tv Closing Bell CNBC August 29, 2019 3:00pm-5:00pm EDT
yesterday where we saw the leadership of financials and retail we see a broad based rally with technology joining in on the action today, as well. >> we have hawkish rhetoric out of the ecb >> we'll see thanks for watching. >> "closing bell" starts right now. ♪ good afternoon welcome to the "closing bell." i'm wilfred frost at the cat post up 2.7%. trade related stocks doing well today amid resolution hopes with china. we're 59 minutes left of trade. >> i'm sara eisen. welcome, everyone. look at what's driving the action president trump said trade talks are set to resume at a different level and china saying it's in favor of a calm approach and hinting it won't retaliate treasury yields taking a pause from the recent slide. joining us for the hour, final
hour of trade, barry knapp back. certainly the tone feels better. do you think it's fundamental with the trade tensions or some month end rebalancing stuff? >> i suspect there's a bit of month end rebalancing going on i think it's too early to tell whether the macro economic fallout from the latest negative business confidence shock has what degree of effect it's had next week's ism on tuesday, payroll's on friday, will be much more important bempl marks to see whether we're over the hump sort to speak on this i tend to be cautious and not chase the move today. >> on the big stories that we are watching today, kayla has the story. josh lipton is tracking tariff concerns for apple kayla? >> the hope began when chinese
officials said there was some effective communication of the two countries and it continued this morning when president trump said in a radio interview there's a conversation scheduled today. >> i have talked scheduled there's a talk scheduled for today at a different level and yeah, they have been talking. let's see what the end product is i think that's what you have to judge it by. >> beijing wants washington to shelf tariffs but the u.s. trade representative filed legal notice for the tariffs to go into effect september 1st. sara >> thank you mixed bag for the retail sector today following a slew of earnings before the bell courtney has the details. >> best buy with a mixed quarter, raised the earnings forecast and lowered the high end of the revenue forecast. tariffs impact 60% of the cost of goods sold and the ceo thinks the impact substantially less
due to the mitigation strategies it is creating uncertainty and expects gaming to be soft. dollar tree was also mixed but it raised its annual earnings forecast prior to list four and the new higher tariff rates, dollar tree said it successfully mitigated most of the impact figuring out the rest now. dollar general had the best report of the day raising the full-year guidance with plans to successfully mitigate, absorb or otherwise offset the tariff impact wolff? >> very much now apple with the tariffs of the wearables products starting this week. josh lipton has more for us in san francisco. >> so apple's watch and airpods could face 15% tariffs beginning september 1st. analysts estimate apple sold 80 million watches and 50 million airpods and if apple decides to absorb the tariffs it could cost $500 million
or apple to try to pass along increases to consumers but that risks denting demand and another possibility here that the government decides to exempt apple from the levies. saying that the government they don't think wants to penalize the popular products. >> joining us now is laurie calvasina. barry still with us, as well laurie, let's start with the broad markets. what are the key levels on the s&p 500 in the course of this week >> i would say i'm in barry's camp i wouldn't be chasing the fumes that are bidding the market up today. the number i'm watching for is 2725 to take us down to about a 10% pullback from the late july highs. we have had a crowding problem in this market the tariff news, maybe it's not going to get worse i think that's what we have heard over the last couple of
days in i time soon but it is materially worse over the past week and we are about to go in conference season. the impacts there. so to me i would look for the down 10% move. >> is it based on earnings expectations and how the tariffs feed through do you think they're too high at this point >> first order impact and secondary impacts. first order impacts, i was starting to feel a little bit better about estimates and what we heard over the last few weeks, the tariffs go up a little bit we have cost issues to deal with directly and a possibility of downward revisions and spooked corporates again and that creates another opportunity for behavior to turn more cautious we have seen a lot of emphasis on cost cutting this year. i think you're going to hear more of that conservatism. remember, a lot of companies have other companies as customers and will be an impact. >> barry, where are you on earnings estimates for next
year already come down enough >> i think that the estimates are -- i just think there's a big range of outcomes around them so if you think about what's happened over the course of the year consumption fell off a cliff late in the year in response to the stock market crash. it was very much an echo of 1987 and '88. the same dynamic occurred. no leverage in that household sector consumption came back. worked through the inventories this morning numbers looked like all drawn down my thesis was that the manufacturing slowdown in the u.s. less to do with global trade and tariffs and more to do with the unexpected inventory glut and then drawdown and that if we got to this point you would see global trade start to recover and u.s. manufacturing coming back. but as lori described we have had another business confidence shock. and so, that business confidence shock is a major determinant whether we'll get spending on
software to surge the way it did last year. driving noninflationary growth productivity respounded sharply. that could all stall if software and research and development investment stalled out in the second half of the year, next year's numbers are flat at best so that's a big key inflection point. >> where does that leave us on valuation of the market? what's a fair multiple less than 4% off the highs much worse for the cyclical sectors. >> you have to look beyond pe multiples. that's not like two years ago. i think historical comparisons are difficult. when you start to look at valuations with price to sales, price to cash flow, things not distorted by the tax impact, i mean, we are trading very close to levels that have marked the ceiling of this cycle and if you bake them all together, we say
one standard deviation above the model. we're not cheap. it takes more than 7% drop to get the valuation froth out. >> does that account for the lower rates? which presumably do help the multiples in a fair way. >> we have spent time looking at pe multiples against changes in the fed fund study rate and did a study around that high in the market and we found that you'd had expansion in the pe multiple in the high teens and that's actually the best that we have ever seen during a fed easing cycle except the qe era. we are in fed easing mode. that's good for pe multiples will we throw massive amounts of stimulus i don't think we're there yet. >> you guys are both kind of saying fight the fed here. >> absolutely. the most telling thing that -- >> are you not supposed to fight the fed? >> if you go through the
noncrisis period of qe november of 2010 when qe-2 was launched through the taper tantrum and earnings yield les the real yield of cyclical stocks, it widens sharply in that period. bond-like stocks stayed flat but with real rates down 2%. that drove those stocks up so if the fed is in expanding the balance sheet mode that will help utilities a lot and reits and nothing for the economically sensitive cyclical sectors and capital investment fell through the period that's the key here. fed is not going to bail out economically sensitive sectors and drive capital investment. >> lori? >> i don't think we should fight the fed here recognize the fed has already done the heavy lifting we can't count on them for everything. >> the bond market is expecting a few more cuts. >> i think we'll probably get more cuts but the problem is what's priced into the market is fed easing without any damage on
the underlying economy to cause the fed to need to do that if you look back historically ism clips negative, jobless claims spike we haven't seen that yet the market is assuming to get the fed cuts and not pay the price. >> thanks for joining us after the break, markets stuck in a range we'll take a look at all of the ups and downs in the s&p 500 this month and the key levels to watch heading into september. later, diving into former new york fed president dudley's controversial op-ed on fed policy, a former new york fed official who worked with dudley tells us why the central bank should resist the urge to get political. as we head to break, here's a check on the data tracker today. second reading of q-2 gdp at 2% matching expectations but down from the first reading initial jobless claims did rise by 4,000 last week but still a
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another day in a row nasdaq up 1.5% we have been steady higher pretty much all day. the dow up 328 let's send it to mike santoli. mike >> here's what we have first just give may reason really just give the market a reason to pop up to the higher end of the trading range and then after that, another brick in the wall. that's the wall of worry that this market is climbing higher ground. take a look at the internals of this rally try to gauge the underlying strength there don't stop the party that party being this economic expansion. we'll look at macro ipd kndicat. this is your august. and look at how obedient it's so far been in sort of going methodically right within this range. 2930 and this is around 2820 one week
ago today, 2922. and then in the 13th closed to 2926 essentially the market recouped what we lost the other day, trading in i think a technical way, but when's interesting about it is this bottom of the range held pretty well despite the bad news, the yield curve inversion. so it's not broken just bent i think is how we say it look at the sector patterns. we have an unusually one way market action. 12 day this is month, all 11 sectors moving up or down. today we're on the cusp. consumer staples are about flat. the rest of them are up. that shows a very macro way to trade. people are not looking at companies. we are an the back end of earnings season and see if that means a major market inflection point is near.
>> low volume august plays into both of those charts. >> to some degree. although i have to say this week has actually not been bad on overall volumes. all things considered. yes i think you get that gappy moves and essentially just sort of a machine's obeying the lines on the chart because it's not necessarily full participation but i wouldn't necessarily say low volume is causing the market to kind of catch an upside air pocket. >> thank you what do you do in a market like this when you have everybody moving together, macro is the sorry? can be frustrating for stock pickers. >> for sure it can be. i think you need to get broad market measures of risk like the vix, the shape of the vix curve. six month versus one month skew you need to get the indexes to an extreme low before you buy. you definitely have to come in on the weakness.
on tuesday's -- after tuesday's close we were about .6 of a standard deviation below the post-crisis mean oversold you can buy those dips if you wish i agree with lori. probably 10% is the right level to reengage in the market. down 10% from the high i would be more comfortable putting risk back to work there. but the measures of risk are such that it just never really got extremely enough oversold to push us back to new highs. don't chase the rallies. >> not convinced >> i'm not convinced yet. >> speeging of that, all 11 sectors are higher by the week by at least 1.4% groups like communication services up 3.6% we are 43 minutes away from the closing bell and the dow's trading higher again up 328 after the break, ubs says interest in disney plus is surging.
but that may not be a bad thing for competitors like netflix. we're looking ahead to more earnings after the bell as they gear up for results and the key things to expect coming up in terms of a preview here's a look at how commodities are trading today. ♪ keeping the night interesting, is all about setting the right tone. ♪ lower carbs. lower calories. higher expectations. ♪ the light beer you've been waiting for has arrived. corona premier.
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welcome back to "closing bell." time to get word on the street raymond james downgrading bank of america and removing its $32 price target the firm citing concerns that the bank's greater sensitivity to flattening of the yield curve. >> luke capital as a buy with a $118 price target calling it one of the best positioned in autos and industrials and generates half of its revenue of autos with 14% market share. and a survey conducted by ubs finding that 43% of respondents intend to subscribe to the new disney plus, that's more than disney's guidance of 20% to 30% 57% indicated they would cancel at least one other video service if they subscribed to disney plus
it was taken as good news for disney and overall decent news for everybody else, too. >> i think good news for disney. i was interested in the second bullet point 57% of people to cancel a different service. >> of the people that said that they would cancel a different service. >> of the people that would take it out. >> to keep all of their services >> well -- >> more than 60%. >> i think a higher chunk of people saying they won't keep everything in order to pick it up bank of america note, i get the thinking but it's a sort of odd time to be doing it. everyone is aware that bank of america is heavily attached to the yield curve and already moved significantly and now the downgrade comes and seems late to the party downgrade and the bank stocks today certainly ignoring the downgrade and rally. >> rates are going down and as if they're going to just continue to move in the same
direction. >> right. >> i think that that dynamic for banks is way overplayed. the flattening of the yield curve. 1995 is a great example. flat curved from 180 to 0 and net interest income going up bank stocks went up in 1995. i still see bank loan growth as strong profitability is good. i wouldn't -- i could see downgrading that one and upgraded something else perhaps. >> yeah. >> doesn't make a heck of a lot of sense to me. >> let's bring in the analyst behind the disney note john, how should we read this note clearly positive on the response from your consumers around disney plus. what about everybody else? >> you're right. bullish for disney 80% awareness of the product over 40% sound like they're going to subscribe the video market is very crowded
and this is before apple tv plus and more to come and then to a certain extent some subscription fatigue. >> john, to what extent do you think disney will upgrade the forecast of subscriber numbers >> we think the current management guidance is relatively conservative. there's a lot of execution they have to get out in the u.s. and markets around the globe they want to test the waters and see how things are they have been very aggressive with pricing the bundled pricing with hulu and espn plus, the three-year deal for $4 a month signing up for 3 years, there's focus on subs here and the end of the day it probably will prove conservative. >> where do you think we're heading long term particularly considering the bundle they'll offer with hulu, with espn do you think a lot of these services are going to start to be bundled again even if at the moment we consider them rival
streaming services >> we've done other survey work with ubs evidence lab and looks like the average consumer will be two to three products subscribers with sports have the bundle but that number's going to come down quite substantially. seeing the range of 3% to 4% declines and we think 5% to 6% by the end of the year and people focus on sports will have that and entertainment will be viewed through disney plus, netflix and the other services coming to market. >> we just looked at a good graphic of all the pricing options across some of these services disney's coming in at the low end. how much do you think that factors into the decision? >> absolutely. they're going to look at value and you combine price with the slate, the high quality content with the brands that resonate all over the world,we think they get out of the box very, very strongly and really the
bigger question is, what can we expect from some of these other brands to come afterwards? apple tv plus, what does that brand stand for? hbo has great content, too we'll see what that product looks like in late october there is more to come. >> thank you for joining us. >> thanks for having me. still to come here on "closing bell," we have got your last chance trade and barry is looking towards the sector down 5% this month. latter, "the wall street journal" said amazon kept burn book 'll talk to a reporter that broke that story next. geico makes it easy to get help when i need it.
welcome back we have 31 minutes left of trade. here are the key things driving the action stocks getting a boost as president trump said trade talks set to resume quote at a different level. china said it's in favor of a calm approach and hinting it won't retaliate and treasury yields ticking higher amid a more optimistic outlook. the high of the day on the dow was 373. time for a news update with
contessa brewer. >> here's what's happening right now. florida governor declared a state of emergency for 26 counties as hurricane dorian now is forecast to be a category 4 storm by the time it hits the u.s. monday. residents in southeast florida could start feeling tropical storm force winds as soon as saturday night dorian affecting travel plans as airlines cancel flights and cruise lines redirect routes multiple airlines of delta, american, united, southwest are waving fees. disney cruise line and royal caribbean have adjusted itineraries because of the storm. city of milwaukee is urging residents to stop vaping immediately. 16 people in wisconsin hospitalized with chemical pneumonia causing serious lung inflammation and they vaped marijuana or tobacco before being hospitalized. alec trebek is back at work.
he finished treatment for stage 4 pancreatic cancer and told fans he is on the mend but it's going to be a good year. we're glad to hear it. that's the cnbc news update this hour back to you. >> contessa, thanks. let's send it to mike santoli for the second dashboard. >> another brick in the wall right? markets often said to climb a wall of worry when it's worry. we take a look at the aaii weekly survey of consumers it is a pretty dramatic picture. an increase in bearish sentiment. obviously the orange is bears. the blue is bulls. this is the split right here over 40% bears just over 20% bulls. that's a pretty big split. i'll circle that one we have to go back to last december to find something similar and more extreme and then early 2016. these were all major market lows, severe corrections
this is a 6% pullback from the record high on the month that's an outsized sentiment response all else being equal sentiment is depressed and just a lift to neutral is a bit of a tailwind there's a burning off of over negative sentiment in the short term. >> we are still 3% from the highs again. >> right. >> it's pretty impressive. >> note worthy that people got very nervous about the outlook i think because it's a macro focus. we saw what was going on with the bond market. yields collapsing and seemed like something more going on than a pullback in stocks. >> whenever you have the volatility around tweets and unknowns of what's going to come out on trade policy, i think that factors in. >> thank you very much
barry, to what extent is so muc of the yield move was driven by overseas factors and once people get comfortable that, yes, the yields are low and because of overseas picture that they can allow equities to rally again? >> i think you are on to something. we wrote a report of yield curve to the world and our point is flattening is discounting a recession in global trade. we had expected at this point, actually we thought by may to see improvement in global trade activity and it is not ordinary imports of china, what they take from the rest of the world, still falling at an 8.5% analyzed rate. that's obviously spilled out into the german economy overall and headed towards recession china's impulse to the rest of the world is basically in recession. south korea, the market's down 6%, 7% for the year. that piece of it is in contraction and that's what's
driving the yield curve lower. that was the best paper at jackson hole about how the supply of safe assets in the u.s. has become more and more dominant since the financial crisis and when there's a risk off event it just drives money into the u.s. notwithstanding the fact of less dollar demand because of trade it is dollar demand for safe assets and driving the curve. >> might be good time for 100-year bond. >> never sell enough to make a difference. >> argentina's extending theirs. >> yeah. >> go longer. >> i think investors should buy them from argentina and austria. but you can't sell enough to make a difference. what's important is that under president obama they were actually extending the duration of the issue and mnuchin stopped that it makes sense to do it.
i don't think he should bother with 100-year bonds. sell more 10s and 30s. we have a market flash on altria. >> shares down just about 4% right now following the news that the f da investigating whether e cigarettes cause seizures, looking at a handful of cases altria with a 35% state in juul. so we know now an fda commissioner e-mailed gottlieb in saying no cause but an association with juul and being investigated for social media influencers and whether minors were targeted. the ceo appearing on cbs this morning where he admitted it is not clear what the long term effects of vaping really are again, altria shares down about
4% back to you. >> we are not having a good week anyway after deal talks revealed between altria and philip morris thanks. abercrombie shares are tanking. up next, what the other big retailers are saying about trade tensions and how that could impact your wallet. plus earnings results after the bell llpreview the key things to watch in those reports where is gate 87? excuse me you should be mad at non-seasoned travelers. and they took my toothpaste away. and you should be mad at people who take unnecessary risks. how dare you, he's my emotional support snake. but you're not mad, because you have e*trade, whose tech helps you understand the risk and reward potential on an options trade it's a paste. it's not liquid or a gel. and even explore what-if scenarios. where's gate 87? don't get mad. get e*trade and start trading today.
welcome back lawmakers calling on amazon to take action from having dangerous products on the platform deirdre bosa has more from us. hey, d. >> reporter: senators blumenthal, menendez and markey say we write to you with grave concerns and to provide required visible warnings on products sold on your platte form the letter references a "the wall street journal report" last week that found over 4,000 items on the platform deemed unsafe, banned by amazon or deceptive labels the senators requesting response
by september 29th. amazon said they plan to respond. >> didn't they take it off the website? >> reporter: remember that third party merchants make up more than half of the products sold on amazon so the whole issue is that they can go back up very quickly. there is an amazon blog post on how they plan to confront this and how they're trying to take the items down but stuff is slipping through the cracks, guys. >> thank you i have to say if amazon is responsible for things being sold on its platform, why doesn't facebook have to be responsible for the accuracy of things posted on the platform? i know it's different but just saying that senators vice president gone as far to hold facebook to account. >> trying to figure out how to do that. reloiing on third party, it is trekkie for the companies. i get the point. >> interesting that they have
written that letter. >> 20 minutes left to go the tariff countdown is on next tranche set to take effect sunday the impact remains top of mind for retail executives though it is starting to influence the guidance columbia sportswear tim boyle on this network earlier today expressed concerns with a number of ceos this morning >> this basically rogue application of tariffs coming at a very bad time in the united states is going to be really, really hard to manage. >> it's hard to say how consumers will react the general overall volatility in the markets adds caution to the outlook. >> i don't think anything in the basis change we have the unknown of tariffs and where they go and what they may do i don't know that any of us have
an answer for that at this point in time. >> joining us to discuss is patrick mcgeever, welcome. how overall much of a cloud is this hanging over the retail sector right now >> hi, sara. certainly a growing cloud. but there have been a number of retailers that really haven't felt it yet and that aren't expecting a big impact, even some that you would expect to be impacted by it like dollar tree, for example, which reported this morning. they don't really -- they can't raise prices to offset the impact and a lot of what they are doing is leaning into or leaning on i should say some of the vendors and extracting price concessions, cost concessions, from them. >> what about best buy which was thought to be in the eye of the storm with this latest round of
tariffs and maybe the stock's not doing too well today but the quarter is not bad, nor was the guidance >> the quarter wasn't too bad. they had a 1.9% increase if same store sales in the u.s canada was tough their comps increased more than 6% last year because last year this time consumers were getting that big win fall from the tax cuts so that plays into the numbers this year, as well on a year over year basis but you're probably going to see it more at a retailer like best buy which has higher priced products and has a little more exposure to china and will probably have to take price increases but yeah i think they're more quote/unquote in the eye of the storm but even there they're mitigating it reasonably well at this juncture. >> we are going to see unless the president changes his mind these tariffs starting sunday
and ending in december for apparel and other consumer products on the september 1st list who has the most innovative ways that you have heard of dealing with it, switching supply chain and being proactive about it or absorbing the cost or other ways to deal? >> the bigger retailers i think have more -- i don't know if they're so much innovative but the power to put more of the pain sort to speak on to their vendors so i think that's where you're seeing the least impact, that would be walmart, target, eastbound to some extept dollar general which reported this morning. they don't import as much because the chunk of the business is consumables and many sourced in the u.s. but bigger retailers. i don't know i'm seeing anyone with any big, new innovations in terms of getting around the tariffs. it is more the overall scale and leverage that the u.s. retailers
have. >> any serious sign that is suggest the u.s. consumer is starting to feel the pinch >> not yet. >> i would say, no i think if you just look at earnings and revenues of the shanghai composite what you see is margins have been crushed over the last year in china. things are being absorbed. ep last year, i spoke with a friend of mine making robes for hotels he was told in add vaps that the supplies will absorb the 10% tariff other friends in industrial products, 25% is too much. right? so that's impacting the industrial sector and supply chains and probably contributing a weak business confidence in the manufacturing sector but on the consumer side, apparel side, i think they're being absorbed at this point. 10 to 25 it's not absorbable but at 10 you can probably take the hit. >> patrick, your take on that point? quickly. >> yeah, no.
i agree with that. it does seem like right now at least it's being absorbed by the supply chain some of that is direct from the manufacturers in asia, china, some of through the third parties, the middlemen that are also involved in some of the buys, the purchases that u.s. retailers make but yeah certainly something i'm watching closely and have concern about the next step up in tariffs in september and also in december. >> patrick, thank you for joining us. >> thank you. we have just 14 minutes left until the close. we are up by 324 on the dow. over 1% of gains for all of the major indices today led by the russell. next, the last chance trade. [leaf blower]
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welcome back just about ten minutes left of trade here you can see we're going strong across the major indexes sector heat market, a pocket of the red. that's consumer staples. information technology, financials having a nice day continuing that comeback trade for the week financials up 3% after underperforming august. >> three more basis points out of consumer staples and adds another point to mike's chart today. we have ten minutes left to see if we get it and we have 9:30 left to get your last chance
trade, barry. >> we called for a risk off, risk off call for the entire year and like lori i don't think it's complete so i wouldn't buy into a big rally today but if i bought anything the sector to me overdone on the downside through this risk off over the course of the last month is financials and regional banks in particular the banking sector through the deregulatory process has gotten fant significantly more profitable return on assets is back to where it was return on equity is back above 10% at a level where they should trade at a premium to book net interest income is going up. cash levels going down growing assets and some compression on the margin, obviously. but the sector is just been way overdone we have had the third episode this year where we have had a yield curve scare and the group's come off safely.
earnings have been catalysts that have lasted for a couple of months or so. >> 2020 a risk for the banks >> 2020 is a regulatory risk for the banks, for sure. now, typically what happens in those run-up to the election is you get weakness in the call it 18 months to 12 months ahead of time but then as you get closer to the election people realize things may not change all that much and at least we have a complete disruption of the congressional breakdown, you won't have serious legislation to come about. there's discretion written into dodd-frank for sure and could be a roll back of the loosening it's a risk out there but the group is incredibly cheap and like the tech sector in the 2000s it stayed cheap in the business cycle but an opportunity, as well, because as we go through the next cycle -- right. because as we go through the next cycle we'll probably -- banks probably be stellar performers for a longer time horizon, for sure, banks make a lot of sense.
>> after the bell, earnings from del. deirdre bosa has a preview for us. >> the pc and data storage giant should give us clues of global i.t. spending, a market facing uncertainty and worries of a downturn the company also sells infrastructure equipment so investors are looking at how it's positioning itself in the space, supporting customers. del shares are major underperformers and down 30% over the last 3 months wall street is expecting earnings per share of $1.47 on re knew of $23.3 billion guys >> d, thank you. also earnings from ulta beauty after the close. courtney has a preview of that for us. >> ulta share prices down slightly since the last report and still up 40% year to late. ulta added to the exclusive
cosmetics product line in early august investors want to know if the brand is still generating sales and traffic for ulta it is expected to see growth of 6.6% for the quarter revenue expected to gain nearly 16% at $1.69 billion with growth of nearly 14% or 280 per share sara >> thank you, courtney let's bring in eric chemi. >> that's right. three key things to watch for. any mention of the company's progress on 5g including sales to samsung of course, the's also the big china question, especially with regards to the ban on selling to huawei along with broader trade tensions finally looking for comments of the broader chip sector slowdown.
the stock up 50% or so this year in 2019 and bringing you the numbers after the bell. >> eric, thank you. we have about five minutes left in today's session. time now for the closing countdown with the dow up 322. trade with michael gibbs director of strategy at raymond james. how much technical repair and recovery is this market doing this week? hard to read into it on the final week of august but we have made a lot of ground back. >> yeah. after you have a big selloff like we had on friday, especially a surge in down volume, you have to watch it real closely in the coming days and downside momentum it builds the obvious to keep moving lower but on the rebound you want to look at how does it look on the rebounds are you having the right groups moving higher? up until today we didn't have that the highest volume day this week on tuesday which was a down day.
mixed. yesterday the leader was energy. tech up 10 basis points and energy's not the leader. so today changed that to a great degree with strong up volume you have got the leadership the way it should look and the cyclicals, industrial, tech, leading the way and you have a piece of good news out of china on trade the overall volume's tepid 60% of the 30-day average an hour ago and not unusual because it's the last holiday week of the year and when's so important is next week and we have a good day-to-day we need to follow up with strength next week with a full audience back in session and then also next week we get some pretty economic data ism manufacturing and jobs report so if we build momentum, strong up volume, the participation that we need, the market could continue to trade lier might even try i to make the way through the resistance level up
in the 2940 level if we can do it so we'll have to see what happens next week, see what develops and all about building momentum. >> michael gibbs, thank you very much let's send it up to mike santoli for the dashboard. >> higher ground, take a look at the relatively healthy sbrernls, up/down voluntarime is around 8 the dow jones industrial up 80% is pretty good. it is not so much decisive but moving in the right direction and then in terms of the character of the stocks working today, you are seeing outperformance by the higher beta names more aggressive cyclical faster moving stocks and low volatility defensive yield plays. that is 1-year look at that. see the massive outperformance here's what you watch. an attempt at bottoming in the high beta. by the way, without low vol giving back, this's a best story
if the laggards pick up and the stuff leading doesn't give ground that's one day's action today and we have to see if that continues. bonds relaxed today. let's get a look from rick santelli in chicago. >> thank you, mike we had a nasty seven-year note auction today. the bid to cover the worst in 17 years. looking at intra day of 2s, up 3 basis points long dated maturities started to give it back 30s are down on the day and 2s are up 3 on the day. dollar index, the big star, see the chart? it poked through what has been 27 1/2-month highs nasdaq, the best percentage gainer for more, let's did to frank holland. >> thanks a lot, rick. that's right the nasdaq on pace for its best day in two weeks microsoft with a biggest positive impact on the ndax.
apple shares up higher after it sent out invites for an event of a new iphone is expected chip stocks with exposure to china having a strong day. nvidia shares up around 3.5% dollar tree worst performer in the ndax now bob pisani at new york stock exchange. >> a bit of a reversal today and this week from the trend we have seen throughout the month of august cyclicals are ruling industrials like caterpillar, trade names, nike, all having a good day flat to down the defensive consumer names like coca-cola, verizon, merck don't kid yourself, though the trend has been simple. short cyclicals and go long these kind of consumer names the new high list is littered with consumer names at new highs. pepsi, merck, home depot,
target all consumer names an easy trade to put on given the uncertainty around trade none of which has been resolved today despite the soothing words from the chinese ministry of commerce there's the closing bell we are just near the highs from the day. the dow jones industrial average up 315 s&p 500 closing above 2900 good afternoon to you. welcome to "closing bell." i'm wilfred frost. >> i'm sara eisen here with mike santoli. the dow, s&p, nasdaq, russell 2000 with a strong session third day of gains for the major averages of the last four trading sessions and a big one today. s&p up 1.3%. did get all sectors to close green? consumer staples barely negative so mike's -- everybody moves
together holds everyone was higher as we mentioned and as bob said a cyclical story home depot, intel and nike leading the dow. >> as rick said, we saw the yields move higher but that helped sentiment particularly for the banks dollar slightly higher europe was higher earlier. asia didn't really take part s&p 500 now up 2. 7% this week strong week. tomorrow will tell i'm sure. >> on track to break the streak? four straight losing weeks for the market. still waiting for a slew of earnings we'll bring you results as soon as we get them. first, though, talk about what happened today in the market justin kelly, cio of winslow capital joins us barry knapp is still here.
and mike santoli, to you, of course, on how much we read into the action that we saw this week there were some fundamental headlines that drove us like china overnight saying they don't want to retaliate more and a calmer solution. >> consider the unwind of pessimism built in over the last week s&p 500 finished today almost exactly of a week ago and that was the day before you had that escalation of the trade war from the president on friday and then you had the retaliatory comments so essentially you have just sort of won it back and what happened in the intervening few days was people took the idea that the trade war was at a standoff and it's going to xaser ba bait the move in terms of a global slowdown. all the stuff just i think pressured the stock market enough to where people overextrapolated immediate weakness and not seen the evidence of it and people got too negative, unwound some of it in the last couple of days and a
positive, this trading range has held, but i don't think it really tells you what the story is from here on out besides just, hey, maybe we overdid it in the short term. >> justin, do you think this week's bounce back was justified? in fact that we could touch fresh highs again relatively soon >> indeed. de-escalation is holding the tree to the whole market we have in a two-tooered market all year companies are doing well but companied levered to the manufacture economy are having a difficult time and for the pressure cooker to come off you need a de-escalation of the trade war and the market is right to react this way and a soothing of the tension there would be very positive to reaccelerate the earnings. >> mix signals on the economy today, barry we did get that second look at second quarter gdp which was quite good the consumer spending component
up to 4. 7 was a lot better. and then a drop in pending home sales and a level we haven't seen in months really. jobless claims, mini tick-up what do you make of the data and how all of this trade anxiety is manifesting on the economy >> you are right i never really understood the narrative that growth slowed in the second quarter it actually accelerated if you look at final demand to private domestic purchasers. that's a yellen favorite that core demand out of the u.s. much stronger in the second quarter. retail sales - >> corporate earnings, too. >> continuing to be quite strong through july might have been aided by prime day and domestic momentum there. the housing market is recovering from its tax bill related disruption in 2018 much like the same thing happened in 1987 so that's all fine but the fallout
you allude to is potentially evident in ism on tuesday, perhaps payrolls a week from friday august payrolls has a notorious history. least number of companies reporting to the survey the whole year and it misses by 80,000 on average and has for some 20-odd years so i'm not sure that we have really gotten a good view of what that negative confidence shock fallout to the economy is and a final point about the markets today. we are patting ourselves on the back of the equity market behavioring. the high yielders all was pretty punk all right? still down sharply for the week and the treasury market, the back end is down 12 basis points in yield bounced 2 today. you're not really getting confirmation of currencies - >> tell you that global growth is a problem >> agree.
>> slowing, not that the u.s. consumer looks better. >> that's why focusing on the business dynamic confidence and labor investment is crucial to the story and we are going to get more information in the next week or so. >> justin, you're a large cap growth fund manager. does that mean you're basically a tech fund manager? >> no. we go where the growth is but today that does happen to be a lot in the techology area. we see the best opportunities in tech, consumer and some of the medical device companies and the health care space. but the other gentleman is quite right that the u.s. consumer is very strong today and one of the best themes is e-commerce within the u.s. consumer. growth is accelerating and the opportunity is still immense since it's 14% penetrated in the u.s.
big winners from the acceleration of the e-commerce spending so we have a lot of portfolio in tech. >> ulta beauty earnings are out. the stock getting crushed after hours. courtney with the earnings. >> it was a miss reporting $2.76. the street looking for $2.80 revenues of 1.6 billion is light. the street looking for 1.679 billion and analysts expecting 6.7 growth and ulta lowering the full-year earnings guidance. gross margin did expand to 36.4% from 36% last year in the same quarter. and ceo dylan said that the forecast was cut to reflect head winds in the u.s. cosmetics market and doesn't get into details of what she believes the head winds will be.
>> is this an industry that's heavily exposed to tariffs >> so in the early lists there was a lot of cosmetic makeup components, sort of the ingredients going into the cosmetics so again kind of complicated what piece of that impacts everyone but there is certainly some exposure there. ulta's a retailer, right they're one removed from the vendors so there's some ability to split some of those costs but yes it does get complicated and can create uncertainty. >> thank you that's a big drop for the stock. 15.5% and expect 4.6% and they were at 6% to 7% e-commerce growth of 20 instead of 30. so really taking down the numbers. >> still has an aggressive growth stock pe. it was kind of like a can't miss story for very long time and it's expansion phase and a
renaissance there and i think the street's going to keep it on a shorter leash. the stock faltered before the number and mid-20s forward pe and taking comps down and it looks like maybe it's sputtering growth, talking about challenges to the u.s. cosmetics market, that's bringing into question -- >> what does that mean for kylie jenner that was a big growth driver >> you got to hope she doesn't -- >> peak in i don't know. >> i don't know either >> we should all worry about her a lot. >> ulta stock down sharply what about marvell technologies? >> that stock down sharply about 5% right now the second quarter wasn't beat on the top and the bottom lines. a penny beat on the eps of $5 million beat on the revenue line but an interesting comment from the ceo in our third quarter we face a worsening macro environment with the impact of the current restrictions on shipments to huawei.
that comment with weak third quarter guidance on the top and bottom line. that's sending the stock down more than 5% back to you. >> all right thank you very much, eric. marvell technology, any thoughts >> no. honestly not beyond because it doesn't seem like it's a bellwether for anything in particular we are looking at right here. this is not a market that's going to be all that forgiving with the group up a lot and the stock up a lot if it's not perfect. >> we are going to leave the discussion there thank you very much. justin and barry, in particular, for being here for the full first hour of the show, as well. up next, technical analyst tom mccent land said there's more room to grow before worries about a market top i don't know what's going on.
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doprevagen is the number oneild mempharmacist-recommendeding? memory support brand. you can find it in the vitamin aisle in stores everywhere. prevagen. healthier brain. better life. welcome back we have an earnings result on del. >> it is a big beat on the bottom line. $2.15 versus $1.47 expected. revenue slightly above expectations $23.45 billion versus 23.3 billion. expected some interesting commentary of del's vice chairman about the broader macro environment saying
we are in the early stages ofa technology led investment cycle. i.t. spending is healthy and the business drivers strong. this is a good signal of del essentially a technology conglomerate based on the scope of the business and the stakes in other technology companies and echos from other companies like box's ceo but keep in mind del is badly lagging the tech market down 5% year to late some analysts have said it looks like a bargain at the levels and the stock is up .6%. that's what you could expect back to you. >> thank you your take? >> it looks like hp enterprises. and the reaction seems somewhat semiand low expectations looks okay in terms of overall demand in the sector. >> that is up 5% del in after hours trade. stocks rallied for a second
straight day today putting the dow and s&p 500 on track for their largest weekly gain since early june bob with a look at the big movers frank will do the same at the nasdaq bob? >> remember all month, cyclicals down sell them and buy consumer names on the trade uncertainty we today and this week there's been a bit of a reversal. semiconductors have rallied this week transports, retail industrials, banks, all outperformed and beating and the defense i sectors that have done well in the month of august lagging so consumer staples, reits and utilities. is there a little better news on the trade front? there was today. normally is this just end of the month rebalancing? maybe that bottom line is it feels tentative because we haven't resolved anything on the global
trade wars. >> thank you nasdaq helping the other major averages today frank holland is there with the details. >> nasdaq with a best day in two weeks. american airlines a best saying it's best positioned for a fare war after the boeing 737 max returns to service apple sending out invites for what's expected to be an apple iphone release launch. mylan up 4% today. three other pharma stocks among five finishing negative and dollar tree worst after a miss on eps today >> okay. thank, thank you very much. next guest says despite recent fears, stocks are mar from a top let's bring in tom mcclellan thank you for joining us. >> thanks for having me on and the beard's a good look on you,
wilfred. >> i appreciate it i'm following your lead, tom let's dive in to the charts you prepared for us today. >> all the compliments are from beard wears. >> including your husband. >> what's wrong with that? >> exactly we should move on or else our bosses will be disappointed in us yield curve is a first chart to look at for us. >> yes yield curve all over the news and everybody worried the sky is falling. the sky could be falling some point in the future but everyone needs to just keep their pants on for now and realize the yield curve is a long, early warning of trouble doesn't say that trouble is upon us now and so, it takes several months to even over a year sometimes before we get the final price high after a yield curve and inversion and if you get an instance like 1995 there was a momentary yield curve inversion and backed off and the bull
market kept on going so that's possible don't panic now if you're a stock market investor. running a bank, yeah, you should be panicked because this is not healthy for the banking system. >> yeah. second point you want to make is about an oversold bottom on stocks. >> we have oi brought you an obscure but fun creator of 19 70 and looked at regardless of which way it was going. the absolute value of the number and the average up to a really high level it's giving you a message similar to average true range. you have loud days with big up or big down and that's a sign of a bottom and sure enough that's bottom were the indications of that right now at the same time the advance/decline line is acting very trongly, only needed 1900
net advances today for a new all-time high so even though prices are still off the high breadth numbers are saying liquidity is fine for now and don't need to worry about a big crash. >> and final chart, sentiment. >> just because we don't need to worry about a big crash doesn't mean people aren't doing it anyway we are seeing bottom of the indications in the put call numbers. number of puts traded versus calls and in this case for the equity only so not the futures not the indexes. this is just for individual stocks and when that gets up to a very high level like we have just seen for its 21-day moving average that's associated with important bottoms and we have done enough work for a bottom. we have bounced now. seeing a strong breadth. not out of the woods for seasonality right now. especially when you gate big
mushy bottom line we have had in august opposed to a spike low like we had last december you tend to get a slower climb coming out of it we are in a bull market and a slow climb coming out of it but the bull market to live on into early 2021. >> tom, thank you for joining us get to see you. >> three bullish takes. >> thank you. up next, find out how a corruption probe at the united auto workers union could impact contract talks with the big three. plus, president trump's fight with the fed is prompting former new york fed president bill dudley to call for the central bank to hurt trump's re-election bid. coming up, we'll get some reaction from somebody that used to work with dudley at the new york fed
it's something very important for me to be here. the storm looks like it could be a very, very big one, indeed and mike will be going i have just spoken to president d you -- douda of poland and expressed the warmest wishes and wishes of the american people. our highest priority is safety and security of the people in the path of the hurricane. and i will be rescheduling my trip to poland in the near future we're gathered here in the rose garden to establish the united states space command it's a big deal. as the newest combatant command space com will defend america's interests in space, the next war fighting domain. i think that's pretty obvious to everybody. it's all about space
we're joined by vice president mike pence, secretary of defense dr. marc es per, acting director of national intelligence joe mcguire, acting secretary of the army ryan mccarthy, acting secretary of the air force matt donovan, chairman of the joint chiefs of staff general joseph -- >> president trump speaking in the rose garden about paspace a we'll monitor it and bring you headlines as soon as we get one. he canceled a trip to poland to monitor the storm set to hit this weekend meantime, switching gears to a federal corruption probe that's hitting the united autoworkers union. phil >> if question is what impact will the expanding federal investigation into the uaw have on the contract talks?
the contract expires on september 14th yesterday a fair amount of attention focused on suburb of detroit where the home of the uaw president was raided by fbi agents again, this is all part of an expanding investigation. the focus by the way of this raid yesterday was gary jones, his home, he's the president of the uaw. in terms of the contract and those negotiations, now, they're really going to heat over the next week and a half coming down to three big issues. time for certain new hires to reach full pay and like to shorten that up in terms of how many years that happens. the amount of temporary workers hired by automakers as well as health care costs. the automakers woumd lild like members to pay more. 23 you look at gm, ford and fiat chrysler, we'll show you a four-year chart here, guys, this stocks have done nothing over the last four years and for
investors, the concern here is these contracts, these talks could ultimately lead to a strike we haven't seen one since the late '90s k. the big three get contracts in place beneficial to them making billions of dollars here in the united states? so this could be a contentious week and a half of negotiations. >> contentious i'm sure. phil, while we have got you sticking on autos, quhak ywhat u tell us about the tesla plan with insurance >> they announced this a couple of months ago for insurance. they rolled it out yesterday there's a lot of caveats with the insurance program offered by tesla. first of all, it is only in california now they say they'll expand it but for now only in california and only for tesla owners. not like you can go in with a chevy and say insure our vehicle.
if you talk with an analyst, we have done a little bit of that, or read the notes out there they don't think it's a big game changer and not sure it's much of an impact a lot of people, ifthey have their insurance tied in through the home or other policies, that's how they get discounts already so are they going to unbundle the insurance the expectation is that it won't move the needle initially by analysts covering tesla. >> phil, as always, thank you very much. up next, former new york fed president bill dudley urging the central bank not to enable president trump's trade war. well'll discuss whether dudley wept over the line with someone that used to work at the new rked intelligence gives you the power to see every corner of your growing business. from managing inventory... to detecting and preventing threats...
we have some news on disney. eric with the details. >> disney is selling its 80% stake in the yes network, this's the regional sports network that airs new york yankees games. disney selling that stake to a consortium that includes sinclair broadcast group the yankees against and amazon among other investors. people speculated that amazon would control the network but sinclair will be directing how the network is run disney selling that stake that it got when it got the fox regional sports networks as part of the big sale. they're getting rid of that
yankees part, network, yes, to amazon sinclair and the yankees among other investors valuing the channel at about $3.5 billion. back to you. >> thanks. i think amazon being in the mix there is interesting. >> were we expecting this kind of consortium? >> i think one of the options that was floated out there, multiple investors sinclair bought the 21 regional sports networks that disney unloaded initially and did indicate an appetite for more. amazon's presence is interesting. there was some talk that amazon to make a biggest splash with it and interesting to see how they deal with streaming of the content because right now i believe it's a box sports app to stream some of the yes content so that might change. >> just the fact that amazon is getting in on the deals i wonder if it does something for valuations of sports properties. >> it is interesting because i think the other regional
networks didn't go for as much as others thought and perhaps disney hoped i think they're baseball centric. not as valuable. >> a local property. >> premier league in the uk, as well. >> local story. >> it's in my home time now for a cnbc news update with contessa brewer. >> here's what's happening a federal judge closing the case against jeffrey ep stone after hissed is. the dismissal was a formality. the judge allowed alleged victims to speak before the court. the end of the criminal case does not affect any pending civil claims. the president trump is planning to roll back controls of methane leaks the latest attempt by the administration to shrink emissions controls. florida continues to prep
for hurricane dorian to make landfall this weekend. many are expecting the storm to intensify into a category 4 hurricane. including the national hurricane center before hitting the coast. the president just moments ago announced he'll not travel to poland in light of the storm. and participation in high school sports is dropping for the first time in 30 years according to the national federation of state high school associations football while it is still the most popular sport saw its fifth straight decline in 2018 of course, one of the big reasons behind that is the risk of injury, especially of head injury the way it goes. that's the news update. >> all sports, though? >> all sports. but led in the declines by football which, you know, if you go to certain parts of the nation, texas, you can't get away from high school football but other places parents are putting a kibosh on that.
>> thank you. >> you're welcome. >> bill dudley drawing a firestorm of controversy after an opinion piece earlier in the week in which he said the fed ought to abandon the apolitical stance and consider how the president's re-election presents a stress to the economy. that's a point in the op-ed. >> you haven't defended him outright but you haven't criticized him as much as some perhaps. >> arguments on both sides. >> larry summers responding to this earlier today >> for a trusted former official of the fed whose thinking is inevitably going to be tied to the fed to recommend that they raise interest rates so as to subvert the economy and influence a presidential election is grossly irresponsible and is an abuse of
the privilege of being a former fed official >> joining us now, mark cabana, head of u.s. bank strategy and worked at the new york fed at the same time as bill dudley do you agree with fo your former colleague? >> i think it sets a dangerous pre precedent. the fed has to focus on maximum employment and stable prices and it raises questions about how much the fed can betrusted in the eyes of lawmakers and the public to try to pursue optimal monetary policy. i think it opens a par dora's box of sorts that's difficult to put back in if the fed did proceed along those lines. >> maybe we should just unpack a little bit what dudley is suggesting there are two things in this op-ed. the first is that maybe they shouldn't play along with the trade war adding stimulus to enable tariffs and the kind of
trade policy that hurts growth that's the one and then, you know, people thought he undermined the credibility with the political take at the end of the piece saying, well, the fed can influence elections and since this trade policy and president not exactly been great for the economy in his view maybe they should do that so i think they're very separate issues. >> fair point. on the first point, i think that the fed is trying to resist somewhat the pressure that they're under to underwrite the trade war. you have a divided committee we heard that last week at jackson hole they're concerned about the outlook and the rest of the fed presidents are pretty comfortable trying to keep rates where they are and doing that because the economy's still in good shape relatively speaking and because they're worried about trying to or falling under the impression they're underwriting the trade war and the fed should not come up political pressure from this administration or any other administration i think you are seeing that. second point, i agree.
i think dudley wept over the line to say that the fed should try to act so as to influence the election. >> a whole different can of worms. >> exactly. >> why is there a defense for the first point? you're separating the trade war from fiscal policy i doubt you'd argue even if they disagreed with the fiscal policy that's the government's right to decide upon and if the economy therefore is slowing or likely to slow because of silly fiscal policy you lose some monetary policy. >> that's exactly right. the fed doesn't know how trade policy is going to impact the economy. powell said that there's no rule book for how the monetary authority should respond right now. there's a lot of survey data and sentiment data pointing in the bad direction, that suggests that the economy should be slowing but the economy is resilient. gdp was pretty good this morning. prices where the fed wants them to be. i think that's what they're doing right now, focusing on the
dual mandate and what they should continue to do going forward. >> what do you think of the investor reaction to this piece was? >> almost universally critical people are very protective of the idea that the fed should respond to the economy as it comes but i do think that the messaging of powell had out there which is we don't know if modest declines in the federal funds rate would be a proper counter to any negative affects of the trade war they don't have a solution you can make that case without saying the fed should act in a political manner. >> i wonder how much it resonated inside the fed because there are people there who are i think fiercely concerned about independence of the central bank. >> i think that's right. many fed officials feel that way. this is a lot easier for dudley to say sitting in princeton, new jersey, where he's retired and 0 pine about public policies than the seat at the new york fed if he were still in the seat at the new york fed, no way he would have been making the
comments and being a former insider he can say the things and maybe sympathy to dudley's views within the fed but not act on that and threaten their independence. >> mark, thank you for joining us. >> thank you for having me. >> the fed put out a rare statement saying we do not make policy based on politics. up next, you may have heard of the infamous burn book from the movie "mean girls. a report claims amazon has one of its own we'll discuss with a reporter eato, raht the srystig ahd. ♪ you should be mad they gave this guy a promotion. you should be mad at forced camaraderie. and you should be mad at tech that makes things worse. but you're not mad, because you have e*trade, who's tech makes life easier by automatically adding
welcome back "the wall street journal" publishing a story saying amazon has a private burn book. joining us now is katie honan, one of the reporters that broke that story thank you for joining us. >> thank you for having me. >> what exactly have you unearthed here >> well, the very short love affair between new york city and state and amazon throughout the process an amazon spokeswoman
said it was a preparation of a hearing of mean and some funny things that new york elected officials and union leaders and others saying about amazon at rallies and twitter and hearings to get a read for what was going on in new york city as the climate got increasingly worse for the company in their plan to bring in hq2 campus to long island city, queens. a look at i guess opposition research for a lot of other campaigns for something. >> so, i mean, is this typical as you say opposition research as is the norm in these days or a sign that this partnership between amazon and new york was never going to work? >> i think it was both it really revealed how strained things were in the process and probably a good look at how mismatched new york and amazon were it's good to look at it in relationship terms both sides wanted the other to change drastically new york wanted amazon to be
union friendly company when that wasn't going to happen and i'm sure amazon wanted new york to be friendlier to bringing the thousands of jobs so it was sort of impossible almost from the get-go. >> anyone that's watching "mean girls" knows there's a person called out the most in the burn book in terms of most trash spoken about her. which politician was it? >> it was queens state senator michael ginarris and selected to ab secure state agency with some pull over the subsidy that is amazon was going to get. he among others were the loudest critics of the plan. it was his district to come into he had 25 entries, other politicians less than a dozen or so some of the selections were kind of funny in what was picked, a union leader standing outside in a cold day and said it was cold but not as cold as jeff bezos'
heart which was highlighted in the book and really ran -- really was a range of things people said in the short three-month-long process. >> katie, thank you for joining us fun story. >> thank you for having me. what's the latest jobless claims likely to be and what does it predict about the prospectof resons aecsi
santoli, final dashboard of the day. jobless claims day. >> calling it don't stop the party. try to figure out the theme. taking a look at the long term trend in weekly jobless claims, the four-week moving average of initial claims, these shaded areas are recession. always to point out there i's always an upturn before recession or has been in every other cycle. could you possibly say that this little dip here from a few months ago was the low in this cycle for jobless claims could be we are bumping along right at those 50-year lows in terms of weekly claims. not having a lot of really lift in this number so it fits with leading indicators and other domestic macro number that is say the bond market might be signaling there's a recession rushing forward toward us. >> pink floyd is featured here. >> so is pitbull.
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lingerie brand what is the story? >> first off, she converts there's influencers and celebrities and mega celebrities and rihanna is one of those people she has been very out there with her body for a long time, and we are reaching this new wave in lingerie about body positivity her line showcases all types of bodies, not the more cut, tried and true ones we see from victoria secret. >> how many other stars are in that category in your eyes is this hundreds of people or five or ten that can have this sort of power across different brands >> i think she is definitely in a stratosphere in terms of having that. rihanna doing beauty and lingerie is on brand for her it would be weird if she was doing a healthy, green drink. >> do you think it is the way it will be as the brand evolves in other words it will remain direct to consumer, mostly a social thing where would it go, who will partner up >> here is what i think. i think victoria secret should
turn into a retailer, not just a brand and nurture these. a lot of companies, pepsi, general mills, they have their own venture arms because they see them, they invest in them and nurture them victoria secret has the great brick and mortar, and the direct to consumer startups are becoming brick and mortar. direct to consumer is a way to launch, and to get scale it helps to have brick and mortar. >> some of the celebrities are attracting real venture capital money. i mentioned the reese witherspoon brand earlier, gwyneth paltrow and others what makes a celebrity successful as an entrepreneur at scale? >> a few things. one, they have to want to be an entrepreneur there's a difference between being the face of the brand and promoting it, in saying i have equity in this and you see the future as owning your own brand. gwyneth paltrow and goop is on
brand. as long as you are willing to drive it and it feels it is coming from your heart it is a winning formula. >> are more of the deals bullish for instagram and facebook does a lot of the purchasing go through that platform? >> absolutely. amazon is bounty paper towels, razors and instagram is fashion. you don't want to buy your fashion from amazon, but you do with instagram allowing you to do ecommerce and shopping. that's the place where you go for your vogues and esquire and shop for highly-branded items. >> what is the lesson for retailers and specialty apparel retailers struggling we saw gigi hadid go to tommy hilfiger and it went up. what is the right way to work with people like this to get sales up >> so i think you have to figure out what -- knowing what you as a retailer do well, you have to embrace that
i think there's been too much retail in general, so having some retreat is a healthy thing. almost like a market correction. what you need to do is make it more of an experience, not just a place to shop. we could buy anywhere now and amazon will be at your door the next day going there needs to be more than baubles on shelves. if you embrace that digital marketing and you have store, online and celebrity, you need to drive it beyond deals because the attention of the consumer is not there. >> thanks for joining us just under a minute left for the shoef. back to broader markets today, mike essentially a day where your chart had another point to it, which is that all sectors moved in the same direction. >> yes, all sectors moved in the same direction because it was mostly an index-based move we talked about the likelihood because bonds have done so much better than stocks, not just for the last month but for the last year, you had a spring-loaded potential rotation into stock. honestly, investor sentiment got to bearish in the short term it doesn't mean it will be back
to the old highs immediately because we stopped literally where we were last thursday's close before you had the reacceleration of trade. >> you did have yields go up i wonder if you need yields to go up to continue this pattern >> the pattern has been yields need not to go down. if they bottom it is probably okay. >> that does it for "closing bell." >> have a great evening. "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 steve grasso, dan nathan, guy adami. wait, there's more also joined by head of u.s. equity and quantitative, bank of america, merrill lynch, great to have you with us tonight. >> good to be here the bulls taking charge on wall street in hopes of a trade deal sent stocks soaring don't break out the rally just yet. we one chart that could be
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