Transcripts For CNBC Closing Bell 20180125

Story here for stocks. We could look at a record close for the market the dow is up 63 but coming off its highs. Courtney reagan with stay closer look. The stocks falling a bit here as the dollar strengthens, like you mentioned, those comments from President Trump to joe kernen in davos. We have found some footing lets see what happens going into the final hour here not a repeat of what we saw yesterday when we saw this pretty fast fade around the european close time. Its the big m word thats being discussed as the main driver for this rally. Momentum thats taking equities higher there are commentaries coming out of the blue chip dow earnings, like caterpillar, and bellwether indicator like 3m we do have that phenomenon happening today. Caterpillar, 3m and Goldman Sachs helping to lift the Dow Jones Industrial average health care, materials, among the strongest sectors. And biotechs etfs, the hxb and bxi. The aerospace and Defense Group is hitting a new intraday alltime high today led by rbc, northrup, General Dynamics and boeing is in there, too. Momentum is lifting many boats but not the transports no boats in there. We have the airlines and those are being weighed down today in the transports down again for the Third Straight session so, thats something we can continue to watch. Tech has faded throughout the session today but it wasnt the big laggard like yesterday apple is down and we know that weighs heavily across the board when we see that. Were starting to play the script in reverse with that dollar up, now golds down, oils down, and the s p is down. Courtney, thank you. Lets talk about this wild ride. We did hit multiyear lows. The dollar index was in the 88s. Then the president spoke with cnbc and said he supports a stronger dollar. Yeah, i think they were taken out of context because i read his exact statement. Ill tell you where i stand, which is ultimately very important. Number one, i dont like talking about it because, frankly, nobody should be talking about it it should also be based on the strength of the country. We are doing so well our country is becoming so economically strong again and strong in other ways, too, by the way, that the dollar is going to get stronger and stronger, and ultimately i want to see a strong dollar pretty clear there. The president spoke defending treasury secretary Steve Mnuchin who earlier today in davos clarified his remarks from the day before suggesting a weak dollar is good for america listen my comments have been that in the short term where the dollar is, is not a concern of mine, okay, that it will fluctuate that in the short term theres obviously benefits and issues with a lower dollar. Again, in terms of the benefits, it is beneficial for our trade imbalances there are also issues for people who hold dollars i want to be clear in acknowledging both mr. Mnuchin would not be the first treasury secretary to have to clarify his position on the dollar, thats for sure. And i wonder if they all read the wall street journal yesterday saying, do you want to be associated with the weak dollar president or the strong one . Dominic chu has a look at some that could get hurt. We know variable prices go into a stock and how much a company is worth the dollar is a big part of that story because for the most part a lot of businesses in america get revenues from abroad and they have to translate those and profits back into u. S. Dollars so the value is important. As you point out, a wild ride today. Watch some etfs that attract the value of the dollar. Within the s p 500 is there are stocks on both ends of the spectrum, those more heavily tilted toward International Business and more domestically focused. According to data from msci and factset, these Companies Get a lot of their revenues from abroad they do a lot of business there, so they could be stocks more at least sensitive to moves on the dollar mcdonalds gets twothirds of their revenues internationally also estee lauder, 70 intel, 78 priceline. Com, around 84 , 85 numont mining, almost all of it international. On the flip side, check out these companies because a whole slew of them within the s p 500 get almost all if not all of their revenues domestically. Chesapeake energy on the natural gas side, 100 of all revenues here domestically. Nordstrom and u. S. Bank, 100 of their revenues, and kroger 100 as well. Around a quarter of the s p 500 is all 100 revenue focused on america. Certainly some names to watch on both ends. Either insulated from dollar moves or perhaps a little more susceptible to them. Back over to you. Dom, thank you very much. Well see you a little later. Lets talk about who wins and loses from a weak dollar joining us, tom essay from the sevens report. Good to see you. This is a situation where the government will talk up the dollar but, you know, the strong dollar is in the best interest of the United States at the same time, a lower Dollar Benefits the companies that they are trying to support right now, those multinational exporters who benefit from the lower dollar and it helps our trade deficit. You cant have it both ways. They tried to, i guess, right . Youre right. Theres unfortunately no clearcut answer to the question, is a strong dollar good for america or is a weak dollar good for america . A strong dollar certainly benefits some aspects of america. We import the vast majority of our goods in america so, consumers certainly feel it when the dollar weakens in terms of rising prices the u. S. Has a massive current account deficit and we depend on Foreign Investment, foreign capital flows into the u. S. To fund that deficit. So, we need a strong and stable dollar to continue to encourage Foreign Investment into the u. S. Its also true that a weaker dollar helps corporate america, by and large, especially Larger Companies that you report on and the s p. So, Large Companies tend to benefit. Small to medium size companies, where my firm operates, not so much they prefer a stronger dollar. Can be tricky for the consumer, too. I want to draw your attention to whats happening in the dollar right now. Even after the president just came out and said its going to get stronger and stronger, were barely in positive territory on the dollar index, which now im going to ask you, how weak is this thing you know, its pretty weak. Its been a substantial move, especially in the currency markets to started the year. When you consider Economic Growth in the u. S. Is as strong as its been in years, were expecting at least three fed rate hikes the fact were talking about an 88 handle on the dollar is a bit shocking and it shows you just how much momentum there is in this market. Really what people need to focus on in the currency markets right now isnt so much what the u. S. Is doing, even what the treasury secretary is doing its what the bank of japan and European Central bank are doing because the dollar is trading lower. Euro and yen getting stronger on the anticipation of less accommodation from those Central Banks. Thats the real driver of the dollar today i mean, tom, were at a threeyear low for the dollar index for the most part. Do you see it going much lower from here . Theres so much momentum in this market. You know, you want to sell things making lower lows so we could see a bit more of a decline, but at some point fundamentals matter, right it would still appear were the Fastest Growing developed economy in the world the fed is more likely going to be more hawkish than less hawkish this year. So, is there value in the dollar near these levels . I think over the longer term, yes. How much do you expect political rhetoric to push the dollar around here, relative to Everything Else . Its surprising how its become such an issue again in the last couple of days. Its a little headscratcher to see the treasury secretarys comments and then the president dialing those comments back a little bit so, i think perhaps we might see a little lull here we saw a similar kind of effect around other global forums, whether it was at the u. N. Or whether it was at the g10 last year we saw this kind of protectionist rhetoric, this america first, weaker dollar kind of rhetoric come to the forefront of those summits and gatherings as well i suspect if recent history is any indication, well see a little lull here i agree with your other guest that well eventually see probably sooner rather than later fundamentals come back into the picture and i think provide a little floor for the dollar gentlemen, thank you both thanks for your thoughts on the dollar today thank you we have are 50 minutes to go still. Dow is up 61 the russell has been hit harder by the weak dollar small caps are down four points. But the broad market, the big companies, the s p also down the transports are down nearly 200. Well keep an eye on all of this as we head into the close. A lot of volatility well show you much more of joe kernens exclusive interview with President Trump and much more ahead on the closing bell. Announcer coming starbucks is gearing up for earnings after the bell. Will the report provide a caffeine jolt to the stock or leave investors roasted . And bitcoin on notice. Well tell you what leaders like Christine Lagarde and larry fink said about the need for regulation in the world of crypto the closing bell is back in two minus. Te is the monolithic view of emerging markets obsolete . At pgim, we see alpa in the trends, driving specific sectors of out performance. Where a rising middle class powers a booming auto industry. A leap into the digital era draws youthful populations to mobile banking and ecommerce. Trade and travel surge between emerging markets. Everyday our 1,100 investment professionals around the world search out opportunities for alpha. Partner with pgim, the Global Investment management businesses of prudential. I thyou never got the brakes looked at . L. Oh yeah. No. At cognizant, were helping todays leading manufacturers make things that think and do automatically. Imagine that, a world of new Digital Products and services all working together for you. Can i borrow the car when its back . Get ready, because were helping leading companies see it and see it throughwith digital. Welcome back another interesting day. Kind of a headscratcher the dow is up 58 points, which would put it in record territory. The other major averages are trading lower. Second day in a row weve seen this pattern. The dollar has been a focal point today with all the talk about it at davos, which well get to in a little bit here. Newell brands, by far, has been the worst performer in the s p today after the Company Announced a major restructuring that could include the sale of its industrial and commercial businesses and close up to half of its factories and warehouses. The Company Also Announced three Board Members are resigning. The stock is down 21. 5 right now. Big President Trump arriving in davos today for the World Economic forum a few minutes ago we showed you what he just said to our joe kernen about the dollar, but the two also spoke about the president s views on trades. I like bilateral because if you have a problem, you terminate. When youre in with many companies, like tpp, 12 if we were in, you dont have that same you know, you dont have that same option somebody asked me the other day, would i do tpp heres my answer ill give you a big story. I would do tpp if we had a much better deal than we had. The deal was a horrible deal nafta was a horrible deal. Were renegotiating it i may terminate. I may not. I went around and tell stadiums full of people you may reenter are you opening the door to reopening tpp . I would do tpp if we were able to make a substantially better deal. The deal was terrible. The way it was structured was terrible if we did a substantially better deal, i would be open to tpp. Well, you can catch more of that interview tomorrow, 6 00 a. M. Eastern time on squawk box. Joining us right now with their thoughts on the president s talk about trade and the dollar, jimmy, cnbc contributor from the American Enterprise institute and jared bernstein, also a cnbc contributor from the center on budget and policy priorities good to see you both jimmy, is this part of the negotiations, you think, the president opening the door to multilateral trade agreements when in the past he said he only wants bilateral and fair trade agreements for the United States i think the problem with putting, i think, an optimistic spin on those comments is that all these trade ministers from Asian Countries are looking at whats going on in with nafta right now, where they see its been a complete fiasco its close to collapse the administration has made unreasonable demands even in that interview, the president failed to make a substantive critique of the pacific trade deal the way he judges these trade deals fund mentally, if theres a deficit, its a bad deal thats hindering them with nafta and the pacific trade deal, which has sort of moved on without the United States. Jared, how do you think the public would react if the u. S. Ultimately joined the Transpacific Partnership well, certainly not just trumps base but a lot of people on the democratic side would be unhappy if it werent a very different deal now, i kind of agree with jimmy. When donald trump says the structure of the tpp was terrible, i really dont know what he means in terms of what would be less terrible what does he want . Does he want to get rid of the intellectual protection, rights of origin, currency controls these 12current agreements are multidimensional chests and its very complicated yeah, if he were to say, im signing onto the same old tpp he would engender a lot of discontent thats not what hes saying. If he says, i want to sign onto a different one, what difference are you talking about . Hes open to the idea of a multidlarl agreement the problem is the other multilateral agreement is not goingwell. Until it says exactly what he wants from these deals, what would get him to yes, then its just rhetoric. I kind of think well, go ahead, jared. I think jimmy made a fundamental point that i dont want to lose i think for donald trump what really matters is if theres a negative sign in front of your trade balance with the United States if there is, hes unhappy. If there isnt, he likes it. Any trade deal, any negotiation that doesnt have america end up with a positive trade balance is one thats going to make him unhappy. By the way, his comments about a strong dollar are actually kind of inconsistent with the rest of his program. I can remember a time when treasury secretaries and president s would attend gatherings like this and they would get an earful from their trading partners about the strong dollar and the impact it was happening on trade do you think to some degree the clarification by mnuchin about his view of the dollar had something to do with some trade partners saying, you know, you got to worry about this weak dollar, especially when you consider the increase in tariffs that they fear may be coming, jimmy . Listen, heres what you have to be prepared for if youre a trade partner with the United States that this will not be the last time you get whipsawed probably by the with the president or treasury secretary or somebody else in the administration the president s impulse is obviously toward that he thinks a weak dollar is good, he likes low Interest Rates he has certain impulses hell talk about i realize it was mnuchin this time obviously, the president has talked about this in the past and hell walk it back so, i think what you have to expect is volatility jimmy, is the Transpacific Partnership a fixed document right now . Whats in it or is the whole thing flexible and can it be can the terms be determined by the u. S. . Yeah, i mean, again, theyve moved on the other nations are coming up with a document, so the u. S. Would have to come in at a later date, renegotiate what was already a very lengthy negotiation process and change it how i mean, the president wanted to update nafta thats what the pacific trade deal did it updated nafta so, i am not all clear as jared said earlier what the president would want other than a trade surplus thats not going to happen from these deals. That is not something you can negotiate into a deal. The you know, jared, i wonder how much of a position of strength the u. S. Files like it has right now going into davos here after the tax cut and the impact it seems to be having on major corporations and now the talk of all the repatriation of cash thats going to come back to the United States here and how that helps strengthen the president s talk of trying to come up with fair trade agreements with some of these trading partners you know, its a great question i think theyre kind of two different audiences when it comes to davos one is kind of multinational ceos from around the world and theyre all going to be figuring out how this plays out for them. I think for the american multinationals, the tax dleel is very favorable my understanding is that trump is being, you know, kind of warmly welcomed by global ceos i think trade ministers have a much bigger problem. You see that with this little dollar up and down i think its a real microcosm what we saw. The lack of clarity that youre always going to get from the trump administration, whether its fuzziness on what they really want in a trade agreement or where they want the dollar to be or where trump wants Interest Rates to be. Its all going to be very confusing relative to past u. S. Positions that have been much more clear jared, just before we go, you mentioned that if the presidepresident or the u. S. Did join the tpp, democrats would be unhappy what specific provisions would they be unhappy about . Precisely the same ones they were unhappy about last time intellectual protections, much more protectionist than free trade. The investor state dispute part where sovereign governments really get undermined by these tribunals. No chapter on currency management i think those would be the real big sticking points, the absence of that last chapter on currency in particular and the isds thats something progressives really dont like. Not just here, in europe as well jimmy, anything you think would go down poorly with the republicans . The republicans are very confused right now, what they think about trade. You know, they dont know if its a good thing, they dont know if its a bad thing theyre confused about nafta again, theyre kind of like the president. If you ask them how they would like to have the pacific trade deal changed to be more friendly, im not sure you would get certainly not a single unified answer maybe many different answers all right guys, thank you. Jimmy, jared bernstein. Adding to the close, 38 minutes left in the trading session, the dow is strengtheni strengthening. We were up 90 points a moment ago. The s p, the nasdaq, the russell all fractionally lower. Starbucks shares have been basically flat in the past year. Coming up, a debate on whether the coffee giants earnings, due after the bell, can heat up the stock. First, one wall street firm becoming the ultimate amazon bull after significantly hiking its target price well have those details when we come back. Obvious. Sometimes, they just drop in. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. The dow is up more than 100 points and the dollar is weaker, just slightly. Its been a roller coaster afternoon here here are the sectors of the s p 500. Utility leading the way of 1. 5 . Interest rates took a step back. Health care is up there, too on the flip side of things, real estate is and energy are lower energy hurt a little by the move down in crude. I bet the utilities went to the top of the list after Interest Rates started to move lower when the dollar went higher all these things this interrelationship going on today. Meanwhile, amazon shares have been higher after d. A. Davidson raised the target on the stock to 1800 up from 1500 because of strength in the Cloud Business thats a 33 increase from its Closing Price of wednesday its also the higher target price for any firm covering amazon, which is up 1. 1 today theyre playing, can you top this on wall street right now. Amazon shares up more than 60 in the past year. I cant do the math in my head that quickly, but im wondering at 1800 what its market cap would be for does that put it over the top . I dont think it does, to the trillion. It would be close close. To give a sense of how big a number that really is. Just about 30 minutes to go to the close the dow is up 110 now. Go figure. Another one of those days where we see a stronger market going into the close here. It will be interesting to see what the close orders are. Airlines grounded despite the broad market rally today find out why those carriers are under pressure and if this is a buying opportunity. Can starbucks brew up a comeback we have a bull bear debate later on closing bell. My experience with usaa has been excellent. They always refer to me as master sergeant. They really appreciate the military family, and it really shows. Weve got auto insurance, homeowners insurance. Had an accident with a vehicle, i actually called usaa before we called the police. Usaa was there handson very quick very prompt. I feel like were being handled as people that actually have a genuine need. Were the webber family and we are usaa members for life. Usaa, get your insurance quote today. So, howell. Going . We had a vacation early in our marriage that kinda put us in a hole. Go someplace exotic . Yeah, bermuda. A hospital in bermuda. A hospital in bermuda. What . What happened . I got a little overconfident on a moped. Even with insurance, we had to dip into our 401 k so it set us back a little bit. Sometimes you dont have a choice. But it doesnt mean you cant get back on track. Great. Yeah, great. Id like to go back to bermuda. I hear its nice. Yeah, id like to see it. No judgment. Just guidance. Td ameritrade. Welcome back time for a cnbc news update with tyler mathisen. Lawmakers on capitol hill want to make sure the false Ballistic Missile alert in hawaii earlier this month does not recur. The Senate Commerce committee Holding Meeting on the Emergency Alert system we are quite pleased with the level cooperation we have received from the leadership of the Hawaii Emergency Management Agency thus far. We are disappointed, however, that one key employee, the person who transmitted the false alert, is refusing to cooperate with our investigation fascinating. Fighting intensifying in yemen today following Saudiled Coalition air strikes on rebelheld locations in the southwest of that country. More than 10,000 people have been killed. More than 2 million displaced since the fighting began in march 2015. Egypt moving the ancient colossus of the famed pharaoh ramses ii to a museum under construction near the countrys famed pyramids outside cairo this is taking place amid great fanfare. It dates back some 3300 years. Thats the cnbc news update at this hour. Back to you folks. Thank you, ty see you later. Tyler, thank you. Lets see, how about a quick check of the markets dow is up 103. S p slightly lower transports down 182. Weakness in trains and airplanes there as we head into the close. And i apologize for talking over the twobox again joining our Closing Bell Exchange right now, here at post nine, chris with region atlantic, hes the chief Investment Officer there peter costa of empire executions is the president of said company. East at post nine as well. Rick santelli holds no executive positions at the cme in chicago. Thank you for joining us today chris, im going to start with you, the dollar. There was a time when, you know, you could all things went back to the dollar, you know, whether it was a move in Interest Rates or the equity market or gold or whatever it is is that still the case right now in your view bearing in mind what the president said today about wanting a stronger dollar. The dollar is extremely important. Because if we if we have a weaker dollar, then that means that something that im looking out for, inflation may spike up in 2018 because if we have a weaker dollar, it will cost us more to buy the foreign goods we buy. The reason i ask, though the dollar index has been setting lows, threeyear lows right now, but yet the inflationary implications are lost in the treasury markets because Interest Rates have been multiyear low as well. Right so, thats so, thats where you have to get a stronger dollar, weve got to increase rates. That will that will keep the dollar going so, what this really spells out to me, its trouble for Bond Investors. Either way you go, Bond Investors are not going to be happy. If we have a weak dollar and inflation is there, Bond Investors arent happy you have rising rates and longterm Bond Investors arent going to be happy. Thats my biggest fear, for Bond Investors in this dollar market. Rick, you want to speak to that well, everything chris says make sense i mean, if we purchase less, thats why a strong dollar, a strong currency for any country, if you think about it from the people standpoint, its always the best thing they can buy the most so, if were buying less and europes buying more, the euro may have less of an inflation problem, the u. S. May have more. With regard to Interest Rates, the pieces dont align right monetary policies put everything in kind of a shakeup snowglobe sort of fashion. Everything is mixed up what chris said should make sense, right here we sit one basis point under the high yield of 2017 while the dollar continues to fall 102. 20 for 2016. Were down 14 from that even though there was a bounce today because of the verbiage attached to it, that could be written off as an ekt doelgts with a lot of the computer programs that trade off news headlines. In the end, i think the dollar will stay on the weaker side the euro will stay on the stronger side. Interest rates will move up. I think the problem still lies in europe and japan. I think europe will have a big problem because they are way behind buying the insurance they need with respect to raising rates and dramatically reducing the balance sheet. But i think the further we get in this process and the more Central Banks that go in a less stimulative direction, its at that time i think chris will see that the relationship gets more back to normal and Interest Rates will rise more rapidly and, peter, of course, a lower dollar, as it continues lower, has not hurt the equity markets as we continue to set records. Not at all. And i think some of that i think there is european money moving into the u. S. Based on the fact they can buy more with the euro in the u. S. So, i think there is some European Investment coming in. Its been going on for probably about three or four months i dont think thats the reason the market is up where it is but i think its an underpinning. What about the dow, the outperformer relative to the other averages is it a quirk of earnings led by boeing, but 3m, some results there. What do you think about that my bigger concern is the divergence between the transports and industrials i know thats old school weve gone over this before. Its so important, though. I think it is still important. Even though the one index may not carry as much weight as the other, having that kind of divergence when you see yesterday and today, to me all right, granted, it was earningsrelated, but earnings dont they dont hit the transport market that hard i think theres something more going on here. I think that divergence will show up at the airlines were hit yesterday. United airlines was going to opening up new routes here and starting a fare war. There was reasons behind it, but it is it 190 points on the you know, on the transports 190 today . Thats a lot of movement on the downside. Where do you see us with the equity market now as we keep setting these records . I think theres still more to go its tough to say where its going to end bull markets dont die of old age. So far theres nothing really out there that is a big enough concern to end this rally. Even with inflation and rates and the fed. Thats a whole thats still to come. Thats the main thing out there. Watching all those Central Banks, see what they do. Guys, thank you. We have a news alert now on cbs and viacom eric with those details. Reuters is reporting that the ceos of both companies, cbs and viacom have met and discussed a possible merger. In is a step further than we talked about, about combining those two Companies Back together the boards are scheduled to meet on a regular basis it appears the next time they meet, they will bring up this merger discussion as well again. In is being reported by reuters that cbs and viacom, their ceos have discussed possible ideas about merging the companies together again back to you guys do they even need to leave the building to meet, those two companies . I know that viacom building but i dont but cbs is separate. Blackrock. Yeah. Anyway, that was we can show the shares again up about 1 . They priced in a lot of this already as these reports have been dribbling out, including david fabers over the last couple of weeks. We know its going to happen. When the Redstone Family wants it to happen, it will happen. I guess its about les moonves, not that he could say no entirely. Hell end up running the entire company anyway. Viacom up 2. 5 . Cbs up 1 . I bet bitcoin is on that one. People dont think bitcoin has any value. Youre right. 22 minutes left. The dow up 127 points with other major averages in negative. Ahead, speaking of bitcoin, it has become the buzz word at davos this year, surprise surprise, as leaders weigh in on the cryptocurrency well tell you why that may not be good for bitcoin bulls. Starbucks shares have gone virtually nowhere over the past year can todays earnings provide a jolt well provide that when the csi blom rhtaclongel cesig bk. Most etfs only track a benchmark. Flexshares etfs are built around the Way Investors think. With objectives like building capital for the future, managing Portfolio Risk and liquidity and generating income. Thats real etf innovation. Flexshares. Built by investors, for investors. Before investing consider the Funds Investment objectives, risks, charges and expenses. Go to flexshares. Com for a prospectus containing this information. Read it carefully. We cut the price of trades to give investors even more value. And at 4. 95, you can trade with a clear advantage. Fidelity, where smarter investors will always be. [ click, keyboard clacking ] [ keyboard clacking ] [ click, keyboard clacking ] 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. Welcome back with the rally rebuilding on wall street, the dow up 117 points have you to be specific talking about the rally because the other major averages continue to be slightly lower than nasdaq, the weakest down 12. New meantime, tobacco stocks are under a lot of pressure today after an Fda Advisory Panel said there is no evidence to support the claim by Philip Morris international that its smokeless tobacco device is less harmful than cigarettes. Surprise, surprise, bitcoin has become a buzz word at davos this year. Thats not necessarily a good thing for crypto investors seema mody joins us with more on that. Both u. S. Treasury secretary Steve Mnuchin and imf managing director Christine Lagarde understood the benefits of the currency but turned to the risks, which include lack of transparency. My number one focus on cry o cryptocurrencies and whether that be digital currencies, bit coins or other things, is that we want to make sure theyre not used for illicit activities. So, in the United States our regulations, if youre a bitcoin wallet, youre subject to the same regulations as a bank. I totally agree with what he was saying about the fact that the am anymorenonymity, the lac transparency and the way it conceals and protects Money Laundering and dark trades is unacceptable blackrock Ceo Larry Fink joined the discussion, which was moderated by cnbc, calling cryptocurrency an index of Money Laundering despite the risks, fink said cryptocurrencies is a really technology that should not be dismissed. Guys, that was the big takeaway of these major names in finance are no longer ignoring the rise of cryptocurrencies. Instead theyre focused on the regulatory component no concrete ideas on how this will be done kelly . Thank you, seema. Seema mody meantime, the nfl is about to get some new old competition. Eric has more. Thats right, kelly new, old, however you want to say that, its the xfl coming back Vince Mcmahon, the chairman of wwe, he announced today officially that hes bringing the xfl back he went back and got his old trademarks and investing 100 million of his own money not money from the wwe company but Vince Mcmahons own money into this league he spoke with media a few minutes ago and answered a lot of questions one thing connecting football and politics heres what he had to say. As far as our league is concerned, it will have nothing to do with politics. Absolutely nothing and nothing to do with social issues either. Were there to play Football Players like Colin Kaepernick would be welcome, but players like Johnny Manziel because they have criminal records, they would not be welcome in his league he said this would be a january or february start, start in the year 2020. He has a couple years to work on it it would be about eight teams, ten games with playoffs and championships. No word on broadcast partners, streaming partners he did say it would be a quicker league, a faster league and they would work on those Media Partners in the next couple of years. Back to you guys wow so, what am i missing here . Eric, this is your area. So, weve had a 10 decline in ratings for the nfl this year, maybe because theres too much football on the air. There may be nfl that tefatigue on what was Vince Mcmahon thinking . That was one of the questions asked. He said, if i do this in january and february and do this when all other football leagues are ending, i have an opportunity in seven months of the year when there is no football he thinks theres enough demand across the country that he can get people to watch. If the rules are better, the game is quicker, only two hours, he thinks people will watch that. I support it being quicker. I know we have to go the 30 for 30 documentary covers a lot of this the nfl has changed a lot of ways to develop the pioneering things the xfl was going to do. Like the ska cam and rules adjustments, but you watch the game, it takes a lot of time theres replays, timeouts he said there will be no halftime maybe that will move it up and want have such a slow pace of play. Well see if the nfl copies him again. Thanks, eric did you watch the xfl, the original almost 20 years ago i actually had a relative who coached that in that league. Really . Yeah. But, no, i didnt sounds like a future guest. 13 minutes to go to the close. Dow is up 132 points s p is barely positive transports and down. Nasdaq and russell are lower. Starbucks are hoping the earning report this afternoon provides a pickmeup for that stock. Airline stocks seeing another day of turbulence as a number of major carriers report earnings is an airline fare war coming up well ask an airline ceo coming up lets get started. Show of hands. Who wants customizable options chains . Ones that make it fast and easy to analyze and take action . How about some of the lowest options fees . Are you raising your hand . Good then its time for power e trade the platform, price and service that gives you the edge you need. Alright one quick game of rock, paper, scissors. 1, 2, 3, go. E trade. The original place to invest online. Boy, there goes the market again. Art cashin says it shows an imbalance to the buy side of 500 million with the dow up 127. I was just looking you mention the boeing was the big gainer, 3m, j j, and Goldman Sachs up 1 . Apple is down 2 imagine what the dow would be doing if apple were not down 2 . Its one of the high priced stocks. Thats a great point. Were seeing divergence between the dow and the other but the s p slightly positive. The russell slightly positive now, too. Starbucks set to report after the bell and investors hope the results can give a little jolt to the stock its been a laggard. Kate rogers with a preview. The street is looking for eps of 50 cents on revenues of 6. 2 billion. Same store sales growth is estimated to come in at 3. 3 h globally the Coffee Company opened its shanghai reserve roastery and plans to open two more in milan and new york this year analysts looking to see how streamlined operations will affect its bottom line. It planned to close more tevana Retail Locations investors hoping to hear about the tax rate will affect them. We will hope to hear more on the call later today back over to you. Thanks. Well see you next hour. In the meantime, is starbucks a buy or sell. Nicole, what do you think . We mentioned earlier, starbucks has been pretty flat for the past year. Whats the next catalyst for you . The catalyst is this Management Team setting its track record the comp is very important they have less disruption this year so were looking for 3 in the americas were also excited to see the p l in china finally, the Channel Development business so, everything theyre doing in the Grocery Store is a very powerful model and something we think is very undervalue eric, you think the stock has room to fall i look at the fundamentals. You have a company that has decreased earning growth theres no question. The stocks been flat up until, perhaps, this most recent run. But its matched with the market the comparable same store sales theyre, you know, 3 , what used to be 6 from 2013 to 2015 management just they totally missed projections at the end of 2016 they had to revise them. And youre going into this environment, this retail environment. Its ugly in retail today. I mean, theres no question. And theres been a lot of insider sales. So, thats a big flag for me, too. All the reasons i dont like it. To me, its decaffeinated as a stock. What about the tax cut. Goldman has estimated their savings this year will be about 425 million and they are upgrading the pay and the benefits for their workers couldnt that be a boost for them going down the road look, i think its great theyre updating pay and i think its great for the country, certainly, but i dont think it will have a material difference for the stock in terms of its growth i really dont i think that i just dont see it, no what about this issue, they used to post 6 same store sales growth in the u. S. , now 3 is that the main issue for this stock . I think it is when we look at earnings and we look at the stock on a quarterly basis outside of that, i think that they can start to get credit for other things theyre doing, china in particular, Channel Development. Its a drinking of coffee is very habitual and they need to get back into a cycle of what the new innovation is, how they market that and how they get the customer back more often and how they attach food to that sale. Well see how the numbers look when they report next hour. Nicole miller, art schiffer, thank you for your thoughts today. With the dow up 127 points, here we go again we have the closing countdown coming your way in a moment. After the bell well get another exclusive look at cnbcs interview with president donald trump. Sissorbcfit ing cn, rsin bune wldwide nobodys putting their money into equities. Theyre not investing in commodities or fixed income. What people are really putting their money into is what they hope to get out of life. But helping them get there requires a real refusal to settle for average. Because when you approach investing with a tireless desire to beat the status quo, Something Wonderful can happen. 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Get e trade coming up with the last two minutes of trade here we go again a late rally let me start with the dollar because that has been the focal point this afternoon with the interview portion we showed of joe kernens interview with the president in davos, where he wants a stronger dollar, clarifying what secretary mnuchin said yesterday he believes it will get stronger and stronger the dxy, which set threeyear lows earlier in the day came back a bit we saw other markets respond as well gold went down it finished down a percent today, even though its been setting highs recently here. And Interest Rates also moved to some degree. Lets show you the dow an interesting day we had a stutter step, we up 141 points look at that on the open, that let bottom there caterpillar looked like there was a huge buy order on caterpillar this morning after the earnings came out. Just before the open, that order was withdrawn and down the stock went a little interesting inside story there. Its finishing higher as well today. Look at brent norris, some of that had to do with the lower dollar, but now its gone lower as the dollar went higher here its that interrelationship but still 70 a barrel you wonder how much longer we have to see wti hits 70 a barrel. Im looking at that spread. Getting a little more narrow driven largely by the movement of that dollar. Very much so. We have earnings coming out tonight. Starbucks, we mentioned that already. Everyone watching that carefully. Thats a really, really big one. We wonder what theyre doing internationally, too. And that little chip company, intel. Oh, yeah. It will be interesting to get the guidance there chip stocks have been in a little trouble recently, havent they the Semiconductor Stocks struggling, along with tech in general. The engine continues to march higher look at the dow, up 141 points on the dow a record there and elsewhere stay tuned for earnings coming up on the second hour of closing bell with kelly evans and company. See you tomorrow, kel. Thank you, bill. Welcome to the closing bell, everybody, im kelly evans looks like were going out with more green than we had through the session today. The dow is up 130, almost 140 points right now well see how things shake out thats a half percent gain for the blue chips it comes after some strong earnings performance from Companies Like 3m. The s p looks like its just turned positive on the bell. Both the dow and the s p if they stay positive, that will be a record close russell 2000 flipping just about two points higher as well to close at 1601. Its alltime close high is 1610 so its beneath that the nasdaq composite, the laggard all day, is fractionally lower. Were waiting for two major earnings reports josh lipton is standing by to cover intel numbers, and kate rogers is standing by for starbucks. Thank you very much. Joining me now, cnbc senior markets commentator, mark santoli, and michael from destination Wealth Management. Thank you, everybody topping the dow again today was boeing, repeating a familiar pattern this year and last year. Apple actually trailed over on the s p, Varian Medical Systems was the leader while Newell Brands lagged big time down 20 well have more on that. Mike, the dollar a big story of the day. Looks like its going out a little stronger. What do you make theres a lot of macro back and forth going on in all of these asset markets. This is a flat day for the market dont get blinded by the 140 gain in the dow. The s p is flat. The market has slowed down today. Its not a bad thing its been offsetting action after the earnings thats fine. Bigger picture we have stocks stretched up here, the dollar is stretched to the low side. Oil and bond yields pretty much at the upper end of their range for a long time. Im not saying this has to break apart, but it shows you a little edginess about how far these trends can go. And if theyve gone too far, maybe a selfcorrection of some kind. A little retrace of some kind. Stephanie, what do you think . Well, you know, when we were up so much early on today, underneath the surface it was so much different because there was a lot of anxiety about earnings and the reaction to earnings even caterpillar. Look, caterpillar was fine, Texas Instruments was fine the reaction is the news. Everyone saw the news so that was a little uneasiness. Why is that was there anything was it just were expectations too high was it just reflecting the market backdrop . All of them are up huge all of those the dow was up 3,000 points since thanksgiving. Led by technology and industrials. So, i get that look, union pacific, that wasnt fine there were some issues there ill give you that, down 5 for the day. Probably should have been. Under the surface there was a lot more concern and just wondering what was going on as opposed to this tripledigit rally. We saw in the first week of earnings, a little beat and all this excitement and momentum behind it. Quickly on the transports, union pacific, as stephanie mentioned, was down 5 . Some airlines didnt look so hot after earnings jetblue, for example, following the action we saw there yesterday. What do you think the message is here first of all, i think what mike said is a really great point. People have to remember the dow is up 3,000 points since thanksgiving so, any time you have a breather or you have stocks retracing, perhaps past trading patterns, where there is some concern that perhaps earnings maybe wont be as great as everyone thinks, i think its a perfectly normal sort of pause in the market. Weve gotten to a point here, kelly, that a pause in the market on an underlying basis feels like a down day now. Thats how crazy things have become i think at this point, i think mikes right, you ignore what happened on the top line in terms of the number on the dow on the underlying basis, we basically have a flat day. You had a fun metric, too we should have put you up on the screen for this one. Talk to us about this ratio that could be a sell sign. Looking at how much stocks have outperformed bonds in the last little while. I mean, its been the trend for quite a while now, but you see its at the upper end even in terms of the upend in terms of how stocks of the s p 500 have done compared to longterm treasury does that matter no theres a lot of chatter, you will have these mechanical action by Pension Funds who like to keep a certain portfolio mix. It will tell them to trim back on stocks, maybe buy bonds will that cap yields and take steam out of stocks or is that already happening . Perhaps. I dont think thats the kind of action that, first of all, always happens like clock work at the end of the month, like a lot of people talk about but it is it is something you might see as an occasion for a little reshuffling. Fair enough we have intel earnings out now looks like a pretty good beat. Lets have josh run us through with the numbers intel reporting eps of 1. 08 versus expectations of 86 cents. A beat that. Revenue 17. 1 billion, also a beat the street was looking for about 16. 3 billion. Gross margin, kelly, 64. 8 the dividend is hiked by about 10 . Turning to the guidance, though, kelly, theyre looking for q1 guidance of 5 cents. The street was at 72 cents on revenue, 15 billion plus or minus 500 million they say the street was at 15. 3 billion. In line there. On the call a lot of focus will be on meltdown and spectre, those two big security vulnerabilities. A lot of attention on whatever commentary the ceo can give on that call begins at 5 00 p. M. Eastern. Thank you shares popping more than 2 . What do you think . This is one of the stocks that hasnt participated in the rally we were talking about of all the great stocks since thanksgiving this is down 10 relative to its peers. Year to date its down 3 from its high i think that there are a lot of question marks about the security issue whats going on with intel, you have a new cfo, a lot they can do in terms of costcutting. They have a new product cycle. They have some places seeing growth like data center. Pcs are not so bad, not so good but not so bad and a stock trading at 14 times earning with a decent yield. You can wrap it around saying low expectations, a decent report so you get a little bounce which is so opposite of what we talked about with lamb, which were up so much. And then had a big decline. Intel is only up 1. 5 . Theyre boosting the dividend. What do you make of it all well, i think thats exactly what we should expect is going to happen to these Type Companies that will have huge benefits from tax reform or tax cuts Technology Companies in particular are going to see a significant benefit from tax relief the increase in dividend is not a surprise as stephanie mentioned, there are some challenging issues related to this company. Certainly the security concern will be highlighted on the earnings call. In the end is the Technology Space growing . Yes. Will intel capture some of that space . Yes. Will intel get a tailwind . Yes, given tax cuts. Well circle back to this first, we want to hit starbucks results. Earnings are out how do they like this is a mixed first quarter. The street was looking for 54 cents on eps this came in at 58 cents adjusted this was a slight miss 6. 07 billion. Comp store sales a real mix here they mixed across the board. Global up 2 the street was looking for a gain of 3. 4 in the u. S. Also increase, 2 for same store sales the street was looking for a gain of 3. 2 emea was supposed to increase by 1. 7 that fell by 1 in the quarter china very important to starbucks. They were looking for an increase of 2. 1 this only grew by 1 they also added they increased their active starbucks rewards members by 1. 4 Million People during the quarter thats also an important metric for them and starbucks is down now by 3. 5 back over to you. Theres a lot to die gust what were you saying was down 1 down 1 was emea, Comp Store Sales. They were looking for an increase of 1. 7 thats a miss for sure. Thank you very much the shares are down 3. 5 Kevin Johnson will weigh in on these results in a cnbc exclusive interview tomorrow on squawk on the street around 9 00 a. M. Eastern. What do you think . Its still not a stock valued for missing comps. Its a mid20s not missing that much. Exactly theyre trying to figure it out. Theyre trying to get answers to traffic questions and all the rest of it this quarter was supposed to be earnings of 60 cents as of june 30th now the estimate went down to 57 they came in at 58 so, theyre earning less than you were expecting seven months ago. The stock is in the same place its trying to find its way and i dont think theres a clear vision to exactly how you get there in the next couple of quarters. The stock is up 13 since july everyone thought that, you know, the horse was behind them, the consumer is strong and all that stuff, right right the consumer is strong but theres a lot of competition and doing a 2 comp in the u. S. When guide was 3 to 5 comp, thats disappointing. Coming out of a retail environment for q4 that a lot of the companies that sold off did well starbucks wasnt sold off but theyre not getting much benefit of the doubt. Thats the point. Consumer datapoints have been good and this stock rallied into that, up 13 as these data points were coming i can see why its pulling back. To your point, its not cheap. Its expensive you still have these competitive issues that really wont go away with a two comp in the u. S it wont. Michael, what are your thoughts as starbucks is now dropping 3. 5 . This is obviously a growth name thats basically turning into a mature company. And theyre trying desperately to find growth thats what shanghai roastery is about and starbucks preserve strategy they have, to roll out a more premiere offering, to try to capture higher dollars when people come in its essentially in my view a pretty mature stock. The multiples are in the 20s its a little tough to see how this is a growth stock i think theyre trying, but really the underlying core business feels like its very mature. Especially if i heard kate right, she said the street was expecting their comps in china to grow 2. 1 and only grew 1 thats disappointing. Thats supposed to be the marquee next area for them, they have challenges as well. Following shares of cbs had ended up slightly and viacom up 1. 5 after news of merger talks. Reuters reporting both companies are expected to discuss aid potential merger at the next board meeting. Lets bring in brian for a little more on what this means to these companies theres been so much speculation. What is your base case of what happens with these two Companies Getting together yeah, its hard to say, frankly. Its always been something of an inevidentability they could go together because of the common control. At the same time, the issue has always been whether les moonves could be persuaded to do it. Ultimately if youre him, its probably more in your interest to position your company for a sale to someone else rather than being saddled, for lack of a better word, with viacom the question is what makes it in his interest to pursue something . What do you think about that . Theres a certain sense of destiny around this as basically partners kind of get together elsewhere. I dont know if it makes it more attractive because its in the family and you have this common owner trying to orchestrate this thing or not i do think the game is, get enough scale so you can concentrate on the networks better positioned, have the studio manufacture content in house and all the rest i dont know what at what price that makes sense. These Legacy Companies are trying to do anything to find growth comcast reported a great the stock was up, down, they didnt announce a buyback that was big enough because theyre giving theyre giving themselves some dry powder to figure out maybe they want to do some sort of m a this year i applaud that and i applaud these companies trilg to figure it out because its challenging. The landscape has changed so quickly. The fact murdoch has everybody sitting back and going, wow, okay absolutely. How different is this environment . Brian, do you think thats a catalyst here . I think its concentrated many joinz minds i think that if youre again, if youre moonves, youre thinking, no, potentially theres others who might be interested in cbs. If youre redstone you might think, im not giving up control any time soon. The conventional wisdom is that scale matters. By the way, i think its possible you can succeed without scale, but lets just go with the assumption that everyone believes you need scale, therefore, you pursue it and so, yeah, i think its contributed to the current environment. And, michael, what are your whats your take on this do you think this will be a good thing, before we go . Well, hon list, i dont know if it would be a good thing. I know these companies are desperate to figure out, how do they compete against a netflix juggernaut how do they compete against this new landscape . Theyre desperately looking for new ways to do that. Disney is taking proactive action, whether cbs viacom together will make a difference. Its hard for me to see how, but what else are they going to do otherwise theyll sit around and get killed by their competitors. Brian, thanks for joining us with the latest on cbs and viacom there meantime, lets circle back to the earnings we have big movers in intel and starbucks. Starbucks is still lower kate rogers has more. We wanted to give you an update on their guidance they raised this for full year 2018 but it is consistent with what they previously guided. Theyre saying adjusted eps should come in at 2. 48 to 2. 53 above the previous estimate of 2. 39. Theyre saying theyre raising this because of tax reform but its consistent with what they previously guided. We also wanted to reiterate, they have 3 to 5 comps for the full year of 2018. And also just an update on those Comp Store Sales china, asiapacific, thats up 1 for the quarter but china in particular up 6 once again, thats a very, very important metric for starbucks something important to watch the stock is falling by around 3 . Thats really important so, i mean, i wonder if people breathe a little sigh of relief. The market has digested this the way theyre going to digest this but china up 6 is much better than the whole asia region is up 1 . Weakness in europe, a decline in comps there. We kind of go back to the drop of 3 for stock after hours. Stephanie they said, 3 to 5 growth is what they want for so in my mind, im going to go back, rejig the model and have lower expectations and i think the stock could probably sit here as a result of that, as people kind of work through, okay, what are they really growing at and where is the growth driver . I think china is phenomenal for this company but its still very small in the grand scheme of things in terms of total revenues for the company. Thank you stephanie, michael joining us to talk about these earnings and so much more of the news today. Thank you. Well keep monitoring the movers. Much more ahead on the closing bell. Announcer coming up airlines in freefall well tell you why the carriers are losing altitude for the second straight day and whether theres more turbulence ahead. And well have another exclusive look at president voumps sitdown with cnbc in das. Stick around closing bell will be right back fees . What did you have in mind . I dont know. 4. 95 per trade . Uhhh and i was wondering if your brokerage offers some sort of guarantee . Guarantee . Where we can get our fees and commissions back if were not happy. So can you offer me what schwab is offering . Whats with all the questions . Ask your broker if theyre offering 4. 95 online equity trades and a satisfaction guarantee. If you dont like their answer, ask again at schwab. President trump arriving in davos for the World Economic forum. Sitting down with joe kernen, here is what he had to say about joe mnuchins comments on the dollar today. I think they were taken out of context i read his exact statement ill tell you where i stand, which ultimately is very important. Number one, i dont like talking about it because, frankly, nobody should be talking about it it should be what it is. It should be based on the strength of the country. We are doing so well our country is becoming so economically strong again and strong in other ways, too, by the way, that the dollar is going to get stronger and stronger and ultimately, i want to see a strong dollar. Well, thats some pretty candid remarks sure enough, the dollar reversed its losses the dollar was in the 88 range and then went positive after those comments lets bring in jason furman, along with jason johnson, former chief strategist for ted cruzs 2017 president ial campaign and our own economics reporter steve liesman. Welcome, everybody jason johnson, ill begin with you, what do you think about all this rhetoric about the dollar first of all, its great to be on your show talking about the dollar when i was in government, the treasury would never let me talk about it i think the president s Statement Today was exactly right. Secretary mnuchin made a mistake yesterday. He cleaned it up today and the dollars not something that Administration Officials should be talking about. In fact, its not something we should be worried about. We should be worried about getting the economic policies right, strengthening our economy and then the dollar will take care of itself mr. Johnson, what do you think . Well, i think politically speaking the president had no option but to do what he did i mean, heres a here was a candidate whose entire campaign was based upon strength, strength in every way. Strength of the american economy, the american worker, america first, and in this case he needed to do what he did, which was to walk back secretary mnuchins comments and talk about his preference for a strong u. S. Dollar steve, it seems if nothing else, the market took the president s comments as a signal that there wasnt some kind of orchestrated kind of all points bulletin in the administration to go out and knock the dollar down and they took some heart in that i do wonder. The question, what could the Administration Even do if it chose to try and weaken the dollar those days are not with us when a government could even do that. Thats important. All the talk about the dollar is a little overblown i think the president came forward and when youre treasury secretary, i think you get a piece of paper and it says, dont say anything but strong dollar. And it was kind of weird i know they talked about it before, but ultimately, youre right, theres not going to be and hasnt been for a very long time a concerted effort to weaken the dollar through administrative means other than, for example, whats done in terms of Monetary Policy which is reaction to the economy the u. S. Is very committed in this regard. I dont understand why these the traders get so up in arms about these comments and then we, of course, feed into it when the market moves the way it did. It did a complete and pretty dramatic round trip today. Ultimately youre right, there is no policy coming that will result in a concerted effort of the dollar through administrative means if you want to talk about the impact of trade, thats another story. Jason, do you agree with that given the history of administrations who have either looked for and emphasized a weak or strong dollar absolutely. I dont think that i agree with steve is exactly right. I think there are moments when it can matter very dramatic moments, like 1985 with the plaza accord, smaller ones like the pressure we put on japan over their Exchange Rate i think there are times that it could matter you want a coordinated effort where your words are synched by lateral or bilateral actions and backed up by administration. Here all you had were words and i have no idea why the market moved. The market evidently decided it had no idea why it moved and it moved back. Mr. Johnson, what were you going to say somewhat like a president and a cabinet secretary contradicting one another. The two jasons confused me there. Nothing to add yeah, i was going to say, probably everybodys confused now. It is the two jasons and our own steve liesman. Thank you for joining us jason furman, jason johnson. You can catch joe kernens entire interview with President Trump at 6 00 a. M. On squawk box. Semiconductor firm maxim reported after the bell. The increase individend by 17 on top of strong guidance. Youre seeing the stock pop about 5 after hours back to you, kelly. Thank you, eric maxim up 5 . Airlines going the other way. Not exactly taking flight again today. Jetblue, american, southwest, all seeing their stocks hit after earnings well look at whats behind that turbulence government officials have been jockeying favor to land amazons Second Headquarters well talk to a mayor of a city and saying amazon y mabe using up in whats goodwill in a prdriven search roperty, like their car or home computer, to help them do their work. But they might not know that those items may need special insurance to protect against costly damage, theft, or liability on the job. Trusted choice independent Insurance Agents represent multiple Insurance Companies and customize coverage so Business Owners can focus on business. Announcer to find an agent, visit trustedchoice. Com like you do sometimes, grandpa . And puffed. Well, when you have copd, it can be hard to breathe. It can be hard to get air out, which can make it hard to get air in. So i talked to my doctor. She said. Symbicort could help you breathe better, starting within 5 minutes. 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[ click, keyboard clacking ] [ keyboard clacking ] [ click, keyboard clacking ] 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. Shares of alaska air, american, southwest and jetblue all closing lower today. Jetblue down 6 . Alaska down 4 after yesterdays decline and thats after the first three reporting an earnings beat. America and southwest beat the numbers. Jetblue did miss is this a sign of turbulence to come for the Airline Sector . Joining us, ben, former Spirit Airline ceo and david berman, Research Analyst at bernstein. David, let me start with you because i know youre probably feeling these moves painfully the last couple of days. Whats going on with the Airline Space . I think whats going on right now is not about whats actually happening today. Its about what investors are fearing is going to happen over the course of the next 12 to 24 months as more capacity is added in the Network United has come out with more strategy to grow capacity faster than people thought. We havent seen if the economy will grow into is that and we havent seen if the strategy is going to be up to fares. Doug parker spoke with phil lebeau earlier today and he basically said, just because theyre expanding, you know, they might be adding capacity, going to new markets its not necessarily just going to mean that everybodys pushing fares lower, david do you buy that . I think its important to keep in mind here that where the capacity is going into the market is going to be secondary markets, at least on uniteds part those markets are going to be a smaller part of the market its also important to know that when united goes out into some of these markets theyll be using lower gauge, higher cost aircraft going in with lower gauge, higher cost aircraft and strategy of cutting fares to fill it is never going to be successful we dont think thats necessarily the hope we think united is trying to carve off and collect back some share is that they have lost through prior managements reduction of service of some of these markets. I do think there is something to the idea that this isnt just about the aggregate headline number ben, let me ask you something specific i dont mean to put on you the spot im scratching my head about jetblue. Maybe because im stuck in ten years ago when they were the fresh, hot, new kid on the block with all these great amenities and great ratings but they missed on earnings today they had really low Passenger Satisfaction numbers relative to their competitors last year. Whats going on. They missed their estimates any time you miss, people will be surprised at whats happened. I think the underlying trends are still pretty good for the industry, but i agree with what was just said in that capacity is such a bugaboo for this industry and when you look at jetblue, whos focused in new york where theres a lot of competitors, delta, america, united, all with a lot of capacity there and up in boston, you can see how nervousness about capacity might affect concerns about their future earnings as well. Its notes capacity say big part of it, but those concerns are coming as youre seeing really pretty significant increases in labor costs, obviously fuel costs going up, too, so any of those things is it just exacerbated or does it say, well, maybe people wont be so aggressive on pricing because they cant be . Right now, like i said, its much more about sentiment. If you look at what united told you, they guided you to an earnings per share number higher than what the street was expecting for 2018 america did the same thing if you look at the guidance numbers southwest give you, you get to a Pretty Healthy number relative to what is in the consensus sell side forecast i think this is a lot about what the fear is going to happen about capacity growing in excess of demand and gdp and whether or not this is going to have a hugely destabilizing impact on the market as opposed to anything around nearterm cost pressures. One thing that stuck out at me, southwest said when asked about tax reform and any savings, it said it would use those savings on planes. How important is it for the carriers right now to buy planes what are they looking for . It reminds me of davids point that if theyre using highcost planes, you know, it makes it harder for them to lower fares and not get hurt. David is right about that a lot depends if theyre buying new planes to replace older, less fuel efficient planes or buy new planes to grow faster than the economy as the industry has been doing one thing id like to say is united has been a bit of an irrational actor over the last 12 months. I think their announcement of their capacity growth, even though its in smaller markets, has made people quite skiddish theyre the ones who have been propagating low fares and trying to go after the lowcost carriers now theyre talking about growing. So, this sort of instability of their announcements, i think, has put investors a little bit on edge. Might be a little different than, for example, if american or delta it made the same kind of announcement. Fair enough more than a little on edge after the last couple of sessions. Thank you for joining us the transport index was way down by those airlines dow transports down almost 200 points different picture for the industrials. Blue chips were up 140 on the bell 3m, one of the better performers the s p hung on to positive territory by two pints, same for the russell and the nasdaq was down three today lets check on names moving on earnings after the bell. Intel and starbucks reported intel is up 4. 5 right now starbucks still down more than 3 intuitive surgical, down 1. 5 . Time for cnbc news update. Lets get over to tyler mathisen. Thank you very much lets tell you whats happening right now. President trump sitting down for dinner earlier this evening. European time with European Business leaders in davos, switzerland. Guests include executives from siemens they congratulated him on the tax cuts he recently signed into law. I just want to thank everybody. The receptivity weve had an the United States has had being here has been incredible sitting around this table are some of the greatest Business Leaders in the world some of the greatest companies in the world meantime, a Senior Palestinian official says peace is off the table if President Trump insists on recognizing jerusalem as israels capital in response to mr. Trumps threat to withhold aid money to the palestinians until they return for peace talks. The Washington Post reports that the Guggenheim Museum turned down the trumps request to borrow a painting by Vincent Van Gogh for their private living quarters. Instead, the curator offered this, an 18 karat fully functioning solid gold toilet. Critics have described the toilet as satire aimed at the excess of wealth in the country. I would call it a royal flush. That is the cnbc news update at this hour. Sadly, i have to hand it back to you on that note yeah, i think the guggenheims should be flush with embarrassment on that move thank you. Starbucks share sharply slower after a revenue mix up next, the stfa money traders tell us how theyre trading this stock Fire Fighting is a very dangerous profession. We have one to two fires a day and when you respond together and you put your lives on the line, you do have to surround yourself with experts. And for us the expert in gas and electric is pg e. We run about 2,500 2,800 fire calls a year and on almost every one of those calls pg e is responding to that call as well. And so when we show up to a fire and pg e shows up with us it makes a tremendous team during a moment of crisis. I rely on them, the firefighters in this department rely on them, and so we have to practice safety everyday. Utilizing pg es talent and expertise in that area trains our firefighters on the gas or electric aspect of a fire and when we have an emergency situation we are going to be much more skilled and prepared to mitigate that emergency for all concerned. The things we do every single day that puts ourselves in harms way, and to have a partner that is so skilled at what they do is indispensable, and i couldnt ask for a better partner. Welcome back starbucks share lower 2. 5 after hours. Just reported earnings on the phone is r. J. , who joins us from morning star r. J. , youll be on the call top of the hour. What are your questions . Yeah, i think first and foremost is whats it going to take to get traffic going in the u. S. Right now transaction growth was flat in the quarter. That comes down from the 1 we saw in the most previous quarter. Thats front and center of most investors mind. I think thats the first focus second is china. You know, that was a little disappointment 6 comp versus 8 last quarter this is a big quarter, they launched the shanghai roastery so there should have been a little more halo effect. I think its still an overall growth story in that region but figure out what went down there. And then just refining what the growth plan longer term are for this company i still think its an interesting allocation play but those are top of my questions. Well, we will borrow them as we talk to our fast money guys r. J. , well let you go thank you. Lets bring in fast money traders steve grasso and guy steve, what do you think about the numbers, especially the miss on the comps and some of those points that r. J. Was making . The hope was you were going to see china better. You were going to see the tax refo reform a little more beneficial here, you would see comp sales that were actually more beneficial to them lets remember, they have an effective 34 tax rate, so that is going to come down. If theres more money in consumers pockets Going Forward im not talking backwardlooking right now, but this stock has underperformed dunkin. In the coffee space you still stay with dunkin, but i dont think its lights out for starbucks. Guy, a company with a growth stock multiple thats kind of struggled to kind of earn it for a little while now it reminds me, i was saying earlier, to nike for a while when the stock was sideways for a long period of time. Great brand name needed to get things moving again. What do you want to hear to get confidence want to find out why they stumbled in china. You talked about it, youre talking about a stock that trades 23 times forward earnings with the next big growth driver being china. You can make the argument theyre saturated here in the United States. We can have that debate. But if they are, in fact, growing in china, why are the numbers so disappointing they are disappointing numbers margins were lower and comps were lower what is the hangup in china and is that the Growth Engine down the road margins in europe were less than expected margins in the United States coming down. You have to ask yourself does 22 times forward earning the right number you see its up 55 bucks. Is dunkin outcomping starbucks . I believe they are. Check me on that, but for a while now in the coffee space, it has been dunkin. If you go back further, something spelled a little bad in the coffee space. Both were for sale seems like dunkin has figured it out a lot better than starbucks has. Appreciate it good stuff as always catch all the fast money action beginning at 5 00 p. M. Eastern time today amazon has narrowed the field for its site for Second Headquarters, down to 20, but its being secretive about the process. Well hear from the mayors of ruin of the cities in nng and a critic who thinks its not as democratic as it sounds daniel jacob for every hour that youre idling in your car, youre sending about half a gallon of gasoline up in the air. That amounts to about 10 pounds of Carbon Dioxide every week. malo hutson growth is good, but when it starts impacting our quality of air and quality of life, thats a problem. So forwardthinking cities like sacramento are investing in streets that are smarter and greener. The solution was right under our feet. Asphalt. Or to be more precise, intelligent asphalt. By embedding sensors into the pavement, as well as installing cameras on traffic lights, we will be able to analyze the flow of traffic. Then that data runs across our network, and we use it to optimize the timing of lights, so that travel times are shorter. Who knew asphalt could help save the environment . Theyre not investing in commodities or fixed income. What people areally putting their money into is what they hope to get out of life. But helping them get there requires a real refusal to settle for average. Because when you approach investing with a tireless desire to beat the status quo, Something Wonderful can happen. Those people might just get what they wanted out of life. Or maybe even more. E. One week after amazon narrowed the contenders for the coveted hq2 project down to 20, leaders of those cities are attending a u. S. Mayors of conference in washington if theres a transfor mayors to trashtalk each other, amazon is trying to put a lid on it. Scott cohn is at the meeting one mayor i spoke to likened it to a big poker game everyone is trying not to say too much, but, you know, trying to maybe play the others a little bit, being very coy about it if its a poker game, amazon is the dealer and amazon is telling all the cities now to keep their cards even closer to the vest. They want this next phase to be very quiet, very confidential. Much more traditional from an Economic Development standpoint. And so, the cities are vowing, the mayors are all vowing theyre not going to get into a bidding war over this. Trying to assure their taxpayers they wont overpay when it comes to actual numbers, the mayor of boston says its premature to talk about that i think its too early to get into that kind of conversation because unless they know something i dont, were not really sure what amazon is looking at were certainly not going to get into aid bidding war we can stand on our own two feet we have a city when that bridge comes to it, well cross it. Our taxpayers are excited about this they know this could take our city to the next level we have a Great Technology base of employees and those folks would love to have amazon as an option for it. Reporter we have been grading all the cities using our americas top states for business data, along with data from the Census Bureau and the canadian government, because toronto is in there. Can you check out our report cards, imperfect as they might be, on top state site. Thank you scott cohn. Earlier today d. A. David analyst tom fortt had this to say about where amazons second quarters will end up. What amazon is doing with these request for proposals, 238 originally, they whittled it down to 20, its all about influence. Where else could they have more influence on politics and on Regulatory Environment than having their Second Headquarters located just outside washington, d. C. Joining us now with his view of amazons mission is scott galloway, professor of market at new york universitys school of stern business what do you think this is all about here for amazon . Just as amazon has algorithms and crawlers that go out, creating this sucking sound down, price of transferring brands to amazon, i believe they created an offline algorithm pitting cities from one another. I think amazon already knows where they want to be. And theyre just creating this kind of hunger games environment to mature the best term sheet possible and then give it to the citys mayor where they want to be and ask him or her to match it, which will be irresistible scott, do you actually think that amazons mode here is strictly to get maximum concessions from that city that, perhaps, theyve already decided on, or was it to promote some kind of sense of goodwill out there, like were going to create some teamwork attitude. Some people have said the losing cities have a pitch book to attract other companies. Maybe thats just too much of a bright side view, though. Yeah, thats definitely, i think, a halffull view. I think they were genius in occupying the front page and lead of every story in business media, which they are great at doing. The reason amazon doesnt need to spend any money advertising is theyre great at occupying old medias bandwidth. No, this is simply put, an incredibly deft calculation to extract, you know, several tons of flesh this is going to i mean, my prediction, simply put, ive been on the board of a dozen private and Public Companies that talk about a Second Headquarters and it ends up in one place, where the ceo wants to spend more time mr. Bezos has a house in d. C. And new york your other guest said, if hes in d. C. , he becomes less subject of regulation. The new headquarters will be in the metro area of new york or d. C. Because thats where a 53yearold man with 105 billion wants to spend more time these other cities its ridiculous they entertain the notion, they produce a term sheet they go against. I was saying, this reminds me of lebrons decision, back when he was was he going back to the cavaliers or not and it was this whole media event and all this hoopla. Anyway, professor, do you think people are seeing through this is this going to backfire on amazon . Are seeing through this . Is this going to backfire on amazon i think people are increasingly fed up with big tech the notion just think about this rationally, this is an individual who can do anything he wants, and hes probably going to have spend 60 to 120 days year at the Second Headquarters do you think he is going to want to end up in a city he doesnt want to be in because they offed more tax breaks . This decision has already been made frankly its not reminisce end of henry ford who was more concerned with the commonwealth than adding a few extra bucks to the bottom line. Henry ford. What was in a brazil thing he tried to do, ford landia do you know what he tried to do in brazil, henry ford, he cleared the rainforest we wont get into it we take your point, though and well see if any other companies try to follow suit thank you for your time. Thank you. We are going to get another check on starbucks and intel ahead of their earning calls. On fast money, the socalled bitcoin oracle returns and he will tell you what he sees next for the crypto marke hey, what are you guys doing here . Were voya. We stay with you to and through retirement. So youll still be here to help me make smart choices . Well, with your finances that is. We had nothing to do with that tie. Voya. Helping you to and through retirement. 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. Im kayla touchy in washington the white houses immigration framework is coming into view. According to our colleagues at nbc news on capitol hill, who were on a Conference Call between adviser to the president Steven Miller and members of republican staff, the framework will include a path to citizenship for 1. 8 million d. R. E. A. M. Ers. Both those who already have d. R. E. A. M. Er status and those eligible but have not yet applied. The other pillars to the framework, a 23 billion trust fun for the border wall, an end to chain migration and a an end to the veegsa lottery. We will see how the gaps get filled in when the white house provides more details ahead of monday certainly a significant development. The second in a week as they seem to be moving in this direction. We have another earnings alert, this on e trade, eric, how did they do . The earnings beat on the top and the bottom line, but the more interesting part here, and this is why the stock may have dropped about 4 right after the bell they announced they were buying 1 million accounts from capital one. Retail brokerage accounts worth 18 billion in assets. The stock dropped 4 its starting to come back down 1. 5 , 2 on the screen thats the story on e trade. They beat on earnings but this big acquisition from capital one. It is a weird move. Capital one bought a discount brokerage a couple of years ago. Its about that service. E trade is often considered a target itself. It changes the narrative if they are bulking up and they are down about 1. 5 this afternoon and the calls for intel and starbucks will start in a upcole of minutes we will have another check on those stocks and what to listen for when we come back. Tomorrow, its a day filled with promise and new beginnings, challenges and opportunities. At ameriprise financial, we cant predict what tomorrow will bring. But our comprehensive approach to Financial Planning can help make sure youre prepared for whats expected and even whats not. And that kind of Financial Confidence can help you sleep better at night. With the right financial advisor, life can be brilliant. Yes or no . Gin. Do you want the same tools and seamless experience across web and tablet . Do you want 4. 95 commissions for stocks, 0. 50 options contracts . 1. 50 futures contracts . What about a dedicated service team of trading specialists . Did you say yes . Good, then its time for power e trade. The platform, price and service that gives you the edge you need. Looks like we have a couple seconds left. Lets do some card twirling twirling cards e trade. The original place to invest online. Intel and starbucks reported earnings earlier this hour they are moving in different direction. Intel is up 3. 5 starbucks down 3 . Lets start with intel we talked about starbucks in the challenges Intel Holding on the games right now. It is holding on. If you took the beat for the quarter they just reported and the guidance of the Current Quarter it nets out better than expected i think the guidance can be interpreted a couple of different ways and then the call is going to be about the Security Breach with the chips and whether thats going to be of a long tail to it in terms of expense. It has been frustrating i wonder, do they need to do something bigger for intel yeah. In the chip space. It is the defensive, incumbent slower moving mega cap in the group right now, the fashion has been to own the faster moving stuff is there anything intel is trying all the time. You know what i mean its one of those things, its so much of a legacy business that they may be doing the right things but its thard to get new people excited about night the shares hanging on the a gain of 3. 5 starbucks weaker we talked about some of those challenges set your tvs or alarms, squawk box tomorrow morning you can see the joe currentan interview and President Trump in daf coast that begins at 6 00 a. M. Mike we played a few key sound bytes today saying he might be open to the Transpacific Partnership and saying he wants a strong dollar. Strong dollar trade is going to be where his focus remains. And i do think thats maybe what we havent heard yet is more on that he had comments on nafta, too. Trying to work it out. I want to know what else there is. Preserving some suspense. Thank you that does it for closing bell. Fast money starts now. Fast money starts right now live from the Nasdaq Market site overlooking new york citys times square guy adami, tim seymour on the panel tonight. Western digital moving lower. And intel higher in afterhours. Plus, they call him the bitcoin oracle, the man who called the rise and fall of bitcoin is here with another shocking predict. It could have farreaching kblik force the crypto world. Vinny lingham, who is also the host of