Transcripts For CNBC Closing Bell 20170926

All the latest details for you. After the bell, nike will report earnings. We got a debate on whether the stock is a buy ahead of that release. We begin with all of the news how ut of washington. Cnbcs john harwood is in d. C. With developments on the effort to repeal and replace obamacare. Ylan muil has the latest on the tax reform eamon javers, details on the press conference with the Prime Minister of jane Janet Yellens speech this afternoon. John, lets begin with you. Wilfred, today it became official what was obvious yesterday when Susan Collins became the third republican to oppose that Graham Cassidy block grant bill to repeal and replace obamacare. Turned tout be three republicans who caused them to pull the plug rand paul of kentucky, john mccain of arizona, Susan Collins of maine other opponents as well. Many states including the states of these three senators lost money under that plan. Remember, this is a plan in 2026 would have taken away 215 billion that the government is on track to spend now on health care now we saw that announcement, Lindsey Graham and bill cassidy, the two sponsors theyre not giving up. Mitch mcconnell said we are now moving on to health care thats the top priority agenda for President Trump and republicans. And now we see if they can pull that off all right, john, thank you. Lets bring in ylan mui now with the latest on the plan for tax reform as it stands for all that we know about it right now, ylan. Reporter kelly, i just spoke with two Senior Administration officials and they insisted that President Trump is all in on tax reform remember, trump had been criticized for not knowing the details of health care and not doing more to stump for it, but on tax reform, im told he does support the framework, and that the big six will unveil tomorrow and hes been particularly focused on lowering rates for Corporation Corporations trump will be making a big speech on tax reform tomorrow in indiana. Ive learned hes also inviting that states democratic senator, joe donnelly, to join him. Saw the president meeting earlier today with both republican and democratic members of the Tax Writing Committee in the house, show trump is still hoping to win over at least a few democrats on this issue but for republicans, House Speaker paul ryan said today this is a mustwin for the party. Tax reform is the most important thing we can do to restore confidence to this country, to get jobs and prosperity and that is why were so singularly focused on getting this done this year. Reporter guys, House Republicans are holding a tax reform retreat tomorrow. Were ex ing a big reveal on the tax plan to happen after that. Back over to you. Ylan, thank you very much for that lets go to eamon javers at the white house for more on President Trumps joint News Conference with the Prime Minister of spain. Eamon . Reporter hi, wilfred, the press conference wrapped up a few minutes ago at the white house, talking about a number of topics but especially north korea. He said once again the United States is prepared to use the mill their option against north korea if it come that president. He says if it does that will be devastating for north korea. Frustration. You could really hear in it his voice when he talked to me, the nfl situation is a very important situation i heard that before about was i preoccupied . Not at all not at all i have plenty of time on my hands. All i do is work to be honest with you, thats an important function of working. Its called respect for our country. And for people to disrespect that by kneeling during the playing of our national anthem, i think is disgraceful all right eamon, thank you now Steve Liesman joins us from cnbc headquarters with a wrapup of, oh, yes, fed chair Janet Yellens comments this afternoon, too. Some business news. Fed chair janet yellen went further than she has in the past, guys, in acknowledging the fed may not fully understand the inflation die nynamidynamic. Ultimately she ends up in her speech before economists today, backing the feds current policy of gradual rate hikes and removal of easy Monetary Policy. The reason, she says theres substantial drawbacks to the fed going too slow without further modest increases in the federal funds rate over time, theres risk that the labor market could eventually become overheated, potentially creating an inflationary problem down the road that might be difficult to overcome without triggering a recession. That was the conclusion of the speech, but she spent most of the time before that speculating about the possibility the fed might have inflation and the job dynamic wrong. If these sorts of favorable supplytype shocks continue, achieving our 2 inflation goal over the medium term may require a more accommodative stance of Monetary Policy than might otherwise be appropriate i know what you care about, was it hawkish or dovish is a little bit of both. Hawkish in that she concluded in the face of uncertainty the fed should plow ahead with rate hikes. It was dovish for the fed chair to openly speculate the fed may have inflation wrong and speculate also about policy changes, guys, in it does. I like the line from peter where he said i had to splash water on my face because i thinktime hethin im hearing a more hawkish janet yellen that was the end of it. Dovish is the default. You know what the markets did, if you can put up intraday, the two year, it goes straight up and right back down it ends up i thenk even lower on the twoyear yield than it was before the speech. So they had this whole sort of hawkish idea and then maybe not. All right and the dollar gave up a little bit of its gains. Right. Today as well. Kparkt exactly. By the end of it. Thanks very much. My pleasure. Were going to discuss this further with our closing bell exchange, mike, president of portfolio family of funds. And Rick Santelli from the cme rick, lets start with you off the back of Janet Yellens comments talk us through what you think the bond market did in reaction to it. Very ittle. I mean, i know steves looking at a basis point or two, but, you know, 143 is where were at. We settle at 142 we could argue about a few base points we also happen to have a had a twoyear note action which might have given it a speck more volatility even that auction was just average, considering the last twoyear note auction we had about four weeks ago when the yield was 132 instead of 142 that didnt go much better so theres an issue there. Maybe its the topic janet chose. Traders on this floor, they dont care about the reasons day like the normalization going on even if thats the right word. Slightly higher rates. Theyve been too low for too long lets balance sheet. Its been too big for too long exactly between the last fed meeting and the long press conference, where there was a lot of head scratching by the group regarding why inflation has been so tame, it seems like all of a sudden, in just a couple weeks, theres so much more knowledge about the future being more highly inflationary didnt really make sense to any. I splash water on my face, too, just because i dont understand how in a couple weeks so many things could change, but at the end of the day, the timings right, theyre doing the right thing. The pace isnt bad lets leave it at that and keith, the markets mixed still this afternoon the russell still continuing its march higher for those small caps and we still have to think about why names like facebook were down 5 yesterday. A lot of bigpicture themes today. Movement out of d. C. Or maybe the lack thereof where does that leave you. Kind of remipnds me of Janet Yellens speech. Definite maybe maybe it will go higher, maybe it wont listen, what we see in the markets now is pretty much just a churn. Its certainly taken on the behavior of a momentum trade from industry to industry, sector to sector two recent examples, runup in the Energy Complex really since june sure, some has to do with the commodity price lifting up but a lot has to do with the money chasing after the bullish septemberme sentiment. The tech sector that sold off massively. Looking at another potential tech wreck part 2 like we had over the summer. Its what the market has become, momentum play from industry to industry, you do have larger theme ideas going on as youre pointing out i think until we get out of this month, get out of this Third Quarter, really start to try to understand and ascertain what the fundamental drivers will be, maybe it will be Third Quarter earnings, maybe it will be the tax package, maybe something to do with north korea. I think were doomed to be stuck in a rut for the foreseeable future so even though the macro things are overlaying the market, we do think about those on a daytoday trade, youre going to continue to see this churn for the next couple weeks. Michael, the market hasnt really been rocked by the decision not to hold a vote on the Graham Cassidy Health Care Bill its the same eventuality met tax reform, would the market be knocked sideways yeah, i think with health care, everybody expected that not much was going to happen, so it isnt a surprise. I think the expectations for tax reform are a little bit better but, again, watching the sausage being made on all this legislative action, theres still a big degree of uncertainty as to whether were going to get anything, and if its going to be anywhere near what was maybe hoped for or promised earlier in the year so i think theres a lot of uncertainty. With respect to Janet Yellens speech today, i mean, maybe we will, maybe we wont im not sure it really moved the needle at all. I think the fact remains theres a lot happening in october that may drive the feds Rate Decision in december and thereafter corporate earnings being one of them, were about to come on the Year Anniversary of sort of an earnings reboot where earnings have been stronger this will be the Fourth Quarter in a row but the comps are going to get more difficult and so its you know, are we still going to get that same degree of Earnings Growth that weve had the last several quarters and to what extent has gdp been impacted by the hurricanes and the storms if those reflect slowdowns in any other data points, then its not a fore gone conclusion that the fed will raise in december or two, three, four times in 18. So theres still a lot to look forward to here. Keith, briefly, just because youre talking a lot about inflation, some inputs include o oil there. Doing well lately. Taking a pause today what do you make of the energy space lately remarkably, the jawboning from o fopec and saudis have started to work on the market and maybe some of the production cuts latched into the story and narrative as well. I maintain oil will be stuck in a pretty tight range even though its expanded a little bit i cant see the brent or wti t getting much above 60. It got overbought in our work. Pulling back a little today. Every time it goat gets up to 6 basins, 27, 28 these days and still have a lot of debt to pay off down there as long as oil stays up here, theyre going to pump until theyre blue in the face and put a lid on prices. Im not sure thats a play that will get extended to the upside for very long. Its going to come back in here i think in the next couple weeks. Michael, you own facebook were you topping out today after yesterdays big selloff . Were longterm investors, so, no, we really didnt do anything over the last couple days i think the reasons for the selloff, you know, some of them were facebookspecific, some were more broad eer antitech feelings yesterday the net result is its a great longterm growth story its not cheap trading at a mid 30s p e we think hoeover time it demonstrated it can grow into the multiple we expect it to continue to do that. If you guys like it long term, why not take it at 5 , or for if you go back to its peaks in the selloff that weve seen potentially true although weve got a full weighting in it right now so its not necessarily the decline wasnt that substantial where it was a screaming buy due to yesterday. When you have a position like we have, thats pretty full, theres no need to add to it we certainly werent selling it yesterday. Still up 30 this year. Exactly the tech rebounded today but not to the same extent thank you very much. Michael, keith and rick. We have about 45 minutes or so to go before the bell just over that we are high by around about a third of a percent for the nasdaq that was down almost a percent yesterday. About a tenth of a percent for the other two indices. Coming up, the five largest hedge funds in the world are now primarily computer driven. What happens jo s when you remoh human touch from trading show one fund is using algos with a mind of their own. Later the playbyplay on todays bombshell ncaa corruption allegations that have an adidas exec and a number of coaches in the cross hairs of investigators. And we want to hear from you. Reach out to the show. Tell us your thoughts. Use twitter, facebook, or send us an email, closingbell nbcuni. Com youre watching cnbc first in Business Worldwide. Welcome back to the closing bell. Lets check in on todays Market Movers Darden Restaurants one of the worst performing stocks in the s p 500 today after reporting lower than expected samestore sales last quarter owner of olive garden blaming Hurricane Harvey for the shortfall. Down some 5. 86 . Shares of boston beer are hopping higher after Credit Suisse upgraded the maker of sad adam s citing strong growth in its alcoholic iced tea and seltzer brands the analyst also says the stock, plunged 25 over the past it years, continues to decline, it could become an attractive takeover target. Meanwhile, call it the rise of the machine, trading at all five of the hedge funds primarily driven by computers. It that includes londonbased leslie picker is in london with a look another what happened. Reporter hey, kelly, thats right, its just past 58 p. M. Here in london and the Trading Floor has cleared out but the machines are still hard at work. This screen behind me is just a small subsoeet of the millions pieces of data that the computers are sifting through and trading. Mangroup manages about 40 billion this way its been a socalled quant fund for 30 years over the past three years, Machine Learning, to help support its trading. Yesterday we spoke with the cio who told us that Machine Learning has produced alpha beyond that of traditional quant. We view it as a way of finding pat teterns where we dot direct the machine exactly where to look, a good example might be if you want machines to buy on dips, then its sometimes quite hard to describe a dip perfectly, but the Machine Learning will just look for patterns of what dips look like and what happened next. Reporter he wouldnt be surprised if in five years half of mans hls assets or training was supported by Machine Learning guys there are so many things to talk about what was that box that you guys were looking at with the what was that contraption, leslie, with the silver and the looked like green and red numbers in there or something. Reporter the cube, exactly, they call it the light cube. It shows performance of each individual strategy, market, fund, within man ahl here in london so people here who work on the floor can see realtime fmp performance. One of the benefits of quant, a selling point, theres a much more transparent process when it comes to returns than, say, traditional fundamental hedge funds which, of course, dont have a by the minute tabulation of those sorts of profit and losses it looks like a little bit of a gimmick to wow it would be really transparent if they told how they were doing the trades. Leslie, we spoke earlier about some of the risks that the cio is aware of in terms of the threats to algo trading. One of them being leverage what about momentum . Clearly we are late stage of whats been a very long bull market many people, many critics of robotic trading, et cetera, quant trading say it can only work during an up trend or down trend but cant pick when its going to change direction. Reporter exactly thats one thing theyre hoping Machine Learning will be able to solve, when the exact turn will happen as of right now, the science makes it very difficult to actually predict a downturn, as you mentioned in momentum, of course, is a huge issue that took place in 2007 when there was a squocalled quantquake, everybody was in crowded trades and a few that happened to unwind caused a huge Ripple Effect scared away a lot of investors for almost a decade. Were starting to see a resurgence as well of those concerns, guys. Yeah, sauch huge part of the strategies, leslie good to get a look at it thank you very much. Have fun tonight. Reporter thanks, guys. Leslie picker in london do you see anyone in the office no, because its machine driven no, im joking it was very busy they have a lot of employees at mangroup. 40 minutes to go until the close. Dows up 22. S p up four. Nasdaq also up 22. Russell, outperforming again, up 7 1 2 points. We have an expert who says under armours pain could be nikes gain. Well break down a bull and bear case. Also coming up, the equifax fallout, a major shakeup today at the Company Following that massive data breach which exposed private information of nearly 150 million people. Weve got the latest on the boardroom changes when closing bell returns. Most American Homeowners would be shocked if they knew just how rich they were. The average American Home value has increased 40,000 over the last 5 years. But many dont know you can access that money without refinancing or selling your home. With a home equity loan, you can pull cash out of your house for anything you need home improvement, college tuition, even finally getting out of credit card debt. Come to lendingtree. Com to shop and compare home equity loans right now. Because at lendingtree, when banks compete, you win. Welcome back weve got a news alert on saudi arabia Jackie Deangelis at the details. Reporter good afternoon to you. The king of saudi arabia issued a decree allowing women to drive apparently this will go into effect in about ten months time it seems to be part of a little bit more of a modern vision for the kingdom. Remember, deputy crown prince issuing that 2030 vision, setting the stage for a longerterm process of transformation, but certainly within the region and saudi arabia allowing women to take to the streets and drive cars definitely sets the tone for that giving them a little bit more freedom within the kingdom. Back over to you a huge deal, obviously. Its part of theyre remaking the vision 20 reporter 2030. 2030. Thank you. There were concerns they were back tracking on that over the last couple weeks when they said they were worried about the oil money and people being able to keep government jobs these social measures are a key part of remaking their economy, right . Reporter absolutely. Its part of how theyre presenting themselves to the world. I dont want to connect two things, but i will remind you they talked about the ipo saying it will take place in 2018 some people said saudis efforts to keep opec prices up has been part of that, the Broader Vision as well of how theyre perceived could potentially be linked as well. Jackie, thank you very much for that i mean, kelly, it is a big deal, reminder of extraordinarily how far they still have to come. I cant believe how much theyve done in the last couple years, though, and the kinds of moves for the crown prince to become crown prince the power struggle yeah. Before this decision, they were the only country still in the world that didnt allow women to drive. Well, yeah, and there were also thoughts one of the reasons they wanted uber and lyft to move along was to not address that problem at all. Yes anyway, a long way to come. News alert on secretary of state Rex Tillerson. Lets get over to eamon javers with that one. Reporter hi, kelly, the state department announcing in the last couple minutes that secretary of state Rex Tillerson is going be visiting china september 28th through september 30th hes going to talk about north korea and trade while in china thats a potentially encouraging sign on the negotiations over north korea. We just heard the president in the rose garden a few moments ago praising chinese leader xi jinping for putting out that notice to chinese banks saying that they ought to not be doing business with north korean entities so perhaps a bit of a warming here between washington and beijing, as the secretary of state now expected to head to beijing for talks september 28th through the 30th kelly. Eamon, do we have a date yet for the president s own visit to beijing . Reporter i dont believe we do ill have to check that. Dont have that detail right in front of me here. Mr. Tillerson going first, then, in seems thanks very much, eamon. Reporter you bet. Still to come, corruption on the court. U. S. Authorities handing down charges of bribery, widespread conspiracy, people connected to a College Basketball scandal including coaches and an adidas executive. Adidas. I meant its wrong no, no, sit very good. Adidas. German company we got all the details on the ncaa bombshell coming up is the monolithic view 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. I enjoy the fresher things in life. O. 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. Welcome back time for a cnbc news update with sue herera. Heres whats happening at this hour, everyone. President trump says hell travel to puerto rico next tuesday to visit the hurricanebattered island. He made the announcement during the meeting this morning on tax reform with lawmakers from the house ways means committee. Puerto rico is very important to me and puerto rico, the people are fantastic people. I grew up in new york, so i know many people from puerto rico i know many puerto ricans. And these are great people, and we have to help them alabama gop senator Luther Strange accompanied by his wife voting in that States Senate runoff despite being backed by President Trump, he is lagging in the polls to his opponent, ray moore, who has been endorsed by steve bannon. Strange was appointed to the senate seat left vacant by Jeff Sessions. The Dallas Cowboys along with owner jerry jones taking a knee while linking arms prior to the national anthem. Before their game with the phoenix cardinals last night they then stood together for the star spangled banner the game was the most watched monday night game this season. Monday night football is up 63 over last year that is the news update this hour wilfred, ill send it back downtown to you. Sue, thank cryou very much f that. Executive with adidas along with ten college ive done it again, adidas along with ten coaches indicted today in a Corruption Scandal rocking the sport and Business World cnbcs Contessa Brewer at the manhattan courthouse with the details. Contessa, good afternoon. Reporter good afternoon. Arraignments are happening here this afternoon for a sports agent and Financial Adviser at the center of two separate corruption and bribery schemes in College Basketball. Federal prosecutors are charging ten people in total, four of them coaches, at top universities, and in a News Conference today, they laid out the diagrams of how these schemes worked one involves thesports agent, christian dawkins, Financial Adviser munish sood bribing coaches to then push student athletes toward their services when they leave college for the nba. The coaches charged today cast aside that responsibility, choosinginstead to use their influence to benefit themselves, without regard to the players own genuine interests. All of those charged tote contributed to a paytoplay culture that has no business in College Basketball. Reporter the other scheme involves a top adidas executive funneling money through sood and dawkins to get the players to attend adidassponsored schools. Either to the playe erers or thr families then theyd go on, the idea was, to become sponsored professional players in the nba fbi says this was an undercover investigation that still continues now out in the open and will proceed looking into corruption and misconduct. We should mention both adidas and the more than seven universities involved here have come out and said that they would cooperate fully with the investigation. Wi ln j fr w wilfred, kelly on the heels of that sports news, nike set to report earnings after the bell tonight. Up 6 this year. Nikes competitor, adidas, topped the brand in being the second biggest sports footwear seller. Is nike still worth a buy for investors . Joining us to debate guys, very good afternoon to you both you are a bull on nike, but not so much because of what you expect them to report this evening, but long term, you think that the challenges have had their time and its time for nike to fight back. Right, i think whatever they report this evening will not change my view on them i think theyre a strong, great brand. I think the adidas, adidas, which we want to call them, run into market share, is going to slow we already see the throwback starting to slow down. So i think that big gain theyve been making will slow. I dont think this news today will help them, either, so i do think nike is the winner in the space. I think theyre the premier guy with tech. Under armour who i thought was going to be the premier guy in tech has really faded. I think this leafs pretty much an open road for nike. Theyll have to fight it out with adidas. I think theyre the winner in the space. Sam, you have a hold, neutral rating on the company, why look, nike is the big kahuna, no doubt about that whatsoever they talked for years about their pull model too much inventory in the marketplace. Theyre facing growing at amazon and so on. They have to return back to that pull model so while maybe theyre on amazon now, so what do you mean theyre on amazon we havent seen it sold directly yet. Theyre on amazon through thi thirdparty sellers but dont have control of it its a matter of what they choose to sell there the problem i have, youre trying to 180, 200 sneakers oversupply in market they didnt anticipate when they guided for the year at the end of the fourth yaquarter. We think theyre going to have to do a major reset. Thats going to take some time were looking at a visibility here more than anything else. Nike, of course, heavily involved with the nfl. Do you expect them to comment on the recent issues tonight . What would you like to hear them say or you want them to stay clear of it . From what i understand, they already said they support the players, i think they staid what theyre going to say i dont think fundamentally that has anything to do with their business you just say were standing with the athletes, done, say nothing else, people get in trouble. You dont think it will affect their sales no, i mean, when youre talking about the nfl, youre talking about the football players, youre not necessarily talking about the fashion part of the business which is where, you know, the majority of the business is. If you go to a foot locker, finish line, any of those guys, a basketball shoe, you know, maybe 5 of the people buying that basketball shoe ever play basketball in the shoe so this is a fashion business. Thats where theyve been slow to sort of catch up with that. Thats where adidas has really stepped up the exactly so, jan, i understand why youre, you know, excited about nike here, but you have to admit that adidas has kind of been the leader in the footwear category, and thats been nikes biggest business traditionally so they havent been they havent been the leader in the footwear category. Theyve been the biggest share gainer in the footwear category. Nike is still the leader in the footwear category, theyre going to be for a very, very long time i still believe these gains adidas saw, adidas saw, are going to slow down i think the throwback is not going to be as important i think we see nike take some share back i think nike going on amazon is a really, really good idea it will help their business, not hurt it. The least said about the nfl the better just on the point about basketball sneakers for a second, though, i mean, so is there an opportunity here for nike with these revelations, these allegations against the adidas executive working with ncaa basketball coaches to bu d build, engrain that brand arguably if thats coming out the way it is and gets pushed back on quite a bit, is that an opportunity for nike to kind of remain dominant, to kind of start to fight back that share that its lost there absolutely. If these colleges dont run the other way as fast as they can, ill be surprised. Sure hoping we dont see anything come out about nike on this same format, but if this doesnt hurt adidas with their college promotion, it certainly should sam, just quickly as well, we got earnings, obviously, coming out in about 22 minutes. What numbers are you looking for, key factors the main thing were looking look, the numbers we think dont really maestter we think whats going to g is what they say about whats happening Going Forward and how credible that is and what theyre going to tell us now versus what theyre going to tell us in a month at their analyst day. I think that were i dont think were going to get the full story of whats going on at nike in the longterm plan until we get to october 25th at their analyst day. Okay, gents, thank you for joining us inings come out after the bell well have all of that as it comes. We got 21 minutes to go. Were a little higher but not too meaningfully tech is enjoying a bounceback. Nothing near the size of its selloff yesterday. All three indices on the greenwigreen which will snap a threeday losing streak for the dow. Ceo of ek equifax is out before hes set to testify. Up next, Colorado Governor John Hickenlooper with his ohio counterfar john kasich have been leading the charge on Bipartisan Health care reform t gl find out what the demise ofheop plan in the senate today means for their efforts after this if you could book a flight, then add a hotel, or car, or activity in one place and save, where would you go . Expedia gives you the world in your hand, so you can see more of it. Expedia welcome back home builder, lenar, hoping to lure in millennial home buyers starting today, Eagle Home Mortgage will offer a Mortgage Program with a feature to help pay off outstanding student loans. Up to 13,000 worth. Depending on the homes sale price. Lennar is up about 1. 25 on the news its wilfs favorite story of the day. Ive read a lot about it, compared to the uk off the back of this. I think this is the key takeaway on this is 3 i think is the maximum, 3 , 13,000, whatever is the smaller of the two. Is that in addition out of nowhere or is it a sort of shifting of who the individual is now paying off interests toward it sounds like its additional this is sort of a gift as opposed to a gimmick thats pretty impressive im not surprised to see a jump in the share price its not a huge cost, snesly, 3 if it can drive a cohort currently arent buying homes at all. I think youre right. A psychological impact well see if it gets people comfortable with the idea. A lot of people say having student debt is a lot of reasons they dont buy a house. By the way, it reminds me how much i think 6 to 7 . The size of debts people are left with, enormous. Anyway, moments ago Senate Republicans announced that there will be no vote this week to repeal and replace obamacare, as planned, theyre moving on to tax reform theyre vowing tole to back to health care, saying they have learned exactly what needs to be done senator Lindsey Graham, coauthor of the shelved bill, promised a triumphant return for the proposal with a process that gives more attention and time, we will repeal and replace obamacare with a block grant called Graham Cassidy heller johnson. Now we have something to talk about that makes sense the 50 republican senators, a lot of governors and i hope the american people. Joining us now is a governor, not one senator graham was likely referring to, we welcome john hickenlooper, democrat from colorado whos begun working on a Bipartisan Health plan with Ohio Governor and 2020 running partner john kasich. Am i a little ahead of yeah, what are you guys up to . No, new york weo, trying toe republican and democrat can work together, not that they can run together i dont know, weve seen crazy things happen already. Yeah. The name on the ticket would just be too long it would be impocket impossible. It would be kasich means you cant run with anyone ever. Probably true thats probably not bad advice thats not my advice. On the point of the health bill, governor, you know, now that it looks like the gop wont have a vote this week, senator graham still tried to say that the block grant process is the way to go. Do you disagree with him well, i think its worth looking at i thnk the key, what governor kasich and i have been talking about, and a bunch of other governors, all right, we had ten governors who signed that last letter to Mitch Mcconnell in the senate, the real focus is what is the how do we make the these the turbulence and how do we stabilize those private markets . Thats a first step. So, you know, the costsharing reductions, extend them through 2019, lets look at some sort of reinsurance, but now i think at a certain point, and i talked to john kasich last week about this, we have to begin looking at how do we control costs Going Forward . Whats it look like to really take on health care and the Affordable Care act, and whether that involves block grants or other aspects, you know, if youre going to have block grants, you got to make sure that youre not cutting, you know, allocating resources away from states. Right . Its got to be theres got to be some fairness in this governor, i mean, clearly you didnt like the Graham Cassidy bill, itself, but where do you think were headed now with obamacare, say in six months time, if nothing is done on the republican side, whilst they focus on tax reform, will small changes be made or will we just see things worsen on the current track . And is President Trump right when he says it will implode well, i think that im hopeful that senator Lamar Alexander and senator patty murray continue what theyre working on in the Health Care Committee in the senate and look at short term what are things we can all agree on to improve and strengthen the Health Care Program of the United States, and once we get that, then i think its time to roll up our sleeves, republicans and democrats, and say, all right, is it block grants, do we need guardrails on that, low do we make sure if thats the preferred direction, how do we make sure they work . I think the time has come now to try and get everyone in the same room and have some governors, you know, the ones who have to implement these rules and regulations, laws that come out of washington. Lets get us some governors in there as well, say, what can work, what can we really look at i mean, none of us we all agree we want to control this ridiculous medical inflation that weve been seeing for the last 30 years long before the Affordable Care act. You know, im looking at some of the recommendations here and, you know, from the governors, you know, they want the Trump Administration to make the costsharing reduction payments, keep premiums from going up, temporary Stability Fund for states to create reinsurance programs, could reduce premiums. Keep the individual mandate. Try to get young people i mean, a lot of this i got to be honest, i dont see great ideas in here. It sounds like it either just fiddles with the status quo, throws more money at the problem or does health care in this country still need a great idea . I think it needs several great ideas and if you look through a little further, youll see woucone of the big pushes ts layered in is this notion thof transparency im a believer, long term, if we allow consumers especially as the copay goes up and up and up which most people are seeing with insurance plans, they want to see before they go to get their broken leg fixed or before im talking not about an emergency broken leg, but when theyre going to get a medical procedure of any type, theyre going to want to know what it costs in the whole, and then what its going to cost them i think that transparency between, you know, hospitals and clinics and other met call pdic providers, if we get transparency out there, consumers will begin shopping and get more comp missietition w medical care is priced and get quality and kelly joked at the top about the possibility of running alongside governor kasich in 2020 that aside, do you think the party system is a lot weaker than it used to be in terms of having that sort of structure that would keep it very clear, republicans will always vote together, democrats will always vote together, and theyll always oppose each other yeah, you know, it is the partisanship has gotten worse and worse. You know, ive been in i never ran for student council. I ran for mayor of denver in 2003 ive been in politics for 14 years ander year has gotten wore i think part of it is the election process and the attack ads. You know, you never see coke and pepsi doing attacks to each other. It would depress the product category of soft drinks. They work, but theyd attack each other and counterattack each other and the whole category would go down were depressing the product category of democracy. I think part of that is getting people away from, you know, winning at all costs the election, and really looking at long term maybe compromises will pay a better dividend than just always trying to be right. Well see were always trying to be right. Thats a joke. Governor, thank you very much for joining us. Is always a pleasure. Thank you. Governor hickenlooper. All right. After reporting a massive data breach, the ceo of equifax is out. Well have the details on that c suite shakeup, next. baby crying slow jazz music fly me to the moon and let me play bell ring ive got a nice long life ahead. Big plans. So when i found out medicare doesnt pay all my medical expenses, i got a Medicare Supplement insurance plan. [ male announcer ] if youre eligible for medicare, you may know it only covers about 80 of your part b medical expenses. The rest is up to you. Call now and find out about an aarp Medicare Supplement insurance plan, insured by unitedhealthcare insurance company. Like all standardized Medicare Supplement insurance plans, it could save you in outofpocket medical costs. Call now to request your free decision guide. Ive been with my doctor for 12 years. Now i know ill be able to stick with him. [ male announcer ] youll be able to visit any doctor or hospital that accepts medicare patients. Plus, there are no networks, and virtually no referrals needed. See why millions of people have already enrolled in the only Medicare Supplement insurance plans endorsed by aarp. Dont wait. Call now. Welcome back shares of equifax on the rebound slightly today after news the companys ceo is leaving aditi roy has the details. Aditi . Reporter hi, kelly, reaction from lawmakers have been pouring in since the announcement was made this morning. The release says Richard Smith is retiring as chairman and ce of Effective Immediately the board of directors appointed current board member mark feidler to serve as chairman paulino do rego barros jr. Named interim ceo, a sevenyear veteran of the company and most recently served as president of the asia pacific region. The company says its starting a search for a permanent ceo feidler, a partner and cofounder of private equity firm msouth said speaking for everyone on the board, i sincerely apologize. We have formed a special committee of the board to focus on the issues arising from the incident and ensure that all appropriate actions are taken. Smith who will stay on as an unpaid adviser to exfax was supposed to testify in front of the House Commerce Committee next tuesday and Banking Committee next wednesday a slew of lawmakers are speaking out saying they still expect smith to testify in front of Congress Next week we did just hear from the company if we asked them if smith, would indeed, testify, and the company said smith is scheduled to testify before congress, kelly, and that they have cooperated with congress. Back to you guys yeah, people still want a lot of answers aditi, thank you hate that they fram retirement. I think no one is talking about it like that. Just a copout. Take responsibility or dont, but its stuck in between. Speaking of retirement, we have a news alert on senator corker john harwood, whats happening there . Kelly, this is a legit retirement its bad news for republicans. Bob corker, popular republican senator from tennessee, announced hes not going to seek a third term i just got off the phone with his chief of staff and senator corkers put out a statement y saying that he had always planned to serve two terms, but he had not confirmed until today that hes not going to run next time that had been a safe seat for republicans. Republicans going into 2018 dont want the Playing Field expanded this does expand that Playing Field. Interestingly, were going to watch even more closely tonight to the results from that alabama runoff between roy moore and Luther Strange for the possibility that a roy moore victory could put that state in play as well and expand the possibility, its a long shot still, that democrats could win back the senate in 2018 john, thank you very much for that john harwood for us in washington another market flash this time, josh lipton has the details. Thats right. Check out shares of twilio, theyre dropping hard after news hit that amazon is going to be launching a new twoway text messaging product and that is having impact on twilios shares of course, its software is used by companies to create secure messaging between employees and customers, but twilio dropping hard on that headline. Guys, back to you. Yeah, thats ha tough one thank you, josh. Up next, were coming right back with the closing countdown. Starting with advanced manufacturing that brings big ideas to life. And cuttingedge Transportation Development to connect those ideas to the world. Along with urban redevelopment projects worthy of the worlds top talent. Here and all across new york state, were building the new new york. To grow your business with us in the southern tier, visit esd. Ny. Gov. To grow your business with us slow jazz music ier, fly me to the moon and let me play bell ring just over a minute to go, we turned negative in the last five or ten minutes for the dow and the s p, at least the dow was set to break a threeday losing streak doesnt look like it will do that quite s p just above positive. The nasdaq still does lead the rebound, but really given up a lot of the gains we look at s p sector pfs performance, tech is at the top. Its given up a lot of the gains. Tech up 0. 4 only meaningfully positive one a quick look at the dollar because the dollar has held onto its gains today whereas equities have given up. Dollar up half a percent against the euro and yen bob . Four down days in a row for the dow. You want to see more highs, though, take a look, we got them in the transports. New high russell 2000 dow industrials excuse me, s p industrial sector, new highs. One thing i want to say, nike, theyre going to be reporting after the bell they announced earlier theyre not going to report futures orders anymore that was a key metric for a lot of analysts. They say its not relevant i beg to differ. I think its important. Nike up just shy a percent. It was up. 1. 5 in the final hour or so of trade. Ringing the bell here is Flowers Food Inc at the nasdaq is the Options Industry Council h thats it for the first hour of the closing bell. Kelly has the second thank you, wilf, welcome to the closing bell, everybody, im kelly evans. We have a record high for the russell 2000 small caps, add five points today, 1,456 the new high close for the russell up from 1,451. Different story for the other major averages nasdaq, s p managed to add a few points today s p up to 2,497. The dow lower on the bell. Art cashin said there was about 500 million to sell we tried to stay positive throughout much of the session started to sell off after remarks from fed chair janet yellen this afternoon. On the bell, dow down eight or nine points to 2,287 for the blue ships. We turn our attention to earnings after the bell, nike, also micorn releasing their results. Well bring you to those as soon as theyre out. Plus corruption charges against Ncaa Division 1 coaches and adidas executive those are rocking the College Basketball world today a college a. D. , athletic director, and former reebok executive along with a former nba player will join us with more on that later. Joining me on the panel today, we have cnbcs senior markets commentator michael santoli, dan clifton in the flesh. And Neil Hennessy in the flesh hes Portfolio Manager and chief Investment Officer of hennessy funds. Results are already starting to cross. Overall market holds in pretty nicely around the highs more stocks up than down nasdaq cant put together two straight down days probably a net positive all around not a really kind of sharp takeaway from the action today except that market refuses to buckle. Neil, what would you add in terms of the action were seeing i wouldnt add anything except that were continuing on in the bull market and theres a lot of room still to continually grow Going Forward. All right very hopeful this afternoon. I would say also no momentum behind this move so were just hovering but thats not so terrible after what weve done. Lets hit these earnings real quickly. Some say it could be a tech bellwether here. Josh lipton has the results. Kelly, micon reporting eps of 2. 02, expectations of 1. 83 revenue, 6. 14 billion thats also a beat street was looking for Gross Margins clocking in at 51. 3 in the release they say Sales Volumes, 5 higher, nan Sales Volumes 3 higher. Dram and nam averaged sale prices for the quarter increased 8 and 5 respectively heading into this sprint, kelly, this stock was up near ll lly 6 year to date i was talking to betsy of luke capital, she has a buy on the name on this call. She wants to hear more about that gross margin guidance demand for what is seasonally that strong q4 also this companys capx plans looking ahead. That call starts at 4 30 eastern and well be on it kelly, back to you josh, thank you mike, as i mentioned, there were some doubts actually on the street of whether micron could live up to expectations. Up 60 this year up call it 3 . I wonder what apple shares are doing in response, too the pricing it has. Apple would be a buyer, not a seller of these pruroducts its amazing the stock hit a high of 36 and change in 2014, down to 10 and now back up to 36. So its basically made this tremendous round trip. Thats what it does. It goes on these huge runs because the commodity, itself, that it deals in goes on these runs and, you know, the earnings estimate had been ramped up higher in recent months and its still vaulted. Thats kind of happens in these pricing environments. Neil, apple was frakal lfracy lower there. Theyre going to have a healthy margin on the phones given the prices theyre charging. Apples apple for gods sake. Theyre sitting on billions of dollars of cash. Would be nice if we had some of that back to the United States, only 247 billion overseas the real question with apple is do you really need anymore on your cell phone . Thats the real question i mean, i cant work my tv let alone the phone. I cant work the remote to get the tv once the tvs on, im okay. Isnt the first premise of capitalism is you can exhaust human desires and needs . You can always kind of get in. Lets bring dan in here major developments this afternoon. The senate is not going to have a vote on the health plan after all. Mcconnell said theres been a budget agreement, rumors from axios they might try to combine all of these into some kind of budget deal. What are you guys thinking first, let me say if they try and combine health care into tax reform, im the biggest bull for a tax bill getting done. Ill start dropping my probability very quickly. I was going to say, youre the bilggest bull if they combine it, you say no way. No way. Susan collins, lisa murkowski, telling you no on health care. Dont even try it. You want to go try it, try it separately i think this is a Good Development. When john mccain killed health care, our tax reform baskets fell the market was extrapolating health care to tax reform. Our tax baskets are all holding up in the last couple of days because now it can stand on its own. Tomorrow will be a very big day when we get this tax the journal had an interesting point today, said basically the problem for republicans is theyre trying to squeeze more than 5 trillion worth of tax cuts into a 1. 5 trillion box, referring to some of the budget process there. This is the classic washington 10 pounds of tax cuts, a 5pound bag. Jo when you get to the bottom of this, theyll Start Playing around with the timing of the provisions in tomorrow tes report, it won be permanent, because thats too expensive. Let them play with the rubiks cube now, my experience with this is when we see the release tomorrow, this tax framework, it may disappoint a few people but the process is moving. Health cares out of the way its tax reform, tax reform, tax reform i think thats a Good Development for the market. I was going to ask, where else where the lines being drawn where the rubiks cube is going to be moving around . Is it the 20 Corporate Tax rate, is it the top individual rate, 35 versus 39 wheres the play in all that we think the corporate rate is going to end up when the bills signs at 23 , we think the top income tax rate is going to go down a point or two to 37 . Lets get back to neils point were going to repatriate 1 trillion of cash, reform our International Tax code, have Small Businesses pay the same tax rate as boeing these are all positive G Developments i tend to believe as we get into this process, people see show growth ore yeiented this is, th market is going to start you want to comment on that, neil the Corporate Tax rate coming down, that would be very, very good, for a couple reasons number one, say you make an extra 2 billion take that into earnings now or take 1 billion and high more people and go and take a chance on building your business. Because you still got 1 billion sitting in your pocket for the future if it doesnt work out in three or five years, you close it down and get another 1 billion in earnings this could be really, really good for the economy, for jobs, for the market. And we talked a lot when the president was first coming into office about how much the runup in the stock market was predicated on that coming through. Do you think at this point thats priced in other words, if what dans describing doesnt come to pass, are we talking about a major selloff or no . No. I think youre going to get a selloff of 5 or 10 , thats only going to quick and short, a week or two weeks. Etfs that are Market Driven own the exact same companies in the exact same percentage. If theres any scare, theyre going to sell it off they cant do limit orders theyre just going to sell at the market that would be getting more selling but it would be over quickly. This market, to me, is exact same as 82 to 2000 where the market was up each and every year for 18 years with the exception of the 1990 when 837 banks and savings and loans went broke. Yeah. It was down onehalf of one percent. I dont know what everybody is talking about. Up 40, down 25. Lost 25 in one day. We can hope hold that thought, everybody. We have breaking news on the ncaa bribery scandal here. We have those details. Reporter thats right, kelly, the ncaa put out its statement, said the nature of the charges brought by the federal government are deeply disturbing the ncaa continued to say we have no tolerance whatsoever for this alleged behavior. Coaches hold a unique position of trust with student athletes and their families and these bribery allegations, if true, suggest an extraordinary and despicable breach of that trust. They learned of these charges just this morning. Of course, the ncaa says it will support the ongoing criminal, federal investigation and kelly, that statement is from ncaa president mark emert obviously going to be more to come here. Well be following if throughout the hour, eric, thank you. Guys, pivoting back to what we were discussing, ichi was gog to ask you, dan, what are the pay fors if theyre able to get the big picture stuff youre talking about done im looking at state and local tax deduction, king and others are steadfastly against. Yep, yep. Be else is this going to come are these maybes or are these very likely . So first the probability of tax reform has increased in the last week because the senate said theyll increase the deficit by 1. 5 trillion they made it that much easier in that respect theres 500 billion of corporate deductions nobodys talking about. The section 199 manufacturing deduction, wind and solar tax credits, theyre going to be put on the table without it. You got repatriation, 160 billion. Move to territorial tax system is going to generate money the corporate side is generally paid for 1 trillion in, 1 trillion out. The individual side, it gets harder because you got 28 House Republicans from new york, new jersey and california. I can tell you those republican members dont want to take away the state and local tax deduction. Thats going to be a real grind on finding those the Retirement Savings committee, theyre going no go crazy if you take away the ira deduction. Youre talking about contributing after tax dollars instead of pre tax dollars thats a big difference in terms of how far thats going to go. I was going to ask neil and mike, quickly, if the individual tax cuts, lets say, dont happen, or the changes dont happen, how big of a deal is that is. My view, not a terribly big deal honestly, i dont necessarily think were on pins and needles about that aspect of it. Probably maybe on sentiment it wont be that great in terms of the way individual investors might feel about things, but in general, i dont think thats the linchpin. Mike, i agree if you take your gross what you make and take what you met after paying taking your deducti deductions, everybody ss in th 15 range. You know thats i mean, just steve forbes was right, in my opinion, go to a flat tax, take the money out, and maybe put a value adde tax in in. You want to put a likelihood on that happening . Im trying to get a tax cut through First Quarter of 2018. I want to see your vat tax basket thats right. Thats right. I think there was one for a while. We had a vat tax basket try to create baskets on everything our tax baskets are saying onethird is priced in plenty of upside if this takes off. Speaking again about the individual tax lets throw this out, if that doesnt happen, if they get Corporate Tax done, nothing on the individual side, where does that leave you on the economy, what does that 3450emean for the pard the president . The corporate changes are progrowth have to cut taxes for people in wisconsin, pennsylvania, if you want to do corporate the president gets excited, talked about delivering tax cuts to lowmoderate income households we see a scenario where you do the 2003 tax cut, very similar on the individual side, and add the corporate, its on steroids. Kelly, we grew 4 in the 12 months following that 2003 tax cut. If theyre going to drop money out of a helicopter, thooireyr going to get growth higher and stocks higher. I was going to bring up some Janet Yellens comments this afternoon, neil, she talked about actually for the first time elaborating on risks of an inflation overshoot and said well be looking at labeler market data for any more strength, anticipate, waiting for the risks of further tightening its a litmus test whenever janet yellen makes her remarks but is all of the potential stimulus that dan is talking about going to be offset by whats happening with the fed or how do you read this you know, i look at janet and raise an Interest Rate slowly, Everybody Knows itst gois goin happen people forget abouthistory, it tends to repeat itself i took my First Mortgage at 14. 5 , people are whining about 3 housing is doing so well because youre paying less to own a house than rechnting an farmtap. Its not going to crush the housing market, not going to crush anybody. What do you think the implications are if we Start Talking about helicopter money from the fiscal side instead of the monetary side . I think it would be probably a little bit of a net positive the marnket wants to think in those terms. Who knows whats go ing to all come out you know, after the 2003 tax cuts, you know, youre not that far removed from a recession youre kind of ramping out of it i dont know if youre going to replicate that scenario. What are your best ideas for the market there are plenty of companies out there you can actually buy ill give you one, thor, we talk about all the malls, theyre going broke, youre not going to buy an airstream without seeing it, right youre not just going to buy that online. Thats not coming from amazon if youre going to move money, youre going to probably use brinks probably not going have mom down the street move it through the alleys so theres plenty of value out there in the marketplace, just that the headlines are all saying we need a correction. Why . All right real quickly, dan, we just heard senator corker is not going to have a third term. Big alabama race tonight implications of the midterms still looking bad for you . Youre seeing the antiestablishment side of the republicans, roy moore is slykely going to see tonight, going to see more challenges in states like tennessee. Bob corker getting out on top. Youre going to see more antiestablishment republican, makes it harder to govern. Tax reform politically is what they need to get done to survive in 20178. I think theyll punch it through. Thank you very much when we come back, nike is set to report its earnings the stock has actually been significantly underperforming the dow this year. Well get instant analysis of the results, talk about whether it could be set to bounce back. Plus pinterest is teaming up with target to put its search tool into the retailers app Ben Silbermann will tell us how it will impact the ad strategy. We want to hear from you, facebook, twitter, or email we want youre watching cnbc, first in Business Worldwide youre developing ai applications on the cloud. Finding insights hidden in decades of medical documents. And securing millions of iot sensors. So get back to it. And do the best work of your life. Whentertaining us,es getting us back on track,hing . And do the best work of your life. And finding us dates. Phones really have changed. So why hasnt the way we pay for them . Introducing xfinity mobile. You only pay for data and can easily switch between pay per gig and unlimited. No one else lets you do that. See how much you can save. Choose by the gig or unlimited. Xfinity mobile. A new kind of network designed to save you money. Call, visit or go to xfinitymobile. Com. Welcome back these nike earnings are out. Sarah eisen has the numbers are. Reporter nike reporting earnings per share, 57 cents a 9 cent beat. Total revenues coming in in line with expectations. Nike reporting 9. 1 billion, analysts looking for 9. 08 billion. Gross margin, in line with whats expected, marked decline from last quarter, 43. 7 this is an interesting quarter for nike because they broke down the geographic sales a little bit differently than were used to getting they condensed it from six regions to tower heres what i can tell you north america, key market, everyone was watching this this is a weak spot. Down 3 revenues in north america. Thats what analysts were expecting and it does show the vulnerability of nike right now versus competitors like adidas, especially in the home market. We also got pretty good readthroughs from finish line and foot locker over the summer that suggested that this was going be a weak number as for the rest of the world, though, very strong, europe and the region there, africa, up 5 . Greater china, up 12 , actually double what analysts were looking for. And asia overall, up 6 . So total nike brand sales up 2 . What i can tell you is the sentiment was low going in this is a stock that has underperformed both competitors like adidas and the overall s p this year and over the past 12 months. Overall, its a pretty solid report especially that bottom line im going to dig through and figure out what that is exactly ac about. Some people were looking for expense s to contribute to that bottom line. Going to look about guidance nike had a pretty optimistic second half of the year view on its business coming back and, of course, any commentary on whats going on in the competitive space, especially with adidas, we just got that word recently from npd group that adidas is now the second most popular brand in terms of market share in the u. S. Overtaking the jordan brand. So whats going on with some of the recent weakness in the jordan brand that sort of thing of course, any comments on the nfl protests theres a lot in the news not to mention the bribery allegations involving a competitors executi executi executive, alleged bribery and kickbacks that you guys is been talking about today in College Basketball cant believe they didnt lead with that in the press release. Yeah, right. Im sure theyll get some questions on the call. Sarah, stay right there. Michael, what do you make of it, real quick you know, right along with sarah, expectations were low and not only that, by the way, 73 cents a share was supposed to be the earnings as of may 31st for this quarter the estimate got down, you know, to 48 cent. You. Then they beat it into 57 it shows you how people were really downgrading their expectations for this quarter. Also the stock has been sideways for two years. Really, two yearsplus it seems as if theres a little bit of relief, even saw it at the end of the trading day when people started to bet an a beat. Started to see it lift into the close. Lets bring in this issta in stw retail partners. As sarah nailed it here, expect faations were low going o the quarter and its really a back half story here i would certainly point out as i came on your show last quarter as the much abused bear here that, you know, weve heard from just about everybody in the space from finish line to foot locker, to hibbetts that things have decelerated in in the footwear space, what does that mean that means wholesale is going to be incredibly promotional this q4 all of these retailers have said that and yes, nike is doing its best to pull out of the unhealthy channel, but, you know, three quarters of their business is still exposed to wholesale here, so im still, you know, a bit cautious into q4 and of course nike, as sarah said, has doubled its market share over the past year and sarah, nike shares popped 3 , up less than 1 now. Interestingly enough, finish line is getting a boost on this it looks like, little more than 1 boost. Reporter yeah, the problem with the finish line and foot lockers, good tell on the north American Business for nike, nike is a company in transition where its focusing more on the direct to consumer part of its business, selling online directly, nike. Com, selling into stores and essentially all of the growth right now in this athleticwear category is happening direct to consumer nike still gets the benefit but Companies Like finish line and foot locker are really getting hurt by it right now so youve got a mix and got a company like nike in transition thats why the commentary on the call, especially around direct to consumer, is going to be so important to see how nike is really pivoting its strategy away from the foot lockers and the finish lines of the world. Keep in mind, foot locker is 70 exposed to nike so its getting hurt not just on the direct to consumer but on the amazing surge in market share were seeing in adidas in this country. Michael, i imagine theyre going to talk a little bit more about that i mean, if fashion is such a big part of this, versus people actually wearing the sneakers to play basketball, run around in them, whatever, how can nike be cool again made me laugh when i was reading some person interviewed about the air jordans, said the kid didnt know who jordan was. Yeah, i mean they go, how do you not know who jordan is . Just in general, as you say performance as opposed to fashion has been the two ends of the spectrum and its been fashion for a long time its been more lifestyle so, talk about a basketball shoe glut, you hear that thrown around a lot so i think just being levered to different parts of the business has been hampering them. Ive been looking for them to say anything about Foreign Exchange to see if that was an influence on the bottom line or not. Who knows. You often hear these x currency type numbers being thrown around. Perhaps not when the dollar has been weak. All right, guys, thank you very much, sarah, appreciate it, sarah eisen staying later for us stacey, late night in london, too. Thank you both. Thanks. Nike shares still up. Pinterest, meanwhile, is raising funds but has yet to tip its hands about any plans to go public is the ipo in the cards or is the company trying to a vovoid mike santoli is so excited for this interview, hes been for this interview, hes been putting his together he already has a follower. The big disclose after this. 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. Exclusive partnership with target, integrates the lens tool into target apps consumers will be able to take a picture in h the target store and discover similar products available to buy at target what does it mean for pinterests advertising strategy joining us is Julia Boorstin along with the ceo of pinterest, Ben Silbermann. Ben, thanks so much for joining us at ad week. You announced this partnership with target. What does this mean for revenue and Growth Prospect . Weve been really excited target was an early advertiser on the platform. Theyve seen really good results. We helped them identify new customers and people come to pinterest to discover new things theyre excited as a way to sell more products. Theyre going to advertise more on pinterest . Going to this more, going to work with them to share trends we see with consumers, help with merchandising efforts. Were going to integrate lens, Computer Vision technology, into their app. Announced 40 , 200 million monthly active users how much is your revenue growing . Happy with our Revenue Growth not going to give any figures today. Deals like the target deal are a good sign for us theyve been advertising with us for a while na saw really strong results. We were able to sign a Great Partnership with them for the next couple years. Your company is valued north of 12 billion what can you tell us about ipo plans . We dont have anything to announce today the company is focused on two things, one, growing the user base weve been excited pinterest grew 40 over the last year 200 million users all over the world. The second is creating an advertising product that works to bring in new customers, very measurable lets people see emerging Consumer Trends and merchandise. Kelly, you want to jump in here youre a big pinterest user. The biggest we mike might be even bigger. You should see the cat gifs. Its a little weird. All these people are going to go looking for that account. Theyre going to find it. Im going to have to actually put one up. There it vigt there ben, its kelly here we thank you very much for joining us i was going to ask you since i use pinterest a lot, i noticed a lot more political content in there lately, gifs and memes and things like that i really i dont like seeing it what are your thoughts about that kind of content on your platform most people use pinterest to get ready for things in their life people do things like plan what their living rooms going to look like, plan what kind of recipes they want to cook, plan a special event slyke a wlike ag thats been a major focus. Its pretty minimal compared to a lot of other platforms. Is is there a way that you could intentionally minimize it if you decided to . Thats exactly what im doing. Im looking planning wedding stuff, planning home stuff, looking up, you know, chip and jojos home line or whatever and its hard to avoid those sometimes. What are your thoughts well, weve always really cared about making sure youre seeing things that are relevant for you. So we invest a lot to look at what you pin, recommend things you might like as well. Hopefully as you continue to pin more things for your wedding, more things for your home, youll 23450i7find things that represent your taste. As kelly mentioned, a lot less political content on pinterest than facebook and Google Facebook and google have been plagued with negative headlines. Have y are you trying to take advantage of the opportunity to become a bigger alternative to them, are you reaching out to the companies . What are the conversations like . Were focused on making the environment great for the users. Great means its relevant content, positive and inspiring place to plan things out big impact on advertisers as well, advertisers want to advertise in a space that feels safe, high quality and positive. Its been one of the reasons why weve been able to make progress with advertisers over the last couple years. I have to ask about amazon, at ad week everyone is talking about how amazon is going to be the third big player in advertising in addition to facebook and google. Amazon is an advertiser on pinterest. Seems in a lot of ways it could be a rival as an ad giant in that space or maybe a potential buyer. How do you feel about amazon amazons obviously a big retailer but we work across a whole range of different retailers, target, folks like walmart. The reason retailers are excited about pinterest is theyre looking for new ways to help people discover product they havent heard before when someone plans what their home is going to look like, that i have intent, theyre going to buy furniture but havent narrowed down on to a specific product line or brand. A lot of retailers see big opportunity in that. They search on pinterest and buy on amazon . They buy wherever the pin takes them, could be amazon, could be somewhere else. Great fascinating times. Keep us posted on your ipo plans. Ben silbermann, ceo of pinterest. Kelly, back over to you. Good stuff. Thank you very much. I look at the pins and buy on amazon you have weird its eclectic i wouldnt say weird its a very good test of what our crew thinks of me right there. So its interesting. What i wonder about, slightly more seriously, if its so projectbased, oh, im planning to decorate a home, planning a wedding, is the membership of the users lumpy . When something happens that i get all excited about, i spend a solid almost like im binge pinteresting, then dormant the next three months. Sometimes im dormant for three years, i go back, man, i can get on pinterest again and look at all this stuff youre absolutely right. Maybe a problem down the road if somebody cares about the lumpiness of their results or user attrition. I steadiness. Thats why i wonder about the politics. Anyhow, time for a cnbc update lets get over to sue herera. Thanks very much, kelly, mike heres whats happening at this hour, everyone attorney general Jeff Sessions says the Justice Department will intervene on behalf of people who sue colleges claiming their free speech rights were violated he spoke before an audience at georgetown law school. Freedom of thought and speech on american campus are under attack the American University was once the center of Academic Freedom a place of robust debate, a forum for the competition of ideas. But it is transforming into an ecochamber of Political Correctness and homogeneous thought. A shelter for fragile egos a fastmoving wildfire in Southern California has burned 2,000 acres and forced hundreds to evacuate. Its the canyon fire it started on monday afternoon and it is only 5 contained. No word on what caused that blaze. Former White House Communications director Anthony Scaramucci and estranged wife arriving for their divorce hearing today. According to a report, ball filed for divorce when she was nine months pregnant in july it was later reported that scaramucci wanted a paternity test for the newborn well keep you posted on that one. Thats the news update this hour kelly, back downtown. Or dont. Or dont. I know. You dont have to. Its a little messy messy, messy. Thank you very much. You got it. Sue herera. Lets send it to meg tirrell for a quick market flash. Were looking at shares of Parker Hanifan under pressure this afternoon on news of a department of justice antitrust lawsuit thats been filed here essentially over its acquisition of clark, they are challenging that 4. 3 billion deal that closed in february the department of justice essentially saying this creates a monopoly and they are asking Parker Hannifin to divest in Aviation Fuel business, sufficient to replace clark, competitive significance in the narcotic place you are seeing Parker Hannifin down 1. 7 on this news, kelly. They look at every corner airline what i dont know what that industry you described was but theyre all over it. Aviation fuel filtration busine business thats right. We dont want a monopoly there. Sure dont. A lot of the industrial rollup companies, i mean, thats what theyre trying to do is corner little segments of the wholesale market interesting one. Bribery scandal rocking College Basketball world up next well hear from a former sneaker exec turned College Athletic director and a former nba star on the reverberations that may be felt by athletic Footwear Company and throughout College Basketball. Plus the president announcing hell travel to puerto rico next week to view the devastation from Hurricane Maria. Ahead, we will get the latest on those Recovery Efforts hey gary. Oh. Whats with the dogsized horse . Im crazy stressed trying to figure out this complex trade so i brought in my comfort pony, warren, to help me deal. Isnt that right warren . Well, you could get support from thinkorswims inapp chat. It lets you chat and share your screen directly with a live person right from the app, so you dont need a comfort pony. Oh, so what about my motivational meerkat . Inapp chat on thinkorswim. Only at td ameritrade. Today, Central New York and the Mohawk Valley are rising together. Were invested in creating the worlds first stateoftheart drone testing facility. Which marks the start of our nations first 50mile unmanned flight corridor. And allows us to attract the worlds top drone talent. Here and all across new york state, were building the new new york. To grow your business with us in Central New York, visit esd. Ny. Gov. Welcome back remarks by fed chair janet yellen this afternoon may have helped push the dow negative dropped 20 points on the bell. The other averages stayed po eed positive the nasdaq up. The russell up to close at a record high of 1,456. Lets check on movers after hours. After reporting results, nike is now negative popped 3 initially. Top and bottom line beat look for more information on the call micron, holding on to a gain of 3. 5 also after a double beat. Ten people including four College Basketball coaches and adidas executive were charged with accepting bribes involving agents, Financial Advisers, and apparel executives just moments ago, the ncaa put out its statement saying in part, we learned of these charges this morning and, of course, well support the ongoing criminal federal investigation. Acting u. S. Attorney joon kim also addressing this in a News Conference earlier today fraud, abuse, and corruption of the time alleged in the charges brought today contaminates all that is good and pure around it and it has no place in College Sports joining us now, peter roby, at let hletic director at northwestern university. Here with us on set, former nba star, charles d. Smith, on the San Antonio Spurs with chuck person whos one of the coaches who was indicted today we thank you both for being here charles, to begin with you, were you shocked to hear this about somebody you used to know and play with . Im shocked to hear habit it, period i know chuck personally. Hes a great guy always been caring of other individuals. I think the whole thing is a shock overall. Why, though i think a lot of people almost reacted the opposite way which is to say the culture has gotten so out of hand it was a matter of time. I agree it was a matter of time the ones who get hurt in all this is the kids and their fami family when you look over the last two, three years when all the Shoe Companies began to have summer games and control their own teams, you got about each of the top three Shoe Companies that have 40 teams, 30 kids on each team theres 1,200 players on each shoe companys team. So theyre competing against one another. You got theyre paying for clothing, paying for travel, hotels, gear so these kids are getting everything some kids have never been in a hotel before some have never traveled before. Its just become this systemic problem, its been pervasive for a long time but its really gotten out of hand. Peter, do you also think its gotten worse today relative to when you were at reebok . What kind of pressure did you feel then or do you imagine people are feeling today to put a name like adidas on the top tier of brands who are going to support and turn into the next generation of stars to support their brands yeah, this kind of thing has been going on for almost 40 years. I mean, sonny started it at mikmiknike many, many years ago many of the Shoe Companies jumped onboard with it when i was at reebok, i tried my hardest not to get us involved in all the aau stuff because i thought it was going to compromise peoples values and it was sending a wrong message about the right way to do this and i was it was a lot of pressure i think a lot of people felt like the way we were going to sell footwear is if we got our footwear on young kids and then started to connect with them at an early age i just never agreed with that. And im glad that we never did so this has been going on a long time its theres been a nexus between the aau Footwear Companies and College Teams for the last almost 40 years people have known that its been going on for a long time and people just couldnt prove it until now and so now the cows are coming home and this is just the tip of the iceberg and theres a lot of people that are nervous right now in College Athletics charles, aside from indictments and arrests, which, of course, maybe would have some kind of deterrent effect down the road, what in terms of policies do you think might have to be implemented, whether its the relationships between the Shoe Companies and the College Teams, or these club teams or anything else . I dont know whether you can put any policies on corporations that are involved in recruiting and dealing with children. I think there needs to be an education and Services Provided to the parents and to the kids at a young age to know its a fine line between being unethical in success and they walk that fine line so much that its very its very difficult. I mean, you had government and legislation put sugar bands on coca cola, 7up and sprite, but are the kids obese because of that no not at all so its very difficult to see how theyre going to come to some solutions, but i look at it from the childrens standpoint, because theyre the ones that get hurt the Shoe Companies are not regulated but all the regulations are on the children and the colleges are the brokers. So peter, let me ask you, though, i mean, is it that this behavior needs to be fully cracked down i mean, what were describing is basically a model of companies saying these kids are so important, were going to throw whatever we can at them, and then in these cases, going too far. But even behind that line, theyre going pretty far as it is i mean, what do you think needs to be done at this point what can be changed about it well, i mean, weve added rules to whether its in the ncaa or in corporations around finance reform or reporting. Youre always going to have people that are looking for an edge, the winning is more important than the values. And so theyre going to break the rules and cheat. So the only thing that you can really do to try to make it stop is put the people that are cheating in jail you know arrest people, indict them, let them go to prison, expose it for what it is put people on probation. Throw the Death Penalty at folks if they are habitual in terms of their breaking ncaa rules. Wow. Thats the only way youre going to send a message thats that its not tolerated. Weve been having this conversation since the early 1900s. From when the ncaa and all those things started, people have been breaking rules, putting ringers on their teams to compete in order to win yeah. And so speaking of which nothing has changed nothing has changed. Lets just take a quick look. We actually have video of one of the defendants in this case, this is christian dawkins, former nba agent, just leaving the courthouse in downtown manhattan. Charles, you also agree there needs to be some pretty severe penalties on these guys to send a message . And does there need to be something more systemic done. Look, i probably know every agent out there. I know a lot of guys who were agents, derek brooks who got on the other sfid thid side. Its a test of your moral fiber at some point. So much pressure to sign guys, generate revenue if question look at this purely from a business perspective, you look at all these kids, you can look at them as startup companies. And im a venture capitalist im going to invest in Ten Startup Companies and if one of them hits, im going to make my investment back. Is there any way to make that what youre describing sounds pretty transparent. Is there any way to make that a better outcome for the kids . Is it because of the one and done model Mike Francesca mentioned earlier. Why is it that concept turns out to poorly for the companies and kids being invested in well, its a doubleedged sword on the talking about the one and done model because theres no other industry that puts constraints on anyone who has professional attributes that can become a pro or can become an executive we just looked at the young ceo of pinterest. Right. So you want to put these economic models and sanctions on kids and thats a challenge because you shouldnt be doing that and if it was not done, we wouldnt have a lot of these problems all right guys, thank you, both. Appreciate you joining us today. Charles smith and peter robey. President trump announcing he will head to puerto rico a week from today to survey Hurricane Marias damage to the island after tweeting that the island is in deep trouble were going to g tethe latest on the Recovery Efforts that are under way there right after this whuuuuuat . Rtgage offer from the bank today. You never just get one offer. Go to lendingtree. Com and shop multiple loan offers for free free . Yeah. Could save thousands. You should probably buy me dinner. No. Go to lendingtree. Com for a new home loan or refinance. Receive up to five free offers and choose the loan thats right for you. Our average customer could lower their monthly bills by over three hundred dollars. Go to lendingtree. Com right now. 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. Shares of insurance and Reinsurance Companies getting hit hard today look at sss down 5 . Estimate of damage in puerto rico from Hurricane Maria keep climbing the president announced hell be heading to puerto rico next tuesday to survey the storms devastation. Nbcs Gabe Gutierrez is in san juan, puerto rico, with the latest reporter as President Trump announces hell visit puerto rico next week, theres now a desperate scramble to leave this island a group behind me wait do get on a charter flight today this morning, we saw many more travelers trying to secure a commercial flight out of here. There are only about ten a day san juans airport, there is no ac, the backup generators have kicked in but only go so far we saw mothers sleeping on the ground with their children some of them waiting for days for a flight meanwhile, hundreds of thousands of pounds of humanitarian aid is flooding in. The National Guard is son the move and the Dallas Mavericks today came and helped deliver some of that aid. Aid. Puerto ricos governor is urging the federal government to bring in more federal assistance as puerto rico struggles to recover, theres no telling how long the recovery will last but the infrastructure is decimated. Gabe gutierrez, nbc news, san juan, puerto rico. Thank you very much next, well get a behind the scenes look at a Company Building an Amusement Park to entertain and promote the sciences i know that retail expert, liz dunn on why she sees more pain ahead for the Athletic Company one company is looking to blur the line between the physical and the digital. Kate rogers has the story. Kate reporter hey there, kelly, thats right, two bit circus is taking the traditional Amusement Park model and turning it on its head in a los angeles warehouse, two self proclaimed mad scientists are blending engineering, computer science, and robotics to create Interactive Games for children and adults alike. They met ten years ago while working as engineers in los angeles. They bonded over a shared passion for games and technology you want to see how its done yeah. Were s. T. E. M. Nerds. Reporter the business started as a consulting agency, building high tech activations for clients like google and intel. We said, lets do our own event. Reporter theyve raised 21 million to build a high tech Amusement Park inside our Amusement Park, youll find the future of fun. To us that looks like augmented reality. Well have a ton of midway games made awesome by Technology Reporter the park opens early next year. Experiential, immersive, getting people really hands on, they are the character reporter two bit circus is hoping to inspire more dreamers like themselves to think big and maybe even a little crazy. And of course were out here in beautiful l. A. For cnbc and ink magazines iconic tour its our second time here, weve got a lineup of iconic entrepreneurs, including tony robbins and so much more on day tomorrow on cnbc i dont know if that looked like fun or just chaos it was intense. I dont know if i could handle it. Kate, thank you very much. Hedge fund legend Julian Robertson Sees Opportunities in big tech hell have specific names when we come back tmobiles unlimited now includes netflix on us. Thats right, netflix on us. Get four unlimited lines for just forty bucks each. Taxes and fees included. And now, netflix included. So go ahead, binge on us. Another reason why tmobile is americas best unlimited network. Another day at the office. Why do you put up with it . Believe it or not you actually like what you do. Even love it. And today, you can do things you never could before. Youre working in millions of places at once with iot sensors. Analyzing social data on the cloud to create new designs. And using blockchain to help prevent fraud. So get back to it and do the best work of your life. At this years delivering alpha conference, Julian Robertson warned investors the market feels like its heading towards a bubble with the exception of a few big tech stocks the apples, the facebooks, the googles, those great growth companies, are priced cheaper than they would have ever been in the 60s, 70s, and 80s. Drum roll, please the full interview with mr. Robertson was just posted. Head over to deliveringalpha. Com. The Parent Company of the nyse is launching a website to trade tech it has the big five names but also highly liquid names like tesla and nvidia probably about a dozen, if im not mistaken, 10, 12, Something Like that. Nothings real until it becomes an index based product, nothing in the market actually happens is this a sign, though . Its a sign that its become a handy way to talk about big growth stocks. Its interesting in the sense that a lot of people tried to recreate it in some kind of bespoke way. Another bellwether for you, people watching micron after hours. The last time we checked, shares sold up 3. 5 its up 2 after hours is that enough to get some life back in . Certainly it will support the idea that semi conductors are going to be relative outperformers. They were bouncing yesterday micron has always been a fast moving quicksilver animal in the stock market it has the same consistency as people using pinterest. Yes, those little burst well hand it over to fast money for more coverage starting right now fast money starts right now. Live from the nasdaq overlooking new york citys times square im melissa lee. Tonight on fast, mikey just taking a big led lower well tell you what sent the stock moving well have full coverage throughout the hour, sara eisen at the Stock Exchange is all over it. Plus a major biotech bust, one stock falling 70 off a failed drug trial. The ceo says he would do it all again. Whats gotten into