tv Closing Bell CNBC February 7, 2018 3:00pm-5:00pm EST
huge multiple stocks get in trouble because earning are so far out in the future because they don'tme menwant to take the risk >> thank you for watching "power lunch. >> all right "closing bell" starts right now. hi, everybody. welcome to the "closing bell, " i'm kelly evans. >> i'm bill griffeth by definition, a roller coaster has to go up and down, it doesn't have to just go down like the markets today, a leg lower, now higher again, another volatile trading day the dow down 100 points on the open this morning, up 400, it's been a 500 point swing in today's session, and, here, clearly, this is the most important hour of the trading day. we have a chart to show you, monday is in the blue.
tuesday is in the orange, or red, whatever color it is on your screen there. that is the last hour of trading on both of those days, and it traveled about 3500 points monday in just the last hour of trading, down 1600 points for a time, and then a 500 point -- or 900 point swing yesterday. >> as you mentioned, we had a big swing in the last few minutes here we'll see. anything happens in the final hour of trade. more from bob on today's move, bob? >> reporter: other things moving things other than the volatility index today. we were tooling along at a narrow range likely to the upside, and 1:00 hit this is the screen we have up here at 1:00 you can see we started moving down there on the heavier volume two things happened at this time we got a budget deal that implied greatly increased deficit, and we had a soft two-year auction what's the effect? the effect is bond yields moved up this has been a problem in the past, but, particularly, the levels we're at now, so bond
yields moved, put up the ten-year yield there, 2.84, around there, that level, we're sitting there now. you might recall that was the level on friday when things kind of got very difficult. this whole mess started on friday when we had the jobs report, and we had better wage growth than expected the yield moved up to the 2.85 level, and the market opens down we got down on the s&p on friday, and, in fact, ended 50 points lower, than that was really the start of this whole thing, if you look at the five days, there you see, moving to the downside the point of this is pay attention to yields because once, again, it may becoming an issue about the market the broader issue, the selling over, the biggest trade of the year short volatility, best volatile we go down, and traders long stocks, effectively selling put options. that fell apart, this phrase, on monday and tuesday, traders went back up, covered the shorts in the vix, and, of course, we have
exposure in the stock market the question is this, have they reduced it enough? the good news is the crowded trade we talked about, vix, short vix, long stocks, crowdedness greatly reduced, but is it enough look at the vix, 17 on friday, we went to almost 50 on monday, and here's the big question, is that enough? right now, we're down to 26. my bet is that if we get a co couple more days the resting stance on vix is higher than 10, but lower than 20, maybe 17, 18, but we have to see guys, back to you. >> okay, bob, thank you. we'll see you on the close we have more stats to wow you with the nasdaq had a range of 100 points today, trailing the other major averages, but let's go to times square we are at the nasdaq market site seeing what's moving there today. >> reporter: peaks and valleys one of the areas of peaks today have been a bit stronger, have been the small caps, really. that's what helped the nasdaq
overall, composite, biotech has been the strength for much of the day. we got it up here, covering half of monday, best gains from the small and mid cap names, chips are down for the fourth day, down 5% in the sector over that period of time it's really the megacap stocks that are the problem here today, and dragging the nasdaq lower. apple and amazon are just about break even for the week, but apple pushed back into the correction territory, down more than 10% of its all time high as well as alphabet, down 5% for the week among the stocks that are up for the week, or big gainers today, hasbro up, over mattel, and wynn, surging after founder, steve wynn, steps down back to you guys >> one of the best performers in
the s&p too. thank you. for more on market action and where investors find protections to ride out the ups and downs, if such protection exists, dom chu? >> protect risk exposure to the marketplace as bob referred to, traders and investors have been doing over the course of the past few days, but there's instruments out there in the exchange funded world that are not crafted to give investors exposure to the market, but try to dampen some of the risk and price volatility with them we highlighted three of the bigger ones here for an idea they are in no particular order other than five out there. these are at least defined by the issues with the etfs the etf at $14 billion in size there's a couple, at least, s&p 500 lowball etf, it's a $7 billion etf, and power shares s&p 500 high dividend lowball
etf, sphd, high dividend there at $2-$3 billion etf how do they compare in stress in the market place over the last week to the s&p 500? look at the spyder trading over the course to month date period, down 4.5% on this. 4.4% in current markets. keep that in mind. look at three efts, lower volatility ones referred to, did they really outperform a little bit, maybe. usmb, 4.5%, and sphd, 4.6% they actually underperformed a little bit do the etfs give you lowball exposure remains to be seen what to leave you with, guys, low volatility etfs are not linked to the volatility relate etns like xib or bsx, not in
that same league, also, these particular efts particularly carry a higher dividend yield than the s&p 500 each we just talked about there has a yield higher than the traditional s&p, guys, back to you. >> thank you very much, dom. let's kick this around is low volatility a way to protect yourself back with us, bob pasani at post nine and cnbc's commentator, mark santelli. i'm reminded, looking at the different instruments that dom looked at. when i go down the supermarket aisle, all the soft drinks it takes up an entire aisle now with all the permutations that make up a soft drink these days. >> that's right. >> they sliced and diced to nothing. >> they have the whole game has different factors and characteristics to package into an eft call it something, appeal to certain investors. i think that the bottom line in terms of, yes, there's a slight
anomaly here in the rough period to the overall market these efts packed with what are supposed to be lower volatilities have not distinguished themselves over longer periods of time and most likely would. these are the slower moving more boring companies, but, ultimately, they are made up of large cap stocks, made up of the same stocks, raw material is in the s&p 500. it's not as if it's promising to be something truly distinct. >> yeah. i agree. this is -- this is the low volatility, but it's not the stocks don't go down in our fund fund, and if you look, he's absolutely right i don't know that you can put it up, but composition of the fund is representative of the s&p 500. you have consumer staples, and 25% is financials which got clobbered this week. the fund goes down with that compensation it's just over time the beta of the stocks is lower than the rest of the market >> peter, my issue with this is it's backwards looking telling you here was low
volatility in the past, this is not saying low volatility in the future >> they are low vehicolatility businesses like waste management, coke, pepsi, but it's assets within the indexes are expensive, while businesses are low volatility, stocks are not low volatility if we have a correction with the stocks being very expensive, so we have to differentiate between low volatility business-wise and low volatility stock-wise. >> yeah. that's a good point. a lot of those very steady dividend paying stocks, especially a couple years ago, got extremely expensive as the world clambered for reliable income i will say the way the s&p lowball etfslv is constructed it takes the 100 stocks within the s&p 500 that displayed the lowest volatility relative to the index over some past period. so it is showing what the stock has done before. >> right >> but, yes, overvalued, they go down in a down market.
>> an issue presenting itself this week is the question asked by smart money, where are the regulators in this monday, jim brought it up, tuesday, colonel icon, and today, cooperman listen to this from the "halftime report." >> i implore the financial service industry and regulators to deal with the crazy instruments created that are destroying the best capital market in the world. as i read last night on one of the services that the inventor, an invenn tor tor of vix doesn' why these products exist crazy to see it down 100 points in a half hour it has nothing to do with economics. the regulators have to put proper leveraging into the system to protect the investor >> so, peter, this raises the other angle of this, which is, okay, we were just talking about if you want to avoid volatility, meanwhile, there's a lot of investors who want to bet on volatility itself going up or
down, and do you think those products should be banned? should leverage products, should they also be banned? what's the question on - >> the history of wall street, they created products to leverage bets. that's what a derivative is. that's what an option is an option is a levered bet on underlying security, and what they created with the vix and mid-2000s, it's just leveraged bets on something, and whether they ban vix, wall street will create something new it's important that the investor understands the playground they are playing in i mean, in the vix perspective or xiv, it said this could go to 0, so maybe this is an education moment for the people that traffic in these types of securities >> is that warning enough? so the broader question is there some kind of systemic risk in some of the leverage and etfs of
which the volatility etfs are a subset i don't know the answer, but there's losses over the xlt going under, even if they are thrown out and regulators will sit up and take notice, and i don't know if this is systemic, but i have a feeling it made a bad situation worse, and that may be enough to restrict it more, maybe restricted to qualified investors, for exam e >> wells fargo was fined for selling these products from 2010-2012, already looking whether the volatility products should have been sold to retail investors. i'm sure this accelerates it >> hope so >> back to what leon cooperman said about the recent market volatility >> i think the s&p is a fairly priced index i don't look at the s&p to go up a bunch. as i said, i came into the area looking for maybe worst case down 15, best case, up 10, i would raise -- lower the
downside risk. i think with the economy doing better than i thought, earnings better, i don't think the market has that risk. >> that was lee cooperman talking about where we stand in this market overall. i mean, and that's the broad question is the bottom put in, and to the point that bob made, is that - >> reduced risk. >> of worry about it, being systemic happening kind of past? >> saying the s&p is broadly -- fairly valued and seems as if earnings or something are better than expected is pretty much the consensus view i don't think that's wrong, but we did manage to put in 10% downside in a handful of days when not much changed about the fundamentals you never know how the market's going to trade around. >> the big thing is a crowded trade has been largely unwound that crowd of trade, short the vix, go long stocks is partially unwound. there's less risk in the system. saying it's fairly valued.
he's rigorous. we are seven and a half times forward arnings, and 17 is fai to him >> the first time we crossed 25,000 in early january, saying how overbought the market is, but back to it again, we say, it's low value >> thinking it was 10% to the upside, went 7.5% in three weeks. >> yeah, so, wow as we know, interest rates are going up precipitously in the last couple weeks. this is what lee said about the potential impact that has on equities as well >> i think so globely, interest rates around the world will go up it will ultimately affect the stock market, but i don't think significantly in 2018. we have a lot of stock that is cheap in the market. >> that's your favorite area, peter, what do you think of what he had to say about that >> well, that's the big question, is when do stocks become sensitive to the rising interest rate? i think we're in the midst of that it was 2.70 last monday morning and the market responded to it i think rates are continuing to
go -- will continue to go higher, and i think we have a market, stock market that on certain metrics are as rich as they were in march 2000, so high valuations don't matter until they do, but what makes them matter is a rising interest rate, and because we have a very levered economy and because we came addicted to low interest rates over the past ten years, we are sensitive to changes in interest rates, modest changes in interest rates. 3% ten-year, 3.25, 3.5, that's a big deal for risk assets because key multiples go down. if stocks go down, that potentially impacts the economic growth, and all the earnings estimates out there, so -- >> right >> i think interest rates really hold the key importantly to where stocks go. >> and we keep mentioning the ten-year yield at 2.853% we'll keep an eye on equity reaction thank you, guys, all, for joining us, peter, mike, and our bob pasani >> the volatility continues. two minutes before you and i
went on the air, the dow - >> almost negative >> almost negative, and the s&p did turn negative and here we are at 15, 16 minutes later and dow up almost 200 points, so, yes, volatility reigns today >> vix near the 24 level, and we are just getting started here on "closing bell. next up, we want to hear from you as we bring in two financial advisers with phones ringing off the hook after the return of volatility what's their advice? that's next. plus, a pension fund manager that just kicked a whole lot of big name high earning stock pick pe e s out of his office. see why when the "closing bell" comes right back directv has been rated #1 in customer satisfaction over cable for 17 years running.
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another market roller coaster ride, but a viewer tweet to me often it's an escalator up, but an elevator down as we say on wall street as well which ever, we've seen more volatility how do you navigate the market joining us, a pair of financial advisers, ivory johnson, and he's also, by the way, a member of the cnbc digital financial adviser counsel, and with us, david nicholas from nicholas
wealth management. good to see you both thank you for joining. i agree, i mean, the -- does the storm clear here but -- and we, you know, we went out and talked to people on wall street yesterday, you know, average main street retail investors, and most of them said, gee, i see this as a buying opportunity is this a buying opportunity, or do you fear there's more to come to the downside here >> no, my sense of this is a buying opportunity if anything, investors are concerned because this is too good to be true syndrome reality is, there's strong underpinnings in the market. look at goods orders, up a 37 month high, 17 year high in consumer confidence, cap x at a 64 month high. as long as those metrics don't change, i still think it's opportunity to come in here and buy some things that maybe were sold off too much. >> david, we comet to get questions from twitter and facebook from viewers, and there's concern about what's
happening with interest rates. we mentioned a moment ago, moving up towards the levels that might have contributed to the stock market weakness. john asked, has u.s. treasury debt become more difficult we heard, of course, there was a deal reached this afternoon that could mean more issues how should they invest for that? >> yeah. i think we're going to see, you know, interest rate rises this yearment that's one of the biggest risks i fear right now, and most of the clients are retirees bonds is an asset class that most retirees own, and i have no concern on the equities side for 2018 my concern is on the bond side if you're an investor and own bond mutual funds, as interest rates rise, you'll see losses on the bond mutual side of the portfolio. we tell the clients we are getting them out of bond mutual fund at this time. i prefer asset classes that
don't have the interest rate sensitivity. we're going to feel it in 2018 >> okay, but, david, what about -- i mean, in the low volatile environment from the last couple years, dividend paying stocks were wildly pop few la ular do they rethink that >> right why did the stocks become popular? right. because yields were low. investors were chasing yield look, as long as the value is there in the company, i like holding dividend payers, but be careful. you'll see the selloff happen in those sectors as interest rates rise i prefer sitting in cash for the next six, 12 months rather than owning a bond or dividend paying stock at this time >> wow ivory, asking what jeffrey was asking, the volatility gauge, should it be below 20 before you invest in the stock market what do you think about that >> i think the sense of a
crystal ball -- that was taken in 2008, he never would have made a decision based on what happened in the last several days i know to the extent you have money that may be in cash, go buy a bond, bonds that mature every two, three years >> now, wait a minute, ivory david said he's going from bonds to cash, and if you got cash, buy bonds. >> but not a bond fund that's a pool of bonds you can't -- no bond is strong on a specific day. >> more sensitive. yeah, go ahead >> if i buy six bonds that pay semiannually, every month i get a check. i have a bond in two years, four years, six years, and eight years. as the two year bond matures, i put that in a longer term bond, higher interest rate, and you make money as interest rates go up >> david, you okay with that strategy >> yeah. you know, it's not a bad strategy the problem is is, you know, you time it perfectly, that works out. there's other asset classes that
you can look at. a fixed annuity, insurance companies have done a much better job of paying interest rates. if you're a bond invester, look at fixed annuities as a replacement for the portion of the portfolio you normally have in bonds try the bond ladder if you time it right, but fixed annuity could be easier, more for retirees that doesn'tment to time the interest rate gain perfectly. >> the economists rarely agree and financial advisers rarely agree. thank you. >> thank you >> for more, go to cnbc.com/financialadviser. >> get good advice there as well still ahead, elon musk successfully test the the world's most powerful rocket live on "closing bell" yesterday, and today, investors hope musk's other company rockets higher as well how much the stock could move on earnings coming up
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welcome back, dow almost negative before the hour, now up 240 points keep bouncing around here. the vix up to 23.5 >> utilities, i mean, they are the strongest proxy on interest rates. rates are rising today, and utilities are up >> exactly, and higher >> i guess they were oversold after the recent volatility. >> real estate higher, 25%, and
telecom is the strongest at 12.5%. perhaps that's why everything is haywire. >> #gofigure more action so far, tronc soars after agreeing to sell the los angeles times and san diego union-tribune to a california based entrepreneur for $500 million. the deal is expected to close late in the first quarter of the year tronc up 20%, but there's snap, look at this, surging on heels of earnings report late yesterday. kelly told you about, the social media stock beat on revenue and saw a big increase in daily active users, up to 187 million daily active users, and the46%, stock that lost 40% last year after the ipo. >> doubled since after hours the gain is doubled. 23% yesterday after results, now up 46% >> as they turn things around. >> market's excited. that's for sure.
again, up $6.50. twitter up 5.5%, up 11% year to date, but most of the time people said this is snap specif specific, figured out the ad platform, a broader advertiser base than twit african-american t -- twitter and the others >> revenue for snap was up 72% in three months. >> you want to see that with a company so young, and growing active users when facebook showed a plateau there looks better by comparison ready for us, sue? there's facebook right there >> down nearly 2%. >> all right let's see what happens, folks. time for a cnbc news update with sue. >> i have been waiting patiently, guys, good to see you. this is what's happening at this time, everyone james mathis at the white house
briefing today grazing over a question about president trump's request for a military parade. >> as far as the parade goes, again, the president's respect, his fondness for the military reflects him asking for the option four felony charges filed against the man accused of killing indianapolis colts linebacker jackson he arrived in court this morning, the 37-year-old is in the country illegally after being deported twice rescuers in taiwan remain at work searching for survivors in the rubble of buildings that collapsed in tuesday's earthquake, trying to reach five people trapped and 140 missing in the buildings, six killed, and 225 injured by that quake. back to you guys another 5.7 quake earlier this morning. they are right in the -- >> scary stuff >> right on two active plates,
so we'll watch that closely. back to you guys >> do you know there was an earthquake this this area this morning? >> yes >> no. >> there was >> 2.2 earthquake in westchester county >> makes me nervous with indian point. >> oh, yeah. >> i don't know if it's shut down now or what, but, anyway. >> i don't know, see you next hour >> sue there as we proceed to the closing bell exchange. grasso get here. this is eric marshall from hodges and rick santelli, welcome. rick, starting with you, the rate moves this afternoon have been interesting, back up at 2.85, maybe headed back to the recent highs what do you think of it? >> well, 284 is the high yield close, not surprised if it came on messy friday with regard to equities, and that's high close going back, of course, to january of 2014, but i do think that we're going to usurp that
by a basis point or two, by the way, up a handful of basis points now the auctions were not terrific, and i can understand why. nobody's going to catch the dropping knife when they could just go in the secondary market versus auction if they so choose listen, i think rates can be putting this away. there's a high every day people tell you what resistance is, and the way i look at it, the minute we surpass last year's high yield close of 2.63, the market has been going up, and it's going to test 3%. it's going to stop on a variety of stops along the tour, but keep focus we are going to get up there it's just a question of when to me, the second most important feature of the market is it's en route, it stops short of that, and it closing under 263, whatever that high is, that was short of 3%, my opinion on that record, whatever occurs, if it occurs that way, say whatever the yield is is the high for a good deal of time, a quarter, five months, six months, so
that's the way i proceed rates are going up every time they fall back, it's probably a good time to sell, you know, when the yields go back down a bit, and this reit test was yesterday when it was crazy in the wee hours of the morning and tested 2.64. it held. that's how i look at rates >> you know, i remember joking two weeks ago with you before i went on vacation, that at this rate the ten-year would be 3% by march, and, hey, that could happen any wway, couldn't it grasso is here with us now thanks for joining us. that's our bad you got mixed signals, i know. >> no worries. no worries >> eric marshall, i know you consider this volatility a buying opportunity going to the transimportaports. you look at those. those are going higher again today. we are seeing a return to what we considered normal activity before all this volatility began more than a week ago do you like the transports here? >> well, we do
we like the transports we think there's certain areas of technology and industrials, some of the cyclical areas that look eed good, and here, we are using this volatility as opportunity to focus on companies where we're going to see the biggest earnings growth within the next year interest rates do move higher, it probably means pe multiples cannot expand. find companies that can grow earnings much faster than the contraction in the multiples to offset effects of higher interest rates >> what do you think of it stocks are volatile by recent standards. >> sure. >> we're not down 100 like the other day, it's still a weird session. >> when you sell off and have that much of a traumatic event happen, it does not heal itself in a matter of hours it's a matter of days to weeks certainly, i would not say that we're out of the woods,
although, this was very constructive today, and decent don't be shocked if we get a whoosh to the downside look at single stocks, levels traded down to in the last couple days, and as you look at the futures or the dow, see the level that they traded.na edown and use that as the barometer, whether it is a new leg lower or retesting those legs >> necessary to get back to monday's flow down 1600 points >> it is not necessary we go back to monday's low, so the low in the s&p cash, that's what you look for look for higher lows, right, and then get constructive back to those old highs, but i would say just focus -- don't focus on inflation. that's the market. that's what sparked the market originally and delever raaging. focus on moving higher in the market and filtering through >> okay. we have to go, guys, thank you
eric, rick, steve, when you can stay longer, come back appreciate it very much. >> dow 252 points, 25 minutes to go the man who oversees pension assets in illinois says hedge funds are better at generating publicity than better returns, and why he simplified hi rtlio amid the market volatility no matter how the markets change... at t. rowe price... our disciplined approach remains. global markets may be uncertain... but you can feel confident in our investment experience around the world. call us or your advisor... t. rowe price. invest with confidence.
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welcome back to "closing bell," major rebound on wall street, look at the s&p 500, names fuelling the index higher led by wynn resorts, up 8%, best day since january 22 of news of wynn stepping down dish network upgraded as m&a speculation moved that stock higher on the dow, boeing, walmart, united tech, merck, as well as intel moving the dow higher by 200 points with today's gains as well as yesterday's gains, the dow is still about 5% below its recent highs, but take a look at the technology companies that are not participating in the
comeback it's the semiconductor chip names, microchip, micron, analog devices, and lam research are under pressure here. guys, back to you. >> all right, thank you. 20 minutes to go we'll watch all of it. we got breaking news from capitol hill as well what's happening >> reporter: hey, kelly, there's a peaceful, but a demonstration happening on capitol hill, a coalition of refugees displaced by the hurricane in puerto rico as well as recipients of dream act, or daca protections, that are here protesting the lack of any immigration reform there are about 200 protesters here police blew whistles a handful of times, and 75 remained in the middle, are in the process of being arrested it's still extremely loud, and they are with nancy pelosi who
is advocating for the dreamers, so, certainly, and interesting development on a day when a deal in this senate is in the headlines, kelly >> that deal sounds like it does not include anything on immigration. >> right >> for dreamers' relief, right >> reporter: that's cheorrect there's no immigration language or any sort of agreement in the budget deal. that's going to come separately, and we'll see what goes from there. >> yes, chuck schumer said mcconnell promised the bill to debate on next week. >> oh, he did, did he? >> that was part of the agreement. thanks, kayla. see you later. 19 minutes left here, back on wall street, up 244 points for the moment >> yeah. >> it's been a volatile day again on wall street >> and nasdaq barely participating. it's basically unchanged right now. illinois state board of investment, the board's chairman
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welcome back here's performance last year, hedge funds saw an 8.5% return now that compares with the spyder for the broad market posting 21% return our next guest is the man leading the charge to take illinois state investments out of hedge funds joining us now is mark lavine, chairman of the illinois state board of investment. mark, thank you for joining us >> welcome >> thanks for having me. >> so you simply don't think hedge funds are worth the money? >> well, their performance has been absolutely terrible, and we started asking questions, we had
a 10% althoulocations, asked questions, like, what are these things half are stock pickers who suckered investors into not using basic equity benchmarks. we did that, and they all -- nearly all underperformed basic benchmarks why would we pay 220 when we get indexes for free the other half of the business are these, like, trading books, traditional hedge funds, derivatives and such, they are 2, 3%, going back years, jus not getting the job done, and take risks, book in derivatives, sell as low risk diversifiers. we want to be investment grade bonds for better returns and less risk. >> i agree with you, not that you asked, because i think we got too complicated with the investments and looking for ways to lower volatility and blah, blah, blah, but i happen to think that a lot of the guys have been underperforming because we've been in a low volatile environment with an upward bias. but what happens when inevitably the bias turns to the downside
how do you protect your portfolio if you don't have some of these instruments in your portfolio? >> we protect our portfolio the way investors protected their portfolios for decades and decades. that's with bonds, you know, sort of good bonds and bonds that -- we don't have a lot of cash the other thing is, remember - >> hang on, marc, i hate to interrupt, but even that has been skewed by this monetary policy period we've been in where the fed has, you know, put -- had their finger on the scale for so long that rates have been art officially low, and now they are going to start to rise, and that becomes a money losing proposition as well >> remember, though, bill, we are a long term investor, right? we can take our time daily vehicolatility does not ac us it's irrelevant. we have a chunk of our money in public stocks. what's going on doesn't bother us in the slightest. when i was chairman, we had no
investment, credit, real estate, that sort of thing we've gone over 10%, $2 billion targeted for those we are actually targeting about 11%, 12% returns, unleveraged risk we are happy with the portfolio. >> what you are doing is especially risky, or not doing is risky, given the situation in illinois, states routinely flagged to have the biggest gap to fill, and you are responsible for filling that gap i want people aware of that. i wanted to ask, too, you see funds like viking up there you are investing with some stock pickers. what kind of fees are you looking for? what's the thought behind that >> right so we had about 81 hedge funds, okay, most of those were stock picking variety. retained five, six of them they are stock pickers, move to the equity book where is exactly where they belong.
we moved mostly from long only vehicles, which most of the managers offer, and so when we pay -- we pay carry over an index, over a benchmark. we are not paying carry on total returns, frankly, the guys we were paying have been generating, 500 to 1,000 basis points over long period of time, and we want to see how they do recently and how they have done over a long stretch of time. we include the lehman period we are very happy with the guys we ended up retaining. >> yeah. >> all right interesting. marc, thank you for joining us appreciate it. >> thank you for having me >> marc lavine we reached out to third point, value act, and persing square and received no comment about their move to divest, yet to hear back from partners in that
regard before we go to commercial, art yelled here that the market on close orders show an imbalance to the sell side, up 2.5 billion dollars. >> wow >> said to me, looks like the market's disregarding it to a great degree and expect more y buye buyers >> off the recent highs measured in five minute intervals dow up 134 and nasdaq negative by nearly half of 1% ten minutes to go. s&p barely higher and nasdaq hanging on to a small gain 24 hours after disney earnings released, target of the proposed merger, 21st century fox has numbers out, previewing that and tesla take two and others next. let's get started. show of hands. who wants customizable options chains? ones that make it fast and easy to analyze and take action? how about some of the lowest options fees? are you raising your hand? good then it's time for power e*trade
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the original place to invest online. coming up to the last three minutes of trade we have not done this for a while, a chance to review the day here peter tuckman ready to trade in the last couple minutes of the market here, yet another volatile day, but i want to take it further back, show you year to date charts of some of the asset classes. first of the dow, of course, we had a good run the first month of the year, and then february hitting and everything changed, but now we're starting to come back a little bit here, but we're back about -- well, we were back 25,000 until moments ago. the market on closed orders taking it back below that. we'll see how we do on the close here the ten-year yield, that rise has resume again we're now back to 285 or
thereabouts, taking us to a four-year high for that. this is interesting. the dollar index seeing a button hook higher here after being lower for the first part of the year, now we've moved a little higher, and as that does that, watch what happens to oil here now, the inventory numbers had, in fact, higher than expected, so oil moved lower, but it's at a time when the dollar moves higher again, not to put too fine a point on that, but brent back to -- or wti back to $61 or thereabout, and brent lower as well earnings, will they matter again? are we to the point volatility -- >> have for the last few days. >> volatility was in the way of it, but interesting stories with tesla and fox here >> a lot it talk about on that launch there the two -- and came back down, and it looked like a movie in
review >> yes >> as a kid who grew up on science fiction film, it was magnificent to watch, but i digress. the ten-year, bill, we said last friday that was the cause of the initial problems, when the report game out, wage growth better than expected, went up 2.85 on the ten year, and the market fell apart, smashed down friday, down 50 points in the s&p 500. today, 1:00 in the afternoon, word of a budget deal, and $300 billion to the deficit, word of a somewhat soft treasury auction, and guess what, we're back there right back where we were on friday, 2.85, just a little bit short of that, and you saw the market weaken around 1:00 when that happened, to i think we made it, thank heavens, back to fundamentals, rising interest rates matter for the market. whether the selling is over, i don't know you see how choppy's it's been, and i think, not 100%, but got rid of a lot of excess
>> the dow, we took off this morning, and looks like we're going to land where we took off from >> pretty amazing move up and down >> another volatile down the dow down nine points, more than that, does it begin to tell the story more on that story and earnings coming your way with the second hour of the "closing bell" with kelly evans and company. see you tomorrow, kell thank you, bill. welcome to the "closing bell," everybody, i'm kelly evidencans. dow dropped about 20 points. s&p 500 down half a percent. that's 13.5 point drop on the bell, 2681 the dow under 25,000, 24,894 the nasdaq shed 1%, back at 7051, and russell 2,000 hanging on a tiny gang on the bell,
1508 the vix at a level 26. we'll talk more about that in a moment big names reporting earnings after hours, julia borsten is covering four of them, watching for fox and zynga and more phil has tesla when it crosses, and yum china. that's in a couple minutes, thank you. joining me now are cnbc senior market congressmen tainter michael santolli and barbara duran. welcome, everybody in terms of the market today, boeing was leading, and apple the laggard, and it was the biggest decliner after its earnings mike, i mean, we were up 250 points just minutes before the end of the session this is still got a weird kind of clicky feel to it >> still arhythmic vibrations in
the market this is how it happens when the market is rocked by a sharp, sudsen move down maybe yesterday morning was a plausible trading low, but, you know, it's fit, and what's going to remain for a while. the volatile measures are not yet back in normal range >> yep >> we have to watch that i'm not too surprised we didn't have another huge uprun on to the close. i think people are expecting some kind of other selling way, but just retest in try to figure out if this is the new range we're in or if we start to refocus on fundamentals. >> there's the swings we've seen just intra-day today, barbara, talk about the interest rate aspect of this for a sec let's see where we are in the ten-year up 2.85, we're still roughly at that level 2.88 is high as it was recently that may be caused some of this volatility what -- what do you think of all the moves we've been seeing? >> well, i think several things have happened. one, we know tax reform was much sooner and bigger than everybody
thought. january, everybody rushed, once the analysts were back from vacations, to increase estimates. you had huge retail buying a third of the exchange was in buying retail. that makes things overshoot. we had the jobs report friday, and that's where everybody suddenly worried about inflation, interest rates backing up, what happens next? the market's in repricing. i think the market settles down. it's not going to have a v-shape recovery any time soon, but it will earnings are solid, fundamentals are solid, but there's an inflation fear factor here to stay >> charlie, are you a buyer on any weaknesses here based on stocks in the portfolio? what do you think about bonds? what do you do with them at these levels >> we would not own bonds. interest rates are going to keep going up over the last 100, 150 years. ten-years average over 4%. recently, we've been down at these levels, 2.8, 2.9 is lower than it should be, but we think the market is anchoring in
estimates of earnings that are too low. the actual earnings estimates should be higher, impact of tax reform and the strong economy is going to take earnings up above even what the revised enings ds are. we had lob corp. supposed to earn $10 this year, but because of tax reform, they earn $11.40, earning an almost extra 15% from tax reform it's not been reflected in the market >> on that note, how are the earnings this afternoon looking? twenty-first century fox is out. >> fox beating on both top and bottom, estimates were 38 cents a share, and growing revenue faster than expected to 8.04 billion in revenue versus stims of 7.94 billion. with fox, the question is, what's this mean in terms of company's acquisitions of fox's entertainment assets by disney there's a statement in here from
rupert murdoch saying the results reflect increased investment behind higher volumes of global sporting events as well as film releases from the studio that led the golden globes awards and oscar nominations. looking ahead, we will continue to deliver value to the shareholders, to achieving near term growth plans, complete proposed accusations, and continue to have successful completion with transaction of disney and planning a new launch of the new fox those are the new assets kelly, back to you >> all right talking about the new fox, but this could have a ways to go julia, thank you shares up 2% after hours on that robert mike, anything jump out to you >> not from the inside of it obviously, hinges on how the merger is going to go. i think that maybe taking together with disney, the stocks, obviously, well off their highs, you might have some
people getting a little bit less concerned how the tv business is falling away, but that's below the top line >> this is interesting are they less concerned because of the commentary disney's had saying we have success on other platforms? >> i think so. it's essentially about, you know, maybe the rate of decline is not as steep or that there is enough adoption of some skinnier pay tv packages it's not going away entirely. i think that it makes sense there's a little bit of relief from it being on the top line as well >> how do you guys see it? >> well, i think, actually, what's most important here is really the future. you know, what disney is trying to do in terms of online streaming, so in a way, it's not as important right now what's happening is what's disney going to do with this takes another 12-18 months to know that's what that's about there >> charlie, do you have a strong opinion on the media space right now? >> i think you got to be selective. the name we love here is madison
square garden, trading at around 11 times earning >> you can't bring that up today, charlie, come on. porzingis is out for a yearment you can't bring that up for today. >> madison square garden that owns the knicks, but we own the one with the broadcast network doing much better. >> still breaking my haereart >> the stock is cheap. we love madison square garden, cbs and viacom, which will merge. we like that stock >> why is that a good merger for cbs? >> les is the best manager for the space. viacom is not as well-managed, so les in charge of both, together, negotiate better deals with carriers. there's real synergy between the two businesses being together. >> all right let's flip to tesla, earnings are out. phil lebeau? >> these are numbers people will be happy to hear about if you're
bullish on tesla they beat the street they still posted a loss of $3.04, but 8 cents better than expected a smidge better at 3.29 billion. a couple important notes, cash, 276 million in the fourth quarter, many on the street expected cash rate much higher at close to $900 million cash level at the end of the fourth quarter, 3.36 billion dollars, and with regards to the model 3, a big question that people will be focused on, tesla says it continues to target weekly model 3 production rates of 2500 by the end of the first quarter, per week, and then weekly production of 5,000 per week by the end of the second quarter. so that's one reason why you saw the shares get a pop there tesla, again, a smaller than expected loss of $3.04 a share kelly, back to you
>> phil, have they produced 2500 total of the things yet? they are still - >> well, kelly, the most recent number we have, something like 1100 in the fourth quarter we don't have updated numbers for january. now, on the conference call this afternoon, that question will be posed. i doubt they give us an updated production number, but the fact that they say they plan to meet 2500 per week by the end of the first quarter, that's going to be reassuring for many investors. >> especially given we're halfway through the quarter. phil, thank you. >> shares 2% lower, unchanged right now. >> roughly on target i think maybe there's relief, and, by the way, fourth quarter model, deliveries were 1532 total for the quarter. they also say here, i don't know if phil mentioned this one line, some point in 2018, we expect to begin generating positive quarterly operating income remains to be seen you don't know if there's adjustments in there
>> take the forecasts with a grain of salt. it's tesla >> a stretched goal, always. >> yeah. let's watch the shares trading higher now i mean, charlie, the cash number is interesting this is one of the major bear cases against them, they are just going through way too much of it. if they had 276 million of cash burned versus the $900 million estimate, are you surprised the market east nis not taking that better >> remember madison is inexpensive stock? tesla is on the other side of that tesla is all the positive and exceptions built in. this company a grossly overvalued compared to others in the space. a lot of things have to go right for the company to justify evaluations. >> are you invested in it? >> no. execution issues, it's promising, but big competition comes in that's well-funded. it's a question whether they make it long term.
>> the fact everyone else is doing electric car things? any other auto makers? gm had a big sweep after its earnings, up 6%, operating margins, i think, in the u.s. better than toyota's now anyone else in the industry? >> no. what's interesting is you know what's happening with auto industry is some of the carveouts they call it, there's a lot happening in terms of artificial intelligence and all of that, so they are trying to maximize that. if you look, inventories have not been great the slide, the credit, all this, it's not the best place to be in the last quarter, i think, but then there's gm. >> yeah. >> very interesting what's going on >> always interesting expectations mike, for tesla, is there a halo effect from the falcon launch? >> not surprised if there were hard core shareholder base of tesla, it's about one person, one person's ability to get big things done, and so, yes, i think so in fact, i think on squawk box this morning, kathy woods was here, big tesla fan, said that
that actually does demonstrate musk's ability to execute on the big stuff. i don't know if it's true. i view tesla as a $50 billion -- like the world's $50 billion call option on a certain future happening relatively quickly, right? it's not so much they say, oh, we know what the vehicle will be in five years and all of that nuts and bolts, so to pespeak. >> that's fair before we go, charlie, i want your thoughts on the volatility in the last couple days issue and we see it playing out here any thoughts on how leveraged products, the inverts, volatility crickontribute to th? where do you think -- as we digest this, what are we learning >> i think what you've got is two big forces colliding, and that causes volatility, and the big sources are higher interest rates, higher inflation, and on the other side, it's a strong economy and strong earnings. those two things are battling
each other right now and causing conflict until that gets sorted out, which one is stronger, we're going to have a lot of volatility >> but you're staying invested in your portfolio? >> absolutely. we're on the side that earnings and the economy are going to be even more powerful than the higher interest rates. we think we are anchored in earnings estimates that are too low. >> barbara, same question. you know, you guys have to have a view on what just happened >> well, i think you have to we have individual clients, they tend to freak out when this happens, understandably, and you're watching it go down to 1600 it's not viable. fundamentals kick it off, and program trading, whatever it is, takes awhile for the market to settle we will have increased volatility aside from the painful trading because we're in the point in the market -- last year, late cycle, and more late cycle with the tax reform, giving us more extension, but pes will not expand from here,
and we'll have good ole market volatility >> change how you invest >> not really. looking ahead, look to see if there's the "r word," recession, in the future, but right now, no >> guys, thank you >> thank you >> barbara, charlie, thank you so much. >> there's more still ahead on "the closing bell. next up, opportunity and fear what should your next market move be? wait it out? buy in fast? plus, former corporate titan, ellen coleman, on steve wynn's fall and what needs to happen to stomp out bad behavior at work. the "closing bell" with kelly evans and mike santolli is back in two minutes
phil and gene goldman. welcome to you both. phil, again, you know, there's plenty of people complaining that there was no volatility, we needed the correction, and stock prices were too high is this an opportunity for you >> oh, for surement i think it comes down to forgetting the market is very different today than it was four, five, ten years ago. this correction doesn't even rank in the top 100 of all time. one day selloff is not a big deal you look at the body of the selloff, also not contextual selloffs like this, a 10% correction is very normal in every bull market we've had going back the last four years this is the chance, everybody. earnings are better now. you get better prices. chance to buy into the market because you get a selloff there, a brush fire in the market >> do you agree or do you see risk >> oh, i agree i think that you look at the volatility of the market, there's not been volatility for a long time. there's a lot of head winds, rising rates, the fed, and step on the other side, there's tail winds, earnings, corporate
growth, revenue growth >> right >> we see a lot of volatility in the market, but the markets rallied for such a long time it's a fomo market, fear of missing out market, best to jump into >> phil, that being the case and the fact that investors' sentiment was really at pretty bubbly levels before the market break, and you had gotten a lot of people used to this gentle ride, i really wonder if, you know, seven, eight day pullback that barely touches the down 10% mark and starts to recover if that shakes out excess enthusiasm and refresh the bull market, what do you think? >> you know, i agree one ofmy thoughts early on was this is a chance to reset and grind higher based on earnings, which is important i think we had so much in the market, a lot has been people rushing in that missed the rally over the last few years, and this is the chance based on tax reform, however, we're already moving quickly back to where we were today was an interesting day ending basically flat, but the
vehicolume really spiked. we had huge volume in the last few days, a good sign people liked the market, and now let's hope it's a fundamentally based market, volatility is a good thing, buy on price rather than euphoria coming back to the market >> can you tell us things you're a buyer of here? >> yeah. i mean, one of the biggest things asset allocation is changing you look at some of the etfs, inverts, they struggled lately asset allocation is in play. we like u.s., growth, we are leery of emerging markets because of the rise of the dollar, opportunities in asia, especially japan >> all right 60/40 is back. phil, is that's true, can we get rid of timber and allman and whatever else? >> well, crypto. >> yes get rid of crypto. >> although, it's unclear if
it's a noncorrelated asset >> don't even. thank you both >> thank you, appreciate it. let's go back to tesla they reported earnings minutes ago, and this is how it's trading, a little bit higher at last check let's bring in roman for more reaction thank you for joining us the shares are up about 2% now what stands out to you in. >> it's a relief, number one, and, number two, just a lot of instances of progress. the fact that they reiterated their production guidance for model 3 tells you that they are getting over the hump on some of the bottlenecks, and then the other thing that's a positive for me that stood out was the cash flow. i mean, we were anticipating they would earn a billion dollars of cash, and the cash burn came in well below that we thought the cash balance would be $2.5 billion, but it's close 3.5 billion, 4 billion the reports are positive >> just looking here
you have a buy on tesla. target price still $500? >> yes, it is. >> wow all right. we're at 352 so needless you are bullish on the company. willing to take them at face value when they talk about the model 3 production ramp? >> i mean, i understand the challenge in that, but the fact that they came out with the target in january, and then reiterated it again here in early february is a good sign, and if these targets hold, then, you know, you are looking at a substantial ramp in revenues and some significant free cash flow once we get into the third and 40 quarters. we think that's going to be, you know, that'll be positive for the shares >> you mentioned taking hard, the fact the cash burn was a lot less than expected, and, i mean, you are talking about a $900 million swing in the cash balance versus what you were projecting i can imagine if the cash burn was heavier than expected, tesla
says that's because we have to race to get capacity up and do these wonderful new things, so what explains the conservation of cash and can that continue? >> yeah. i mean, if they didn't, it tells you they put a lot of investment, a lot of the investment to getting model 3 up has already been put in place, and, you know, what's interesting is that once they get to 5,000 vehicles produced per week, the margins and earnings and the free cash flow really ramp significantly, so i feel like concerns about cash flow and balance sheet have been holding back the stock in the last couple quarters we're seeing this as the first instance in a while where the cash flow numbers were better than expected. they are reiterating at production targets, and so it's hard not to be bullish post this print. >> all right we'll see what happens on the call, but we'll let you go, thank you for joining us >> okay, thank you >> tesla shares hanging on a
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and, qqq power shares down 1.3%. small caps held on for a small gain today, russell 2,000. back now for a look at two stocks moving down on their earnings >> kelly, that's right starting with irobot gap earnings of 16 cent a share including tax impact there's no comparable figure, but that disapoints, stock down 20%, but beat on the top line. the company says that the global robot vacuum cleaner category agree more than 25% in 2017, and household penetration is low, though, shares falling precipitously here in extended trade. over to yelp, downside, 1.60 gap, no omparables includes a sizable gain from a previous asset sale. revenue at $218.2 million, higher than what the street expected revenue up $218 million, an
increase of 12% over the fourth quarter in 2016. the company saying that we are also focused on strengthening our competitive position in the highly trafficked restaurant category, and as a result, expect to incur operating losses of 20-$25 million related to yelp reservations and yelp wifi in 2018 as they invest more in growth shares down 7% there, kelly. >> wow yelp, and especially irobot, that's a tough one thank you. a look at the other names moving after hours. heard from 21st century fox, shares up 1% stim, and tesla still up about 1%, and take-two interactive down 6% after those results crossed. time for a cnbc news update. let's get over to sue. hi, again. >> hello, kelly, hello, everyone senate gop and democratic leaders say they have reached an agreement on the two-year budget deal that would boost spending on military and domestic
programs, but it needs to pass the full senate and house and be approved by president trump. >> the compromise we've reached will ensure that for the first time in years, our armed forces will have more of the resources they need to keep america safe a top white house aide steps down following allegations of domestic abuse by his two ex-wiv ex-wives staff secretary rob porter seen there with steven miller said in a statement the allegations are, quote, outrageous and false, end quote. in the u.k., the duchess of cambridge attended the opening of a treatment center for add t addic addicts, and they are offering a nine-week recovery program you're up to day-to-day. that's the update at this time kelly, back downtown to you. >> sue, thank you. shares of wynn rally today, one of the best in the s&p 500
after steve wynn resigned as ceo. we are live in vegas with the latest, contessa >> reporter: a reason for the rally, investors were desperate for uncertainty how this would proceed and see a lowered risk now for the company having any kind of risk of losing its gaming licenses at this time without steve wynn at the helm here's a couple viable options now that president matt maddox steps into the ceo's shoes he's been with the company since 2002, worked side by side very closely with steve wynn, and this is a succession plan supported by wynn. one, he would run the company, replace the board members with independent members and try to operate the company successfully two, they could try to sell the company off, either wholly or into -- by splitting off in assets gaming regulators, of course, in massachusetts and nevada will
scrutinize any potential buyers who take part of the wynn assets with investigations pending, and losses by shareholders being filed, there's a tough road to hoe. kelly? >> yes, to say the least unanswered questions, still. thank you. contessa brewer covering that story for us lestly picker is here on post nine, leslie, with ellen coleman. welcome to you both. much to get into i have to quickly ask you, ellen, because we just heard about steve wynn leaving his own company, you know, you're whole thing here is to close the corporate leadership gender gap. he was not replaced by a woman in this instance, but what's stepping down quickly say to you? >> the board is serious about the company and what it means going forward, and reputation is one of the things they need to
guard, and he would be depressing the company's shares, putting uncertainty into that market, and so moving forward under new leadership it's an important part of every board's responsibility to their shareholders >> now, obviously, there were pretty significant allegations of sexual harassment at the company. as you were climbing corporate ladders, did you experience sexual harassment as you were, you know, rising through the ranks in corporate america >> no, the '80s were a different time, many of us did experience sexual harassment, and there were not as many places to go then we took care of each other, knew the bad actors, and like-minded men, we figured it out companies have grown so far in 20 years to establish the right policies and practices, people know where to go if they experience any kind of issue, and it's the company's responsibility to eveinvestigat and take appropriate action. >> do you believe putting more women in leadership solves the issue or more than to be done than putting women in leadership
roles? >> there's an imbalance of power that leads to these opportunities. if you drive to gender parody whether it's senior leadership operating roles or on boards, you get a very different outcome in terms of that balance of power, in terms of how things are viewed i mean, i think there's been many studies that have shown howdy versety -- it's not just a social issue, but an economic issue. it results with the credit swiss research report saying 50% of senior leadership in operating roles are women, 19% increase return in equity another by peterson institute, when you go from 0 to 30% women in senior leadership roles, you increase your net revenue margins 15%. there's an economic benefit to diversity and jengender parody. >> interesting that research and research like it has been out there for a while. do you feel as if there's buy-in on the idea?
i mean, in other words when companies look to improve their standing in the areas, do they believe it's going to increase returns or is that just, you know, a way to get people to go along? >> i think many of us have evidence that diverse teams make better decisions, have better outcomes because they are debating the issues. they are getting, you know, they are identifying the elephant in the room they are not shoving it in the corner and are taking better action we have that i have that, and it's great to see studies bearing that out, but it's real. i mean, it's another -- it's another side of it is the war on talent there's tremendous number of talented men and women who graduated from college that are equal to men at 50%, and yet you get, as you climb the company, they are less and less women in leadership positions >> i can understand that, again, that work life balance, dealing with all the issues that have been an issue for a long time. what surprises me is that the boards, you know, this seems like the job -- i mean, i'm going to be flip about this. you show up a couple times a
year, paid pretty well, a little more than that, but why is it that head hunters are not coming to women is there a finite supply of women available for this because you can only do one, two, three at a time. seems like a great gig >> it is that boards are looking for someone who is going to fill a skill gap, so, for instance, do they have the technical background or an international or government background or a sitting ceo or cfo so most boards move to a skill based inventory as they take a look at their people, and so what comes open may not always be something they can match up on the other side of it is as you get more women in steenior leadership positions, there's a larger number of women who have the skills, have the background to do that, and that's why in order to get more women on board, you really need to increase the number of women in senior leadership positions. >> i want to hear thoughts on the role activism plays in that. you famously defended dupont in
the proxy fight years ago, and there's been studies that showed activists do tend to make boards more male and target women disproportionally. do you think that activists are missing the picture when it comes to the returns generated, or do you think that they see it and are choosing not to do that? >> no. i do think that many of the women who have taken over companies in the last five years have been sasked to track on bi challenges to transition the company to a different place, and any time a company's in transition, there's the opportunity to bring in short termism as the answer opposed to creating long term, more stable, more resilient intervienterpris. women took on the challenges, and that creates opportunity for activi activism it does, in today's day and inch, they are looking for more returns. that creates opportunity i don't think you should shrink
from it, but reinvent to be relevant in the years to come. it's here. people have to deal with it. the more we talk about it, the more transparency we bring to it >> you signed up a bunch of companies already, ceos, like coca-cola to the plans we'll see what comes of it thank you. >> thank you >> ellen coleman a news alert on aethena health >> the ceo is joining the board as the chairman of the board and is buying $1 million worth of stock investing in the company ironic because jeffrey immelt, as many know, was effectively pushed out of ge by activist investors, and now this is a board that is being pushed by activist investors from elliot
management, saying in the announcement he's always been inspired by companies, part of the reason he's interested in the company, they outperform and innovate peers bush, the founder of the company, under pressure, remains as ceo, and, also, welcomes immelt's arrival in the statement. interesting moves there, kelly >> it is certainly busy thank you very much. athena shares are higher the stock moving lower, julia borsten with more. >> kelly, take-two revenues missed estimates, revenues at $654 million versus estimates of $664 million, that revenue number actually is what take-two calls net bookings now, the gap etf number is 21 cent per share and 10 cents of tax reform impact. it's not comparable with
estimates, but shares are trading down 3%. another note here is additional delivered net revenue grew 8% in the quarter versus a year ago, and now accounting for 54% of total net revenue. kelly, back over to you. >> all right they recovered a little bit, take-two, as you said, julia, down 3.5%. yum-china, how did they do >> kelly, looking at a strong fourth quarter for yum china this the first full year spun off from yum brands here in the u.s. they recorded .19 on adjusted basis, looked for.18, and revenue at 2.32 billion, and same store sales blew it out of the water, up 5% in total, pizza hut sales rose by 1%, and they were supposed to fall by .2%, and kfc comped up 7% they were to increase by 4.2%. once again, total comps up 5% for the quarter. street looked for a gain of
3.5% they opened up 691 new restaurants for the full year, 339 for the fourth quarter driven by the growth of kfc. stock is higher by 1.5% on light volume the current ceo is replaced by the coo, joey watt, on march 1st. back to you. >> thank you shares up 1.5% one sector soars on this day it ilisstl a buy when we come back
wall street looking to be in for another wild ride, futures pointing to a triple digit loss for the dow. >> the president tweeted about the market volatility this morning saying, in the old days when good news was reported, the target went up today, when good news is reported, the stock market goes down we have so much good, great news about the economy. >> steve wynn is officially out. >> a huge shift for the gaming industry in nevada if you look up and down the strip, you can see the entrance of steve wynn everywhere >> inflation, place for common
stocks, as long as the central bank is not acting to curve inflation, and right now, they are not asking to curve inflation. >> senate leaders announced a longer term budget deal. >> essentially, what the deal does is it lifts mandatory spending caps put in place bit 2011 sequester for two years >> just because we're not up or down 1,000 points in the dow does not mean the markets are calm in fact, the dow's been up and down triple digits already today, and right now, we are holding on strong gains. >> another volatile session on wall street, a swing of 500 points, negative on the close here but the defense stocks including boeing were soaring today, even after we had that move lower on the bell joining us to discuss that, karen finerman and tim seymour >> hey, kelly. >> hey >> thanks for joining us karen, i don't know if this is all we decided we have a budget deal, throw out the caps for a couple of years, and boeing was back in charge, or what do you
think's going on here? >> military play >> military play, a lot of great things going on, and aerospace cycle, gdp growth cycle, the tax deal, fantastic earnings, and, sadly for me, a rotation out of what i own, i think, into that whole space. you had nasdaq, obviously, very difficult day for the faang stocks, but defense couldn't look rosier. 25-ish on average pe, i'm not chasing it here and just being sad about them rotating out of my stocks into their stocks. >> yeah. i was going to say, at what price, really, are the good news for boeing seems like the street loves the predictability, the fast pipeline of orders and the rest of it and bids it up >> well, it's been a free cash flow story for the entire sector look at lockheed's number, 3.4, and general dynamics turned the number where they are more operationally efficient. look at the numbers, a lot of people feel you should get a
premium they did not deserve $22 bucks in free cash flow in volume in 2018, 24 in 2019 is why sentiment in the sector was an 8 or 9 out of 10 weeks ago and cooled a bit now, but it's still very, very high. aerodynamics is the most interesting on valuations. >> i thought it was, like, 50 out of 10 weeks ago. >> 50 out of 10. >> i think that was accurate 50 out of 10 they used to trade cyclical pes. >> great don't depress them we'll let you go great stuff, karen, tim, thanks. fast money is at the top of the hour at 5:00 p.m. eastern. shares of tesla, meantime, higher after the results recapping the headlines when we come right back. [ click, keyboard clacking ]
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we enable you to reach global markets and drive forward with broader possibilities. cme group - how the world advances. ♪ welcome back to the "closing bell," i'm phil lebeau, shares of tesla reporting higher. they lost $3.04 a share. key numbers to focus on? the most important what's happening with model 3 production, the company reaffirming guidance in terms of building 2500 per week by the end of the first quarter and 5,000 per week by the end of the second quarter in terms of overall sales guidance, while they are not giving a lot of guidance, they are saying that from 2018, the company expects to sell about
100,000 model s and model x combined issue and, finally, the cash burn issue in whether or not it is increasing or slowing down it improved in the fourth quarter, 236 million was the cash burn, better than expected. more cash burn much better than the analysts were expecting more "closing bell" coming up after this oh, and there's the closing bell. (sighs) i hate missing out missing out after hours. not anymore, td ameritrade lets you trade select securities 24 hours a day, five days a week. that's amazing. it's a pretty big deal. so i can trade all night long? ♪
the executive fis cheman, greg johnsen will be promoted to chief executive officer. >> seema moda there. o'reilly shares down less than 3% on all that news. let's talk about art it's been a way to diversify investments. last year alone, photographer rose 54% now a canadian photographer who has broken into big money is snapping his way to a whole new level. >> edward takes pictures of decaying, polluted landscape experts sigh the irony is his pictures of the destruction are so beautiful he released his photos in limited editions only a few prints are created from each image. some sell for as much as $50,000. given the limited number of each image and and the rapid
appreciation of his work collectors buy his photographers not only for their artistic value but for the investment potential. this photo, called breezewood pennsylvania, sold for $16,000 in 2009. but it went for $43,750 at an auction last fall. >> i could have just taken that out my window. he was just named 2018 master of photography by photo london. he is here on set with us. we are also joined by kevin o'leary. know him as an investor in efts and stocks but he has been buying his photographs how well have they done for you. >> last october i had all of my art assessed by an insurer, which i do every two years he came back to me and said what do you think appreciated most including the warhols is everything else? it was ed's work
photographer has beat everything in appreciation. it was something investors including me had no idea was appreciating so quickly. what stuns me, and i have always wanted to know this from ed is what stops you from printing a whole bunch more if a print is worth $100,000, why don't you print ten more of them. >> i guess fur like the federal reserve, if you print too much it's not worth anything. >> absolutely. if i overprinted it would be a loss of trust to my collectors if i fool you once, mied a, if i fool you twice, your bad it won't last very long in the market it is a small market you can't do that. >> is this right here that you traditionally release your work as six of the 48 by 64 frame trints and only three of the 60 by 80? that's it. >> there is one smaller size i do nine of but i usually do under 20 of any image. >> had you surprised how this -- i'm sure it must feel good but
how do you know how the market for your own art is doing. >> well, i am surprised. when i started there was no market in fact my mother is very happy that actually one appeared because she thought i was going to be destitute for my whole life but this tin the '90s and into e 2,000s, it began growing as a market and many other photographers who began being collected by museums. i think the german schoolry helped bring the market to photographry in that current, my work was also caught. >> so you keep the number of prints low obviously that's matter of trust with your clients. but i do wonder, the way it is for any photographer, the way digital images are making their way all over the place to obviously, nobody would -- even if they are not passing it off as an authentic print i wonder if there is any good way to keep tabs on it do you worry with the fact that
things become ubiquitous, somebody could print them up or anything like that. >> i would think that the scribes or the writers before the gutenberg press felt the same way now everybody can print and it's ubiquitous i think it's about your authorship, about the ideas you bring to bear. it's kind of the commitment to an idea and then going for it. and living your life that way. i think it isn't something that you take halfway i'm am fully entrenched in it. >> kevin do you think you got lucky because this guy is so good or would you start buying photographs from other people as an investment? >> i have other photographers but ed's work is daunting because he takes images of incredibly desolate polluted place that are destroyed by industry that are so beautiful and that's the ironry. getting back to the ij image work photography is delicate. if the it's exposed to light it can get damage i know your work hangs
corporately. i have seen it in airline lounges. what happens if it gets zrid by fire have you ever reeast placed it just out of the goodness of your heart? >> quick last word, ed. >> there was an interesting story when 9/11 occurred kanter fitzgerald had four of my prints in their offices. they could prove they had them there. and my dealer in new york also had the record of it being there and we were able to replace it at cost to the insurance company. because it is a medium which i can replace, unlike a painting, i can replace a print if it's danieled >> congratulations on the career you have had so far. kevin, congrats. you got lucky man. ed and kevin we have got to go. we have breaking news on russia out of washington. ayman javers who is happening. >> abc news is recoporting righ now russian hackers were able to penetrate voting rolls of a number of u.s. states prior to the 2016 presidential election
nbc news is reporting this is attributable to a homeland security official you -- they are releasing the interview with the official today she is saying that 2016 was a wake up call i'm sorry. she is saying they saw a targeting of 21 states and an exceptionally small number of them were actually successfully penetrated chtd goes further than what we knew before in terms of the targeting of state and local election rolls not just targeting them but actually penetrating a small number we will have to wait for more information as to exactly how many states were penetrated here and what if anything the russians did with the fgs they got in penetrating the computers. those pieces of information are not clear at this time we will wait for more information. >> thinks distinct in much more significant than what we are trying to fig your out about russia putting information out there on social media. you are saying they directly
hacked u.s. voting rolls >> yes, that's right but it's unclear what they did with the information was it to monitor it or steal and manipulate elections we don't know at this point. >> that's fair enough. those questions will be swirling ayman javers thank you thats to it for us on "closing bell," mike. thank you as always. let's flip it right over to "fast money. >> that's right, kelly, live from the nasdaq market site overlooking new york's times square i am brian sullivan in for melissa. traders, pete najarian,guy adami, item item and dan nathan. tesla reporting moments ago. the stock very volatile after hours. right now down just a bit. we will be all over the after hours action and bring you the latest. plus, something is happening with stocks and bitcoin that has never happened before. and it could spell more pain for stocks ahead wells farg o''s top strategist has a big and scary call tha