Transcripts For CNBC Closing Bell 20171114

The right person to lead the turnaround well be talking to former ge vice chair bob wright. The father of nbc universal. Hell join us live here at post 9. Get his take on the outlook for General Electric and conflicting reports in the last hour about whether the Senate Tax Bill will include repeal of the obamacare individual mandate we have Senate Finance Committee Member pat toomey here to tell us whats going on, and what other changes have been made in that bill. Weve been getting conflicting reports on exactly whats in that bill. Well get it directly from senator toomey. Is the rok uru run over stock pulling back after the 125 gain in just the past 3 days a debate on whether this streaming stock has run its course or just taking a breather right now. But we start today with big moves in retail. As Companies Like Dicks Sporting Goods and tjx fall after reporting their results this morning Courtney Reagan joins us with a roundup of whats driving those stocks lower courtn courtney hi there, bill, so it was a mixed bag for retail earnings ahead of the black friday week today. Dow component home depot, did, though, log another really st k strong quarter, still strong Housing Market and returnrelated spending fueling the Home Improvement retailer to beat expectations for earnings revenue and blow past consensus for comparable sales, putting up a really strong number home depot also upping its profit and sales forecasts for the year and on the call executives actually saying it might even be conservative if the first two weeks of november are any indication both the volume of transactions and receipt totals are up and the pro business makes up more than 20 of home depot sales, that was up 12 year over year in the most recent quarter off price retailer tjx, thats the parent of t. J. Maxx, marshalls and home goods, thats been a steady standout in retail this time it beat on prophet, t profit, it was disappointing the company says warmer fall weather is to blame. Dicks Sporting Goods beating across the board for the quarter. Ne next years guidance, a profit pof 20 . Invests in h ecommerce, store payroll and keep prices low for shoppers Steven Forbes thinks its the right thing to do despite the shortterm pain its going to cost back over to you guys. Im amazed that home debow sha depot shares are only up 1 . It happened last quarter, too, kelly, its this continued outperformance. Weve seen a decent run in the shares and i agree, its surprising, and i think jim cramer said this morning it doesnt make any sense, i think the shares should be higher, not what hes buying into. Thats where we set. Were higher by 1. 3 after a blowout result. Granted home depots been one of the best performing stocks. Exactly. One of the most resilient. Exactly. It clicks ever higher maybe the takeaway from this, can they do any better if this is it, you know, that stock has really priced for something. One of the few companies that can say we did better because of a hurricane. I know. I know. Ironically there, right courtney, while we have you, wanted to ask you about this walmart lord taylor story, so it sounds like you can now sort of get lord and taylor hosted on walmart. Com. Whats going on here walmart and lord taylor officially confirming the speculated online relationship, thats really the best way to describe it. Lord taylor is going to launch what it calls a store on walmarts website. Th that happens in the spring of 2018 why . Walmart says shoppers on its site are looking, serarching fo higherend products like the kind lord taylor does and walmart does there seems s to be potential lord taylor to find new shoppers they dont already have on walmart. Com and walmart. Com likely doesnt want to lose out in the shoppers on their site already are looking for higherend products. Walmart owns bonobos and mod cloth and they dont sell those on their website so really what its going to look like or how shipping will work, if customersitem from the lord taylor store from walmart. Com in the same basket its come inniing in the spring. What they want to do is create a virtual mall. Yes. Lord taylor becomes the anchor store. I like that thats a good analogy. I assume it means other stores may be coming along the road. Thats a great analogy, bill. Thats actually how lord taylor tried to explain it to me, i asked what about the merchandise, will it be the exact thing you find on lordandtaylor. Com . The lord taylor store in new york doesnt have the same merchandise as a lord taylor store somewhere else and look at our regular website as a store, this is going to be a steeore, th its just on walmarts site. You get it, bill, i think you got it faster than i did. And me. Taking no credit for that. Bill the retail im calling you next time. Thanks, courtney. Ill see you later that was all on background, by the way. Lets get to our Closing Bell Exchange for this day with the dow, everybodys lower right now. Victoria fernandez from crossmart Global Investments is with us today. Steve grasso from stuart frankel. Rick santelli joins us from chicago. Welcome back, rick so, steve, once again, it would even appear, i mean, we were down, what, 145 on the open this morning, it would appear that this market is still very sensitive to whats going on in washington as far as the wrangling over tax reform right now, yes . I would say its definitely d. C. Tax reform issues, headlines, and when you look at the overall market, bill, when we sit here and we watch this, Market Participants that are playing around in the market, trading this market day to day for years and decades on end, it feels to me that this market has been not only resilient, but when were down 5, 10, 15 handl handles, it feels like were down about 10 and i think that might be the new normal that has been thrown around by el arian about new normal as far as rates and inflation. This might be the new normal correction where you get basically a 1 from the highs and we feel as if oh my gosh, weve really corrected here. So i think that people that are buying this market have to make it right in their head and say, you know what, im really not buying a tremendous dip right now, and maybe there will be a little more to come, but we cog were close to alltime highs. What you make of the reports, muhammad al airian could be looking at vase chairmanship of the fed . Hes been my guest, been on cnbc many times. I think he gets it i think he gets the notion of a fat thumb on the scale with respect to Monetary Policy has its limits both in terms of dimension and in terms of time its on the latter i most agree with mohamed it would be interesting. Im a big john taylor fan. I think mohamde elerian would make a wonderful pick as vice chair. Rick . Yeah, go on. Im curious, i dont know if he still espouses the new normal the implication there is growth is lower, maybe productivity lower, Interest Rates lower. What would that look like at the fed . Qua does it look like right now . Thats the way it is now i think the new normal doesnt need to be the normal forever. Hopefully it will become the abnorm abnormal, get back to 3 plus growth i think mohamed dpully understand understands that at a time where growth is so chinsy and Global Dynamics are starting to pick up, i agree with steve grasso, its been hard to really identify any Headline Movement politically affecting market ma. Now its a different game. Europe smaking reforms, french are addressing tax policy. Isnt a question of the u. S. Getting more competitive its a question of falling behind i think these are all big issues i think Mohamed Elerian understands most of those and how they fit into policy victoria, apropos to all that, we sit here today, it was yesterday that calpers, the Huge Pension Fund said they were going to double their bond portfolio. Today the utilities are hitting alltime highs again at a time when the fed is starting to drain its portfolio and raise Interest Rates what am i missing here something somebodys wrong here, dont you think . Well, bill, i think when you look at a total portfolio, theres definitely a component that theres for fixed income regardless of whats going on in the marketplace. When people are looking at fixed income, theyre looking for diversification, theyre looking for that income component that they can rely on to meet any liabilities they may have. So i think it makes sense that they can add to their fixed income allocation, you just have is to be careful if you do have rates continuing to move higher which we an this pail well have in december, then you got to position yourself properly. You got to do shorter Duration Bonds to have in your portfolio, make sure you have coupons in there so when you do have volatility in the marketplace because of rising rates, you can buffer that and ride it through and reposition yourself out further on the curve once rates hit a more steady pace. Would you buy utilities here . Im not sure i would actually buy utilities. You know, as rates move higher, thats going to be a segment that really gets hit so i think for with the rising rate environment, i would aim more toward the financials i think we might actually aim toward some industrial names youve got some benefit that may be coming especially in the tax reform, if we get the expensing that you have coming, 100 expensing there. Theres some benefit for industrials. So i would look more at financial the and industrials and probably not utilities but steve, can we take a rising rate environment for granted when weve seen how much flattening the curve is doing, and to bills point about calpers, if the emblematic Portfolio Manager is going to increa increase its fixed income exposure, how much more could that flatten things out . I agree it is a complicated strategy when you start looking at all different pockets of assets, but maybe to bills point, maybe utilities dont believe that rates are increasing as fast as we think they are increasing and just maybe we skip december. What happens if we skip december wow. Does the market believe right now that we are raising rates in december i would say that 92 of the Market Participants say that we are. Do utilities tell you that theyre up 17 year to date. Theyve outpaced the s p so can it handle all levers being pulled i think theres room enough to say, hey, you know what, were going to skip december, and were going to unravel the Balance Sheet. I think that will handle your yield curve flattening with one swoop and then the market will digest it and probably move up in the equity market. Boy, if they skip december, that would just play into Janet Yellens comment today that the fed has been confusing the public with so many different voices out there. Rick, do you think that would be a smart thing for them to do . I think they should raise in december right right. You think they should raise, but when you look at reasons for not raising, and i understand, rick, your core and i do get it, i totally agree with your core, getting back to a normalized rate environment but are there reasons for them to hide and say we couldnt raise because of x, y or z low inflation. I think you would agree with that. Well, inflation absolutely. They can always find reasons. How many years has it been they find a lot of excuses i think at this point the market is ready for it. I dont suspect that its the december rate hike thats moving the markets the way it is. I think theres many other issues at play first of all, the dollar index is at a threeweek low okay not necessarily the type of behavior youd expect from a currency sure. Where the central bank is going to be raising. Very quickly, victoria, your thought on that. Are you positioning yourself for a rate increase . We are positioned for that. We have been for a little bit of time weve anticipated that the fed would raise the three times this year and possibly two to three next year. I know that inflation is low, but theyre really basing things on asset values, it seems, more so than the inflation component which they find a mystery. So i think, yes, i think theyre going to raise in december, based on the asset values that weve been seeing in this market all right i suspect weve been having a little shadow right now. Thank you, folks good to see you. Thanks for your thought on todays market action. Which shows some minus signs right now. As we head toward the close, we got 47 minutes left in the dow i missed that, the dow was down more than 160 points earlier today. Oh, wow. Now down just 37. S p down six, nasdaq and russell lower, too. Up next, shares of ge tumbling for a second straight day. Yesterday the Company Announced it is cutting its dividend in half today, cnbc spoke exclusively with new Ceo John Flannery well bring you highlights from that interview what flannery said that had investors fleeing once again today. Plus well speak with former ge vice chairman bob bright about whether flannery is the right person to turn the company around and we want to hear from you reach out to the show and share your thoughts with us. Nds twitter, facebook or even se uon email. Youre watching cnbc, first in business worldwide what is the power of pacific . Its Life Insurance and Retirement Solutions to help you reach your goals. Its having the confidence to create the future thats most meaningful to you. Its protection for generations of families, and 150 years of strength and stability. And when youre able to harness all of that, thats the power of pacific. Ask a Financial Advisor about pacific life. Ge stock falling for the second straight day, as the companys turnaround plans failed to impress investors. Ge chair and geo John Flannery was on squawk on the street exculusively earlier today urgin investors to have confidence in management we disappointed people with some tough news yesterday. So we were low on 18 outlook, low, obviously, dividend cut, and i think lower than most people expected so im not surprised the investor reaction, because we had disappointing news but im very confident where were headed with the company, and what we need to do and the team is ready to go. What gives you the confide e confidence, youve mentioned that a number of times in our previous interview as well yep. Thereat you that you are on that right track. You just described couple things ive spent, you know, as we said, 100 days just exhaustively crawling through the company weve looked at every single business, weve looked at how the Company Works horizontally, corporate spending, Research Spending i have a very strong command of whats going on inside the company. Beyond that, i look at my track record, david, if you go back and look, this is very, very similar to what i experienced in health care. I walked in, had a look, said this is fundamentally a very Good Business and there are basic things around operating, Capital Allocation, how we work as a team that make a difference im feeling very much the same way again. I recognized as i said yesterday, its show me time. I think the notion everyone had with the stock at 30 and the stock at 17 just kind of says what i most fear, which is that its okay. I would have preferred you to say, jim, you know what, we didnt get the straight story, and the straight storys bad because thats honor jim, ive been completely transparent in the time ive been on the job at what the issues are with the company, and what im doing to fix them that is my perspective thats where i am right now. Thats how im Going Forward thats what you would expect of me and i think weve been quite clear about where we have underperformed and how we fix that joining us right now, mr. Robert wright, the former ceo let me just say, hes the man who created nbc universal. When it was under the ge up yell la hes now a Senior Adviser at lee equity partners. Bob joined ge in 1969 as a staff lawyer and in 2000, then you became vice chair of the board as part of your capacity as head of nbc and the first guy to greet me when i got off the boat back in 1991 as well. The father of financial news. Standing right next to me. With the loveliest person in financial news, kelly. So here we go. All right here we go i feel like Jeff Sessions attorney general youre here to answer why did you buy ge and why have you hung onto it for so long . You had plenty of chances to sell. Because i was with ge directly for 33 years and 7 years i was out of ge, but connected to ge so its a 40year career and it is it has wonderful people great ideas. It was a wonderful place to work and, but, you know, in the last 17 years, ive gone through, you know, three horrible periods 2002 to 2004, the stock went down to 22 a share from 40, and it was when jack retired, it was 43. We got 9 11, it went to 36 the it went down further it was a power problem, then it was enron created this huge energy bubble. And that exploded. That cost us probably 10 billion, 12 billion, 15 billion, orders and payments then we had 2008 2008 and 2009 yep. That was a very expensive stock went to 5. In both of those cases they were macro events. That happened to ge. We also had about a 10 billion insurance problem in 2004 and 2005. Because of 9 11 and others having to restate the whole that was all in ge capital. Whats the problem now, what happened well, thats almost impossible to answer you know, one thing i can say is ge has and historically had a fantastic Organization Called Financial Planning and analysis group. And they operated at headquarters and they operated at each of the business. These people are so well trained, so well educated. And their job was to actually look at the legitimacy of operating earnings, so forth, and alts to so to be paying att to the Balance Sheet make sure the assets are properly stated and the liability are properly stated. So when people raise questions about that now, everything from how things are counted to how the earnings are reported you say that i cant understand it i cant understand it. The culture of the company was to know all about that stuff all the time certainly, and certainly to the ceo level, and the cfo level, and lots of other people but something something gone wrong. One thing i want to say, because they have 18 Board Members some of these people its going to 12 now, by the way. Well, i mean, they still have 18 right this month. Yeah. Dthey are some of the most terrific people you could ever imagine to put on your board if you look at the backgrounds of these people, i mean, its just really incredible i mean, they have they have wizards of people, they have former ceo of unilever and chairman of the board. They have people from the dean of the nyu school of business is on the board John Flannery says he wants pushback from his Board Members. Well, thats was immelt getting pushback, do you think i dont know. One of the things that i hope you guys can do, jeff immelt should come forward and at least offer some comments about this its not a defense of anything but explain because all these wonderful systems reported into him in one way or the other. For Little Things like why did you have a Corporate Jet shadowing you all over the world . Well, you know, thats maybe thats a little what theyre emblematic of. Kelly, thats not the issue here i mean, yes, i got it, but where was fp a, where was the theres an audit committee, outside auditors there shouldnt be any issues with pensions. Pensions are very simple look and see how much have you got in reserve, what is your forecast now, granted, you know, Interest Rates have gone down probably from 7 , 8 , to maybe 3 or 4 thats a problem but thats the easy issue. Im running out of time here. Is John Flannery the guy well, he is is he the one to turn things around he is the guy we deal with what we have. I wish he was a little more transparent about the Balance Sheet. I think thats a lurking issue could be getting rid of it you could just say ive looked at the Balance Sheets, gone through the assets and liabilities, were okay. That would help a lot. That would help a lot. People who look at teahese remaining Businesses Health care, power, aviation, what in the world do these have to do with eecach other . Why does the remaining company make sense all three are very technical and can be very much aided by digital efforts. Thats part of the whole thing what happened to the Digital Change they are organizations that have tremendous amounts of data that needs to be computed, can be done, you know, and big data can help them a lot and they can exchange a lot theyre very sensitive. They have that in common ill be frank, im agonizing what to do with my shares. This is the worst day of my business life. What are you going to do . Im going to sit there with it im not going to sell it now. Its too late. Im going to trust the history of this company, the quality of people that are there. Wonderful people and theyre all over the place and they just need to be given a chance to how much time you going to give them . Even John Flannery says this is not a sixmonth turnaround, this could be a few years. He has to turn that into a little more closer range here. We need to see progress. You know, these are extraordinarily Good Businesses and come on, we got to get going. The only one powers in a bad cycle but thats not its not really cyclical. Its just in a bad period. S seamans put that out a week ago. Said we have an issue with power, we too many much inventory. Same thing here. They should not have sold nbc i guess. That goes without saying. Nbcs greatest contribution was, we were probably at that time the largest Cash Generator for ge which theyre starved for right now. There you go. Bob, always good to see you, my friend. Thank you. Bob wright joining us. Buffalo wild wings was soaring today after news broke a private equity firm is looking to buy it to take it private 25 gain were going to have the latest on the story and what other restaurants might be takeover targets next. Plus Shopping Malls starting to court Online Retailers. Sound familiar to fill their empty space. Find out if that could give the mall industry a lifeline thats coming up on closing bell. Another day at the office. Why do you put up with it . Believe it or not you actually like what you do. Even love it. And today, you can do things you never could before. Youre working in millions of places at once with iot sensors. Analyzing social data on the cloud to create new designs. And using blockchain to help prevent fraud. So get back to it and do the best work of your life. All right. Lets check movers on a day with minus signs across the boards for major averages vodafone repohigher Earnings Results in line with expectations beat on revenue and increased fullyear forecasts. That has taken the stock higher by 5. 75 meantime, citrix board of advisers added an ad didditiona 1. 7 billion to the Buyback Program there for a total of 2 billion. Thats through the end of next year the companys ceo says the buyback demonstrates confidence in their overall plan and commitment to return capital to shareholders those shares up 1. 1 kelly . Shares of Buffalo Wild Wings are soaring today on news of a takeover bid by roark capital, owner of arbys and carls jr. Kate rogers joins us now with a look at who in the space might be next. Kate hi there, kelly, fast food names like mcdonalds and Restaurant Brands international have continued to thrive this year, fast casual names have been hit hard making them attractive for potential buyouts. Analysts say names like Noodles Company and zoeys kitchen with smaller market caps and struggles may be on the radar next another beaten down name, chaez cake factory, fallen 25 for the year could make sense although its a riskier move analysts say given its exposure to malls which have been struggling b. J. S Restaurant Group also down 15 for the year, has been floated as another potential name theres also been chatter surrounding two other restaurant bids j. A. B. Holding company which owns panera, caribou coffee and keurig could be eyeing Dunkin Donuts one name that has analysts split, though, as a possible acquisition target, is, of course, chipotle that stock cant seem to escape its food safety woes which resurfaced this week after actor Jeremy Jordan posted on social media he had been hospitalized after eating at the fast casual chain. That stock is down over 25 year to date. And while some say it could make for a worthwhile takeover, others say we may instead see more activist intervention to turn the brand around. Back over to you guys. The dunkin one is interesting. Their shares are up relative to cheesecake and others hit bigtime making it less attractive as a takeout target, i think. Whats also interesting, too, were seeing names like dine equity and brinker, some of the biggest losers there the fast casual space theyve also been rallying today. Among this chatter one other interesting thing that was pointed out to me by an analyst today, from morningstar, he was saying tpg bought Mendocino Farms yesterday, a really small chain hes saying chains with 15 to 30 locations could be really interesting as potential takeover targets in the future, too, because theyre moving into second and third markets and also could be attractive for buyouts. You know whats interesting, if you believe that there are just too many restaurants out there, i happen to one of those people. Im not, by the way. What does private ekpy see in all of these its not like theyre taking them off the market. Theyre buying them, keeping them on the market i guess theyre imposing more financial discipline on those companies when they do that. Is that the idea yeah, think that is the idea. Something that was also pointed out about Buffalo Wild Wings is they are franchise and Company Owned so they could push the company to sell more of their companyf o companyowned locations to franchisees to make cash on a deal like that well have to wait and see. You dont think there are too many restaurants can never be too many. Im with you, kelly, i like the idea theres a ton to choose from. All right tauhank you, kate. See if private equity agrees. Time for a cnbc upnews upda. Lets get over to sue herera. Officials report at least five the shooting scenes including an Elementary School in a remote area of Northern California at least five people are dead. Including the shooter. Seven more were injured including two children the local nbc station reporting the shooting started at a home before moving to an Elementary School we have multiple shots fired in rancho tehama, multiple shot and multiple victims at the school the Elementary School. Im told at this point the suspected shooter is deve veecey Law Enforcement bullets. Israelless mis military dea rocket defense system. The system defends against shortrange rockets and intercepted hundreds fired by Palestinian Militants during the 2014 gaza war. The robot maker boston dynamics showing off a more advanced version of its spot mini robot looks a little bit more polished and less scary than the one first unveiled in 2016 its movements are also a bit more fluid i dont know its still creepy to me. Im sure its going to be excellent, but i dont know what you can do about it. Looks like its looking at you, bill. Yeah. I dont know i just if it delivers food to kellys house, i think shes in. There we are. Maybe i dont know bring that from the restaurant just kind of creeps me out a little bit thats all i can tell you. Im with you. See you tonight nightly business report. Yes, looking forward to it very much. See you then. Me, too see you later. Thanks, sue. Here we are on the floor of the Stock Exchange 26 minutes left in the trading session with the dow down just 34 points. With me, gordon from rosenblatt securities second day in a row, weve seen a big sell offon the open. Today, big one 164 points weve come back. Buy the dippers seem to be back here. The trend is still to the upside starting to see some chinks in the armor a little bit were watching a couple things obviously keeping an eye on the vix. 11, 12 on the vix in the scheme of things, thats pretty low. Exactly the question is will that elevate and will the dow or t the russell, s p, all continue to languish tax reform, you have to admit, theyre watching washington very carefully as we watch both the house and senate try and work out their respective bills here, right yes i think some of that, bill, may already be priced in to some extent i think theyre, pektexpecting o outcome at some point. Really shn us much this year on capitol hill you have a lot of things in play you get to the enend of the yea tax selling. Right, right. Going into a Holiday Weekend Holiday Season here the other part of it, too, look, people are saying were getting to the end of a cycle. However, when you do you pull the chute on that . 2018 is still an up year so the question will be do we rally into the close, and then have a reverse january effect where guys kind of start to bail out early or see it carry all the way through or will guys start to cash out here into december so were excited about from a floor traders standpoint that things might finally start to heat up. Bring on the volatility thanks, gordon see you later. Kelly . Thank you both. Streaming service roku having a big run its soaring around 100 since its earnings last week the stock giving back some those gains today. Its down paabout 1. 1. 5 well discuss if its sustainable or moved too fast. Tomorrow tax reform will be in focus on squawk box. Paul ryan will weigh in on the house and Senate Tax Bills and how eyl pa tthlimcthe business community, tomorrow 8 30 a. M. Eastern. Dont miss it. I cant wait for her to have that College Experience that i had. The classes, the friends, the independence. And since we planned for it, that student debt is the one experience, im glad shell miss when you have the right Financial Advisor, life can be brilliant. Ameriprise yeah, i got some financialbody guidance a while ago. Howd that go . He kept spelling my name with an i but its bryan with a y. yeah, since birth. That drives me crazy. Yes. Its on all your email. Yes. They should know this . Yeah. The guy was my brotherinlaw. Thats ridiculous. Well, i happen to know some people. Do they listen . What . Theyre amazing listeners. Nice. Guidance from professionals who take their time to get to know you. Firstthen you put yourselfareer. Through school. Got the degree. Youve given it your all, to reach the goals youve set. Dont let student debt hold you back. Refinancing Student Loans with sofi can save thousands. So you can get where youve always been headed. Sooner. See how much you can save with sofi. The leader in student loan refinancing. Minus signs for the major averages except for the dow utilities. See that up nine points right now. If you look to the individual alltime highs, its all the Utility Companies in this i cant find anybody buying utility stocks i keep asking money managers, would you buy utilities . No, i wouldnt buy somebodys buying utilities stocks as they continue higher. When we come back, well round up other stocks that the largest Institutional Investors and hedge funds are buying and selling. Plus advanced auto parts skyrocketing today, up nearly 20 after its earnings report. Well break down the number and lookt etr is i awhheths a turning point for the company. Thats still to come on the closing bell. So what else is new . Hows your mother . Umm. Shes doing good. She needs more care though. She wants to stay in her house. I dont know even where to start with that. First, lets take a look at your Financial Plan and see what we can do. Ok, so weve got. Well listen. Well talk. Well plan. Baird. As you probably know, gop members of the Senate Finance committee are looking to move the tax bill out of committee as soon as tonight. Senators appear to be nearing a decision on whether to include a repeal of the obamacare individual mandate in a first on cnbc interview, we are pleased to be joined by senator pat toomey, republican of pennsylvania right now. Senator, good to see you again welcome back thanks for having me. Were almost going to have to do this on an a la carte basis, provision by provision just to get a sense of whats i this bill right now since we havent seen it yet. On the individual mandate repeal, senator cotton thanked his colleagues like you for putting the provision in there, then we heard from chairman hatch saying its not in there yet. Can you clear that up for us i think thats just a drafting question. I think it is going to be included were going to include a provision to repeal this very onerous tax on lowincome americans. And well take this up well take it up tomorrow when we have the new actual legislation senator, if thats the case, does that mean you dont have to delay the Corporate Tax cut to 2019 look, at this point, were going to continue with the structure that we have which delays the corporate rate until january 1st of 2019. Keep in mind that the provision that allows full expensing of Capital Expenditure kicks in on january 1st of 2018. So the incentive to make new investments which will really spur Economic Growth, that occurs on day one and its even more pronounced when the deduction can occur against a current 35 rate and as you know, your deliberations have to be taken into context of what the house is doing on the state and local ded deductions, you want to eliminate it completely. Wheres the middle ground on that, if anything, or are you guys going to try to stand pat on that . I think the senate going to proceed with the provision as it is which would disallow the deduction of state and local taxes. That is one detail, its an important detail, but its only one of many important details in how we deliver lower taxes for the folks we represent we are adjusting rates, were adjusting bracket thresholds, were add jujusting the child t credit the net effect, this is all that matters to my constituents, the net effect the vast majority of tax filers are going to be paying less if taxes to the federal government. Snarkenator, a lot of the pu is probably confused by this bill because its basically Corporate Tax reform kind of now being talked about as spring individual tax reform. Which is more important to you, that corporations get a tax cut, or that individuals get one . Look, theyre both very, very important. But its not just a Corporate Tax cut. So on the so let me take them one at a time. First of all, as i said, the vast overwhelming majority of individuals are going to have a tax cut. Theyre going to owe uncle sam less money that direct savings is a pay raise for the folks that i represent. At the same time, its a very good idea and for those very same people that we make our business tax code competitive. Its completely uncompetitive. We got arguably the largest tax code in the industrial world were going to change to the that one of the best were going to lower corporate rates to 20 , were going to allow full expensing of capx, were going to fix our international piece to u. S. Based multinational can be competitive. When we do those things, that is going to encourage more investment, more Economic Growth were going to make the corporate rate permanent that is going to provide certainty that people want to invest in the united states. And all of that will translate to more demand for workers and higher wages i want to ask you about a controversial issue, but it seems senator mcconnells dealing with it headon today. I want to get your opinion of this on roy moore running for the senate in alabama. I mean, clearly if you lose that seat to the democrats, this puts a lot of these deliberations into question. Whats your view on roy moore, should he continue to run or not . And should it be Jeff Sessions as a writein candidate as senator mcconnell is suggesting this afternoon so, look, ive made my views on this clear. I think the accusations have more credibility than the denial and so ive suggested i think it would be best for roy moore to step aside but i dont control that and the people of alabama will make that decision what weve got to do is move ahead on the biggest and best tax reform since at least the mid 1980s. That is what im focused on. And getting the hopefully every last republican, and i hope some democrats. In the end, actually, i think thats entire possible because tax relief for middle income families and tax reform that makes American Business competitive, thats a frpretty good combination all right senator, thanks for your time. Appreciate it, sir thank you. Thanks for having me, guys. Pat toomey of pennsylvania joining us as we mentioned, roku shares pulling back after rallies more than 100 in the last 3 days is the run for this streaming stock over a bull and a bear join us, coming up. Will they stay true to their words . Or did they promise you one thing. Only to do another . Right now, congress is talking about tax cuts that will add trillions to our National Debt and hurt our economy. Its time to tell congress. Dont borrow more money from china. And leave more debt to our kids. Keep your word. Tax cuts shouldnt add to the National Debt. Yes or no . Gin. Do you want the same tools and seamless experience across web and tablet . Do you want 4. 95 commissions for stocks, 0. 50 options contracts . 1. 50 futures contracts . What about a dedicated service team of trading specialists . Did you say yes . Good, then its time for power e trade. The platform, price and service that gives you the edge you need. Looks like we have a couple seconds left. Lets do some card twirling twirling cards e trade. The original place to invest online. Mr. Cashin told us a moment ago that the market on close orders show an imbalance to the buy side to the tune of 500 million. Well see said it looks shaky. So there may be a few sellers in it the weeds waiting for that market close well see what it does to the market. Dow down 38 going into the close. Roku lower, down 10 after an0 n oppenheimer downgraded it. Is rokus run over or motnot . Joining us dan rayburn from frost and sullivan youre our bull mark, youre technically our bear you got a hold on this stock kind of a wishywashy bear are you there, mark . Thanks for the intro. Lets see, how about we just go down as owls on the stock . Look, theres pros and cons here. Okay. What keeps us on the sidelines is really valuation. Very few ways as investors to play ott, netflix is one we like that story if you want to play ott, roku is an interesting asset to look at. Wed prefer to be buyers but lower. Dan, are you as bullish now as you were 100 ago, 50 ago . I was here a week ago talking to you about ro caku, 20 of smt tvs this year have the roku os theyre comparing Gross Profit Margin of roku to facebook, snapchat and twitter to marks point, those arent ott companies. Theyre hard to compare. Is this rally a reset for the market to try and figure out what the companys quois worth short squeeze . I think its a short squeeze. I think its a reset in the sense that a lot of people understand what roku is. When you say theyre an ott provider, its not really what they are yet many people say that i think its helping roku in the short term of getting a lot of people interested in their stock and company and what theyre going to do moving guard. The share move is astonishing. Just absolutely rocketed after a report not just on day one but day two and they were up today before this turn yarnt what does that price action, itself, tell you well, people love acceleration growth stories. And, you know, just the three numbers you need to keep in mind here are their platform revenue which is why people are buying the stock, not for the devices but the platform revenue grew an accelerating 137 . The platform gross profit grew an accelerating 157 . A number of active accounts grow an accelerating 50 . You dont see those kind of accelerating stories so when you get triple digit and acceleration, i mean, thats a great reason to be excited about the stock. You like it thematically i just want to be patient about it i think its a good asset. I think theres a lot of upside potential long term. A lot of things they still need to prove id rather pay, you know, four times sales, three times sales id like to get a shot at it that way rather than paysix, seven time saling its trading at a premium to netflix. Thats rare air. So i just think i want to be careful on valuation we like the fundamental asset. All right very good. Dan rayburn and the always decisive mark. The owl. Thank you both for joining us. Thank qulu. Well come back with the kbt closing countdown with the dow down 32 points after this. [ clacking continues ] good questions lead to good answers. Our advisors can help you find both. Talk to one today and see why were bullish on the future. Yours. Talk to one today and see why were bullish on the future. I thyou never got the brakes looked at . L. Oh yeah. No. At cognizant, were helping todays leading manufacturers make things that think and do automatically. Imagine that, a world of new Digital Products and services all working together for you. Can i borrow the car when its back . Get ready, because were helping leading companies see it and see it throughwith digital. Show of hands. Lets get started. Who wants customizable options chains . Ones that make it fast and easy to analyze and take action . How about some of the lowest options fees . Are you raising your hand . Good then its time for power e trade the platform, price and service that gives you the edge you need. Alright one quick game of rock, paper, scissors. 1, 2, 3, go. E trade. The original place to invest online. 2 1 2 minutes left in the trading session with the dow down 37. This soot one of those days where we saw a big selloff on the open this morning. Happened yesterday although todays selloff was a lot bigger we were down 160plus points at one time then came back again and here we are finishing down about 27 points. The best gainer, the biggest gainer, the gainer, for the dow today, was united technologies, which was making a presentation at the goldman conference today. Ge continued lower it was down 7 , 8 for a time but off those lows. Couple of the other movers today, in takeover news, Buffalo Wild Wings, you heard about this, roark capital making a 2. 3 billion bid for the company. Up it goes, 23 gain i think its 150 bid. Its below that right now. Mattel continues higher after hasbro made that offer for the company. And its up another 5 today while hasbro takes a little break here oil down today as the iea reduces its out its demand for next year even as output continues. So a 2. 25 decline for that today. Bob pisani, ive been harping on this all day utilities continue higher up another nine points yet i cant find a single fund manager who wants to buy the utilities because rates somebodys buying utilities thats a historic high. Alltime high we have opened down five days in a row now on the s p. That has not happened, infact, i dont know how long, but its been a really long time. Its been a very defensive tone to the market the last five or six days again, look today. Bills mentioning utilities, Consumer Staples really the only two things that were on the upside energy, industrials, materials, all your cyclical names were on the downside so people have been talking about progress on tax reform, but everyone know nows its not going to be a home run theres a flatter yield curve, everyones trying to figure out what that means. China data was a little disappointing. Nobodys quit figured out what the saudi arabia situation is like when we got a lot of highlevel princes under arrest, what this means. Theres a few things around causing you to hold back a little and, again, that russell 2000 as you can see here, again, underperforming today. This must be the eighth or ninth day in a row thats happened. Down 30 on the dow as we head to the close here. Stay tuned a lot more coming out of washington on tax reform and much more coming up on the second hour of the closing bell with kelly evans and company. Ill see you tomorrow, kell. Taunk yhank you, bill welcome to the closing bell, everybody, im kelly evans the dow down 31 points the s p down six nasdaq and russell 20000 down ppt down. 25 . The dow was down more than 160 points here, managed to close down only 30 that leaves the blue chips around 223,409 General Electric extended its losses, down more than 10 in the past two days after new Ceo John Flannery outlined his Restructuring Plan coming up, is there more room to fall or is it time to buy this dip . And s. E. C. Fines falling to the lowest totals in four years. What it means for the future of wall street regulation with former s. E. C. Commissioner harvey pitt. He will join us coming up. Joining me on the panel, cnbc senior markets commentator michael santoli, along with fred lane, founder and managing partner at Lane Generational of raymond james. Charlie is here, vice chair and head of the Investment Group at ariel investments. Welcome to everybody the biggestdepot higher by 1. 5 there ge the biggest loser down nearly 6 over in the s p, advanced auto parts, a huge move after its earnings beat, closed higher nearly 16 was up more than 20 at one point in the market. Newfield exploration, biggest loser down 7 , ge was vying with that for the title for a while it was another brutal day for General Electric as we mentioned the shares down nearly 6 . The stock down more than 10 over the last two days this all goes back to the plans to cut its dividend in half and the unveiling of the restructuring yesterday. Ceo John Flannery telling cnbc today that its, quote, showme time, michael, and investors are waiting for the results. Theyre waiting or unwilling to wait. And, therefore, you have this real twoday liquidation in the stock. I feel as if, you know, flannery had you cant fault the message which is, look, were doing kind of the basic operational discipline things but its going to be a pretty long wait. Its going be three to five years he said before he expects to get a payoff. I think investors are basically reading that as either dead money or maybe more downside what i find interesting is it shows you ge is not much of a bellwether because very general moves in the broad market. The equal weighted industrials, etf, which includes ge but its equal weighted was a little up on the day. Wow. Shows you people are rotating out of it. Fred, are you guys a buyer here gosh, no. Absolutely not its a black box i dont think flannery presented any real plan other than were going to do better i mean, that, to me, is not a plan all right charlie, what about you guys no. Unfortunately, theres other diversified industrials we like better we like Illinois Tool Works a lot better with margins in the 20s. Ge does seem like whenever they have a change in ceo, the new one says the old one hid things. That seems to be whats happening here again. Mike, this is exactly the problem. Yeah. For the issue of whether its now time to buy, nobody not a lot of major investors seem to be expressing that optimism, yes, now we put things behind us. Well, first of all, its not going to be a v bottom most likely, not going be this moment that it bottoms. Its a process you know, maybe that process is going to be hampered by the fact that its an extremely widely owned stock that you just got great excuses to sell because if you were in it for the divide s dividends, now its been cut in half also youre going to have tax selling into year end. All these things are probably going to weigh on it i do think its actually helpful that wall street sentiment is also very negative on it. True. Small minority of analysts still sticking with it all of it is taking shape at some point, contrarian i think the issue is the businesses, themselves, are very longcycle businesses. You cant turn them very fast. Its not like you can just tweak pricing or salesmen commissions and owl aftall of a sudden nextr is going to be better. Great point shares down 6 continuing their slide today. Tiger global the newest big investment l firm to reveal what stocks theyre buying and selling. Thats right. Tiger globals filing out earlier this afternoon the firm run by chase coleman. Still liking most of the faang stocks increasing stakes in amazon, facebook, and netflix during the quarter they did dissolve a profession in googles Parent Company, alphabet, however. The firm also appears to be very bullish on China Internet taking new positions in waybo and upping their stakes in alibaba and jv. Com tiger was a shareholder in ipos that went public during the quarter. Roku, and an argentinian travel site tiger actually owned before its ipo. Its important to note the stakes are from the end of september and may have changed in the six weeks since, guy all the faangs but alphabet, it sounds like. All the faangs but google, kelly. Leslie, thank you what do you make of it. F. A. N its momentum. If youre mostly Global Growth oriented, you rigre right ther. The stock should be up big given those holdings fred, as i was going to flag, the chinese internet names have done as well if not better than the u. S. Platforms this year are you guys following that trend . To, we are u. S. Centric the reason we are is we think theres excessive Political Risk as it relates to china weve heard some rumblings about that tiger global is focusing on including the faangs are companies favored by secular growth those are the things we follow we believe secular growth, top line growth, is the solution to returns. If you have top line growth, organic growth and revenues and profitability and good returns on capital, stocks should appreciate yeah, thats why Everybody Loves these tech platforms right now. How about Goldman Sachs . The cfo, marty chavez, speaking at a banking conference today. He said the outlook for the firms Trading Division doesnt look that great in the companys Fourth Quarter goldman has been one of the worst performers among its peers in each of the past three quarters the company down for the year. Just about 1 , today about 1. 5 . Charlie, what is going on with goldman, how can they write the ship here . Does it just depend on an improving trading environment . Yeah, when people talk about a bad trading environment, that often means long and wrong it often means you were badly positioned for some market goldman has always done a very good job in commodities and Commodity Markets have been particularly tough other people have not had the same really poor trading results that they have i think its a great trading firm it absolutely is a great trading firm i think theyve been badly positioned so are you a buyer of goldman here im an owner. I absolutely am an owner its not the tablepounding chief it was a couple years ago but have a lot of the best people have a growing, lending business, growing Asset Management business thats actually very strong and frankly, they do pretty well in the equity underwriting markets right now. All the fpos youre reading about coming out of china are participating well its the trading area thats been the top laggard this year. Fred, whats your read on whats going on in goldman no, i agree with what charlie said i mean, clearly, they do not have the same structure or asset mix that the Big Money Center banks have have a much smaller lending business the concern is obviously they get more aggressive in a lending side is just going to the credit quality, maintaining quality im not too concerned about that i agree with charlie, i think its i think its probably a pretty good hold at this point and mike, is it because the broader environment is difficult for them or do they stick out like a sore thumb from others who are doing better i think the broader environment mostly is whats difficult goldmans business is most exposed to the trading environment. So thats why they get hit the hardest. I think when you talk about historically low levels of volatility not just in stokes but across asset classes, vol e volumes follow volatility. You can give the benefit of the doubt. Can say maybe they shouldnt have that much of a skew toward those businesses and trying slowly to rectify that. What about slow rate . Hurt them as much as it would for a more classic deposit bank . They dont have the left rvle probably volumes on fixed income sides and in particular with hedge fund clientele its also the client concentration in addition to the markets they trade. All right speaking of Interest Rates, a familiar face of cnbc viewers, Mohamed Elerian considered for vice chair of the federal reserve. Chief economic adviser at alians currently, the former ceo of pim pimco. Sources telling cnbc the vice chair announcement is not likely to happen this year. Charlie, what do you make of this move potentially . Absolutely no way id like to see who the source is for this story other than eleri elerian. Why do you say that this is mr. The economy cant grow quickly, lower for longer, new normal everything that donald trump believes in. Elerian says cant happen theres just this is not going to happen. Fred, what do you think ill leave it at that im going to leave it with charlies summary. Wow all right. Major skeptics. Id say check the box he does have a ph. D. He does have a ph. D. Hes foreign trained but check the box. I would say if we take it on face value, that at least hes among the candidates for the vice chair i think it would be sort of a welcome addition i mean, obviously somebody whos thoughtful about the macro whos also traded markets. Hes a practitioner on some level as well as kind of a thinker with a ph. D. So, you know, it all fits in i would say that if we really were going to be kind of reductionist about what this administration wants in the fed, jay powell would not be the nominee. Right . Hes not necessarily somebody hes continuity, and so if theyre going to defer to people at the fed to who they might want to be vice chair, its not out of the rellment mohamed would be among them. Not an intuitive fit. Charlie, is it possible he changed his view of the economy or somehow its able to jibe with what a Trump Administration would be looking for look, you seen anything in Donald Trumps history to say hes going to appoint people who disagree with him strongly i havent seen that. I think mr. Elerian, what is he known for . Known for saying in the world we inhibit now, inhabit now, the economy is going to grow slower, Interest Rates are going to stay low, we all better get used to it that is is not what donald trump thinks. Actually i would argue thats true more recently, hes been talking about the potential benefits of tax simplification and perhaps even a little bit of a boost from tax reform. Now hes certainly a free trader you would imagine, a globalist that might not be a great fit. Fred, last word on this. Listen, the main problem is hes not a cheerleader for the trump agenda necessarily. In this outlook. It doesnt mean he couldnt adjust his attitude. Also hes not the only voice on the fed. I do agree with charlie, he doesnt fit the ideological mold i like him much because i think hes a straight shooter. I agree with his positions i think we are in a certainly in the developed world, the industrialized nations, we do have a lot of demographic headwinds were facing which are going to depress growth, going to have low Interest Rates thats not going to help geeldmgeel goldman, by the way, back on the volatility issue defaults are always the stocks i think his points of view are very realistic but that, again, may be a problem. Because they may not be kibt with more of a sales message youre taking yourself out of the running, fred, with this kind of talk. For sure. Im definitely out of the running. Im definitely out of oil so many reasons im out of the running. Oil tax closed lower today after revised demand in Growth Outlook from the iea it was weaker than expected. I can see the hit there, the refiner did manage to stay positive marathon oil down 4 conoco down nearly 3 . Charlie, this has been a weak area lately, though the oil prices moved up, whats going on well, we got two dissenting views o s of longterm demand f oil. One view which i happen to sub vi subscribe to, growth is better than people expect, back to our conversations about growth opec is saying demand is going to be strong probably growing 1. 5 million barms a day over the next year or two and then came out today and said its going to be a lot lower those competing views of longterm demand for oil are fighting it out right now. Went to 57 because people were thinking there was going to be more demand and had a bad day today because the other side got a chance to speak. Yeah. Wti still above 55 bucks it was about down 2. 5 today guys, thank you. Have to leave it there charlie, fred lane, who will not be vice chair of the fed thank you both very much. Thank you. For joining us today. Thank you. General electric Ceo John Flannery addressing the companys Restructuring Plans in an exclusive sbrinterview earli today. Ahead, well talk about how much more pain investors could be in for or if the stock is starting to look more attractive. Plus, Online Retail has h been blameded for putting shops malls on the endangered species list coming up, a look at why etailers could possibly help revive this industry we want to hear from you, contact the show on twitter, facebook, or send us an email youre watching cnbc first in business worldwide. Your brain is an amazing thing. But as you get older, it naturally begins to change, causing a lack of sharpness, or even trouble with recall. Thankfully, the breakthrough in prevagen helps your brain and actually improves memory. The secret is an ingredient originally discovered. In jellyfish. In clinical trials, prevagen has been shown to improve shortterm memory. Prevagen. The name to remember. Ge down another nearly 6 today. Exclusively on squawk on the street earlier today urged investors not to give up on the stock despite the dividend cut. I dont underestimate in any sense, i feel as deeply the gravity of what we have had to s for income, this is a very, very tough measure. Its not anything we took lightly. I looked at this in very great detail i just felt in the end it was something we had to do so its not something thats easy to go through, and im fully cognizant of the shareholder impact on that. And are you thinking at all at this point about a path to restoring the dif devidend evenf its not to where it once was . Listen, i come back to the most important thing for us to do now is improve the results of the company, improve the cash flow of the company. Incredibly disciplined about how we invest the capital of the company. To the end of growing the ea earnings and cash. As we grow the earnings and cash, job one, well move the dividend forward, too. Why would i own a stock, Charitable Trust does own, why would i want to own stock if i know that 2018 is a year of massive heavy lifting . Right now, why would someone buy the shares right now id say the outlook for the company over three to five years, over three to five years, growing casual and earnings over three to five years. Thats what someone should buy is is it going to be immediate, is it going to happen in two months, four months, six months . No theres operational things we need to change for the company. Joining us now, brian langenberg, principal and industrial strategist at langenberg co. And long with Senior Analyst at cowen for a bear bull debate brian, youre a bull, you have a hold on this stock, 25 price target now what gets us from here to there . We did upgrade going into the meeting on monday. Its a simple matter of earnings power. Nothing that this company has done the last few years should make you impressed you shave a new ceo whos come p certain certain internally who has to fix the pla place. Pray to the normal lady of cash flow look at the power business the one that really blew up. Has a third of Global Installed base if you can accept theyre not busted and can get Free Cash Flow to revenue to, say, 9 , a reasonable number, the fair value of this company is worth 25 a share now. Okay. Youre not going to hit tomorrow its buy and be patient. Gotham, youre saying the stock should be valued around 16 why . Around 17 is our price target i have three kind of principle argumentment arguments. A breakup would make no economic sense. Theres no quick fix for jettisoning parts of the port folio. Thats because we consider things like net debt of the Industrial Company and some of the liabilities that are unfunded such as underfunded pension and Retiree Medical and the like thats about 37 billion that would have to go somewhere and would be a negative in the case of a breakup secondly the hangover of forward Capital Allocation takes a long time to heal what i mean by that, the business parading agencies would be levered approximately at three times right now. Takes a long time to work that down and as they said yesterday at the meeting, mr. Flannery, its not going to be worked down next year in fact, next year the Balance Sheet, the debt level will expand so what you have to hang your hat on in the interim is a dif de dividend yield at approximately 17, at a 2. 8 dividend yield underlying Free Cash Flow is nil, close to nil next year. Its hard to make a case. Brian, you know, when flannery was here this morning, he in a very long interview used the word cash and cash flow many, many times gave you the impression they have the playbook operationally from when he was Running Health care, whether it be financial controls, efficiencies, all the rest of it not necessarily very exciting. What would you be looking for in the next few quarters as signs of progress . Probably the market is going to sniff out when things are improving before the stock really looks compellingly cheap. Right good question. I dont think youre going to see it the next two or tree quarters lets step back and think of this earlier this year jeff immelt said im leaving due do lack of interest this is not like youre a union guy, checked in, got enough points to retire, okay then the cfo goes from vice chairman to, oh, something blew up, i got to fall on my sword. Your new cfo came out of the smallest business unit, shes been in boston minute. Youre John Flannery, come in, one run run a couple things pretty well and have to fix it up. Its a mess. Frankly, it will take five years to fully fix the company the best playbook, dave cody came into honeywell 15 years ago said, okay, lets stop viewing around. Should they bring him to ge now . Think he should be on their board right now. Gentlemen, thank you very much debating this stock of the week. If you cant beat them, join them Shopping Malls are starting to fight back against Online Retailers by renting space to some of them up next, find out if these Online Retailers can save the malls. Plus wall street fines plunging under President Trump well discuss whether thats because of less oversight or the wave of big pelts denaieunr president obama has skewed the numbers, when we come back shield annuities from brighthouse financial, allow you to take advantage of growth opportunities. With a level of protection in down markets. So you can head into retirement with confidence. Brighthouse financial established by metlife. Your kids go to college and you start trading. Yeah, 5 years already. 5 years, hmm. You ever call your broker for help . Once, when volatility spiked. And . By the time they got me an answer, it was too late. Td ameritrades elite service team can handle your toughest questions right away with volatility, its all about your risk distribution. Good to know. Thanks, mike. We got your back kate. Does he do that all the time . Oh yeah, sometimes he pops out of the couch. Help from real traders. Only with td ameritrade. Many of americas malls continue to struggle as the popularity of Online Shopping grows. A new report from the wall street journal says some landlords want online startups to become tenants and fill up their empty space. Will it revive retail as a strategy joining me Jeffrey Rosen both at post 9 welcome to you guys. In a way, its funny this is such a big story, but this idea that you would take a warby parker and put it into a Shopping Mall i guess seems strange because they started as online it seems strange if you think thats where it only exists. Where consumers are going, expeg they want to got into the store, feel the glasses now people just want that experience when they go into shopping jeffrey, heres the interesting thing about it, so brick and mortar is dying because of online. Yet, the two are coming to resemble each other quite a lot. How much of a difference does it make if you started online and have a few stores versus starting in stores and having a little bit of an Online Presence i might debate the first part of that, that brick and mortar is dying im not sure it truly is theres certainly a lot of hype about it retailers go in and out of business every decade. Weve seen it a lot. What were going to find were early if the process of Online Shopping versus brick and mortar i think were going to see the most successful retailers are going to have the combination of both, good omni channel platform of online sales as well as brick and mortar customers want to go into stores even lately, Companies Like walmart Just Announced theyre working on ways to get the customer back into the store amazon is now working on a deal with 7eleven where customers can go in there and return things yeah. I think were still in the infancy stages of it. I wonder what it means heretofore the mall owners, landlords. If this became a prevailing mode of trying to fill gaps in your mall, its a little more unstable, maybe a little more shorter term i dont think theres anything more unstable than seeing a jcpenney go out of business. True. Or sears or stalwart Department Stores completely vanish so if anything, having these Smaller Stores and their presence in there even if theyre paying, you know, 20,000 a month for the 1,900 square foot theyre hanging out in, itst money in. Is it going to have an impact on reits losing money on the stock market you see the numbers going down probably not moodys was saying its not going have a huge impact on that. Jeffrey, what do you think in terms of how lucrative it is for one of these newer upstarts to come into a mall relative to, you know, one of these long tenants . Its great. Its not just malls, by the way. Its urban streets i mean, you know, walk up and down the streets of new york and youre going to see popup stores and new concepts all the time. Its a great way to fill space its a great way to add excitement to the mall or to the building wherever it is. Are they getting do they pay less or typically pay more than i think it depends on the situation. There are certain owners that definitely have a better vision say, you know what, i want to bring this retailer in because hes going to add life to the center and those tend to be the most successful the more should the owner operators, many cases not just in new york city, theres a lot of Shopping Malls, developments where the owners do not want to cut rent because then it affects their valuation in the market and of course they lose the cash. Rather leave things sitting empty and thats been a plague should they accept lower rents, more month to minute kind of things, have we come to that moment the reality is weve been overmalled for the past ten years. You know i mean, theres going to be malls in Shopping Centers that are going to close and they should close and theres retailers that should have closed probably ten years ago that are closing now its not i think weve all seen it coming. The fact that some of them are closing now, its sort of the perfect storm. Everythings hitting at the same time but sounds like its making the mall a little more exciting again. I like the new stores. Well see how it all works out heath, jeffrey, thank you both. Thanks. Time now for a rcnbc news update lets get back to sue herera. Heres whats happening at this hour, everyone. Senate republicans have decided to include the repeal of the Affordable Care acts requirement that most people have health insurance. And theyre going to include it in the overhaul of the tax code. They are now merging the fight over health care with the highstakes effort to cut taxes. Optimistic, would be helpful. Thats obviously the view of the Senate Finance Committee Republicans as well. A prosecution witness in the corruption trial of three former soccer officials testified that fox sports, mexicos groupa televisa and bravo paid bribes to secure Television Rights for soccer matches first trial to emerge from the u. S. Investigation of corruption surrounding fifa. An auction house in england is selling a unique gift a family of four woolly mammoths dating from the ice age. The four were found together in siberia in 2001 and they appear to have died suddenly all at once and thats never been found before so theyre expecting it to fetch quite a sum. The auction is set for november 21st thats the news update, kelly. Theyre hoping they can glean some information about the end of the ice age because its very rare to see an entire family like that. That would be cool. It would. Yeah. Thank qulu, sue. Well see you later. You got it. Sue herera. Lets take a look how we finished up the day an wall street had declines but nowhere near, the dow finished lower 30 points, s p down six nasdaq down 19 russell down about four. Utilities by far the best performer today. Lets get to some of the other big stories today in our rapid recap. Retailer advanced auto parts among the Companies Reporting Quarterly Earnings this morning. The company 1. 43 per share. Dicks Sporting Goods beating across the board for the quarter. Next years guidance implies a profit drop of 20 . Home depot raising fullyear guidance, better than expected Quarterly Results helped by a 7. 9 jump in comps. People relying on this for current income, this is a very, very tough measure and so its not anything we took lightly. I looked at this in very great detail in the house version, because when you look at state and local tax deduction, we keep the mortgage deduction what we did was we added 10,000 for a property tax deduction. I do not believe the Senate Version could pass the house without some working and reflection upon those s. A. L. T. States as well. Your new survey says individual investors are the least bullish theyve been in stocks in the surveys history. Very simply, the stock market is overpriced and people think its overpriced. Least bullish in schillers survey yeah, hes been for a long time keeping these pomonthly surveys. Doesnt necessarily fit with other sentiment readings exactly exactly. Which at least as of a couple weeks ago were way, way high. A longterm sentiment measure, just the sense sort of a rolling average orr Something Like that. Meaning its effectiveness if it really does take hold as a contrary or something is longer term. Once we saw how extreme the sentiment just the regular bull bear, this pullback is no surprise once you reach those kind of levels. We have a news alert on ibm. Leslie picker, whats happening there . Hey, kelly, thats right, this comes from the 13f filing from berkshire hath ware, slashing his stake in ibm, down 17 million shares to hold about 37 million total thats a 68 decrease, kelly now, he declined to say in an interview with cnbc earlier in the quarter what he would do with his wells with his ibm stake. But he had been paring it back over the previous quarter. So now we have an amount, 68 decrease in ibm. Thats Berkshire Hathaway which is led by warren buffett, kell. Tauhank you, leslie dont know if we can show a sixmonth price chart of ibm. Im looking at it right now, the third quarter, presumably when he was doing the selling, around the lows of the year, 140, in the 140s, lets say. Yep. He by no means took advantage of a bounce in the stock which it did have in the First Quarter of this year. Right in interviews with becky, you know, time and again, he did not make it sound like he was never going to touch those shares. He was starting it sh. Oh, no. Coming around to the idea of im very disappointed in what happened and joking about not understanding what was happening there. Exactly he kind of had i think placed it in the loss column to the extent that he has a loss column. I dont think its a surprise that he, you know, definitely still he doesnt exit things often or lightly so, you know, to see him reduce the position by that much just feels like this is a guy willing to give a company a very long period of time to figure things out. Clearly he wasnt impressed with what the way forward looks to be here especially because hes sitting on so much cash. He doesnt actually need to harvest anything to go invest in a new idea thats threw. Going to put more we dont know if its possible hes still selling it down, of course only as of the end of september if hes going to liquidate it entirely, you dont have the buffett premium on a stock like i ibm. Didnt help ibm along the way while he was in it. Ibm shares unchanged after ho hours. Time for the takeaway. We begin with speculation that coca cola is going to make a move in the spirits business wells fargo upgraded the stock today, raised the 12 month price target to 51 and said alcoholic beverages and coffee could be headed to the coke portfolio coke holding an investor day thursday, michael, do you think this kind of departure is likely and is imminent . I dont know if aboabout immt definitely think it would be considered an addon not necessarily a turn away from the core business. I think this environment where coke has come to right now, it seems like its in the realm of possibility. Its, you know, there was a time when it would seem like it was a little bit too risky to be next to the coke brand this way but i know its very selectively, coke has advertised itself as a mixer. Coca cola, itself, like with rum. Things like that also, you look at the way the alcoholic Beverage Market has gone to and its looking more like soft drinks. By the way, ab imbev, management shakeup this week, speculation they would buy coca cola the price was too rich wonder if would ever go the other way or looking its a big bite obviously also the fact coke is involved with monster as an investor, thats an edgy brand. Its been amongst willing to have these brands be on their own outside the monosfer ster trading at alle highs even on this weaker mar t market coca colas james quincy will join cnbc, sarah eisen, for ininvestor day on thursday that will be at 10 00 a. M. Next, has apples face i. D. Been hacked . Researchers in vietnam said they fooled the system with a 150 mask they worked a week on skeptics havent released enough details to prove it was a genuine hack the same researchers apparently pulled off a facial recognition hack of laptops a week ago mike, what if they pulled this off, too obviously apple knew somebody was go ing ing to try this, rigt not to say it was going to be foolproof. Its one of these things you have to go to great lengths, creating a facial mold of a particular person, right its not as if randomly they can grab your phone. No. So all that being said the idea its been hacked makes it sound like its indiscriminate and can happen remotely. Right. Youd have to have at least half the persons face, it sounds like, and go to all this trouble to recreate it. Right so obviously there are hurdles its not foolproof i dont think apple said it was foolproof. Said it was Something Like like 95 some small percentage made it very general. Means 6,000 people in the world who can unlock your phone by looking at it. Scary thought certainly if youre highprofile target, someone stole your phone and went through all the trouble of making the donald trump mask or whatever, i can see the problem. Finally after shares of French Telecom giant altice plunged over the past week, today its u. S. Subsidiary had a sizable drop of its own, closed down 8 . This after Jana Partners exited the stake in the company and Morgan Stanley slashed the price target of the Parent Company today. Raising concerns about its massive debt levels. What now for altice . Coming after pretty poor numbers. People are concerned about a grab bag of things including the fact its a highly leveraged Balance Sheet. If you have the top line flagging a little bit, basically have broadband, cable, Business Centers not necessarily growing, you start to worry about the debt load. Theyre known as a ruthless operator in terms of costs once you get to the end of the point, the question is whats next i dont know if theres a bigger story, it seems like its a little more of a risky balance sleet. Pain the issue is it gives them greater urgency to do a u. S. Acquisition while less capacity to do one thats right. Exactly. I mean, it was always sort of predicated on being part of the consolidation story. Well see if theres many options. Theres a lot of balls in the ard in this space right now. Since President Trump entered the white house, wall street fines have fallen to a fouryear low. Were going to look at a potential impact of what some say is softening enforcement after this stay with me, mr. Parker. When a critical patient is far from the hospital, the hospital must come to the patient. Stay with me, mr. Parker. The at t network is helping First Responders connect with medical teams in near real time. Stay with me, mr. Parker. Saving time when it matters most. Stay with me, mrs. Parker. Thats the power of and. We are the driven. The dedicated. The overachievers. We know our best investment is in ourselves. We dont take no for an answer. We fight for what we want. Even for the things that were once a given. Going to college. Buying a home. And not being in debt for it for the rest of our lives. But were only as strong as our community. Who inspires and pushes us to go further than we could ever go alone. Sofi. Get there sooner. The wall street journal out with a new report showing s. E. C. Fines have fallen to their lowest level if four years last year, total penalties fell by 15. 5 total cases were down 17 . Are regulators starting to loosen up on wall street joining us to discuss is jacob frankel, a former senior counsel at the s. E. Krmt dis. E. C. Divis enforce chlt along with harvey pitt, former s. E. C. Chairman welcome to you both. Jacob, what do you think is going on, an alarming trend or what do you read into it i think its premany chatur g figure out what the numbers mean the tail end of the ongoing investigations from 2015, 2016 i dont think were real will i going to get a sense as to whether there is any type of sea change until 2018 and 2019 only point i want to make is is there was a Supreme Court decision that came out earlier this year that attaches a fiveyear statute of limitations the leadership acknowledged thats going to force them to accelerate their timetable in investigations so well get a pretty good pulse in h the coming months and certainly 18 months as to whether there is going to be a sea change in the stats, but right now, were really looking at legacy cases its too early to tell and to me, these statistics mean absolutely nothing all right, mr. Chairman, do you think the s. E. C. Is shirking its mandate here no. I think that the statistics are very speculative and they prove the ancient wisdom that statistics are like bikinis, what they reveal is interesting, but what they hide is essential. These figures are not official they dont track all of the cases. And they basically reflect past activities, not the activities of the current leadership at the s. E. C. Although, harvey, i wonder if the current leadership of the s. E. C. Would look at the same numbers and say, well, yes, thats right, were basically letting business be business and were only pursuing those cases where we think theres been genuine harm or Something Like that in other words, is it not in the sort of lighter regulatory mode of this administration to perhaps be a little more selective in the Enforcement Actions . No, i think, in fact, its the opposite if you cut back on a more detailed regulation, that provides a more ample ground for Enforcement Actions and people have to toe the mark so i think that none of this reflects a change in policy, it just reflects the fact that the numbers are the numbers and the s. S. E. C. Cannot manufacture cases. And mr. Frankel, i know you also think its too earl will i to tell, but what is the reason why this drop, we just take it at face value, has happened . Is it, again, a policy move . Is it a personnel issue . What do you think is going on here i really none of the above. I think its really a function of what was in the pipeline, i mean, there was a real rush to bring a lot of practices at cases at the end of last year. There were five between inauguration and december 31st there were six between january 1st and inauguration day, in fact, in foreign practices act space specifically, the commission obtained its largest discouragement and Interest Payment in september of this year under the new administration, making those decisions in the past two years so i really think its a function of what cases are being worked on. How long it takes to work them and what the, you know, and what is in the pipeline there is some reprioritization going on we know about the cryptocurrency investigations so i do think when you have a change of administration, you do get some change of priorities. I really make nothing of these numbers. I think that steve peken and stephanie, the cochair the of the enforcementcommitted to mai a Robust Enforcement Program that sends deterrent messages. Its something to watch guys, thank you for now. Jacob frankel, harvey pitt joining us to talk about whats going on over there at the s. E. C. Advanced auto parts soaring on todays trade innerin earnin. Down 40 since the beginning of the year is this the beginning of the turnaround todays closing word is blank. E ass y e ilahd. Threonwharstl ea. You too, unnecessary er visits. And hey, unmanaged depression, dont get too comfortable. Were talking to you, cost inefficiencies, and data without insights. And fragmented care, stop getting in the way of patient recovery and pay attention. Every single one of you is on our list. At optum, were partnering across the Health System to tackle its biggest challenges. [ click ] [ keyboard clacking ] [ clacking continues ] good questions lead to good answers. Our advisors can help you find both. Talk to one today and see why were bullish on the future. Yours. Talk to one today and see why were bullish on the future. Work keeps me busy. So ive asked chase sapphire reserve cardmembers to find my next vacation. Rome, show me something. Im having breakfast at the pantheon. What an amazing view. Of your finger. Look at this view. Your finger isnt that incredible. Your finger and check this one out oh its so amazing move your finger three times points on travel and restaurants on every continent. Sapphire reserve, from chase. Make more of whats yours. [vo] progress is an unstoppable force. The season of audi sales event is here. Audi will cover your first months lease payment on select models during the season of audi sales event. Ibm shares down 1 this afternoon after Warren Buffetts Berkshire Hathaway slashed its stake in the component to 37 million shares from 54 million drop of about a third there. Again, ibm taking it on the chin not a huge decline but still about a 1 move lower. After that report, mike. Yeah. Obviously, one more reason to back away from it, but, you know, i dont know that was the reason you were there in the first place. Its one of those stocks that has not one of those stocks that has not participated you talk about dead weight in the dow between ibm and ge and a couple of others yet the blue chip is hanging in there, although they were down, of course. Were going to discuss whether this is a turning point for the auto parts sector, next. Coming up, rich ssro will tell us exactly what three names are worth buying on the dip. A big earnings mover today, shares of vance auto parts up more than 20 tonight. Phil lebeau has more reporter kelly, you see the move and you think, wow, they had blockbuster earnings for the quarter. They still werent very good, down substantially compared to last year. Advance auto parts was way better than the buck 21 that analysts were expecting. There are still a lot of problems at Advance Auto Parts, this is whats weighing down auto parts retailers they have better than expected margins but same store sales were down 3. 4 for the quarter theres a lot of pressure not only on advance, also on oreilly, auto zone. You look at all the auto parts retailers, theyre feeling that pressure that really started last year, i want to say four months ago when people say, wait a second, amazon might be getting into selling auto parts to people. Why would i need to go to an Advance Auto Parts and thats why all of these stocks remain under pressure bottom line is this, kelly this was better than expected in terms of earnings. But theyve still got a long ways to go before people can say, okay, theyre out of the woods, they have completely turned things around it was a fascinating response for all the reasons that you said phil, thank you so much. Phil lebeau. 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A day where you get to return that love, because shopping small makes a big difference. So, on november 25th get up, get out, and shop small. Its time for todays closing word, the word today is blank. Theres a resurgence in socalled Blank Check Companies according to a report on cnbc. Com the secs website defines it as a company that has no specific plan or purpose or has indicated its Business Plan is to engage in a merger thwith another company. This week Legacy Acquisition run by former p g executives is preparing for a 345 million ipo. Its run by a former real estate exec and could begin trading in london this week these two listings are part of a larger revival this year there have already been 27 ipos of Blank Check Companies in the u. S. , the most active year in a decade according to renaissance capital. One of the largest newcomers is run a former facebook exec, a familiar face to us at cnbc. The popularity of the companies looks as theyve become a favorite for hedge funds as they look to fill in the blanks in their portfolios, mike we used to call them blind Pool Companies its bull market behavior. It crops up when the markets have been on a roll for a while. It seems strange, although i would say its not that different from giving money too new hedge fund or a closed fund that lists on the exchange they buy Public Companies already, where is this is more of an acquisition. It strikes me as a very distressed asset type of move to if we look at the oil one that happened, consumer goods it doesnt feel to me like you want these companies to buy fully valued, wellpriced assets it feels like its more about, okay, how can we create value at something the Public Markets are pricing weekly or how can we create passive Public Markets that we dont think the current ipo thats right, usually its an executive or executive team that has connections in one industry, seasoned opportunity says theres some underpriced stuff out there. It is interesting for hedge funds to invest in these, because its not in the indexes, it looks like maybe it can have a catalyst behind it it needs a different name, Something Like ceipo create a whole tier youre trusting the management skill to just go and execute. And ill think about it tonight, but something catchier along those lines. Make sure you, you know, email it to yourself so you have a copyright on it and all the rest it will be brilliant. Michael, thank you very much as always that does it for closing bell. Fast money starts right now. Fast money starts right now live from the Nasdaq Market site overlooking new york citys times square im melissa lee. Tonight on fast, General Electric shares are cratering, the stock sinking, an additional 6 weve got a special report plus theres one dow stock quietly surging to all time highs and one trader thinks theres even more gains ahead. Well tell you the name. First, the dow sinking more than 150 points before