Transcripts For CNBC Closing Bell 20171025

Shares of dow component nike rallying today after the company said it expected sales growth to be in the high Single Digits over the next five years the Company Holding its investor day investors are liking it so far so far. And mark parker will be joining us in a rare and exclusive interview to discuss more about his plans for growing revenue for the sportswear giant. Its the best performer in the dow components today President Trump said earlier this afternoon the u. S. Desperately needs tax cuts well talk about that and more, Congress Secretary wilbur ross will be here post nine joining us exclusively coming up in a little bit good lineup of guests. We have a good lineup today. Lets get to the top story. The market selloff continuing today. The major averages off the low right now but the dow was on track for the worst day since early september. Lets bring bob in here look whats driving the move lower today. Hello william finally volume and volatility and we should have it because were getting some Interest Rate pressure so we have very good durable goods report u. S. Economy strong. Some vague discussions and reports that maybe miss pl taylor would have the insight track to be the fed chairman the market is most worried about the prospects for overly aggressive fed thats the biggest threat to the markets. So we had a little blip, the overall market dropped a little bit particularly momentum names, even banks, banks normally move up when yields move up, not today though, look at the big names out there. Goldman sachs goes down. This is a little unusual, these have been big momentum names theyve been all strong recently in fact a number have been hitting highs. Then we have the earnings picture. Now look what happened to boeing, its down 3 you might think, my heavens, but they didnt have a terrible Earnings Report in fact the numbers were good. Boeing has been an absolute mons they are year. One of the great momentum place of all time. Its up about 60 on the year. When you get a little blip, oh, it doesnt matter what the Earnings Report says, folks, were going to lighten up because we have huge profits in boeing in fact if you look at the big momentum name that we have seen recently, all of them are down a little bit today because the momentum guys simply come in and say, okay, lets lighten up. So you look at microsoft, you could look at apple. You could look at home depot, broadcom and video all of these names are a bit light today and should be. By the way, guys, there is in fact an etf for this put up that mtum if you can that was just up. You could buy all of these names, theres an etf that tracks all the momentum names. Thats been up over 30 this year thats why momentum has been a big story and thats why on a day like today, you get momentum stocks on downtown side. Back to you. All right bob, thank you. Green light capitals David Einhorn rethinking the Investment Strategy perhaps. Writing what if equity value has nothing to do with current or future derived from a companys ability to be disruptive to provide social change or to advance beneficial technologies, even when doing so, results in current and future Economic Loss David Einhorn joins us now exclusively with leslie picker, its all yours thank you sarah david, i want to start right at the heart of this letter here. Are you saying that Value Investing no longer works in in these markets . Im actually saying the exact opposite of the way the letter is being interpreted the letter is actually a defensive Value Investing. What were saying is is that the value of a company has to do with the current and future profits discounted back at an appropriate rate and then when a tone of irony, we are saying hypothetically what would it take for that theory to be wrong and advancing the way that we think some investors are investing today and we think ultimately this is a temporary phenomenon time to time when Value Investing gets out of focus, people question, hey, is this ever going to work again the last time it happened was around 1999 when everybody was talking about eyeballs its like the new paradigm for investing. And that didnt end very well. I think right now were seeing similar investors questioning the viability of Value Investing, and theyre looking at other possible ways to explain the strange behavior of certain stocks i think over time, this is going to revert and Value Investing which historically has been a terrific strategy is due at some point for a significant recovery so you say its a temporary phenomenon, do you have any sense on what could shift it more towards traditional Value Investors market a traditional Value Investors market what and when could change the phenomenon youre seeing today i dont know the answer to that i dont know what will change it i dont know when well change it i look back to march of 2000 when the nasdaq bubbled up at the top and there was no particular reason i can see why it had the top right then, why it had to reverse, i know the tone of the market changes it changes from time to time, it does it without warning, its not particularly predictable but over long period of times historically, value does tend to win out, and after a long period where it has it has been a challenge for Value Investors, i think its actually probably pretty good time to be involved in that strategy in recent letters, you highlighted this bubble basket of shorts, amazon, netflix, tesla just to name a few how big is this basket of shorts and how how has the size of that changed over time we put the bubble basket in place in about 2014 for the first three years, 2014, 15, and 16, we basically broke even on it. We have losses in the bubble basket its not particularly large. I think it gets a disproportionate amount of attention because i like to write about it i find the companies and the behaviors and stocks relating to them to be very, very peculiar and so its kind of fun to talk a lot about it, but its a much bigger part what have ive been speaking about because i think its interesting to people, people know these companies, and theyre interested in what goes on with them compared to the relative importance that they have within any portfolio in terms of how much capital i have backing behind these positions and i like what you said about amazon in your letter from the Third Quarter, you say just because amazon can disrupt somebody elses profit stream, it doesnt mean that amazon earns that profit stream is that something thats fundamentally wrong with amazons Business Model with a lot of these bubble stocks or as you call them bubble basket of bubble shorts . Is it wrong with their Business Model these days i think its a fundamental mistake that investors make. I think theres a view at the moment that if you can disrupt somebody elses profits, youre entitled to those profits. And so therefore youre valuable but i think the bigger question is is, where are your profits . And if youre going to value a Company Based on their profit, sooner or later, they have to actually exist and they have to exist in size and if you look at the value of these companies, its assuming really reason really large profits in the future, and its hard to see where they come from the truth is sometimes when you compete away the profits within an in street, those profits are just gone. And amazon might be just a great example of transferring profits from Corporate America back to the consumer and that might be socially good, but im not sure why thats particularly value to believe amazon shareholders. And of course, uber has that same mantra, uber, amazon have just economies scaled growing, looking at the market as a zero some game. But, either way, your performance does seem to be turning around, you know, beating the s p 500 during the quarter, what do you attribute that to and what does that tell you about your outlook for your performance for the rest of the year yeah, its very hard to figure out what our performance is going to be on a month to month base, but things definitely did improve for us in the latter part of the quarter the improvement seems to be continuing into october which was weeks ago seems to be a pretty good month for us and were hopeful that were going to continue performing its been you think year long portfolio which has outperformed by a little and its been an okay year for the short portfolio which is loss money, but not nearly as much as the market and hopefully this will continue when you look at the market though on the short side, does it make you want to sit out and not put as many short positions into your portfolio . I mean, how do you really be a Long Short Equity Hedge Fund manager in this environment when it seems like the market just only knows one direction these days expect for of course today. Well, look, right now i think, i think were in a market thats rising. When the markets rising, its going to be harder for your shorts the problem is we dont really know which way the market is going. So we try to do as constructive portfolio both good idea of long and short that have favorable risk adjusted returns. And given the dynamic weve had lately of momentum doing so well which tends to be more on our shorts and value doing poorly. We think were doing pretty well relevant to the environment that were in we think that the valuation discrepancies between the loans and shorts is particularly, particularly good right now. So if we do get a reversion in style or tone in the market, we actually think were positioned to do rather well. Youve been right in the past in calling the makings of the financial crisis, putting on a short position of lehman right before that went under do you see any Systemic Risk or anything that might cause a potential reversal what have were seeing with the stock market these days . I dont know. I dont like to make big predictions about which way the stock market is going. I think i read something the other day weve gone about the longest ever without a 3 correction which means theres probably a fair amount of optimism thats given to things. Its hard to know what will change were positioned to do at least okay, no matter what happens. One company that youve been touting is caterpillar, that saw a decent rise yesterday on a nice earnings beat is that something you think will ultimately played out in your favor, i know off short position were negative. We think they built a lot of inventory, we think theyve put a lot of inventory into the channel. We think theyre beginning to have to hire back people, commodities are moving against them and markets are beginning to turn against them as well the company has outperformed expectations this year, but we think the 2018 is shaping up to be a year of potentially sizable earnings disappointment for them and tesla of course is another short youve had for a decent amount of time. And that one seems to be moving more toward your favorite down about 6 in the quarter. Do you think that will continue over the course of the next few months you know, its hard to predict again the particular direction, stock over any particular period of time, but the tesla story, you know, seems to be coming towards a head a little bit the companys under a lot of pressure to perform, to actually manufacture large numbers of cars i think thats actually a skill. And i think that theyre having trouble executing on it. Meanwhile, i think the demand for some of their older cars which are more expensive, i think the market for that is beginning to saturate itself out, theres lots of competition coming within electric at all different price points within the market and finally, you know, tesla customers have benefitted from government subsidies some Time Next Year theyre going to run out of customers that are eligible. And thats going to put them at a sizable competitive disadvantage to the newer entrants in pan electric vehicles will that benefit one of your longs gm i would hope so gms actually selling half as many electric cars today as tesla. Its such a small part of gm because they sell about 9 million cars a year and tesla sells about 100,000 at this point. Thats of course you want more of an activist on earlier this year. We can expect to see more of you from the future . We are rarely activists our general strategy in buying companies is to buy and hold them for a good period of time and watch them play out. And thats what people should expect for most of our investments. We held gm for, you know, at least two years before we became activists and it was only as a result of conversations that we have that made us think this was a worthwhile thing to do you know, since we have that situation, weve resolved it in terms of, you know, the market has decided what tngs and the shareholders decided what they think. And now we think its just up to gm to perform and execute on their Business Plan and theyre doing a good job i found it interesting in the quarter that you added positions in some kind of more legacy tech company. The Semiconductor Space under a bit of pressure today on some weakness and amds earnings, does that concern you at all for the future of that space i think its very exciting story right now. Because were getting towards the end of how much smaller you can make that. And so the results of that, it is that the cost, the pricing has stopped falling for the product and yet the demand is growing. Its not so much anymore its more about cell phones and servers, the kinds of things that are exciting for them and to require lots and lots of d ram. Yet you have trading around 40 today. Pe of around five. I think this is a pretty interesting situation and were excited to be back involved with it is there anything that you think the market isnt pricing in in terms of the political environment or different trends related to active and passive investing . Are there certain things we should be paying attention to that were not right now the active investing is a typical phenomenon when momentum is going, when value and growth is growing, index funds tend to perform really well. They have the biggest waiting to the value of the company theyre the most underweight whatever the most undervalued thing is when you have a market like this, its harder for value people to perform relative to an index. And capital comes out, people sell their value stocks, redeployed into the momentum stocks and this goes until it doesnt go and weve seen this happen i think three or four times over the course of my career. And when it reverts it tends to revert pretty sharply. I think it will do so. What about the uncertainty related to tax reform. Is that something that youre looking at when modelling different Investment Opportunities right now . I actually think tax reform has a much better chance of passing than the Health Care Package did. And i think that whats interesting for Value Investing is they tend to be profitable. They tend to pay taxes lower Corporate Tax rate should really benefit them and a lot of companies were short, they dont really make any money. And so its harder to see why tax reform will help them so much were hoping tax reform will pass and we, we expect that would actually be positive David Einhorn, founder of green light capital, hope you come back soon thanks so much. Bye leslie good job. Thank you. That was a lot. There was a lot there. There was a lot to pick apart there. Absolutely i thought it was really interesting what he was talking about with this current market being similar to the 90s and early 2000s and obviously hes got a position that would is protect him in the event that we see Value Investing is coming back and this active passive thing is cyclical exactly you had to be patient, and thats what hes having to be right now. Thats for sure. Thanks leslie thanks guy. Lets get to this wednesday with the markets trading lower today, mark travis is with us from Intrepid Capital funds, Jonathan Corpina has been waiting patiently here at post nine we have Rick Santelli checking in from the cme in chicago mark, let me start with you, what do you think about what david was saying here . Market comes and goes in cycles and youre telling people that, you know, youre a little concerned you should be concentrating more on risk than on returns right now what do you think about what David Einhorn said bill, i couldnt agree with him more i think index is value agnostic. And just like gravity, at some point the free cash will the value will be unearthed. Its just a question of patience and so in these periods of low volatility like weve seen money drives towards whats moving and, you know, you take a company like tesla, its going to burn a billion five this year and about a half billion next year and as long as the financing windows open, thats all neat and good. When it closes things can change in a hurry so, you know, i like businesses generally a lot of Free Cash Flow that have, you know, insider ownership of significance and where we can do a discount of free cash and lower asset valuation, get a higher price. Jonathan on the overall market, einhorn stopped short of saying any kind of big prediction he doesnt like to make big predictions on which way the market was headed. He did say the stock market seemed to be pricing in a the love optimism and he is positioned well if there were a change hed like to see this change for a Value Investing comes back in. What causes such a pair dime shift in the market . Is it going to be higher rates theres a combination of things were constantly looking at here. Whether its higher rates or tax reform clearly those are going to have an effect on the market. He was spot on on a couple of good points here value wins out one of the things he was saying. When investors, large or small and looking at companies, you always have to look at where is the value in this company. And he also said one of the points he made was when looking at a company where are your profits . Right, you could did disruptive to your competitors, but at the end of the day, you need to have your profit. Its all about growth all of these tech names including one that he shorting like amazon. The current market view is, they are disrupting other peoples businesses and therefore, they are valuable. Right and its all cyclical. Where everyone takes a step away from looking at the markets trading at alltime highs and really start evaluating and look at the fundamentals of some of these companies. Meanwhile rick, the march higher, the treasure continues were at 244 at the ten year right now. Theres a sense, we keep getting drabs about the president s thinking on the next fed chair, then theres a feeling as he before he heads to asia next week, that we might get a decision this week what are you guys talking about there . You know, were mostly talking about central bank meetings, specifically tomorrows ecb meeting you know many try to get their positions under some control especially in front of mario drogy tomorrow this could be a seminole moment with regard to central banking and it fits with David Einhorns synopsis disrupting is a big deal okay whether its Central Banks or amazon or netflix. But the result is, that when the disruptions done, a new normal arises and i think were at that place with regard to Central Banks so, for example, if mario drogy was extremely dovish tomorrow, even if the most hawkish pick of the president on his replacement for janet yellen is front page news, that will get lost in a dovish mario my point is the market is vulnerable on these days, especially today and yesterday in front of that meeting i think thats where all eyes are focussed and the best way to understand exactly what mario drogy means to the market, just watch that dollar index after his presence conference begins, which side of 94 the dollar index is will give you all you need to know something that sarahs been telling me all day today as a matter of fact gentlemen, we have to go at this point, thank you, thank you for your patience. Mark travis, john, let you get back to trading. And Rick Santelli joining us for the exchange we have some news on that search for the next fed chair eamon javrers, whats the latest gary cohn is out. I just spoke with an official here in the west wing who said no, in fact, gary cohn is still in nobody has been ruled out this official says. And in fact the list of five candidates that the white house has been talking about still stands that said, this Senior Administration official said that gary cohn is critical to the effort on tax reform and he may be so critical to that role that it might not be prudent to announce a change right now. That according to a Senior Administration official in terms of gary cohn and whether or not he would get that job. Couple other points that the official made, the president has not made a decision yet on who he wants as fed chair. The president would like to announce that this decision before he leaves for a trip to asia on november 3rd, but theres no guarantee that the president will necessarily make that announcement before november 3rd theres been a lot of expectation that were definitely getting is before then this official saying that the president could wait until he returns saying the president i thinking intently about that he knows the value and the importance of this job in terms of Global Markets and the u. S. Stock market which is something the president talks about very frequently and also, the president has not called anybody back for second interviews yet any of the five candidates thats something they wont rule out here at the white house as the president continues to think about this job theyre saying here gary cohn has not been ruled out but also saying hes crucial to the tax reform effort that it might not be prudent to make a change in his job position rightnow and announce anything right now. Yeah, make of that what you will eamon, is the president listening to fellow republicans on this one . Some of them have strong views on this matter i think he is we talked a little bit about the president doing this straw poll yesterday when he was up in the Senate Meeting with senate republicans. He asked for a show of hands on who they preferred for fed chair. I talked to another official here this morning who said that the president does take that interest account and saying that he considers that to be one data point. Hes looking at a lot of different data points. One of the questions for president is does he want to keep janet yellen . Its been assumed bay lot of people that he would want to get rid of janet yellen. The president has been pushing out most of the people who are affiliated with obama and things that obama did so you would assume that the president would want his own person in there. But, hes been saying kind things about janet yellen recently maybe he wants to keep her a lot of factors here or maybe he thinks hes doing that all by himself. Well, the president certainly not shy about taking credit for the Stock Market Movement this year but look, theres a lot of factors in play and the white house says the president s thinking about all of this and hasnt made a final decision all right eamon, thank you very much. Its been a rough week for ge than stock down 10 in just the last three trading days. Following the huge earnings miss were going to break down the move and new comments from ceo john flanery just ahead. Stay tuned today, a focus on innovation in the Southern Tier is helping build the new new york. 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. All across new york state, were building the new new york. To grow your business with us in new york state visit esd. Ny. Gov. Right in the heart of the was in his financial crisis,state and saw his portfolio drop by double digits. It really scared him out of the markets. His advisor ran the numbers and showed that he wouldnt be able to retire until he was 68. The client realized, i need to get back into the markets i need to get back on track with my plan. The Financial Advisor was able to work with this client. Hes now on track to retire when hes 65. Having someone coach you through it is really the value of a Financial Advisor. Chipotle shares down about almost 15 right now posting its worst one day decline in over five years after reported disappointed Quarterly Earnings and same store sales partially due to hurricanes harvey and every ma as well as to high avocado prices and they said theyre going to reduce the number of stores theyre going to open in the next 18 months to focus on fundamentals they need to get their act back together also that kwa sew launch wasnt as much as expected not what they hoped for. Lets go to dom chu for a market flash shares of dynajy spiking on a dow jones report citing sources saying that Vistra Energy might combine with them. They are big independent power producers. They each have a value of over 10 billion, although the equity side of things is more like 1. 4 billion and vistra could be announced next week, but of course, bill, sarah, the usual caveats apply. They could fall apart. But it could be a very big combination of two texasbased power producers. Back to you. Not a bad deal. No. Thank you, dom you got it. See you later shares of ge sinking yet again today. Down around 10 since the Company Reported earnings on friday and on that day, ceo john flanery said the cash flow was in his words, horrible lets bring in our morgan bren within a look at the stocks rapid decline this week, morgan. Hey bill, yeah, it has been a rapid decline. Ge now trading at just under 21. 50 per share that is a more than two year low. This is the worst Weekly Performance since may 2010, and its only wednesday. Shares fall further than 10 this could be the worst week since may 2009 the recession when ge traded for just under 13 bucks a share. All of this due to disease ma earnings and cash flow, growing expectations that the dividend will be cut especially since the new ceo has not actually said that its safe a wave of analysts downgrades this week and of course blowout earnings from other industrials like 3m, caterpillar, and honeywell which have been a stark contrast to ge all of those factors are pressuring the stock meanwhile, flanery did speak today from San Francisco at ge digitals conference, former ceo jeff invested billions of dollars into making ge a digitized Industrial Company there has been speculation about just how much plannery would support that vision given his focus on costcutting. But today, he did say ges quote all in on digital because the quote company that just builds machines will not survive. Also, announcing a number of partnerships, including a bigger one with microsoft right now though, what investors details about that dividends, devesttures, new 2018 Financial Guidance they wont get that until ges Investor Update on november 18 and shares are under pressure. Back over to you see what happens until then morgan, thank you. Weve got a news alert here on fcc rule that limits tv and newspaper ownership. Julia has the story. Announcing it will have plans to make changes to its long standing media ownership rules and aims to eliminate the limits on local oips of tv station and newspapers chairman outlining a plan that the fcc says now will vote on on november 16th. Thats the next big fcc meeting and the rules will take effect soon thereafter. This is something that newspaper owners as well as tv station owners such as cbs and fox have wanted for a while but could see more media consolidation as a result of the changes of this role back over to you deregulation push, thank you. Sue herrara, hi sue. Hello sarah, hello bill, heres whats happening that the hour everyone. Whether or not 401k contributions will remain taxfree appears uncertain the tax writer said changes could be part of his partys overhaul but when asked if the 401k tax break was on the table, President Trump seemed to soften from the tweet sent a few days ago. Where he promised no changes well maybe it is and maybe well use it negotiating, i think kevin brady is fantastic he knows how important 401ks are. Walgreens will close roughly 600 drugstores as part of his 4 billion deal to buy riteaid. Most stores will be under the riteaid brand. A list of the locations has yet to be made public. Why shouldnt you toss your goldfish in a pond because they grow up to look like that. Wow. Officials in ohio release these images as a reminder to residents, not to release their pets into local waterways there you go thats the news update this hour ill send it back download to you, bill. Electric. Wondering whats wrong with the large goldfish, i dont know well, they tend to be predatory to other fish that are in the pond. I see thank you, sue you got it, bill. See you later see you next hour. Coming up as we mentioned, boeing dragging the dow lower today despite beating on earnings and raising its guidance before the bell this morning. Why this stock is selling off which sarah ani meacd co bk. 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. And im the founder of ugmonk. Before shipstation it was crazy. Its great when you see a hundred orders come in, a hundred orders come in, but then you realize ive got a hundred orders i have to ship out. Shipstation streamlined that wh the order data, the weights of , everything is seamlessly put into shipstation, so when we print the shipping ll everythings pretty much done. Its so much easier so now, were ready, bring on t. Shipstation. The number one ch of online sellers. Go to shipstation. Com tv and get two months free. All right. So heres the story on boeing. Theyre down about more than 3 right now despite beating on Third Quarter results and raising full year guidance phil lebow has more on this story here, phil people look and say wow, boeing must have had a terrible Earnings Call because it was down so much its fairly upbeat not only in terms of the Third Quarter but the outlook, especially wli you look at the commercial side of the business. Couple of things stand out from the Conference Call with Dennis Mullenberg talking with analysts about the commercial side of the business. Strong demand. Theyre even talking about possibly increasing seven production beyond what theyve already forecasted over the next couple of years. Theyre still pressing their complaint against others and in terms of the overall market, listen to dennis talking about the demand for commercial and cargo traffic right now. Airlines continue to report solid profits and passenger traffic Growth Continues to outpace gdp. The traffic growth of 8 through august also, cargo traffic is experiencing healthy recovery with 10 freight traffic growth over the first eight months of the year okay. So it wasnt a perfect quarter there were a couple of notes in there that got a little bit of attention. First of all, they are taking a charge of 329 million or they did in the Third Quarter as they continued to wrestle with getting the tanker probe refueling program up and going the first planes are expected to be delivered next year, thats the latest charge that theyve take on that Program Still as you look at shares of boeing, this is a company that raised its guidance for full year earnings by another 10 cents today, yes, it was due to the fact that they have a lower than anticipated tax rate and theyre going to have label the stronger earn wx but theyre operating cash low up half billion dollars in terms of net guidance altogether, i know it doesnt look like when you see a stock down more than 3 , this was a relatively strong report from boeing after a relatively Strong Performance for the entire year. 50 points off the dow today. Phil, thank you. Thanks, phil. The biggest winner on the dow today is actually nike shares getting a nice little pop on the companys bullish outlook it just laid out in its investor day we have an interview with nike chairman and Ceo Mark Parker to t l e tas. Dont go away. Stocks are off the lows of the session, but still lower overall. The dows down about half a percent down 108 points. At the low down about 190. All the sectors in the s p are read lower by telecom, industrial, and energy shares. Dow you heard the two stories. Boeing and ge are the biggest losers. Nike is the biggest gainer on the back of those comments at the Investor Conference that theyve been holding in oregon today. Ahead were going to tell you what was said thats driving that stock higher. And still to come, renegotiating the north American Free trade agreement and tax reform both at the the top of President Trumps agenda right now you will hear from commerce secretary wilbur ross about the progress on both thats coming up on closing bell. 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. The strikingly designed impolexus nx turbore. And hybrid. Lease the 2017 nx turbo for 299 a month for 36 months. Experience amazing at your lexus dealer. Thank you so much. Thank you so were a go . Yes we got a yes what does that mean for purchasing . Purchase. Lets do this. Got it. Book the flights hai si si ya ya ya what does that mean for us . We can get stuff. Whats it mean for shipping . Ship the goods. Youre a go you got the green light. That means go oh, yeah. Start saying yes to your companys best ideas. Were gonna hit our launch date scream thank you goodbye let us help with money and knowhow, so you can get business done. American express open. He also said that earnings per share growth will be in the midteens over the next five years. That one was unchanged from the last investor day in 2015, both taken together were actually a relief given some of the slowdown nike has seen in its key markets. They didnt update the big target they laid out two years ago that revenue would reach 50 billion by 2020. At this point, it seems harder to achieve and a lot of analysts going in were expecting them to lower that to 40 billion but nike did get some new numbers on where the growth is going to come from for instance, the company says three quarters of growth over the next five years will come from International Markets thats up from around half right now. They also said half of the growth is going to come from innovation new categories they projected that the companys digital revenues will grow from 15 of the total to 30 over the next five years as well parker brought on kobe bryant to tease the expansion of his life, a new shoe, the kobe 360 Trevor Edwards is the president touting nike is still the number one brand, citing a bunch of third party surveys there. But heres the reality, bill, and this is the stock chart. Since that last investor date two years ago, nike shares are down about 15 now its two Top Competitors have gone completely in opposite directions under armor is down 67 in that time adidas is up what happened, where did adidas come from all the sudden . It slumbered for years for years and all the sudden it has come out of nowhere and has just set the world on fire. What happened . The resurgence came in north america. I think a big chunk had to do with kanye west and the yeezy smith. Its just amazes me athleisure became more of a lifestyle kind of situation. Yes, yes. More of a sfags brand and its something that parker talked about today on stage, he says its still married with sports either way were going to ask him where the trend is going, what some of these changes are going to mean for the Company Going forward because in the next hour, weve got an exclusive interview with the chairman and ceo of nike, mark barker really looking forward to that very much should be very instructive all right, 13 minutes to go before the closing bell. And as we mentioned, stocks are softer today the dows coming off that fresh record we set yesterday. Its really all about earnings these days because we did get good Economic Data s p is off about half a percent. Goldman sachs issuing a bit of a warning for amazon earnings that are coming out tomorrow well tell you all about that coming u p. Lets begin. Yes or no . 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Gov amazon might be a great example to transfer back to the consumer and that might be socially good, but thats not why thats particularly value to believe amazon shareholders. Green line capitals David Einhorn here on closing bell weighing in on amazons Business Model. This as Goldman Sachs put out a bullish note on amazon ahead of its Earnings Report due out tomorrow but goldman warned that the company could miss wall street expectations on guidance tom forte, Senior Vice President and Consumer Internet analyst davidson and tim lesco gentlemen, welcome to both of you. Tom, lets start with you. Your bullish on this stock this idea that einhorn said just because you can disrupt someone elses profit stream doesnt mean you can earn profit yourself and hes a little puzzled by that and amazons valuation and that context clearly the market doesnt think so, take the other side. The other side is that 51 of units sold on amazon were third party. If you look at buckets of profitability, their Cloud Computing is number one. The retail effort is collecting commission on a sale and not being first Party Retailer is number two i think 51 could be 75 over time thats a big bucket of profitable so i think that theres a lot of upsides in margin for amazon longer term. Tim, youre our bear in this case youre a value player just like David Einhorn, now he has chosen to short amazon, but you havent, why we are not a long, short Investment Advisor we are long out shot by it, by not owning something, therefore wed be a bear on it i dont think were a bear on amazons ability to run a business, ability to take share, their ability to disrupt other businesses similar to what einhorn said the problem is they dont do it with any profitability and at the end of the day, earnings are what matter, and were just not willing to bet five, six, seven years in advance for them to finally make some money but isnt the point that they could . Just they could stop i mean, they could stop spending like crazy for market share and earn a profit any time they want and in fact weve seen that even in recent quarters well, i mean, they were founded in 1994 and we have yet to see a consistent string of earnings hard to say that the tiger is going to change stripes now and become a Better Capital allocator or draw profitability. Even if they did, youre talking about 250 times earnings so the a. Earnings they would need to generate to justify the stock price really would have to be pretty significant. Tom, you have to admit, even as other retailers struggle mightily, this has been a water shed year for amazon seems like they are everywhere and we talk more about the Amazon Effect that it has on other retailers, every time they announce a new initiative and thats companies too. Yep are you worried that theyre trying to do too much at once . No, i definitely think that the big key areas for amazon on advancing their influence and advancing their wallet share is in the grocery category where you saw them buy whole foods, and everything theyre doing on the apparel side especially their efforts on womens apparel which is historically been more difficult for amazon to pursue than mens apparel i do believe that they have the capacity to go after all of these opportunities and what people often forget about amazon is, theyre not beyond exiting something that isnt working so for example, i cover qvc, they had video retailing effort, live programming, promoting apparel, it wasnt working for them they turned it off amazon, yes, they answered a lot of categories, but if it isnt working, theyre not afraid to stop and pursue something else. All right well see what those earnings look like tomorrow with the guidance the dow is down 120 points off the lows closing countdown coming up in just a minute here be right back. 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Two and a half minutes until the close dow down 1156, reminding us once again that the laws of physics havent been completely repealed, stock prices dont go up every single day, sometimes they do go down and they have gone down again today. The dow was down 190 points. Were well off the close our best and worst performers inside the dow today, nike holding its First Investor day in two years positive comments from their new drrks oh mark parker and you will see him with sarah next hour, should be very instructive to hear what he has to say about a lot of issues facing that company right now, most especially in the very, very competitive retail business. Boeing, even though they had to go to earn wx phil telling us the stock is down 3 thats been the big laggard on the dow today. The march continues higher, 245 for a time today the highest yield weve seen since march. 243 right now. Oil down today, surprising build in inventories on crude oil and price went down a bit, down 29 cents today. So were now on wti at 5220, and bob, look at this, what was creeping a little bit higher although its off the highs of the day, the volatility index, our friend the vix thank goodness. Its about time something happened remember, we used to not Pay Attention until 20 now were making a big deal about it thats how things have changed heres what we learned today we learned that the market, most cares about a sudden spike in Interest Rates thats what weve learned. Market doesnt care whether it occurs because Economic News is better than expected with the durable goods or whether mr. Taylor might be in on the federal reserve. Or whether theres an inflation spike, the cpi is going to be on monday what we learned, the message of the market is it cares most about a sudden spike and it doesnt like that. And when that happens, the big momentum names including your boeing which had a decent report, sell off also earnings coming up, those count duo. Four companies reporteding with itll be highlights in the nerks hour commerce secretary wilbur ross on the tax reform package and the ceo of nike exclusively with sarah eisen coming up on the next hour of the closing bell. Thank you, bob welcome to the second hour of the closing bell, im sara isisen in for kelly evans today. Heres how were finishing up on wall street. Another down day the second one in the last three sessions here. Looks like the dow is closing out with a loss of about half a percent, decline of 112 points making it the worst day for the dow since september 5th. So its been a while the s p 500 down half a percent, all 11 00 sectors within the s p closing in the red nazi dock finishing lower, more than half a percent. Similar kind of declines on the russell 2000 nike one of the bright spots in the selloff finishing the day higher after announcing new sale targets at its investor day. Coming up, you will hear from nikes Ceo Mark Parker in an exclusive interview on closing bell and its another busy hour for earnings meg terrell covering for us. Kate rogers will bring us the latest from Buffalo Wild Wings and Contessa Brewers will have the numbers from las vegas fans. First lets talk about this sell off today. Joining us, markets commentator as always, mike santulli, danny hughes, and paul hicky from the spoke Investment Group dow closing off the lows, we were down 191 points at the lows of the day weve got leaders like nike, the company laying out plans for new growth targets it helped the dow turn around a bit late in the trading day. The latter there, boeing, the company did take a 329 million Tinker Program charge, and it has been a big winner overall this year. For the s p, it is fleur systems at the top and chipotle falling behind after disappointing earnings, mike, another earnings story. Yeah, it was. I think you saw what i think is typical sell on the news responses to stocks that have been up a lot going into earnings, since i think that weighed on some of the indexes today, but also just a matter of fatigue. The market has been kind of trudging higher, especially at the index level, especially the dow, and i think it was time just got a little stretch, but really, mitigated the damage midday 12 30 just started turning right around. Let me bring this in too danny, last hour, green capitals was on the show. Whether Value Investing will ever work again in this market listen from time to time when Value Investing gets out of focus. People question hey, is this ever going to work again the last time it happened was around 1999 when everybody was talking about eyeballs what you think . Furrowing your brow i dont remember 99 he means after 99 the result of or after 2000 really when we fell off a cliff perhaps. I would agree with that here and there. I think there are some values. I think there are some segments of the market that have fallen off their own cliffs, retails being one of them. Where there might be some opportunity for Value Investing. Youre kind of doing in the face of big, huge onslaught of technology and things that are changing the way people are operating both from a business sense, consumer sense, really in every way of our lives. You know, ges doing a lot of soul searching right now and john flanery saying, everythings on the table. Stocks in general have been so buoyant lately. How much optimism is actually priced into this market right now when it comes to tax reform or fed policy or earnings in the economy overall . You know, i think theres a lot you just asked there, sara, when youre looking at the market here, i think, you know, the market is expensive by any stretch of the imagination and to David Einhorns point value is very out of favor and at some point it will come back into favor. The key is the timing. You can have the right thesis, but if the timings off by even a month or six months, it can be difference between night and day here so i think as far as the market now and the market in 1999, you saw a very thin rally driven by a few names in tech whereas in the overall market continues to make new highs with the market so its not as much a divergent market now as it was then. As far as the fed is concerned, i think there are a lot of fears and worries that this whole rally has been on the back of Central Bank Liquidity you cant underestimate the power of earnings here and earnings have growing rapidly. As long as they show the expansion in growing more than the consensus expects, i think thats going to be positive for the bulls and the market and michael, heres a news bulletin for you, telecom, the worse performer in the s p today. Speaking of sectors that cant get out of their own right now Telecom Sector is two stocks in the s p not a lot, yesterday when we saw the earnings results, looked like the metrics on the wildest subscribers was okay but the market was unimpressed because this upgrade cycle doesnt look great massive overhang when it comes to their media strategy. If the stock is below 3741 when they close the deal, its more that has to be issued. I think very negative sentiment, but the charts ugly. Thats so yesterday now we have earnings today from them, how did they look . To beat in the Third Quarter, especially when it comes to earnings per share and adjusted earnings basis, they came in at 3. 27 versus analysises average estimates. Revenue just beating expectations as well at 5. 77 billion for the quarter. Versus expectations of 5. 76 billion. The company also raising the lower end of its 2017 revenue guidance and has the 22. 7 billion to 23 billion for the year also raising its 27 adjusted eps guidance now seeing 12. 50 to 12. 70 a lot of beat as weve weve been seeing is due to reductions in spending both in research and development and selling general and administrative spending. Theyve been doing that for a few quarters now company also breaking out impacts from puerto rico they dont expect any disruption from the storms in puerto rico, but they do detail the costs theyre seeing there for the Third Quarter, that amount due about seven cents to earnings. For the fourth quarter, they say itll be an impact of eight to 11 cents dont see an impact from the puerto rico operations in 2018 up there about three quarters of a percent, back over to you. Looks like a manufacturing facility over there. Thats right. A lot of Drug Companies have manufacturing in puerto rico yeah. So tepid response there we have more earnings this time las vegas sands, oddly Contessa Brewer got that assignment, contessa that is gaming and i enjoy it nine cent beat on the earnings per share here analysts expected 68 cents per share, we came in at. 77 adjusted for revenue, we have another beat here, it came in 3. 2 billion in revenue versus the analysts expectation of 3. 15 a lot of this growth attributed to mccow and a big recovery. The market is recovering overall in the mass market and the vip gaming market. So a big beat here for las vegas sands. And the stock up 2 right now. Its either las vegas or mckou its either or never both at the same time. Yeah, exactly i think people like the idea of playing the Chinese Consumer right now. Its still way below what is it the 2013 highs when you had the real frenzy excitement so stocks been working pretty well its actually up Something Like 18 year to date so it seems like this reports pretty much in tune with the story. Good cash flows exposure to them, being here at the same time and i think that theyre running the business properly we own the stock and were going were happy about the speed. It is up 2 any thoughts, mike i know you were looking. Lifting the guidance is obviously in that positive this is a megacab slow grower at this point and i think the market has been unwilling to put a good multiple on the huge cap bioteches that dont show good growth catalyst, but it seems like its okay. Its in tune stock seems like its been pretty gentle performer in that group though. All right were going to have another one to talk about here in a moment earnings alert on Buffalo Wild Wings. Kay rogers has the numbers for us. This is a mixed report. Nice beat on eps here. Theyre reporting a 1. 36 adjusted 79 cents on revenues a slight miss, 497 million. The street had been looking for 501. 6 million now also a mixed story here. Companyowned stores, they fell by 2. 3 . The streak had been looking for a fall of 3. 4 franchise locations also worse than expected, down 3. 2 in the quarter compared to the street looking for 2. 6 the stock as you can see is up just slightly. About just slightly here in the green and also to down for the year though. Important to remember about 35 the stocks also halted, itll resume trading at 4 25 p. M. I heard it was halted now weve got an opening time. Paul hinky, tough year for Buffalo Wild Wings, do you like this one i mean, this is an area where were away from. Theyre just facing pressure from all different angles. Wholesale chicken prices record highs, margins are being crimped. Labor costs are higher and then you have the informal ratings nfl ratings down which certainly doesnt help Buffalo Wild Wings the entire restaurant sector that has just been not a great environment to be in for investors. Its down 35 , maybe you could see a little bit of a relief rally, but theres just pressure from many angles there. I mean, if you want to wrap it all up, mike, the earnings season so far, yesterday, everyone got very excited about some of those industrial names, caterpillar, 3m. Today less so, butless of the bell weather tomorrow is going to be the biggies on technology. Where are we at this point i think thats where you are in earnings seasons. Theres always a push paul between whos domestically exposed, whos in the right sectors, the wrong ones . Look, i think the point to point, earnings are nice, theyre doing fine, theyre going to be up five to 8 or wherever it is by the end of it, but from three years ago, were up 10 in earnings per share this quarter versus the Third Quarter of 2014. Three years, 10 , stocks up 20 as group so its not as if the market has coming as a surprise that earnings are positive at this point. Final thought, whats getting your attention right now everything. Its part, everythings a sparkly, shiny thing theres really a lot to look at. A lot of squirrels. A lot of squirrels. I like to look at, you know, the semimyspace i think that got away ahead because everybody kind of saw, you know, the being like such a big part of the bit coin revolution. And as we saw with amd, you know, that didnt turn out to be a good place weve seen a lot of volatile any some sectors and final word to you you also like to tael up how were doing that the point in the earnings season and how technology might fair tomorrow with these big names like microsoft, alphabet, all reporting in amazon. Yeah, thats a big day for the tech sector and getting back to the point of the semimy, over the last 50 trading days theyve traded up more over the last trading days as far as daily moves than any other time in history in the index of the socks. Any time its been close is late 98, 95, and 2014 believe it or not, three months later, higher the stocks continued higher each time pull back today is understandable its up 35 days out of more than 37 of the last 50 days right youre going get a pullback long erp term, i think the trend is still positive for the sector and tech overall. Sure feels like it. Paul hicky, danny hughes, thank you for joining us appreciate it. See you later. One stock weve been glued to all day, nike, shares higher today. One of the bright spots in the dow after investors cheered the Companies New sales growth targets and some of their plans for how theyre going to get there. Ceo mark parker tells us in an exclusive interview, more details on how he plans to achieve that growth and gain back market share. And a little bit later, were not finished, commerce secretary wilbur ross will be on or the floor of the New York Stock Exchange to talk about how tax reform will effect the economy and whether congress can get a bill to the president s desk on time of course we want to hear from you, you can contact the show on twitter, facebook, or email us. Youre watching cnbc first in business worldwide whoo woman class, lets turn to page 136, recessive traits skip generations. molly i reprogrammed the robots to do the inspection. Its running much faster now. See . Its amazing, molly. Thank you. nike one of the bright spots in todays sell off as the company lays out new ambitious growth targets of its investor day in beaverton, oregon, joining me now to discuss in an cnbc exclusive interview is nike chairman and Ceo Mark Parker mark, im sorry i couldnt be there, traveling seven months pregnant across country can be tricky welcome. Saviorry, sara thank you for joining us. The news today, everybody was looking for you to update this 50 billion target on revenues that you laid out last time for 2020 you didnt do that does that mean that that numbers still achievable . We plan to achieve our 50 billion target within the next five years and what we laid out today was a single digit Revenue Growth and midteens eps target and well dissect that into all the various elements to give you more depth in detail on it we did that somewhat today during our meeting and well wrap that up with andy campion, but whats exciting about today is it really maps out or overall longterm Growth Strategy. And lots to be excited about consumer direct offense is really what were lining up against. I think thats true with everybody. The innovation were laying out, incredible array of innovation, the best pipeline of innovation ive seen in my whole time at nike, and thats been a while. And then were going faster, so were taking our business and going twice as fast, and some parts through the express Lane Initiative were going even faster than that so speed, direct, innovation new categories. Youre excited about that the pipeline nikes been criticized by analysts and investors for being in an innovation lull. What you have planned and how you plan to combat that narrative. Yeah, ultimately, the most important thing we do is create great product. Some of the highlights i put out there would be in the running category which is a 5 billion category for nike weve got three platforms that are in various stages of scaling. Vapor max, new form, the top 150 running shoe on the market today. We have new air max coming with the air max 270. React platform which is a highly responsive lightweight platform that goes across all sport categories and into sportswear and then we have the zoom x which is an amazing high Energy Return cushioning system that was featured in breaking two marathon attempt i think part of the bullish outlook that investors liked was three quarters is going to come from international i think thats up from around half right now where specifically do you see that growth . Is it in china thats been working well for you well obviously chinas a really critical market its a big part of that growth potential, but we also see that in asia pacific, latin america, and then of course europe. So all parts of International Business are going to be growing. Chinas the biggest. If you look at the population that target population in china for nike, its really moving toward ten times of what it is in the United States its a digitally based consumer. Were seeing real success in our connections to consumers through our own platform, through our own retail and then obviously through our Digital Partners like team wall for example great appetite for sport for china. We just looked a at chart of the china sales which i know are still a bright spot within your report, but theyve slowed i mean, were not saying 30 growth that we were seeing several quarters ago, can you get back to that point or is it just because the size is growing of your business there i think therell be inflections up and down if you look at across any of the quarters but as we look longterm, our prognosis for growth in china is bullish. So were, we feel very strongly about not only where we are in terms of the brand, but in terms of the product and again, the connections were making with the consumers throughout china so, and the other thing, the backdrop factor there is the population is a lot more active. We see 400 Million People in china that are active at least once a week. And thats growing so the potential for that market is enormous and we feel really good about where we are positioned today and Going Forward. What about the u. S. , mark whats the major driver of the slowdown in business in north america . Well, i think weve seen that acceleration of the retail consolidation going on over the last 12, 18, 24 months and thats obviously deaccelerated the overall market what were doing is shifting our position to go more direct to create more differentiated retail and to create a better experience for the consumer moving forward thats whats critical so how do we take that disruption and turn it into an opportunity . And thats really what a lot of today our discussion today and our Growth Strategys all about is raying that out you cant ignore the market share loss though, the resurgence of adidas, i know you hate to talk about competitors and dont like to even name them, did that catch you off guard . Well, you know, first of all, let me say competition is a great thing. Were a sports company, we love competition, it makes us better. We are if you look at the market share basically sustained our market share when you look at all the channels across the footwear and apparel ndustry. That said, theres huge opportunity for us Going Forward. So, todays meeting is all about how do we take our innovation, how do we get to market faster how do we connect with the consumer to elevate that experience because thats ultimately whats going to drive the growth and make us more competitive incredibly exciting, whats going on here at nike. The excitement that we have as a team and thats what were trying to share today. All right so you still wont go there. The consumer, the direct consumer shift that youre implementing, its a big deal. Do you think wall street fully appreciates it well, i would say that our longterm investors appreciate it but its hard to appreciate a total transformation of the business and thats really what were talking about. The company is going through a massive transformation when you look at the supply chain, speeding that up, the product creation process, moving that a lot quicker. So speed to market, the connection to the consumer, the direct connection we have to consumers, powered by digital and membership is enormous this is a massive change and then the innovation pipeline across both performance and sportswear, weve never seen as much innovation as what weve got in the pipeline up and down the price points as well we feel really strong about the transformation i hope today really gave investors and analysts a better sense of what our Growth Strategy is. Were going into great detail. So theres a massive transformation going on here at nike well, and as you do that, mark, what does it mean for some of your retailers. What does it mean for foot locker or finish line or dicks which has been struggling lately were working with the Retail Partners to differentiate the marketplace. I thinks whats important is the greatest percentage of growth Going Forward is going to be through differentiated retail. So that means an elevated nike experience, more distinctive experience where the brand and the product is celebrated, the story telling is robust. And clear and compelling so were working directly with our Retail Partners who will actually elevate their game along with ours at the same time uhhuh. We think theres room with our key Strategic Partners to move forward, but, were putting a lot of emphasis in balance with that through digital at the same time. So its going to be a marketplace that we create with our partners and then through heavy investment in our digital capabilities yeah, speaking of digital, whats the latest on your partnership with amazon . I know this was a slow, sort of small rollout, investors were very excited about it, what can you tell us about whats planned . Well, were still in the pilot stage, so were learning a lot. Were still conversing on how to best move forward. But i will say were encouraged and weve seen a lot of learnings on both sides over the past few months. Its really incredibly important that our brand is represented at the highest level possible i think partnerships like t mall and china in europe are great examples where large digital platform partner can actually help us move the brand forward and grow our business. What about jordan brand what can you tell us i know the growth is strong overseas, there is chatter that in north america, its lost a little bit of its relevance we got those mpd numbers that show that adidas took the number two spot over jordan brand last year is it losing its luster yeah. No, i dont think its losing its luster, i think were going through a Market Correction in the United States. I think as we move forward through the rest of this fiscal year into the next fiscal year with the expansion of categories within jordan, the emphasis on performance in basketball and other sport categories dimensionalizing our sportswear business, the opportunity we see in Womens Womens sneakers specifically in apparel, were quite bullish on the opportunity for jordan Going Forward speaking of basketball, nba rollout, big deal. Little rocky, what was with the lebron uniform ripping, what can you tell us . Have you made improvement kps. Absolutely. Yeah, we obsess the detail, the quality of the performance of a product, especially the product that is on the best athletes on the courts and fields of play. So its critical were working with the nba, weve isolated the issue and we feel like weve got command of the situation and feel good about where we are its really an incredibly innovated uniform if you look at the lightweight range of motion, the temperature, the ventilation that we have built into the uniform, so the player feedback has been enormously positive so we feel like weve isolated that issue and feel good about where were going Going Forward. And also with the entire nba relationship the nba is an incredible partner, our success so far is with the business is two times what we thought it would be, double the success right out of the chute. And were quite bullish on where that goes from here. And then finally, mark, i wanted to ask you a broader policy question, nike was the corporate face of tpp. I was there at campus when president obama there was to tout the transpacific trade deal it was one of President Trumps first actions was to remove the u. S. From tpp. Theyre currently renegotiating nafta, do you worry about this world . Nike is one of the most dependent companies from a supply and demand standpoint on overseas markets, do you worry about which way this administration is taking us in a trade direction . Well, just to be clear, we believe, as a company, in free and fair trade were hopeful the partners can come together. For decades literally and i think we know how to adjust our offense if we need to do that. Thank you very much for coming on and weighing in at your investor day. Investors like what they heard today. The ceo and chairman of nike. Thanks. Great stuff so i guess he intends to keep this 50 billion target it sounds like he was saying over the next five years thats where the moderation is, mike its just not as hardedged a target necessarily over 2020 lets bring in other voices in to respond to junior interview here what you think about the what he had to say from that conference go ahead. I think we got exactly on that we needed to get some flesh on the bones, but what direct to consumers going to mean . Nikes undergoing a massive transition towards a directive consumer model we needed to get a better sense what have that was going to be we kind of got that. We kind of understand where the growth is going to come from, what is this going to be its about innovation, technology, its about platforms. We have to remember that nike spends a multiple of what adidas an under armor spent on research and development combined thats really important. You think about brand ambassa r ambassado ambassadors, going out and getting Clayton Kershaw and bringing them on, if you dont have the innovation behind your product, you tend to be in a situation like you did with steph curry and the curry too where the innovation wasnt there. And you end up with a flop with your last question it was what we were asking too. We would like to see more about what are we doing with amazon and what does that Partnership Look like . The brand equity that you can get with the partnership if with amazon and nike along with Market Expansion is powerful we were kind to looking for more of that. I think we got what we needed. He doesnt say that lightly hes a product guy, designer by background he side the pipeline has never been as robust as right now than his whole time at nike do you take them from their word is that what you heard also . You started listing off new sneakers and product lines i think theyre the best there is at innovation and i think that theyre going to move forward with individualization of the shoes and personalization and all the things that we know they have to do and speed of making that. Theyre already testing that stuff. I think thats going to be high margin product, i think its also going to have a nice halo for the rest of the product. I started wearing nikes in 1975 when they invented the waffle trainer, i have 100,000 miles on my feet in nikes they make the best product on the street, and they always have, and they do fwhoet apparel and shoes. And yes, things come and go, weve got a big fat throwback now and weve seen a big increase in market sharer for adidas, but nike is the game to play when you want to have innovation, the best shoes, the best pricing, the best brand out there, and ive been pushing strong brands, not just nike, but strong brands across the industry from the point of view of versus the Third Party Seller nike will win direct to consumer, theyre going to win on innovation, i heard everything i wanted to hear in your interview just now, as a matter of fact, that may be the best interview ive ever heard with mark, its that was fabulous ah, thank you teague, jan makes the case that nike is going to be well positioned, figure it out and lead what does the environment look like and is it going to be con deucive to nikes strengths in the sort of typical time horizon of an investor you talked about potential revaluation of the stock is this move in their direction toward more athletic and toward wanting more innovation and basketball going to help yes, i think it will. Look, we live in a world where 80 as a timer between two seconds and two months and i think if you look at a time that we talk about as long term investors, youre definitely in a great spot innovation is going to come and its going to drive brand value Going Forward. Nike is right there. They have all of this in the pipeline, theyre thinking about this correctly they understand that the transition to the consumers is where you need to be and positioning themselves very, very well. All right gentlemen, thank you appreciate your comments, teague, jan, thank you both. Sara says hi, and big thank you. It was a great interview there was a lot to talk about. We hadnt heard from him since last march Buffalo Wild Wings shares have reopened. They were halted when the earnings came out. Kate rogers with an update for us, kate thats right, bill, they have been as high as about 24 in the after hours trade. Now around 18. 5 , remember, they had a really nice beat on eps reporting a 1. 36 adjusted versus 79 cents mix on comp store sales. Franchise locations, they were down more than expected. Companyowned stores fell less than expected. President and ceo sally smith, shes noting fiscal fitness and cost control saying the company has promoting boneless buffalo wings at a time when regular prices are up by around 25 . So once again, now were higher by more than 18 , nice move here in the after hours back over to you wow, thats amazing for that company. For some degree among other things show this is a crowded short. People lost confidence in the strategy here, of course its been activist pressure obviously a Spring Loaded move here with the stock down 34 year to date. Amazing time for a cnbc news update now with sue herrara. Hello again heres whats happening at this hour everyone. The u. S. Ambassador to the united nations, nikki haley had a scary moment during her visit today to south sudan demonstrators got too close as haley and that countrys president greeted local civilians at a u. N. Camp she was however safely evacuated by security agents well this Retirement Party is for a plane, not a person United Airlines organized the event in honor of boeings 747 plane which the airline will stop using on november 7th the last flight will go from San Francisco to hawaii. If you want to win the megamillions, get ready to pay a little bit more. The cost of a ticket is increasing from 1 to 2 it is one of several changes lottery officials are making that go into effect this saturday and construction crews are used to problem solving on the job of course, but this one was a little bit out of the ordinary animal officers had to be called in to get this five foot gator out of a Drainage Pipe that they were repairing watch your fingers there you go they are. Yes. Youre up to date you got it see you later imagine that, a gator in florida. President trump once again saying he opposes changing contribution levels for 401k retirement plans to help pay for a massive tax cut. Coming up, commerce secretary wilbur ross tells us whether the president would veto a bill with 401k changes or whether its just a negotiating tactic that and much more with wilbur ross coming rit ghup 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. This is not a cloud. This is a tomato tracked from farm to table on a blockchain, helping keep shoppers safe. This is a financial Transaction Secure from hacks and threats others cant see. This is a skyscraper whose elevators use iot data and ai to help thousands get to work safely and efficiently. This is not the cloud you know. This is the ibm cloud. The ibm cloud is the cloud for business. Yours. You were seven months pregnant you let it slip out there thats pretty obvious you were leaving, so well see you tomorrow we have a big day on closing bell rest up for that i wont be here, but youll have somebody will be here im always the last to know. See you later. Enjoy the rest of the show. Big interview as well we are joined on the floor of the New York Stock Exchange with wilbur ross. Rebec rebecca, its all yours. I thought i was always the last to know, but folks, welcome, good to see everybody yes, we are joined by the 39th commerce secretary wilbur ross was with us today. We were talking about the tax reform and a tax plan. Big up down day off the lows the market started to turn down after comments from kevin brady, house weighs and Means Committee saying the 401k idea is not on the table. Its easy to talk about lowering rates, its more complicated to talk about ways to pay for it. As were learning about the state and local tax deductions, mortgage interests and things like the 401k package. What do we take back to make sure we can pay for rates . The real way to pay for the tax cuts is by stimulating the economy and generating more tax revenue. If we can get the economy up 1 a year more than where it otherwise would have been, that generates two and a half trillion dollars over ten years. So the real debate is over the technicalities, how much growth will you really get from the tax cut . Youre talking about dynamic scoring. And while most people will say yes, there is some certain amount of growth to the economy that will come from tax cuts, right . The real question is where the rubber hits the road, how much you can get give into that you have people like senator bob corker who said you will not vote for a tax fwhal adds a dime to the deficit thats where you get into the issues for the pay fors. Do you have enough republican votes with dynamic scoring to be able to pull this off . Well, i think we do and i think we got a very good advance hint of that with the house going along with the budget proposal. The extreme right wing in the house had planned 12 amendments to the budget. The president s urging they decided not to pursue them just take it the way it was thats a very powerful thing because it saves us about ten days of debate and more importantly, the reason they would do that is to get to the tax bill so im very optimistic that this will be much better received than the health care probe you do think that the votes are there and it could potentially happen by the end of the year i think the votes will be there, therell be little compromises along the way, theres some discussion by some of the members about having some portion of state and local taxes, deductible, maybe for the lower income bracket there is some discussion about adding a fourth bracket. Itll be bells and whistles that will change, but i believe directionally the president will get what hes asking for the bill we have not seen the specifics yet, we expect to get a bill, do you think that will happen next week its hard to put an exact time denomination on it because congress is so processdriven rather than results driven but its certainly going to be very soon. And if its not next week, itll be very quickly thereafter secretary ross, one of the huge issues that weve heard about from businesses are concerns about what happened to trade, what will happen to trade pacts, specifically nafta. Theres been tough talk to the administration where do the nafta talks stand that the point and do you expect to see it renewed . Where they stand is theyre recessed for another couple of weeks, but substantively weve now gotten through most of the fairly easy issues, were now into the harder issues whats unfortunate is people prejudging the outcomes. What they ought to do, lets get a deal if we can get one if they dont like the deal, lets talk about that i think its silly to ha late nato, they dont have any idea whether theyre going to have a deal or not. Are you optimistic about the deal i think there will be a proposal that we can take to the president. Whether it will be a proposal that will recommend a whether itll be a proposal that he has said, different story. But were trying to do a difficult thing by asking two countries to give up that they have enjoyed for 22 years. And theyre not in a position for anything there so thats a tough sell and i dont know that well get every single thing is it enough to make it worth it mr. Secretary, thank you so much thank you, becky, good to be on you there all right becky, thank you very much. Good to see secretary ross as well apple denying a report that it told suppliers to boost production to the new iphone ten. We have the latest details on that coming up with advanced safety. 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It finished the day down 112 points s p, nasdaq, russell also lower, and in the after hours session, we had three Companies Reporting earnings all beat handily on the bottom line, but weve had a mixed picture as far as Stock Performance in that time meantime apples fighting back against a report that its compromising accuracy of its facial Recognition Technology in order to produce more phones faster thatto sry when closing bell returns. When this bell rings. It starts a chain reaction. Thats heard throughout the connected business world. At t Network Security helps protect business, from the largest Financial Markets to the smallest transactions, by sensing cyberattacks in near real time and automatically deploying countermeasures. Keeping the world of business connected and protected. Thats the power of and. Shares of apple finishing the day off their lows after denying those rumors surrounding its facial recognition feature in the new iphone x. Josh lipton here to clear things up for us. Josh reporter so bill, apple was in the news this morning for all the wrong reasons. Bloomberg reporting that apple told suppliers they could reduce the accuracy of the face Recognition Technology in the iphone x apple allegedly did that because it would make it easier to manufacture those new phones but apple is saying this report is not true, telling cnbc in a statement, bloombergs claim that apple has reduced the accuracy spec for face i. D. Is completely false and we expect face i. D. To be the new Gold Standard for facial authentication. This report got a lot of attention, of course, because it speaks to those rumors and reports that have been flying fast and furious about the iphone x now for weeks, specifically questions about whether the initial supply of that device is going to be constrained even more so than usual. One closely followed analyst at kgi says apple will ship around 3 Million Units before launch and only around 30 million for the holiday quarter. The new iphone x is available for preorder starting this friday bill, back to you. All right, josh, thank you very much. So alphabet, amazon, intel, microsoft, all of them set to report earnings tomorrow around this time after the bell we have a preview, coming up i was playing golf days ago. Love golf. I used to love golf. Wait, what, what happened . I was having a good round, and then my friend, sheila, right as i was stepping into the tee box mentioned a tip a pro gave her. No. Yep. Did it help . It completely ruined my game. Well, the truth is, that advice was never meant for you. I like you. You want to show me your swing . Its too soon. Get advice thats right for you. Investment Management Services from td ameritrade. Tomorrow on the halftime report, bank of america chairman and chief executive Brian Moynihan in his first interview since reporting earnings thats noon eastern time dont miss that. Tomorrow, another busy day for earnings key numbers to watch from kesoon, alphabet and microft mi and i will preview those when we come back. Is guy. Check it out selfappendectomy oh, thats really attached. Thats why i rent from national. Where i get the control to choose any car in the aisle i want, not some car they choose for me. Which makes me one smooth operator. Ah still a little tender. vo go national. Go like a pro. Gglobal bonds, and highdividend strategies. Sure, these are investments. But theyre not what people really invest in. What people really invest in, is what they hope to get out of life. But helping them get there takes a pure focus. Because when you invest their money without distraction, hidden agenda or competing interests, Something Wonderful can happen. 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It can provide what we call an unlock a realization that often reveals a better path forward. At wells fargo, its our expertise in finding this kind of insight that has lead us to become one of the largest investment and Wealth Management firms in the country. Discover how we can help find your unlock. As we just said, tomorrow the busiest earnings day of the quarter. Tomorrow, get this, ford, comcast, american airlines, twitter. Thats before the bell after the bell, big tech names i think the afternoon reports from the big tech stocks are what i most anticipate the big f. A. N. G. Names have been out of favor will this be a change of tone that lasts for investors preferences . They worked most of the year, but now were talking about industrials, reflation trades. Now well see if maybe these numbers can draw people back this is a critical week, and tomorrow is the critical day of the critical week because of these important reports. Absolutely. Still watching that bond market. Rates keep going there. Thanks, mike, see you tomorrow closing bell. Its done. Fast money begins right now. Fast money starts right now, live from the market site overlooking times square im melissa lee. Tonight on fast, wall streets biggest bull calling for a near term correction. Whats got Morgan Stanleys mike wilson so worried. Hell be here to explain amgen sinking after hours after a rough week one analyst says keep buying the stock, hell make his case and to