Transcripts For CNBC Closing Bell 20171115

Evans. And im bill griffin. Weak day for stocks again. Off the lows, but not by as much as weve been lately weve seen a sell off each day this week and then weve come back come back a little bit but still down triple digits on the dow right now. Whats behind the move and whether this pullback is worth buying plus a top money manager from aria investments will give us her pick right now. Youll to want hear that coming up new developments for the at t time warner deal, including talk of a potential complaint coming from the Justice Department david favor will have the latest for us shortly plus you probably heard President Trump set to speak at the white house in the next half hour or so after returning from that 12 day trip to asia well bring that to you live as soon as it gets under way. Going to talk about a number of things including taxes and trade and other things as well lets start though with this sell off day, the dow down more than 160 points at its low this morning, bob has more on whats behind this sell off again, bob. Hello, six down days in a row. We have opens down six days in a row. Havent had that in more than a year i want to show you the s p 500 chart. The reason is every day the last six days, weve opened at or near the lows, and then come off of the lows to go into the close. Say the s p is down 20, 22 points at the close, that would be the reversal of the trend, thatll get a lot of people talking. Only 1 from the historic high a week ago theres some cracks showing out there. Weve been talking about the transportation stocks. Thats a real weak part of the market right now weve seen poor Earnings Results down, almost 20 this month. Fedex, csx, transport, ups, broad swath of stocks down 4 or 5 materials were also a market leader, they were earlier, but also showing some signs of weakness, dow there, of course which is a dow component down almost 6 on the month freeport, down about 3 . Were seeing an expansion of new lows, not new highs, but new lows on the New York Stock Exchange century link, archer daniels, whirlpool, and vinny, come over here, dow component that did a 52 week low and thats merck right here its been a while since new lows guys, back to you. Theres been weakness in biotech lately century link, i think bob is like a 20 year low over there in that telecom is upsetting high yield too. Theres theres definitely pockets here of weakness and we mentioned the russell 2000, weve been talking about that the last four or five days. Thats notably been underperforming for a while. Thats an issue related to tax reform because small cap stocks would benefit this proportionately from any Tax Deductions that started in early october. Thats been around a while too thanks bob lets get to the Closing Bell Exchange with all of that stuff there, we are joined from the partners, hes at post nine with keith bliss now the glass was suddenly half empty for the stock market, what are you guys talking about here on the floor well some of the points that bob just made with the return are important to look at, but one of the things were really focussed on is whats happening until the high yield market if you look at the etf thats cracks the hyg which we have vastly oversold at this point in time we would expect that were all talking about the coal mine, and the coal mine are still in our collective conscious from seven or eight years ago. Were looking at that a little warily one thing thats important to note about the strength as the cap point to that, the strength to the market as you said, we started off with the big selloffs on the open and trade higher through the day and we start higher. We are moving down lower, but were still not oversold yet in the Broader Markets. 23,000 on the dow. Talked about where are people going to set up a good bid in the market i think thats when we get down to that level, around 2515, 2520 watch those levelings right now. It could continue for some time. I dont think its the be all end all and real correction that everybody not everybody, but a lot of people are looking for. We will see weakness in this the other important point that you were just talking about is the russell 2000 and thats a tax debate problem thats also a yield curve problem because you remember the broader makeup of the group, our financials in nature and theyre being whammied a little bit by that flattening yield program and whats going to be the aspects of that going forward. Ben, you guys try to look for those cheap names lets call them in the market that everybody else is overlooking, hasnt been a good year for trades like that talk to us about some of the places that you do see value here and whether an overall market skit like this may be creates some opportunities for what you do. Sure. So we look for misunderstood, not wellcovered companies that really wall street has forgotten about and particularly as this market moves more and more into, you know, passive and etfs, it creates a lot more opportunities for us and so one company that were really excited about is regis corporation, which is the largest hair salon operator in the country and they have a new ceo thats come in, hugh sawyer who wl are refocussing on refranchising and growing their companyowned stores, but hes taking out extensive costs just sold off one of their salon concepts and we think this stock, which is around 14 today has a potential to go to 20, if not 25 over time. We think theres lots of pockets of smaller opportunities in these stocks the talk of the flattening yield curve, on the twos and tens that its been in about a decade here. The dollar index continues lower. The Inflation Numbers came in low. Oil continues lower, do you think the market is starting to sense the slowdown economically here is that whats going on, do you think . You know, i think that the market is sensing a bit slower, im not sure if its sensing a full blown slowdown. If you look at some of the numbers in europe and even to some extent in japan and you forget all the negatives they have with negative rates and the central banks, the data lately doesnt look too bad and with respect to the u. S. , yes, we have the nine Inflation Numbers, retail sales might not have been something to celebrate, but it wasnt a bad number we have seen certain things recede a bit whether it was michigan or philly fed, some of the more qualified numbers that are less quantitative, but still important, but i dont think its which looked like it jumped when we saw the rates move ten year move closer to 240, but its dribbled away, were down half a dozen basis points on 30 year bonds. The other issue was mentioned by keith bliss and that is whats going on in high yield and theyre also, its a cautionary tale, by nothing to flash yellow or red. Hopefully youre looking at some charts, a one month chart in the barkley spread widen with hyg gets a little less pricey. And thats probably a good thing. Acting a little larger, but that made sense and its an etf, just a different animal keith, what about some of the selling pressure thats come right into our sessions from europe even from asia, whats going on there . Well, we certainly have seen a rotation of lately in the last week a rotation of money out of the emerging markets and out of some of the european markets in my mind is not all that unusual. Theyve had an excellent run, theyre going to recalibrate, looking at better riskadjusted returns coming into this market. Writ large, not in maybe individual names, but if you look at the Broader Market, ive said it for a long time, the u. S. Still remains the best risk adjusted return game in town and therefore theyre going to take their gains, move it out. It has created a bit of a momentum leap around the globe from session to session, i think thatll start to straighten itself out a little bit. Again, echoing ricks comments who echoed mine earlier, i think the bigger issue right now for the market outside of the tax debate shenanigans going on in washington is high yield thats got to get rectified in the next few sessions. Hyg has to catch a bid bring it back. Telecoms names need to get out and the market will start to stabilize a little bit more. Before we go, i know you take your stocks on a case by case basis. From a perspective, are you looking at the companies that could be hurt by the tax debate if they dont get the kind of relief they were hoping for and by the Monetary Policy thats going to start to see a little tighter money down the road here a little bit no. You know, we really focus on the small and microcaps part of the market, and in those companies, regardless of what goes on with the tax bill were going to continue to see it really well and so i think, you know, and i would contend that the economy is improving and, you know, maybe 18 to 24 months from now were going to have challenges, but as we talk to the companies on a case by case basis, they are very encouraged about the outlook for the economy. And theyre not focussed on the tax bill and all of these other things aechbts and they just continue to see improving demand and improving fundamentals in their core businesses. Were continuing to find very inexpensive stocks to buy in the small cap part of the market we are encouraged. All right very good. Thank you for joining us today good to see you, keith, rick, as always see you later, thanks. My pleasure bye uncertainty over tax reform is weighing a bit on the Broader Market Speaker Paul Ryan talked taxes on squaux, we are joined now with more now from washington. Now that the senate is taking out the repeal of the individual mandate along with its tax plan now this is a strategy that the house had considered, but it decided not to go that route and house Speaker Paul Ryan said o cnbc today though that his members do still support that idea weve had the house votes to do that. We passed our repeal the individual mandate back in may, but we never had the votes in the senate what we didnt want to do is make tax reform harder than it already is, but it really is whether or not the senate has the votes for this or not. So were seeing what the senate can do, if the senate can get it through committee, if they can get it through the floor, then well meet them in conference and assess at that time. The house will be voting on its own version of the tax bill tomorrow afternoon, but this debate is just red meat for democrats ahead of that vote right now, theyre criticizing the gop tax plan as essentially paying for tax cuts for corporations by taking Health Insurance away from the poor and its not just democrats who are worried, some moderate Senate Republicans are weary as well senator Susan Collins of maine says that she is concerned about mixing health care with tax reform, but that she wants to see a whole bill before she makes a final decision now there is another change that is also royaling this as well, and that is the proposal to make all of the individual tax cuts temporary. So that means the lower rates, the repeal of the alternative minimum tax, the increase in the exemption for the estate tax, all of those go away after the year 2025. So guys, there is a lot of complex details here in these proposals and not a lot of time for lawmakers before they have to vote on these ideas back over to you very interesting if you cant get the numbers to work, change the time, verizon. Go back to complicated taxes and theyre bething that other lawmakers in the future wont have the ability to raise, raise those taxes once they expire thats a big can of soup theyre kicking down the road there. Thanks see you later. Thank you meanwhile target promised increase investment in stores and new brands, but a lower Fourth Quarter Sales Outlook sent that stock down, its down now almost 9, almost 10 i think right now. Well hear from the companies ceo coming up in a few minutes here and amazon making its presence felt in the aisles of whole foods. Ahead, what the online giant is doing for Holiday Shoppers that could mean trouble for other supermarkets and we are awaiting comments from President Trump after returning from his trip to wel in lbrg that to you live as soon as it gets under way. Stay with us is the monolithic view of emerging markets obsolete . At pgim, we see alpa in the trends, driving specific sectors of out performance. Where a rising middle class powers a booming auto industry. A leap into the digital era draws youthful populations to mobile banking and ecommerce. Trade and travel surge between emerging markets. Everyday our 1,100 investment professionals around the world search out opportunities for alpha. Partner with pgim, the Global Investment management businesses of prudential. [ 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. We are basically using the same script we used monday and tuesday again today. Sell off on the open and weve come off those lows. This morning the dow is down more than 160 points, just like yesterday, and now were down 94 points though yesterday only closed down what, 30 . We have a ways to go still lets get some of the other movers on wall street so far today, therapeutics falling sharply as the company said that it has paused enrolling new patients in two key trials testing its parkinsons drug following deaths of some patience of patients the Company Still expects to report data from that late stage trial in the First Quarter of next year. The stock as you see, down almost 40 airbus winning one of the largest aviation deals in history, signing orders for 430 jets with equity firm Indigo Partners that deal worth 49. 5 billion. Its expected to be finalized before the end of the year and as a result, airbus is up two and a third percent right now. Shares of target are headed the other way. They are down nearly 9 . More than that moment ago on the back of a weak holiday forecast in their earnings morning, Courtney Reagan has more, court. Heyly it kelly, target beating across the board for the quarter beating by five cents for the quarter. That beat is embedded in the full year guidance, which then makes the Fourth Quarter the Holiday Quarter Profit Guidance a little cautious, although the comp sales, that forecast is actually above consensus, but that seems to be what investors are focussed on here today so i asked the ceo if hes just being conservative or if hes seen something that trends an early november that are making him cautious im actually surprised with the reaction we had a really solid q3 traffic was up, comps up 90 basis points, digital grew by 24 . So all the leverage we look at, working well brands have been well received small stores off to a great start. Remodel stores like the one were in today delivering exactly what we expected and its still early weve got a lot of work to do, but we feel really good about our position as we go into the Fourth Quarter sales were twice as strong as analysts had expected, up for the second straight quarter. However, the online sales really responsible for almost all of that comparable sales strength, again this quarter for target. That is something that weve seen before. But some investors are concerned about that, targets online sales make up under 5 of the total sales. So thats a point that many people are watching. Now, cornell does say that stores are still very important. They enable digital growth in fact, almost half of online sales are touching the stores in some way whether thats an order pickup or for that online order is actually being fulfilled from the store. So thats something that were watching very closely. We know theres a number of new brands that targets launched including four in the fall then kelly, hearth and hand collection from chip and joe wan in a gaines is actually amazing. That was the word cornell used to describe it so far with the shortstop response Holiday Quarter is really key, so theres a lot to watch here for the retailer back over to you guys. If i get in there, im going to boost their q4 numbers myself with the collection. The important thing about the guidance, especially the lower end of it which is what the reaction seems to be its such a wide range you could drive a truck through it seems to indicate if they had narrow guidance down even at the bottom its not like the stock would have reacted worse, right . Youre right. So the Guidance Range is wide, so for 1. 05 to 1. 25. Its in there, but of course thats at the higher end of that wide range so that is some concern. The comparable Sales Forecast however does look like its above the street so maybe theres some concern that higher sales are coming at the cost of lower profit we know that targets making a lot of investments theyre paying their employees more in the stores theyre investing in digital theyre remodelling stores these are all things that many analysts think that target does need to do, but it does come at a cost all right courtney, thank you very much. See you later. Courtney reagan there in a target store no comment on were you excited about the chip and joanna. Its not surprising theyre seeing gains from the gains. Thank you for serving that up for me today so far played it best you have to look at the twitter history to see what im referring to that wasnt bad. We have 40 minutes to go it was kind of bad 38 minutes to go until the close. Dow is down just about 100 points they were looking to see if we have a rebound like weve seen throughout the lows, but still sitting with the s p down nine and the russell down three Ariel Investments has a new contrarian investment pick and well find that out next department of justices lining up new allies in its position in the proposed merger. Well tell you who they are and what it could mean for investors coming up. And were awaiting comments from President Trump after returning from his trip to asia. Well bring that to you live as soon as it starts. Should get under way pretty soon here well be back in two you always pay your insurance on time. Tap one little bumper, and up go your rates. What good is having insurance if you get punished for using it . News flash nobodys perfect. For drivers with accident forgiveness, Liberty Mutual wont raise your rates due to your first accident. Switch and you could save 782 on home and auto insurance. Call for a free quote today. Liberty stands with you™ Liberty Mutual insurance. Rays always been different. Last year, he said he was going to dig a hole to china. At t is working with farmers to improve irrigation techniques. Remote moisture sensors use a Reliable Network to tell them when and where to water. So that farmers like ray can compete in big ways. China. Oh. He got there. Thats the power of and. Minus signs today and the dow holding with these triple digit declines point wise, down half a percent though right now. And in fact, thats the big loser today among the major averages s p, nasdaq, russell down roughly a third of a percent or a little bit more. Yeah, sliding back other way now with about 356 minutes to go and she joins us live from the Impact Conference out in chicago. Its great to see you again, im just going to cut right to the chase here id like to know what your best new typically contrarian ones in the market. Youre going to love this well, i think the most contrarian thing that i can recommend today is to be in favor of cash as an asset class. I think that most people have overinvested in classes, whether its high yield, equity bs emerging market doesnt matter i think people are too overweight and they need to think about doing the opposite, the contrarian trade to be long cash theyve gone into the riskier assets because of the lower Interest Rates Monetary Policy weve seen do you agree with that and do you think the tide is starting to turn now as the fed does get ready to raise those rates absolutely. I think its not just about the fed raisingses rating, i think in general we pay a lot of attention as valuations. Theyre very risky i mean very rich. And elevation risk is a real risk and i would say thats the reason to take risk off the table, not just what the Federal Reserve will or will not do. Going to cash as a manager is an incredibly risky move you know, what happens if the yield curve doesnt invert for a year, two were and the bull market doesnt end for a couple of years i mean, is this move going to just sit there while those gains continue to pile up . Well, look, im not one to time the markets we all know that, but all of our Research Shows us that valuations are very rich and when that is the case, you know, you want to make sure that you play defense, not offense. In investing its important to know when to hold and when to fold and i would argue that cash has a role to play in an investment portfolio, now as contarians, as unconventional things go, not just arguing as in straight cash the way to actually exercise that expression of being on cash is to own cash rich companies. So by owning Companies Like a microsoft, china mobile, you know, who are very good equity stories to begin with, but because we have strong net cash Balance Sheets, you get two to one. Thats how i would express my views on owning cash owning cashrich companies aha now what about dividend payers everybodys looking at those sort of rich dividend yields if you will right now, does any of that concern you is that attractive to you . How do you play those right now . Well, i think dividends are always, you know, cash in your hand is worth more than two in the bush, but that said, as again fundamental invests, we do a lot of research as to whether the dividend is sustainable or not. And frankly, we knew that it was not sustainable, so we avoided owning the stock in our portfolios for many years. So i think one has to do research, its not just about looking at the headlines and figure out whether the dividend yield is sustainable or not. If you recall a couple of years ago, before the financial crisis, a lot of people owned banking stocks because they seem to have high dividend yields and yet, those dividends got slashed. You know for a decade, frankly, you know, we still havent seen dinds go back up you have to be careful you cannot go by headline investing. You cannot figure out, you know, which cash legitimately will come back to shareholders whether in the form of dividends or shared buybacks like in the case of microsoft or itll never come back because the cash does not belong to you in the first place. Its in the enough to distributed to invest in the business i wanted to ask you, your overweightings, the biggest ones i can see in terms of sectors are health care, tech, which youve mentioned with microsoft a bunch of times and telecom why is it such a big part of your fund . What do you see there . Well, auzs i mentioned, close contrarian thinkers. As a sector is very much in favor and overvalued we think telecommunications is the new staple if you look at your smart phone, ask yourself, even if theres a recession, even if you lose your job, would you give up paying your monthly bill on your smart phone . I would argue that smart phones are actually more of a consumer staple today than shampoo. And so i would say, telecoms is a sector that trades at a huge discount in the market and they have great dividend yields so you get two for one. Great Investment Opportunity with recording revenue streams, Monthly Subscription revenues, and yet, you get the defensibility of the valuations in terms of high dividend yields thats why we are overweight well, i think shes on to something. Ive used my smart phone more than shampoo in the last couple of years thank you for joining us thanks for having me. From aerial investments. I have two by the way really . Yes no. I dont believe that. Time now far cnbc news update with sue herrara, hey sue. Hello guys. Heres whats happening. A group of female lawmakers introducing a bill to overhaul the harassment complaint process in congress. This after some members have come forward with their own stories on harassment. It requires mandatory Sexual Harassment awareness training. Congress should never be above the law. Congress should never be play by its own set of rules. As elected officials, we should be held to the highest standards, not the lowest. This needs to change, and so we need accountability and we need transparency and we need this kind of reform and we need it now. Emergency crews bat American League five alarm warehouse fire in south st. Louis the fire caused part of that building to collapse and at least one person was injured between 80 and 100 firefighters were on the scene. North korean state tv showing photos of kim jongun visiting a tractor factory and driving one of those tractors. He also toured various workshops within the facility. You are up to date, thats the news update to this hour ill go back downtown to you, bill, ill look forward to the nightly business report. Looking forward to it, see you then, thanks, sue. The nose counting continues among the gop on the Senate Tax Bill stepping in the with the latest tally, whats going on bill, senator ron johnson of wisconsin has become the first republican senator to oppose the tax bill, telling dow jones that he is not going to vote for this tax package. That means republicans only lose one more senator and still pass this bill on the floor now the senator had concerns about pass throughs versus corporations and how theyre treated. Hes the first one to come out against it back over to you thank you heres the president participate in three formal state events and attend three key regional summits it was the longest visit to the region by an american president in more than a quarter of a century. Everywhere we went our foreign hosts greeted the american delegation, myself included, with incredible warmth, hospitality, and most importantly, respect and this Great Respect showed very well our country is further evidence that americas renewed confidence and standing in the world has never been stronger than it is right now when we are confident in ourselves, our strength, our flag, our history, our values, other nations are confident in us and when we treat our citizens with the respect they deserve, other countries Treat America with the respect that our country so richly deserves during our travels, this is exactly what the world saw, a strong, proud, and confident america. Today, i want to update the American People on the tremendous success of this trip. And the progress weve made to advance American Security and prosperity throughout the year when i came into office, our country was faced with a series of growing dangers these threats included rogue regimes pursuing deadly weapons, foreign powers challenging americas influence, the spread of the murderous terror group, isis, and years of unfair trade practices that had dangerously depleted our Manufacturing Base and wiped out millions and millions of middle class jobs. The challenges were inherited and these products really showed what previous mistakes were made over many years and even decades by other administrations some of these mistakes were born of indifference and neglect. Others from naive thinking and misguided judgment in some cases, the negative influence of partisan politics and special interests was to blame. But the one Common Thread behind all of these problems was a failure to protect and promote the interests of the American People and american workers. Upon my inauguration, i pledged that we would rebuild america, restore its economic strength and defend its National Security with this goal in mind, i vowed that we would reaffirm old alliances and form new friendships in pursuit of shared goals. Above all, i swore that in every decision, with every action, i would put the best interests of the American People first. Over the past ten months, traveling across the globe and meeting with World Leaders, that is exactly what i have done. Earlier this year in saudi arabia i spoke to the leaders of more than 50 arab and muslim nations about our strategy to defeat terrorists by stripping them of financing, territory, and ideological support. And i urged the leaders to drive out the terrorists and extremists from their societies. Since that time, we have dealt isis one crushing defeat after another. In israel, i reaffirmed the unbreakable bond between america and the jewish state and i met with leaders of the palestinian. Authority and initiated an effort to facilitate lasting peace between the israelis and the palestinians in brussels, i urged our nato allies to do more to strengthen our crucial alliance and set the stage for significant increases in member contributions. Billions and billions of dollars are pouring in because of that initiative nato, believe me, is very happy with donald trump and what i did. To preserve and protect western civilization and the values we hold so dear to promote security and prosperity in september, at the United Nations general assembly, in new york, i urge that the nations of the world join in confronting rogue regimes that threaten humanity and laid out a model for International Corporation grounded in respect for sovereignty and the responsibilities that come with it on each trip, i have worked to advance american interests and leadership in the world. And to each of these places i have carried a vision for a better, a vision for something stronger, and sovereign, so important, sovereign, and independent nations rooted in their histories, confident in their destinies, and cooperating together to advance their security, prosperity, and the noble cause of peace it was this same vision that i carried to asia two weeks ago. And it was this same commitment to you, the American People, that was always at the forefront of my mind and my thinking our trip was defined by three core goals first, to unite the world against the Nuclear Menace posed by the north korean regime a threat that has increased steadily through many administrations, and now requires urgent action second, to strengthen americas alliances and economic partnerships in a free and open indopacific made up of thriving independent nations respectful of other countries and their own citizens, and safe from foreign domination and economic servitude. And third, to finally, after many years insist onfair and resip ro call trade, fair and reciprocal trade so important these two words, fairness and reciprocity are an open invitation to every country that seeks to do business with the United States. And they are a firm warning to every country that cheats, breaks the rules, and engages in economic aggression, like theyve been doing in the past, especially in the recent past. That is why we have almost an 800 billion a year trade deficit with other nations unacceptable we are going to start whittling that down and as fast as possible with these goals, it was my profound honor to travel on this journey as your representative i explained to all of the World Leaders, and across asia, how well the United States is doing. Economic growth has been over 3 the last two quarters, and is going higher unemployment is at its lowest level in 17 years. The stock market has gained trillions of dollars in value since my election and has reached record highs we are massively increasing our military budget to historic levels, the house has just passed a nearly 700 billion defense package, and it could not come at a better time for our nation once again, our country is optimistic about the future. Confident in our values and proud of our history and a role in the world i want to thank every citizen of this country for the part you have played in making this Great American comeback possible in asia, our message was clear and wellreceived. America is here to compete, to do business, and to defend our values and our security. We began our trip in hawaii to pay our respects to brave American Service members at pearl harbor and the United States pacific command, the guardian of our security and freedom across the indopacific region as our country prepared to observe veterans day, we remembered the incredible sacrifices and courage of all of the veterans Whose Service has preserved our liberty and a way of life that is very special we also thanked military families for their support for our brave servicemen and women, from hawaii, we travelled to japan. A crucial u. S. Ally and partner in the region. Upon landing in japan, my first act was to thank the American Service members and Japanese Selfdefense forces who personify the strength of our enduring alliance. Prime minister abe and i agreed on our absolute determination to remain united, to achieve the goal of denuclearize north korea. Shortly following our visit, japan announced additional sanctions on 35 north korean entities and individuals japan also committed to shouldering more than of the burden of our common defense by reimbursing costs borne by american tax payers as well as by making deep investments in japans own military this will include purchases of u. S. Advanced capabilities from jet fighters to missile defense, systems worth many, many billions of dollars, and jobs for the american worker. Prime minister and i also discussed ways we can deepen our trade relationship based on the Core Principles of fairness and reciprocity. I am pleased that since january of this year, Japanese Companies have announced investments in the United States worth more than 8 billion, 17,000 jobs they dont have water, thats okay what oh, its over here japanese manufacturers, toyota and mazda, announced that they will be opening a new plant in the United States that will create 4,000 jobs. We also signed agreements between our nations to enhance infrastructure development, increased access Affordable Energy and advance our Foreign Policy goals through Economic Investment from japan we travel to another key american ally, in asia, the republic of korea. My official state visit to south korea was the first by an american president in 25 years speaking before the National Assembly of the republic of korea, i spoke the truth about the evil crimes of the north korean regime, and i made clea that we will not allow this twisted dictatorship to hold the world hostage to nuclear blackmail. I called on every nation, including china and russia to unite in isolating the north korean regime, cutting up all ties of trade and commerce until it stops its dangerous provocation on this is the whole key to what were doing, on denuclearization. We have to denuclearize north korea. We have ended the failed strategy of strategic patience and as a result we have already seen important progress, including tough new sanctions from the u. N. Counsel. We have a security counsel that has been with us and just about with us from the beginning south korea agreed to harmonize sanctions and join the United States in sanctioning additional rogue actors whose fund and funds have helped north korea and north Koreas Nuclear and Ballistic Missile programs its unacceptable to us. The United States welcomed the decision of president moon to remove the payload restrictions on missiles to combat the north korean threat and together we reaffirmed our commitment to a campaign of maximum pressure like japan, south korea is increasing its defense contributions. During our meetings, president moon acknowledged his desire for equitable costsharing for the United States military forces stationed in south korea and i visited soldiers at camp humphreys, a brand new joint south korean base paid for almost entirely by the south korean government. At that base, i discussed with the United States and south Korean Military leaders both military options and readiness to respond to north korean provocation or offensive actions. During our visit, president moon and i also discussed americas commitment to reducing our trade deficit with south korea at my discretion and direction we are currently renegotiating the disastrous u. S. Korea trade agreement signed under the previous administration, it has been a disaster for the United States last week, 42 south korean Companies Announced their intent to invest in projects worth more than 17 billion in the United States and 24 Companies Announce plans to purchase 58 billion in American Goods and services. From south korea, melania and i travelled to china where as in japan and south korea we were greatly honored by the splendor of our reception our trip included the First Official dinner held for a foreign leader in the forbidden city since the founding of the modern china where we enjoyed a very productive evening hosted by president xi and his wonderful wife during our visit, president xi pledged to implement resolutions on north korea and to use his great economic influence over the regime to achieve our common goal of a denuclearized korean peninsula. President xi recognizes that a Nuclear North Korea is a grave threat to china and we agreed that we would not accept a socalled freeze for freeze agreement like those that have consistently failed in the past. We made that time is running out and we made it clear, and all options remain on the table. I also had a very candid conversation with president xi about the need to reduce our staggering trade deficit with china and for our trading relationship to be conducted on a truly fair and equitable basis. We can no longer tolerate unfair trading practices that steal american jobs, wealth, and intellectual property. The days of the United States being taken advantage of are over in china, we also announced 250 billion worth in trade investment deals that will create jobs frin the United States from china, i flew to the city of danang in vietnam to attend the leaders meeting for iowa peck Asia Pacific Economic corporation. There, i spoke to a major gathering of Business Leaders where i reminded the world of americas historic role in the pacific as a force for freedom and for peace. Standing on this proud history, our offered our vision for robust trading relationships in which indopacific nations can prosper and grow together. I announced that the United States is ready to make bilateral trade deals with any nation in the region that wants to be our partner in fair and resip ri call trade. We will never again turn a blind eye to trading abuses, to cheating, economic aggression, or anything else from countries that profess a belief in open trade, but do not follow the rules or live by its principles themselves no International Trading organization can function if members are allowed to exploit the openness of others for unfair economic gain trade abuses harmed the United States and its workers, but no more no more. We will take every trade action necessary to achieve the fair and reciprocal treatment that the United Statesoffered to th rest of the world for decades. My messages has resinated. The 21 apec leaders for the First Time Ever recognized the importance of fair and reciprocal trade recognized the need to address unfair trade practices and acknowledged that the wto is in strong need of reform. These leaders also noted that countries must do a better job following the rules to which they agree i also made very clear that the United States will promote a free and open indopacific in which nations enjoy the independence and respect they deserve. In vietnam, during a state visit i also met with president wan and Prime Minister fook to discuss the growing friendship between our countries. Our vietnamese partners are taking new actions to enforce sanctions on north korea in addition, we committed to expand trade and investment between our countries, and we pledged to address the imbalances i am particularly pleased that the United States and vietnam recently announced 12 billion in commercial agreements, which will include 10 billion in u. S. Content. Finally i visited the philippines where i met with numerous World Leaders at the u. S. Asean and east asian summit, we made it clear that no one owns the ocean freedom of navigation and overflight are critical to the security and prosperity of all nations. I also met with the Prime Ministers of india, australia, and japan to discuss our shared commitment to a free and open indopacific during our visit, president dew war day thanked us for supporting the recent liberation of marawi from isis. We pledge to strengthen and deepen our longstanding allian alliance at the east asia summit, the United States negotiated and signed four important leader statements on the use of chemical weapons, money laundering, poverty alleviation, and countering terrorist propaganda and financing and crucially at both summits and throughout the trip, we asked all nations to support our campaign of maximum pressure for north korean denuclearization. And they are responding by cutting trade with north korea, restricting financial ties to the regime, and expelling north korean diplomats and workers over the last two weeks, we have made historic strides in reasserting american leadership, restoring American Security, and reawakening american confidence. Everywhere we went, i reaffirmed our vision for cooperation between proud, independent, and sovereign countries, and i made clear that the United States will be a reliable friend, strong partner, and powerful advocate for its own citizens the momentum from our trip will launch us on our continued effort to accomplish the three core objectives i outlined to unite the world against north Korean Nuclear threat, to promote a free and open indopacific region, and to advance fair and reciprocal economic relations with our trading partners and allies in the region we have established a new framework for trade that will ensure reciprocity through enforcement actions, reform of international organizations, and new, fair trade deals that benefit the United States. And we have laid out a pathway for peace and security in our world where sovereign nations can thrive, flourish, and prosper side by side this is our beautiful vision for the future this is a future where this vision, this dream, is only possible if america is strong, proud, and free. As long as we are true to ourselves, faithful to our founding and loyal to our citizens, then there is no task too great, no dream too large, no goal beyond our reach my fellow citizens, america is back, and the future has never looked brighter. Thank you, god bless you, and god bless the United States of america. Thank you very much. Thank you. Thank you all. Should roy moore resign, mr. President . Do you believe shouldnt he resign President Trump not taking any of those shouted questions there. To finish out the statement about his trip to asia which hes just returned from, no word though on taxes which we expect to hear the president hit tomorrow morning with house republicans, lets bring in eamon for more hi kelly, using words like respect and strength and success to describe the tone of his trip to asia going through a travel log really of all the different stops and the different items that were ticked off in each location the president here very focussed on the ideas you heard at the end, america is back and putting this in the context of his entire presidency and his goal to create jobs for american workers, listing all of the foreign trips hes been on during the course of his presidency and some of the things hes said in other countries and also talking about the reception that he go in each of these countries, clearly important to him that america is shown the respect he believes it is deserved on foreign soil. The president here wanting to make this speech top talk directly to the American People about what he was doing overseas for all of that time and of course, the moment that well get a lot of attention there is the moment that harkens back to marco rubio on the campaign trail, pausing briefly twice there to reach for a sip of water the president apparently a little bit dehydrated during the speech and thats understandable, he just got off of a very long flight yesterday on air force one. So, the president here recapping the highlights for us eamon, everyones going to jump on that moment, but im curious well, especially because the president especially because the president mocked marco rubio for that, right. Yeah. Now he might have more empathy for marco rubio. I see snls opening skit already. Weve all been there. The dows down 130d points right now. The president didnt say anything just then about tax reform he had the national audience, of course, hell have other opportunities to do so, was that a missed opportunity well, he did talk about the stock market i mean, hes putting this in the context of the highlights what have he feels have been the successes of his administration. Hes going to talk about tax reform tomorrow up on capitol hill, but thats going to be a speech aimed to his fellow republicans and the house of representatives there hes going to really urge them to come together and support this bill and get this over the finish line and ironic here that you just had that report from our reporter just before the president talked about the first republican senator to say hes not likely to vote for this which gives the republicans and the senate a margin of just one senator now. Obviously, this is the beginning of a long negotiation. A lot of senators like to hold up, hold out the prospect if theyre a no vote going into the negotiations to maybe get a little bit more. See where it is. More on that in a moment. Thank you. At the white house, lets send it down to bill with the closing countdown. And bob here with me as we head towards the close, bob, we were just saying, i asked the gang to show us a threeday chart of the dow where we saw on the open each day a sell off and then a comeback of sorts, but today, a different story as were heading back to the lows of the day, were down 136 points right now yeah, so six days in a row open down and the good part is weve rised all six days in the middle of the day and higher today is slight reverse, were not ending at the lows quite, but the market has drifted lower middle of the day, and i think thats got people wagging about whether or not that little extra push, that little willingness to buy on the dips may be back rating a little bit. Again, down 1 on the s p from the highs. And yields on the ten year as well drifting lower, their roaring that spread between the twos and the tens. First time in about a decade we have some earnings coming up in a little bit. Heres Cisco Systems will be reporting among others including elle brands, thatll be coming your way here on the second hour of the closing bell with kelly evans and company. See you tomorrow, kell thank you bill and welcome to the closing bell everybody. Not much of a rebound afterall today. Closing down 135 points. Down 160 at the lows briefly down 100 at the hour turned lower again, thats of a drop of more than half a percent. Same was true for the s p 500 today. Pretty much in identical declines for all the major averages, everybody including the nasdaq and the russell down about half a percent today its the fourth and five days that the dow and s p have been lower. Now on pace to close or they did there at a three week low. We have turned back the low. We have a pair of key earnings reports out after the bell shortly here cisco and elle brands will turn in their results and a little notice provision in the Senate Tax Plan could have a big impact on institutional and Retail Investors Michael Santulli is here along with Portfolio Manager and hennessy funds, he joins us from a conference, and dennis berman, hes made it down on set with us, dennis, which we always appreciate it. Nice to be here know youre a busy guy. The biggest winner was general electric, actually, coming off a deep twoday drop though the biggest loser was caterpillar. The biggest winner, alaska air, and the biggest loser was target down nearly 10 after the bell after the disappointing guidance this morning pullback with the volatility index hitting the highest since august today concerns not helping sentiment the house is expected to vote on its bill tomorrow and the wall street journal just reported that gop senator ron johnson will be voting against the senate plan, mike, his beef apparently is that he says that unfairly benefits corporations more than other types of businesses. Yes well exactly i mean, i think the challenges to getting something impactful done in terms of a tax bill had been more front and center than the potential upside thats been the case for the market for a while i think this shows you though its raising the question of, exactly how many other maneuvers are you going to pull or efforts are you going to strain for to get that 20 corporate rate . Because that put this whole process thats largely been about. You have one senator saying, you know, lets not play that game and youre going to have to do without me this is a big one, dennis by the way, there was a blow from the ceo counsel last night when john busy asked in the room, how many would increase investment if the tax deal does go through and doug said where are all the hands . It was interesting. The attitude of most ceos is im going to give money back to the shareholders, i dont to want invest, but we have to take into account the fact that optimism both on the Small Business level and big business level, its improved its strong. We have to give them the doubt and say maybe dont want to be in a public forum and raising your hand. Nonetheless, felt like an emotional moment clearly we didnt have projects that met our hurdle rate you dont have ceos saying please give me a little extra cash to plow into hard assets. The ones that need to do it and see the opportunity are already doing it fair point. Neil, what do you think if tax reform does not get done here . Whats that going to mean for the market and investments i think corporations, if theyre just going to hand it back to the shareholder, i think thats crazy because they should risk some of it and trying to expand their business organically if they do that, their competitors have to do that. They dont have to spend all of their savings if it comes down to a 20 level, kelly. They can spend half of it and still have higher earnings and if it doesnt work out, you have future earnings on the sidelines. Itd be crazy just to hand it back to the shareholder. Me personally, i just wait until the dust settles i dont Pay Attention to anything, i wish they handled the corporate sector one way on the tax and the individual, the other way out and instead of combining them, it would have made life easier for all of us if it doesnt happen now, neil, whats going to happen to the market or do you care if it happens . Actually, i think the Corporate Taxes for sure going to get through the perception for the corporation, the real world is the middle class benefit from the tax cut simply because stocks theoretically and most likely will soar as earnings continue to climb. And that hits their retirement accounts the rich dont need an ira they dont need a pension Profit Sharing but the middle class does so if it sold that way, i think well get the Corporate Tax through and the market will be up, if not, kelly, its not going to affect anything, corporate earnings are there fair point. By the way, senator ron johnson whos going to be on squaux tomorrow at 7 30, thats going to be an interesting one the first republican to really come out and say he will not support the Senate Tax Bill. Real quickly, what were you going to say on that as happened, if you tax the individual mandate question to the tax bill, you really start to add the volatility into this question so i think the markets still saying, its going to happen, but id be curious what mike thinks lets say a tax bill did not happen, it was a crater like obama repeal was, down 10 no. Certainly not on 10 it might be one of those excuses to say okay, finally we need that poll back that weve gone, you know, 400 days without or Something Like that. As we seem to be moving more of a risk, youve been flagging the moves in high yield debt for the last week or so, does that theres telecom issues in there yes this has also been a wellperforming sector, what do you think is going on . Definitely a lot of mitigating factor, its gotten a lot of attention as a check on what the stock market is doing. Is it confirmed by what the market season saying and lately it month in particular, high yield spreads have moved up nap means that investors are taking on a little bit less risk, theyre label the more weary of buying high yield data at low rates. This puts it into perspective absolutely. Of the high yield bond spread you see how much we spiked up there in late 2015, early 2016, came all the way down, almost to the lows of the cycle. That was just the china spike. That was the china oil crash right and the industrial earnings recession. And basically was if that compound calamity, so what weve had is all year, high yield was very performing very well, people kind of flocking into it, thats been supporting equity valuations, so this little tick up from very low levels is not even at the level we saw in august or march, so its something to watch and just one more reason for a half step back is it a structural shift . The senate bill is more punitive on limiting Interest Deductibility and that hurts the debt thats out there, companies ability to kind of borrow more and more is that part of whats going on here i believe it does obviously the most highly levered companies have the most need for the most deductibility. I think mikes right weve been boiling so long in that market, kelly weve been boiling so long and we did a great story about it in the journal. You have to put it in relative perspective. Relative perspective, we are still near historically type spreads. Yes, and neil on that real quickly, when you look at the market overall, whether its a credit or the equity side of it, do you disagree with those who are saying its time to move the cash and this is a market tie. Since twen, kell wlib i dont agree with them first of all since 2010, weve had 14 market moves of 5 to 10 on the downside with the average time frame being 16 days, and we had four time frames where from peek to trough the market was down between 10 and 20 and that was an average of 50 days. And the last time we saw Something Like was that 12 , february of 2016 yes, were going to probably have a pullback, but will it rule in the bull market dmop, because on each and every one of those 18 pullbacks, the markets snapped back almost twice as quick as it went down and met new highs. With corporate earnings where they are and where cash is and cash flow se, the markets going to continue go people have to be aware that these passive investments, they have to sell at the market and once the selling starts in an etf or an s p 500 fund, its going to be getting more selling and its going to be quick and over thats true we have seen sharp selloffs and sharper rebounds lets get over to cisco earn chgs are just out. Josh lipton has the numbers, josh cisco reporting near eps of 61 cents street was looking for 60 cents, revenue of 12. 1 billion, the analysts have modelled 12. 1 billion, recurring revenue now 32 of total revenue and turning to the guide, kelly, q2, ciscos modelling eps between 58 and 60 cents at the midpoint, thats a penny above what analysts have been looking for cisco saying look for Revenue Growth between 1 and 3 , in terms of product revenue performance, kelly, cisco saying that was led by security applications which increased 8 and 6 respectively. Cisco has new reporting segments now. They have what theyre calling their structure platform segment. And that includes switching, route, but also wireless and data center. Infrastructure platforms revenue decreased by 4 , this call starts at 4 30 eastern, kelly, back to you. Josh, thank you and dont miss by the way an exclusive interview as chuck robins friday at 9 00 a. M. On squawk on the share. Up nearly 4 yeah, seems like thats slightly positive guidance, you know, for an uptick, probably with some relief, i think that people are bracing for some of those weaker sectors to maybe have continue weakness, telecom related demand the absence of that kind of may be due for it best it has been kind of consolidated its gone below the highs. Were going to to have more coming up. We have breaking news on the fed to get to here steve leishman, whats happening . Comments from eric rigdon saying he supports it over the next several years other than that, hawkish than hes been maybe in the past, the economy is passed the point of maximum sustainable employment or unemployment. He sees low inflation being temporary but unemployment is consistent he goes into a detailed look at whats permanent and temporary when it comes to falling below the 4 level and he says that could boost pressure on inflation and on asset prices hes been out there a dove who turned hawkish, kelly, as you know and these sort of wrapping it up, and i think this is another sign of why markets should prepare for december rate increase and start having that discussion about what happens next year and how many rate hikes there are. All right, steve, thank you dennis, what do you think . Well it was interesting at the wall street ceo council, both koen and mnuchin talked about getting wage growth going and going and granted in a low unemployment environment that should be happening, we simply have not seen it when the tax bill is trying to do is in a lot of ways encourage some of that wage growth doesnt talk like he thinks somethings broke therein though, sounds like oh, unemployment goes below four, were going to see the pressure on wages and inflation cohen talks like somethings broken it has been tepid physiotherapy a long time. Its just interesting to see how theyre trying to turn the dials on that question i think there are in even some ways much bigger forces at work here the fed itself and the fiscal treasury, fiscal irs policy and the tax clause but theres huge implication whabs do you think the fed should do, raise in december because unemployments low and the stock markets high or should they wait because inflation and wages arent there . Well, i think Everybody Knows rates are going to go up do they have to go up in december maybe, maybe not it doesnt matter. Inflations under control. One of the biggest things about the unemployment figure that people forget about is the contracts that are out there are not tied to inflation. So its not like we were like in the early 80s where the contracts were one year after another, you went with the rate of inflation its no longer like that so, yes, wages should go up, look at target, targets minimum now is 11 everybodys starting to raise them because the work force isnt really there and so, as we go forward, i dont think youre going to wage increases are going to give us inflation this any way, shape, or form. Well, like you said, you still think the feds going and others arent sure well find out ourselves in just a couple of years. Thank you guys thank you for joining us here today coming up, weve got more reaction to ciscos earnings including how you should be trading the dow component following these results with the shares up nearly 4 . But first, little known provision in the Senate Tax Plan could have a very big impact on how investors are taxed when they sell stocks we have details on how much that could cost you in a moment and we want to hear from you. You can contact the show on twitter, facebook, or over email, share your thoughts with us, youre watching cnbc, first in business worldwide. Let out your inner child at the lexus december to remember sales event. Experience amazing at your lexus dealer. Anything worth pursuing hard work and a plan. At baird, we approach your Wealth Management strategy the same way to create a Financial Plan built to last from generation to generation. Well listen. Well talk. Well plan. Baird. Welcome back with another down session and one of the more severe ones weve had lately on wall street. The dow closed down 138 points, we are down 160 at the lows. Half percent declines for all the major averages, s p down 14, nasdaq down 31 and the russell down seven today provision in the Senate Tax Plan could have a big impact on took investors. We have the details out of washington kelly, the proposal would limit the accounting methods that investors can use when they sell their stocks. So the rule would require them to follow first in, first out accounting which restricts their ability to sort of package these stocks to maximize their gains or their losses. I spoke to one analyst who said that that could change the way that trillions of dollars in assets are managed and thats why you see some big players like van guard getting worried that theyre going to be hit now the payoff for all the potential market disruption is not very big the joint taxation estimates that that provision would only raise about 2. 7 billion dollars over a decade, that is a drop in the bucket compared to the 1. 5 trillion price tag of this tax plan, but this is just one example of the bitter fights that are going on over the guts of the tax bill. You saw today, ron johnson becoming the first republican senator to oppose the tax bill he says that hes concerned about the way corporations versus pass throughs are treated in the plan and hes going to be on squawk box tomorrow morning at 7 30 to lay out all of his concerns straight from the horses mouth. Back over to you guys. Yeah, itll be interesting to see the reaction to that throughout the evening thank you very much. Our next guest can tell us about how the new rule will impact investors both from an institutional and individual point of view. Chairman and ceo, ivory johnson, founder of the Wealth Management and a member of the cnbc Financial Advisor council, thank you both for being here. Tom, what kind of impact would this have . Thank you, kelly. We see three impacts, First Investors will pay more in taxes, second, funds and Fund Managers will have less flexibility, their hands will be tied in terms of how they manage their portfolio in a way that we think will damage returns not only for tax paying investors, but also even for nontaxable investors, and third and finally, we think that the impact of this will include making markets less efficient, ironically imposing taxes as a greater factor in how investors and how Portfolio Managers make decisions about markets which we think is exactly the wrong way to go to try and promote, to promote growth which i know is the objective of this Tax Reform Initiative yeah, tom, i mean, i was all said to get extremely riled up until i saw the number it would raise 2. 7 billion, thats it, were talking about an industry with trillions and trillions of dollars, even on the individual side in Retirement Assets and stock market assets. 2. 7 billion is nothing. Is it really going to have an impact well, what we see is 2. 7 billion is really being a drop in the bucket in terms of trying to pay for tax reform, but we see a very significant cost in connection with that small benefit in terms of paying for whats trying to be accomplished here we see the cost here is not just the 2. 7 billion that investors will pay, but what this does to markets, the impact not only on investors who are paying this tax, but also on other investors, and also on the ability of the markets to allocate capital and promote growth in the economy. Ivory, what about you what impact would you be seeing here well, i think its going to impact the ordinary investors. Wealthy investors can plan around after Tax Investments that, you know, are subject to capital gains, but the ordinary investors, the smaller investors will certainly see a bigger tax cut. Another thing people havent considered is that when investors give money or stocks to charities, they tend to give the lower cost base stocks of charities. This might impact who saves the government money because theyre providing a need for people who are in need, and then also, think about the ro bo traders, right, this is a Disruptive Technology who are touting themselves as tax harvesting and so this is, this is going to affect them and their ability to market and you never to want have a Disruptive Technology mitigated by legislation yeah, ivory, its a good point. I was thinking of the roboadvisors selling their ability to have the tax laws vavrsing engines and making a portfolio over time. I would wonder about the fact that there would be adjustments if in fact this ever became law, for example, wasnt shorting against the box a technique not that long ago that was restricted and people have somehow found a way to make tax sufficient portfolios around that oh, absolutely. I think there are going to be some changes to the legislation. Im interested to see what impact the 300 million that the securities and Insurance Industry spends lobbying will play in this are they in favor of thwarting their competition or are they against the mutual funds in their portfolio and in their lineup becoming less competitive . Yeah, and mike, my only thought when i saw that number two tahoe, they are shaken, looking for every coin to try to pay for this thing. That is exactly the inference you come up with by the way, this was only taxes that were deferred otherwise right, so theyre kind of front loading revenue to the government that in theory was going to be there at some point along the way. Well see if they bend on this like they have on some of the Silicon Valley Stock Options and other things tom and ivory, thank you both for joining us thank you up next, well get analysts reaction to ciscos earnings that just crossed a couple minutes ago. Still up about 4 . Whether you should buy what has been an underperforming dow stock right now. Plus shares of papa johns slumping 14 since the ceo blamed the nfl anthem controversy for slicing into its sales now the company is in full damage control, even issuing an apology. Well have all of those details, coming up. Not rebalancing your portfolio. Focused on what you love, not how your money will last through retirement. We make it easier to plan for retirement with day one target date funds from prudential. Look forward to your 401k plan. 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 it can detect a threat using ai, and respond 60 times faster. It lets you know where your data lives, down to the very server. It keeps your insights from prying eyes, so theyre used by no one else but you. It. Is. The cloud. The ibm cloud. The cloud thats designed for your data. Ai ready. Secure to the core. The ibm cloud is the cloud for business. Yours. [ 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. Not rebalancing your portfolio. Focused on what you love, not how your money will last through retirement. We make it easier to plan for retirement with day one target date funds from prudential. Look forward to your 401k plan. Pretty big move for a company like cisco, shares up 4 after earnings came out just a few moments ago. Joining me now, daniel ives is here whats the headline do you think from this quarter for cisco . I view it as a step in the right direction. They definitely have clearer head winds in terms of big ticket items on switching and networking youve seen the transition there, more of a subscription model, software approach, i mean, romes note built in a day. Even for a fundamentally Hardware Company look, but theyre starting to meet that shift to a Software Centric model. Thats been their playbook from an investor perspective, you didnt need a lot here to sort of get the bull case going. And i think this is one given the cash flow, given where theyre positioned, i think its one where i think that sort of transformation is in half. Investors have something to hang their hat on here. Eric, do you agree . Its certainly encouraging, this has been in transition for a good couple year under the management of chuck robins and weve had some mixed results so i think theyve made some management changes, i think this is certainly a good sign that maybe things are solidifying and maybe they can start moving forward. And accelerating some of the growth which has been lacking for a little while here. Yeah, i mean, dan, its obviously been kind of stuck in this relatively slow organic growth mode. Do you think theres anything cisco needs to do to change the portfolio, be a more aggressive acquirer i know theyve done some of it you saw that, but i do think organically going to move the needle, but acquisitions i didnt expect them to make more significant acquisitions, in security, in cloud, if you look at the transformation, look at what the dow has done and microsoft, oracle. Right now theres a window of opportunity for them to turn this around and make sure theyre not left behind. Thats going to be organic and acquisitions if you look at these results, its a step in the right direction and shows that the underlying factors there are starting to shift positive how much of a Software Company can cisco ultimately be . So they would like to get it to 50ish percent between software and services. Right now, specific to kind of the growth elements which is the software components, its only about 15 of revenues which is their Application Software and their security software. So they can, they can ramp that up in a meaningful way and that would be critical for margins as well as for growth yeah, and they have a host of other issues to deal with. Im sure well hear more about that on the coal ceo, thank you, dan ives with the shares up nearly 4 . Ciscos chuck robins will join the crew friday at 9 00 a. M. On squawk on the street. L brands earnings are out. Lets get over to that report. Hi kelly. L brand shares moving lower after reporting an earnings that came in flat or in line with expectations, excuse me, 30 cents adjusted revenues at 2. 62 billion. Although in the press release, the company says for the third quarter, the exit had a negative impact of about 2 Percentage Points to both the total company and victoria secrets comp sales. L brand shares down now more than 5 . Lets switch over to the upscale furniture seller, Restoration Hardware which really has been focussed on streamlining its inventory operations this year the company raising its guidance its q3 guidance, you can see the stock is up more than 12 , building on off of what is a stock op about 170 here in 2017 big winner lastly in the tech space, net app reporting better than expected earnings, 81 cents adjusted, strong beat, the Analyst Consensus was for 69 cents, revenue at 1. 42 billion. That too came in higher than what was expected. Guidance also strong and that stock up nearly 7 kelly. Thank you very much mike, big movers there especially rh. Yeah, Restoration Hardware is a fascinating story. Huge contingent of short salers think its a mess. Enormous leverage buyback. So its essentially direct tug of war between the ceo and the shorts and you see they actually had good enough results for another pop today. Rh was one of bill millers investments which just adds thats right. Oh yeah, hes more than willing to stand in front of the semiabled short sellers on a risky stock with an aggressive Balance Sheet and say i see something there. Keep an eye on that one l brands, stocks were up from 39 to 47 since august, it had this move i think its going to be about the skbrout look. Its 52 week range up at 75 its had this kind of stair step down. Those shares awe you mentioned down more than 5 now after the report time now for a cnbc news update, lets get over to sue herrara. Hello everyone, heres whats happening that the hour. Investigators found another victim from the deadly shooting spree in Northern California the gunmans wife. Her body was hidden in the home. They believe she was the first victim of the shooter. You see his picture there. Hes been identified as kevin neil he literally cut a hole, cut a hole in the floor, were confident that he murdered her, shot her at some point, probably late monday, and literally just put her body in the floor and covered it up. A massive pileup on a highway in china killing at least 18 people. Another 20 people were injured Officials Say more than 30 cars were involved. It began when a car crashed into a bus and hit the oil tank on the bus which sparked a huge explosion. And for the First Time Ever, scientists have tried gene editing inside the body to cure a disease. The experiment was done earlier this week in california on a 44yearold man with a rare metabolic disease. The patient received billions of copies of a corrective gene intervenes youly to permanently alter his dna. Signs of it working could come in about a month so were going to keep track of that story and we wish him all the best of luck that is the cnbc news update, kelly, ill send it back downtown to you. I was going to wish you a happy birthday, but after that news update, im not feeling so happy. Thanks, kelly i appreciate it. I know, there was kind of grim news today unfortunately. Anyway, you have a happy birthday. Thank you so much i appreciate it. As always sue herrara. Lets look at how we finished the day on wall street. Testifies red across the board s p down about 14 and nasdaq down 31, russell down seven, everyone was down half a percent today. One of the deeper selloffs weve seen for several sessions now. Lets get to some of the other big stories of the day in our rapid recap. The purpose of this is to cut taxes for everybody, and so, we want to keep doing that and we know that this fix is really knows make sure thats the case. Yes, that is one of the bottom lines for the house. The doj staff has been approaching state attorney general. This is a fairly typical in this case, what were hearing at least is that while approaching a number of state ags, perhaps as many as 19 or 20 of them, theyve gotten very few of them, at this point to sign on to the complaint. Stores still matter theyre still going to generate the marngt of retail sales for years to come. Our new brands have been incredibly well received it was just a couple days ago that we introduced hearth and hand, collaboration with chip and jo, and the reaction across the country has been amazing its driving traffic to our stores visits to our site the head of the cfpb basically has sent out an email saying his intention to resign as head of that office by the end of the month its like other Global Markets are more fundamentally valued i think the u. S. Is ahead of the pack so to speak and again, not that, you know, things are going to go down, but i think were basically at a peak. And then just before the market closed, mike, word that senator ron johnson will oppose the Senate Tax Bill, do you think thats why were down 138 here i dont really. We were down 160 on the dow, both today and yesterday in the morning and you kind of clawed your way back i think its been a global kind of risky move. I keep pointing out, japan is down 6 from the highs, europes down 4. 5 in the recent highs in the last couple weeks, ron johnson of ohio has nothing to do with that when you put it that way. Thats a fair point. Time now for the takeaway. Today its a streaming version and we again with amazon dropping its plans to create a skinny e bundle according to reuters. Amazon said they couldnt get enough profit or networks to sign on, they concluded that quote, its not necessarily the direction of the tv business will eventually go now thats especially interesting given that a skinny bundle i think is it filo launched today with nonsports Entertainment Offerings from scripts to, discovery, and others, whos got the model right . I was going filo, we can decide what its going to be called here. Dwloon either one has a right or wrong, but everyones experimenting with what the right mix is going to be and the right pricing. I mean, amazon by saying look, were not really clear that a new bundle is the way its going to go. Theres plausibility because maybe people can do it ala cart. You can shop on the platform public. The way you offer movies. Its a buck apiece on the other hand, this filo if thats what it is, people criticized it for being priced too aggressively 16 for nonsports bundle, thats not net cost of those channels in other words if you just passed along the cost of those networks, it would probably be under ten. Wow, theyre trying to build in profit as opposed to build a scale. See if theyre forced to go the other way. Heres what amazon does like a Sports Illustrated tv channel. Times launching the service for 4 9d 9 a month through amazon channels aimed at sports lovers and offer movies and documentaries is this an espn killer no, but i do think its a relatively, you know, shrewd, i think lowrisk way to see what espn has not just espn, theres a bar stool sports was getting in bed with espn, now theyre doing their own streaming network or Online Network and i think its an extension of the fact that every publishing site has become video. I mean, video is where are all the ads are. It does make sense obviously its not going to be kind of live anything, live sports, but, it makes sense. I think the si brand has value they can tell some stories wait to see if theres any swim suit i would imagine they might make use of that in the slow months of the winter finally hulu is offered for free its going to have limited commercials. Hulu will reportedly get a cut of sprint subscriber revenue per month. Calm of things, tivo did this with network can the network handle it and whats the takeaway from doing this partnership no idea if the network can handle it. Its another reminder that what these companies are, whether its at t, verizon, sprint or tmobile, theyre just data theyre just data clearinghouses and all they need is to find new ways to maximize data load on those networks so that they can sell it to you even if its unlimited, theres always caps. So it makes a lot of sense, but ting shows you that thats kind of the table stakes now. You have to have something content oriented for subscribers. At some point i dont think hulu is for sale right now not to an outsider. All the sudden if you could pick up if you throw content out there yeah, the verizon approach. Kind of cobble some tough together exactly a lot of changes under way across that whole sector papa johns has a problem on its hands the Pizza Company is doing an about face after blaming the nfls anthem controversy for sliding sales. Details on an apology up next. And were keeping a close eye on all of these after Hours Earnings movers were there are some big ones, rh up 14 cisco up 4 . L brands moderated about 3 . Were going to get a check on alofhe sckcoming up. 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. thank you. And im the founder of ugmonk. Before shipstation it was crazy, like. Its great when you see a hundred orders come in, but then you realize ive got a hundred orders i have to ship out. Shipstation streamlined that whole process. The order data, the weights of the items, everything is seamlessly put into shipstation, so when we print the shipping label everythings pretty much done. Its so much easier so now were ready, bring on the orders. Shipstation. The number one choice of online sellers. Go to shipstation. Com tv and get two months free. On the companys november 1st Earnings Call, protests for lackluster pizza sales and the controversy has continued to grow for that nfl sponsor. Kate rogers is here with the latest kate hi kelly, thats right. Papa johns late last night sent out several tweets an apology after johns controversial comments over the nfl and statements made on Earnings Call were describing factors and we sincerely apologize to anyone that thought they were divisive. That definitely was not our intention, we believe in the right to protest inequality and support the players movement to create a new platform for change we also believe together as americans we should honor our anthem, there is a way to do both they would find a positive way forward. Theyre open to all except neoin a zis and included the middle finger emoji they did have a big impact on the stock. Papa john ses down 14 since october 31st, that is the day before the call on that day, it lost 8. 5 . That was its worst day in about two years. Falling as much as 12 for the year papa johns is also down more than 30 while the pizza competitors are faring better dominos is up by around 10 and yum brands which owns pizza hut is up about 25 for the year pizza hut and dominos did not cite any impact on their bottom lines, kelly back over to you thank you, kate what a saga. Kate rogers. Speaking of sagas, bitcoins wild swing continues news that Payment Company square is testing in on its cash app were going to hear from the cfo kpumg and on fast money, the father of high speed trading has a rnwaing about bitcoin, more closing bell right after this. You always pay your insurance on time. Tap one little bumper, and up go your rates. What good is having insurance if you get punished for using it . News flash nobodys perfect. For drivers with accident forgiveness, Liberty Mutual wont raise your rates due to your first accident. Switch and you could save 782 on home and auto insurance. Call for a free quote today. Liberty stands with you™ Liberty Mutual insurance. You know we often ask celebrities about their biggest money mistakes when they appear here on the closing bell fran fresher delight and her Financial Advisor who shes brought with her about thousand avoid one of the biggest celebrity money mistakes it has to do with charity. Here at the New York Stock Exchange, theyre going to tell us right after this. Baa baa black sheep, have you any wool . No sir, no sir, some nincompoop stole all my wool sweaters, smart tv and gaming system. Luckily, the Geico Insurance agency recently helped baa baa with renters insurance. Everything stolen was replaced. And the hooligan who lives down the lane was caught selling the stolen goods online. Visit geico. Com and see how easy it is to switch and save on renters insurance. My biggest money mistake oh, geez, probably those roomba vacuums. I kind of got obsessed and just started buying bunches of them and theyre bumping into each other and chasing my cat and knocking things down and breaking them. That was sort of a mistake i realize i had a dumb investment, when i was on happy days finally making cash, i got talked into investing in super cow embryos, that would yield cows with a lot of milk. No you didnt were going to get rich not a dollar. Okay, weve heard a lot of celebrity money mistakes here on the closing bell today managing wealth for a number of athletes and celebrities like Fran Drescher and theyre both here to discuss the mistakes people make when giving to charity. Thank you for being here youre welcome, thank you for having us. Did you make a mistake and learn or whats going on here . No, i think for me personally, i think that the only mistake that people make is when theyre not true to their heart and they dont follow their guts and, you know, they dont make ethics and principle their guiding light. And thats the only thing. I think all too often, you know, we make money money the priority and we dont really think about whats of true value as long as you make that your guide, and, you know, we both are kind of on the same page about that, she understands that thats where im coming from, its a good marriage, because we have to this in terms of Conscious Capitalism it cant be at the expense of everything thats of true value. Youve brought your adviser, melanie, who is the head of philanthropy management at Morgan Stanley what mistakes do you think people make when this comes to giving to charity . The first thing is theyre not following their heart and theyre not following great advice in many instances, clients, not necessarily celebrities but all individuals who are donating property or assets or their time, dont think strategically about what theyre doing so you need to be mindful of, is this organization aligned with my mission, is this truly the area of focus for my giving. The second is, have i narrowed down my choices. For fran, her focused area is in the space of cancer, but shes specific about the way shes approaching cancer and not looking exclusively at cure, right . Looking at the opportunity for prevention and, you know, i mean, she can pull her hair out sometimes from me because i dont want cancershmancer. Org to be supported by companies that are part of the problem. Even if the right hand is doing good, the left hand is part of the problem. And so theres a disconnect there. I really want her to connect me with people that are pure in their interest, in really trying to grasses that our lifestyle and what we buy has a lot to do with why we get sick and congratulations, because youve had so much success with your philanthropy, its good to know about that approach thanks for joining us. Today is National Philanthropy day even better check out cancershmancer. Org whats happening, seema . Reporter tryon has won a seat, a win for nelson peltz pg e can still contest it. Shares of p g are up michael, this is a huge turn of events. Now, peltz had always said its very close, i dont want to give up both sides said it was close, p g was quick to say all the money they spent in fighting the effort was worthwhile. Its true when the vote was thought to have gone p gs way, stock sold off shares are up about 3 1. 75 after hours. They said were doing this with the company anyway, this is a signal that peltz is going to bring a little extraaccelerant,t of eyes to get this transformation moving quicker. What will be the first reaction by the company . Hes won we have to have the official count, right this isnt bush v. Gore, is this hopefully not i think david is with us on this big turn of events. Reporter i havent seen the company confirm it yet, kelly, 43,000 votes is nothing, mike, you know that, at a 91 stock, its not a lot of money, 4. 3 million, not even 4 million bucks. Its so close. Let me quickly go through what happened here, of course whats most important is p g declared victory as we all know in a hardfought proxy fight that went on for months and months and ended up getting fairly heated despite the hopes on both sides that it would sort of stay civil. They declared victory. It went through an independent inspector of elections what they found was the victory was by 43,000 shares or votes, a virtually indecipherable amount of votes if it holds up and there is a challenge period, that will be it, mr. Peltz will take a seat on the board of p g, certainly quite a turnaround given the companys decision to make a decision that it had won that proxy fight. Well have to see what the company chooses to do after that but thats where we stand right now, guys. Apparently the recount has shown they have won at tryan by a very small margin, but nonetheless one that reverses the statements of the company were waiting for an official announcement and whether theres going to be the challenge, which is the right of either side. David, it reminds me of when Hunter Harrison was brought into csx and shares skyrocketed with Procter Gamble, a 3 increase for the 60 million total spent over this and for this big turn of events which youve just broken the news on, in a way indicates it doesnt matter so much even if this does happen what do you think will change right away at proctor if they have peltz on the board now . Reporter your points welltaken certainly one person can make a difference mr. Peltz argument was, whats one more person, come on, guys, im only one more guy who wants to be added to the board, i dont even want to take anybodys seat but he does have a particular point of view, he does have a very strong personality. And certainly, given the war that was waged by p g to keep him off that board, one would expect they think hes going to have a lot to say in that boardroom. But nothing is going to happen overnight, although you can see there is an impact with shareholders believing over time at this point his appointment to that board will be a positive. Again, i dont want to get too far ahead of ourselves here, just to recap, the recount took place, as is always the case it was so close but p g declared victory. The independent inspector has reported that tryan won by 43,000 votes or shares, and the question is will there be a challenge or will p g say, okay, join us. David, can you remember another case like this where the vote has been so close and overturned from what we thought we knew about what the answer was . Reporter no, i cant, at least nothing comes to mind. Nothing certainly of this significance there may have been some cases, kelly, that ive overlooked because they were smaller proxy fights or something along those lines. Nothing comes close given the high profile that this had remember, this was the Largest Company that ever had been dealing with a proxy fight of this nature . Even though it was only one board seat, unless were talking about, as you know, a 200 billion plus giant and this is going to change the whole narrative, people will write stories about how all the moneys been spent and the turn of the tide, and companies are fighting back after bill ackman lost adp and so forth, now all of a sudden activists claimed their highest profile, highest dollar amount target yet no doubt about it, companies are still going to fight this one did fight pretty hard i do think it raises the question, i think the assaults on p g and the efforts with adp as well which did not succeed did show you that activists were a little bit at a loss in terms of trying to find ripe targets because these were not truly broken companies that part of the story remains intact yeah, its very much true its a huge win people thought it was folly to go after a company of this size. As i thought about it, it was 43,000 shares, that is the margin it is basically nothing, its 2. 5 billion shares i believe is the total. Hanging chads, david. Reporter its a rare day when i can tell santoli something. Thats because you dont show up in the 4 00 that often. You would probably have a lot of opportunity. Reporter i know how long a day you work, and you know how long a day i sometimes work. I would like to come to you, mike, because david taylor here, do you think hell come under some pressure . That certainly has to be a question, given he testified against peltz and the decision to declare a victory, and we dont know whether the challenge will take place, but it doesnt look good certainly on paper, does it . I agree with that, it was clearly also his decision in terms of what kind of tone to strike in countered the peltz move and yes, to spend that money and declare victory. I do think there will be some pressure, i dont think its the kind of company that will make rash decisions necessarily, but its worth asking the question especially since peltz had that back and forth as to whether taylor could claim any credit for the Stock Performance since he was there and all the rest of it not over david, when are we going to for sure reporter i dont know, but we do have a press release out, so we can stop the sources and say what weve already reported for the last 15 or 20 minutes or so, is official. Independent inspectors preliminary report shows nelson peltz elected to Procter Gambles board again, kelly, the key will be the challenge, i dont know whether p g is going to challenge or whether hes just going to sit down and get on the board. Whether theyll draw this thing out. Like in 2000 ill stop drawing the comparison david, great stuff, thank you very much, david faber reporting that in fact nelson peltz has won a board seat at Procter Gamble 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. O tonight on fast, shares of cisco surging after hours, that Conference Call is under way, well bring you the details as they unfold. Plus top strategist at wells fargo says he solved the market mystery. Hell be here to explain and