tv Closing Bell CNBC July 12, 2019 3:00pm-5:00pm EDT
you know >> i don't know the hard numbers, but i got the impression that smokeable cannabis is still very popular method >> i'm surprised the quality issues haven't drawn people into the legal. you are talking about some of the pesticides and other things in the illegal dispensaries. >> pesticides on golf courses were found on weed at an illegal dispensary >> have a good weekend "closing bell" right now welcome to "closing bell." i'm wilfred frost j & j sinking. more on that and the broader markets, dow, nasdaq and s&p all set for record all-time closing highs. >> happy friday, good afternoon. welcome, i'm sara eisen. let's get to what is driving the action transports are the leading group. health care sector is lagging. june ppi wholesale inflation
data out this morning was up slightly joining us for the entire hour is from ariel investments, pushing back against the earnings theme you're feeling good? >> i'd say i'm better than the market is feeling. i think the market is looking for soft earnings, maybe 3% decline in earnings. we're hoping that we might get a positive number, but not as bad as the markets think >> let's drill down on all of the big stories. let's start with you, bob. >> all three major indices at new highs. and let me show you, a nice group of retail stocks hitting new highs. walmart, home depot, dow tjx, autozone. a small group of consumer staples breaking out to new
highs. proctor and gamble, colgate, starbucks a 52 week high for them the payment systems, mastercard, visa, visa the biggest gainer of the year up 36%. they have been on fire recently. finally one last point, the vix down to 12 and change. this is sitting right near the lows for the year. obviously august is a slower part of the year, but even so, a pretty low vix >> and the nasdaq pacing for a record close as well bertha coombs has a look at what is leading that index. >> interesting today we have small and large caps up about the same amount on a percentage term but the nasdaq and s&p's record run this week really stem from the strength in the mega caps. microsoft in particular up for the third straight day on pace to close at a new record high. it already gained over 35% this year as it did in almost all of 2017 chips though today are the
standout leading up nearly 2% on the day and over 3% for the week and the worst performer, i wi illumina the sector off 3.5% especially after the concerns about tougher drug pricing controls potentially coming from the white house. >> and we'll turn now to johnson & johnson plunging on new fallout surrounding its baby powder controversy meg tirrell has more >> they are facing thousands of lawsuits claiming its talc products are linked to cancer and today it is reported that the justice department is pursuing a criminal investigation. for its part j & j says that the implication that there is a new development is wrong noting that it disclosed a subpoena from the justice department in february and disputed claims that its products cause cancer. and closing arguments are
scheduled monday in a case that the company contributed to the opoid crisis >> and charlie, have you got a specific view on j & j >> jaw, yeah, and nothing new happened today the idea that they are looking into fraud is not significant news, not that would take it down tens of millions like it did. and we don't see that there is evidence that the talcum powder causes cancer. we think ultimately this will get settled for a reasonable number >> and health care under the political spotlight. do you think this is a good buying opportunity for j & j >> it has a diversification. we like their hip and knee business they have a number of new drugs that are doing well. it is a broad company so we love j and j and j here okay phil is joining us with the auto
stocks >> both shares of ford and volkswagen moving higher because they have confirmed and announced details about the alliance we told you about yesterday. here is the agreement. they will be collaborating on developing electric and and you ton muss vehicles, ford gets access to platform and vw gets access, actually pays to have ownership stake in argo ai in fact it will be investing $2.6 billion which by the way the valuation climbed to over $7 billion. as for ford, as you take a look at shares, neither the ford ceo nor the volkswagen ceo would talk about exactly how much money they expect to save by collaborating on electric and autonomous vehicles. >> these types of collaborations, the fact that they are still needed by the big legacy automakers and in fact still only just coming into play, is that big relative win
for tesla? >> well, i don't know if you would look at it as a relative win or it could make some people say you know what, you will have to spend billions of dollars more in tesla. not this that they didn't already realize it if they continue to go it alone in terms of electric which they already have been doing, but autonomous. that is really where the big investment whether l. take place. bottom line is this, we will see more partnerships and collaborations like this between automakers and tech firms as they realize just how much money they will need to spend over the next 5 to 10 years >> phil, thank you charlie, are you in any of the autos? >> auto suppliers. they can win in all kinds of different powertrain economics we do think that will be some softness in manufacturing levels as there are too many cars on the dealership lots. but demand at the dealership is starting to pick up again. so we do think this could be a lull before a pretty good period >> eurozone industrial production data was better than
expected, but daimler came out with a profits warning do you think the european autos will continue to suffer whether it is trade war related or not >> yeah, just long term we have not believed that the european automakers are well positioned it is obviously a lower growth rate universe that they are in we have trade potential problems coming into the u.s. so the names again, we don't really love any of the actual manufacturers. we love the suppliers a lot more >> interesting that the daimler warning did not hurt the auto stocks today u.s. ones. >> eurozone industrial production by the way because we of course continue to point to the relative outperformance of u.s. growth, that was very strong 0.9% and the china data was largely in line with expectations. so we'll see if that continues but not a bad couple data points still ahead, mark cuban is speaking out to cnbc about facebook's push into crypto calling it a big mistake
we'll discuss the growing chorus of criticism with kara swisher plus a deep dive into president trump effexoratiffexan the dollar and june producer price index is up. closing bell g llilbeig beinbe . we are on record high closing watch. you might take something for your heart... or joints. but do you take something for your brain.
we have new highs in the market, but the real action is under the hood ten year bond yield, there is a lot happening here that i think is really important. so the key point here is when we look at the long term down trend for the ten year bond yield, this trend line goes back to 1981 so it is interesting as we had that fail in 2007 and again in 2018 and it has retraced this sort of magical number that lot of technicians look at 62% retracement. of that movement to the 2018 highs. so what is the risk to bond yields our work when we look at this momentum indicator, a rate of chachk indica change indicator, it has been very oversod we think the act that we've seen over the last couple days certainly this week is very important and we think that we are starting to put in an intermediate term low and that will affect a lot of sector
rotation as we move through the back half of this year >> and so if that is right, where do we get back up to >> that is a great question. starting point in terms of resistance is around that 50 day moving average 230 is really where the short term down trend comes in that is probably your first backup point but if we look at moves in the past, it takes some for yields to put in a bottom i do think through the back half of the year and rest of the m market cycle, rates will grind high >> all right we look forward to the next three installments >> starting off with a bang. >> and gentleman beliei can't b taking a day off such a slacker we have just how long unilg til bell 47 minutes
let's bring in an investment strategist from edward encouragn expectations are low enough? >> expectations are moderate i don't think that we're seeing your information i can't in the market, which is a good thing. but we can't expect asset returns to climb the way that they did in the first half of the year the fed has shown its hand and markets won't get much more than what they expect so whether that expectation is realistic or not, it kind of stops there. and there is not going to be a much more of a push to grind higher at least as far as we see right now. >> what are the big worries within earnings season >> well, there are quite a few we have a really interesting market with both bonds and stocks rallying. so the inverted yield curve is problematic in terms of what financials are going to do and financials are becoming a larger share of the s&p
and of course we have all the macro conditions weighing on earnings, trade tensions, that will weigh the big performer which is tech stocks that is what led the market higher can we reach new highs we sustain them as tech kind of takes a sliding back seat with global trade tensions. >> and charlie, you personally are pretty optimistic about earnings you think expectation is too low? >> yeah, we like the fact that people are so negative i think people are nervous about earnings there was a slowdown in m&a activity in the second quarter energy and material stocks we would say could be soft. but we think expectations are so reasonable that there is a good chance people will beat those expectations >> why do you think people are so worried about earnings? market soars every day to a new record high despite flat earnings >> and the best environment is when people are pessimistic. you have to be careful when everybody is optimistic. >> and earnings are the goose.
they really drive the markets higher and if they run out of gas, you have to expect that the car doesn't go as far as it could. >> and you are positive on em? >> and not because at the moment, but long term investors. and we see things in em that are good for long term investors namely hifr differengher divides if china rebounds and a trade deal occurs, we will see that carry over into emerging market stocks >> great to see you. still to come here on "closing bell," one wall street firm upgrading tobacco stocks because of their relationship to the ten year yield we'll explain. and wall street turning bullish on snapchat with shares already up 200% this year. we'll discuss the latest upupgrade and whether it is too late to get in on this one
welcome back time to get to word on the street ubs upgrading deutsche bank to neutral. it is disappointingly weak, they have gone from sell to neutral, upgrading shair pried share pri. closed at 6.50 a weak half hearted upgrade, sitting on the fence so binary at the moment. >> and expect more cost cuts to show their determination it change the bank proceed tilfile a buy on american express calling it a shining star among financials the firm says amex is best positioned to gain from falling rates. and a buy rating on philip morris based on the relationship between tobacco valuation and the ten year treasury yields
saying the market is putting a 40% discount to tobacco. do you agree with that call? >> not a space that i know a lot about, but i think that you can continue tobacco consumption continuing >> altria has a 6% yield so just saying that these are good late cycle plays typically and with yields where they are, whether the ten year will tick up a bit or not, that dividends yield should become attractive in a way that it hasn't been despite being late cycle >> yeah, there is an interesting new theory called the popularity asset management model and it says that when you have an unpopular product, it actually can mean that your stock can do better over time because people didn't want to own it. and i think frankly the cigarette companies have benefited from that. there is a stigma to owning the stocks that probably depressed stock prices and produced better
returns. >> and also owns 35% of juul another stock we're watching today, snap higher after goldman sachs upgraded to buy. heath terry is the analyst and here is what he said earlier today. >> we actually see a lot more happening behind the scenes in their ad tech stack. advertisers are starting to find more and utility out of advertising on snap. this integration that they have done with shopify which has opened up e-commerce channels for them means that the inventory that they have got from all this new usage is going to get mondaytized at a higher level. >> and just yesterday bank of america raised its price target on snap based on the success of its gender face swap filter. i don't know why this is necessarily good i mean, these are so freaky. >> i can't stand that. that is me as a guy. i don't know how i got facial hair >> they could have at least made
me blond anyway, i think that is slightly terrifying >> take it off, take it off. >> brent, do you think this is a good filter for the stock? >> i mean i think that they are doing good things behind the scenes but i think that the stock has already run 180% they there is just way more attractive names that investors should be focused on snap has a history of flaring up, flaring down, not being super consistent we believe that they have done some incredible things behind the scenes, advertisers are taking them more seriously but i think after the move and valuation, we like facebook, we like a handful of other names mid cap more than snap up 180% here today >> charlie, what is going on here is there some new life here?
>> i'd like to remind even this stock was 25 2 1/2 years ago this has been a disappointing story. if you went to sleep for five year, would you be confident that this company would be in good shape the answer in our opinion is no. we do not think these filters i a business model >> brent, do you agree, in five years time will this company be doing very well. >> i think that they will be okay, but i think there are more compelling stories for social. you look at facebook and some of the other mid cap valuations, there is just better places to park your money. i think that there will be a name that again millennials are addicted to this i have kids that will not get off and i literally have to take the phone away, they are on snap so much during the day so i think it will be the question can they make a great company out of it and our belief is that the jury is still out. they are not making money.
it is effectively a one trick pony, if you will, for millennials. so there is a lot of issues. so i wouldn't say that it will be a terrible story, i won't say that it would be -- i'd just say i think that there is more compelling names to focus on >> what is your top pick, brent? >> we continue to like in large cap facebook and amazon. we talk a lot about a mid cap match in go daddy and small cap wicks. >> okay. and quickly, those companies will all be on capitol hill next week you don't think that snap benefits at all that they get the regulatory scrutiny from antitrust to privacy regulation? >> everyone in the internet will have the same regulatory overhang no one will be safe. the group that has been effectively dentsed because of
the overhang you see the software valuation and i think that many of these stocks are bad bets. i think that you could see further downfall in some but we think a lot of it is already embedded in the stocks >> brent, thanks >> thank you 34 minutes left in trade we are at session highs up 200 on the dow, dow, s&p and nasdaq all set for all-time closing highs. still ahead, carely is pi lchar picking a financial stock down 30% in the past year and financiaang earnings kif next week. we'll preview. and as we will he hhead to brea depot, starbucks, costco, walmart making the list of l-meigalti hhs
trade. we are for record all-time closing highs. three things driving the action of course record close watch is one of them. industrials are leading and health care is lagging and june ppi data out this morning was slightly positive. >> feels like it is all still a celebration of powell, right hinting strongly at a rate cut time for a cnbc news update. >> and here is what is happening. tropical storm barry expected to make landfall on the louisiana coast after sunrise. possibly as a category 1 hurricane. some areas are expecting more than 20 inches of rain this as the swollen mississippi river is already in a flood stage. several freshmen democratic members of congress who recently visited southern border detention facilities testified about their poor conditions. but some republicans from border states accused them of failing to deal with the problem >> when these women tell me that they were put into a cell and
that their sink was not working and we tested the sink ourselves and the sink was not working and they were told to drink out of a toilet bowl, i believe them. >> not funding so we have a place to put people. it is time for action. this texan is not going to watch his state and texas communities get overrun because the cowards of the swamp fail to come their job. >> and that is the news update back to you.come their job. >> and that is the news update back to you. >> sue, thank you very much. let's go back to robert for the second market dashboard. >> let's look at utilities there is a lot going on here i think the starting point is if we look at this long term up trend for utilities sector, it is really bounced off this uptrend a number of times. and so we're at that point once
again in terms of price. now, the relative performance versus the s&p 500 is really important here because it tells us a different story lots of folks telling you want to be in defensive stocks, that is where the leadership is i beg to deliver what is happening here, if we look at the 20167 high, we made a new price high on utilities, but relative performance began to roll over in advance. now let's take a look at what is happening here that is the high in december in terms of relative performance. we now have a lower relative performance high that is a pretty clear divergence developing in terms of relative leadership versus what we see in price those are always warning signs you have the utility at the upper end of the range this is not where we recommend buying defensive dividends type stocks at this point you will get a better opportunity later on in the market cycle right here we think that you want to be fading those and looking at more cyclical stocks through the back half of this year and into and through 2020 >> if you did that analysis
against other sectors that have similar characteristics, other defensive characteristics, would it look the same or is it just utilities? >> it is similar if you look at the staples sector, it is not exactly like this, but you are seeing similar divergences. relative highs in december when the market fell apart, lower relative highs in the stach plea well so you want to be fading in the back half, add incrementally through the summer and fourth quarter. >> charlie, what are you doing with defensive sectors >> we would agree that cyclicals are cheap and defensive is expensive. and anything that is interest rate sensitive is expensive in our judgment we remind people the 100 year average in the ten year is 4%, not 2% so we think that with the potential for more inflationary environment, we could see significant increases in interest rates
>> so do you think the yields is something real, no the just a technical correction >> in fairness, i've been saying rates would go higher for a long time and haven't been right. but at these levels, you are now getting negative real yields we have producer prices up almost 2.5% versus a year ago. so 2ment 10,.20, we could go a t higher >> are banks defensive >> they have been sold down. they are sensitive to interest rates. right now at these levels we think that there are some attractive banks and we wouldn't have said that year and a half ago. we are thinking that people think interest rates will go down so right now relatively cheap. the dollar taking a leg lower this week and sara has a look at how president trump could be the one moving it >> so this has been a really hot topic on wall street the president's dollar fixation is intensifying. trump complained about the strong dollar in tweets,
rallies, speeches, reportedly during interviews with fed ford anonymo broker board nominees and president trump has made it clear he wants a weaker dollar and it is no wonder why. this is a big setback for corporate earnings q1, north american companies reported almost $23 billion in negative currency. that is the most painful since 2015 and as you see, it is much more than european companies reporting hits on average companies in north american took a 5 cent hit to earnings per share during the quarter thanks to the strong dollar q2 earnings not looking much better they say it is cutting in to profits still. so a strong dollar also makes exports less competitive another major focus for this president. and trump has a point. according to the big mac oig
index, the dollar isoff valued especially at the chinese yuan which is almost 50% overvalued and that is the subject of research notes so what can he do. >> he can complain and talk it down he could order the treasury to order the fed to intervene in the currency market against that weak dollar. or he could actually put sanctions on countries where he thinks that the currencies are too weak all of these have been tried before all have failed. it is really hard to go up against a $5 trillion a day market but clearly this is a risk that traders are watching >> and one of the reasons why we're concerned about inflation because a president who wants to make the dollar weaker by definition adds to inflation one thing that he can do is run trillion dollar deficits and he is and deficits are probably going to be headed higher. that has historically been bad for higher inflation, bad for a weaker dollar. so we have a strange situation
where leaders around the world are all trying to compete with each ear for who can reduce the value of their own currency. that is fundamentally inflationary >> about the line, be careful what you wish for. sort of stating the obvious. but maybe the ecb has rates artificially keeping the euro down but you have a struggling economy versus a strong economy here >> so how are investors going to take this earnings season if we're expecting more billion dollar hits? >> the good news is i don't believe that the dollar can outperform forever and it has been a headwind to corporate earnings so when we finally get a quarter when the dollar isn't outperforming, we will see stronger earnings growth up next -- sorry, first of all let's check in on the markets. up 0.8% on the dow
a wide ranging interview was had with mark cuban. here is what he had to say about facebook crypto currency >> it is to be determined. i'm not a big fan. i think it is a big mistake. not so much because what will happen here in the united states, but globally i think globally and in countries where there isn't a lot of rule of law or a lot of government stability or currency stability, yeah, then it can be dangerous. >> he also weighed in on breaking up big tech >> people are afraid what the future impacts will be and so they just take it out on, well,
let's just break up the big faang companies. that is not what is going to solve it and when you break these companies up, you actually give them more power because nobody else out there that is made you will that will step into their place. you will just have a few more companies doing more of the same thing but only having the protections of the antitrust regulations. >> let's talk more about all of this with kara swisher very good afternoon to you thanks for joining us. i want to start on that second clip we played i slightly disagree with his premise. do you think people are arbitrarily saying let's just break up big tech or do you think that there are more thoughtful debates going on behind the scenes as to how the best way to regulate them is >> i was up at the capitol right now talking to a lot of legislatures about that issue and i think that there are very thoughtful discussions happening about it i don't think that they will go into something -- a lot of this stuff is campaigning, but people
are thinking hard about what the right regulatory relief for a bunch of different issues are. and in some cases separating companies might be to create more innovation, to create more competition. and in other cases it might just be certain regulations so i definitely think that we are down that road, it just depends on which one of these things happens first we'll have to see. there is a hearing next week on antitrust, i think next wednesday or thursday. >> so as we're speaking, the ftc did approve the roughly $5 billion facebook settlement, they are saying sources there. and these are of course actions stemming from the cambridge analytica privacy breach we knew that was coming. so dow jones reporting that it was 3-2 vote on partisan lines to settle it for $5 billion. any surprises there? >> no, it is the smallest fine i can think of i should add a zero to it and maybe they will start behaving but this is a fine from a
consent decree of something that they violated. so it will be interesting to see what they require of them going forward. about you remember, they broke the consent decree to get to this fine, so who will monitor them so they don't do it again i suspect this is the best that they thought that they could do. but what are the rules or things that they are putting in place to get them to force them to follow the decrees they had previously agreed to and i don't know what those are. >> it is not really moving the stock which is up and having a banner year. is this all that investors can expect from fines like we've seen in europe for instance with google or do you expect more dramatic action? >> $5 billion has already previously been thought to be the number and so everybody -- it was a blip in fact investors were relieved that it was not more this is a parking ticket so we'll see what other things
they are requiring facebook to do going forward, but it search isn't the kind of thing that would put fear into the hearts of people in silicon valley. >> is the french tax a parking ticket or more significant >> that starts to get a debate on how little taxes a lot of these companies pay compared to other industries so even though -- i think one of the things that the french put that in place because they couldn't come to an agreement on a larger international tax system so that is where we're going, i think the europeans are fed up and they are trying to figure out a way to slow down american companies. and i don't think that they are doing it for competitive purposes i think that they see the impact on their countries and they want to have an international understanding about how much taxes they pay, what kind of laws and regulations they need to be subject to so it is working on a global level, but still u.s. companies so they need to be rg laegulated here in the u.s. >> charlie, you're in facebook >> no, no, no.
we think that there is a significant risk of regulatory problems for these names we remind people it is not what makes economic sense, it is not what is legal, it is what is a political reality. and we think that there is very few things that elizabeth warren and donald trump agree on and they both think that technology is exercising way too much power. so we think the stock prices are assuming that these will be parking tickets and we think that is a mistake. a reminder that the last administration charged the banks $400 billion in fines. and the impact it had on the banks was significant. we think that the fines will end up being a lot more than $5 billion. >> kara, you have an interview that is hitting the tape this weekend. who is it with >> i think we'll just wait and see. he talked a little bit about tech he hasn't been that outspoken on tech and in fact has xwotsen qui gotten a bit of money from tech. he thought the right to be forgotten was something that he
wanted to look at. but i do think that the leading democratic candidate on this is elizabeth warren who has been talking about the breakups it is just a question of what will happen. these fines are not enough but it has to be a combination of regulatory, fines, and a general idea that the companies which have never had any regulation needs some regular lays. and so that is coming for sure just a question of when and how. >> kara swisher, thanks for joining us we have 13 minutes to go before the closing bell. on record close watch for the dow, s&p and nasdaq. thhaienctre r last chae ad wi crl
an odd turnaround from a slightly odd decision in the first place. it wasn't like this was a very clear carve out of their business it was just an attempt to sort of get a high multiple i think on a high growth part of what is a slowing business >> i wonder if it is just the turn against the beer trends, beer declines? >> i think that is why they were trying to list this part of the business where it is still growing to see if they can get a higher multiple. nine minutes left of trade charlie, what is your last chance trade >> the last year and a half, i've been boring people with our recommendation of kkr and blackstone and the thesis was that they were partnerships -- and lazard. people didn't love them. they were cheap because they were partnerships and index funds can't own partnerships but blackstone and kkr has converted to c corps and they have performed very well the last one is lazard, and it is still a partnership and it is remaining extremely cheap.
less than ten times earnings great money management business. next quarter could be a little soft, but we love lazard as a stock. >> is the uplift from converting as big for them as it was for blackstone which was a much more pure play private equity as opposed to the other parts of asset management >> yeah, so before the convergence, kkr and blackstone made the case that it wouldn't matter, that they could be owned. and then surprise-surprise when they converted stocks moved way higher when you can be owned by an index fund, it increases demand for your stock literally the next day we think that it would have a big impact on lazard 9.5 is way too cheap we think that it would have a 30% increase in the value sglf it's been good having you. safe travels back home. we're on record close watch here with just 7 1/2 minutes left of trade. we'll be covering all angles of the marketn r osg unown.ouclin
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ite it's been a strong week. how do the major averages look to you in terms of valuation, sentiment? >> we're definitely getting strong sentiment and what we're seeing is a lot of participation out of the sickly calls so we're seeing i'd say a good breadth in terms of all the secretators moving higher and the ones lower are the more defensive. so a lot of optimism that what we're seeing from the fed may provide a bid for the economy. and i think this changes perceptions of what we might hear with the upcoming earnings season as far as outlook from a lot of these companies i think that they might be able to have more of an optimistic outlook moving forward >> and everything is rising today. have you been keeping an eye on the support levels for j and j >> yeah, right now we're looking at 130 130 looks to be like a pretty significant price level, so i am watching that for j & j. and i think that it is interesting that you are seeing a bit of a selloff in phrma and
a rally in the health care stocks and i think the plit riolitical is shifting. doesn't mean that pricing will go away. it looks like pharmaceutical companying may be where the political risk now sits. and that is affecting the pharmaceutical sector as a hole, but particularly johnson & johnson is down today. >> thanks for joining us robert has the third installment of dashboard >> so let's take a look at the financials banks reporting next week. this will be key for the market. a quick look at the financial chart, that is where we get the leadership coming from so let's start here with the 200 week moving average. it is such an important long term trend for the market. that is where we bottomed in '16. the end of 2018. we think that is a cycle low
it looks like a major turn developing here. here is the problem. not a lot of relative performance. we have to see that develop. so as much as i think the price pattern is fine, that relative performance trend needs to reverse in order to generate the up side reversal developing. we think that is starting to happen here. >> all right robert, thank you very much. sounds like a bullish call on the banks. let's get to rick santelli with the bond report. two minutes left of trade. >> yeah, what a wild week in sovereigns and treasuries in particular two year notes down a bit on the week like all treasuries you can see it with the intra day ten year but maybe the real story is to open up that chart up. long dated were up on the week, long dated sovereigns around the globe were up. it will be have he interesting to see if the steepening features remain. the fed of course really into that quarter point ease at the end of the month, really the catalyst for many of these
moves. and you don't need a catalyst, they are all rocket ships with regard to equities what a historic close for the nasdaq >> and nasdaq 100 and certain sectors. it is tech, it is software in particular that is driving tech to all-time highs. and also consumer discretionary at all-time highs. chips still about 5% away from all-time highs we have got histor totoric highh tech and a lot of consumer names. 137 new names when it comes to small caps, a lot of them are in the consumer space over to bob. >> diverse group of stocks powering the dow jones higher. particularly industrials boeing, some of the other ones like caterpillar, 3 m also doing well
united health olalth moving this forward there. home depot up about 2% big move up in the transports, the truckers had a very good day overall like ryder reports of a weaker truck market pushing capacity out of the market and the end of a historic week, dow, nasdaq and s&p 500 all closing at new highs and at the highs for the day. a record breaking good afternoon to you welcome to the closing bell. i'm wilfred frost. >> and i'm sara eisen. a triple record close on wall street capping off a strong week at the highs of the day nofrpi inotchir closes for the dow, s&p 500 and nasdaq s&p 500 closing above the 3,000 level for the first time ever. russell 2000 index and small caps join the party.
it has been lagging. >> and i'd also point out another day that we end at the highs of the session as has been the theme. but week to dit, we haate, we hn gains. declines in europe this week, china down 2.6%. july has seen the u.s. really stand out in terms of relative outperformance and it has been risk on for the week to date outperforming sectors energy, consumer discretionary, technology and industrials >> so joining us to talk about the market, we have managing partnerouglas and the liz young. and so what stands out to you and what has been an absolutely banner week for stocks, ending on a high note >> i think what is interesting is the leadership now has gone back to technology and the high beta stocks.
and that concerns me because we know earnings will be soft so where do we go from here if companies don't come out with the growth rate that the stocks are now discounting i feel that we will get somewhat of a pullback >> aren't we expecting negative earnings growth? >> we are. and i worry that companies will say that our forecasts won't be what you think that they will be for the back half of the year. everything is back half loaded again and we have this put with the fed and i don't know if that will provide at least that much support given how far we've come to your point. >> and liz, what is your take on these records? >> i think number one the fed put is worse and the market is almost ignoring earnings. i don't think that companies will deliver on the growth rates that would work mathematically at this level. but -- and i don't want to say it didn't matter, but it matters a lot less than what the fed is saying and what jerome powell did is prove that he is there to support us and it didn't necessarily mean
that -- >> you've been pretty cause you issues on this >> i have been cautious. i'm still cautious in the sense that i think the risks are skewed to the down side if the fed doesn't do what the market wants to >> and bob pisani, we'll start with you >> and we're seeing individual stock breakouts on top of the index breakouts. remember market cap weighted indexes bigger stocks to move the index along. but retailers broke out. we had walmart for example and home depot two companies that are in the dow jones industrial average new highs. tjx and autozone also hit a 52 week high. some consumer staples hit 52 week highs today proctor and gamble another dow component, colgate another major consumer staple, 52 week high. the payment system companies, fintech companies, mastercard and visa, have been absolute
monsters this year visa did not close at a new high though and finally year to date on the vix, we're at a 12 handle. we did not quite close at a new low for the year, but we're within a quarter point of that that is a sign traders are anticipating a rather quiet august >> and tech stocks driving the nasdaq better thrtha coombs with the ds >> chips were the best performing sector, up about 3.5% but not driving this rally it is really a question of large cap tech and particularly the software names that is where we saw the record highs in those sectors, 137 of them here on the nasdaq, a lot of them in that software sector. microsoft closing at yet another all-time high close now north of a trillion dollars amazon is getting close to that market valuation and we also saw a number of
consumer names t performers tod also seeing all-time highs so the sort of cyclical, consumer, software, tech, juggernaut that is moving things forward here >> and the fed has been very supportive of markets so far the focus will turn to earnings now. are you optimistic that markets will welcome what we hear from earnings >> i think that we've set the bar pretty low, so we're on track to underperform and overdeliver. but keep in mind average earnings growth is 6.25% and we're expecting negative 2.6% growth. yet the market has taken off this year and really shows no signs of stopping. so again i think that the market will punish negativesmore than it will reward positives if surprise on the upside, i think the market will be okay, but i don't think that it will drive anymore rallies. >> and just to be clear, even if we get any negative growth rate on earnings, that will be the
second quarter in a row. that is a technical earnings recession. amazing to see stocks run up like this. >> and the stocks that will be put in the penalty box i think will take a couple quarters to come out and the ones that make earnings will be the flights to safety stick with large cap liquid, microsofts, amazons of the world and i think the opportunity as investor long term for us is any of these big caps or any of the liquid names that come down here is an opportunity to buy them especially if it is a one or two quarter short term issue microsoft is one of you our lar largest holdings it is one of the highest quality cash flow companies out there that really has a long term trajectory >> one thing that perked up today were the transports. we've been talking about day after day the market hitting new record highs and transports have lagged maybe an ominous signal. but they rose 2% today and were actually a leader. what does that tell you? >> the goal of monetary policy
and the goal jerome powell continues to state is that he wants the economy to keep moving along at this pace and he will do what he needs to do make sure that we continue expanding >> so this is the market backing him up >> yeah, if you want to extend the expansion, this is how we'll price it so if he continues to say we'll support an expansion, here are the things that are economically sensitive that would indicate that expansion can keep going. >> and what about the banks. if we do get a rate cut, that of course is not going to help the banks, but we have seen a bit of a speep steteepening of the cure not as bad as people expect? >> i've been pretty xrukconstrue on financials for a while. but i still think that they are high quality companies especially in the u.s. and a good place to be if we're not heading in to a recession. now, obviously clear that if their interest margins will get hurt if the curve doesn't steepen any further, but they still can hold up as long as the
economy is healthy >> what should we watch besides net interest margin? everyone expects that to be weak. >> and then income might suffer a bit, but loan growth could offset that a little bit and i do think that the fee income will be good on the ipo sad, probably bad on the trading side but it will come down to their guidance the big point on the banks either way is the last two quarters, they have had an easy setup. hasn't approach to be a catalyst for the stock prices so you can say we might get that again, will you will the stock price reacts >> the appetite for treasuries will stay there. you can buy german bunds, japanese bonds but nobody wants those the appetite for treasuries everyone at a 2% ten year is going to continue to be healthy, so the curve probably won't steepen. >> and if you saw the last two weeks, they have all raised their dividends. so whether you want a 2% treasury or a company that is
raising the dividends, cheap valuations and one other thing that i would look at is assess management fees. given where we are, up 20%, that comp will start looking a lot better remember what happened in the last quarter so that could provide some support. >> and i would think mortgage rate financing would be helpful. >> that would be helpful, but you have to watch credit i think people will be focused on are we in the 7th, 8th inning of credit and are loans improving and what quality of those loans are we delivering. >> banks up 3% for example for goldman this week. thank you both for joining us. tech a huge factor in the record rally up next, we'll preview netflix earnings and whether results can help drive the sector higher >> and ftc reported will i a proofs a multibillion dollar settlement over the clambridge
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ftc received a $5 billion facebook settlement. both are saying no comments. facebook shares rallied into the close. michael pachte represent r is jn the phone. $5 billion, is that lower than worse case fears >> i think it is about probably worse case fears they guided a $2 billion charge, they get to deducts this, it is a civil fine so about 4.25 billion after tax. so little more than they said, but certainly i don't think that people thought the number would be $10 billion once then 3 so seemed pretty reasonable. >> anything to extrapolate here as far as other regulatory action facebook could be looking at >> i think facebook better clean its act up and it better clean its act up quickly i know that they paid lip service to doing the right thing by their users and they really cannot afford another massive breach so they will have to tighten security, they will have to
communicate to regulators clearly that they have it under control. and this is unanticipated. the way cambridge analytica got access to the data was really essentially through an open door facebook has to close all the doors and make sure that they don't provide any data to anybody that could be abused or they will have a much bigger fine in the future >> everyone says that they need to clean their act up and at the same time they are launching a cryptocurrency that has attracted the attention and scrutiny from every major central bank in the entire world and now the president of the united states. >> just continuing regardless. michael, do you think that at any point whether from the french taxes, regulators in europe or here, any kind of punishments that really hurt them $5 billion is something the stock market thinks that they will laugh off >> well, they have $45 billion in cash. and they generate about $30 billion in pretax income so they can weather another 15 of these
but i think that in fact that they probably are looking at another $5 billion in overall fines. that seems about the extent of what they will face. i think that you guys made a great point on cryptocurrency. this is the world's biggest network of any kind, of anything and if regulators are worried about money laundering or illicit transactions, you know, this is going to draw a ton of scrutiny i think this is exactly the wrong time to be getting in to this type of a business and i think facebook will have to tread very, very carefully >> i mean, you say that and yet the stock is up more than 50% so far this year and many of the bullish analyst calls have been the fact that this is a huge new opportunity for them >> yeah, i mean the fact is that there is no alternative to facebook for users there are plenty of alternatives for access to banking and to credit there is no alternative to connect with your old high school friends or to send your mom pictures of her
grandchildren. so they have an amazing defensible mote aat and i thinka is why most of wall street likes them and so i think if they just stuck to their core business, it is definitely worth $204 i have a target of $225 and i was at $275 at one point i could get there again if they put all this stuff behind them it is the unnecessary risk of future regulatory fines that is a problem and i think cryptocurrency is opening up a pandora's box. >> michael pachter, thanks for phoning in i just text my mom photos of her grandchild, but some people do it on facebook >> my mom hardly can operate texts. >> wait until she has a grandchildren. >> certainly isn't on social media. the nasdaq closing at a record and faang stocks are driving the tech rally all year
long netflix second performing stock in that group behind facebook. the first to report earnings with results due after the bell on wednesday what can we expect let's bring in bernie mctirnan where are the expectations >> everyone is focused on the international net ads. so the guide for 2 q is only about 3% growth and consensus for the remainder of the year is low single digit growths in 3 q and 4 q. and international is the growth driver for the company with domestic competition on the rise with disney plus launching later this year, hbo max, and then also the nbc product as well >> what is the expectation for domestic >> third party data consensus is
350. >> the story has been about the legacy players pulling off all the legacy hits. first "the office," then trefrid oig. will this impact the numbers >> short term there could be some disruptiodisruption i think that it is focusing on documentaries, comedy specials and movies you had 30 million people watch murder mystery in the first week of it launching. and that is going to be the way to change from license content to that. >> murder mystery, stranger things, the crown, those shows, house of cards, are big marquee shows. expensive to make. clearly spending a fortune to having a bigger catalog. are they focussing too much on the quantities now to try to replace the friends and the office >> i think it is hard to create great scripted dramas.
there is lots of competition so i'm mostly focused on disney plus for example that they can leverage their brand and instead of competing with the hbos and netflix of the world for scripted content, they can create with a built-in audience with "star wars. >> i know no one excepts subs to actually fall, but if that did happen for a quarter or for two quarters, what would it do to the multiple would that be a 10% pullback or a 50% pullback >> so right now the company is trading seven times revenue. one of the reasons why i'm neutral, i think revenue will decelerate and that will focus people on either ebitda multiple or free cash multiple. right now they are only expensing about half of their contents costs so folks on free cash flow, negative 3 billion this year, i
forecast negleative 3 year, you need to go out multiple years. >> but that has always been the case >> you could tie back to the multiple revenue always. if revenues decelerate, i think that is when you have to focus on ebitda, you have to focus on free cash flow >> very interesting debate thanks very much >> thanks for having me. still to come, next week the banks of course kickoff on monday citigroup the first. we'll have a preview of all of the banks. > and up next, which cyclical sectors are worth rotating into as the market touches new you unchartered territory. and here is a look at the dow winners this week that helped drive the index to a record high
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welcome back have a look at how we finished the day. record all-time closing highs for the dow, s&p and nasdaq. there was the high of the session as well. a nice little rally in the final 20 minutes or so of trade. up around about 1.5% for the week as a whole for the dow. china was down 2.6%, europe just shy of 1% for the week final installment now for the market dashboard, robert, what are you focusing in on >> so we saw the ten year
bottoming, utilities diverging to the done side, financials maybe putting in lower, but let's take a look at the semi etf. if we go back to the lows at the beginning of the year, relative performance coming from semis began to lead early on so if we can pull up a chart of the smh, i think there is interesting technical bits showing up here. let's start with the cycle low off the 200 week moving average back in 2016, exact same thing here at the end of the last year, key point here is this relative strength going into that cycle in 2016 showing that same sort of leadership going into october of last year and again it is starting to build up here. look, some of these names have run a long way, a little overbought but i think you want to buy these names. the real key is staying focused on the long term cycle, no the near term dips we think there is still running room >> what says that you want to buy it versus utilities?
>> great question. we've already had that defensive run in the utilities and the relative performance on the tilts is almost exactly opposite of what we saw with the semiconductors and other cyclicals. utilities with their peak in 2018 and lower high in may of this year, and seeing the exact opposite pattern we think rotation is more to cyclical stocks. >> robert, thanks so much. appreciate you joining us today with mike away time for a cnbc news update. hi, sue. >> and thank you so much here is what is happening at this hour. before departing for wisconsin, president trump telling reporters the government has an obligation it carry out sunday's deportation enforcement raids. >> people come into our country illegally. we're taking them out legally. very simple. it is not something that i like doing, but people have come into our country illegally. we're focused on criminals
>> 412-12 the house voting to renew the 9/11 compensation fund through 2090 it goes now to the senate for approval where mitch mcconnell says that he wants to see a is that the vote before the august recess and british police say they have now opened an investigation into a leak of negative confidential memos that led to the resignation of the british ambassador to washington kim darroch resigned after president trump called him stupid and said that he would no longer deal with him after he said his administration was ine inept. that is the news update. back down to you >> and the president today said apparently he actually quite liked him and he wishes him well >> yes, he did and here we go again >> here we go again. sue, have a lovely weekend >> you too still ahead here on the "closing bell," president trump
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mark cuban sitting down for an exclusive interview calling facebook's cryptocurrency a big mistake. >> what they will do with libra is to be determined. we'll see what happens i'm not a big fan. i think it is a big mistake. not so much what will happen here, but will happen globally i think globally and in countries where there isn't a lot of rule of law or a lot of
government stability or currency stability, yeah, then it could be dangerous >> mark cuban isn't the only one who has been critical. president trump tweeting last night in part, quote, i'm not a fan of bitcoin and other cryptocurrencies which are not money and based on thin air. it can facilitate unlawful behavior and including drug trade and other illegal activity let's bring in matthew and ben good afternoon to you both ben, i'll start with you specifically on that presidential criticism, do you think the criticism is fair and how significant is it that the president has been drawn into this debate? >> i know, welcome to the party, president trump. i think it is exciting that he is talking about crypto which is something that that is an achievement right there. i think that him being critical about libra makes sense, him being critical about bitcoin is
not understanding what bitcoin really is. i think libra is the threat that he is talking about but that bitcoin isn't. >> is libra a threat, matt >> what an amazing time that we're in a sitting u.s. president is tweeting about crypto, the fed chair is talking about bitcoin being -- resembling digital gold one of the largest tech companies on the planet is launching a cryptocurrency so this is an amazing time for the whole crypto and blockchain ecosystem obviously with a lot of challenges ahead. >> so when you hear people talk about whether it is a threat or not, you hear everything from risk to financial stability to money laundering to privacy. what is the real threat do you think? >> i think that you have two dynamics especially with facebook given the challenges that they had with privacy and security but i think that it is a broader kind of financial access with
this new crypto medium of money, which means that i think this is all less about libra than cryptocurrency it is taking a pile of fiat currencies, u.s. dollar, et cetera, putting them in a bank account, tokenizing those. that is not massively innovative what is innovative about this is what 2.4 billion facebook folks will have in terms of access and then on top of that, the wall let i think is the real story that will continue to flourish under that strategy >> ben, you said at the top that you do think that there are some concerns around libra. specifically what are they >> a couple things first of all i think if the president sat down with the winklevoss twins, we'll hear new stuff. i think libra is an issue because of facebook. bitcoin, there is nobody in between when you use bitcoin bitcoin is math.
it is all based on math. so the threat of privacy, threat of data being taken, those things aren't as relevant. when you look at libra, you are looking at mark zuckerberg and that is where it gets scary. but his concerns about bitcoin and it being used for evil things, it is not like the american dollar was never used to buy drugs the fact that the tech nothing h technology has been grood illicit things didn't mean where it is going. >> but it could be harder to track i think is the point you mentioned winklevoss twins earlier they suggested that they were going to try to work again with mark zuckerberg and facebook because of libra. is that just trying to play nice but not expecting to go anywhere >> i'm not expecting a kumbaya moment, not expect goinging the b expecting the big rapprochement, but this wallet, everyone and their mother will have an electronic wallet so that means
everybody will be comfortable with the idea of crypto. so libra is very important and i think that is why we've seen bitcoin go up in price so they see it as a part of the whole ecosystem becoming mainstream do i see them sitting with mark and having coffee? i don't know if that will happen >> you don't think that they feel shunned yet again by mark zuckerberg and the facebook team for launching a crypto without them >> i think they are smirking >> yeah, it is absolutely personal there is no way that this isn't a personal thing he didn't launch libra right after they launched gemini and not the be thinking about the winklevoss twins so there is a personal thing going on so whether he will steal their fire, look, they make money when the bitcoin economy goes up because they own 1% of all bitcoin. so for them it is a good thing >> matt, final word. >> well, i think that it is time for the u.s. to take a leadership role in this space.
bitcoin is a global currency libra is trying to get 2.4 billion facebook folks on to a new crypto a lot of projects are leaving for switzerland, singapore libra is going to be burnished in switzerland but there is also a massive opportunity here despite trump's comments, his chief of staff mick mulvaney was one of the founders of the blockchain caucus so i think as this unpacks, i think that members of congress will learn more and we'll get to a better state >> matt, ben, thank you for joining us major averages closed at pies today but aditi roy looking into some stocks that got crashed. >> can in business stocnabis st and the broader sector may be affected by unlicensed cultivation. company shares falling more than
17.5%. kanntrust disclosed the investigation monday and late yesterday they put a hold on sale and shipment of all can that business product during the probe. shares all down today. as set management group telling me that the three things investors should be watching for are execution, corporate governance and cash value. back to you. another stock falling today, a bchl ab inbev leslie has the details >> anheuser-busch suspending plans to list its asian unit in hong kong set to raise as much as $9.8 billion. it had been planning to sell a minority stake in budweiser. but they said that they would not be producing due to several factors including prevailing far are ket conditi market conditions.
reports surfaced that they were postponing pricing of its ipo the ipo though would have been the largest of the year surpassing even uber's $8 billion deal earlier this year up next, shares of oracle also under pressure after a judge sided against the company in a massive government contract case we'll share the details. and up next, facebook's reportedly facing a $5 billion fine over its cambridge analytica scandal. we'll speak with a "wall street journal" reporter who broke that figure coming up next.
welcome back record all-time close highs for the dow, s&p and nasdaq. highs of the session as well >> one of the winners today, facebook ran into the close. ftc reportedly approving a roughly $5 billion settlement with facebookoover the cambridge analytica privacy breach joining us now is the person who broke the story, emily glazer. thanks for phoning in. tell us what you learned >> what we reported earlier today is that the ftc voted this week to approve a roughly $5 billion settlement with facebook and this is over a really long running probe that the ftc has
had into the tech giant privacy missteps like you mentioned, they all stem from cambridge analytica. and it was a 3-2 vote by the commissioners and that broke along party lines. so the republican majority lined up to support it, all the democratic commissioners objected which is our understanding. >> and swing was there in the $5 billion figure any reporting on whether or not it could have been a lot bigger? >> that is a good question what we know is that they said back on april 24 that it was expecting to pay up to $5 billion to settles probe and that was after there had been reports for weeks that it could be $2 billion. all of a sudden it came out with a much higher figure we don't know too much more about how things went down in terms of the figure but $5 billion is a record for the ftc by quite a bit it actually goes back to a going willing sett
going the settle in 2012 so this is a massive record for the ftc. >> what about this notion that you are reporting that it was a party line decision? does that mean republicans are going to be looked at as not being toughenough on facebook and on some of the privacy concerns >> that is definitely something that could come up i mean, it's been a long awaited multibillion-dollar settlement between facebook and the ftc and what we've been reporting is that part of the holdup was that the democrats were not keen to settle and the republicans did want to. our understanding even months ago is that the republican chairman struggled to win support for the deal from at least two of the panel's democrat democratics. and that these folks were concerned that the settlement wouldn't be tough enough so there definitely was a lot of political and partisan wrangling going on here. but in the end, they did get that 3-2 majority from the
republicans. >> so how do you think this sets up congress and facebook and some of the other social can hes ahead of next week's congressional hearings >> i think what we know right now is that there has been so much of a huge spotlight in d.c. on tech and whether or not there is enough scrutiny of firms like facebook and others of their competitive practices, their privacy practices. we also know that the justice department is gearing up for an anti trust probe of google and also has authority to look into apple and the ftc has taken jurisdiction of facebook and amazon so i can't speak exactly to what might happen in congress, but we know that the regulators are really starting to aggressively go further into big tech firms and that they there are ongoing probes and possible ones for the future. >> acceemily, thanks for joinins turning now to oracle, losing its legal challenge to the $10 billion cloud contract
earlier. josh lipton has the details. >> a judge today ruling against larry ellison's company saying that since oracle doesn't meet the technical criteria for consideration for this bid, it cannot demonstrate prejudice as a result of other possible errors in the procurement process. so does this mean rivals like amazon and microsoft can now encroach on oracle's turf meaning the federal defense business i checked in with an analyst who said in the near term no after all, these contracts take just so long to put together but he said that it does give rivals perhaps a stronger advantage in securing cloud based spending by the government in the future. but for its part, oracle telling me it continues to secure cloud business with government agencies we look forward to working with the department of defense, intelligence community and other public sector agencies to deemploy modern, secure, hyper scale cloud solutions that meet their needs.
in part they claimed a conflict of interest in the suit, that the pentagon had favored amazon in the bidding process but the pentagon plans to go ahead and award the contract perhaps as soon as next month. and only two contenders now remain, amazon and microsoft going ahead to ahead aws saying that the dod deserves access to the best technology in the world and we are unwavering in our support to their mission. guys, back to you. >> josh, thank you very much up next, investing your future there is a retirement savings crisis, but it is hitting one community bigger than others and coming up on "fast money," traders will tell you which stocks they are watching into earnings next week.
let's take a look at how we finished up the railroadecord d. the dow surging into the close almost 244 points there. notching a record high s&p 500 closing above 3,000 for the first time ever. and the nasdaq composite setting its own you all-time high at the close. 8244 up more than half a percent. russell 2000 index and small caps actually gained today 0.8% but it has been lagging over the last few months. cnbc has a financial wellness initiative called invest in you, ready set grow >> and martin cabrera is a member of the wellness counsel he has an op-ed out on the
retirement crisis in the latino community. thanks so much for joining us, martin >> thank you good to be here. >> so give us the headline from the op-ed which is available at cnbc.com this as you called it is driven by lower savings rates, is that right? >> i think it is low saving rates overall but especially in the hispanic or latino community. there you are seeing more individuals having lack of access to some of the investment programs and 401(k) savings programs but i think you are starting to see that change over time. >> so it is a lack of access to the right type of savings programs as opposed to, say, lack of education for the need to be saving >> i think there's lack of access some of the programs aren't offered to lower paid employees, but also kind of the education piece of it. as more individuals and those in the latino community, as they are getting access to some of the 401(k) programs, you will
see a 95% participation rate but some of them don't have access to the 401(k) programs, but you are starting to see that change over time >> why not why is the access such a problem? >> i think because some of them are private sector employees and they are lower service employees, and they're not offered by their private sector employers. but i think there's some state sponsored programs that are encouraging them to save more and to provide for the 401(k) savings. so you are starting to see that change, but you are also starting to see the growth and just the buying power for the u.s. latino market, which is about 2.1 trillion if you were to look at it as an economy, it probably would be the ninth largest economy in the world. so you are seeing more folks graduate from high school, but also from associates and bachelors degrees, and they're coming into the work world with more skill kind of as employees, but also they have more discretionary dollars. that is going into some of those
401(k) savings programs. there is a positive light at the end of the tunnel. >> martin, are there any small initiatives you have seen in action you would like to see rolled out on a bigger scale >> i think there are different states that are taking some initiatives. i know the state treasurer here in illinois has secured choice illinois, where it is actually allowing some of the private sector employers and employees, kind of allowing them to participate, but it is taking 3% automatic pay out of their checks to be invested in a 401(k) so it is going to allow them to kind of having savings once they do retire. it was the first state to pass it there have been ten other states california just passed it last year for california secured choice, which is going to be very impactful not just to those kind of those individuals but also to the markets, domestically and internationally. and then, also, there are other programs kind of -- just financial literacy as cnbc is
doing, but also for the stock market gain programs and education programs for grammar schools and high schools, too. >> martin, thanks for joining us >> thanks for having me. and you can read martin's full piece from the invest in you part of the website, cnbc.com/invest-in-you we should know that nbc and comcast are investors in acorns. up next, the things every investor needs to their radar as we head into a new trading week. you get to be in aox b lucky you. "closing bell" will be right back back ♪ but perhaps this year, a more exhilarating endeavor awaits. defy the laws of human nature,at the summer of audi sales event. get exceptional offers now.
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welcome back kids, how we finish the day on wall street, record all-time closing highs and finishing at the high this session as well. nice momentum into the close dow closed up nearly a full percent, s&p up about half a percent and nasdaq somewhere in between. the russell took part. it has been lagging of late but up 0.8%, above 3,000 for the s&p 500 first time ever. now we will look ahead on wall street. amazon's prime day kicking off monday chewy is set to report results for first time since going public and big banks are set to report earnings. let's start with prime day courtney reagan with a preview
of that. courtney. >> amazon's fifth annual prime day event starts at 3:00 a.m. eastern monday, runs for 48 hours for prime members in 18 countries. there will be more than a million deals. core site estimates the event could generate $5.8 billion in global sales since you have to be a member to get the deals, the event is a recruitment tool, too. prime day isn't just a big day for amazon though. it has created a halo effect for rivals, many which offer competing deals. adobe analytics predicts sales could surge 79% compared to an average monday or tuesday in july thank you very much. now chewy is set to post results for the first time since going public lesley pickard has the preview hey, lesley. >> hey, wolf that stock up 55% since its ipo just last month. a slew of analysts initiated coverage on chewy this week with more holds than buys actually. the main bearish case on the street is valuation. the stock popped in its ipo as investors clamored for the
largest pure play online pet retailer the bulls, however, point to chewy's growth and a recession-proof category with a path to profitability. chewy's first quarter earnings are due out after the market close on thursday with a conference call to follow. we will be listening in, guys. >> leslie, thank you sticking with earnings, the big banks also set to post results next week. wilfred, you will be busy. what should we watch >> so the question really is how much the moves we've seen in interest rates are hurting banks' earnings. that's the big question for this quarter. the ten-year yield collapsed during the course of q2, started around 2.5%, ended around 2% lower rates are expected therefore to weigh on net interest income and net interest margins for the quarter and perhaps more importantly for guidance going forward that said, there are a couple of offsets to look out for. first, the loan growth expected to be solid outside of real estate that is, meaning that even if the net interest margin falls, net interest income overall may hold up. second, solid fee income is expected asset management fees should be
strong in line with strong equity markets while fees in the investment bank will be varied but very strong for capital markets like ipos, softer for example in trading third, cost controls remain a key long-term driver for the bigger banks share price at the setup was looking fairly easy a month or so ago, but has seen some pickup, sarah, since capital return plans were approved by the fed and that might make things a little harder earnings kick off with citigroup on monday. >> it has been decent year so far if you are looking for the year-to-date performance for banks up 19% zoom out and go 12 months, one of the worst groups in the market, almost flat, up 4% that's where people point to the weaker valuation as well. >> on a pe level they're trading about 60% of the average of the rest of the s&p 500. so clearly they're very cheap, they're long-term average relative to the s&p is always a bit lower but not to that extent there's room for pick up the same thing kind of applies as the last two quarters, and
that hasn't been enough but maybe it will be this time around if they give good guidance, they say we're not fearing the interest rate outlook, maybe they can catch a bit. >> i think the other thing that's key is whether the powell rally extends into next week. >> of course. >> beyond the tone from the banks because that was the name of the game. >> citigroup kicks off on monday we are out of time today thanks for watching "closing bell." >> have a great weekend. "fast money" begins right now. "fast money" starts right now. live from the nasdaq market site overlooking new york city's time square i'm melissa lee. tim seymour, guy adami and pete najarian the fcc has approved a $5 million fine for the facebook giant. plus johnson & johnson not out of the woods yet, the doj launching a criminal probe into what the company knew about the cancer risk in the baby powder first we start off with judgment day for the markets. stocks soared to all-time highs