tv Closing Bell CNBC August 27, 2019 3:00pm-5:00pm EDT
well, thank you for watching. >> that's all we got. >> that does it for "power lunch" and "closing bell" starts right now. ♪ welcome to the "closing bell." i'm morgan brennan that stock is down philip morris after it confirmed merger talks with giant altria. altria started the day higher but dragged down into the red like the rest of the market. dow's down 41 points and moving back towards the flat line are we going to hold here? we have 59 minutes to find out. >> i'm mike santoli in for wilfred frost. morgan, look at when's driving the action yields slip and stocks follow as the yield curve inversion deepens more
plus consumer confidence slips but less so and bill dudley says the fed shouldn't enable the disastrous path of trade war es ka ligs and should attempt to influence the election not cutting rates further. we have it all coming up in hour joining us for the hour is steve grasso here at post nine good to see you. >> good to see you. >> a wobbly session today in terms of the market. up on the dow. that didn't hold but we are also kind of oscillating off the lows here still within this month-long range. >> i think it's about yields german yields, negative yields around the world probably heading even lower from there and taking the equity markets with it. that's it from the 50,000 foot up and now trade headline, dudley today writing today and trump tweeting dudley in any other news day i think dudley should have been
the focus from start to finish but when you have rates and when you have headlines on trade that kind of gets lost in the shuffle and been covering it quite well but that to me is something spectacular as a former fed official talking in those terms. that should be a knee jerk reaction to the marketplace. how divisive this has become and almost trump against the fed but realize boit realize both of them on the same side of the u.s. >> same objectives it is getting chatter and we'll continue to talk about it. also, hard to find a lot of people siding with dudley on this as far as i could tell in this particular point he made. >> out in the open. >> yeah. >> it was odd to me to go on the record and say this. this seems like a little bit of suicide on a personality or a character assessment. >> contributes to the debate of
the politicization of the fed. >> correct you want to think it's an independent body, thinks for itself and goes on just what's best for economic conditions and it has a totally different agenda but the feel from this is it's become such a spat that it gets into the psyche that we are not dealing with computers but personalities here. >> we should point out again a former fed official and getting into that story, as well let's focus on the big stories we are watching today. bob pisani is tracking the market rick santelli with the signals of the bond market and ylan moy is following the fed. >> stocks with 10-year yields. down in the morning. stocks following relationship holding there stocks come off the lows banks weaker all day on the lower yields the bank etf, that's the kbe, threatening to break to new lows for the year and also seeing
weakness in consumer staple names i think for a specific reason smucker's weak on poor earnings and guidance they talked about deflation their pressure in coffee and peanut butter. elsewhere, the new high list, again, littered with the defensive reits and utilities. >> thank you turning to the bond market as a key recession indicator flashes red once again rick has more on this in chicago. rick >> i agree markets acting like a key recession ipd kay or the i think it's an indicator that markets are screwed up bob's right. paying attention to rates today because they're guns hots. all making new cycle low yield close. welcome at the drop just since july of this year of 10-year notes. finally, let's go to may of
2007 last time 10s and 2s inverted. now minus 4. mike, back to you. >> rick, thank you very much now to the fed as a controversial op-ed and a presidential tweet ramp up pressure on jay powell and the central bank ylan has that story. >> the beef starts with bill dudley, the former head of the new york fed calling on the fed to stop cutting rates to put president trump on the hook instead. in an op-ed of bloomberg he wrote, quote, central bank officials face a choice. enable the trump administration to continue down a disastrous path of trade war escalation or send a clear signal that the president will bear the risk the fed said that its policy decisions are guided solely by the congressional mandate. political considerations play absolutely no role then of course trump himself weighed in tweeting that the federal reserve loves watching the manufacturers strulg with the exports and that our fed is calling it wrong for too long.
dudley also arguing that re-electing president trump could be a threat to the u.s. and global economy but the fed is clearly rejecting the idea of trying to shape the outcome of the election, guys >> definitely a fiery op-ed. i'm just curious is there a press departmecedente how usual or unusual for a former fed official to pen an op-ed like this? >> highly unusual. the remarks are stunning, controversial. but i would point out that the fed is not shy in the past about saying that it doesn't want to be stuck with the short straw and not sporesponsible for stimulating the economic growth and recovery in the financial crisis, ben bernanke said that congress had a role to play, as well. that it should not send the country over the fiscal cliff, it should pass stimulus measures and that was very difficult for
congress to do so the fed had to act but that is something that the fed often -- a role the fed has to play holding the short straw and being last man standing, last backstop for the economy. >> yeah. and of course, a bit of traditional view that the fed sometimes not seen as changing interest rates in an election year because of fear for seeming an undue influence. >> that's a side consideration not a primary driver but certainly, the idea that the fed operates in a political vacuum is not true they're aware of the political pressure that's all around them but the idea that this is a primary motivating factor in the decisions certainly is something that the fed had to be clear about pushing back on. >> absolutely. thank you very much. stocks trading back up toward the flat line actually with 53 minutes left in the trading session. the dow down 17. s&p 500 just nosed above the flat line and nasdaq
russell 2000 small cap is consistent underperformer. for more bring in john kadunis john, good to have you here. >> thank you. >> talk about the general position here of markets we have the stock market really unable to escape the gravitational pull for now for the short term of the bond yields going lower. >> it tells we'll have a volatile market for the unforeseeable future there's so much going on in the event risk that every day's going to be depending on what the president tweets, what headline comes out, what the yield curve is doing, what's going on with the china situation and the trade war. we're going to have volatility it is here to stay the question is, how do you n navigate through the markets >> how do you navigate the
markets, john? how do you counsel investors right now? >> we are telling our clients and seeing a lot of people start to look for right now it's important that, number one, you're invested in the markets you just don't shy away because you're scared of volatility. number two, you have to be an active manager to be able to navigate through the volatility that is clearly here it's a stock picker's market you can't just blindly pick the entire market because there's going to be some gems out there that you have to have professionals look at. so i think it's very, very careful but you have to be invested and you have to look for people that are going good risk managers and that's been very successful for us in the last, you know, couple of years. our liquid alts is something that's been very attractive to the customers and buying products like the market neutral and just became this month the
largest liquid all fund in the world, almost $8.5 billion where it does not concentrate on what happens with interest rates. so it's neutral for that convertible arbitrage fund and sells options to get some yield so no matter if the interest rates go up or down it's a consistent return. >> just to be clear, liquid alts is in a liquid kind of mutual fund platform. steve, we just talked about how the market seems like it's following yields by the nose and on the other hand lower yields should be supportive of stock valuations it's a push/pull right now. >> it depends on the backdrop they happen in a slower growth environment then the market is spooked for all the obvious reasons but today on a microcosm you have oil pop from 1:00 about 2% and then
yields rally so you're watching the equity market follow the two into the close and let's see how long it lasts. >> john, if i was an investor that's concerned about trade tensions and the uncertainty from a global macro economic standpoint, why are the small caps once again underperforming today? is there an opportunity to be had in all the weakness? >> we feel that small caps is an opportunity to buy in the long run, during these types of market conditions, they should be insulated from the global, especially some of the domestic small caps, did global trade wars that are happening. so if you can pick a good mid sized company that's not necessarily global in nature in terms of their trading abilities then you should be able to perform pretty well anr time th really well and you can't just
take a daym they will perform during these volatile markets, during the global type of volatility that we are seeing. >> all right we'll see if that plays out. john, thank you for joining us today. >> thank you. more opioid news this afternoon this time of purdue pharma dom chu with the news. >> the manufacturer of oxycontin according to our colleagues over at nbc news citing sources familiar purdue pharma and the sackler family in settlement talks according to people familiar that could try to settle more than 2,000 lawsuits brought against thecompany for a total price tag of somewhere between $10 billion to $12 billion. that would involve at some point according to the sources familiar purdue pharma going into a bankruptcy situation to
then be restructured the company to then take profits from the sales at the company to fund the trust for the benefit of this particular outcome i will say this. we reached out to the sackler family for a comment and we have a response back from purdue pharma with regard to the news of these possible settlement discussions and this is what they had to say. quote, while purdue pharma is prepared to defend itself, the company has made clear that it sees little good coming from years of wasteful litigation an appeals. the people and communities affected by the crisis need help now. purdue believes a constructive global resolution is the best path forward and working with the states' attorneys general and other plaintiffs to achieve the outcome. like i said, this is not the sackler family or purdue to cut one check for that they will sell units to raise some money, restructure for profits in the new company to
raise some of that money and finance it through drugs and the cost of the drugs to help people with overdose situations, all of that is what goes into this an interesting development in light of johnson & johnson losing in that court case in oklahoma for $572 million. that's the story for right now we'll see if anything else develops after this. >> thanks. showing the quotes for j&j and the smaller pharma xens that might be exposed to some of these settlements or lawsuits. they're lower, pretty much at the lows, endo and others. i wonder if just the idea of this large settlement from purdue putting a bigger number out there for what the industry might be on the hook for. >> last week, a huge number for j&j and wasn't that large. now you have to game the numbers on the settlement. look at the market caps. bigger the company, the more to
absorb it. those are the names to play and stay in. teva down 55% year to date. >> it's true a lot of them not great position before this. >> certainly i think that's a key point you made j&j rallying 2% today. a smaller than expected payout in terms of this loss we saw, court loss we saw yesterday and does it speak to the fact that j&j is big, diversified and other businesses and makes up for the losses >> exactly j&j has been dealt with head wind after head wind in this marketplace and there's a ton of reasons why j&j should n't be bought and yet the market is up because it's all about positioning and where people are on the side of the boat. they were all totally negative on j&j and that's why the stock is up. >> steve, thanks talk again soon. still ahead, snap taking a skid today adds facebook tests out a messaging app. plus an exclusive interview
with honeywell ceo find out what he said about recession risks in america and the globe. heading to break, here's a check on the data tracker. august consumer confidence coming in ahead of estimates with a reading of 135.1 and down fractionally from july's reading and home prices rose in june that was slightly below the 3.3% pace in may. stick around ging? prevagen is the number one pharmacist-recommended memory support brand. you can find it in the vitamin aisle in stores everywhere. prevagen. healthier brain. better life.
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welcome back to the "closing bell." we have got 41 minutes left of trade. taking a look at markets right now. back to the flat line with the dow down just about .3% right now. the nasdaq 100 actually turning positive, as well. let's send it over to mike, though, for today's market dashboard. >> thanks very much. laying off some risk shifting risk around the portfolio. tails, you lose. lowering the vig the cost of making a bet coming down for stocks arguably and then the long con.
something about a confidence game there so laying off some risk. we have been talking a ton about the interplay of stocks versus bonds, the performance of bonds has been excellent relative to stocks but we have two looks at this total return of the total bond market etf, the ag against the s&p 500. this is just month you have a widespread between the total return including interest in dividends. that in theory toward the end of a month to cause rebalancing of balanced accounts out of bonds and into stocks if they want to get the weightings back to the normal 1-year basis no that the often when the stock market remains pretty much in bull mode for this outperformance by the bond market almost a 10% total return for a relatively conservative investment grade return. if we're pricing in some bad economic outcome, that makes
sense, but if not arguably it could turn into a tail wind for equities. >> before a comment of steve on this chart, mike, talk to me about your theme here with your charts today. >> it is about bets, gambling, confidence games things like that. >> okay. >> just taking a flier on an opportunity to turn a buck i guess. no reflection of people in this building >> not at all. i must say i have a terrible poker face and not good at the gambling steve, what did you think of that chart given yields dropping to record lows right now >> what i think is the most interesting about that is when you look at what should be going on month end whenever there is an implied equity for sale it doesn't happen the way it used to happen what usually happens now is they leg into that position so they do it not on the last day of the
month but maybe the last two weeks of the month we are already there people rehedged and rejiggered the portfolios so don't expect there to be a large portion to trigger at the end of the month to buy equities and doesn't happen to the counter of it. >> what are you looking for in september then >> september is going to -- you have to remember, we are in the last week of the summer now but most people don't get back to real work until the second week of september because we have the shortened week next week everyone will sit there and start looking at the fed again everyone's going to start to digest trade headlines again but at a certain point people paid to make money and put money to work you have to be invested in this market, in this economy and you start to see money coming back to work probably late september. coming up, shares of roku up 350% this year and a firm says this is a perfect time to buy.
we have the word on the street on that call next. plus, we'll discuss the philip morris altria deal. plus, as we head to break, here's a check on how commodities are trading today. oil getting a lift after four days in the red. silver a big winner. (vo) the ant mindlessly marches on. carrying up to 50 times its body weight. it never questions the tasks at hand. but this year, there's a more thrilling path to follow. (father) kids... ...change of plans! (vo) defy the laws of human nature... ...at the summer of audi sales event get exceptional offers now!
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bell." time for the word on the street. william blair out with a note on roku saying its user growth tracking ahead of netflix when at parallel stages of the growth and will have over 80 million active accounts by the end of 2025 and roku has 30 million active accounts as of q2 that's a pretty bold call considering -- i don't know how far you have to go to say when netflix at this stage of the infancy but it was a long time ago. >> it's pretty incredible to see roku run up in general it's been considered now such a big play on all of the streaming and cord cutting suntrust raising the price target for chipotle. that firm is bullish on the company's carne asada product and contributing to check and traffic growth shares up almost 2%.
wedbush securities adding zynga to the best ideas list driving significant upside and maintaini maintaining the $9 price target. they say buy and been something of a turn around story and a turn around stock over the last couple of years. still well off the lows we saw back in 2015. coming up, we have got your last chance trade and steve is looking at a commodities play. and major opioid news as purdue reportedly looks to settle and j&j faces a half billion dollar fine a. analyst says johnson & johnson isn't out of the woods just yet.
30 minutes left to go in the trading session and just like that the dow is down triple digits again down 100 points exactly right now after being up as many as 155 and down as many as 176. the s&p, the nasdaq also lower and the russell 2000 small caps are the big underperformer down more than 1% it is time for a cnbc news update with sue.
>> hello, everyone here's what's happening at this hour a federal judge is blocking missouri's ban on abortions at or after eight weeks of pregnancy. planned parenthood filed a lawsuit claiming the law is unconstitutional including exceptions for medical emergencies but not for rape or incest as it is currently written. a new study shows more people are dying from preventable heart disease. number of diseases from stroke and diabetes leveled off by deaths of high pressure risen especially among african-americans. dorian heads toward puerto rico the island declaring a state of emergency in anticipation of that storm with sustained wind of 50 miles per hour. and the climate activist tuneberg is nearing the end of the zero carbon transatlantic
journey and began from the uk and headed to new york for the u.n. environmental summit. she's been nominated for the nobel peace prize for initiative on climate action. you're up to date. morgan, back down to you. >> it is cool to track that journey. >> absolutely. >> thank you. let's send it over to mike for his second dashboard. >> morgan, thank you so tails, you lose, trying to convey the factor of stocks in the market is not necessarily the predictable result we're talking about the yield curve, have been for a while now and deepened below where it had been this cycle and goes back to early 2007 that was the last time you had a sustained inversion of the yield curve. this is the zero line obviously. we are just a bit below that what i wanted to point out is a little drop lower in the yield curve in the last couple of weeks and stocks while they're
pressured by it and restrained by it are not at the lows. but stocks are holding a couple percent above where they traded at the lows a couple times this month. you can't draw conclusions that the stock market is immune to the yield curve but at least telling us perhaps that these are not perfectly linear predictable interactions and just to point that out, look at the chinese currency versus the dollar every time this is fixed the market had a little bit of a mini panic and here we are shooting higher. nobody wants to see this shows you the potential for instability in china however, stocks are kind of hanging in there have we built up callouss to this we don't know. but really wanted to point out that once you get used to how the market is reacting to a given swing factor it often changes, guys. >> mike, thank you. news breaking in the last
half hour. opioid makers falling sharply on headlines of nbc news saying purdue pharma offering to settle more than 2,000 claims for between $10 billion and $12 billion. joining us on the phone is former fda commissioner scott gottlieb thank you for joining us today we have a settlement for johnson & johnson yesterday. now this talk of $10 billion to $12 billion for purdue being reported by nbc today. is this -- i guess is this the beginning of resolutions around the drugmakers around lawsuits for the drugmakers when you see the $10 billion to $12 billion does it set the bar higher in terms of what the settlements could look like? >> potentially if you look at where purdue is today relative to where it was. purdue was the company i think that in many respects is most culpable here and so i think the culpability should lie where the
malfeasance was and purdue remember in 2007 the company that makes the narcotic painkiller oxycontin pled guilty to criminal charges at the time and paid $600 million penalty at that time and commiserate with that, three executives paid i think separately $35 million in fines so this company has already admitted to wrongdoing in the past and the latest settlement is part of an ongoing saga with pure due what we need to make sure is that the penalties are ascribed to the companies that are responsible for the marketing tactics that drove the excess utilization and looking at the companies further afield to the marketing factors, manufacturing the narcotics, they're further removed from some of the tactics and behavior in the market that i think drove a lot of this. >> in terms of purdue and what nbc is reporting regarding a possible settlement could
involve a restructuring, talk of bankruptcy to make this settlement actually happen and seeing drugmakers that are tied up or exposed in terms of the opioid litigation right now trademarkedly lower here is there reason to believe to see similar financial restructuring happen with those companies, as well >> certainly the market's interpreting if you look at what's happening, interpreting the purdue potential settlement this high of a dollar figure, extrapolate it out over the manufacturers with bigger businesses at this point, the numbers can get quite high purdue is setting the floor on the settlements and could be quite high and if you look at this from a public health standpoint, you have to start to think about whether or not settlements of this magnitude to drive out of the market the legitimate manufacturers, this is a public health need and
medical need for opioids for certain patients the drugs do work, especially for short term administration and chronic pain and you worry about some of the more legitimate manufacturers getting out of the market as a result of the kinds of penalties that they're going to have to pay and leaving the market for manufacturers that won't be as responsible and with j&j marketing a patch which is very specialized and i don't think you people made the same allegations of j&j allegations around, for example, purdue that pled to criminal charges in the past. >> in terms of what this does to the market and the fact that there is actually a legitimate need for nees types of drugs in certain medical scenarios, are there other technologies developed or coming to market to replace opioids? >> there are none -- non-opioid
treatment. most of the drugs in development are in early development but this is a space where if you talk about particularly the chronic treatment of pain, so drugs used in more chronic administrations for the treatment of pain there's no free lunch every drug developed for the treatment of pain on a long-term basis, certainly familiar with the addiction risks associated with opioids but others where there's some emerging evidence that they can help -- be a potential addiction, tylenol and ibuprofen causing damage to the kidneys and have other side effects with chronic administration, there's no free lunch here, no drug without certain liabilities associated with it. so it's a difficult space particularly talking about the treatment of chronic pain, no good drugs without certain risks associated with it. >> scott gottlieb, thank you for jumping on the phone and breaking this down for us.
merger talks for a potential all-stock deal and did not disclose the possible stake to hold in the potential combined company people familiar with the discussions told cnbc they're considering a 59%/41% split respectively let's bring in jordan waldrip. i guess first question would be why are the stocks reacting as they are people think there's tremendous industrial logic to putting the companies back together. they once were a single company. what is your take on how the market is digesting this >> i would agree that there's a lot of sense in combining the companies now. i think long term this is about positioning the combined company for the future in the tobacco market and the ancillary areas to try to get into the way the market's reacting today is about the time frame.
i believe what we are looking at here is a little bit of a reality check on where they are in the transition to future products such as heat not burn, vaping and eventually maybe cannabis. >> is the future looking at tobacco companies non-combustible? are we moving away from traditionally lit cigarettes and the other newer technologies and potential merger is really all about that >> i think eventually. no one can say when tobacco will fully go away or if it will. we're talking about what's driving the businesses what's going to be the bottom line thing that makes shareholders excited and heat not burn offers higher margins and growth opportunities in a way to get away from some of the shrinking consumer base that tobacco has
juul, same situation it is a little bit too popular and then look longer term and the cannabis market is something that we don't know where it could go there's unknowns there but altria made a move into the space with an acquisition of a space of kronos. >> steve, this entire tobacco group selling off today. we don't know the exchange ratio. but does it seem like an opportunity here just because they're considered cash cow companies, not growth stories. >> i'm not sure. jordan is a shareholder of both but if you look back on the charts back from june of 2017 both of them have been in serious decline. when you look at the businesses and to combine now you have the vape market, e-cigarette market is a target for the fda. cigarette market always a
target i'm not sure why you wanl stock deal i don't see it as an opportunity. jordan sees it differently. >> jordan, thank you for wroining us today. >> i see an opportunity from the business perspective to position themselves for the future. >> yeah. >> there are challenges today without doubt. there are challenges that the fda's presenting but looking forward it's about getting these companies in a position to be successful in the long term and, yes, facing -- criticism. >> thank you, jordan. >> yes >> all right thanks we appreciate it still to come, the ceo of honeywell weighs in on the state of the consumer. those exclusive comments coming up. we have your last chance trade. one move to make before the close.
14 minutes left to go in trading. dow down 86 points steve, what is your last chance trade? >> this is a theme for a couple of months. central banks, attention we are putting on them with money policy and actual currency, where's it headed? lower. rates lower. so that to me means that more money's flooding into gold and to alternatives and if you like gold then you should like the miners because they outperform 2 to 1 and sometimes 3 to 1. gdx versus gld. >> six-year high in gold not running hot for you?
>> it is but if you look at it on -- i'm a big technical angled guy and looking at the marketplace and the old high in gold and then the low and the retracement levels we have already broken out where the sell comes in. 50% over the bounce levels, we are busted out of that and we could be heading for new highs and usually when they go towards that old high they make new ones and overshoot levels are the nice big fat round numbers and then $2,000 and then above from there so as long as we can count on central banks to do what they have been doing for a last couple of months/years then gold should be moving higher and get a risk premium outsized beta return. >> gdx up as you speak thank you for joining us for the hour. >> thank you for having me. after the bell, earnings results from hpe the key thing to watch.
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johnson yesterday for $572 million. for more let's bring in damien c conover. you had yesterday's response to the j&j news that stock up a bit. what is this reported purdue pharma settlement, the magnitude of it say about the industry's liability? those other publicly traded companies perhaps with exposure? >> it's a good question and what on investors' minds right now. looking at purdue pharma, it is important to think about them as one of the companies that has the most exposure to opioid prescription, especially relative to companies like johnson & johnson where it looks like less than 1% of their prescriptions were a part of the identify ownership sales at the peak and through the different years so i think looking at this very large sum i think it's something that's much more important for the firms that have a lot of exposier like a
purdue pharma and less -- i don't think you can extrapolate that huge amount into a j&j to pay. >> the timing. damien, the fact that we have this j&j settlement in oklahoma yesterday. now this report regarding purdue and the settlement talks today is there anything to be gamed out there in how investors think about more clarity and just maybe the magnitude of the resolutions? >> i think it's difficult to judge the exact magnitude. i'd say with certain companies they have more exposure than others w. j&j, they have very little exposure. we have modeled in nearly a million dollars in costs for the litigation and realistic and within the ballpark of where they end up with this whole process. i think when we see the case coming out of oklahoma that was over $500 million even though the market was happy with that i think that's a high number and
extrapolate to the cases in the u.s. you have a large number and what's likely is this case in oklahoma gets appealed and i think we will see some settlements over a long period of time that will make this whole process go away but i think it takes time and i think not as bad as what the oklahoma case says and what the recent announcement that purdue may just a few minutes ago. >> also some talk of perhaps a global settlement that the industry might participate in. we have to leave it there but thank you very much for your time today. >> thank you. we have six minutes left until the close. stocks fading once again dow down 112 right after the bell, earnings of hpe josh lipton has a preview. >> hpe expected to return 40 crepts on revenue of 7.3 billion. the company's biggest segment hybrid i.t. -- the rivals of del
and nova and 5.7 billion for the quarter. analysts are interested in what the ceo says about the state and health of i.t. spending right now. cisco did suggest macro softness does neri see the same and worry that they have to lower prices back to you. >> josh, thank you. the results after the close once they hit the tape we have five minutes left to go in today's session it is time now for the closing countdown. joining us to trade the close is kevin hanks at td ameritrade great to have you. we started with the dow up triple digits. what are you watching into this close? >> what we really saw today was an early morning bond rally which really took some of the steam out of the regional banks and the russell and the weakness in the russell just seemed to kind of bleed into the other
indices and we just got weaker as the day went on but some of the impetus for today's selloff really from the russell 2000 after the bell what we're going to watch is earnings from auto desk expecting a $15 move based on the option implied volatility, more than a 10% move in that name tomorrow morning, of course, the little blue box. tiffany's looking about a 7.5% move north of $6 in their option implied. those are the two we're looking at getting to later in the week we'll get retailers so before we move on for the labor day weekend, still a lot to go for the week. >> yeah. one of the questions we have been kicking around is fang. how important it is to the recent years rally how important is it now here >> the thing that fang is in so much is about 30%, the fang futures, of the nasdaq
and the nasdaq drives a lot of these moves. they have the higher beta on a lot of stocks so fang moves the nasdaq nasdaq moves the markets we watch the fang stocks every single day interesting how weak netflix has been having trouble getting any footing since really i think the disney announcement so that disney/netflix relationship interesting as we watch going forward from here. >> kevin, thanks for joining us. dow down 104 right now let's send it over to mike for the third dashboard. >> this pullback we have had in the s&p 500, about 5% off the record high and brought the valuation of the index below the 5-year average to look at the forward price earnings multiple of the s&p 500 it is now at about 16.4. the five-year average just above 16.5 what's interesting about it is
it brings it back into the range where we spent 2016. we had another flattening out of corporate earnings and an earnings pullback back then. bond yields were very low. it's a much lower bond yield it makes stocks relatively more attractive and doesn't mean stocks have to go up from here this relies on earnings estimates in the outquarters beginning of 2020 you have fairly aggressive earnings forecast but at least right now a little bit of risk out of the market because stocks are a bit less expensive. let's get out to chicago with rick santelli. >> thank you, mike looking at a one week of two-year note yields, it is friday the 16th all the way on the left of the chart a low close. why is that important? only maturity not making a new cycle low. look at bonds from july 2020 we had a bottom in 12.
bottom in 16 right now it's hovering at 1.47. getting very close to all-time territory. everybody's nervous about the negative yield yourve. since june they're positive 22. we are negative. they'd rather have our economy frank, the nasdaq seems to be dipping into the close. >> rick, that's right. we have on the bright side costco with the best day on the ndx. best day since march following the smash opening of the first store in china the stock also on pace for its best way since 1998. tech having a mixed day today. the chip etf flat down fractionally right now amazon with one of the worst days on the ndx. now over to bob pisani at the new york stock exchange. >> another day with lower bond yields bringing stocks down.
banks down oil stocks still down even with oil up this is a theme for the past couple of weeks. we have a rebalancing here at the close including the emerging market talk more about that later the dow down 119 points. not far from the lows of the day. ♪ welcome to the "closing bell." i'm morgan brennan in for sara eisen. >> i'm mike santoli in for wilfred frost. the dow finished with a loss of 125. half a percent s&p 500 down s&p essentially gave back a third of yesterday's bounce from friday's selloff and zigzagging around this range.
russell 2000 the laggard for sometime. >> in terms of what actually outperformed today, three sectors in the s&p higher. yuletities, communication services and materials interest rates once again in focus today. we saw stocks slip as yields slipped. that two-year 10-year treasury started to invert further, as well continues to be a focus. joining us now to talk about the market day, kevin o'leary and margi fartel another volatile session kevin, but in general, what do you think of the market? >> it's very interesting for equities for me. inversion doesn't scare me with a perverse situation in europe pushing down these yields but i look at cash flow in the u.s. primarily private companies where i have strong mandates to look at data that's proprietary and never seen a stronger
economy dmes cli right now do i want to take the risk of up the balance sheet on converts or in debt when i can get 2.6% yield on equities and have some growth potential we are still in that zone. it hasn't changed. >> margie, good focus globally of yield curves and the credit markets relatively firm. not necessarily been showing a lot of signals that they're sniffing out weakness and stocks for now are in a 5% pullback from a record high where does that bring you across the asset classes? where do you think folks should be best positioned >> i think equities will be the star performer over next 12 months best part of the bond market is high yield market and then 4%, 5% i think equities match and do better so i think equities will
be where we want to be. >> and then implicit in that is you don't think that there is an imminent recession or that earnings are about to fall apart. correct? in that case the bond market would have it correct right here. >> that's right. it looks like the indicators suggest clocking along at a 2% growth rate. that's a strong backdrop the fed taken the foot off the brake so that says to me no way to have a recession this year or next year. >> kevin, if this is a strong economy here in the u.s., the consumer is in great shape, where would you focus investments right now? consumer focused companies or elsewhere? >> i take a contrarian view and dip back into small and mid cap without exposure to china that have really been beaten up the russell 2000, some sectors of it, probably stay out of the safety zone like reits
so the russell 2000 without reits is interesting to me because a lot of those companies don't talk about china, don't worry about trade war and they're servicing an economy that's really, really strong and not performed. that means maybe in the quarters ahead for a better bang for the buck in the small caps. >> talk about what the street is actually seeing about the outlook. strategists with warnings of elevated recession risk and dangers. morgan stanley saying the risk of nonlinear tightening is high and rising rbc says risk of a growth scare taking hold in the u.s. equity market is rising rapidly bank of america says revision trends are moderate across the board and more risk of more cuts goldman sachs with a bigger hit to u.s. gdp from the u.s./china war. jpmorgan said it's nearing time
to add risk back a lot of this is strategists kind of observing what the markets have been suggesting and how they're positioned and extrapolating the implications for that where would you fall i gather you say stocks outperform for the next 12 months is that because you think that the street essentially is looking at the wrong things? >> yes i think they're looking backward in history books previous cycles. the fed too tight last year. they have stopped being so tight. and i think that in six months, 12 months, from now, you'll see the economy actually start to reaccelerate and i think that will be the leading indicator to have a better equity market. there's no way we will have a recession with the strength of the economy right now. >> kevin, just looking at the different wall street market calls that we just put up on our screen, the fact that the majority of them basically
pointing to rising risk of recession right now and a much more cautious tone, do you think that's overdone, overblown >> i think they have a -- they look at history saying we're so long in the cycle. we vice president seen any hit at all i would caution everyone, if you really want to look at indicators that are very, very early, look at the bronze spreads on junk debt go and look at real garbage single seed debt issued by the energy companies, for example. and when those spreads blow out that's a great signal for recession. you don't see that right now this is really trashy debt with no kof nance and the first to signal trouble ahead i look at it every morning absolutely no evidence that any of the pundits -- when you talk about s&p 500 and 46% of sales in other markets like china and asia and everything else, that's different issues i'm talking about home grown companies selling to consumers
in america i have my money there and feeling warm and fuzzy. >> last year, last fourth quarter, we didn't have a recession at the doorstep either and we did get a 20% draw down in stocks in a hurry it was an unusual selloff. perhaps related to the calls of a scare, tightening of financial conditions coming out of some financial stress somewhere in the world. do you have a way of kind of placing the possibilities on something like that? >> well, i think if you look overseas, look in some of the highly indebted emerging markets, there's a risk of a financial accident, especially as growth has slowed down but for the u.s. economy i think those risks are small. i think we have seen a lot of trading oriented accounts take their money off the table early this year, haven't gotten back in, waiting for the big correction and there's money on the sidelines waiting for disaster to put money in that's why i don't think they
get it. >> kevin, if we have a -- continue to have a resilient u.s. economy and strong consumer, the data holds up relative to expectation, does the fed have a reason to cut again? >> i prefer powder to be dry it's amazing trump jawbones the poor guys every day. but i think the reason the market is so resilient, a personal thesis, is there's probably going to be in the next three or four years a bilateral u.s./china trade deal. not saying tomorrow. >> three to four years >> takes a while but it is so valuable, it is so incredible, it can extend this cycle longer than any other in history because when you -- remember, china never had a growing mid cap market or middle class market nobody cared at it it's a largest economy on earth. imagine the country with a real bilateral trade agreement and trump is not into these parties
together let's work with france and germany. he couldn't give a damn. that's clear from the g7 he says get a bilateral deal with the u.s. and china, most valuable trade deal in the history of the planet an i want to be there in equities the day that happens. >> three to four years, really quickly, three to four years does that imply or assume that president trump gets re-elected or do you think this is something to continue regardless of who's in office >> you don't have to love or hate trump or be involved in the circus in washington give me a president without a second mandate at full employment ever never been one you get a second mandate unless you're impeached and doesn't look like it happens everybody's working in america nobody wants change. i haven't heard a better idea than deregulation of tax reform. he is in for a second term whether you like it or not. >> all right we'll have you back. see if that comes to pass. thanks again, kevin and margie.
we have an earnings alert on hewlett-packard enterprise hey, josh. >> hpe with eps of 45 crepts versus 40 cents expectations for the year, mike, they raise the eps forecast so they're looking for between $1. 72 and $1.76. in terms of segments, hybrid i.t. servers, storage, software, 5.5 billion. intelligent edge, networking equipment, 762 million finance services, 888 million. i have a chance to catch up with a ceo and wanted his take on the health and state of i.t. spending and telling us that it is solid in his words. did see certain softness in some segments, notably compute and storage.
some investors and analysts may worry does that mean that hpe and the rest of the economy to lower prices neri saying, listen, look at the margin performance and does remain strong and talked about tariffs. neri telling me his company is able to manage to mitigate that tariff impact and told me benefiting from a diversified supply chain and will be on cnbc tomorrow morning where i'm sure he'll talk about the report and a whole lot else back to you. >> i'm sure we will. josh, thank you. it's amazing the stock's down 22% over the past 6 months. >> a rough ride. some relief and very, very cheap looking stock. still ahead, find out if the ceo of honeywell is seeing signs of recession on the horizon. and then steve ricchiuto why
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revenue also beat the company of 97 million in revenue. the company did lower its full-year eps guidance and gave q3 guidance below estimates. the cfo with color saying while we continue to execute well and are not materially impacted by current trade tensions and uncertainty, we are taking a prudent stance to the fiscal 2020 outlook, the revenue model is much more resilient than prior cycles and a prudent stance, the software company lowering the full-year guidance and giving q3 guidance below estimates and down right now almost 9%. >> thank you. as recession fears rattle the market, i had a chance to talk with honeywell, $113 billion industrial giant at the center of trade business investment and the global economy. i sat down with the ceo and
chairman in a cnbc exclusive and asked whether he sees a recession in the u.s. or across the world. >> recessions can be self created which is if a lot of people, leaders like myself, become nervous and they stop investing, stop, you know, a lot of both people, capital investments and that's propagates the fear and so on. so i think a little bit of that may be taking place. yes, we have seen a little bit of a slowdown but nothing dramatic overall our markets are performing fairly well particularly in the u.s. has been very strong but even overseas seeing -- i don't see this major recession coming so i'm not -- i guess i'm not pessimistic about 2020 environment's slightly worse than it was last year. but i would emphasize the word slightly and last year was a very strong economic year and i think people tend to look at
this from a negative perspective which is, well, what if china/u.s. conflict escalates and a hard brexit and the negative side? we have to be ready for those scenarios. but i tend to be more of an optimist what happens if there's a resolution and a good economic resolution in those two major conflicts? i think things could take off and the economies and sort of the animal spirits return and the investment profile increases and a risk of a recession there's also an opportunity for an acceleration and investment. >> honeywell operates in a number of spaces so he's not the only ceo weighing in on the air starbucks ceo kevin johnson saying we have not signs in the u.s. of anything related to a slowdown but we do know these things go in cycles.
i think sort of a key takeaway here from my conversation with honeywell is that there is still growth, that growth is slowing, especially compared to last year i would categorize him as cautiously optimistic. there's exposure in china but it is production in china for china. and i think that is sort of a key template for many manufacturers out there. in terms of global footprint and much more localized in terms of how they manufacture and servicing different markets. and so, this idea of tariffs, mitigating the risks, something that honeywell says it has been able to do and it's also betting really big on industrial software, as well. a longer term story, part of the reason we sat down but in general optimistic. >> on a company that touches lots of parts of the global economy so it's good he is not detecting any outright weakness,
not yet. for more on the economic outlook, let's bring in steven ricchiuto. good to have you here. >> thank you. >> you're focused in on the bond market, yields and what the message we should be deriving from that about the economic outlook and what the fed should do so what's your two minutes on that >> i think we have to do is sit back and say the markets are not telling us anything about a recession, especially the bondof honeywell and starbucks, the fundamentals are doing pretty well no stronger growth than over the past eight years but no weaker growth either so the economy's holding up pretty well the market however is reflecting a global problem and that is there is global excess supply and the deceleration in europe and taking place in china magnifying
that for a deflationary risk and the risk of the federal reserve to get in front of europe is approaching a spiral we can't fall into that problem. >> how does the federal reserve get ahead of that problem? cut rates further? >> i think part of the problem is they have to change the narrative. they have lost control of the narrative and sad to see this happen but not the first time it happened go back prior to paul volcker. the reason why he was so unique is changing the narrative because the narrative at the time was not working we created inflation, a stag inflation environment and no one anticipated to develop and the net result is to change the narrative and he did it by targeting money supply as the federal reserve focused on controlling money this fed has to do the same thing. but in reverse they have to focus on inflation. we need a higher rate of inflation in this economy,
beyond 2%, possibly 3% we need inflation accusation in case there's a downturn and we don't have that today. and therefore, this fed has to start far getting money supply and targeting stronger money supply growth and inflation and allowing the fed funds rate to drop. >> there seems to be waning confidence that central banks engineer inflation >> we are unique to certain extent because japan failed in this because japan didn't correct the banking system for years. europe hasn't corrected the banking system even today. we have solved our banking system problems and qe-1 and 2 very well documented how much they lifted the rate of inflation and inflation expectations twist screwed things up and then qe infinity unfortunately, they have to do a large-scale asset repurchase program
we are done with targeting the balance sheet. we are going for an inflation target and do whatever we need to do to get there and one thing is to pump reserves into the system and pump up money supply growth. >> what do you make of the report from former new york fed president dudley today came out encouraged the one-time colleagues not to help trump's path of trade war escalation. >> i'm saddened to see a former member of the federal reserve open market committee to bring politics into the situation. i think it was a mistake i understand his sympathies. a lot of people perhaps understand there were more appropriate ways to go about it than today. >> thank you. >> my pleasure. up next, we will break down the charts to see why there could be a warning sign in another strong consumer confidence reading. plus, the messaging wars p th facebook developing a new apto take on snap. those details are later on "closing bell. ♪
over to mike santoli for the fourth and final dashboard of the day at the telestrator. >> morgan, the long con a. con is a confidence game we did get new data today on consumer confidence out of conference board encouraging picture. you did see basically confidence overall. this is the blue line. total consumer confidence number holding around130. that is just barely below the long-term highs that we saw back for this cycle just earlier last year so that's the good news. and the good news also is that this typically rolls over well before a recession and this is definitely in the camp of the data series that say, look, things still seem okay other two lines show a massive divergence this is consumers' assessment of the current situation, they own situation what they can observe, the job market, all of their elements of the economy and consumer finances look very, very, very strong. this is the consumer's assessment of the outlook so
that spread is getting pretty wide and something that's typical of later in a cycle. you will see this widen out a little bit so baby it's not the best news but the good news is consumers are a lot better the tell you how things are today than predicting the economy and something to monitor but i think i would put it overall in the category of, sure, maybe we are getting later in the cycle but nothing to tell us that the downturn is imminent here. >> this chart tells it all about kind of a mindset of the consumer right now. >> the mood of the household. >> exactly thank you. shares of opioid makers taking a sharp turn lower before the close. a nbc report saying purdue pharma offering $10 billion to $12 billion to settle this ylan >> purdue and the sacklers family to set tell lawsuits
against them 2,000 cases have been consolidated in federal court in ohio accusing the company and the sacklers for starting and sustaining the crisis. nbc report that is purdue proposed filing for bankruptcy and restructuring for a trust to pay out between $7 billion to $8 billion including $4 billion of in-kind drugs to local governments including medications to rescue users from overdoses and sacklers to pay additional $3 billion to $4.5 billion. similar to the $250 billion tobacco settlement in 1998 purdue said it sees little coming from years of litigation and resolution is a best path forward. the family didn't provide a comment to nbc back over to you. >> thank you very much. let's bring in cnbc's meg tirrell on the news line for
more on this story meg, great to talk to you. what's your initial take on the news of purdue's apparently willingness to settle and the size of the estimated cost $10 billion to $12 billion and means for the overall industry might be looking at and expectations of what might have come out? >> hey, mike i apologize for noise. i'm boarding a plane coming back from oklahoma. this number is very large. i think that's how wall street is reacting right now an seeing the stocks move amongst other companies involved in the litigation drugmakers on this news. also a distributor this is a large number, of course, purdue is considered to be the most liable of all of the companies that still probably more than folks think they might be able to pay but it is making people think
that this could help move toward a global settlement with all the parties, not just the cities and counties but potentially the states and something we haven't heard coming together. so far it locked like the states wanted to work alone on this and the companies to go for settlements is only one with all of the parties involved. this is a pretty important development. >> i understand that purdue is really arguably the most liable here and seeing $10 billion to $12 billion but in terms of and especially as they talk about bankruptcy and restructuring to make the settlement happen, how does that translate to the other companies, even if the dollar amounts are lower far potential settlement could you see similar carnage to balance sheets >> potentially, morgan purdue is not the only company where bankruptcy is discussed although it's a bargaining chip
in at least two of the settlement discussions and used it in the oklahoma settlement case it is also being talked about potentially for other companies and one was hit or agreed to a doj settlement and a thing to start seeing and the companies don't have that kind of money to pay other companies like johnson & johnson clearly don't have worries of bankruptcy, deep pockets but the same liability is another question. >> meg tirrell, thank you for joining us safe travels from oklahoma we appreciate it. still ahead, snap shares surging nearly 200% this year. up next, a new potential threat to its business from facebook. plus we'll discuss whether ceos are overextending themselves at more than one corporate board.
do you have concerns about mild memory loss related to aging? prevagen is the number one pharmacist-recommended memory support brand. you can find it in the vitamin aisle in stores everywhere. prevagen. healthier brain. better life. time now for a cnbc news update with sue herrera. president trump announcing the intent to nominate eugene scalia as secretary of labor he's a well-known labor attorney and son of late justice scalia nearly 6 million children's water bottles are being recalled over choking concerns. federal officials receiving reports of a defect causing drinking spouts to detach. the bottles were sold in costco,
walmart and target. protests over newark's water crisis were held outside the mtv video music awards last night leading to several arrests. and finally, college board is dropping plans to add student adversity scores to the s.a.t.s. the controversial plan would have added a single digit number to reflect a student's socio economic back ground it will now instead try to capture that info in a broader array of data points you are up to date that's the news update this hour >> it was controversial to say the least, sue. >> yes. >> thank you. snap stock dropping today after reports said that facebook is internally testing a new messaging app and some are similar to snapchat's. the new app which will be a
spinoff of direct messaging of instagram to share status to close friends and joining us is casey newton that first reported this story certainly we have seen facebook in the past and instagram more specifically take on snap. is that what's happening here? is this another i guess potentially copycat service or product? >> that's right. there's one part of snapchat that's really sticky for north american teenagers and that's the messaging function young people are opening this app, dozens of times ady to send messaging. instagram is never able to capture that magic so this threads app is an effort to steal that away from snap. >> and you said they're looking to steal that business or that product or that i guess attention away from snap is it a straight-up copy of what snap does? how does it functionally work
and engage people? >> yeah, mike. if you have used instagram you might have seen the feature to create a list of close friends and once you create that list you can then share stories and messages directly to the close friends so the way threads is going to work is you will log into it with instagram and only see the close friends and designed to be a kind of first home for the people that you're closest to in your life. so definitely some differences there from how snap works. >> you know, i think back to earlier this year and mark zuckerberg said private messaging is the future of the company. how does this product fit into that vision? >> zuckerberg said earlier this year to see private messaging as the future of the company and if that's true then facebook has to build new messaging products
i think instagram has known for a long time that messaging is a huge part of what draws people into the app as you pointed out. they were working on a standalone messenger earlier and they have had some new opinions and they have seen some new data to take to get young people to use a different messaging app and now putting that in to practice and the hopes to become a big part of the future of instagram. >> so how likely is it that we actually see this come to market >> so what i have seen is pretty far along. this is well passed the alpha stage of software development and tested internally in facebook i think the next thing to look for is does this thing enter the market facebook loves to test apps like this in new zealand or spain or something. but from the conversations i have had it seems to be fairly
far along and my expectation is very least they test it in another country. >> casey, snap has about what, 300 million users. it would seem to me that the target audience for this probably has both apps it would be my guess a matter of trying to absorb more eyeball hours >> yeah. i think that's a big part of it. but never forget that facebook is the most paranoid company in silicon valley and on the lookout for the new user behavior and subset of new people doing things away from facebook and mark zuckerberg sees that as an existential risk say tens of millions of u.s. teens using snapchat is a problem that zuckerberg works on until he solved it. >> all right casey newton, thanks a lot.
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welcome back focus on your day job. that is blockrock's message to ceos with a report today arguing overextended leaders make for bad investments, voting against 94 ceos attempting to serve on boards other than their own this year, almost triple how many they voted against last year ceos cannot be on more than two public boards. they're calling it an overcommitment that limits a capacity to focus on their own company's mission and goals. possible ceos who they would vote against joining new boards, disney, twitter, mcdonald's. joining us now is jeffrey kahn at elevate partners. jeffrey, do you agree with blackrock? >> well, look. i think larry sphinx criticized but it's a wise move times are changing and the
practices need to keep up. think of the world of business today. the pace of change ten times faster disruption and competition coming from all angles economic institutions of capitalism are literally under attack so i think the board members need to step up and they need to manage the risk better and be more focused and spend time in a smaller handful of companies and deeper and not wider it reduces the risk and it raises the ceiling for all parties. >> do you think this is actually, when you have a heavy hitter like blackrock make rules like this, do you think it actually changes governance at companies? >> i do. i think that governance is positive and it will drive economic value i think what it will do is force or allow board members to do a deeper dive and not only manage the strategy because it's changing so much more rapidly but really the people side so it gives them a chance to
focus on ceo succession planning and succession planning for all key positions in the company and takes time there's a massive inflow of talent in and out of companies and really the board's number one responsibility in my opinion to focus on the leadership pipeline and that requires getting the know the people. challenging them developing deeper bonds. making sure they don't leave to go to another company. so i think, again, this governance is going to drive economic value. >> jeff, it is interesting or maybe ironic the ceos that we cited who would kind of fall afoul of this blackrock rule like bob iger, stooen easterbrook of mcdonald's. they have done a great job for their own shareholders and i guess one could argue, also, they derive benefits of exposure to other companies i'm thinking of iger on apple's
board and that. >> they do but there's an argument for exposure and learning from different businesses and widening perspective and ways to do that on average where they don't necessarily -- where they don't have governance responsibilities, too. i think on balance spreading yourself too thin as a ceo being on different boards where you have governance responsibility and shareholder responsibility just has too much risk so on balance, yes, some ceos can do it very well and all can learn from it but i think there are other way that is ceos to learn without putting the risk of shareholder value at risk. >> yeah. jeff, just to wrap all of this up, i mean, is there data out there, have you been tracking this yourself in terms of the impact of ceos on multiple boards and whether that overextension does translate to poor invesths? >> it's hard to track it because
times are changing and the pace of change has sped up literally tenfold in the last ten years and when i say that i mean not only from a strategic and disruption point of view but from talent in and out so quickly and really hard to do an apples to apples comparison but by talking to board members the number one thing they say is they want the board members to develop stronger relationships with these rising stars, the future leaders of the company, and that just takes time. >> jeff cohn, thank you for joining us today. >> thank you. up next, an up close look at the next generation of high-speed trains in the u.s seema mody is riding the rails with that story. >> hey, mike that's right we are in new castle, delaware, in a new train coming into service in two years we'll uncover the major features and capabilities and discuss
♪ are we supposed to dance? ♪ boy boy bands without dancing are just ok. get a better than just ok unlimited plan with spotify premium included on america's best network. only from at&t. more for your thing. that's our thing. welcome back amtrak is finally upgrading the high-speed train service and seema mody explains why it's an uphill battle with infrastructure seema? >> hi, morgan. following years of criticism of commuters and travelers, amtrak
is upgrading the fleet 28 new high-speed trains to run across the northeast corridor as a vital link between boston and washington, d.c. the trains will be built by france's allstone, manufactured here in the u.s. in fact, 95% of the components are source 95% of the components are sourced domestically with the exception of the exterior of the shell which comes from italy the trains are pretty fast, 160 miles per hour, versus the 115 miles per hour the current trains operate at. these trains would be even faster if it wasn't for the aging infrastructure, the rails that these trains operate on that's why amtrak is requesting the administration to unlock federal funds to update the train -- excuse me, update the railroad's tunnels and bridges that, again, these trains interact with. some of the other cool features, guys, we have adjustable lights. you also have a personal outlet and usb port and a bit more service area here if you are
wineing and dining or need more space for your laptop. back to you. >> looking sharp there, seema. i am loving the story today. i'm curious though the fact that you do have this order for 28 new high-speed trains, i wonder how the fact that it is creating this demand, if 95% of the parts and the actual train -- the guts of the train itself are being manufactured here in the u.s., is that going to help establish a supply chain for american-based high-speed rail because it has been a big issue and it has been an issue that has plagued us over the past 20 years at times, too. >> yes morgan, as you know it certainly has been an issue. i closed that question to carolyn decker of amtrak who we caught up with earlier today i asked her why did amtrak pick a manufacturer from france, and she basically said that the u.s. railroad system didn't really have another option here in the u.s. because america doesn't have the high-level expertise in high-speed rail. but they're hoping that by manufacturing these trains here
over time more americans will have that skill set. >> seema mody, thank you still ahead, investors will get another read on the consumer tomorrow when tiffany, pbh and own foreman report earnings. find out what to expect. that's coming up we might die wi. and most of that debt is actually from credit cards. it's just not right. but with sofi, you can get your credit cards right - by consolidating your credit card debt into one monthly payment. you can get your interest rate right - by locking in a fixed low rate today. and you can get your money right. with sofi. check your rate in 2 minutes or less. get a no-fee personal loan up to $100k.
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the dow finishing down 120 points, or about half a percent off the lows, but well off the highs because the dow did start the day up triple digits the s&p finishing lower by .3 of a percent. similar situation for the nasdaq russell 2000 were the under performing, down 1.3% in today's session. it was a scenario where we saw stocks move lower as yields moved lower as well. >> ten-year treasury breaking below 1.5% that was the trigger tomorrow will be another big day for earnings in the consumer sprays courtney reagan previews results from tiffany and pbh let's start with courtney. >> well, tiffany and pbh are the first retailers to report since the trade juarez war escalation friday investors want to know how the changing policy impacts forecast tourist spending going to be key for both results as well
last quarter pvh ceo said the trade dispute had not hit the retail company yet, but lower international tourist spending were concerns. tiffany hair shoulders are watching to see if tourist spending worldwide has improved after tourist spending fell 25% in the u.s. last quarter >> brown foreman is the other big consumer company reporting results tomorrow frank holland gives us a preview. >> hi, mike. they are expected to report an eps of 37 cents, a 9% decline year over year the ceo lawson whiting calling 2019 the year of the tariff and saying that tariffs had a $125 million negative annual impact on the company another thing to watch for are sales of jack daniels. last year they were flat for the iconic spirit, while its premium segment including reserve showed double-digit growth. back over to you. >> thanks very much. all right. we have another read on the
consumer >> exactly. >> we have consumer confidence today, so we will see if it goes to the company. >> we will get another read on gdc as well. a big data week to go here even though it is coming into a holiday weekend. >> plenty of people are sitting it out that dose it for "closing bell." >> "fast money" begins right now. live from the nasdaq market site overlooking new york city's times square, this is "fast money" i'm melissa lee. your traders on the desk are pete najarian, guy adami and tim seymour. another rate shock hit stocks, so where are the markets headed from here. we are digging in. also asaid, a $16 trillion warning from a top wall street strategist why he says the biggest bubble ever is about to break costco craziness this tells a tale of two chinas. yields moved lower, the bond market sending out the clearest warning yet that the recession could be coming with the yield curve at the dee