Transcripts For CNBC Closing Bell 20170925

In a few minutes President Trump is expected to make a jobs announcement well bring you nose commethose north korea fired back with tough talk to the u. S. Eamon javers has details. Reporter we got the white houses First Response to the north crkorean comments. First the comments, what he said about the United States in the wake of the flybyes by american bombers over north near north korea over the weekend he said since the u. S. Declared war on our country, we will have every right to take countermeasures including the right to shoot down u. S. Strategic bombers even when theyre not yet inside the airspace border of our country. White House Press Secretary Sarah Huckabee sanders in the brea briefing a few moments ago said the United States has not declared war on north korea and to suggest it has is absurd and also had this to stay. Take a listen. Its never appropriate for a country to shoot down another countrys aircraft we its over International Waters our goal is still the same, we continue to seek the peaceful denuclearization of the korean peninsula, thats our focus. Doing that through both the most maximum, economic and diplomatic pressures is possible at this point. Reporter the white house very much focusing on a diplomatic solution to this war of words at least so far, this is just a war of words guys, back over to you. Eamon, at the same time when the North Koreans are going out there putting words into his mouth by saying we have declared war, what do you think their intention is behind that if their going to yre going tot do you think theyre going to do to follow it up . Reporter the rhetorical dials have been dialed up to 11 on both sides. Start talking about fiery and tour, things weve seen said in the debate, theres not much room to escalate the rhetoric, maybe thats what you do, you put the words in the other persons mouth the white house saying we have not declared war on north korea, its absurd too say we have as the United States, and also the United States is trying to find a diplomatic solution here so theyre looking to dial this back a little bit in terms of the rhetoric over the weekend the president continued to lob tweets at north Korean Leader calling him little rocket man, and saying that the north Korean Leadership might not be around for much longer. So those things are sort at oods wi odds with each other the white house trying to do a delicate dance, the president lobs a rhetorical grenade. From the podium there, the press secretary try to dial it down. Very much so, eamon, thank you very much. Appreciate that. As we said, the markets did take to little bit of a slide back on those headlines earlier. Youre joining us to talk about it on our closing bell exchamg. We have paul steve grasso from stewart franco on the floor our own Rick Santelli at the cme in chicago guys, good to see you all. Steve, we have, again, the story unfolding for a while, not specifically north korea but even when we get adverse h headlines the market finds a way shrugs it off to rotate, stay supportive near the record highs. Today may be a fumbling of the baton. Energy up but the banks and techs both down. Where does that leave us with the overall market i think youve seen this big tech, sell big tech, sell risk on, sell the growthy names that have been doing so well. Remember, mike, you better than anyone knows this, end of september, have the quarter rerebalance, monthly rebalance a lot of this is sell what works, buy what wasnt worked. We havent yet seen the rotation, to your point, take hold for anything longer than one or two or three different sessions this is a big month for energy and i think it could last a little bit longer, at least until the end of september i think youre going to see this rotation of selling the large cap tech stocks. S p energy up interestingly, thats part of the low dollar, so even today, i mean, you see it up half a point, paul, you know, were getting a flight to safety move. Is the overriding story, its been so weak and its supporting some of these markets . I think were going to see a more sustained sector rotation partially because of the tax reform thats coming the tax reform is going to reprice, revalue, and change the price earnings ratios of almost every publicly traded you seem pretty convinced its coming. Well, i think most people think that it is, and theyve worked out a way that they can do it with just 51 votes, just republicans. You think its going to make a huge impact, just to drop the rate to 20 , what do you mean when you say it could reduce earnings that much its going to change with every company. The rate is 35 . Its going down to 20 not every company pays 20 tax rates today. Microsoft, ibm, 5 to 8 because with Corporate Tax loopholes, and with being able to park money overseas and not pay taxes on it, Global Companies are going to be paying more in taxes and theyre going to get a hit to earnings, whereas youd be surprised how Many Companies actually do pay the 35 , but theyre all companies who are almost all the revenues come in the United States. And those are the beneficiaries a massive you dropped some of those names, anybody from altria, verizon, dollar general, home depot, kraft. All the companies if you think about it, theyre going to get a 15 tax on their revenues is going to go directly to earnings. If you look at the s p overall, fact set says that the forward p e earnings today are 17. 7. If you take in the tax cut numbers, the market is going to drop to 15. 9. That assumes, though, that the companies producing the largest volume of aggregate profits are the ones that are at 3 pa 35 i dont think this is based on the average tax rate. I know. The average isnt going to move the same based on lower tax domestic companies. We as investors, we kind of look at the valuation of the market i mean, all the people who come on here and say the market is way overvalued you get that tax, p e rate down to 125 preside to 15. 7, its going to look like the fiveyear average and not overvalued. Rick, what about you, were at a kday, a session, showing flight to safety characteristics. Is sthat goithat going to be the overriding factor for a time reporter i think it could be my opinion is the markets are treading water here. Were post some of the big central bank meetings, kind of in between i think were very comfortable close to that 2. 25 level in tens we gave up several basis points today. It was very hard to argue with the fact that tsit was driven by north korean headlines probably some computer trade mixed in i understand, theres an effect. But i think the real issue there is, its not the real main strategy i dont think many investors are going to anticipate that this is going to be the crux of their trading goingforward they deal with it. Its kind of a passive form of the trade. Im very optimistic on the active form, but i do think were in this period where its going to be a bit difficult, and as for the dollar index, you know, yes, its had a bit of a rally, but we also did have german elections and unlike august excuse me, november 8th, their elections obviously didnt have nearly as big an impact as the United States elections in november but the euro looks to be closing at the lowest level on the green back since the 24th of august we could say thats flight to safety on the dollar but if you look back over the last several month it isnt the dollar index that seems to be the most buoyant currency against north korea. I think some of the channel is probably due to the nature of the german elections and the status quo that may remain rick, you mentioned, you know, makt markets treading wa. Certainly has been the case for a while. If we have a market where fed meetings seem to be not much of a market mover, jobs numbers have not really been much of a market mover, what do you think the bond market, the foreign currency markets, are waiting for as a potential catalyst . Reporter oh, no, i dont disagree with that i disagree with that a lot i think it is all about central banking and it is all about the calibration of that which shows up in Foreign Exchange and its all about exports, its going to be the yen versus the euro with regard to Auto Industry issues between germany and japan. These issues are out there my opinion, going to get worse we still have lots of capacity around the globe and i think many countries are vying for, you know, the best place in line to do their exports, and i continue to see that dynamic showing up. I think the energy is a big positive i think that will give a little bit more backbone to the equity markets moving forward as well steve, as we look back to the session, dows down 63, down about 130 i think on the low were coming back, but names like facebook, netflix, are still down big this afternoon. What do you make of that huge weight on the overall market w look at what happened with apple, performance in apple coming off their event, say thats normally what happens with apple, juxtapose it with facebook, the whole sector, whole stpace is taking a hit theres no one burying the flag saying i want to buy large cap tech you want to take profits there, take profits, buy energy. Shortterm profits . All short term. I dont see this thing playing out into year end. I see it playing out into october. I dont see it being a big mess. If you look at what rick said, the ten year, you could see the end of the month, you could see money coming back to the ten year, coming out ofequities, going back to the ten year and buying the dollar because these are things we havent seen. What were you shaking your head about, paul every analyst i know is looking at this, how the tax reform is going to effect especially the big tech companies. Amazon will actually benefit but almost all the other ones are going to pay higher taxes. I think that this is a longterm sector rotation out of these Global Companies, global tech and youre going do see more and more of it especially the only problem with that is the passive investing. Theres so many etfs so many funds now. An apple owns 40, 50, 60 different etfs its hard to get real excited about an exxonmobil longer than a month or two. Yeah, but the Institutional Investors they all own theyre moving out i think into the analysts and all the major brokage firms are looking at this and theyre starting to move out and into u. S. Centric stocks so far, its large into small today. Growth into value. Russell 2000 actually green on the day. Maybe its the start of something. Paul, steve, rick, thank you very much. We have 50 minutes to go until the close. As we mentioned the dows down 67 it was down 130 at the lows there. The s p down 9 the nasdaq down 70 the russell, mike, as you mentioned, positive,. Coming up next, the ratings are in for the nfl games did the president s harsh words toward the National Anthem protests impact ratings . Well have those numbers next. Later, Qatar Airways named the Worlds Best Airline for 20. 17 well talk to the ceo about trumps travel ban and we want to hear from acoutoyo reh t the show on facebook, twitter, or send us an email youre watching cnbc first in business worldwide. Us. Its what this country is made of. But right now, our bond is fraying. How do we get back to us . The y fills the gaps. And bridges our divides. Donate to your local y today. Because where theres a y, theres an us. We are watching the white house, the president is expected to make a statement on jobs. Something to do with the workforce of the future. Well bring that to you as soon as you get it. He may also, michael, not be able to resist the opportunity to elaborate on his comments about pro sports, the players, their protests of the flag and the anthem. Yeah, thats the standard disclaimer that it could encompass anything jobs plus maybe Something Else. Fact exactly. Well begin that as soon as we so it. Take a look at the markets the nasdaq is the conspicuous loser today down more than 1 . The big faang stocks dragging that russell 2000 hanging around the flat line. Take a look at shares of blue apron, jumping today after Guggenheim Capital initiated a buy rating and 9 price target firm believes the Meal Kit Delivery Service Industry will experience 25 growth over the next 3 years. Yeah, blue apron at 5. 5 right now. The ratings in for this weekends nfl games which came amid the flurry of tweets and comments from the president criticizing protests by come players during the National Anthem the nfls controversy comes as espn and parent, disney, are locked in a battle with their own with tv provider altese. Julia boorstin is live from new york the owner of optimum, i should say. Julia is over at ad week with more for us on those stories as theyre developing jul julia . Reporter were starting to get the ratings in from yesterdays nfl games and some of the nfl games may actually have benefited from the president s criticism of the nfl and its players. Cbs cough rverage of seven gamp yesterday 4 on average from last year. Sunday nights nbc game was down 10 from the year earlier game that was a tough comparison there. Now, so far, big brands are standing by the league and its players. Ford issuing a statement saying, we respect an individuals right to respect their views even if theyre not the ones we share. Nike saying it supports athletes hyundai is saying, as an official nfl sponsor, we stand for and respect individuals freedom to express their 1st amendment right. While the nfl continues on iespn tonight espns parent company, disney, threatened to pull espn, abc, and other programming from al altice if the two companies cannot strike a deal by the end of the month. Now, altice saying espn and its owner are demanding double the rates for abc for the same content they offer today they say exorbitant fee increases for espn. Disney counters, for broadcast basic, altice charges its customers 34, which is more than 15 times the amount were seeking for the markets mostwatched station. Disney also says the company has never had a disruption of a service, or a blackout, for its family of networks so, kelly, well have to see how these talks progress it would be a very big deal for disney to pull a blackout on those channels back over to you. Certainly will. Always a game of chicken when it comes in this, julia, thank you very much. For more on the impact of the politicization of sports and what it means for the business, were joined by former nfl wide receiver danonte stallworth. Great to you here to weigh in on this you know, in the whak of the president s comments, obviously we saw the nfl, the nba, the owners, players, really kind of unify and saying, look, we want to sort of defend the rights of preexpressio free expression. They were defending a principle, but perhaps perceived a threat to the brand, the business, itself do you think this is an issue that does impair the business or ratings or interest in these leagues . I dent think so, at least not now. Not from what weve seen you saw what julia just reported how nike, hyundai and a couple other, handful of other corporations have come out in full defense of the players and the players right to exercise their 1st amendment. To me, thats the most interesting thing about this whole issue, were looking at it, a lot of us, i should say, are looking at it from the perspective of are the nfl players being disrespectful . Number one, there are people on other side of the argument, veterans in full support of the players who are kneeling for social justice efforts to progress social justice in this country so i dont think its going to hurt the ratings were up, you know, from last week, or from last year, im sorry, of last week and the games were actually pretty good. I dont usually go out of my way to watch every single Football Game but the games yesterday were were exceptionally played, wellplayed games. Came dune came down to the wire. A lot of them. The president s rhetoric on friday had a lot to do with people tuning in to see what the players would do in pregame. I wonder what the league is going to do if it feels like its being put in a tough spot and doesnt want so much people focusing on the anthem what if it says, look, to its carri carriers, we dont want you to take this, we dont want this to be the big story at that point, do you think sponsors and brands might feel more pressure coming on them to put pressure on the league i know this is all hypothetical. Yeah, i mean, you know, whenever youre looking at your business interests first, youre always going to see whats beneficial and whats negative for your business, but at the end of the day, the players and the fans, together, collectively, are what makes this game so great having a great product on the field, youve got a lot of like i said, this past weekend for so many good games on, and thats not usually the case. Usually theres a bunch of blowouts or just sloppy play this past weekend showed that the nfl can be unified, not only off the field or on the field, showing unity with each other, holding, interlocking arms and showing that sign of solidarity, but also on the field, too, where we feel like that not just the president of the United States is attacking nfl players individually, but hes also attacking the great things that the nfl has done and can do in this country. Donte stallworth, former nfl wide receiver, thank you for your time. Thanks for having me. Appreciate is. Meanwhile, President Trump unveiling a new tracvel ban, yesterday, prestricting travel from eight countries now, iran, libya, somalia, yemen. They lift restrictions from sud sudan. Add new ones to chad, north korea, venezuela. The Supreme Court canceling the october travel ban case from its schedule after the new policy was unveiled. Phil lebeau joins us along with a special guest, ceo of Qatar Airways in a first on cnbc interview. Lets bring in akbar al baker, ceo of Qatar Airways joining us from the puget sound area where the company has taken delivery on a boeing 7478 freighter plane. Mr. Al baker, thank you for joining us let me start first off with the plane behind you youre taking delivery of freighter aircraft what are you noticing in terms of freight travel and the demand that is out there, particularly orienting out of the middle east well, you know, we are an International Carrier and we see there is a huge upswing in the freight business Qatar Airways is the Third Largest Freight Carrier in the world and we see that by taking more capacity that we will be able to grow our freight business very strongly mr. Al baker, as you know, we talked about in the introduction to this interview, the fact that the Trump Administration has renewed its travel ban, adding some more countries to it. But primarily when were talking about the middle east and north afri africa, while qatar is not listed among those countries, we do know these travel bans have hurt the amount of people who want to come or can come to the United States. What are you noticing is the impact, monetary impact, that Qatar Airways is seeing when it comes to traffic flows into the United States . How much have they fallen off this year . Frankly speaking, our load factors have been in high 80s. We have not seen any effect of this travel ban. We dont operate to countries like venezuela, chad and several others that you just stated. So our business is continuously growing and we hope that this additional travel ban will not make any effect, and im certain it will not make effect. What is important to note is that Qatar Airways is a carrier that is very highly sought after by the passengers. Mr. Al baker, its kelly here back in new york you know, i just am wondering, we see advertisements by your country all over the place trying to get the International Community onboard with your point of view on the blockade that you guys have been hit with how severe an impact has it had for your business, and, you know, how quickly do you think it needs to be raised . Sp wewell, other than the blockading countries we dont see any effect on our business our business is continuously growing. I dont want to get into politics but already the World Community have realized that all the allegations that was laid upon my country was created by those countries that wanted to blockade and trample on the sovereignty of my country and make qatar one of the provinces and have failed very miserably in doing all what was their plans against my country we also know americanairlines rebuffed your attempt to buy 10 of the company recently. Would you consider another pursuit for american or another American Airline in the future United States is a very great country. Americanairlines is not only the airline serving in america, we have other opportunities and when the right time comes, we will take those opportunities and we will very much want to invest in the United States. Exactly as the President Trump soon is going to talk about employment and Qatar Airways wants to be part of this group that will want to create more employment in the United States. When it comes, sir, to opportunities in the United States for you, are you concerned about the efforts, the ongoing efforts, of the u. S. Airlines to essentially prevent you from having greater access to our markets, potentially, and arguing that you are subsidizing an unfair competition . We have an open sky agreement with the United States United States is a country that always honor ts the agreements its signed with other countries. Weve not done any harm to the three american carriers that are crying wolf continuously they have failed to prove any harm to them by us operating into the United States and we are always open to any direc dialogue to provethat their allegations are false and without any justification. Quickly, mr. Al baker, this is phil lebeau, again. Youre already flying into 11 u. S. Cities. Do you expect to add more cities in the next couple of years . Yes we are going to add two more cities in the very near future last week, san francisco, and were going to announce another two destinations we have already simply announced pittsburgh as our new freight destination into the United States akbar al baker, making it clear, guys, that Qatar Airways is not going to slow down its expansion in the United States you heard it yourself, kelly, if theres an opportunity, they would like to make an investment here in the u. S. Perhaps with another airline, make an attempt to do that back to you. Yeah. From his lips maybe to the president s ears phil, and mr. Al baker, thank you very much. Well, coming up, apple reportedly telling some suppliers to slow down delivery of components for the iphone x as the stock continues its fall. Ta sign that iphone demand is not living up to expectations well talk about next. Today, smart planning is pushing the finger lakes forward. Were the number one dairy and apple producers in the eastern United States. Supported by innovative packaging that extends the shelf life of foods. And infrastructure upgrades that help us share our produce with the world. Here and all across new york state, were building the new new york. To grow your business with us in the finger lakes, visit esd. Ny. Gov. You know win control . Be to grow your business with us in the finger lakes, this guy. Check it out selfappendectomy oh, thats really attached. Thats why i rent from national. Where i get the control to choose any car in the aisle i want, not some car they choose for me. Which makes me one smooth operator. Ah still a little tender. vo go national. Go like a pro. Youre searching for something. Whoooo. Like the perfect deal. On the perfect hotel. So wouldnt it be perfect if. There was a single site. Where you could find the. Right hotel for you at the best price . There is. Because tripadvisor now compares. Prices from over 200 booking. Sites. To save you up to 30 . On the hotel you want. Trust this birds words. Tripadvisor. The latest reviews. The lowest prices. With sue herera. Sue . Hi, kelly, hi, everyone heres whats happening at this hour the Supreme Court canceled an october hearing on President Trumps travel ban the Court Ordered a briefing on whether the new travel restrictions proposed this weekend mean the existing case should be dismissed. The new order indefinitely bans almost all travel from seven countries including iran and venezuela. Japans Prime Minister shinzo abe announced that he would dissolve the lower house of parliament on thursday and seek a new mandate preparing a spendi ining package to help overcome the difficulties japan faces including boosti ining sol programs the general election is scheduled for late october. It has been exactly one month since Hurricane Harvey hit houston, and the massive cleanup is still under way piles of debris litter the city, and more than 40,000 homes suffered at least some damage. Organizers have revealed a new graphic for the 2020 Tokyo Olympics its inspired by fireworks and it has 45 squares representing different kinds of light the games are1,032 days away mark those calendars thats the news update this hour back downtown to you guys. Mike all right, sue, thank you very much. We got about a half hour to go in the session. Kenny with neil securities to break it down. Obviously, big tech weakness, story of the day then we have north korea headlines as well. Thats really the headline. Tech is weak because of north korea versus being the other way around, right . The whole threat about north korea kind of elevated the anxiety level and so right away, if people start to get nervous, they take money out of the high performers, some of the names are very volatile. People feel theyre going to hold it on the side, put it in gold, put it in treasury or reallocate it to stocks and sectors that underperformed. The laggards, the story of step really. The beaten down stuff has been revived. Are we out of the woods . Last month, september, everyone thought it was going to be volati volatile its been the opposite. We got four days left forget today, today is really over, right . Got four days left for it to be volatile i dont think nearly it was as volatile as anybody expected at the beginning of the month myself included. I thought it was going to be a volatile month in fact, nothing but complacent. Lets see what happens come october. This year in october is the 30th anniversary of the 1987 crash. Sure. You know, just saying. I think we might make mention of that at some point. Well start preparing. Kenny, thank you very much. Yeah. Thank you, both. Less than a half an hour to go with the dow down 55 points compared to down 130 at the lows the s p down seven the russell is now positive by about half a point the nasdaq still down 63. Coming up, shares of apple are down 5 in the last five days today there are reports apple could be dialing back some of its supplier shipment. Well explore what applapples decline means for the tech sector coming up. We have a Health Care Debate of our own hear from a pair of analysts amid what stocks to buy over uncertainty of bhaum caobamacar. Stay with us our thinkorswim Trading Platform aggregates all the options data you need in one place and lets you visualize that information for any options series. Okay, cool. Hang on a second. You can even see the anticipated range of a stock expecting earnings. Impressive. Whats up, tim. See options data like never before. With thinkorswim only at td ameritrade. Welcome back markets slowly drifting higher after lows dow down 60. It was down about 130 earlier. S p 500, halved its maximum losses from earlier. The nasdaq still the story, down a solid 1 russe russe russe russell 2000 slightly down sprint down. Cnbcs david faber reporting the Exchange Ratio for the stocks is expected to be at market, in other words, no additional pr e premium. He says the deal seems likely it could face an uphill battle with regulators over antitrust concerns. Right, weve finally gotten back to a quote unquote competitive market the performance of the stock this year has been awful, the worst performer. Maybe energy the actual its one of the worst performers. Telecom, yes. In general quhout a doubt its been the big guys that have mostly taken the brunt been winning shares yeah. It is interesting because the fact that the market loves the idea in general of this mergen, in a sense, argue s against from the regulators perspective exactly when it was First Industrial logic so to speak is there. When verizon and at t are rallying when the thing first gets reported. Also this could have gone a number of different ways didnt have to be like for like. Could have been a Cable Company involved might have said the cable landscape is beyond the telecom companies. Theyre still talking about renaming that whole sector. Right. It could kind of encompass communications. Thats certainly their hope, going to say its not like it used to be where you only have one way of getting wireless s ls service and data Everything Else davids report, though, sprint was going to be the target and might get a further it seems as if right now the reporting says this is about what you might get. Yeah, by the way, newstreet said they think towers stand to lose 4 to 9 of market cap if a deal is announced because youd have consolidation, less spending from each company, names like cci more power, from buyers of towers. Yeah, several different ripple effects to examine there. All right. 22 minutes left before the bell we still have the dow down less than 60 now. Still kind of slowly drifting higher the russell still slightly positive on the day. Still ahead, the Graham Cassidy Health Care Reform bill seems to be falling by the wayside in the senate what should you do with Health Care Stocks . That discussion is ahead. Apple is off its alltime high more than 64 a share. Up next, well head to the nasdaq, get the broader impact of the move on the tech sector when we come right back. And i get back to business. Of emerging markets obsolete . At pgim, we see alpa in the trends, driving specific sectors of out performance. Where a rising middle class powers a booming Auto Industry. A leap into the digital era draws youthful populations to mobile banking and ecommerce. Trade and travel surge between emerging markets. Everyday our 1,100 investment professionals around the world search out opportunities for alpha. Partner with pgim, the Global Investment management businesses of prudential. Welcome back dows down 62 points right now nasdaq still down 65, or more than 1 . Its the hardest hit average today. The s p is down 7. The russell still in positive territory. Just slightly. How about shares of nvidia, amd, slightly lower after rival, intel, unveiled a new gaming chip which they say is much more advanced in frame rate improvements compared with the previous generation. Games movement will be much more fluid and less choppy nvidia shares down 4. 5 in response. Injanvidias Stock Movement s choppy. Michael. Quest diagnostics up of the worst performers, proposed cutting lap test reimbursement rates by as much as 10 next year it thats typically considered to be a very stable business. Oh, 7 , for time and again you look at the list of 52week highs and had the lab names on there. Longterm organic growe erero a hit there. Apple shares have been creeping lower since latest product unveilings there are reports apple has asked suppliers to slow iphone x production bertha comes with that reporter were watching apple down for the fourth straight session and helping to cast what you call the ecosphere. Apple asked its suppliers to taiwan to slow down, also really bleeding over to the chip here take a look at nvidia, among the worst decliners, some others include oled, thats the display company, universal display theyre among the biggest decli decliner keep in mind that apple did the same thing last year with the iphone 7, they sort of slowed down to gauge what demand was going to be. And we still have a month before iphone x actually can start to be preordered. Meantime, its the other big tech names dragging things as well in fact, facebook is the biggest drag on the nasdaq 100 facebook is actually here, although up 4. 25, about 8 today, its the biggest decliner and biggest drag amazon, interestingly, having hit 1,000 a share during this quarter, is now down 3 quarter to date as we look to the end of the quarter at the end of the week bucking the trend, a handful of names, really tough to find when you look around the tech space cisco up fractionally on semiconductor hitting a 52week high today, notwithstanding being in the chip space which is down about 2 overall. Boutique initiation over at craig helmer capital, a 52week high really tough to find those tech names in the green today. Yeah. Interesting, bertha, never a better cisco is now a value stock. The whole movement is growth and devalue. Found cisco on the upside on a day like today. Reporter also looking at a rotation to some of the less momentum stocks. Seeing more of a rotation back into biotech and health care, as things at least for biotech look to be okay for the moment because of all of the talk were hearing on Graham Cassidy, youre not hearing about people talking about attacking drug prices so, theyre getting a little bit of a breather. Well see a little bit of rotation there. Absolutely, rotation has been the story marketwide bertha, thank you very much. Appreciate that. With about 15 minutes before the bell, see the dow is still sitting on about a 63point loss at the moment, 130 loss earlier. The s p 500 down 8 points. Russell 2000 clinging to the small lead, large into small and the changes to the proposed Graham Cassidy health enghuprt tgaerunlikelyo rn ou spo to pass the senate this week well discuss the impact that could have on your Health Care Portfolio when we come bight rack thank you so much. Thank you so were a go . Yes we got a yes what does that mean for purchasing . Purchase. Lets do this. Got it. Book the flights hai si si ya ya ya what does that mean for us . We can get stuff. Whats it mean for shipping . Ship the goods. Youre a go you got the green light. That means go oh, yeah. Start saying yes to your companys best ideas. Were gonna hit our launch date scream thank you goodbye let us help with money and knowhow, so you can get business done. American express open. Livestreat the airport. E sport binge dvrd shows while painting your toes. On demand laughs during long bubble baths. Tv on every screen is awesome. The Xfinity Stream app. All your tv at home. The most on demand your entire dvr. Top networks. And live sports on the go. Included with xfinity tv. Xfinity, the future of awesome. Welcome back its been a good year for Health Care Stocks, despite the dip today, theyre up nearly 20 this week, though, the continuing effort to repeal and replace obamacare seems to be coming to a head Senate Republicans want to vote on their newest bill, they only have until the end of the week. Joining us now to discuss whether this is a good time to invest in Health Care Stocks, charles, at mizuho securities. And Senior Health care analyst at morningstar thanks for both of you for being here sheryl, at this point, what would you say the stocks inyou group are handicapping in terms of the prospects for this bill or anything like it to follow . Well, weve had enough fit and starts with this bill that refuses to die and finally go away to all of us i think be a little an hence ce i little apprehensive to call the end of the process being over until probably saturday. I think youre seeing in hospitals and managed care stocks with exposure to medicaid mansioned care some significant concern in especially todays prices that they might somehow pull a miracle out and get this bill past the senate and reconcile with the house in time to meet the deadline. If theyre showing significant concern, if youre an investor who didnt really think the bill had much of a chance, do you think that now creates an opportunity to buy them well, it certainly could. I think that the stocks relative to their fundamentals still have a lot of work to do but we like hca, no matter what happens. They have enough cash flow and Growth Opportunity that we think hca can survive the overarching decline in demand for hospitalbased services by continuing to grow in other sectors. We like United Health group for a lot of reasons, not the least of which the optum business but also the progress theyve made on the health plan side. Those are the ways wed play it. Other hospitals still have to turn around and fundamentals will matter here when we finally get out from under this threat of massive changes to the Health Care System that weve been living under since january yeah. Okay, vishnu, you have a few Different Things you thing are opportunity. Pbms, express scripts, cvs, some distributors, again, mckesson, talk a little bit about why these stocks are where you think investors should go. Those stocks have been under pressure a great deal over the past yearplus i think theres a lot of value in those names from our perspective at morningstar, we believe that companies that provide cost saving and Efficiency Services are the ones that will thrive longer term. So evover the next couple decads no matter what the legislation look like, no matter what government funding looks like. Theres a need to curb the cost of health care in the u. S. , companies that provide services or goods or products that help do that are the ones that will thrive longer term and pbms and drug distributors are two undervalued sectors and two sectors i believe investors should take a look at if looking for a longterm play within the space. Vishnu, interestingly join bring up the pbms, its not just the potential for this legislation that perhaps is adding pressure to them, a lot of people questioning really the value of the Business Model, whether amazon might be an entrant into that world, and also just, you know, all the pricing noise surrounding pharmaceuticals in general yeah, definitely. And i believe theres a lot of noise out there, and a lot of misconceptions about what kind of role these players really do occupy along the pharmaceutical supply chain what i can tell you, these companies deliver efficiency and costsaving services so what they do, they negotiate drug pricing owe on behalf of the clients. If you take the companies out of the system, drug pricing in the u. S. Would stay the same or go up these companies, again, their job and number one mandate is is to bring cost savings to clients and Efficiency Services and theres a reason why most major insurers and most Health Care Government programs utilize pbms for the pharmaceutical, drug medical plan management because they provide those kinds of services. Sheryl, you know, talking about these gop efforts, you dont sound that enthused about them is there any type of gop bill that the Health Care Sector broadly would rally on or is it all seen as taking dollars away from the sector . Look, as long as youre dealing with a part of congress that has to seek cuts to the medicaid program, block granting the medicaid program, none of that is going to be good for the Health Care Sector because with the expansion, especially on the providers side, theyve come to become quite dependent on medicaid we all expect exchanges to be really weak next year, thats not new news the fundamentals really are being affected here not just by whether theres a bill or not. Its the transformation of how health care is delivered, where, when, and how much, and that transformation is part in parcel of what i think has been discussed on pbms, but also more importantly on the provider side that were simply not using as much in Patient Services as we used to and thats the dangerous part of this very perspective not all that enthused about hospitals. I think the model has to change dramatically i think the leading Transformation Company is actually United Health group for a lot of reasons and hca is the one company that isnt Like Community or tenet that has to turn around, isnt potentially fighting a proxy fight with its largest shareholder, tenet is. Theres noise here the two companies that share the understanding of the Transformation Health care is undergoing, irrespective of what we do in washington are hca and united in my group all right sheryl and vishnu, thank you for your time. Thank you so much for having me. Thank you. When we come back, well have the closing countdown for you. After the bell, its the nfl versus the president altice usa versus disney over espn fees. The sports business anything but fun and games these days ahead, what it means for consumers, advertisers and investors. Youre watching cnbc, bifirst in business worldwide oon, you may want more than parts a and b heres why. 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Remember, Medicare Supplement plans help cover some of what medicare doesnt pay. Youll be able to choose any doctor or hospital that accepts medicare patients. Whether youre on medicare now or turning 65 soon, its a good time to get your ducks in a row. Duck quack call to request your free decision guide now. Because the time to think about tomorrow is today. slow jazz music fly me to the moon and let me play bell ring just over three minutes left in the trading day, we have the dow down 58 5 point5 points down 130 points earlier. Modest decline and the dow and the s p 500. Although the nasdaq has been where the real action has been to the downside. 1 losses all day driven by faang stocks facebook getting hard hit. Lots of doubts about the Business Model lot of scrutiny on that Business Model as well. Oil, however, is to the upside, actually continuing to drive higher above 50 a barrel. Helping the Energy Stocks as well the vix is worth watching here it did pop a little bit comfortably above the ten mark maybe the market is getting a little jumpy, at least than it was last week. The s p 500 last week stayed within a 12point range for the entire five days just today weve actually been in more, bob pisani, than a 14point range still isnt fireworks but a little more than last week. A little more the north korean thing is certainly heating up whats interesting to me, the reversal in the momentum name. Whenever you get a slowdown you see it immediately the etfs, sheet easily a nasdaq internet etf, qnet. Notably, downside. Chinese internet stocks had a notable down, crane stocks solar stocks have been on fire recently they sold off today. Lithium stock, theres a lithium etf, lithium batteries that sold off as well. Se semiconductors, smh on there, semiconductors, also to the downside dow leaders, the worst performing stocks of the year in the dow were the leaders and have been for a while. General electric down more than 20 . Back to work. Exxon has been back, chevron back ibm generally had a terrible year its back a little verizon which didnt have a very good year has been a minor Leadership Group recently. Finally just to note, mike, apple down 1 . But if you look at some of those components manufacturers over in taiwan and hong kong, they were down rather noticeably, foxconn, of course, the biggest contract manufacturer in the world, these are numbers over in taiwan catcher and pegatrog, computer component designers. Sunny optical, most have never heard of them but they provide parts for the camera for the iphone its amazing we went from potential shortage, and are they going to be able to make enough, to now apple supposingly saying, hey, slow down, were not sure what demand looks like. My understanding is this has happened before. They did slow down in other iterations of the iphone when trying to figure out the numbers so apparently they usually go hoefr over a little bit. The real problem is they havent figured out 3 what the demand is for the iphone x. When you see momentum stocks break as they have today, sometimes that means the overall market is going to wash out a little bit again, not really, right something is always working against it. No, again, that range has been fairly down even today we were only down nine points when news of the north Korean Foreign minister came out. Yeah, that s p, 2,496 been hugging around the it 2,500 line thank you very much. Ringing the bell here, best global brands, and at the nasdaq, Advertising Week ringing a bell heres kelly with the second hour of the closing bell. Thank you, mike, welcome to the closing bell, everybody, im kelly evans. Pretty much declines across wall street today the dow dropping 53. Thats down from a low when it was down 130 today still, that puts it back below 22,300 for the blue chip today about. 25 now the nasdaq, the worst performer as the guys were just discussing about a 1 drop, a little bit recovered from that 6,370. Interestingly enough the russell 2000 manages to not only move higher today, 1. 2 point increase is enough for a record high for the small caps with the chorus of nose who decide this is their new favorite place to invest in the market growing 1,452 lets call it rounded off for the russell in the close today. Republicans Health Care Bill looks like it could be dead on arrival, a measure to repeal and replace balm obamacare lates week. Coming up, former kansas senator Kathleen Sebelius will join us with her take. Now the war of words between the white house and north korea heating up bigtime today. Eam eamon javers has the latest. Reporter hi, kelly, heres the comment from the north Korean Foreign minister earlier today that the white house says is simply absurd, north Korean Foreign minister holding a presser in new york city, saying since the United States declared war on our country well have every right to take countermeasures including the right to shoot down the u. S. Strategic bombers even when theyre not yet inside the airspace border of our country. Sarah huckabee sanders, white House Press Secretary, saying it was absurd to suggest that the United States has actually declared war on north korea as the North Koreans did today. She also went on to say this its never appropriate for a country to shoot down another countrys aircraft when its over International Waters. Our goal is still the same we continue to seek the peaceful denuclearization of the korean peninsula. Thats our focus doing that through both the maximum economic and diplomatic pressures is possible at this point. Reporter so you saw the president issuing tweets over the weekend that were fairly robust in terms of the rhetoric. Today, looks like the white House Press Secretary deciding to dial that back a little bit and emphasize the diplomatic solution here that the white house is looking for in the wake of dmat that Foreign Ministers comment from north korea earlier today, kelly. Yeah, at this point weve had the u. N. Council, you know, Security Council meetings, u. N. General assembly meetings, aea n eamon, in the last couple weeks. China today i saw was encouraging both spids ides to p down the rhetoric. Reporter between china and the United States when they septembsent a message, said they ought to cooperate. That could be a helpful sign, could be a way out of this morass both sides ratcheted up the rhetorical level to just about the maximum here so where do you go from here, how do you get yourself out of this without losing face on either side . Maybe the chin naez cese can co and broken a deal, kelly. The president had an opportunity if he needed to address north korea or if he was going to elaborate on everything that he was saying about pro sports and the athletes and anthems over the weekend he had that jobs announcement at the white house earlier. We didnt really hear much from that. Reporter yeah, thats right. He was asked questions, the event they held at the white house was to focus on s. T. E. M. Education particularly for women and girls. Ivanka trump participated in the event here at the white house, designed to focus attention on that and highlighting the fact theyre going to earmarking 200 million toward that goal the president was asked questions by reporters at that event, simply didnt answer them all the vooe poresponse to the brouhaha over the weekend came from Sarah Huckabee sanders, said if the protesting nfl players were protesting police brutality, they should protest against the Police Officers at nfl games rather than protesting against the flag of the United States this white house appears to be simply disputing what it is that Colin Kaepernick says that hes took a knee for in the first place in saying this is all about from the white houses perspective, this is all about defending the flag kelly . All right eamon, thank you eamon javers at the white house. Reporter you bet. Joining me on the panel today, cnbc steen your markets commentator michael sandoli, mark spelman, manager at alpine funds. Nancy tang heler, chief investm officer of Heartland Financial we saw the dow down 130 points at the lows today, did come back quite a bit. Interesting, the story for the year and especially this month, if theres one jolt to one part of the market, it gets buffered by Something Else thats been the case today the faang stocks clearly being sold heavily this isnt a drift lower, maybe were going to re facebook down 4. 50 , worst day since december. People just questioning exactly what it means for the Business Model if theyre going to get all this scrutiny on how content and ads gets shares. However, i think its interesting with tech and the banks down, throughout the rest of the day, the market kind of ground its way to minimize losses to some degree. Well see if it plays out more laggards have been leading in september. I dont know if its just a mechanical picking up whats gotten beaten down too much. Thats been the pattern. Mark, efven the retail secto up 6. 5 this year. Again, destroyed so far this year but people do seem to be turning around here and looking for different opportunities. What do you make of the gravity of the situation with north korea, does it, for investors, move things around enough they might say, i want facebook down 4. 5 or is that unrelated . I think pafacebook being dow 4 is apple related. If you ask me. The stocks have had terrific runs all up 30 plus. Get a sell the news event when it comes to apple and taken the whole group down i think today is an extremely interesting day, see the income names all up, saw ge, you you love the income names. Absolutely. Rates are down and dividends are back in style at least for the short term. You would think the tech would be the safety trade, thats the way its been in the past. Today certainly wasnt a safety trade. Nancy, what would you say is the reason behind all of that . I do think investors are worried about regulatory scrutiny and a lack of support from the white house i am i mean, it feels a little bit like microsoft in 90s, wed been selling as you know facebook, apple and google but still have large positions in them and i think investors are kind of rethinking what is this going to mean . Is facebook and google to this administration what energy was to the Obama Administration . Wow. Thats not going to be that is quite a statement thats not just saying, oh, theyre going to look at them a little bit, oh, theyve had a runup that is saying they are a pariah, an athema. You dont want to make too much of it, this is still, you know, almost 500 billion company, whatever it is. Right. Its still doing a wonderful business i think the question is, today it was really liquidation. Three times average volume in facebook other big faang names were not traded as heavily. You want to put ad dollars to work online, has that fundamentally changes . No, i dont think so. Part of the bull thesis for facebook was it was a zerotouch platform, algorithm did all the work, users put the content in, advertisers found their target audience the company didnt have to filter it, do nothing. If that changes over time or theres an implicit tax hiringe iing tons of people. Its a correction not a selloff. For those names now, also you were saying with pnc, some of your region banks, thats an area thats perked up a little bit of late youre actually saying thats done so well for you at this point its getting out of your price range. Were out were underweight financials i hate to be underweight financials given the macro scenario we stick to our disciplines so weve been net sellers and were underweight in that group and would expect to be until we see some kind of correction. We still own some banks but the regionals have gotten very expensive. Are you on the other side of that, mark not exactly i we like to see rates going up but that 102 yield spread is only 80 basis points. Right. At the lowest its very difficult for the long term for banks to really have the profit kick in at that point. Were about equal weighted were not finding a ton of really good opportunities there. Would love to see that 102 spread get a little wider so they could make net interest margin. I see here your picks are along the lines of cisco, at t. I want to ask you guys what you think the impact of Corporate Tax tree form will be. Wooe sta were starting to get kdetails out. A guest last hour suggesting this could make a huge difference in terms tof earnings for the s p. It can. If your tax rate is 38 , one of the reasons you see small caps pop up every once in a while i think in can make an enormous difference we in the tech world, facebook and maybe valuation mattered a little bit today you saw cisco was actually up a little bit. Thats what mike again, the dividend guy here. Ibm yeah, exactly its just amazing. You see 38 of the stock the dividend has been raised 30 38 , excuse me, last year and a half 3. 7 yield 13 times earnings. Today that was very attractive thats one of the names we love nancy, what were you saying about ibm . It was up, too. I agree with namark i suppose youd like us to disagree. Just saying its another example of whats happening in the markets . We now have to declare it terminally cheap and move to the sidelines. Texas instruments is another stock thats been raising their dividend 24 , 25 annually paying po ining out 100 in cas. The things you like about ibm, take a look at cisco, youre going to like cisco better. Ibm is the last stock youd buy . Youre looking for tax cut beneficiaries. They have an incredibly low tax rate in general, when it comes to the tax reform kind of theme, i think the market has been in the mode of gridlock is fine, and we might have something positive come out of tax to support 2018 earnings estimates. If it doesnt if it doesnt, it doesnt all fall apart but one fewer thing to hang your hat on for 2018. I think small cap is also indicating that maybe thats where were going. Do we have a quick market flash here with lets go over to seema mody. Reporter new integration announced between shutterfly and apple photos, shutterfly saying the new application allows users to create, customize and purchase shutterfly photobooks without leaving the application. Shutterfly says its one of the first to participate in apples new project extension framework for the photos app which was first announced during the Apple Worldwide developer conference were looking at shares spiking on this new collaboration with apple, that is shares of shutterfly, up more than 2 here kelly, back to you all right, mark apple still has some mojo. Shutterfly up. To your point earlier, apple suppliers today not doing so well semiconductors in general today not doing so well. What do you make, though, specifically of a market move like this . I think weve been waiting for the new apple phones for a year and a half and it is a classic sell the news event. I dont think apple is going to be terrible. We own some, less than we used to about six months ago. I just think its going to take a break here again, this is an event thats been waiting for 18 months they still buy back a ton of stock, have a ton of cash and raising their dividend we like the stock. I think its dead money for about six months. Nancy, what about you yeah, weve been selling as well we were buyers about 89 a share, so weve been given it back to the gross stock investors. Are we wholesaling out of it . No the Dividend Growth is important. We think its a good stock you can own for the next three to five years. I mean, my case has always been that apple despite being the largest stock in the market is not a bellwether of the overall market it goes on very long streaks and its down 9 from its high the overall market is kind of held in there. I do think it finished one of these massive runs to the upside and probably does at least need to knock around at a range at least for a while. All right, guys, thank you very much. Thanks. Good to hear you today. Mark spelman, nancy tengler. President trump bashing nfl players kneeling in protest during the National Anthems in case you hadnt heard. Players, owners, across the league showing solidarity. Well discuss whether it could hurt the nfls bottom line. Later, ceo tells us whether the kneeling controversy could make advertisers pull out of the nfl. And we always want to hear from you, contacthsh vt e owia twitter, facebook or send us an email youre watching cnbc, first in business worldwide in the eastern United States. Supported by innovative packaging that extends the shelf life of foods. And infrastructure upgrades that help us share our produce with the world. Here and all across new york state, were building the new new york. To grow your business with us in the finger lakes, visit esd. Ny. Gov. I enjoy the fresher things in us in the life. O. Lakes, fresh towels. Fresh soaps. And of course, tripadvisors freshest, lowest. Prices. So if youre anything like me. Youll want to check tripadvisor. We now instantly compare prices. From over 200 booking sites. To find you the lowest price. On the hotel you want. Go on, try something fresh. Tripadvisor. The latest reviews. The lowest prices. Hey youve gotta see this. Cno. N. Alright, see you down there. Mmm, fine. Okay, what do we got . Okay, watch this. Do the thing we talked about. What do we say . Its going to be great. Watch. Remember what we were just saying . Go irish see that . Yes im gonna just go back to doing what i was doing. Find your awesome with the xfinity x1 voice remote. Welcome back lets send it back over to seema mody for an earnings alert here. Seema . Reporter hi, kelly, eyes on shares of Ascena Retail. Keep in mind this is a small cap name, market cap of 400 million. Earnings, 5 cents 1. 66 analys this is the owner of dress barn and an taylor. Chief executive officer of Ascena Retail cautious in the press release, said remain clin challenging, sales were down and were planning for the trend to continue for the foreseeable future back to you, kelly. Yes, and the shares are up 15 . Tells you a lot about the psychology of where they are seema, thank you. The nfl, meantime, hit hard by health issues, falling ratings and controversial player protests apparently thats not hurting the leagues ability to generate a profit robert frank is here with details. At the end of the day, football is a business, and a big and growing business we know nfl players get paid very well, but the big gains have been to the owners and team values 32 nfl families are now worth a combined 100 billion. Thats up 8 from last year. The top teams are up even many h more dallas cowboys, most valuable team in American Sports up 14 last year. Nearly double the value of five years ago. Owner jerry jones has been a master at monetizing from merchandise, to stadium sales and naming rights. It had profits of 350 million last year. Now, the new england patriots, theyre ranked second, up 9 , worth 3. 7 billion Merchandise Sales just blowing up after their big super bowl win last year. Now, followed by the new york giants at 3. 3 billion buffalo bills, theyre the least valuable team but theyre still worth 1. 6 billion rising team values driven by revenue, media and tv deals, about half of it a growing share from corporate sponsorship deals. The team generated 1. 4 billion from sponsorship, naming right and ad signage last year and stadiums, those are the big cash cows right now Miami Dolphins getting 250 million from a naming rights deal with hard rock. And the Atlanta Falcons getting 900 million from sponsorship around their new stadium all that means that 19 of the nfl owners are now billionaires. With a b. Robert, thank you very much. Thank you, guys. It joining us with more is chris, cofounder of bhv, former ceo of caa sports Media Ventures and cofounder of College Sports television bought by cbs sports. Great to have you with us. Welcome. All right thanks for having me you know, interesting about the team values, just wanted to mention, im thinking to myself, you know, its kind of like house prices, when something gets so high, can it keep going up you hear robert talking about corporate sponsorships i dont know, are these destined to become more and more lucrative franchises well, i mean i think if you look at the trajectory, clearly theres an appetite for professional football, college football, football in general in this country and, you know, obviously the nshlnf is a very commercialized, commerciallydriven enterprise and theyve been able to take consumption of fans in terms of attendance, sponsorships and advertisers and, of course, tv rights, and continue to drive consumption higher so well theres nothing that would indicate at this point that thats not going to continue well, theres a couple of indications. I mean, viewership has been trending lower there are concerns about safety. Youth participation is down. And now this whole politicization issue, i mean, you think thats going to have no effect if the long run . Listen, i think in the grand scheme of entertainment consumption, you know, the nfl and live sports, in particular, is everything is lower than it used to be, but it still holds real value inside of, you know, the media ecosystem and fandom so i think theyre going to continue to fight some of the Market Forces there, but theyre a very strong brand. I think yesterday was a day like ive not seen before ive been watching nfl football for 40 years and the nature of the protests and this particular issue is something thats going to play out over time, and well see where it goes. Chris, i guess football and just in general, live sports place in the ecosystem you mentioned has been this big question because the broader trends of lower viewership for commercial television, for all kinds of content thats in realti realtime, has been going down faster than the value of the sports eyeballs has. So, in other words, sports rights are even more valuable because of scarcity value, because there are so few things that can command a mass audience is there ever a foreseeable moment, though, where you have a break point, when you have a down round, so to speak, in League Sports rights at some point . Well, i mean, thats the question that everybody wants the answer to. I dont know that its theres anything that would indicate thats the case i think because of new consumption and digital and mobile and over the top and all the things that are now at kind of the top of the first inning, if you will, to use a baseball term, theres a lot to play out over the last several years and going to be a transition for somehow i believe monetization of digital and mobile for sports will catch up with the consumption. Right now consumption is way ahead of monetizatiomonetizatio i was just seeing richardsons statement, the owner of the panthers, he said politicizing the game is damaging, takes the focus off the greatness of the game, itself, and those who play it. Chris, you raised an interesting point of whos going to show the games in the future. Theres a lot of debate about whether twitter, facebook, amazon, will be appropriate platforms, will they be bidding up big do you think they will be Going Forward . They certainly started to dip their toe in the water over the last couple years, twitter, now amazon doing thursday night football, facebook is experimenting with live sports i think youre going to see a whole bunch of that over the next several years in anticipation of the really big sports rights, im talking all the big league deals starting with the nhl, then mlb and all the nfl packages those are all kind of 2020, 2021 and beyond, and i think those thats where if theres going be a tipping point, thats likely where well see some of the bigger players, you know, really make the big investment. Im sure like theyre doing now, theyll want to be involved im talking about carrying it exclusively and paying up even beyond the size of the contracts that weve seen today. Thats the big question, right are these tv platforms, the traditional carriers, going to be the ones shelling out major bucks for these contracts or with all the cash the tech giants have, will they be the ones to do it . Well, well see i dont know that its going to be an all or nothing it may be that, like as an example, the nfl which has five different temperature pav packae they slice off one and take it away from a traditional broadcast and put it in the hands of a digital player, much like they experimented with thursday night football with currently the amazon package i could envision a day, you know, in 2022, when all these packages come up again, where a big digital player buys monday night football and the rest stays in more Traditional Television distribution yeah. Thats its going to be interesting. Especially with everything going on now to see how it all feeds into it. Chris, thanks for joining us. You got it. Well, the latest attempt to replace obamacare is undergoing lastminute changes to help win over skeptical republican senators doesnt look like its working, but coming up, former health and Human Services secretary Kathleen Sebelius explains whether increasing money to certain states to win votes could help get the bill over the finish line. First, one major wall street bank says a specific part of the Retail Industry will be able to shake off and thrive theman azo effe effect our fast take when we come back. The classes, the friends, the independence. And since we planned for it, that student debt is the one experience, im glad shell miss when you have the right financial advisor, life can be brilliant. Ameriprise [and her new business i do, to jeanetgo. Jeanette was excellent at marrying people. But had trouble getting paid. Not a good time, jeanette. Even worse. Now im uncomfortable. But heres the good news, jeanette got quickbooks. Send that invoice, jeanette. 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This is not the cloud you know. This is the ibm cloud. The ibm cloud is the cloud for enterprise. Yours. Welcome back it is time now for todays fast take its an amazon kind of edition today. We begin with kroger because the grocery chain is fighting back against amazon with a new website to recruit local and emerging brands to its stores remember, last week came the news one of amazons first moves after buying whole foods is to centralize the decision making, michael. Has amazon misfired here i dont know if they misfired i think everythings converging toward one another right . So central decisionmaking doesnt mean we just go with the off the shelf national any old supplier i think it means lets just figure out exactly what region were going to be using. I think its krogers effort to say, we can kind of play in a similar game, we can try to be natural, organic, local, all the rest yeah, the website, itself, its, like, www. Kroger. Com wearelocal. Emerging brands is fascinating, too albertsons buy the meal Delivery Service last week. Plated. All the big packaged Food Companies buying whatever little trendy single product brands are out there. So its a bit of a gold rush. Ive eaten a lot of trendy stuff over the years im not still eating it. Its a fad. Its a fad but it might still work for them. Next, amazons delivery effort is, meanwhile, beefing up amazon is adding shake shack, chipotle the olo tieup, down another 1 earlier today. Can amazon win food delivery you know, i dont know. Honestly, i dont live in america, i live in manhattan, so every place delivers so its sort of seems like a whats the big deal . I do know that there was a lot of bearishness toward grubhub for a long time, because it didnt seem like they could really make it work on a National Basis so can amazon have the better app, or i mean, whats the line of competition . Sounds like chuck had a nice he said, look, the goal, hes convinced for amazon, is to drive people to prime now. Right. Ultimately, that becomes the ondemand portal they can a. I. That, you know, monetize that, the whole e ecosystem i would understand. Theyre going to a. I. It. My a. I. It, the next phase to understanding the web. Next, one place amazon cannot win according to jp morgan their analyst insists offprice retail like tjx and ross stores is a Treasure Hunt model amazon simply cant copy online michael, is he right i dont know if i would consider t. J. Maxx right for Treasure Hunting i understand what theyre talking about. I do. Its a serendipity, dont know what youre looking for, you want to see what came in. Just want a deal. It makes total sense. Its a little bit consensus of a call. More than a little bit. How the street views ross and t. J. Maxx. The companies have had partly because theyre benefiting from all of the inventory that the bankrupt retailers exactly, not only that, the brands are very conscious of where and when they make their stuff available, right, if its just past the season, naid rather put it in the store than just throw it up online. I do think theres a point about off price sort of extreme discount competing with amazon as we both now probably observe, amazon is not the low price place to get stuff anymore the most convenient. Im willing to pay that price. Im happier to pay a much lower with un. I think frequency of visits and dropping in is something these chains have more than the department stores. I just went to an aldi, 70 dark chocolate, i mean, it costs nothing. It is very good. Much of the green and black i was paying 4. That was my takeaway. Time for a cnbc news update with sue herera. Sue . Hi, guys, heres whats happening at this hour, everyone protesters interrupting the Senate Hearing on the Graham Cassidy gop Health Care Bill gop leaders face an uphill fight this week to prevent a final defeat of their health effort. Just three republican opponents would kill the bill in the narrowly divided senate. A tearful Anthony Weiner is sentenced to 21 months in prison for sexting with a 15yearold girl in a case that round up rocking the president ial election because weiners wife was a close aide of hillary clintons. The former congressman telling a federal judge he was, quote, a very sick man for a very long time and was, quote, profoundly sorry. Volvo plans to expand its manufacturing facility in berkeley county, south carolina. The automaker will invest more than 1 billion in that state and create more than 1,900 jobs. And britains prince harry and his girlfriend, american actress meghan markle, making their First Official public appearance as a couple they held hands as they walked toward the city hall in toronto, and attended a wheelchair tennis event at the Invictus Games for wounded veterans and, of course, prince harry is heavily involved in that particular charity having basically founded it. Thats the news update, kell, back to you. All right, thank you very much, sue. You got it. Sue herera. Lets send it back to seema mody for an Earnings Report. Reporter as we talk about technology and security, take a look at red hat. On the rise here in extended trade on what looks like a strong Earnings Report 77 cents adjusted. The street was cents. Revenue, 723,000. The eps i would point out for the Third Quarter guidance in line with expectations but the commentary quite positive as well in the press release. Shares up 5 here, kelly. All right, seema, thank you. Up next the krrkceo of ad g interpublic, how theyre being impacted by the nfl National Anthem kneeling and facebook and google allowing advertisers to target hate groups. Plus rapper eminem is headed to wall street tag east part of his music calois find out how fans and investors can buy a stake in his music on the closing bell. I count on my dell Small Business advisor for tech advice. With one phone call, i get products that suit my needs and i get back to business. Not rebalancing your portfolio. Focused on what you love, not how your money will last through retirement. We make it easier to plan for retirement with day one target date funds from prudential. Look forward to your 401k plan. Leaders in advertising gathering today for new yorks annual ad week, thats where we find cnbcs Julia Boorstin joined by interpublic ceo michael roth julia . Thanks so much, kelly, and michael, thanks so much for talking to us today. So as the ceo as one of the largest ad Agency Holding groups, whats your opinion on the latest controversy between President Trump and the nfl is going to do to tad dollad dollas most valuable ad time in television. Well, look, i think the controversy lends itself to obviously sports has a lot of opinions and people are going to have opinions one way or the other. I think whats great about it s is, you know, one of the things that makes America Great is the 1st amendment, and in sports, people have a lot of ways of showing it people paint their face. They wear weird hats and i just think its important that the ability to express ones opinion is very important. As far as our clients go, we havent seen any pullback from our clients, and i think its still a very important part of the tv offering that we have do you anticipate a time when the nfl could ever get too political for your ad clients . Oh, eventually something could get too political, yes but i dont expect to see that in the nfl. The other big ad question here, in ad week, of course, is this big conference comes just a couple of days after the latest revelations from facebook. Theyre handing over 3,000 ads, thought to be purchased by the russians to manipulate the election what does all of this sort of controversy about this facebook russia ad buy mean for you and your relationship with facebook . You know, facebook and google and all the other media outlets, these are important vehicles for us to reach the consumer on behalf of our clients and its important that the insights that we get from the consumers, so its a platform, a very important platform in our industry facebook and google make up 70 of the ad spend in it. I think its important because they have such a long reach and opportunity that they take responsibility in terms of whats shown via their platform. And i think thats what were going to be seeing. Kelly hi, mr. Roth. Yeah, its kelly here. Back in new york i guess downtown in new york anyway, im just wondering, broadly speaking, do you think that facebook and googles total ad share, you know, the growth there, has that peaked are people has where are you guys putting the marginal gl dollar to work would you say thats the duopoly for the ad dollar here i dont think theres any question that the duopoly is the major force with respect to social media, video, and search. There are other players in the space. Obviously, amazon is an important player and i personally believe amazon will grow significantly as a player we have twitter, we have all sorts of oath, one of the new comers in the space. So i think its important that we have opportunities to reach consumers. And what will happen is the clients will be more efficient in terms of where they spend their money and theyll reach the consumers in the most efficient way without the most noise interfering with their mess samg. Theres been a lot of talk on capitol hill about how there needs to be more government regulation of that duopoly facebook and google. Especially when it comes to political ad spending. Do you think that there needs to be more regulation, will we see more regulation . I think i think facebook and google, were working with both those organizations to make sure that theres proper screening, and obviously, theres work to be done. If its not controlled, the tendency is to normalize the internet just like tv became normalized and people had regulation so i think the googles and the facebooks if they dont get their act together, i think the reaction from the legislators will be, in fact, to put in some regulation my personal view is we can solve this working together. A year ago we were here at ad week and that was when facebook revealed mismeasurement issues since then, google, youtube struggled with some brand issues, brand safety issues. There was a small advertiser boycott of youtube do you think both of those companies are doing enough to manage those issues . And the concerns of you and your clients . Well, you know, frankly, ill be personal about it, thats when our clients need an arbiter in terms of where their dollars should be allocated, and whether theyre having effectiveness that is required so we play an Important Role in that that said, i think both of them are making an attempt to clean up their act, make sure the viewability is what clients should be expecting in terms of what they pay for and have work to be done but theyre trying to fix that were working with them to make sure and frankly, the clients, if they dont get it right, theyll take their dollars and put them elsewhere. Well, it will be interesting to see where they put those dollars. Michael roth, ceo of ipg, thanks so much for joining us today. My pleasure good to be here. Kelly, back over to you. Yeah, thank you both very much even quieted down a little bit we could hear that a little more easily guys, thank you. Health insurers trading lower today as it appears the republicans latest proposal to repeal and replace obamacare could fail ahead of this weeks deadline up next, former hhs secretary, former governor of kansas, Kathleen Sebelius joins us with her take. Later, rapper eminem is going public how investors can buy a piece of d atreal slim shadys catalog anwh it means to the Music Industry coming up youre watching cnbc, first in business worldwide baby crying slow jazz music fly me to the moon and let me play bell ring whats Critical Thinking like . A basketball costs 14. Whats team spirit worth . cheers whats it worth to talk to your mom . Whats the value of a walk in the woods . The value of capital is to create, not just wealth, but things that matter. Morgan stanley welcome back the senate may still hold a vote this week on the Graham Cassidy bill today the bill was changed to appease two republican handouts by allocating billions more to their states of me maaine and alaska will that secure their much needed yes boths joining us now, Kathleen Sebelius former health and Human Services sec stair and former kansas governor thank you for joining us good to be with you. Let me guess, you love this bill well, its unfortunate, but i think what you saw today earlier in the senate with some seriously disabled americans protesting this legislation on the grounds that it means life and death to a number of them, is actually realtime issues. This bill would devastate Medicaid Programs. Underlying Medicaid Programs gradually in every state in the country. Kind of blow up state budgets. And there are 10 million disabled seniors and children who rely on medicaid for their health care. Thats just a start. Its estimated so let me just ask you sure. Speaking as a former governor because thats at the crux of this latest effort which would basically say, okay, we take the funds, turn them into block grants, try to equalize that and increase the number gradually over time Going Forward. How would that work in practice for a state like kansas . Is that something that could at least allow you to express your vision of what health care should be in that state . Well, i think it actually theyre talking about two real pots of money, both of which go down so the first is for the socalled expanded population. Kansas is one of the states that didnt take advantage of the federal cost share to expand the program to right. Single adults, although the legislature recently voted to do that and the governor still has vetoed to. Twothirds of the states did that would go away entirely within the next couple of years. In addition to that, thats about 11 Million People around the country, that money is then spread out a little bit, but in every state, medicaid, the largest Insurance Program that we have in the country, is capped on a per capita basis so every state loses money whether you expand it or not i mean, its part of the reason why its the Biggest Program in the country is because of the expansion under obamacare. We have to remember, this was not the status quo prior to that so now its well, actually it sounds like it was. It was the largest Insurance Program even before the expansion. About 11 million adults now have additional medicaid coverage prior to that, were talking about half the births in this country being paid for by medicaid 10 million disabled children and adults the largest payer for nursing home coverage in the country about 40 of Childrens Health insurance. So thats the underlying program. Its the largest transfer of federal dollars to states across the country. This is not about obamacare. This is what medicaid looks like thats the program theyre talking about block granting, cutting and capping. Yeah, no, i take your point that it was the biggest prior to that so i apologize if i misspoke its certainly the biggest today. It is. It did expand under obamacare. I just so if this gop effort does not go forward, and it sounds pretty dicey at the moment, we revert to the status quo now which is that people on medicaid are on medicaid, on medicare are on medicare and everybody else is either covered at work or theyre trying to get a plan through one of the exchanges which sound a little bit pricey these days. So what would your recommendation be if theres no change as were heading into 2018 and beyond with people facing such high premiums in the individual market . Well, in six weeks, open enrollment for the marketplaces begins for 2018. Assuming that some bill doesnt miraculously pass which i lope it doesnt so the Administration Needs to very quickly make sure that the law is followed. That people know open enrollment is coming. That they follow the law on the individual mandate encouraging young and Healthy People to sign up, that they pay the subsidies that are due under the law to Insurance Companies so low income americans can take advantage of health insurance. They can stabilize the marketplace. And they can encourage other Countries Companies to come in thats the best way to lower costs for everybody. Miss sebelius, thank you very much. Good to talk to you. Kathleen sebelius target making a big pledge to employees in the hopes of keeping them from moving on to competitors. Well have those details coming up. Tonight on fast money a technician who called the selloff in big die will tetech l you what to buy now instead. Ing thats a great idea, but why dont you just go to thinkorswims chat rooms where you can share strategies, ideas, even actual trades with market professionals and thousands of other traders . I know. Your brain told my brain before you told my face. Mmm, blueberry . Tap into the knowledge of other traders on thinkorswim. Only at td ameritrade. For tech advice. Dell Small Business advisor with one phone call, i get products that suit my needs and i get back to business. Welcome back target is upping its minimum wage i think for the third time now. Courtney ragan has the details hi, kelly target giving employees a holiday gift in october targets bumping up the minimum hourly pay to 11, 15 bucks by the end of 2020. Kelly, youre right. It is the third time in three years that target has raised wages. This time a little bit louder than the last two raises the timing also means that 100,000 seasonal employees will start at higher pay. Thats convenient. The retailers current minimum pay is 10 up from 2015. Target doesnt expect an earnings hit reiterating the comp sales and Earnings Guidance from the Current Quarter and year while ceo wouldnt say, it seems target has been planning this for some time. Investing in the team was part of the 7 billion Investment Plan that was asked discussed february last year walmart began a 2. 7 billion bump in hourly pay where new employees start at 9 an hour and bump up to 10 as the countrys largest private employer, we know walmarts pay gets attention gap, inc. , was the first retailer to raise its wage to 9 in 2014 and 10 in 2015. 11 is well above the federal minimum which is still 7. 25 so thats something, too yeah. Courtney, thank you. Michael, tight labor market or what it reflects a few things. Obviously target has to make the calculation that the cost of open positions and constantly replacing people who leave is high enough that youd want to try to be known as the place you can get a higher wage. Also, probably means that smaller businesses competing with a target or other big chains for the same workers are going to be at a disadvantage. True. Going to put the squeeze on them. How would you li tkeo own shares of rapper eminems catalog . Well tell you how next. Ive always wanted to create those experiences for others. With my advisors help along the way, its finally my turn to be the host. When you have the right financial advisor, life can be brilliant. Ameriprise this is all taking me back eminem fans have one more way to show their love for the rappers. Royalty exchange, an online marketplace to buy and sell royalties announced today that its new Company Plans to take eminems whole series public joining us with more is matt smith. He is the ceo of the Royalty Exchange thanks for joining us. Glad to be here. Even though this is kind of catchy, its also a little complicated. As i understand its mark and jeff is it bass or bass . Its bass. They hold an interest in every recording since 99 and now theyre going to sell up to 25 of their royalty rights. Whats in this for the Bass Brothers why are they doing this . Well, you know, honestly you should probably ask them what theyre getting out of it. I can tell you the whole reason why were doing this in general. The Music Industry is booming right now. Entered a big bull market since last year and it has to do with streaming. Goldman expects it to go from 3. 9 billion last year up to 28 billion by 2030, so thats huge growth in the Music Industry unfortunately, for investors theres not many ways to directly participate in this most of the big labels are owned by huge conglomerates. Its had ard to get exposure to the growth were starting with a trophy asset, this eminems catalog ftp and the Bass Brothers have been great to build this solution for the brothers. They want the fans of eminem like they are to be able to participate in this. Investing in royalty streams has been around a while. A lot of times its through institutional platforms or maybe for privately through sort of High Net Worth investing channels what are the virtues of having it listed ultimately on an exchange also, how sensitive will that value of that investment on the exchange be to expectations of future record sales or is it a standard take from each individual artist . Well, theres a lot of questions youre asking there. I think one of the biggest things to think about in terms of how it will be the prices will be affected based upon the future, i think that the important thing to think about there is the for the eminem catalog in particular, whats included in it is everything that was produced up through 2013 so any new albums are not included in this i will say there tends to be a bump in any old catalogs when something new is released. What is the minimum amount, matt so if i want to get involved in this, whats the smallest amount that i could put in and get involved 2,250 is the minimum. Okay. So if i give you 2,250 lets say october 1, what am i going to be collecting and when from that point forward thats a good question. The key for us, the way the royalty flow is structured is its to bring investors closer to the royalty income. Dividends and Dividend Income is the key part of the strategy our goal is to distribute as much as we can of the proceeds and grow dividends over time. So are you guaranteeing that ill get dividends or are you saying theres some potential up side and im going to hang on to something with a share price as is in our sec disclosures, our intention is to distribute dividends and grow those over time. What proportion of the earnings every time somebody plays one of these songs, right, does this include streaming . You mentioned thattes a busine. Yes. A couple of cents of that, does that flow into this fund and then i benefit from that yeah. Exactly. So this is not a fund. Its part of a royalty Investment Company as part of that investors get paid regular dividends just the bumper intro you had playing the eminem intro youre welcome. The more the better. Matt, we have a zillion more questions. Please come back. Id love to. Thank you very much for coming in. I love eminem. It takes me back. High school. That was like the latest thing. Different time line. Very different. That does it for cloclosing be. Fast money begins right now. Fast money starts right now. Live from the Nasdaq Market site im melissa lee. Traders on the desk are tim see more, guy adami. Tonight on fast, dont call it a comeback oil soaring above 50 bucks a barrel if youre attempting to buy stocks, commodities king Dennis Hartman says there is a better stock to own. Plus, drama in the end zone. Could protests and donald trump tweets