Transcripts For CNBC Closing Bell 20171003

The transports to record highs again today. Plus the grocery wars are heating up again. This time walmart is making a newing a b decision to go after amaz amazon very interesting a lot of people in new york city are very excited about it. Well explain coming up in a little bit. Good for brooklyn. We start with our top story right now, executives from two scandalridden companies have been meeting facetoface with lawmakers on capitol hill today. Cnbc cnbcs wilfred frost has the highlights of the wells fargo hearing, about millions of unauthorized accounts opened by that company and aditi roy has the latest on the exequifaxs ceo, the attack that compromised the data after more than 145 million milliamericans. Aditi, start us off. Reporter former equifax ceo Richard Smith was grilled for close to three hours by about two dozen lawmakers. As he headed out of the hearing, i asked him about the breach he remained tight lipped eped a walked past our cameras. Gave an eight page remark before he began the remarks with an apology. The ceo, im ultimately responsible and i take full responsibility im here to say to each and every person affected by this breach, im truly and deeply sorry for what happened. Ive talked to many consumers. Identi ive read your letters equifax is committed to make it whole for you. Reporter smith also told the subcommittee it took the company 40 days to notify the public about the breach because at first, the company only noticed suspicious activity and that it took weeks to understand the depth and breadth of the breach. He also said it happened because of human error and technological mistakes he also maintains that three exequifax executives who sold stock after the breach was discovered did not know about the hack when they sold the shares smith, tomorrow, sits before two Senate Panels for another round of questions kelly . And that could be fiery adi aditi, thank you lets head over to wilfred frost now, he has the latest on the other hearing of the morning it was wells fargo ceo tim sloan. Hey, kelly, yes, indeed tim sloan tried to list a variety of changes hes made since taking the helm as ceo ten months ago however, most of the questions focused on what he knew before the scandal became public, while in prior roles such as cfo heres sloan on that in 2013 when the sales practices issues were elevated to the operating committee, i sat on that operating committee, youre absolutely correct b, in my role at that time as cfo, that it was elevated to that group. We took action, but in hindsight, senator, we took action that was insufficient as i said in my Opening Statement senator warren in particular pushed hard, quoting past earnings calls at him. In the april 2011 call, for example, i think ive marked that one, you said, i cant wait to get a credit card in every one of our creditworthy customers wallets. Nothing about whether your customers wanted or needed a wells fargo credit card. All that mattered was opening new accounts this was warrens ultimate conclusion at best, you are incompetent, at worst, you were complicit either way, you should be fired. Strong words. Now, speaking to me on the way out, sloan summed up his feelings the focus of the hearing was wells fargo one year later i dont understand why we spent as much time as we did talking about history, but we were able to get our issues out. The stock has recovered from its lows of the day. Its now down just 0. 3 . Guys yeah. We got a lot to talk about on that one wilf, thank you. Good stuff there was tim sloans testimony enough to regain Investor Trust joining us in a debate today, dick from vertical group research, our bear today marty mosby from Vining Sparks has a strong buy on wells fargo right now. Dick, what do you think . I know youre looking at the fundamentals you see a deterioration of the earnings at wells forgo, but how do you think tim sloan is doing in trying to restore confidence in that bank i think hes doing an excellent job. In fact, while i agree with the senator that the board of directors should be dumped, i dont think he should be dumped because no matter what hes done the past, i think hes doing a sue bu superb job in terms of turning it around. My problem with the company is not tim sloan or the board of directors. My problem with the company i t havent been able to increase their operating earnings and havent been able to increase it in the last 12 month now theyre facing a restructuring of the business at a time when they need to do something to show they can increase sales and earnings and it isnt happening. Marty, why do you think his outlook is brighter then well, weve been through this before when you have disruptions and reputational issues. We see theyre working through that judiciously and with the fervor you need to have to get this thing pulled out. The testimony today at least what weve seen in writings afterwards is talking about the changes that theyve made. Which is a nice pivot. The second thing is if we talk about Earnings Growth, there have been headwinds that have taken away earnings. Look at the need to increase debt or look at the impact on efficiencies where they spent over 3 billion to fix these issues this year, once those things begin to plateau then get recaptured k ed youll see the earnings grout come ba Earnings Growth come back as we look into 2018 and 2019. Ill get you to respond to that, dick i was looking at charts today for the company. Its interesting that wells fargo stock hit an alltime high in february this year, and were only a couple dollars away from that so it would appear the markets not as concerned act the protracted deterioration youre seeing in the earnings right now. What do you make of that i think its pretty clear in looking at bank stocks, people are no longer looking at what do these companies produce, are they selling any of the products that theyre producing, whats happening to the quality of the loans portfolio . All theyre looking at is some mythical theory that if Interest Rates go way up, that Bank Earnings will go way up. Theyre forgetting, for example, the fact that right now, wells fargo is paying about sorry, the industry is paying about 45 basis points all in for money. Whereas, the federal funds rate is 116 points. Now maybe every american is a sucker and going to stay there and take ten basis points on his credit account, but if, in fact, hes going to demand market rate on his deposits, the banks have got a problem. Marty, what do you make of that point also here just looking at part of your case for the stock, you think theyre going to do things like lessenexpen expenses is that true given theyre trying to improve their public image . Not realistic in the next six months what were talking about is wells fargo as a longterm investment they underperformed since the announcement of this crisis a year ago by over 20 , so there is relative value in wells far go that you can catch. Their dividend yield is 3 if we go back to what dick was just saying, yes, theres starting to be a positive spread on deposits but always been a positive spread on deposits. Well see more competition as with e get 100 basis points of spread deposits are a valuable source of funding thats what makes a Bank Different than a finance company, you can create profit here. Let me ask you both, dick, starting with you, what you thought of tim sloan on capitol hill today under psh from senator warren did he basically keep his job today . Well, i think so. I think he got a little bit flustered under the harsh questioning, but i dont think theres any reason that someone should come after tim sloan at this point maybe a year ago, two years ago, but tim sloan has taken a huge efforts to try and turn this company around and reestablish its credibility. The most important one is hes gotten rid of the decentralization where sal salespeople were running product lines and centralized the operation bringing core business, core operations like human resources, risk management, you know, back to a central location, which is going to have a Significant Impact in improving the company, but not in improving the results what do you think, marty . Well, if you look at tim sloan, he was the cfo when this was going on look at the financial impact, its less of 1 . The cfo is in charge of accounting, in charge of the earnings, reporting those earnings they have impact in committees in general but the Business Operations is left up to the person running that business it cant be around the whole Company Running everything so, i think what hes done here is step forward, shown that theyre addressing these things with the real strength and magnitude we would like to see and i think hes making progress here all right, gentlemen, thank you. Good to see you both thank you. Marty, dick, thanks. Yeah. You bet. 50 minutes to go until the bell after a strong day yesterday in which we started the quarter with all four major averages in positive territory, the dow is tacking on another 78 points now, 1 3 of 1 smaller gains. Still higher four gains for the s p eight for the nasdaq the russell taking a bit of a breather yes. Down 1 1 2 points. Still ahead the oracle of omaha, how hes investing in the market right now. Later, amazons purchase of whole foods may be helping that chain shed the whole paycheck image. Well tell you about a study that found a rather surprising number of people who are defecting from one of whole foods key competitors, though, as a result. And we want to hear from you as always. Reach out to us here at closing acoo on twitter, on febk, send us an email. Youre watching cnbc, first in business worldwide kind of feel e its a game changer. I wouldnt go that far. Are you there . Hes probably on mute. Yeah. Gary wont like it. Why . Because hes gary. phone ringing what . Keep going yeah. laughs voice on phone its not millennial enough. There are a lot of ways to say no. Thank you so much. Thank you so were doing it. Yes we got a yes start saying yes to your companys best ideas. Let us help with money and knowhow, so you can get business done. American express open. I just saved thousands in less than a minute, i found out how much home i can afford. I like how you shop for loans the same way you shop for flights online. I didnt realize at lendingtree you can save money on almost any sort of loan. I consolidated my Credit Card Debt with a personal loan. I found a new credit card with 0 interest for 15 months. You just shop, compare, and save. And its all free. Go to lendingtree right now and start saving. Welcome back as we watch markets marching higher again today in a litany of alltime highs in the s p 500, names ranging from the defense stocks, some of the health care names, the home plays, and speaking of which, driven b by an increase in home sales and home prices. Deliveries increase 12 , orders increase compared to last year lennar trading up 5 . Becky quick sat down earlier today with Warren Buffett to discuss everything from wells fargo to tax reform. It was his comments on the stock market that caught our attention. Becky has more now from omaha. Good afternoon, becky. Reporter hey, kehl he, hey, bill it was what warren talked about with stocks. Youve seen higher record numbers that come in every day, whats happbeen happening with t oracle of omaha thinks stocks actually make sense at these levels at least for now. The one thing im sure of is that over time, stocks from this level will beat bonds from this level. If i could be short the 30year bond 3 or something, and long the s p 500, and just have it put away for 30 years, stocks are going to far outperform bonds. The question is, which variable is going to change and everybody expects Interest Rates to change, but theyve been expecting it quite a while. Reporter of course, the 64,000 question or maybe the 64 trillion question is, when the fed is going to raise rates and just how quickly buffett says he cant guess on that, has no estimate when it comes down to that he thinks not even janet yellen could know the answer to that question at this point that is something thats going to depend on the committeconomy other variables. Get this, over the short term, there is something he thinks is impacting stock prices right now, thats the uncertainty over the tax bill, whether or not that goes through congress he thinks its a better than average chance that that bill does get passed. He says republicans, look, they need a win, theyre going to put something up on the table and if they cant pass the tax cut, then theyre going to have a tough time passing anything. So he does think its likely it happens but says its impacting behavior right now including his. Thats really unusual. Buffett almost every reacts based on what he thinks washingtons doing, based on what he thinks the market is doing. He says right now hes not selling some stocks he might otherwise be selling to the tune of billions of dollars in Berkshire Holdings because he wants to see what happens with Capital Gains. He knows if the tax bill goes through, you could be looking at Capital Gains dropping from 35 this year to 20 next year in a matter of months so he says why would anybody sell anything right now . In fact, he thinks there are hundreds of billions of dollars in potential sales that are being impacted by this right now. So, guys, it will be very interesting to see how this plays out over the next few months. That is crazy. Right is i mean, he doesnt look, you know, six months down the road at all. Were marching every days to new highs. Does he think actually when they get that tax legislation changed, the wave of selling prs pressure for people who have been waiting for the change to come through reporter he says well see, hell know in the next month or two because theres only 30some days left in the legislative calendar to get this passed. If he thinks theyre going to pass it, hes definitely not selling anything this year and paying 35 Capital Gains he could sell next year and pay 20 Capital Gains. Same thing, end of the year, people are looking for losses for the things they want to sell this is a huge impact. He say its definitely impacting him to the tune of billions of dollars. He thinks this must be important. Everybody out there is going to do something similarly. This must be important. Kelly is writing it down. Reporter based on whether the tax bill goes through or doesnt go through, thats going to have a big impact people are holding onto tllosers they might otherwise sell. Based simply on the tax situation. Thanks, beck. See you later. Safe travels home. Becky quick in omaha joining us on our closing bell exchange, well talk about mr. Buffett comments oliver is with us at post 9. Sitting next to seven from the street. Com and Rick Santelli is at the cme in chicago i mean, you know, hes famously said dow 1 million, too, down the road which we can talk about at some point. In the more short term here, sarge, an impressive rally, twoday rally for the stock market to begin the Fourth Quarter. On the heels of what we already sea in the third quarter. No doubt. Were at risk for some immediate profit taking, i think, and i think as we head out toward the later stages of this legislative calendar, we have to pass a budget before we can talk about tax reform so dont forget the ecb. There is headline risk Going Forward. That said, i think by the end of the year, or by the end of the next six months we will have considerably higher prices for equities i do think the trajectory is still that way and it will also depend on who the fed chair is i do not think janet yellen i did think she would be the bed chair moving forward as recently as a month ago given her bewilderness over the situation, what got us here, i think shes kind of talked herself out of the job and i think youre looking at a guy like jerome powell. Oliver, how focussed are you on personnel changes at the fed right now . I think its important. Theres a big question the more immediate question to us, how is the deleveraging of the Balance Sheet by the fed going to impact stocks and Interest Rates as much as that helped drive asset prices higher, there is a valid argument, im not sure its entirely solid, that it will have the opposite effect as they start to deleverage thats a question thats going to be answered over the next 30, 45 days. Obviously , tax reform as we talked about tax reform. Are you waiting to see what happens with that before you make big moves as Warren Buffett is suggesting hes down . No, were not a very different scale than Warren Buffett that said, we do take into account tax situations and every year, as we get closer and closer to december and ultimately january, we look at maximizing or minimizing, you know, tax consequences for clients. The end of the day for most clients, individual clients, th Capital Gains tax if youre already long term is going to have a much lower impact than what Warren Buffett is talking about at this level because its billions versus thousands. Right. Im thinking through when you say, well, hes still hanging onto shares of wells fargo, there can be a lot of different motivations and he just brought up another one there even as were trying to figure out what that may mean rick, what about you essentially, to me, we have the dollar back toward about 94 at the highs today and emerging markets you cant keep them down reporter yeah, no, well, its very fascinating because i know youre alluding to that when the dollar gets strong, emerging markets are going to submerge and i dont think i dont think thats been reinvented, in other words, i do think that it gets strong enough, the emerging markets will have a problem, smaller problem they would have had five or ten years ago when the dollar denominated, products they were dealing with were on a larger scale. Exclusively and 94 is the level to Pay Attention to you know, we settle at 10 it, trying to get to 94. Lot of ground to cover especially ken you look especially when you look at the change of the equity markets still down is 1 1 basis points as you brought up, he usually doesnt have shorttermism if we want stocks to go on longer terms, people like Warren Buffett not sell, i guess we raise the Capital Gains rate, right . Sure. Why not . Sarge, youre the guy with the level what are you scouting for here in terms of numbers the s p 500, yourpoint of resistance yesterday, we reached it right on the close. We opened that level this morning and support all morning. I dont have another level until 2,541. One could crop up here but i do see clear sailing up to 2,541. Only about nine point from here. I thnk thats where we go. Oliver, real quickly, you have a couple names you think are places to be today cisco, a couple times, total we were talking about just yesterday. Why are these attractive to you . Cisco, again, Cyber Security is going to continue to be a bi theme for investors and the country and the world. Cisco is a leader in that space. We like leaders in the space total, wellrun company. Energy prices are likely to rise over the next three years. Not drop its got a 6 dividend right now. So for safer energy play compared to some of the other stocks out there, we just like it as a core holding in our portfolio. Repatriation stock, too. Yeah. Its a repatriation stock. Yes we do get the tax plan, assuming, passed at some point, should be out of the 2. 5 trillion or 3 trillion overseas, probably 900 billion to 1. 3 trillion is actually eligible to come home. Right. If you project maybe 25 , 30 of that, well, cisco is probably in the top six or seven stocks. Got it. Very good, guys. Thank you. Always appreciate your thoughts. Thank you heading to the close with 37 minutes left in the trading session here with the dow up 75. Still in record territory. So is the s p right now. Up next, walmart is checking another item off its Shopping List the retail giant announcing an acquisition today that could help it speed up delivery times and better compete, yes, with amazon well bring you those details. Later, what do a native american tribe and blockbuster eye drug have in common . Part of a deal of drug maker aller kbr allergan the rally continues on wall street for the most part. Three out of four of the major averages the dow, s p, nasdaq, still moving higher. The russell which was yesterdays big gainer has fallen today among the small caps. Look at some of the other movers on the market, Urban Outfitters under pressure after Deutsche Bank downgraded the retailer from sell to hold on valuation purposes stock down almost 4 shares of Urban Outfitters rallied 20 over the past three months with nearly half of that gain coming in just the last month. And roku shares falling sharply for a second straight day. Sending that stock down more than 18 just this week. Of course, this after the streaming media player maker announced its new products which are priced aggressively to increase the number of active accounts out there but shares are still up more than 20 since it just came public last week and its 50 above its ipo price of 14 today, down almost 10 thats a big move i wonder if its just part of that shakeout. Well, we wondered if this could last so many of these ipos this year in that area have come oust the gate running fast, and then they falter well keep an eye on roku. Also the grocery wars heating up as Walmart Announces its buying parcel, special ic s i in lastminute deliveries. Could help compete with amazon which earlier this year bought whole foods. Since that acquisition whole foods prices have dropped and thats negatively impacting traffic mostly at trader joes and sprouts. 10 of trader joes regular customers visited whole foods between august 28thseptember 3rd, more than any other competing chain. Also interesting is the data shows lot of overlap between trader joes and whole foods and you never know for sure. Sprouts. Maybe its been reported but its not a bad strategy if whole foods whole idea in the u. S. Was to say, were going to go into a whole foods neighborhood, you know, undercut them on price, and benefit from that effect and its largely worked at this point. Its an amazing to me how quickly were seeing the response i mean, peoples loyalty changes just like that is it just because of price . Theyre moving from their beloved trader joes Everybody Loves trader joes for various reasons. Theyre going to go to whole foods because they lowered the prices theyre visiting. Trader joes has done well my sister will always tell me, try to get into trader joes in new york city, dont try, but you got to get the lime cherry popcorn tortillas. They have a lot of unique quirky and costeffect if products that appeal im not sure whether whole foods can we will see just more evidence as weve been saying this is a watershed year in the retail industry. Oh, yeah. Its fun, its great for the consumer. Its fantastic for the consumer and its time now for a cnbc news update. Which is also than taftic. Walmart up 1 today lets get over to sue herera. Taunk yhank you, guys, very. Heres whats happening at this hour, everyone President Trump and first lady melania meeting with puerto rico residents affected by Hurricane Maria and meeting with local and federal officials working to restore power and deliver food and supplies to the islands 3. 4 Million People. Secretary of Defense James Mattis along with joint chiefs of staff chairman joseph du nfor facing questions from the Armed Services committee mattis says the u. S. Should stay in the Iran Nuclear Deal if we can confirm iran is living by the agreement, if we can determine that this is in our best interest, then clearly we should stay with it i believe at this point in time, absent endindications to the contrary, its something the president should consider staying with atm fees have hit another record high. For the 11th Straight Year according to bankrate. Com, the average total cost of an out of network atm withdrawal is now 4. 69. Up more than 2. 5 from last year but its up 55 over the past decade ridiculous thats the news update at this hour i will send it back downtown to you. And bill, im looking forward to you joining me on nbr tonight. Once again, ill see you, nightly business report. Always love doing that show. Thank you, sue. You got it. Here we are on the floor of the exchange with 30 minutes left in the trading session, im here with my friend from rosenblatt securities. Et et even you have to be impressed with im not a naysayer like a certain William Griffith i want to get that off the table. Ive been a buyer. Still even as we go into the close here, were looking as if theres going to be strength to the bell people anxious to get involved with the biggest liquidity event of the day being the new york close. You know, Warren Buffett made the comment to our becky quick a while ago that hes waiting to sell some of his stocks until after he knows what the tax reform is going to look like, more specifically Capital Gains treatment. Do you think a lot of people are koi doing that right now yeah, i think people are waiting for Something Big like that weve seen a lot of things like geopolitical noise youd think its more than just noise and yet it really hasnt moved the needle the fact the vix is under ten now, the market is at alltime high, its just telling you that technical guys are getting squeezed and short sellers are going to be forced to cover sooner or later. Long onlies, why would you give up anything right now . You got to wait and see. Tax reform, some of these other things so, you know, were in that spot where, you know, listen, is this a passive market, is this what the market of the future is going to be, etf creation and then the buying in behind that then were just going to continue this way . So theres a lot of interesting things going on, just in terms of the way the markets structure is i mean, frankly, bill, ive been down here 27 years as a trader and ive never seen what weve been holding at alltime highs so effortlessly. So its really unique and, you know, were watching it carefully. Art cashin said something similar to that yesterday. Thanks, gordon we all learned something here. Kelly . As we always do thank you, both. Coming up, hurricanes irma and harvey destroyed thousands of cars across the southern u. S. Thats leading to higher new vehicle sales at major automakers well debate whether those sales bumped will be short lived, how they will help the stocks. Later a first on cnbc interview with uber investor Shervin Pishevar fights in lo stay with us well be right back. Anything worth pursuing hard work and a plan. At baird, we approach your Wealth Management strategy the same way to create a Financial Plan built to last from generation to generation. Well listen. Well talk. Well plan. Baird. Ronoh really . Gs going on at schwab. Thank you clients . Well jd power did just rank them highest in Investor Satisfaction with full Service Brokerage firms. Again. And online equity trades are only 4. 95. I mean you cant have low cost and be full service. Its impossible. Its like having your cake and eating it too. Ask your broker if they offer awardwinning full service and low costs. How am i going to explain this . If you dont like their answer, ask again at schwab. Schwab, a modern approach to Wealth Management. Certainly las vegas still shaken today after that deadly concert shooting on sunday night. Our jane wells is there still. She has the latest on the investigation. Jane reporter hey, bill at the top of the hour we should get some more information and maybe some answers to the many questions. We have started to learn a few things about the shooter, stephen paddock, known high roller in las vegas, vip at the top tier at cesars days before we checked into mandalay bay, he transferred millions of dollars to the philippines where his girlfriend may have family. See two small holes on the 32rd floor of the mandalay bay. He would have had a direct view of us right here and certainly had a direct view of this behind me this is the concert venue, where the slaughter happened today it is still a cordoned off crime scene and proves no matter how many cameras, security you have in a city like las vegas, it wasnt enough to stop a lone wolf with 23 weapons so do changes need to be made . Were going to do a lot of work thinking about this in the future, about working with the federal government president of the United States is coming here in a couple days with not only the white house, with congress, with agencies, to think about the best path forward in the future. Thats not really for today. Today is about the victims, their families, making sure that loved ones can come to las vegas, mgm resorts will host them in any of our properties, make sure they get home, make sure they have what they need. Reporter mgm resorts is now committing 3 million to humanitarian aid for the victims and their families and also to care for with whatever counseling or needs for the First Responders and others who were first on scene. I want to show you, though, one more video that we have. Up the street at the wynn today, something ive never seen before they were using metal detector wands for guests and checking bags now, is that a sign of things to come i dont know guys, i was in mandalay bay last night, and while there was more security, we hadnt seen anything like that yet bill well, that may have to be the future the question i still have, and maybe you get some answers at the top of the hour as you said, how in the world was he able to get 19 or 23 firearms into his hotel room i know he was there for nofour days, maybe he didnt have the housekeeping come in and change the room all that time how does that happen reporter oh, the Sheriffs Department said he had ten bags. He may not have brought them all in at once housekeeping was in the room and according to what police have told us, they did not see the weapons. He was able to conceal them. This is someone who took a lot of time to plan this thank you, jane let us know what you learn at the top of the hour. See you later. 20 minutes left here this market resilient. Were up 88 points now. Thats about the high for the session i think right now. And the s p, the nasdaq, also continuing to move higher. Allergans stock continues its monthlong slide, though, down more than 7 due to intense political scrutiny from capitol hill over this blockbuster eye drug, restasis up next, whats behind the concerns in washington. Donald trump is in for puerto rico, surveying the damage, after an exchange of heated words with the mayor of san hahn how the president was received and what message he gave to Puerto Ricans. Stay with us 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. Theextreme risk of burstd a pipes and water damage. Y. Soon, Insurance Companies wont pay for damages. That is, not if they can help prevent damages from happening in the first place. At cognizant, were turning the industry known for processing claims into one focused on prevention with predictive analytics, helping them proactively protect the things that matter most. Get ready, because were helping leading companies see it and see it throughwith digital. With baelcome back. Breaking news on auto sales. Phil lebeau has numbers for us. Whopper of a month last month when it comes to auto sales. Sales rate according to auto data, 18. 57 million. That was the pace of sales last month. That is way beyond what anybody was expecting. Even the most aggressive estimates coming from wall street thought we might see a sales rate of 17. 4 million or 17. 5 million. Again, sales rate, 18. 57 million. The first time this year weve seen a sales rate over 18 million. The strongest, at least in a year youd have to go back to late last summer that you saw sales rate as strong as this and guys, just to drive this home, coming into this month, a lot of people said, well, listen, the hurricanes will give you a little bit of a bounce, you might get a 300,000, 400,000 sales rate bounce, might bring it up into 17. 3 million. Huhuh the sales rate much stronger than that at 18. 5 million. Back to you. So if it just went up by a million and a half on a run rate, phil, does that mean theres going to be a major giveback with the series of disappointments after this month . I think most people believe weve only seen part of the giveback or the benefit, if you will, from the hurricanes. People saying, look, give me that Insurance Claim check, i got to go out and buy a new car or truck well see more of that in october. When we look at those numbers in about a month. But theres also the question thats going to be coming up about whether or not were seeing an overall strength in the underlying economy because these numbers are well beyond what people are forecasting as far as the bounceback from the hurricanes is there a stronger consumer out there, is that what were seeing here with these numbers coming in as strong as they are well, we have a bull and bear on automotive stocks coming up momentarily. Well talk with them about that as well. You bet. Thank you, phil, see you later. This controversial patent cnbcs meg tirrell has the latest on the story. She join us. Reporter a very fastmoving story. Just this afternoon, four congressmen on the House Oversight committee have joined the chorus of government criticism of allergans unusual patent agreement with a native american tribe this comes after five senators criticized the deal already and today allergans ceo responded saying the company isnt trying to avoid patent challenges for its blockbuster eye drug restasis, just trying to avoid what he calls double jeopardy, having to defend patents in two systems simultaneously, one of which allergan is asking the Senate Judiciary committee to review quick stepback to review whats going on here. Last month facing charges from generic drugmakers who want to make cheaper copies of restasis, allergan transferred the patents of the drug to the st. Regis tribe. Native american tribes it turns out have sovereign immunity to a specifickind of patent challenge known as interpartis review or ipr. The tribe moved to dismiss the ipr challenges allergan paid the tribe almost 14 million in exchange. Allergan faces challenges through the traditional federal court system in a letter today to the Senate Judiciary leaders, allergans ceo says a major misconception of several senators that have criticized the deal. Last week four senators asked the committee to open investigation into the arran arrangeme arrangement. Just today sorry, last night, senator Claire Mccaskill called it an absurd loophole she said should be illegal. The coalition of congressmen from the House Oversight committee joining in. My understanding is the way this worked is the tribe went to allerga in the tribe is looking to diversify its revenue stream along with other ones. If you think its good for them to be outside of gambling, alcohol, cigarettes, whatever, and possibly represents a stream of income for them to be a ibl to do this sort of patent thing going guard, you know, is it that allergan came up with this nefarious plot to do this or is it that this tribe is actually, you know, hunting through all these filings to say, hey, you, you, you and you i mean, which way does the regulation need to fall, on allergan or the tribes its a great question ive spoken to the attorney and firm who came up with this, its a small firm down in dallas, they focus on patent law they noticed that there was this protection for state universities and other sovereign people people who have sovereignty who include native american tribe they went looking for tribes who might be open to working with companies in this way. They were connected with this specific tribe and their attorney who ive also spoken to they see this as a way to diversify i can see other tribes and other universities now looking to the pharmaceutical entry thats right. I got off the phone from congressman peter welsh from vermont, he points out the Oversight Committee had a bipartisan support for looking at this so miss this is not going to be the end of the scrutiny, guys. I wonder if its the worst thing not with this particular case, but the idea that native american tribes may be able to come up with some kind of revenue stream for it. Certainly that is a good part of this story. Yeah. Thanks, meg. Thanks, guys. Let you get back on the phone. As we just reported this blockbuster month for auto sales with numbers well beyond expectations for the month of september. We have a debate as we said on whether the stocks are a good y n rhtow coming up. baby crying slow jazz music fly me to the moon and let me play bell ring 9 out of 10 couples prefer a different mattress firmness, so we created the only bed that adjusts on both sides to your ideal comfort, your sleep number setting. You can even see how well youre sleeping and make adjustments. Does your bed do that . The most amazing part is they start at 699. Thats 200 off our queen c2 mattress during our fall sale. Ends soon. Visit sleepnumber. Com for a store near you. Welcome back quickly, one of the big stories today is auto stocks the Sales Numbers came in huge, as phil lebeau just told us. The stocks are getting a boost today. 18. 5 million sales some are citing posthurricane buyers as part of the reason behind that surge. Take a look at some of the september performance there, toyota leading the way with a 15 gain gm up 12 . The question is will this momentum continue or is it shortlived because its a onetime event because of the hurricane . Joining us with their thoughts on automotive stocks, eric ross. Hes bullish on the sector jamie from Consumer Edge Research is our party pooper hes our bear in this case whatd you make of these number . Does this play into your argument or not . We saw consumer demand we were measuring spiked up huge because of hurricane buys. Weve been seeing consumer demand of people researching to buy new automotives since may. Youre not bullish because of the replenishment needed because of the hurricane. This is just the start of what we think is going to ba big cycle turn. Why would it suddenly turn in one month if this has been going on since may 700,000 cars were flooded. Thats the hurricane effect. We started seeing people doing Research Back in may you think about when you buy a car, dont walk into the lot and buy the car the next day. Right. What about you, jamie i look at the results today, we see a lot of fleet sales growth which is seasonal, as hertz, avis, enterprise repleni replenish, could also be a hurricane effect to the degree Insurance Companies are going to take time to assess claims and consumers need loaner vehicles i tend to think its more femoral and any type of hurricane or replacement demand could be borrowing from the future and bringing it forward to today in other words no, theres two ways to read todays news if erics right, this is a massive bullish case for autos at a new high, cycle we havent seen this year for if youre right, this is the worst thing we could have seen, because the bigger the spike right now, the worst the hangover will be. I tend naturally as the party pooper to take the latter. I think were in a lull with the new Vehicle Technology cycle as much as people are researching vehicles, whats the compelling step function change in tech . I think a lot of consumers are waiting for autonomous or electrified tech which is probably two, three years out and overlay that with the idea that late model used vehicle supply is ramping significantly. So, a 2015 model which is very similar to a 2017 or 18 model in terms of tech for a 20 to 25 discount is the value purchase theres a lot more of those opportunities on the market. So i tend to think that this is going to be a longer lull on the new vehicle side than september suggests. A lot of those things were flooded. I wouldnt touch them as a potential buyer. In san day this is a cyclical play. So you got to buy first. You got to wait for it to bottom then you have to own it at that point. Then the stocks go up bigtime. Or about his point people are waiting for Autonomous Cars. Are you waiting, if you need a car right now, are you going to wait three years for an Autonomous Car i dont want an Autonomous Car. Exactly, just bought a new car. People are researching new cars. Great things are coming but they still need to own a car. Last thought, very quickly. Id add to that, cars. Com, car gurus, carvana on the used vehicle side, lots of evidence to support the bullish view. My thought is you might be pulling 2018 forward a little bit, thats why this is more ephemeral than long term. All right two smart guys with two different points of view good to see you both thanks for joining us. We have a market flash on Marriott Vacations seema mody, whats going on . Reporter potential consolidation in the time share business Marriott Vacations made a takeover bid for ilg in recent weeks valued at 30 a share. That according to bloomberg. It was reported in june that ilg was working with Investment Bank molis to explore Strategic Options and potentially a suitor that does fit this reporting ilg ill just point out exclusive global licensee for hyatt, weston, sheritan, brands. That stock higher on this. Back to you. 6 pop there, seema, thank you very much. All i know is i think eye glass makers are rushing to the stores. I knew you were going to i like her specs yours, too. We have the closing countdowcong yr n miouway in just a moment. Stay tuned building a website in under an hour is easy with gocentral. From godaddy in fact, 68 of people who have built their. Website using gocentral, did it in under an hour, and you can too. Build a better website in under an hour. With gocentral from godaddy. bell rings screeching tires bell rings 90 seconds to the close and the train rolls on the dow, what do you say all the major averages except the russell today continue higher the industrial average just off the highs that were set moments ago. Now at 22,638. Intel, again, the best performer. American Exchange American express right behind it. And lets give the travns ponsp their due as well, bob pisani, alltime highs airlines and autos were the standouts today. The rails were going lower still at alltime highs on the transports. The key thing here is weve had good reports from major sectors today. Delta had a great report we were up 4 , 5 , 6 in all after tof the airlines throughout the day. Tenyear yield, theyre the airlines. Look at General Motors, too, General Motors had a good report and lannar had a good report its not like were drifting up because everybodys buying stocks we had companies, themselves, are reporting good numbers. We hit 236 on the yield on the tenyear today that took us back to early july in todays session and oil was down a little bit, but still, at 50 a barrel. And if you take a look at the banks youre talking about whats going on with Interest Rates, new highs at all four of the big banks. When is the last time that you saw bank of america, morgan stanley, citigroup and jp morgan all 52week highs . So, it continues. The 44th alltime high for the dow set just this year stay tuned more on the markets and an update out of las vegas on the second hour of the closing bell with kelly evans and company. See you tomorrow, kelly. Thank you, bill. Wng to the closing bell, everybody, second day of the Fourth Quarter nearly as strong and certainly as record setting as the first looks like on the close even the russell, small caps join the other major averages to close in positive territory given yesterday was a record close for all fathour that means to today is, too. The dow closing at 22,642. The s p 500 up 2,534 the nasdaq up to 6,531, almost. 25 gain today the russell 2000 in the red for much of the session did add 2 1 2 points at the bell to close around 1,512, just shy of that level. Again, record highs for everybody. Intel, walmart, leading the way. For the blue chips today lets bring in h our group here to talk a little bit more about it, joining me now, cnbc senior markets commentator michael santoli. Also with us, Dennis Burman from the wall street journal. Joining us today and brian singer, who is a partner at William Blair and Portfolio Manager of the macro allocation fund. Well speak to Shervin Pishevar later this hour. Which is kind of flat to open, and then grinding liar. 2 ,. 3 gain per day. Today, you keep wanting to say its too calm, too orderly, you have too long a streak of wins however, when you have autos up 2. 5 , auto stocks up 2. 5 today, and 12 in a week, Home Builders up 2 today, banks up 8 in the last month, and airlines up 5 so thats either the market telling you a pretty good message about the economy, or its some kind of a wishful head fake rotation of everybody deciding what the hot stocks are going to be for the next couple of months. We dont know exactly what that is, but i think the market has earned the benefit of the doubt. Dennis, what about you. Well, its interesting to hear Warren Buffetts remarks about buying stocks instead of owning bonds if you look at the spreads between the high yield index and Investment Grade index as well, man, those spreads are incredibly tight so if youre looking to get any bit of yield right now, you have to go back into stocks and the market responding. As mike i think rightly points out, the market is sort of presenting bits of data that make it possible where you feel at least comfortable owning those stocks we use dodd have dow 20,000 hats around the wall street journal, kelly, now i have to print dow 23,000 hats. I dont think youre printing 23,000 hats. But we will have more on Warren Buffetts comments in a moment first, some news on taxes out of washington ylan mui brings us the very latest. Reporter a senior republican tells me the house tax plan is highly likely to include a fourth top rate on wealthy households remember, the tax framework from the big six only included three rates, 12 , 25 , 35 , but did give lawmakers an option of adding a fourth rate for the richest americans. At least in the house they appear ready to take it. No word on what the top rate would be, im told it would not be above the current rate of 39. 6 . This move could help republicans defuse criticism from the left that the tax plan so far primarily benefits the wealthy and the senate, finance Committee Chairman orrin hatch said today those attacks are unfounded until all the numbers in the plan are settled, and he did appear to signal that hes open to that fourth rate as well, kelly. Back to you. All right, ylan, thank you very much. Brian singer, just interested in your reaction in terms of the significance of a fourth bracket here and moving the tax plan along and affecting your investors. I dont think its that significant. It basically is expected, what youd expect home them to do tax plan through eliminates to some degree the criticism that its benefiting the rich so in that sense, its expected. Probably priced in no great impact. All right we know oracle has been outspoken on taxes oracle of omaha. Warren buffett sat down with becky quick earlier today in omaha. Becky joins us with some of the highlights including a big deal berkshire hay nouannounced. Becky . Reporter thats right. Berkshire has over 60 billion in cash on hand, at least the last time we checked all that money has been burning a hole in buffetts pockets. Today we find out what he spent some of that money on, although we dont know exactly how much he spent for the purchase. He wound up buying a 38. 6 stake in pilot flying j. That stake is going to jump to an 80 stake by the year 2023. Lets run through some of the number on this deal. Its the 750 Retail Locations in 44 different states, fourth largest trucking fleet in the nation thats because theyre delivering so much gasoline and so much diesel fuel. He said Something Like every 22 second, theres another gasoline drop that theyre doing somewhere . The k in the country with these trucks 70,000 Parking Spaces for trucks at the truck stops 4,900 showers for the truckers when you stop by these places. By the way nc, before this deal today, this was the 15th Largest Privately Held Company in h the United States based on the forbes 400 list. Kelly, this is a classic buffett move coming up with a company like this, buy something you like, something you know youre going sfo to be a longtime hold in, holder for forever over an extended period of time. What is an uncharacteristic buffett move, Something Else thats been going on, not selling stocks as we get toward the end of the year because youre waiting to see what washington, d. C. , is doing you were talking about this with Corporate Taxes, uncertainty about whats going to happen with it. It made buffett do something he never does, wait and see what happens with washington. Heres why i think theres a lot of that going on because i think theres an expectation that if they reduce that if they have a tax act, it will be they will cut the rate, certainly corporate rates, and be kind of foolish to have a gain now and pay 35 tax on it if by waiting a few months you were likely to pay 25 . Reporter so kelly, all of that is what something thats been changing buffetts behavior he said probably billions of dollars when it comes to be Berkshire Hathaway if ma it makes yoo s you wonder whatn to happen to the market. Theres pent up demand dont know what will happen with washington it will all sort itself out in the next few month. Yeah, were going to ask our guest about this in a moment im curious on the individual tax side, hes been outspoken over the years, did he broadly seem to support this plan . Reporter no, he did not. He says he does not like a lot of the things that this plan does we didnt go through every single one of the brackets, idea of shrinking to three brackets from the seven no idea about what he thinks about adding a fourth. One thing hes outspoken about is the estate tax. Said getting rid of the estate tax he thinks is a terrible idea, even as somebody who would potentially again fit do lly be road from the estate tax they like to call it a death tax as if it impacts everybody who dies hi said to illustrate his point why he didnt like it, there were 2. 6 Million People in america who died last year he said only 5,000 of them would have needed the estate tax or gone through the estate tax. He said if you think this is benefiting anybody but the richest of americans, you better think again. Wow becky, great stuff thank you very much for joining us again thats becky quick out of omaha. Lets go back to his point about the Capital Gains tax for a moment its interesting to think for a second is there pentup selling we talk about the tax plan as passing and being a bullish factor when it passes, its bearish, because everybody thinks now i know the rate at which i can sell. It could be that. Although i think we should make a distinction, i think what Warren Buffettt was saying since hes a ceo of a company, if we were to sell as Berkshire Hathaway, Corporate Tax rates might be lower down the road were not talking about lowering the Capital Gains tax for individuals. Okay. Its not about you and me deciding, lets wait until january 2nd. So by lowering to sell all my stocks if its a company that tax on profitability. Owns an investment, then maybe you would wait. Which is interesting, dennis, it makes you wednesdayer then about the conglomerates, anybody else out there thinking about doing things like spinoffs, divestitures, where that could affect those choices as well im sure there are deal makers crawling all over that. Absolutely, i have a rule, kelly, something you dont understand on wall street, the reason, the answer is taxes. And that is a very good point. If you can dispose of an asset with a very low tax basis you bought 40 years ago at a far different rate, i think buffett has got it right just wait and hold on and see where that come in makes perfect sense. What you think, by the way, of h is deal to buy the truck stocks a 40 stake in this one. Look, hes going to soon over 80 after a few years. I think it makes perfect sense good way to spend money. Hes not going to lose money our fixsation on electric cars and Driverless Cars notwithstanding, going to be have decades until the vehicles are off the road and dont need gasoline particularly large crosscountry trucks i think hes going to be fine. Might have gotten a little discount to having a family sell to him i think it makes sense i dont think its that sexy good, fine, solid. Not meant to be. Exactly. If you look at the whole burerkshire hathaway portfolio, his new investments are placing him at the center of the movement of stuff. The railroads, the truck stops, energy hes got the pipelines and electrical grid plays, too its transmission distribution stuff thats always going to be there and grow along with the economy. Brian, lets talk for a second about the transports today. The s p 500, best performers delta up 6 , united up 6 , american up 6 you know, you so on and so forth across the airlines. We talked about how well some o the autos are doing, too what do you make of that basically theres a lot going on in the zindustry right now tax changes being proposed, we got oil prices that are moving, jet fuel prices obviously part of that, gasoline prices part of that they recently kind of picked t out peaked out, theyre coming back down a little bit. Thats supportive for the industry as well a lot of this on a daytoday basis is more noise than anything else. But there are some important aspects of these changes that do underpin the transports. Dennis, what would you add there . You know, these are pretty big moves today. Well, as we know the airline have been in rough times for a while, but look, i think if were wondering about stocks here, were printing dow 23,000 hats, kelly, there is real core improvement and Economic Growth indicative in a number of companies as mike was pointing out. So there is a basis for us not to have total doubts about where this rally is headed but, again, the Airline Stocks are so fuel price dependent, that can reverse on you at any moment, too. One thing, michael, to add on the tax issue before we move on from that, hanes was one of the worst performers in the s p, down 4. 5 . Interestingly, it could suffer if the tax reform happens. Companies with a lot of u. S. Profits, barons was outlining the whole thing over the weekend. Theres a number of thing including hanes brands, insight, you know, mnk. Where oddly if you actually get this type of reform, might go from having a single digit Corporate Tax rate to something in the low that was the concern, essentially all youre doing is a radical shift in the tax burden among companies without necessarily changing the overall. It was one of those things if you built a system from the ground up, maybe thats how you would do it. Yeah, just the way a lot of small stocks are trading strictly on tax cut hopes, some will be on the long end kelly dennis. If theres a change on the e deductibility of interest that rewrites the entire Corporate Finance picture and definitely be winners and losers, perhaps ones we do not expect that come out of the reorganization. Theres a lot that still needs to be answered and gown through. All right we have breaking news. Speaking of the transports, its on ford. Phil lebeau joins us whats happening, phil were 20 minutes away from the ceo meeting with analysts and explaining to them his plan to transform ford. Remember, he became ceo in may he said, look, i want to take the first 100 days to assess the company, see what we want to do. Heres his 100day plan. Really three key points here more on trucks and suvs. Fewer investments in cars. Charging up electric vehicles, spending less on gasolinepowered vehicles. Less on the development of internal combustion engines. And finally, cut costs substantially. Heres an example of what were talking about. Fords plan, cut material costs over the next five years by 10 billion. Thats an incremental increase compared to what they had previously forecasted. Also, ford plans to slash engineering expenses by 4 billion over the next five years. Again, jim hackett will be laying out all the details for his plan in about 20 minutes hes going to be holding a webcast with analysts on wall street well be listening in. Well have updates as well as some sound from jim hackett. Finally, guys, take a look at shares of ford versus General Motors year to date. The reason were slowing this is, they typically move in tandem, but you can see that General Motors has been breaking out much more aggressively than ford over the last, what, month and a half, two months and a lot of that is because people are saying, look, fords put the Building Blocks in place to profit on autonomous drive vehicles and electric vehicles well find out about fords plan, again, more details about it in about 20 minutes kelly . All right, looking forward to it, phil, thank you very much. Brian, before we go, i wanted to squeeze a word in with you about emerging markets today up another 1. 5 even with the strong u. S. Dollar, thats 30 year to date i mean, we dont see this kind of performance last like that very often no. We dont it does, however, seem to come in bursts for the emerging markets and theres a lot thats quite beneficial right now thats going on. This is a first time in a long time where we have growth throughout the world basically, every region is reporting positive growth and were back to that kind of longterm 3. 5 reel that weve seen for the last seven decades or so. Thats kind of what people are looking for, whats getting priced in. Importantly, though, so many institutional changes with rule of law and profit rights have been made in these markets, and that does nothing but increase the fundamental value of assets there. And thats something we can ride for a longer period of time than just this year i know. Five or ten years ago, i would have thought youre right, but lately, i dont know feels like it takes a long time for progress anyway, thank you, guys, for joining us brian singer and dennis thanks, kelly. Former equifax ceo Richard Smith getting grilled on capitol hill today over the companys massive date to breach up next, how future hack attacks can be prevented. Plus, famed venture capitalist pishevar, when he think startups like uber and airbnb could go public. We want to hear from you send us a tweet, facebook message, or somethg,in anyway, email us. Youre watching cnbc, first in business worldwide 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. Want sure ck . Alright, looks like weve got chips, popcorn, pretzels . Pretzels plain, sourdough, spicy, sesame, honey mustard, chocolate covered, Peanut Butter filled, this ones in german, it says, reindfleisch . Plain. Great. So what are we gonna watch . Oh show me fall tv. Check out the best of the best handpicked fall shows on xfinity x1, online, and the Xfinity Stream app. Thirsty . Welcome back take a look at shares of equifax today. As former ceo Richard Smith apologized to congress about the hack that compromised 145 Million Peoples personal data smith explained the failures and promised congress theyve been fixed. Human error involved the failure to apply Software Patch to our dispute portal in march of 2017. Technological error involved the scanner which failed to detect that vulnerability on that particular portal. Both errors have since been addressed. Well, joining us now, brett horn, a senior Equity Analyst at morningstar. Leo, chief Information Security officer at sixtera brett, you cover the company and the shares are up 2. 5 today do you think that he has quelled some concerns around the stock yeah, i think its really just a case of no news is good news i dont think there was really any material new information that came out of the hearings and the market viewed that positively what about tomorrow he may be going up against senator warren, yes, if hes headed over to the senate . Yeahing a i think hes going to continue to face very strong criticism and i think essentially, you know, going to congress and taking his lumps is him, you know, per tforming his last acta ceo. Its appropriate since this happened under his watch. Leo, whats your take on what we learned from the company in terms of what was breached in the first place, what has been done to fix that now, and the fact that lots of americans have signed up for their protection Going Forward . Right, well, were seeing the aim old Security Strategies fail time and time again. Most enterprises have a hard outer shell, meaning theyre using a very robust perimeter defense, but not much defense interior not much defense inside the perimeter. We note from the ceos statement that the adversary had access to the interior of the network from may 13th, to about july 29th thats an extraordinary amount of time for an adversary can do damage so i think its a lesson for enterprises to focus more resources an strengthening the interior of their network, rather than trying to just monitor it or maintain significant perimeter defenses. Brett, what kinds of assumptions are you using for potential liability that equifax might face i mean, it seems to me thats the key swing factor in deciding what this company ultimately is worth, and also, you know, wells fargo is up on the hill today as well, years after, you know, the offenses in terms of its accounts scandals. You cant necessarily know exactly how quickly the equifax matter is going to be put to rest yeah, well, the breach at equifax is unprecedented in some ways, certainly in terms of the scale of the breach. There have been similar type of breaches in the fast experian had a breach a couple years ago, a much smaller one admittedly we sea thie things like the tart breach and so forth. In terms of legal costs and fines, those hits have been material ultimately manageable for those companies. I think, frankly, thats going to be the case for equifax as well brett, yesterday, sheila bair, the former fdic chair, joined us and mentioned she thought banklike regulation could be coming for these companies. And why shouldnt it and if it does, does that significantly change the earnings power well, i think thabs tts the other component of it, what are the ongoing cost i think its certainly safe to assume theres going to be an increased focus on security, going to be higher spending around security. Whether thats at the companys own initiative, or, you know, through government mandates. So i do think its fair to assume that, you know, there will be a longterm margin hit from this as well. Leo, what do you think the longterm security aspect implications of this should be both for equifax, but for all the Credit Rating firms . Well, theres no doubt that there will be more regulation and more spending on security. The question for me and other Cyber Security professionals is what can the adversary do with the information that was taken can they defeat other security controls so we know that Identity Theft is a real risk coming out of this breach, but since the adversary now has information on millions of consumers, can they use that information to break down other defenses . We have knowledgetype questions that can be defeated we have social engineering type activity that can be conducted with this information. So my concern is not just the Identity Theft problem, which is significant, but also the ongoing Security Threat from the use of this information by sophisticated criminals. All right mr. Horn, mr. Taddeo, thank you both for joining us. Thank you well hear more from equifax tomorrow. Hes invested in startups like uber and airbnb coming up, Shervin Pishevar weighs on and whether more could choose to stay private rather than launching an ipo. And Procter Gamble, the ceo promises to take the gloves off in a fight against former activist investor nelson pelz. Well have details straight ahead. 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 welcome back Corporate Leaders at Procter Gamble holding a webcast earlier today to answer shareholder questions as the proxy battle heats up sarah eisen has stayed for late for us and joins us with some of those highlights. Well, its an Important Company and it is crunchtime for both sides in this proxy fight today, p g hosting a webcast this afternoon to address shareholder questions, many are which points nelson peltz continually ra lly raises in his criticism of the Company Peltz has gone after the companys insular culture most upper management, p g lifers board member meg whitman did address the culture critique she was on the webcast listen. Many of you may not know i started my career at Procter Gamble and i think that may have been true of the company 20 years ago, maybe even ten years ago, but increasingly, they are adding outside hires in key roles, so the general council, cio, the brand new head of north america, Health Care Comes from outside the company. And theyre also doing, i think, a very good job of interacting fast in the environment, whether its in silicon valley, the digital environment. So i as a board member, i see a big change in, from p g to being very, you know, Business Savvy globalists and this is the first time weve heard publicly from a board member about the fight behind the scenes. Board members are taking meetings with shareholders along with upper management. The company did say, though, its open to adding new Board Members but that peltz is just not the right fit. In fact, Ceo David Taylor even said theyre in the process, the vetting process for new members to the board listen we will continue to look for globally experienced Board Members who represent the next generation of leaders, as the world is changing fast and new and different prospectives will be needed. Digital perspective, Big Data Analytics experience will be important. As our ability to use the new marketing vehicles and media will only accelerate as a. I. And Machine Learning become important value contributors we will look to add cpg experience as well as specific knowledge in our categories Like Health Care and we will continue to build a board that reflects the consumers we serve actually, peltz argued he brings the consumer package, an investor and board member. P gnd g is saying pelzs experience is mainly in Food Companies which is very different than household products and the timing and the alignment with the board is just not right right now for peltz to join two years into this transformation of the company. I will say, guys, recently got the backing of two key proxy advisory firms, iss and glass lewis, to add pelz to the board. The battle is on between the two sides to convince especially those constitutional investors and index funds which tend to vote late in these proxy contests to vote for their sides. Its amazing. No doubt the whole situation is going to be studied, going to be a harvard case study just so allout on both sides with really highprofile people on all sides of it the biggest ever company. In terms of to get a proxy battle. In terms of a size of a battle i also wonder if i vesters anvee sitting there saying they went either way pe peltz like adp and ackman, the company is fine on its own, maybe it could be a bonus, otherwise well run also, i mean, maybe in the companys favor, if he were added to the board and there was not an appetite to realign the entire company the way he says, whats the productive role hes going to play aside from being kind of a gadfly on the board . I dont know. His argument would be he would only be 1 of 12 members. Not like hes going to come in and split the company into his new organizational structure which he does propose. He would just bring fast, urgent ideas. As for the share price, the stock is up 9. 5 so far this year so no question, the fact that this fight has ramped up adds to the pressure on management to show that he are executing on this transformation we have seen that in the last few quarters to david taylor, the ceos credit, the stock has outperformed since he took on the role about two years ago but its really been supercharged since nelson pelz reve he had a ginormous stake, 3. 5 million earlier this year. Well see if it works sara, thank you very much. Time for a cnbc juupdate wi sue herera. Heres whats happening at this hour, everyone. Russian president Vladimir Putin offering condolences to the u. S. After the deadliest shooting in American History putin speaking at a ceremony in the kremlin, as the new u. S. Ambassad ambassador, jon huntsman, presented his credentials. Joe biden campaigning for alabamas Democratic Senate candidate doug jones calling him a man of integrity jones is running against republican roy moore it has been 20 years since a democrat held an Alabama Senate seat over 38,000 pounds of ground turkey including the Publix Store Brand and fit and active fresh ground turkey have been recalled due to metal shavings the meat was processed and packaged by pressed edge foods which is a North Carolina company. And the boss opens on the great white way tonight. Bruce springsteen to begin an 18weeklong residency at broadways walter kerr theater its one of broadways smallest with a capacity of under 1,000 seats. Springsteen says the show is just him with his guitar, piano, and the words and music. And kelly, just getting an update out of las vegas. The News Conference. The update, sheriff joe lombard said they identified all but three victims of that shooting at this point. Its ongoing i know jane wells is coming up in a few minutes, maybe shell have more details on that. Ill send it back to you sue, thank you very much. We will get the latest on las vegas. Once we come back there this break. In terms of the investigation into the nations deadliest mass shooting, an update on casualties from the attack thats coming up in just a moment. Also President Trump visiting puerto rico to view the devastation caused by Hurricane Maria. Well also head live out to that island for the latest Recovery Efforts coming up. Well, its earnings season once again. Yeah. Lot of Tech Companies are reporting today. And, hows it looking . I dont know. Theres so many opinions out there, its hard to make sense of it all. Well, victor, do you have something for him . Check this out. Td ameritrade aggregates thousands of earnings estimates into a single data point. That way you can keep your eyes on the big picture. Huh. Feel better . Much better. Yeah, me too. Wow, you really did a number on this thing. Sorry about that. Thats alright. I got a box of em. Thousands of opinions. One estimate. The earnings tool from td ameritrade. Las vegas is still reeling after sunday nights shooting left at least 59 people dead and more than 500 injured. Jane wells is on the ground there with the latest on the investigation after an update. Jane reporter hi, kelly, were getting all kinds of new information. This is the crime scene behind me still cordoned off the reason why, you can see over there, we have fbi, an fbi Evidence Team which is out here working with local law enforcement. Surveying the situation. Because, of course, you wanted to see where the bullets came from, where they landed. All that sort of thing were also hearing that the number of injured may be lower than previously thought. Slightly they may have double counted as many as 20 people in certain hospitals. Thats one bit of good news. As for identifying the dead, here is what the sheriff just said all but three victims, we still have an active scene at the grounds near mandalay bay, so we ask anyone to stay away from that area until further notice reporter also, they said they have finished the search of stephen paddocks reno home, found more firearms bringing the total number of guns he possessed to 47. And, you know, this is generally one of the safest and most securityoriented cities in america for a variety of reasons but even mr. Las vegas, himself, wayne newton, expects there will be some changes. I think that when all the investigations are done, that possibly something goodwill come from it in terms of being able to learn how we can do things better reporter and i want to show one more time this video we got earlier today. Inside the wynn where i have never seen this before, they were using metal detector wands and searching peoples bags. Im staying at mandalay bay. That wasnt our experience last night or this morning. Well see what happens this afternoon when we get back to the hotel. Kelly . Jane, was there any more information on the firearms he used either in terms of how he got all of those in the hotel room, what kind of weapons they were to be able to fire so rapidly . Reporter we havent reached that part of the News Conference yet. There were reports that he had a special device which allowed him to fire the weapons more rapidly. Earli earlier, the sheriff had said he got the 23 weapons in there through 10 bags but checked in thursday, four days before the shooting so this may have been a bagbybag process that hasnt been revealed to us yet. You know, kelly, theres no information yet that he owned any of these guns illegally. And in nevada, machine guns are legal if theyre older than 1986 if you go through the long profession of a federal background check which takes, could take a year and cost a lot of money wow all right. Jane, for now, thank you jane wells in las vegas. President trump, meantime, wrapping up his tour of hurrican hurricanedevastated puerto rico moments ago. Contessa brewer was with the t president and joins us. Reporter the work at the commander in san juan continues even though the president is wheels up from puerto rico heading back to the states h e got a chance today to go out and meet some of the families who lived through Hurricane Maria and now have lived through two weeks without running water, without electricity, long gasoline lines, no Cell Phone Communications then he went up in a helicopter and got to see from the air some of the damage that has just wiped out the infrastructure on this island, has crippled the supply chain and where logistics for getting businesses back up and running have been so very damaged. His comments about how much all of this damage costs, though, have caused some consternation on the ground. I hate to tell you, puerto rico, but youve thrown our budget a little out of whack because we spent a lot of money on puerto rico and thats fine, we saved a lot of lives. Reporter he also said today that, hey, Puerto Ricans did a great job not having a lot of deaths, quote, like in a real catastrophe like katrina of course, more than 1,800 people died in katrina right now the death toll in for puerto rico, certified death toll, stands at 16 the governor told us this morning he expects that number to go up because theyre just now beginning the process of going back to hospitals and to the morgues of certifying the deaths and figuring out who died of natural causes, who died because they didnt have access to insulin or medical services, who died from thirst or hunger that is going to take time like assessing the true magnitude in terms of cost for getting this tide back up and running, kelly. Yeah, its going to be a huge effort that much we know. Contessa, thank you very much. Contessa brewer in puerto rico for us. Now some breaking news on yahoo josh lipton, whats happening there . Kelly, breaking news from yahoo providing notice to additional users affected by that previously disclosed 2013 data theft you recall, kelly, in december last year, yahoo disclosed that about 1 billion accounts existing in 2013 had likely been affected yahoo is now saying its recently obtained new data, new intelligence, now believes, in fact, all user accounts, so 3 billion, were affected by the august 2013 theft. Yahoo saying this is not a new security issue, and theyre sending out email notifications to those affected. They say the investigation says that user account information that was stolen did not apparently include bank account information, payment card data, or passwords and clear text. The company saying it continues to work closely with law enforcement. Kelly, back to you all right josh joshua, thank you very much. Josh lipton out west. The board battle is still raging at uber up next well talk to sherpa s ketal Shervin Pishevar to get hita on the ridesharing company. Keep it here youre watching cnbc, first in business worldwide welcome back drama at uber continues to unfold the companys board of directors meeting today to consider proposals to limit cofounder Travis Kalanicks role and strip early investors of voting power. Shervin pishevar thanks so much, kelly, shervin, thanks for joining us here. Thanks for having me. You just wrote this letter. As one of ubers early investors, you have a stake in some proposed changes. What is your position that youre advocating for . I know theres a vote expected by ubers board any minute now. Thats a great question ive written a lot, through letters, kind of rationally explaining some of the views that me and many other shareholders have. Steve russell and i, an early investor and adviser, have hired our lawyers, emanuel handled the court case in delaware so we flew into that and the judge agreed with her, our views, and pushed back bench marks, rejected benchmarks claims and put it into arbitration. Now, yesterday, we wrote another letter explaining to some of the Board Members at uber the implications of the vote today which would be stripping the Class B Shares of the super Voting Rights and vested rights of in of the, about 200 really early founding employees of the company. Some of the advisers some of the investors whove been in this company for a very long time. The reason why this is important to many of those people and many others as well is were a nation of laws and rules. Thats why the little courthouse in delaware stands for so much might be a little courthouse, but it actually holds up our economy and our legal system so today, in the boardroom, its my opinion that if the board of directors of uber decides to strip these rights of all of these early employees and advisers of the Class B Shares, that theyre doing something that is wrong. And that continues a wave of decisions that have been wrong by the board of directors, led really by, in my opinion, benchmark. Now, today, recode came out with a new article, says she doesnt think your position is going to hold up in court. And she said that she thinks you dont have a she believes the board will vote against your position what do you think your chances are . I appreciate karas opinion i have lot of respect, immense respect for her as a journalist, but frankly, hes nshes not lar her opinion on the law doesnt carry as much weight as her opinion on the journalistic side of whats going on in technology the legal review has been done, as i said, some of the greatest lawyers out there. Mark geragos whos now leading our case, quinn emanuel, advised us in a court case before. These are some of the greatest legal minds in our nation. Kelly, you want to jump in here, kelly . Yeah, thanks. Shervin, hi, again. Hey, kelly. Take up on the thought hi. I know your attorney said express this has a formal notice, if you vote in favor, our attorneys thats right. Youve begun such a part of this company you know, what do you mean by that what are the potential outcomes here that theyre referring to in my opinion, when a firm like benchmark decides to take such actions against a company, 12 billion investment is worth over 9 billion and they begin to strip the rights of not just the founders, but the early foundational employees of the company, they bleed into a territory of ethics and law that we think really matters for people to take a stand to have courage to stand up for whats right so what we said in that letter is absolutely true if the board of directors decides today to strip those rights, we will be filing a classaction suit against them and we will pursue them in the courts, not just here in the u. S. , but in many key nations in the markets of which the Company Operates the board of directors of the company cannot be a clown car operation. This has been an amateur hour to watch everything unfold by the company and as a shareholder investor, we have to hold them accountable for their actions. They have a fiduciary duty to do their job and protect the shareholders and the employees and their rights and theyre failing at that test how does this play to your outlook on taking uber public . Youre a shareholder in uber, as well as airbnb how is your jute looutlook in gl the beauty of the employees and team at uber have created is the company is basically like a utility at this point. The algorithm and the data, and the business that they built, is one of the most beautiful businesses that ive seen. Its one of the it is the Fastest Growing company in history. And so that cant be taken away from them by a board of directors. That cant be taken m them by a board of directors, it cant be taken away by lawsuits or any other amateur, in my opinion, actions that have happened the company is fine. The service is fine. It will continue to scale. It is one of the most Important Technology companies of our time it will continue to do so. Many companies, including facebook, zuckerberg, and many other companies have had lawsuits, spiegel. Thats not the definition of how that company will fare when it actually goes public great Shervin Pishevar, we look forward to having you back on to talk about hyperloop kelly, back over to you. Thank you very much i look forward to seeing what the heck is going to happen with uber now shervin and julia, thank you both one city in orgegia is desperate to win the bid for amazons second headquarters, after this welcome back it is time now for our fast take today. We begin with Goldman Sachs exploring a Bitcoin Trading platform, according to the wall street journal, after jamie dimon has called bitcoin a fraud. Im just going to say this feels to me like a bit of a desperate move by goldman. It is a move. Goldmans Lloyd Blankfein says theyre looking at it. Obviously this is one of the few areas of quasi Financial Instruments where a middleman, a market maker, can potentially see some good. If your clients think its an asset class, maybe you have to behave as if it is goldman famed for its trading prowess. Well have to go to the Trading Platform of the future speaking of platforms of the future, Facebook Says users were exposed to ads from russia one critic says, i dont think theyre owning up to the fact that theyre a media company. Theyre hiring a thousand people to monitor ads its an admission that they have to vet ads and filter some content. It does remind everybody that the people who want to get phony stuff out there and want to propagate certain material are ahead of the people who are policing the algorithm i dont know what changes. I think the wall street journal has a better editorial process. Kind of like the one i came out of american has a complicated lovehate relationship with these tech giants. Stone crest Georgia City Council has deannexed 345 acres of land and hwants amazon to pick it fo their headquarters maybe thats the more desperate gamble of the day. Stone crest is a lovely name. Jim thorpe, pennsylvania is a real town. It is in coal country in eastern pennsylvania it used to be called mock chunk. When jim thorpe died, his widow said, if youll name the town after him, youll get some money. I find that to be a heartwarming story well see what works out for georgia. Snaps ceo is making a rare public appearance at the vanity fair conference. Well tell you challenges he faced after going public were drowning in information. Where, in all of this, is the stuff that matters . The stakes are so high, your finances, your future. How do you solve this . You dont. You partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. Morgan stanley. Im living that yacht life, life, life top speed fifty knots life on the caribbean seas its a champagne and models potpourri on my yacht made of cuban mahogany, gany, gany, gany, gany watch this dont get mad bell mnemonic get e trade and get invested one of the things i did underestimate was how much more important communication becomes. And whats really interesting is that, you know, when you go public and you really need to explain to a huge new investor base, right, instead of having ten investors you have 10,000, you have to explain how your business works at the same time that you need to do that, there are all these new regulations about what you can and cant say and how you can communicate. I think one of the things weve been going through this year is learning how to best communicate the snap story that was snap Ceo Evan Spiegel at the vanity fair summit in l. A. Shares of the company are down about 14 from theiripo price in march interesting point hes making about how we have to communicate but its hard to do that youre constrained. He said in that gathering he traded Capital Investors for perhaps long term oriented public investors, which is upside down. Long term oriented . Interesting. If youre a private company, and youre controlle cv vcs on the board coming up, a starstudded fast money tonight, disneys ceo bob hieiger. That does it for us. Over to fast. Im melissa lee. Tonight on fast, the stars are aligning for special special night. Disneys ceo will be here. Plus mark cuban will be here plus jpmorgans marko