Transcripts For CNBC Closing Bell 20240622

High. Yes, down 20 otherwise. Now when oil goes lower, airlines tend to go higher in terms of the stocks as those stocks rallies today. Can you see that each of them most of them up over 2 . We have the number one analyst Airline Analyst on the street with us to day. Jamie baker. Hell give us his top airline picks. And president obama just announcing new Clean Power Plan which could have a major impact on the coal industry and basically industry at large. Weve got the ceo of American Electric power live. And the cit group is completing the purchase of one best banks parent company, cit ceo john than will be joining us to discuss that deal and the impact it could have on the lending environment. That will be a cnbc exclusive in a few minutes. In the meantime lets talk about todays Market Action joining our closing bell exchange, we have chase chief economist anthony chance us with. We have president of onpar executions and our own Rick Santelli joining us as well. Peter, the impact that oil is having on stocks today, describe that. I mean i guess its just the Energy Stocks justin to suffer. We talked about how cheap theyve been. Oil just keeps going lower. Oil keeps going lower. And what it does is it forces the drafting of other stocks to follow. I think when people start getting out of certain positions, it tends to lead to getting out of other positions. I think were seeing some of that now. You know you have to look at the Positive Side to this though. These stocks are getting cheaper and cheaper. You know that i am ready and willing to pounce. Im ready to pounce and getting very close the i think theres a lot of good value out there. Its long term. Its not sixmonth picture. Its a year, two years, three years. But its a there are some very, very enticing opportunities. On that point, bill a lot of people are saying wait a minute. At what point does this become a positive impact for the u. S. Economy . I think youll see that in auto sales. Gasoline prices are down close to 1 from last years levels. And remember that onest reasons why oil prices are down is because of the weak pmi numbers we got out of china. We should not lose sight of the fact that the people of china are watching the numbers and getting ready to act. Rick its not just energy. I mean were seeing a defensive play in the treasuries as well. Youre at two month lows or had been earlier today for many of the maturities along the yield curve today, right . Yeah. Its funny. As i look at the twos threes fives, sevens all of them are higher in price and lower in yield than they finished last year except for one and that is the 30year bond. I think investors will pay particularly close attention when we get to that level which is 275. So were about 10 11 basis points away. In terms of energy you know there are other ways to look at this. The economy isnt only defined about it price of an exxonmobil. I still contend that true economy will be better off for all the gas stations on every corner having price wars. I think its also very encouraging that its one of the few industries before they get done tinkering with it where its supply and demand still rules the roost. If they want to add in more supply, let the demand fall where it may. The economy is calibrated by energy and not just in the cards we drive but we use energy for everything. I think ultimately these price wars bringing down may not be good for investors. Theres a world of citizens outside the investors that do make up the economy. Do we get any hints in todays manufacturing report that this is translating into a boost of this drop in energy and input prices . I think if you dig down deep in the report you see some signs of improvement and, of course youve gotten other prfrpurchasing managers that are more optimistic. I think moving forward, rick is right. The Lower Energy Prices will have an impact. Consumers are going to get a big wind fall because of the Lower Energy Prices. So are businesses. Even though energy and earnings are very low we know that more than 90 of s p 500 are not Energy Related and they actually benefit from the Lower Energy Prices. You know we talked often about the red flags that are showing up these days. Fewer and fewer stock hitting new highs as the market was going higher. Now were getting a report that Short Interest is at the highest level in quite a while, right . That should Say Something. I know its feeding into your argument. Youre still out of the market right now. About you what the do you suspect is coming here . You know i think that what we should expect i think there will be a little butt of a selloff. Its not based on oil. Its based on funneled. Damentals. I dont think it was the greatest Earnings Period weve had any long time. As feared. It was okay. I think without that and with the upcoming fed rate hikes, you know, youre going to see a little bit of a selloff. I think that will help investors at some point get back into the market and it will be an opportunity for some good profits. We have to go to the price action today. Were down 163 points now on the dow. What levels are you watching to see if this selloff intensifies . For me this market would have to go down another 75 to 100 points today. I dont see that happening. Now leading commercial lending and leasing provider cit group completing the acquisition of one west bank today. Joining us in an exclusive is john thain, chairman and ceo of cit group. Welcome you to john. Nice to be here. What does this deal represent for the Banking Industry . There is the first deal where we created a new cifi. There should be more consolidation in the Banking Industry and particularly for institution thats are below 100 billion, i think this is a good sign. You know it the talk is that you and bbnt down in North Carolina are with all the acquisitions that theyve been making and wanting to make recently that floodgates are going to start opening up for regional banks to continue this merger maenaa. Do you agree with that . If you think of the compliance cost thats banks have to endure it makes sense for the institutions under 100 billion to combine. John thinking back on your career and wonder what reflections you may offer as we move through the post crisis period into a world of still incredibly low interest rates, a slightly weak economy and what you see as the most vibrant piece of this industry. We lend into the middle market space. That space hasnt recovered yet. We havent seen the activity this we would have liked. We do see Good Business in our rail car business. Our rail cars are 98 leased. That leads to me to be optimistic about the economy. You know this merger as you know, takes you above that 50 billion market cap mark that regulators identified as a, you know, an important componentst economy right now s that a level to be feared from a regulatory standpoint . Will it change the way you do business . Should that level be raised as the economy improves . What do you think, john . The 50 billion is designated a systemically important financial institution. Were the first ones to go over that. In term of a risk point of view do we represent a risk to the Financial System . The answer is absolutely not. And there is already talk about raising that 50 billion limit to some number 100 or higher. I frankly think they should do that. How much is the cost for you guys increase by being a systemically important financial institution, john . Well we are already at 46 billion of assets. So weve been planning to go over 50 for some time now. The expectation is we would have had to comply with the rules and all of that implies. But it is an expensive process. You could put a rough number on it for us . You know i really cant because a lot of the systems that we put in place so the compliance systems, the bsaml systems swreshgs systems, we would have had to have done that. Its not a specific number. Its part of the overall integration of our systems. Kelly is mentioning your varied career. We know about your time at Merrill Lynch and you were the one that brought Merrill Lynch to bank of america, put them together during the financial crisis. You know im not asking you to second guess Brian Moynihan by any means. But there is talk out there that maybe the two divisions are just not get ago long. B of a and Merrill Lynch s that a business mod that will is still valid today . Do you think merrill will be worth more if it were to be spun off and a stand alone company once again . What do you think about all that right now . I sold Merrill Lynch to bank of america because i had no choice. Ly to protect the Merrill Lynch employees and shareholders pt we did that. And so thats my point. Now its a very different time though. Thats true. I think the wholesale bank thats do everything offer every product to every, i dont think its clear that there are synergies that people expected are really there. So what does that mean now . Should they go their separate ways . The pieces have been integrated. The Investment Banking pieces i dont think its viable for them to split it off at this point. All right. Fair enough. We know these things are hugely costly in both directions. You ran this place for a time and deal with Market Structure now. What regrets if any or what might you have done differently down here now that weve seen the fragmentation of u. S. Equity markets . I think its a negative that markets have been so frag mfragmented. That is really the sec and the rules they have in place that require the marketplaces to trade in so many different places. That is really because of the sec rules. You are worried about liquidity, speaking of the Market Structure right now . With dodd frank rules prohibiting banks to trade for their own account . There is fears that there will be a liquidity problem when the fed does start raising interest rates. I mean you got your finger on that pulse. What do you think is going on out there right now . I think theyre expecting to raise rates. So far there is plenty of liquidity in the marketplace. I think that those who continue to make markets have great opportunities. Speaking of john you know just this deal youre sealing today, your come back of sorts in this industry. How big do you plan to take this bank . You are going to keep in mind some of these tlesh holds that are thresholds out out by regulators or is the sky the limit . No. Were right now about 65 billion post the deal. I think well grow at a kind of a 5 to 10 rate a year. I think well stay substantially under 100 billion. And this size is a good size for a regional bank. All right. John, appreciate your time this afternoon. Thank you, john. All right. Thank you both. Bill theyre shares have not changed much between when the deal was announced and today completed. It was a cash and stock deal. They had that occur enstoi use. We have 45 minutes to go in the session. We have a dow down about 164 points with real weakness in the energy space and oil under pressure here. Coming up you saw it live here on cnbc the president s speech on the new carbon limits. Will it leave the coal industry in the dust . Well get answers just ahead. Well talk to the ceo of American Electric power and get the view from the industry on the president s new clean air plans coming up. And Airline Stocks are moving up. Crude Oil Continues to drop. A top Airline Analyst names his picks ripe for even more gains. Thats next. Stay with us. Why pause a spontaneous moment to take a pill . Or stop to find a bathroom . 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Pg e is using new technology to improve our system, replacing pipelines throughout the city of san jose, to provide safe and reliable services. Raising a family here in the city of san jose has been a wonderful experience. My oldest son now works for pg e. When i do get a chance, an opportunity to work with him its always a pleasure. I love my job and i care about the work i do. I know how hard our crews work for our customers. I want them to know that they do have a safe and reliable system. Together, were building a better california. The s p 500 is down 14. The nasdaq is down 31. You can see the dow there is the one getting hit the hardest. You can blame oil for much of that. Wti crude at the 45 range now down another 3 3 4. And brent is below 50 for the First Time Since january. These are lows we havent seen yet this year. Analysts blame sluggish data on u. S. Consumer spending and china and manufacturing. We all know the reasons. Yes, we keep pumping. So supply and demand is whats going on. It keeps happening as oil hits a low. Airline stocks are getting a bid. For more on what we may expect from the airlines were joined by jamie baker. He is senior Airline Analyst at j. P. Morgan. Welcome becomeack. Thank you. Is it as simple that lower oil costs and airlines will benefit and you should buy the stocks . In a word yes. I dont think the entire investment thesis is predicated on cheap fuel. It comes on top of the benefits that weve already acrude consolidation, better management, the chap 11 car wash that so Many Airlines went through. But lower fuel is good for Airline Earnings and also good for shareholders because a lot of the cash is put back on dividends and buy backs. The gains are not evenly distributed. What is the difference between airlines which tend to hedge fuel and those which dont which would capture more of the immediate benefit . Top rated American Airlines stands out. They dont have any fuel hedging at the moment. I dont think they ever change that policy. Having said that delta, you know, in southwest have both materially overhauled their hedge books. So they are increasingly benefiting as well. But american, the math is very easy. No hedges whatsoever. But what about their business otherwise . You know, there is that movement by the government to inspect whether or not they have been managing their supply, so to speak, and maintaining certain levels so that the cost of seats will continue to go higher. Do you think thats a part of this going on right now . Well i absolutely think that, you know keeping capacity tight and working on pricing what is airlines are doing. What the government is looking into is whether they broke any laws in coordinating this type of behavior. You know, we doubt there is any smoking gun that miff the managements acted improperly. Id say its a mixed bag out there. There are pockets of pricing weakness across the United States. Obviously demand to and from brazil is very very weak right now. But when you take that in conjunction with current fuel prices the industry is generating margins that i never thought i would witness. Its fascinating to look at the Airline Index and how it trended lower, including sharply over the last couple months. What is it about this industry . Is it the participants investors needing to you know leave profitable trades or something larger speaking to Global Demand . Why have they been struggling so much . Are we on the cusp finally of a turn around . Sure. I cant see the chart that you have up. But presumably youre looking at black wednesday, the events of may 20th. And that was a date which time the rug was really the equity rug was pulled out from under the group. I think theres a lot of Learned Behavior out. There traditionally longer term. Airlines have been destroyers of capital. And Good Management is a fairly recent, very recent development. The concerns that we saw over the last several months is that industry would squander the profit thats are currently accruing on aircraft orders on growth and letting the ambitions go unchecked. Instead this is onest things that emerged from earnings season, were seeing that cash deployed in very very efficient means. Buying back stock, bag dif dents, deleveraging improving balance sheets. Airlines are generating returns now that are allowing them to increasingly muscle into the territory that used to be monopolized by high quality industrial transports. Most of the names trade, you know, in some cases twice the pe ratio thats we see on airlines. Before we let you go having made the bullish case for airlines, are there some that you would avoid even now . No not in this sort of market. In fact we just recently added southwest. We upgraded that name to overweight last week with a 50 price target thachl was a stock getting left behind and ignored by the market. Hopefully that one will come back into better focus for investors and we think thats pretty low risk tradeup towards the 50 mark. Do you avoid paying baggage fees when you travel . I do personally . Yes. I have the appropriate chase cobranded credit card. Thank you so much jamie. Good to see you. Take care. Senior Airline Analyst over at j. P. Morgan. Speaking of oil, check out west Texas Investors Club 10 00 p. M. Eastern. Youre best friends with all of them. I love those guys. Breaking news on auto sales. Phil lebeau has the story. How do they look . We knew it would be a strong month. How strong will surprise some people. The sales rate coming in at 17. 55 17. 17 17. 55 million vehicles for the month of july. The significance here this makes three straight months where the sales rate was above 17 million vehicles. We have not seen that in the United States since the year 2000. Again, the sales rate for the move july, 17. 55 million vehicles. Guys, back to you. Thats it. And that is annualized, phil right . Thats not the yeah that is annualized. Thats the pace of sales. In other words if you had 12 months like last month, you would have 17 1 2 vehicles for the year. Overall, the industry is probably on pace for about 17. 2, maybe 17. 3 for full year sales. Zblin credibly. Look at that. Well, theyre firing on all cylinders. There, i said it. Thanks phil. You bet. See you later. Heading to the close though the dow down 150 points. We have about 40 minutes left in the trading session. The s p 500 down 13. The nasdaq is down 29. Up next coal stocks in the dumps after president obama announced tougher carbon emission standards. The ceo of American Electric power tells us why he thinks the president s new regulations go too far. Also ahead, you seen twitter lately . Its falling to a record low. It continues to hunt for a permanent ceo. We have a special report on what may lie ahead for that Company Still to come on closing bell. So youre a Small Business expert from at t . Yeah, give me a problem and ive got the solution. Well, we have 30 years of customer records. Our cloud can keep them safe and accessible anywhere. My drivers dont have time to fill out forms. Tablets. Keep them all digital. Were looking to double our deliveries. Our fleet apps will find the fastest route. Oh, and your boysenberyy apple scones smell about done. Ahh, youre good. I like to bake. With at t get up to 400 dollars in total savings on tools to manage your business. Welcome back. Only one sector is in the green, when its utilities, you know what that means. Theres been a day of disappointment. All of the defensive issues are going higher. Interestingly enough thashgs doing this on a day when weve seen some real major regulation to a sector based on admission thats were going to talk b. Lets do. That you saw live on cnbc president obama setting a new agenda for his legacy on Climate Change today. The new Clean Power Plan will likely create winners and losers across the energy space. Lets get to our report we are more on. That. Good afternoon. The plan is looking to reduce Carbon Dioxide emissions by 32 over the course of the next 15 years. Yes, some companies will be hit very hard particularly speaking the coal companies. We looked at a few of the names, pea body energy and also arch coal. Theyre two of the largest producers to watch. I also want to highlight Alpha Natural Resources filing for chapter 11 bankruptcy just this morning. Now remember coal prices have come down a lot. These companies are bleeding cash. Its no surprise that stronger standards on their plants and facilities to make them cleaner will have a big impact on these companies. I do want to highlight some of the names that could benefit from this. These are the alternative energy names. Lets take a look at the solar stocks. Theyve not really been loved this year. Were talking about Companies Like first solar, solar city and also trina solar. The etfs are popular as well. Those are things to watch. You also mentioned that the commodity complex was hit today. I do want to mention oil prices down 4 on the day. 20 on the month. 45. 17 is where wti closed. Its been a rough stretch for oil. Were looking at a march low as the level of support. Were not that far away. Back to you. Thank you very much jackie. Maybe as close to throwing down the gauntlet of the change that any elected official has attempted. Yeah the president today were here to announce americas Clean Power Plan a plan two years in the making and the single most important step america has ever taken in the fight against global Climate Change. As i was saying the president was clear that he intends to be an agent of change on this issue. It is not sitting well with many in the energy sector. Joining us on the phone is the chairman, president and ceo of American Electric power. Thanks for joining us. Were you at the white house . Were they debriefing new. No. What kind of first step first what is the first thing that happens now having heard that the administration is moving forward with this . I think the first thing that has to happen the industry has to make considerable projess. The Power Companies have already made considerable progress. But we have to go back and look at. This its over a 1600 page rule and is very complicated as you see the nature of how we invest and how we actually run our power system. These are state plans that are produced. We have to be able to dodge 1600 page rule but define what that means in terms of the resources that each state can deal with in terms of meeting the target. Let me ask it this way. Clearly, a lot in the industry and folks in the industry are saying that this is just bad for business. And its too much too soon and the cost will be too high. Let me ask you though as you understand the plan and we havent read the 1600 pages, none of us i imagine at this point, is it good for the climate . Yes. I think it will be good for the climate. As we progress towards the emphasis on renewables and Energy Efficiency well be able to make and adapt to changes to the power system in terms of resources to enable a cleaner Energy Environment from a carbon perspective. Were already retiring 25 of the coal fleet in this country and this would accelerate many respects of that along with natural gas and certainly the advent of Renewable Technologies whether solar or wind power or whatever. We were struck by. That we saw that your track record at aep for retiring coal fired plants i mean youve come down appreciably. So you i imagine the president would be pleased with. That but do you admit that there are some of your colleagues in other businesses that are not doing their part . Is that reason the president has to brit hammer down like this . Well i certainly dont see that way. Obviously the industry together has been moving forward quite dramatically. So theres been a lot of effort going in to a trance formation that is naturally occurring as we rebalance a portfolio that did include shale gas a few years ago and also advent of new technologies are coming into play and thats a natural progression that occurs. My issue is how quickly you do it and the effect has on the ultimate cost to consumers and as well not to impact the reliability of the grid that we depend upon for everything we do in our daily lives. Whether it comes to the clean technologies, how it is youll meet the reduction targets . It is through cleaner coal coal captured technologies . It is natural gas . Is it renewables . How are you pragmatically going to put this into effect . Yeah. So really well be focusing on continued retirements of coal fire generation. But also natural gas is one where we can move the coal to gas conversion because it has half the Carbon Emissions of coal. Were going to have to have a concerted effort from a research standpoint to enable goal to be viable. And then as we pursue nuclear and other types of resources for renewable standpoint, centralized utility solar is very efficient. Much more efficient than the roof top solar. So we need to be wise about what kind of invest. S we make as the technologies improve. And already its changed so much as we have heard. Thank you so much. Nicholas aikins. Time now for a cnbc update. Lets goat sue. Heres whats happening at this hour. James holmes the gunman in the colorado Movie Theater massacre could still face the death penalty. Jurors found that aggravating factors in the case counted for more than mitigating factors such as his ment i willat illness. The jury now goes on to the third penalty phase. A safari operator who worked for a second american accused of killing a lion illegally by the zimbabwe government says the american jan suskie did not break any laws and acted in good faith. Separately Delta Airlines says it will ban shipments of big game hunting trophies. How can anybody forget donald trump publicizing senator Lindsey Grahams cell phone number urging supporters to try it . Well the website turned the tables. Its made public trumps cell phone number urging everyone to call and ask him about his important ideas. And the families of more than a dozen victims of the newtown, Connecticut School shooting would split the 1. 5 million settlement under a settlement of lawsuits against the estate of gunmans mother. The lawsuits accuse her of failing to properly secure the rifle used by her son adam to kill her 20 first graders and teachers back in 2012. And that is your cnbc news update at this hour. Thank you so much. Little less than half an hour to go into the close here. Its been a tough session as we move throughout the day. The dow is down 150 points. S p 500 off 12. Nasdaq off about 30. We have a top trader joining us in a moment to tell us what he is watching as we go into this most important half hour of the trading day after this. More and more, data is visual. In fact, the number of mris has increased by ten percent a year. And a radiologist might view a thousand images to find one tiny abnormality in shape, contrast or movement. Because its so challenging a Research Project is teaching ibm watson to see. In the future, it could help clinicians spot key patterns quickly and precisely. Ibm watson is working to make healthcare smarter every day. Vnchts you seen apple recently . Its trading in now correction territory, 20 off the recent highs, sliding 10 alone from that 132. 97 it hit on july 20th. It also now is below the 200 Day Moving Average. In october of 2012 and when it did, apple fell another 30 over the next six months before bottoming. Not suggesting thats going to happen now. Just something were pointing out here kelly. And it caught everybodys attention. Thank you so much. With less than half an hour to go in the session, lets hear from a top trader. Its been an interesting session. Theyre muted. When we came in today and now were down 20 . Is that why were down 142 . Is that china . A couple things are going on here. First off coal stocks are getting smoked. That was horrific by the way. And were not seeing anything rotationally in energy which has been somewhat surprising. So across the board, in that sector were seeing weakness. So the question becomes what do we look for . We have earnings coming this week. Later this week, though we have unemployment data coming out. I think a lot of the guys are focusing on because they think that may be some sort of bellwether to what the fed does in the late summer months. You have to say between the market here and interest rates, its setting up for a risk for august. It does feel that way. I mean just cant seem to find much incentive for guys to get in here and guys that were representing are laying back taking either a wait and see or just sustaining at the levels. And she can find that things are coming to them as they want. Well keep that pressure on. That is Gordon Charlotte from rosenblatt. Bill . To another concern for the markets, puerto ricos debt crisis gets worse about it day. We sent kate kelly back to san juan. Shes live there with the latest developments and more importantly, what happens next. Kate . Bill just literally a moment ago we got some breaking news on the situation by a statement from the president of the Government Development bank here. The big question of the hour really the whole weekend was whether or not a unit of her bank known as the Public Finance corporation would make good on 58 million in Debt Service Payment thats were due on saturday, august 1st. We were warned on friday that they would not be made. Today she says due to the lack of appropriated funds for the fiscal year the entire ti of that payment was not made today. This was a decision that reflects serious concerns about the commonwealth liquidity and combination with the balance of obligations to our creditors and equally important obligations to the people of puerto rico. Now she goes on to say that i guess as a good faith effort the Public Finance corporation did make a modest payment toward the overall 58 million bill from august 1st of 628,000. So really a portion of what was due use something leftover funds. Now to give you the bigger picture, a lot of concern on the island about a lack of job opportunities. High unemployment unsustainable costs and revenue that had fallen short of the mark. So a lot of talk about chapter nine protection as a possibility for borrowing entities struggling with debt or even perhaps statehood in the longer term. We spoke to congressman pedro luis about both of those things today. The market so far waiting for this news. We saw general Obligation Bonds tied to puerto rican debt. Trading off just a little bit. Although probably saving the big move for the news that we just heard. Finally, one thing to look at is some of the big bond insurers. If you take a look at assured guarantee that, is the largest insurer of puerto rican debt. A little under 5 billion in net exposure. But that say relatively small fraction of the overall 400 billion portfolio. Much more affected and youll see this in the chart, nbia as well as others that have a larger proportion of their overall portfolio exposed to puerto rico. Kelly and bill . A lot of potential ramifications here but early yet. You know kate you mention early days. We see bia there down more than 2 today. But its more its incredible to me that market handled this default so well. If default is the language that we would use. Is that because a lot of these bonds and debt are held about it Puerto Ricans themselves . Why do you think the reaction hasnt been more acute . So i think two things kelly. I think this situation was actually sort of well telegraphed for about a year or two years. Weve known that puerto rico which has 72 billion in overall debt was in an unsustainable situation, especially given the revenue figures, especially given unemployment, people leaving the island and so on. So thats been a factor. I think the other issue though is that puerto rico is to a degree somewhat insulated from the rest of the u. S. Something that folks here arent too happy about. Because they would like to see a greater incentive for the Obama Administration to consider bailing out puerto rico which they said theyre not going to do. Theyre in a sort of very gray area where on the one hand they dont pay federal income taxes. They also dont have a vote in congress. They do have relatively high taxes at the local level including sales taxes that local Business Owners say are a real problem. So its really a mixed bag, kelly. I think for the moment its pretty contained. Yeah in some way this is is our greece. It takes the Market Reaction in greece to force a hand here. Were not getting that reaction. Well see if the hands are forced. Thank you, kate. See you later. Ironically, though back to you. Im sorry. Somebody was quick on the draw there. But we are, too. We have to get to a break. We had 17 minutes left in the trading session. Coming off the lows the dow down 104 points right now. Twitter shares are higt a record low today. The Company Continues to search for a permanent ceo. Our our reporter has what is next. Here at td ameritrade, theyre always working. Yup, were constantly making thinkorswim better. Like a custom screener on your desktop, that updates to all your devices. And you can share it with one click. Wow. How do you find the time to do all this . Easy. We combined every birthday and holiday into one celebration. different holidays being shouted back to work, guys i love this times of year. For all the confidence you nee td ameritrade. You got this. It took Joel Silverman years to become a master dog trainer. But only a few commands to master depositing checks at chase atms. Technology designed for you. So you can easily master the way you bank. Another stock were watching to day twitter is tumbling to an all time low. Down another 5 where below 30 a share. Sources telling me there is internal frustration with noto for driving up expectations and twitter last year and then driving them down last week. Making the company vulnerable to a buyout at this lower valuation. Since earnings more product executives have departed including the director of Product Management and twitters head of growth. Theyre continuing a long line of executives that have left if the last year. The pressure is on to name a permanent ceo before twitters next Earnings Call with interim ceo and revenue chief adam bane the two main contenders. Sources tell met Search Committee is putting pressure on dorsey to decide if he wants to be in the running for the job and what that would mean for his job running square which is headed for an ipo. Sources tell me because dorsey and bane are such good compliments, some investors want them bone involved in permanent leadership. Guys, no comment if twitter. Kelly and bill . This morning we were talking to bob peck on squawk on the street. He was cautious about twitter shares. I know some other high profile investors have been loading up here, believing in the companys long term future. But i dont know. It seems like with each passing day that road gets tougher. It gets more uphill. Well theyre just a lot thats yet to be seen. I mean theyre working on project lightning, theyre working on other various product changes. But these changes havent really been rolled out yet. And i think that investors are really anxious to see whether these changes can actually help add users. There are little changes over the pachl six months or so which have not helped them if a user perspective. Well see if the changes are dramatic enough without alienating existing users. If it got below 30, which i has done today, the valuations can not be ignored. What you have heard . Certainly, there is a lot of talk that going sl interested in acquiring twitter. What ive heard is that folks at the company would not like to sell right now. Because theyre hoping this is a low. Theyre hoping that once they implement the changes, once they get a new ceo in place, the stock will rise again. The question is whether its low enough that a company like a google would say hey, its worth making an offer at this price point. All right. Jewel yashg thanks for julia, thanks for now. We appreciate it. A lot of the market is weaker, bill. Were off the lows here. And they were telling us during the break that the bias is to the buy side noshgts a lot. A00 million to buy as we go into the close here. That may have helped bring us were only down 114 right now. Still a tough session to kick off the month. The s p 500 down eight and the nasdaq down 20. Despite the selloff, we have the ceo of goldman asset manage. And he says the bull market is not being over. Hell make the bullish case for this market when we come back on closing bell. Why should over two hundred years of citi history matter to you . Well, because it tells us something powerful about progress that whether times are good or bad, people and their ideas will continue to move the world forward. As long as they have someone to believe in them. Citi financed the transatlantic cable that connected continents. And the panama canal, that made our world a smaller place. We backed the Marshall Plan that helped europe regain its strength. And pioneered the atm, for cash, anytime. For over two centuries weve supported dreams like these, and the people and companies behind them. So why should that matter to you . Because, today, we are still helping progress makers turn their ideas into reality. And the next great idea could be yours. All right. 7 minutes left were coming back a little bit in the markets. The dow down 116. Joining us now is the bull ishish trader. We talked about the red flags that are raising up right now that suggest we are due for some sort of a pullback here. You know Short Interest is moving higher. Fewer and fewer stocks are setting new highs. You know those kind of things. But its the tale two of markets. You have the short term opportunity and whether its oil or china or european markets or specific spots where hedge funds can go short, hedge funds this year are finally beating the s p 500, first time in almost seven years. Then there is the Global Market which is not nearly as bad as we paint it out to be. Summer volatility. Were in august. The two worst months of the year, september, october, potential for the fed to raise rates, all the noise weve been talking a lot b tend of the day, consumers feel very healthy, the economy is definitely getting better. Not great but better. The Short Interest i wouldnt worry about. That is look at the annual last year when shortages spiked on oil. This is a trend and not a long term situation. What are the top picks . Best ideas in this environment . You know i think you have to buy the oil in here. If you really want to be an vestor go, for the lp market. You have a chance to buy stocks cheap. You havent seen a lot of dividend cuts. Annual Energy Demand is actually up not down. So if you believe that these things move oil around can you buy them cheap. If theyre not there, i love the small cap sector here. The small cap growth side simply because its inexpensive to borrow money and the consumer is getting healthy. If you want to be a real contrarian, they suggest the fed has to wait to raise interest rates. Everyone is so worried about the fed, im not. First of all, very important point. No bull market ever ended because the fed stopped raising rates. The fed cant really get liftoff because the Global Economy is doing a 33. How are you going to raise rates to a significant rate . Theyre going to get paid to wait. All right. See what happens. Good to see you, phil. Appreciate it. About five minutes to go right into the closing countdown. Thats up next. And then after the bell apple in correction territory. Does that make it a buying opportunity or just a sign of more pain ahead . Well look at that coming up. [ piercing sound ] daddy lets play sorry kids. Feeling dead on your feet . Ive been on my feet all day. 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Dont let unanswered legal questions hold you up, because were here were here and weve got your back. Legalzoom. Legal help is here. So youre a Small Business expert from at t . Yeah, give me a problem and ive got the solution. Well, we have 30 years of customer records. Our cloud can keep them safe and accessible anywhere. My drivers dont have time to fill out forms. Tablets. Keep them all digital. Were looking to double our deliveries. Our fleet apps will find the fastest route. Oh, and your boysenberyy apple scones smell about done. Ahh, youre good. I like to bake. With at t get up to 400 dollars in total savings on tools to manage your business. Okay. Just inside the two might be mark. Two things that really put pressure on the markets to day. One, just psychologically the Greek Stock Market opened for the first time in five weeks this morning. Down on the open down 30 . That got everybodys attention. Did come back finishing down a mere 16. 25 at 668 on the athens stock index. We itemized the cost of energy went down. Oil prices at the low for this year so far. Wti crude down 3. 5 . Were at 45 and change. Brent crude is now below 50 and change. Five times this year theyve been wrong trying to buy the bottom in energy. Its spreading beyond energy and materials. Industrials, the big names, United Technologies caterpillar down again on the Global Growth concerns. Industrials is a much bigger segment than the material names and even bigger than the energy names. Youre looking at retail too . I want to point out, take a look at the big retail names. Remember, coors will be reporting on thursday. You think the stock is down 40 this year. How much further can it go . Very important space, too. Thanks, bob. Well see you later. Well see what this bodes for tomorrow. Keep an eye on greece and puerto rico as well. It looks like the dow avoided a triple digit decline as it closed with a loss of 91 points. That does put it will he bow 17,600. S p 500 is down six. The nasdaq down 12 for similar magnitude of declines. The dow is the clear underperformer. Crude oil having a lot to do with. That chevron and exxon generating real pressure on that index today. There is the price of crude. Even looks a little bit better now than it did at the lows earlier. Down about 3. 6 on the wti contract. 45 and change and we will have more on that for you in just a little bit. First though, we are awaiting earnings. We have a lot to get through. Lets bring in todays panel. Courtney reagan, welcome to you. And tim see moreymour to kick things off for us and what is in store for the big names this week. Dan, ill start with you. Does it bode poorly that first day was down for august . I dont think any one day matters in particular for the market as a whole. Weve been trading for lack of a better word fairly poorly for several months now. I wond read into todays action. One interesting point that but maybe should is the fact that we have Michael Kors Ralph Lauren and coach is trading weak. We got a number of these higher end players that are going to be reporting this week. And theres a lot of concern about consumers maybe moving away from some of the previous brands that were preferred, especially when were talking about michael kors and coach. Its hot in the handbag space. Its easy in the leisure space. Coach has interesting things with the changes. They say they are serving a00 people. Very few women notice the change in coach. That is not so good for a company trying to get you to come back. I have to wonder too, how much of that might do with the Chinese Consumer bailing out the big names for some time. And maybe just not turning out in force like they used to. Definitely handbag space. Bad for me right now. What i can tell you . We look at coach and kors a lot of the Luxury Retail relies on china. Were still very much in the unknowns cam on the impact of the Chinese Market selloff. But the other part of this is if you look at the eci numbers last week or the Employment Costs index where the wage components people are worried with all the deflation people are also worried how that computes on wages. So i think were in an environment where people are very concerned about growth. And spending power for the consumer. On a day like today, it makes sense. I would argue that august and august through october this next threw months is one of the worst periods for markets. Well come back to the point on wages in just a second. Nick, i want to get to you. Before we get the results today and move into the retail part of earnings season, how are we doing so far in the bottom and top line . What were seeing is a replay of the First Quarter and getting feared earnings. Those are turning out better. Were 71 . Its been the top lines that are disappointing. So were getting average 3 Earnings Growth right now. But minus 3 sales growth. Its only half the companys beating on the top line. And thats down from the 60 average. Its the disappointing top lines that are causing investors to be cautious. And perhaps causing a lot of merger activity as well. So aig, all state, were going to wait to brit results you to. First though, we have to talk about the move in crude oil. Significantly lower today. Jackie, what is behind it . Theres a couple reasons behind it. The first is we got soft data out of china. Opec raised the supply again in july for the month of july record output. So we see no signs really that anybody is scaling back. There have been some subtle indications that we may see it. But nothing meaningful as far as traders are concerned. Also, some comments out of iran this weekend talking about how they will bump up production when sanctions are lifted to the tune of a00,000 barrels per day. Traders mulling the issues and seeing more oil is coming online right now. That is probably necessary for the marketplace. I will say this. Wti making a 4 move to the down side today was pretty significant. We saw it trading at the close at 45. 17. The next level to watch is the six year low that we saw in march, 42. 03. There is a lot of support there. But if we breakthrough that level, this three hand that will you and i have been talking about for months now could very well be possible. I do also want to mention the fact that brent was under 50 today, a very significant psychological level and technical level for the Brent Futures contract. That making traders believe we could see more pressure to the down side. Back to you. Down 5 . All right. Jackie thanks very much for now. Listen it is one thing if this was happening and deflating the commodity complex. Meanwhile, april sl in correction territory. I think thats why people are kind of tieing the strings together and wondering if there is Something Big area foot. Lets be Crystal Clear about arguably the most important point in this entire discussion. And thats the commodities do not decline in price into a recession or a recessionary type of environment. We can use 2008 as the example. Oil spiked up to 150, 160 a barrel. Some sell side firms talking about prices going as high as 200. Thats what tends to happen. And that causes economic disruptions. Its not generally the other way around. And when you listen to Conference Calls from nonEnergy Related companies, they dont seem to be saying im not saying energy is the cause. Im saying the drop in energy and commodities may be the side effect of slowdown in growth that theyre not taking seriously enough. Listen i dont know. Our view is that that is not the case. Our view this is largely a function of supply and the dollar. Well, well come back to this in a moment. Lets get to aigs earnings which are out right now. We have the details. So were still trying to parse through the numbers right now. You can no doubt guess Insurance Companies tend to be somewhat complicated at times. What we have is a headline earnings number coming in at 1. 39 per share. That beats the average analyst estimate of 1. 22 per share. They also announced a 5 billion Share Buyback program. And theyve already they upped the dividend to 28 cents per share. Were still trying to parse through and find a comparable revenue number. For right now, what we know is that profits or earnings per share have come in better than expectations, 1. 39 versus 1. 22 estimate. Can you see on your screen right there, shares are up by a little less than 1 right now in the after hours trade. About 65,000 shares have trade sod far. Kelly, well keep an eye and parse throughout rest of the numbers. For right now, earnings beat up on light volume by three quarters of 1 . Back over you to. Thank you very much dom. Nick, it looks like theyre doing more on the buy back and dividend front. What do you make of this . Reflection manufacture companies right now that bearish argument is a lot of the earnings are being financially efrpg neared through buybacks. Companies are doing a good job managing costs here. And the like. But until a company like aig and others in the Insurance Industry and Financial Sector begin to generate revenue growth, its hard to sustain a rally. Theyve had good runs. Theyre modestly expensive as the trends have weakened over the past year. Yeah. Hey nick you talked before about how revenues are coming in light or earnings arent particularly exciting. I mean under the assumption that there is one particular sector lets call it energy that, is largely contributing to weakness outside of energy how do you see things going . Dan, we do x Energy Results as well. And we always have a caveat with that. That is all the bad stuff excluded and not factoring in the benefits of lower energy. Eastbound outside the energy sector, the other nine sectors sh the rates of growth of sales and Earnings Growth are still slowing. Were not really seeing that money flow into pure play retail, at least not in a way that retailers feel comfortable pointing their ving on and saying, yes, savings at the gas pump are plowed into savings here. People have been looking for the missing gas dollars. There is speculation that may be going into health care. The premiums, some of the state premiums, some of the Spending Plans are so high deductible right now could be moving a significant amount of dollar there and look at the per foremanance of the health care sector. Weve been overweight in health care for a couple years now. Its hard to get into that freight train. The data is clear at this point. The gas savings, so to speak, are not going foo retail. Theyre not going into health care. Theyre going into savings in general. But as long as were on that point if, i can toss it back to tim for a second. Tim, do you have a comment on what is going on with the Chinese Consumer the savior for the Global Economy in the face of a u. S. Consumer increasing savings more . I tell you, dan, to the extent that the Chinese Consumer is moving towards a more consumption oriented, you know, approach, i think things are getting better. But to expect this to happen overnight, the consumption as part of the economy up is 43 . I would say i think people are overestimating the impactst chinese stock market fallout on the chinese and economy and on the Chinese Consumer because its such a small part of that population. But as were looking toward the Global Consumer to catch life i would make also an argument that i think is one of most stimulative times if you look at the currency weakness and commodity weakness, look at europe. I think they never had it better. This is a generational time for at least the ability that consumer to have a lot more spending power. For as much as people want to make this out as being a terrible time for emerging markets, twothirds of the emergeing markets complex benefit from the input. I think this is a time that people should be looking at lower Commodity Prices as a positive, not a negative even though it seems like its telling us a great are story about risk and Global Markets. Unless you flif brazil my friend. Right. And theyre one of the onethird emerging markets getting hammered. I think theyre going to 360. The ruble could go to 70. Emerging markets stay at the five year lows. Last week i was doing some reporting on the Chinese Consumer. There are a number of things going on there. Folks that study the consumer spaending behavior say that theyre starting to do what the u. S. Consumers are and maybe spend more torns experiences or a second home vacations as opposed to that high end handbag. Theyve grown tired of the labels they sought after for so long whether they got tired of them or just dont like the product, they are seeing that shift in spending happen too. So thats a cause for concern for a lot of the Luxury Companies as well. Some of these folks are actually going over to europe where the euro is weaker and perhaps buying there. But they are seeing weakness in the retail sector. I was in scanned knave yachlt youd be anaysed how many were tloefr as well. Youre so right, courtney. So well see if that does take more of the air out of the names. We leave tlit for now though. Well wait for the Earnings Results to come n appreciate your views. Tim, we leave it there as well. There is more with tim seymour and the fast money crew at 5 00. Bill flekenstein is watching right now. Coming up july auto sales crushing expectations. Well get details on what droest numbers high and if the momentum can continue next. And the apple watch debut to fanfare but it hasnt delivered on sales. And now shares are delivering either. Apple in correction territory closing down 10 with todays price action. With the next iphone set to be unveiled in a month, can that bring investors back to the stock . Thats coming up on the closing bell. It took Serena Williams years to master the two handed backhand. But only one shot to master the chase mobile app. Technology designed for you. So you can easily master the way you bank. What if there were only one kind of dog . Then it would be easy to know everything about that one breed. But in fact, there are over three hundred breeds of dogs. Because no one can be an expert in every one. An app powered by ibm watson will help vets tap Specialized Knowledge in the cloud for every breed. And whatever else walks, flies or slithers through the door. Ibm watson is working to make medicine smarter every day. Welcome back. Lets get you to a news alert. The latest in 50 cent Curtis Jackson bankruptcy filing. According to the latest filing he has 24. 8 million in assets and 32. 32. 5 until in liabilities. The liabilityies exceed the assets by 7. 7 million. He was ordered to payed adds million to settle a suit last month. Ordered to pay 17 million to settle a lawsuit last fall. So he right now is 7. 7 million in the hole. A large part of that is because of those lawsuits. Back over you to kelly. Thats a point. Julia, thanks very much. U. S. Auto sales meantime in july coming in much better than expected. Lets get to phil lebeau with a breakdown of the numbers. Hi phil. Hi, kelly. Strong numbers across the board from the automakers. Take a look at the four largest automakers, keep in mind all of these guys were up 1 to 3 better than what wall street was expecting with gm leading the way with a 6. 4 gain last month. Crossover utility vehicles the story of july auto sales. They were strong for nearly every automaker leading the way, honda crv. These are the top cuvs sold last month. Crv up 11 . Escape up 10 . Look at the nissan rogue, up a1 . Again, those were among the most for lar of the crossovers. The average transaction price, what people are paying when they go into a hoe room. According to kelly blue book just under 33,500. Roughly in line with where it was in june. Compared to july of last year, up 2 . Incentives which is always a concern, slightly higher. Not a real big kick. Take a look at this wall. This says it all. For the First Time Since 2000 were seeing three straight months with sales, the sales rate, i should point out, above 17 million. Again, we havent seen that since 2000. I want to show you auto nation. The ceo is going to be on squawk box tomorrow morning. The dealership stocks, they have benefited the most over the last year along with the after parties sellers. Those are the guys really making the most head way with all of the strong auto sales weve seen over the last 6 to 8 months. Back to you. That is a point. Stay right there if you wochlt joining us for further analysis on the figures and in particular whats driving suv or should we say cuv sales . Carl brower from kelly blue book. Welcome you to. So the crossover market, is that what this is all about . Its what its all about. If youre a crossover brand like jeep, youre doing well f you got crossover thats just resonate well even if youre not a particular brand in that area like honda, you got the bestselling crossover out there. So theyre hot. Some sedans are moving too, trucks are doing well but its all about the crossovers. Phil where did the crossover story come from . The crv has been on the market for years. Its within the last five years that people say i want the utility, size, sit up a little bit higher. They really want to go back to the suv. But they dont want to buy the suv because its heavier, bigger, going to be not as good when it comes to fuel economy. Thats when automakers really pushed the cuv. Im just throwing that out there. It reflects an aging population to some extent. There are a lot of people getting in and out of a low slung car is a real issue. A crossover or suv is perfect for them. I totally agree with thafrment the fuel efficiency is important. Phil, of course talks about the this a lot and what folks are looking for and how the gas prices play into. That phil, im wonldering because we were talking about earlier if the gas price savings were going into retail are they going into buying a new car whether its a crossover or an suv . Well they certainly feel more comfortable spending more money. And carl and i have talked about this in the past. When you look at the transaction prices they are not slowing down. It is not unusual now and i dont know if you talked to anybody raentecently who bought a vehicle, its not unusual for them to say i put down 40,000 on a pickup truck. 15 years ago if you said im putting down 40,000 on a truck, pel would have said youre nuts. Its the norm now. Remember, pickup trucks are immensery popular in this country. Phil, great point. I remember reading in the wall street journal a feature story about pickup trucks had eucalyptus this or that and the fancy interiors. But is that symptomatic of how strong those pickup truck parts of the economy, the oil parts of the economy were . Is there any risk if these start to deflate here . There is huge pentup demand for them. There are Companies Ready for a new truck. The new trucks get better mileage. They offer more features. I think people are willing to pay. They see them as much as a status symbol as they do a functional tool now for the owners. They want to show up at the rodeo and even at the ranch and they want to look good. They have the top end trucks to do it. All right. Thank you guys. One other thing to keep in mind, there is a technology play here. There Say Technology play. We all want the latest technology whether its with our cell phones what not. We also want it in our cars. And people want to rotate into that newest technology. Its not just about cup holders anymore. Thank you. Appreciate it. We have breaking news to get to in puerto rico. Kate kelly, what can you tell us . Hey, there kelly. This just n the Rating Agency declaring a state of default in part rico as a result of their confirmation just within the last hour that the Public Finance corporation largely missed a 58 million payment that was due on august 1st. They have the ability to put it in the bank and get it today. They did not. They said they werent going to because they were trying to balance the needs to the people here along with liquidity concerns. One other piece of news worth noting, they have changed the way in which they set aside money to pay their general Obligation Bonds. These are really benchmark bonds that enjoy constitutional protection and are considered by investors to be super safe. Puerto rico is no longer going to put aside monthly savings for the bonds. It doesnt mean they wont pay them much thats key to remember. But theyre changing the fwha which they set aside for them. That could have an impact and raise the likelihood of a default, kelly. A couple of negative pieces of information from san juan. Seems like theyre throwing up their hands. All right. Kate thanks very much for now. Our kate kelly in puerto rico. Investors are falling in love with apple. Shares in correction territory. Apple falls below the 200 moving day average. What will it mean for the bottom line . Thats next. And a new website is taking wall street analyst jobs to main street. A chief executive p join us to tell us how rate kogz mean big returns for your portfolio. Stay tuned. Apriling is trading below the 200 Day Moving Average and in correction territory. Joining us now is gene munster perfect Piper Jaffray who is still overweight apple. What do you make of the weakness . Its just kind of a continuation of a theme that weve heard all along about the watch, especially i think there are three Different Research articles out about the weakness in the watch demand. I dont think thats anything big. But thats probably what is leaning even more on apple shares today. Its less optimism around the watch. You think its product specific and not reflective of concerns about growth in china or Global Growth generally . I think in this case its product spefgs specific because of the intensity level around the articles that basically suggest that they will not be able to produce 6 Million Units in the Holiday Quarter which for some investors may be a disappointment. I think the other issues asht Global Impact is probably has been issues in weeks before that have weighed down the stock. I think specifically to day its really about the watch. Gene its dan greenhouse. Full disclosure i work with another firm and we have a buy on the stock. In your model, how much revenue do you forecast for the watch . In 2015 2 of revenue and that goes to 30 and 5 in 2017. Lets Say Something would happen and the watch would be a flop and a more permanent state than some people currently argue today. In term of how you think about the company and the stock itself, does that meaningfully change how you see things over the next three to five years . If something is 2 3 and just call it 1 or 2 . From a math standpoint, zint mean anything. Think it is difficult to have the numbers weigh from a psychological standpoint for investors, they obviously want to see them succeed in the new product category. Eventually they have to reinvent themselves again. It has little impact. If its a failure on the finances. But it probably has a little bit more on the psychological impact. Were believers that the watch will prove to be a success. But thats probably the give and the take. Of course i look at the consumer end. Particularly the younger females and the apple watch. They can pick up or the lack of pickup in that Consumer Group with the apple watch. I mean that group in general, i think is part of the bigger theme which is consumers still ask the question about why to get a watch. I think that even though its a little more acute within that dem graphic and its still an overall theme about what to do with the watch or why to get one. If you look at the for example, the New York Times gene real quick. Im sorry to interrupt. If i could ask you, why should consumers buy the watch . Well it takes friction out of your mobile experience. It makes it easier to access information and whether its access to a hotel room flood information, boarding passes. Theres an apple today is through an ad campaign highlighting 30 different applications for the watch. I think that there is reason for it. I think over time the real excitement here is when they come out with native apps. That will open up what they can do. I had think that change the whole trajectory of how consumers view the watch. What about the catch cow, what do we think about the refresh cycle and prospect for the Holiday Season . Its looking like theyre gaining share which is positive. So probably the number are going to inch up which is great for the overall eps. Its still going to beg the question about can they grow next year . This has been such a monster year. I think the theme ininvestors have is that apple is gaining share in the smart phone market which is obviously the big positive. Because its mostly revenue. Yeah. The lion share. Final question we heard tim cook say this back during i think the last fall. Heed is we still think the watch is going to be the gift for christmas. Any evidence that will be the case . Its going to be a gift, ill say that. There is nothing else thats really out there that is super exciting. So probably by kind of that wave of victory, it will probably be one of the bigger gifts. I think the real breakout year is a year from now with the watch. I think the drones are pretty cool as a gift too. All right, gene thank you. Appreciate it. Thank you. Gene munster. We have a news alert on jcpenney with courtney reagan. Wasnt this convenient . We got news out of jcpenney. Marvin ellis son is the ceo effective as of saturday. So this is the first announcement from marvin ellisson. He is being replaced as of tomorrow by michael lement. He is coming from home depot in a similar role and also mike robins is underneath michael lement. He comes from target. Both of these places home depot and target are former employers of marvin ellisson. And remember his big push is all about omni channel, making everything more efficient. And a lot of analysts are betting hes going to use that infrastructure from the catalog at the jcpenney has to really maximize all of the operations. So this is an important move particularly in an area that many analysts are betting will be his strong suit for the company. How is j. W. Penny positioned for the Holiday Season . Thats a great question. We do know that what is what the blan will be is something that ellisson and almond created together. We dont see a lot of big changes happening until 2016. He said maybe some changes. But change for the sake of change is overrated. Well see. I think they can play probably wont dominate based on where theyve been and the traction they need to gain. Back to school will give us an early indication. Thank you. Eyes on jcpenney. Lets send it to dominick chew. Im watching shares of cheg the on line perng platform company. Its a smaller cap company, 700 million prior to this earnings report. Can you see shares down 7 . They reported earnings of a penny per share. That beats the average analyst estimate for a break even quarter. Sales also come in better. 67 million. 64 million is the average analyst estimate. However, the reason why youre seeing that decline, they do offer guidance on q3 revenues. They expect 74 to 80 million of revenues this current quarter. Analysts were looking for on average 82 million. The revenue outlook comes in light. Again, a smaller cap company in light trade right now. The shares are down by 7 just around 42,000 shares of trade. So a stock on the move in the after hours. Again, a small cap company. Back over you to. And this is barnes noble is doing that spinoff of the education business this morning. Thank you. Time now for a update with sue herrera. Hi kelly. President obama says his new power plant regulations are the single most important step america has ever taken in the fight against Climate Change. His plan requires states to cut Carbon Dioxide emission business 32 about it year 2030. Former president jimmy carter having a elective surge troy remove a small mass in his liver. A spokesperson says the 90yearold cart xpeshgted to make a full recovery at Emory University in atlanta. No other details were released. Serious xm radio agreed to pay 1. 3 million to settle claims it violated labor laws by not paying interns. In court papers, the company said it still believed the unpaid Intern Program was legal but would pay the money to more than 1800 former interns to avoid costly litigation. And bobby chrisi Kristina Brown is being buried next to her mother today. The gold hearse carried her remains into the cemetery in westfield. The 22yearold died july 26th. And on that sad note that, is the cnbc news update at this hour. Back to you. Sue, thank you very much. Big calls from the streets top analyst can trigger major moves in the company shares. They didnt always get it right. One website is polling investors to determine ratings and price targets on stocks. Is the performance any better than the pros . And its a billion dollar industry. And who is boosting it may surprise you. Well reveal what is driving the big business of the app gains and which publicly traded companies are taking notice . That is later on the closing bell. Youre watching cnbc, first in business worldwide. A new season brings a new look. A chance to try something different. This summer, challenge your preconceptions and experience a cadillac for yourself. Take advantage of our summer offers. Lease select cts models in stock the longest for around 399 per month. 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Take a look at how we finished the day on wall street. It was a down month. The dow closing down 91 points. We were about 150 points lower at the very lowest estest of the session. Nasdaq and s p 500 faired lower. It was crude that really pushed some of the dow components lower. Down almost 4 on the session. Some investors relying heavily on wall street analysts to rate stocks and set price targets. There are familiar names around here. Others are wondering if there might somebody better alternative. Now there is better where the crowd determines the ratings and the stock prices and here to explain how it all works is Patrick Williams the companys ceo. Welcome to post nine. Thank you very much for having me on. Vetter just went live last year . We started the whole program then. And since then weve had over 35,000 ratings. So really its the crowd that comes to the site and puts the ratings and make the difference. The ratings are price targeted on the stocks . Price presictions about where they think theyre going to go and whether they actually bought this before and really looked at high performance. Is it too soon to tell whether theyre better than sell side anlist . What were seeing is no one is necessarily better or worse. What were saying is that this is another opinion, another point of view. This is something that people should look at. We really want to be the kind of yelp of the stock market to really make sure that people are checking stocks. And also were free. And were easy to access. So were really the voice the crowd. I think youre trying to undermine dans business. My business cannot be undermined. Im an institution. But to that point, you know think someone in the traditional wall Street Community would say, and i will say it you know whether youre an analyst at Morgan Stanley or wherever, there is a certain amount of work and effort that goes into the stock ratings whether theyre accurate or not over time is a separate story. The work the leg work is put in. The channel checks the management meetings. What youre arguing is someone could just sort of roll in off the street, so to speak, and say i had a great experience at the apple store or i went to the j crew many midtown, ill buy the stock as a result s that really information an additive so to speak or muddying the watters . You know we have various ago ga ridges in house if someone is trying to dump the stock. We can measure. That were saying its not just that one person. Were saying its the crowd. So you know if youve got a few dozen or a couple hundred people raising a stock, you know that wisdom of the crowd, you know back in 1906 was pretty much spun off. Thats what were saying. All stocks should have this and should have a feeling for the general public whast company is up to. Lets get specific if we may. Tesla, for example with, earnings coming up this week the analyst crowd has a 310 target on it s that right . Youre looking at 271 . Yes. Were quite a long wafrment the crowd is quite a long way off. That what we feel about that and see on the postings that the crowd put up is they feel a little bit unrelated to tesla. Still the majority of the crowd are not going to be able to ford the product. And the drive in the car seems a long way off. Im sorry to interrupt. You just hit on an important point there. I dont this is going to come out disrespectfully. Youre saying a lot of the people rating tesla in this regard cant afford the car. And thats a perfectly fair the fact that can you afford the car or not is entirely separate from rating it. The Analyst Community has been to a factory or driven the car or knows someone who has driven the car and done some sort of leg work with the car itself and can say well this is much better than a camry. Isnt there, again, just a deficiency, so to speak, between saying tesla seems high priced to me and actually doing something to say tesla seems low priced or high priced . Again, im not decligneing the Analyst Community. A lot of the crowd can afford the car. A lot are raising the stock because they own the car and have a love of the company. But a lot of people also dont. And, you know there have been a lot of different promises made by tesla about what theyre going to bring to market. Things seem a bit slow. It is long to take it apart. I think our audience not being as bullish, theyre still raising the stock. Theyre not as bullish as the analysts. I think as most are concerned, the more the better. Get the information out. There lets see how do you. Patrick williams is the ceo of vetr. We got yahoo, netflix, a whole lot more people to check out. Thanks for being here. At least one president sh hopeful that shoots from the help is hoping to score big at this weeks debate. Im not talking about donald trump. Im talking about new Jersey Governor Chris Christie who has br barbs for another candidate. How is this for taking it to the extreme . Moto cross meets surfing. Its from the makers of d. C. Sneakers. Will this video help sell foot ware . Weep debate it coming up. Well debate it coming up. [ male announcer ] eligible for medicare . Thats a good thing, but it doesnt cover everything. Only about 80 of your part b medical expenses. The rest is up to you. So consider an aarp Medicare Supplement Insurance Plan, insured by unitedhealthcare insurance company. Like all standardized Medicare Supplement Insurance Plans they could save you in outofpocket medical costs. Call today to request a free decision guide. With these types of plans, youll be able to visit any doctor or hospital that accepts medicare patients. Plus, there are no networks, and virtually no referrals needed. Join the millions who have already enrolled in the only Medicare Supplement Insurance Plans endorsed by aarp. And provided by unitedhealthcare insurance company, which has over 30 years of experience behind it. With all the good years ahead, look for the experience and commitment to go the distance with you. Call now to request your free decision guide. O0 as republican candidates prepare for the first president ial debate of the 2016 election this thursday new Jersey Governor Chris Christie is taking notice of another candidate who is not in the debate. Christie sat down with our john harwood with his speak easy interview series. What was on the governors mind . He wanted to take a few shots at Hillary Clinton on her economic proposals. He also wanted to defend his own record. Take a listen. Bridge gate credit down grades. New jersey is not happy with you. You just are playing a weak hand right now as a governor. You know i govern a deeply blue state, cut business taxes, cut the budget 2. A 2. 5 billion and the last 5 1 2 years we got 192,000 in private sector jobs. Havent you had slower job growth . Of course. Because we have higher taxes. There are certain things you cant do because youre not a dictator. For 40 years, middle class wages have not gone up much. Hillary clinton says change Capital Gains taxes to push investment to the future. Is she right . No shes wrong. Thats all bologna. Because what she is doing is just doing that to mask a tax increase. Mrs. Clinton does not know what shes talking about. The other proposals to create jobs . Paid sick leave and raise the minimum wage. That doesnt move anybody in the middle class. You are against raising the minimum wage . Im against the 15 minimum wage for are you against 10 . We have to talk about it. But 15 thashlgs destroy jobs. Whether you look at the change thats we made in emergency emergency and the 192,000 families that have jobs that didnt have them dont think thats insignificant. Youre not running on the new jersey miracle. No. There is nothing no meeshg until new jersey. New jersey is three yards and a cloud of dust john. Meeshg rlz from god. What is happening in new jersey is not a miracle. Its happening. It is grind it out progress on behalf of the people that i work for. Now Chris Christie will have a chance to make that case on stage. Ate pears hell be one of the ten thursday night. Hillary clinton for her part is taking on some water politically this summer. She is out now for release tomorrow with two new positive ads trying to raise her image. Well see if she responds. How did he describe the state of new jersey . Three yards and a cloud of dust. Three yards and a cloud of dust. He said there is no miracles. Hes not a dictator. He talked about having gotten through a business tax cut but wasnt able to get through a personal income tax cut and blame those high tax rates for slowing down new jerseys job growth, democrats tell a different story, of course. Will he and donald trump be on the same stage thursday . They will be on the same stage. Its interesting because theyre friends. He talks on the stum thap hes been friends more than a decade with donald trump. But what he said to me in our interview was that when i asked isnt donald trump becoming the straight talking candidate whose calling card is telling the truth in the race . He said donald is telling his version of the truth. He said some of the things that trump is saying are completely unrealistic and would hurt the credibility of the presidency. Said its not in the best interest of the Republican Party to nominate someone who cant be an infecteffective president. Zbh ill be fascinated to see how we can balance with the time constraints given the number of them. I bet a lot of people will be tuning in. Thank you very much. You bet. John harwood in washington. American ferro taking a victory lap Monmouth Park in new jersey. His competition isnt only at the racetrack. People are spending billions of dollars on a different type of gaming and casinos and tracks are taking notice. Well take a deep dive into this booming business next. Be sure to tune in to closing bell tomorrow. Mark bertolini joins us to discuss earnings and consolidation across the Health Insurance space. You wont want to miss it. Youre watching cnbc, first in business worldwide. When it comes to medicare, everyone talks about what happens when you turn sixtyfive. But, really, its what you do before that counts. See, medicare doesnt cover everything. Only about eighty percent of part b medical costs. The rest is on you. [ male announcer ] consider an aarp Medicare Supplement Insurance Plan insured by unitedhealthcare insurance company. Like all standardized Medicare Supplement Insurance Plans it could really save you in outofpocket medical costs. So, call now and request this free decision guide. Discover how an aarp Medicare Supplement plan could go long™ for you. Do you want to choose your doctors . Avoid networks . What about referrals . [ male announcer ] all plans like these let you visit any doctor or hospital that accepts medicare patients, with no networks and virtually no referrals needed. So, call now request your free guide, and explore the range of aarp Medicare Supplement plans. Sixtyfive may get all the attention, but now is a good time to start thinking about how you want things to be. [ male announcer ] go long™. Welcome back. We have some breaking news on pimco. Dominic chu, whats going on . Pimco the bond fund giant saying their total return actively traded bond fund the ticker there bond theyve said this particular Funds Investment manager had said they received a wells notice from the s. E. C. That relates to this particular etf. Again, the total return etf ticker b. O. N. D. Bond. The notice they say indicates the staffs preliminary determination to recommend the s. E. C. Commences civil action against pimco stemming from a nonpublic investigation into the fund. A wells notice is neither a formal allegation of wrongdoing nor a finding that any law was violated. So thats again some of the boilerplate stuff from what a wells notice is. They do say this matter principally pertains to the valuation of smaller size positions in nonagency mortgagebacked securities purchased by this particular etf between the dates of its inception, february 29th, 2012 to june 30th of 2012. So again, some valuation concerns are being raised by regulators. Theyve issued something called a wells notice. Again, not a formal allegation of wrongdoing nor a finding any law was violated but still an Interesting Development here with pimco and their total return bond etf, kelly. Back over to you. All right dom, thank you very much. News there on pimco. App games meantime like candy crush and that Kim Kardashian hollywood one theyre raking in digital dollars but the players arent with always who you think they are. Eric chemy is here with the details. Whos playing these games, eric . Everybody is playing these games. The data comes to us from mpe, the big retail data firm. They have a lot of consumer data. The interesting thing about these games, that billions of dollars are being spent on mobile games. A lot of us wont admit to it. Right . Everyone says oh maybe ill spend 5 or i buy the game for free our download the game for free but i wont buy any of the credits. But when you actually go into the data its billions of dollars. Some of these games in a sixmonth period youre looking at 50 a person 100 a person. Some of them even 400 a person from december to may. On an annualized basis youre looking at almost 800 a person on some of these games, which is crazy. And looking through the story it sounds like these arent just games youre playing. A lot of it sounds like traditional gambling. Money youre spending . Youre gam snblg. In the same way in the Kim Kardashian game you pay credits to win Little Things or candy crush you can do things called social casinos. You cannot win anything. If you win something it would be regulated, it would be illegal. Because you cannot win you just pay money to get more credits or an interesting slot machine. Its a fun game to play. But its not regulated. The companies dont have to give you anything. So he this win on both accounts. Theres no government involvement and they wont have to pay you Churchill Downs actually bought the makers of big fish casino for almost a billion dollars in december because they know it can augment the gambling business they have. Big fish casino is one of these traditional slots games. Dan is a big fan of the Kim Kardashian game. Interesting thing is the older you are the more people spend. This is not a kids thing. A lot of people think its a phone but the more they have the more they spend in increasing numbers. But its not a thing that operates like a mobile technology. It operates like a casinoo. You go to a casino you see old people there sitting there hitting the slots. Thats exactly what happens on these mobile games. For big fish gaming in particular which is the slots game i guess, you were saying the biggest demo is women over 45 years old. Right. Gamers. They call them the whales. Just like in casinos. Thats a very offensive comment. Its a technical jargon term in the industry. It took me a minute now. I get it now. Let me ask you a quick question before we run. Arent we just paying to play . Is that such a big deal . Youre getting enjoyment. This is exactly what a casino looks like, if they gave you money it would be illegal. The fact theyre not paying you changes the whole political nature of the whole environment. Theyre getting a loophole. And meantime big business for some of the traditional names you mentioned. Eric, appreciate it. Theres more online. You heard about walking on water but what about dirt biking on water . Thats right. Youre going to look at a dirt bike surfing the waves of tahiti. Well have details on this next. Its so shiny. I know, mommy, but its time to let the new kitchen get some sleep. If you want beautiful results, you know where to go angies list. Now everyone can get highly rated service even without a membership. You can shop special offers or just tell us what you need and well help you find a local company to take care of it. Angies list is there for all your projects, big and small. Pretty. Come see what the new angies list can do for you. Take a look at this new video released by d. C. Shoe company. Its called pipe dream. And its australian stuntman Robbie Madison making the impossible happen by combining the two. Hes surfing the waves of tahiti on his dirt bike. According to d. C. The project took over two years to create. Guys when i first saw this video i thought it was some sort of new product. I didnt realize it was an actual motorbike that was surfing the waves. I didnt really understand what it was evil. I thought it was some evel knievel thing. I didnt realize it was associated with d. C. Which is probably the exact opposite of what they wanted. Well hes got the shirt on. Thats something. But to me it just looks like he stuck my daughters kick board to his back wheel. It seems like something i could do. If it took two years to create, it took two years to get it right . You said it seems like something you could do . Yeah im on record. It took two years i could do it. Dan greenhaus officially has until the end of 2015 to do that on a dirt bike. By the way, full disclosure. Theres nothing i believe i cant do. This is right in line. We cannot wait to watch this one happen. Thanks for joining us. Appreciate it. Kick off the month of august on closing bell. Dan greenhaus and our courtney reagan. Fast money coming up in just a few moments with melissa lee and the gang. Melissa, over to you guys. Thanks a lot, kelly. Fast money starts right now. Live from the nasdaq marketsite overlooking new york citys times square im melissa lee. Your traders on the desk are tim seymour, Pete Najarian dan nathan and guy adami. Apple breaking through a critical level and one that could spell trouble for the rest of the nasdaq. A top technician explains later this hour. Plus shares of michael kors getting slammed today but weve got the analyst who says theres a 40 up side to the stock and the breakout could happen sooner than you think. Well tell you what it is that has him so excite. We start off with our top story tonight and that is the steep selloff in stocks today. Crude the big culprit again closing down 4 in todays session. Bond yields tumbling as investors seek safety. The question is is this the start of a summer swoon . These are levels in crude we have not seen since the financial crisis. Is the market telling us something right now . The market is clearly theres major divergence. If you