post-crisis era? is it coming out that inflation is used as an excuse for a cut >> it is something that weighs on the fed heavily because they're really afraid of getting into a japan-style situation where, you know, they said they want to get to 2%, can't quite get there, they lose credibility, and inflation starts to go further south so they want to try to stay ahead of that. >> what's your prediction on how many cuts we'll get this year? >> i think it's pretty much baked into the cake we will get one at the end of july if inflation doesn't start to move up i think we'll get another one and could be one more beyond that. >> jerry, another one of the discussion points used by the fed chair in recent days the fact that internationally the picture has got worse. do you think the fed should
follow rates lower just because they're lower outside in ecb and japan? >> well, rates have been trending low lower and last december they raised rates against the trend. they felt like they had gotten far out there. danger of the yield curve and, of course, strengthening the dollar i think they yielded to market signals for this signaled rate cut. >> yeah. randy, they yielded to market signals and then there's this question about whether they even need to cut rates in july. today's data, lower jobless claims, we had the better jobs report, even firmer cpi numbers come out today is there a risk that powell jumps the gun with the cut when the economy doesn't need it? >> it is hard to see how things have deteriorated between the last meeting and this one suggest a cut. the data has come in roughly as expected, maybe a bit stronger, and we're seeing, you know, maybe a little bit more evidence
of inflation it's hard to really explain why they're going to do it now rather than having -- why not have done it six weeks early >> jerry, your take. >> i think they're trying to correct a mistake and get back in line with market interest rates. while there might be another cut i could see it being one and done. >> jerry, what's your take on how much pressure you think the fed chair is from the president and whether that's influencing the pivot he made over the last six months >> i don't -- my take on it, it may have held up his being willing to cut rates it may have been counter productive so i don't think he did it because of the pressure. >> randy, if we have this situation where in retrospect december was one step too far, what does it say about the underlying strength of the economy if it can be kind of
thrown off course by that incremental extra rate hike? >> i think people get a little bit too wound up over one quarter of one percentage point. if the entire u.s. economy or maybe the world economy depends on 25 basis points one way or another, we're in a lot of trouble. you know, we can get it roughly right and maybe they shouldn't have gone in december or maybe they should have they cut now the difference between plus or minus one quarter of one percentage point isn't going to make or break the u.s. economy. >> you're a economist, i don't understand why you're not on the fed board. a number of vacancies right now. do you think this is a tougher job to be a fed governor under president trump or a fed chairman than prior regimes? >> well, remember, i was there during the financial crisis from 2006 to twine. that was a tough time to be there too. the fed is always in the cross hairs and so the criticism has been much more explicit, but during the financial crisis there was a lot of pretty explicit criticism of the fed.
it's always tough to be there. >> i will note there was bipartisan support for mr. powell on the hill even from senate republicans. >> a lot of people commending the job he's done so far, both yesterday and today, exactly randy and gerry, thanks for joining us. >> thank you. still ahead, the financial stress index falling to a nearly one-year low up next breadok wn whether that could potentially impact the fed's rate cut decision. - did you know that americans that bought gold in 2005 quadrupled their money by 2012? and even now many experts predict
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♪ you need to calm down a historic day on wall street here today with the dow and the s&p 500 closing at record highs so keep calm and carry on. send it to mike santoli for the final dashboard of the day. >> the markets have returned to a pretty calm state. here's a measure of that the st. louis fed financial stress index, when this line is going down, the market is less stressed out you see this is a 10-year look at this coming down off the heavily stressed levels of the financial crisis in 2009 have knocked around here what's notable is we're back to where we were basically last fall when the markets were at their high before we had the fourth quarter freak out about the fed tightening campaign and all the rest of it and this is yet another thing on the list of items that make it look strange that we're talking about a rate cut you're talking about markets at all-time highs, good employment
data, we have inflation even picking up at least on a one month basis, one quarter basis and yet here we are. the other way to look at it is, this is so calm, because we're expecting a rate cut, right, it's obviously a dynamic relationship, it's not all about this in a vacuum and the fed reacting to it for now looks like we're going to overlook these things and get one rate cut in july. >> to your point mike, late december, early january, when we got the start of the fed pivot the main reason cited then was financial conditions >> right and financial conditions have become extremely tight right here by the way this is a multiple component crossing fixed income, volatility indicators. s&p financial indicators part of this it's comprehensive and you're right. tighten financial conditions, the market signals something and then a reverse. >> this is, it shows when we get a cut it's an insurance cut not an emergency cut. >> yes it would seem it's an insurance cut right here final point it was higher up here, say up here, before the financial crisis we're getting a cut while the
fed -- at levels the fed was kind of raising rates from in the mid 2000s. >> thank you time for a cnbc news update. sue has it for us. >> thanks, wilf. here's what's happening at this hour at the top of the hour, president trump is expected to back down on his plan to add a contentious citizenship question to the 2020 census instead, ordering the government to do the survey by other means, but it's not clear how that would occur or how it might be funded after being battered by 8 inches of rain on wednesday the city of new orleans is bracing for tropical storm barry over the weekend. it could get another 10 to 15 inches of rain the morrow says the city's water pumps are working at optimal capacity. >> we cannot pump our way out of the water levels and the waterfalls that are expected to hit the city of new orleans. we feed you to understand this and again, be prepared to shelter in place
>> one day after german chancellor angela merkel seen visibly shaking for the third time in the last month, she attended a military ceremony with the danish prime minister, but as you can see there, both were seated while their country's national anthems were played merkel said there is nothing to worry about. hope that is true and wish her the best. >> we do >> sue, we were chatting about this last time it happened. >> yes. >> i'm pleased they got her a chair at long last. >> i know. >> i hated seeing it when she was shaking. >> it was terrible and been so hot in parts of europe that maybe they could take it all indoors. who knows. >> exactly >> small steps. >> a chair is a good place to start. thank you. >> you got it. >> we've got a market flash on aluminum meg has the details for us. >> the largest maker of genome sequencing equipment the stock down in the afterhours, about 15% as the company's warning about a second quarter ta will come in under expectations and full year revenue that will grow
slower than they previously forecast for second quarter revenue they're expecting $835 million versus analyst estimates of $888 million. full year revenue growth only at 6% versus their previous forecast of 13 to 14% in what analysts expected as well. interestingly what's contributing to this is a population genomics initiative, the sequencing projects that governments often undertake, coming in slower because of a purchase that's not happening this quarter they're also saying that there's lower revenue than expected in direct to consumer genetics, companies like 23 and me and ancestry that they do the sequencing for we don't know if it's them but softness in that market is affecting their revenue growth down 14% back over to you >> ouch. meg, thanks. up next, we will discuss whether the threat of the season's first hurricane and increasing tensions with iran sge help oil pricesur higher after another positive close today.
stocks that got us here, from the milestone 26,000 mark, bob pisani standing by with a check on the best performing and worst s&p sectors since then we've got josh lipton and leslie picker bob, let's start with you. >> the important thing is the dow moved 1,000 points, 26,000 to 27,000, in about a year and a half it was back in january 2018 when we moved up and remember the dow is a price weighted index, so it's the point moves that matter, not the market capitalizations. take a look at the big winners from 26,000 to 27,000. far and away fintech, visa, master cards of the world have moved the markets forward including the s&p 500. visa 394 points of the 1,000 points the dow moved in. almost 40% of the points number two, microsoft, 325 of the 1,000 points from microsoft. disney was a surprise to me when i ran these numbers, that disney was number three, 250 of the
points little bit of a surprise was american express, generally the banks and financials have not done that well american express is an exception. the losers, ones on the other side that actually dragged the dow down here we have cater pilar, of course, that hit a high back way back in january 2018 that was the high. 3m hit a high in early part of 2018 the biggest decliner responsible for 500 points on the downside goldman got clobbered at the end of 2018 on concerns about the global slow down and you can see here that was also a weight on the dow. back to you. >> thank you tech the best performing sector since the market's last major milestone and josh lipton has the details on that for us >> so, wilf, tech is front and center in the run from 26,000. microsoft, you heard bob talking about it, leading the charge here up more than 50% since then the software giant reporting earnings next week on july 18th. interestingly just told us today that teams, its direct slack
response to stuart butterfield's company seeing traction. charging a 40% apple up 15% intel nearly 10% the tech sector overall is up about 20% over this period ibm the only tech laggard in the dow since 26,000, down almost 17%p back to you. >> thanks. from the best performing sector to the worst now, leslie picker is here with the worst performing energy stocks leslie >> that's right. you may want to hold off on thanking the energy companies for getting us to dow 27,000 overall the sector has been struggling, down 16% in the time between dow 26,000 and dow 27,000 the biggest laggards in the sector, not just including the dow components, include exploration names like apache and sim ma racks and names like halliburton and slum sburger components used in oil and gas
drilling each of the names slumdsed more than 40%. >> thank you very much for that. oil has hit a six-week high today, as tropical storm barry barrels towards the gulf of mexico many oil refiners along the gulf have evacuated or shut down production, including chevron and royal dutch shell. >> today's move comes as tensions between britain and iran escalate along the strait of hormuz. bring in global head of commodity managing director at rbc capital markets. the $60 level, wti closing above that, psychologically is that significant? is it significant technically in terms of where we go from here >> i mean, we think it's significa significant technically. the key question we're watching what are we seeing around the iran issue if we can get above the 6250 level for wti we think the next movement could be 66 around this point we think is very important
i mean demand concerns continue to weigh on this market. we see it as a push/ pull right now. >> are you surprised the iran issue hasn't had more of an impact >> the iran issue has been serious in terms of geopolitics. we haven't seen significant production or exports being shut in by this we've had six tankers attacked as you mentioned the incident yesterday with a british tanker that the iranians apparently tried to seize the ship and the british warships having to escort it through the straits of hormuz five years ago these things would have sent oil hire but with u.s. production and concerns about demand we're not really moving up the way we used to based on geopolitics. demand concerns continue to weigh on this market and even a story about tropical storm or a hurricane, five years ago would have been much more impactful, but now gulf of mexico production really accounts for a much smaller percentage of u.s. production it's not nearly the bullish catalyst it used to be
>> still, i mean, it did have an impact what do we know about this tropical storm barry and which, if any, companies are threatened here with closures >> i mean right now we've had about a million barrels of gulf of mexico production shut. 50 5 -- 53%. it's important to watch what happens for refineries that actually could be bearish in terms of demand and so again, a story that we would have thought, you know, five years ago would have been much more bullish in terms of the production that we're seeing, could potentially actually turn out to be bearish if we do have refineries off line for significant period of time much too early to tell what's going to happen but again the story of the dynamics of the story have changed in the last couple years because of the u.s. supply story. >> thank you up next, the biggest names in sports are gathering in lake tahoe for the american century championship golf tournament
steph curry, justin timberlake dom chu. >> great headset. >> love it. >> you like these? for once a year i don't get to wear these headsets. >> like sports broadcasting. i love it. >> it's my chance to put on my sports broadcast hat or headset to do this but to sara to your point an amazing event. it has a big charitable impact but so many celebrities. we just watched steph curry and his group finish up in the last 15 or 20 minutes another wave going out today but charles barkley is one of the most outspoken folks that shows up here every single year as you guys know we covered a lot of top ibs this time around but spoke about the escalation of sports broadcast rights on one of those front and he told us he doesn't see the escalation stopping any time soon >> i've been around a long time and sports rights keeps going higher and the fact is because it's the only thing people watch live sports is the only thing people gather for and you can show your
commercials and get instant feedback if you're on a number one rated tv show everybody dvrs and skips the commercials. sports rights will always keep going up. >> we spoke about some of the other aspects of what's happening around baseball, about football, sports in general with regard to gambling but he spoke very, very at least eloquently about the economy as it stands right now and who is benefiting the most under president trump's economy and he told us he still sees some issues with what's going on in the american economy. >> but i don't talk bad about the president but he's doing a great job with the economy he's doing a great job with the economy. let's be realistic it's not an economy for everybody. it's an economy for rich people like myself. first of all, let me say this, america is the greatest place in the world, but there's always been inequality. i think we need to, obviously, address the inequality between the rich and poor, the haves and have nots. >> now by the way, we spent a good amount of time, probably
about ten minutes or 15 minutes or so chatting about many different things we've only given you some time to digest a couple topics. but the whole couldn't of thnten cnbc.com he did say when it comes to sports gambling he is a self-proclaimed gambling dejennifer rate but worries whether it's good for the game of anything, basketball or otherwise. guys >> dom, awesome. are you hitting the course as well over the course -- >> of course he is. >> no. >> believe it or not, i'm here working. i am not going to be here playing in the event there's a host of other celebrities much better golfers than i am competing. but i will be for viewers out there connoisseurs of golf i will go out to coastal oregon for a marathon two days worth of golf before i head back to new york on sunday it will be a lot of golf for me. >> what's the latest handicap? >> nice life.
>> i would say this, i'm better than your average golfer throughout but i'm not scratch so i'll leave it there. >> you're better than joe kernen the important debate. >> i have played against joe kernen i played on his home track before i did okay i could have done better i look forward to the next time we actually get to tee it up together again. >> so diplomatic dom, thank you >> i try to be you got it. up next, connecticut came in at number 35 on cnbc's top states, not in the top half, of course we'll hear from the state's governor how he's planning to turn around its budget and get his state higher on the top states for business next year. the cloud i need? it has to keep up with sales, supply chain, inventory - ♪ ♪ it needs to track it all, from cincinnati to singapore. ooo! ♪ ♪ and protect it all. customer records, our financials, they better be secured. but i also need easy access, to manage data across my clouds -
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cnbc releasing its annual list of top states for business this week. coming in at number 35 connecticut. 35, connecticut, the state with education finished toward the bottom, 34 place for economy and cost of doing business trying to turn the state around. the governor joins us now. nice to see you. >> it is a turn around we are making progress. >> you know what on the economy, on doing business, how are you going to turn it around >> you are a tough grader. >> it wasn't me. >> went from 37 to 35. we are rising on up. here is what we had to do. we had to get an honestly balanced budget done on time without raising taxes. we did that. that hasn't happened in a long time in this state secondly, what we've got to do is we have to invest in
infrastructure you told me we're not doing well on your ranking. that means really transportation, rail as well as the highways and bridges we're an old state, old infrastructure, and we have to make the investments and turn it around. >> is there any tax at all you would consider increasing if it funded a necessary infrastructure project >> i prefer an idea of electronic tolling we are the only state on the eastern seaboard that doesn't do electronic tolling 40% of the weight would be carried by outof staters who would be paying that, and we need that money. we could speed up metro-north for the folks commuting from fairfield county down here by 10 or 15 minutes, in just, you know, five or six years if we can make those investments. >> i imagine one of the challenges or headwinds in recent years has been, you know, the dependence in parts of the state on wall street, on the financial economy, which has been in shrink mode, right, since the financial crisis is there a way to counteract that or has it bottomed do you
think? >> we have ubs, we have rbs, we have -- >> but for the commuters >> not as many commuting out as commuting in so that's a change, but the world is changing. ubs, the largest trading floor in the world, it will be the largest digital production center in a couple of years when world wrestling entertainment thats that over. whether finance will be as key to our future as it was, or maybe it is more consolidated here, digital media, health sciences, a lot of other things are moving in. >> could the elimination of the state and local tax deduction unfairly punish your state >> yes, it did. >> what's been the impact? >> it makes folks, upper middle class, even more tax aware when you can't deduct that, it has cost us probably a couple billion dollars in lost tax revenue. we are already what they call a donor state. i mean president trump is running up close to a trillion
dollar deficit in connecticut, still spends tens of billions more to washington than we get back. >> governor, it is well reported a wealthy man. ahead of 2020, a lot of the democratic candidates are talking about introducing a wealth tax of some form, increasing the tax that wealthy people pay how would you in your position think is the fairest way and the most effective way for that to be delivered >> i got to tell you, i got to focus on connecticut, and i'm tough on not raising tax rates in connecticut. >> but it is going to come in probably from the democratic side is there -- >> it is a federal level, you mean. >> yes, at the federal level. >> we're not going to do it at the state. >> what would be the best way for that to be imposed >> to be cautious. look, i don't think you want to be talking about raising a lot of big, new taxes at this point, but certainly if you are going to do it, do something like that at the federal level you can't expect the states to take the lead. we are in a very competitive world. i'm going to do everything i can
to keep the best and the brightest in connecticut or coming to connecticut. >> serious question. sallys or pepes? >> pepes. >> i agree in new haven. >> governor, thanks for joining gato he. >>re tbeer >> thanks, everybody a look ahead, the key things every investor needs to have on the radar as we head into the final trade of the day "closing bell" back in a couple of minutes ♪ come on. this summer, add a new member to the family. 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. your daily dashboard from fidelity. a visual snapshot of your investments. key portfolio events. all in one place. because when it's decision time... you need decision tech.
welcome back time for our wall street look ahead. china and u.s., to produce a price index tomorrow meantime, ford and volkswagen gearing up for a big partnership announcement let's start with the china trade data leslie picker has a preview. >> we will be looking for clues in how the ongoing trade dispute is continuing to impact the chinese economy. the data will encompass that on exports and imports. analysts expect exports to slow in june. companies moved up exports to beat the u.s. tariff increase on the $200 billion of goods that
came into effect in early may. imports are expected to have remained weak as well, in line with the previous months that reflects a slowing economy and consumers postponing discretionary purchases like cars and home appliances guys. >> leslie, thanks. ford and volkswagen gearing up for a big partnership announcement phil lebeau with the details. >> reporter: it is the worst kept secret in the auto industry they've been talking for months and tomorrow they will make an announcement the exact details have not been released but most believe it will entail further announcements about working together when it comes to developing electric and autonomous vehicles. that announcement will take place in manhattan remember, as you look at shares of the two companies you have to go back to january when they said, you know what, we're going to start working together in terms of sharing development costs for all types of vehicles. this will clearly be an expansion of that agreement. clearly ford has outperformed volkswagen within the last year. bottom line is this, guys, it is costing a lot of money to develop these vehicles of the future and we will see more
vehicle agreements like this by automakers in the future >> phil, thank you also, some key inflation data due to hit tomorrow more. sarah has a preview of that. >> get excited for the latest read on inflation tomorrow the june ppi expected to rae main flat, but the core rate, which takes out volatile food and energy prices, seen rising .2% it follows today's release of the consumer index which shows the highest corrin crease since january 2018 because of the turnaround of prices in apparel and used vehicle this is the wholesale level inflation. at the consumer level, it is often thought to be the leader for what is happening in the overall consumer space if we are seeing the inflation ratings kick higher, it weakens the case for fed cuts. >> but it doesn't weaken the likelihood. >> maybe in july but is it a one and done or a path for more cuts >> by the way, the bond market is paying attention because you saw yields start to take off more on the upside
look, at 242 seven weeks ago, went to 195. we only got less than half of th that it could run a little bit. >> it was a lousy option today. >> banks did well off that turf we saw today industrials were the best performing sector. record closes with the s&p and dow. >> it will be the most important thing to watch. >> we're out of time that does it for "closing bell." >> "fast money" begins right now. "fast money" starts right now. live from the nasdaq market site overlooking new york city times square i'm melissa lee we have guy adami, rana novini tonight on caps, stocks at record highs now is the time to put on your pull we'll explain why. earnings season about to kick into gear and three names we will be told to buy. we start off with the market at record highs, the dow cruising through 27,000 for the first ti