Transcripts For CNBC Closing Bell 20240714

Chip stocks soaring as President Trump eases the ban on huaweis purchase of u. S. Products. Weak manufacturing and Construction Data keeping the gains in check today joining us for the hour to break down the Market Action is lindsey bell from cfra good to see you again. Good to be here. Feels like a market that had a lot of good news baked into it already. Yes it did. I was surprised we held on to the gains for as long as we did. I thought we would get a sell the news type of thing sooner. I think the weak Economic Data not only here in the u. S. , but also in europe and china, really gave the market what they wanted in the terms of the potential for a fed rate cut next month. One day phenomenon or does this selling have some staying power . You know, i got to say, i think it is going to be a little choppy through the month of july, especially as we get into earnings season. We see how tariffs are impacting companies on the ground. Yeah. It is interesting, youre going to get earnings season, you have expectations of the fed and thats going to be in the back pocket of the market up until the meeting and thats going to be viewed as a positive until we hear from jay powell and company. Yeah, you know what, usually what you see if you look back at history, you have a strong first start of the year, you get a weakness in may, rebound in june and then july also can be very choppy given all the Different Things were looking at between earnings, the fed, and trade, i think were going to were in for a choppy july again. Back to you shortly lets drill down on the big stories were watching today Kayla Tausche has the latest on the china trade truce. Seema mody watching the movers here josh lipton covering the surge in chip stocks and Bertha Coombs with the biggest movers at the nasdaq Brian Sullivan in svienna today after an eventful weekend in asia, we now wait to see what china will buy and how much, which Companies Get the Commerce Department licenses to sell to huawei and when Trump Administration officials will travel back to beijing for talks as they were expected to do in may before negotiations broke down the office of the u. S. Trade representative said there are no scheduling announcements at this time President Trump said hes not in a rush this truce, unlike previous truces, has no deadline morgan kayla, thank you. The s p hitting a record intraday high earlier in todays session on the back of the headlines. Seem wa mody has more. The s p still up about. 4 . And 2954, thats the level to watch to see if we can close at a record what is working for the market, financials have outperformed today. And even on friday, after a number of banks passed the fed stress test and also increased their dividends, a number of sell side analysts talking about whether banks are the new dividend play. In fact, the average dividend yield for the s p Financial Sector is at around 3 , which is much higher than the average of the s p 500 which is around 2 lets pivot to trade you touched on this, this intraday reversal were seeing in a number of Global Industrial names like caterpillar, even deere started the day higher by 1 and traded lower. Utx off the highs of the day i want to draw your attention to post six here, watching shares of boeing trade lower to the close, down over 2 and, guys, lower by 5 over the past one week, 5 million shares have exchanged hands. Thats higher than the average back to you. Chip stocks soaring after President Trump eased restrictions on china, Telecom Company huawei josh liston has more from san francisco. The smh, the etf that tracks the chips is headed higher today, after surging 13 in june that was its best month since september 2010 you can see some of the individual movers too, micron, sky works. Chip investors cheering as u. S. And china announced a trade truce and President Trumps suggestion he would lift the ban on u. S. Companies telling equipment to huawei and cases that dont involve National Security craig ellis says the second half of the year is typically a strong one for chips, but says investors will need to see continued signs of trade progress back to you. That rally in semis is helping power the nasdaq, which is outperforming the major averages today on the back of this trade truce Bertha Coombs has a look at the biggest movers there bertha hey, morgan small caps are weak again today, but it is those big caps, apple and others that are providing the biggest lift to the nasdaq yet the phonemaker is still down from the may trade related swoon, as are semiconductors were still seeing a rally wynn getting a lift after strong macau gaming numbers for june. And chinese internet names like ctrip hit hard in may for all of the strength in tech today, it is the nasdaq nontraditional tech and chip names that are collectively outperforming with new all time highs for idexx lab and a half dozen others bertha, thank you Bertha Coombs. Oil prices volatile as opec kicks off its meeting in vienna. Brian sullivan is there with the latest brian . The very latest is breaking news here, two pieces of news confirmed minutes ago by cnbc and our sources inside of opec number one, the group agreed to a longterm cooperation deal with a russia led partnership. Russia not becoming a part of opec officially but part of a partnership. That is a big deal because it effectively strengthens opecs output, increasing their market power to blunt the growth of u. S. Shale number two, their extension they made last year, the Production Cut 1. 2 barrels a day cut longterm compromise and charter with russia agreed to. And Production Cut of 1. 2 Million Barrels a day extended into 2020. Tomorrow the official opec plus meeting with russia. We should learn a lot more, a long day has ended with a deal, finally, for opec. Back to you. Good stuff. Got about 53 minutes until we close it up on wall street. The s p 500 is above its all time closing high. 2954 was the number to watch see on your screen, 2955 is where we currently stand stocks up throughout much of the day. Lets bring in art hogan from national securities, who is joining us, lindsey bell is still here tell us what this day is all about, what the action means to you. I think it is good were fading in the afternoon only because the incremental news we got wasnt new, it is not great. What we did do was avoid worst Case Scenario. Avoiding worst Case Scenario would be escalation, coming back from g20. Thats going to have an immediate economic impact. Now we know where we stand we know what the bid and ask is. Someone has to compromise. And that probably takes a while. Were at or about where we should be. Im not i think we do i think we do very well to spend most of july kind of sideways and rationalizing gains we have. Is it safe to say all the ongoing continued uncertainty around trade is priced into the market here. To a certain extent, yeah what we know what is not priced in is the length, the duration, how long does this take longer it takes to get this behind us, the more economic damage is done coming into may, we thought we were almost done we saw what happened, we found out that would be much longer. We can have another event if something triggers another one of those escalations were at or about where we should be. Unless things get worse. Lindsey what do you think i think the market actually, it was what you saw in todays action, was pricing in a deal getting done the hope of a deal getting done in the near future to your point, if this does extend into the end of the year, were going to have Major Economic implications. Seeing a slowdown in asia, we saw some of the pmi numbers out of europe, germany seeing major weakness, so i think youre starting to see this bleed into economies around the world and then it is only a matter of time before it gets the u. S. About 44 of u. S. Sales for the s p 500 come from abroad so does that mean were the chances of the fed cutting rates this month have just increased . I would say they increased. The market is way ahead of themselves i think the fed is at a point where the longer this lasts, the more they have to step in. I dont think it is july they will cut this year. The fed does not want to upset the market in any great magnitude. If it didnt go at all in july, the market wouldnt take that well, would it depends what we get in between new and then we have g20 behind us, no disasters. Another jobs number. Those will be very telling if both of those are better than expected, i think the fed can sit back and say were very close, but it is just not time yet. How much how much more focused does this put on the jobs report on friday . It is a huge focus for the market for sure. Were seeing some pockets of weakness in manufacturing and housing, seeing that for quite some time now. Because may was so weak, we need june to be better. Got to get the market out of its the defensive posture too. The environment where bond proxies, things like staples, bonds themselves are going up, gold, you have a hard time rallying more broadly if all of those more defensive spaces continue to do well, right very true what will be interesting and we hit this at the top of the segment, financials. Now that theyre able to increase them and pass their test and buying back shares should be very interesting you think about the multiple utilities, staples trading at and how low the yields are, good point. It is important for something to take over leadership and maybe step in here in the search for a yield. Financials are so has health care. I think we would like to see health care pick up some steam, especially because it is the second largest sector within the s p 500. That will cut rates, you could get a steepening curve, which is another catalyst to the financials, they havent had one. They havent had one. A lot of m a activity, great calendar for ipo that action has been very good trading has been very robust arthur, thank you. Thank you. Good seeing you art hogan. Coming up, still ahead, we have much more on the trade truce when we speak with former u. S. Ambassador to china gary locke. Well ask him whether he thinks a permanent deal can get done. And after the break, a multibillion dollar defense deal becoming official over the weekend. Well take a look at the newly combined l3harris technologies and what that deal could signal about other tieups in aerospace and defense space. Right and somebodys wheel house. Oh, yes, it is. As we head to break, a check on our closing bell data tracker. The june ism Manufacturing Index coming in at 51. 7, above expectations, but still the slowest pace since october 2016. Also Construction Spending fell. 8 in may. Versus estimates of. 1 gain veeras the first decline since nombwere back after this break. . . Its gotta scale across my business. Starting here, in procurement, helping us find the right suppliers. Then here in logistic, to avoid disruptions here in sales. Even here im talking about ai we can build to work. Here, predicting trends. And here, wherever our data lives and here, working with all our other ai i think were done here. Expect more from ai. Ibm watson. Oh, wow. You two are going to have such a great trip. Thanks to you, we will. This is why voya helps reach todays goals. All while helping you to and through retirement. Can you help with these . Were more of the plan, invest and protect kind of help. Voya. Helping you to and through retirement. We could see a record close for the s p 500. It is about five points above that level 2959 is where the s p 500 currently sits dow has a gain of one third of 1 over to mike santoli with todays market dashboard michael . Scott, thank you very much. Heres what you got ahead, bashful breakout, thats what we have on our hands for the s p 500. Going to check in on a relatively grumpy bond market. Some happy rally signals, a little happier earlier well get under the surface of the indexes for a look there a look at the sleepy economic expansion finally in the next hour look at the breakout or would be breakout in the s p 500. Here is a five year chart of the s p with significant lines drawn on top of it there, you see that orange line, thats at about 2950 thats around the level that we have been trying to get over today. You see it is kind of critical now. This is probably just a little bit below that right now youve seen a couple of these breakouts that were brief and rolled over, right in the same region now trying to get above that what is maybe hopeful is to look back at this other period that ended in late 2016, you had another 18 month period where you had very, very halting breakouts, never really got anywhere you traded very volatile below it so thats another year and a half period of sideways, before you broke above it thats after the 2016 election, hard to know if we get a catalyst here, but it does seem as if this period that level was around 2100. Right now were still sort of, i think you have to only give this breakout attempt today, kind of a b minus grade right now, given how much of the early levitation was lost so, mike, first of all, this chart is great, because it puts into perspective what it has taken to hit the record highs in recent years but i was trying to sus out what your theme is with all the charts for the next two hours and then it donned on me, is it snow white and the seven dwarves . Thats what it seems like. I couldnt come up with a sneezy and grumpy. That about dopey . Dopey seemed a little bit i didnt want to get too pejorative about it. If youre going to go in, just go. Maybe chart silver. Thats what they were mining yeah. Happy, doc, i had to look them up i couldnt remember all of them. Sneezy i dont remember that one. Always a good bar trivia. Well be back multibillion dollar defense deal became official over the weekend with the completion of the merger of l3 technologies and harris corp. Someone to my left follows this space quite closely. Youve been following a lot of this consolidation and there has been a lot. There has been a lot of consolidation and i sure have been following this as well. This is the new l3harris technologies, merger of equals, announced last october, became official just a few minutes after midnight on june 29th. Right after harris corp. Finished its fiscal 2019 year. The company which began trading here under ticker lhx, down 4 now, hiked the dividend today. New board green lighting a Share Buyback program. This deal is really creating an aerospace and Defense Technology giant. Now the sixth largest u. S. Defense contractor portfolio including military radios, space hardware, here is the plan theyll invest 4 of revenue into research and development. I spoke with the ceo bill brown and coo Chris Kubasik over the weekend, i asked what they would divest as they work to integrate all the different businesses, brown telling me no decisions have been made yet kubasik saying this merger creates another competitor in the sector and, scott, back to your point before, we have seen a lot of consolidation in aerospace and defense. Last month, another merger eof equals between united tech and raytheon the key is for each of these deals, does it create another competitor or does it take away the competition . In the case of l3harris, the stocks of both the companies coming into this merger, rallying 45 , argument could be made theyre going to add to the competition for some of these future pentagon contracts. Spoke earlier today, i heard you on one of the earlier shows talking about the deal and Defense Budgets only going one way and thats up. It would appear to be the case there has been a lot of speculation, a number of analysts have come out and said all these deals, all this m a, maybe this is signaling a top for defense dollars. But if you actually look at the fiscal 20 Defense Budget proposals, legislation coming out of both the house and the senate, represents increases, both of these executives at this company and heard similar comments from folks including United Technologies and raytheon believe that that number will continue to grow because quite frankly the geopolitical risks, china, north korea, russia, iran, theyre not going anywhere all right good stuff thanks. What do you think what do you think of defense stocks now i was wondering if you were going to ask me. I was basking in my moment of reporting, apparently. There has been a lot of m a in the space it hasnt been priced at a maximum premium. Stocks have done very well in this market. I think youre getting good valuations for the deals i think a tieup of l3 and harris is a good thing Midsized Companies theyre going to create size and scale and theyll be able to take some market share hopefully in the defense and electronics space. We view this as a positive all right, we have got 40 minutes before the bell. The dow is currently up 88 points now were on s p record close watch. Level there, 2959, poised to close five points above the last record after the break, an upgrade in the home builder space and a bullish note on etsy well get the word on the street on todays biggest analyst calls next. And later, semistocks are higher on the back of easing huawei restrictions. Well discuss the chip bump and how long it could last with the former Cyprus Semiconductor ceo t. J. Rodgers were back to the closing bell time to get the word on the street needham initiating coverage of etsy with a buy rating and 75 price target the firm says etsy has the right drivers to continue growth and capture new buyers guggenheim raising price target on discovery saying advertising revenue appears more resilient with strong pricing and maintains its neutral rating on that stock and btig upgrading kb home to neutral from sell. Strong guidance. And, lindsey this comes on the heels of a flurry of earlier upgrades from other analysts last week. A little late to the party i think it is upgrades to neutral. So from sell, so i think we were part of that, cfra we upgraded from at 23 after they reported these Solid Earnings results. We upped our prois taice target 27. Were almost there now the thing is the margins do remain below industry average, inventory returns are still weak we think you can find better opportunity in a play like Meritage Homes and theyre also benefitting from the entry level price point. Do you think it is fair to say there are green chute in housing now in the u. S. . Yeah. I think it is with millennials entering the Housing Market and at the entry price level you have to have the Building Communities and the land and be able to build the homes. Mortgage rates too . Mortgage rates are helping them, yeah. We have little more than 30 minutes. Well call it 35 35, right . Yeah. Right now, up that was good dow is up 100. Been all over the place, up more than that off the open, of course sold off a little bit. Regaining steam as we head to the last and final half hour of trade, which can be a bit volatile after the break, former u. S. Ambassador to china gary locke joins us to break down the g20. What needs to happen before a permanent deal with china gets done. Later Blue Harbor Group ceo Cliff Robbins laid out his bull case last month on this show on real Company Genesee and wyoming. Well get his thoughts on the backs of the take private deal and as we head to break, a look at the biggest winners in the nasdaq today tech stocks outperform the Broader Market well be right back. Welcome back to the closing bell. We have 31 minutes to go here. All the major averages are highhigh er record closing high watch as the u. S. China trade truce sends the stocks higher. The market is well off its highs. Chip stocks higher President Trump eases the ban on huawei and weak manufacturing and Construction Data are keeping those gains in check time for a cnbc news update with su he herera. A federal judge has ordered a defendant in the George Washington bridge gate lane closure scandal freed from prison, pending the cases appeal before the supreme court. Bill baroni was serving an 18 month sentence he and Bridget Kelly were convicted in 2016 on wire fraud charges. Kelly was scheduled to begin her sentence on july 10th. Starting today, electric and hybrid cars in the European Union have to be equipped with a warning noise for pedestrians when the car is traveling less than 12 Miles Per Hour or is backing up and that is because the vehicles are largely silent when operating. Egypt opened a 4,000yearold pyramid to the public for the first time today. It took teams of egyptian archaeologists a year to clear out the Burial Chamber of the pyramid. That pyramid was opened as a tourist attraction and that is one of the countrys main sources of revenue. Prince charles returned to wales on the 50th anniversary since he was invested with his title. His first stop was landof cathedral. The 70yearold prince is the oldest heir apparent in british history. Youre up to date. Thats the news update this hour back downtown to you that pyramid in egypt looks so cool. Sue, thank you lets send it over to mike santoli for a second dashboard. This is about the grum py bon market the treasury market did not lift at all in terms of yield when you got the news this week of this trade truce between the u. S. And china those yields remain well anchored this is a look at how fast the yields have declined and how far they are from their 200 day average. This is a measure of the velocity of the recent compression in yields. It has gone down more than 20 below the 200 day average. When have you also seen it reach these lines, back in late 2011, european debt crisis, here we go in early 2015 and then this one, i think, is significant. Mid2016, thats when you had the ultimate low in bond yields. Each time you had lift in bond yields and it would seem with measures of bond market sentiment, showing lots of bullishness on bonds, people banking on lower yields, you would think it wouldnt take much in the way of Economic Data to have yields pop higher. We have been waiting for that for a while. The market has not given that. Almost as if treasury traders want to see evidence that the slowdown story in the Global Economy is not going to continue to intensify lindsey, you dont expect bond yields to rise in any magnitude anytime soon, do you given the environment that were in, expectations around the fed. Right, exactly, with expectations around the fed, the fed funds futures rate telling you they expect those cuts were seeing slowdown in a lot of the Economic Data around the globe. I think it is going to be tough for these to bounce at least fast anytime soon. Stocks mostly higher today after the u. S. And china reached a trade truce. G20 gains have faded throughout the session. Morgan stanley out with a note, urging investors to be cautious. The firm highlighting the brief rally following the last g20 meeting in november when president s trump and xi had previously agreed to a truce only to then see tensions escalate earlier this year can this truce be trusted . Lets bring in gary locke, former u. S. Ambassador to china. Thank you for joining us today ill start right there, can this truce, i realize were very light on details here, can it be trusted . Well, at least it is a pause. And it means that the tensions will not escalate in the foreseeable future but whether or not the two sides can reach an agreement, a far reaching agreement remains to be seen twice before the u. S. Announced that there had been agreement and at least the secretary ross of the Commerce Department, secretary mnuchin of the treasury department, announced deals with the chinese, only to have the president say no. Im not bound by those and most recently we had what we thought was an agreement, only to have the chinese say, no, theyre not satisfied with it either so at least i think theyre going to go back to the bargaining table i dont i would not expect any agreement soon there is some really, really tough issues that remain to be resolved mr. Ambassador, so you dont expect anything soon, but game it out for me. How long do you think this is going to take to get a substantive deal well, i think there will be pressure on both sides the fed has estimated that with the most recent tariffs that have already been put into place, including in may, tariffs were raised to the full 25 on virtually half of the goods coming from china, thats costing the American Household on average 800 a year and, of course, as u. S. Companies start moving their supply chains or trying to move their supply chains from outside of from china to outside of china to vietnam and southeast asia, there will be some pressure on the Chinese Government to reach a resolution, so that they can keep a lot of this manufacturing in china so there is pressure on both sides, but there is also politics involved. The chinese cannot appear to be weak and certainly the president does not want to appear to be caving into the chinese the chinese want all the tariffs to be removed as part of the deal, the United States is going to want to keep some of those tariffs in place as a method of enforcement. So a lot of tough issues still separating the two. Ambassador, wall street was surprised to see huawei as part of the discussions or agreements this weekend, the fact that u. S. Suppliers can continueto send their components, their chips, et cetera, to the chinese tech company. How do you see it, does it is it something that more broadly enters the trade talks from here on out huawei certainly will be part of the trade talks, especially some of the more severe sanctions imposed against huawei, the criminal prosecutions against huawei and some of the top executives some of the sanctions on why huawei didnt make sense in the beginning, why stop American Companies from selling the glass that goes into the cheap cell phones that huawei produces for consumers around the world or the chips that are used in the cell phones, it is another thing, of course, on whether or not u. S. Companies can buy huawei equipment for their Cellular Networks or 5g. The intelligence agencies of america have deep concerns about the Security Risks posed by huaweis very advanced sophisticated equipment. But when the president interjected huawei and said that huawei as a whole constitutes a Security Threat to america, for the president to turn around and say, well, we can still sell equipment to the Security Threat, that doesnt make much sense and it is sending mixed messages to all of our allies when trying to convince our allies not to use huawei equipment. So here we are, allowing u. S. Companies to sell equipment to huawei, but we also dont want our allies to be buying that equipment. Really sends a lot of mixed messages. Mr. Ambassador, before i let you go, i would like for you to opine if you would, on whats taking place over in hong kong, given your former role im sure you have a point of view and a perspective on what we have been witnessing with the violent clashes between the protesters and police, which have been going on all evening long into the late and Early Morning hours into hong kong. Well, it is very, very disconcerting to see the tensions and the violence escalating clearly the chinese have to be very have to be watching this very closely they do not want things to get out of hand. They dont want the government of hong kong to theyre going to people in taiwan will be watching this very carefully to see how china reacts when hong kong is when the british gave up hong kong and returned it to chinese in 1997, the chinese always said it would be one country, two systems. And that hong kong would remain autonomous and independent for several decades. But in the last several years, the mainland, beijing, has tried to has been exerting more control and almost veto power over many of the policies and even the people being elected to the Hong Kong Congress and that has been very disconcerting to the people of hong kong. The people of taiwan, when theyre told by beijing, we should reunite with taiwan and be one country, three systems, the people of taiwan are saying, well, wait, lets see how youre treating the people of hong kong if thats how you treat them, why should we trust any promises of independence or autonomy you might be sending our way yeah, certainly a key point especially as the taiwan president is set to visit the u. S. Later this month as well. Ambassador gary locke, thank you for joining us today. Thank you still to come, crude oil volatile today reports opec may extend Production Cuts. Were going to look at the energy trade next. Plus, Blue Harbor Group Cliff Robbins will join us for an exclusive interview. His firm owns about 4 of genesee and wyoming, that stock is getting a big boost today on deal news. Rails, aerospace just an industrial smorgasbord. More on it after the break stay with us tell him were flexible. Dont worry. My dutch is ok. Just ok . in dutch tell him we need this merger. in dutch its happening. just ok is not ok. Especially when it comes to your network. At t is americas best Wireless Network according to americas biggest test. Now with 5g evolution. The first step to 5g. More for your thing. Thats our thing. Welcome back to the closing bell. Lets bring in Francisco Blanc and pablo molchinau from raymond james. Reporting on this agreement to extend the cuts, but also reporting that the saudis, iran, opec, has reached a compromise of longterm partnership with russia what does that mean for the oil complex globally now well, look, i mean, i think both opec and the nonopec members of the declaration of cooperation has been working toward establishing a more formal framework so this is clearly a positive as we like to say there is an opec plus put in the market hov however, remember, this is a group that collectively lost 7 Percentage Points of market share in the last seven years. Roughly a percentage point of market share a year to keep the group running. So there is going to be tensions internally and russias probably been the most reluctant member of this new framework, precisely because there is a lot of voices in russia that would like to see production domestically continuing to grow rather than give away market share to texas and oklahoma and encourage shale expansion here so thats where the tension has been having the group collectively come with this new charter will provide i think some relief, some signs of relief, but, again, still i think then the problems are still there, russia is a member, but will probably stay a reluctant member as they have been. If you take Production Cuts and you put it into a bucket and you put geopolitical risk with iran and tanker attacks and things like that into the bucket and pull it out what price do you get for crude Going Forward . You mentioned some of the variables. We have to consider other variables too. For example, the imo 2020 issue, which is looming thats six literally six months from today. Got to take that into account. What is that . The low sulfur fuel regulations for the marine industry that are going to take effect, six months from today, and that will effectively reduce the amount of usable fuel by, you know, a Million Barrels a day, maybe more. That will be bullish for prices, particularly decel prices. Six months from now. Plenty of krun kcountries outsif opec are seeing declines within opec, venezuela has essentially taken off more supply, not voluntarily, of course, because of their own political crisis, and more supply off line in venezuela than what saudi arabia and russia have done combined. So the opec cuts are part of the picture, by no means the only one, and we put everything together, what we got is a cyclical peak for oil prices, 100 brent in 2020 holy smokes, 100 you bring up a key point right there, bringing up the shipping regulation as well, shipping carriers, et cetera, bracing for that lindsey if you look over the last three months, there is one s p sector negative, energy, are there opportunities sneer. Were neutral on energy we went neutral at the beginning of may the way we look at it is the one part of the equation we havent talked about yet is demand so were working on supply, geopolitical concerns could flare up prices, imo could help prices too but a Global Demand is slowing, because of potentially trade, then we have a problem with the energy sector. So thats our biggest concern for sure i think that when you look at the at the energy sector, chinas a big player in may, they declined there was an 8 decline in imports of oil. For us, thats a red flag. Leave it there, gentlemen, thank you very much. Well talk to you again soon. Up next your last chance trade. We will be right back. [leaf blower] you should be mad at leaf blowers. [beep] you should be mad your neighbor always wants to hang out. And you should be mad your smart fridge is unnecessarily complicated. But youre not mad, because you have e trade which isnt complicated. Their tools make trading quicker and simpler. So you can take on the markets with confidence. Dont get mad. Get e trade and start trading today. Dont get mad. Xfinity mobile is a designed to save you money. Whether you use your phone to get fit or to find the perfect gift, youll use less data with a network that automatically connects to millions of wifi hotspots and the best lte everywhere else. So you save hundreds of dollars a year on your wireless bill. Xfinity mobile has the best network. Best devices. Best value. Simple. Easy. Awesome. Click, call or visit a store today. I felt completely helpless. Trashed online. My entire career and business were in jeopardy. I called reputation defender. They were able to restore my good name. If you are under attack, i recommend calling reputation defender. Vo theres more negativity online than ever. Reputation defender ensures that when people check you out, theyll find more of the truth, not trash. If you have search results that are wrong or unfair, visit reputationdefender. Com or call 18778668555. Welcome back to the closing bell lets get a check on individual market movers. Performance food group is buying its reinhart food service. Theyre aiming to build scale and tackle rising costs. That stock is down less than 1 . Brookfield infrastructure and gic will be buying genesee and wyoming. The deal is expected to close by year end it is valued at 8. 4 billion, including debt you can see that stock is up 9 now. Coming up, were going to talk to Blue Harbor Groups Cliff Robbins about that deal. Genesee wyoming is one of his top holdings hell join us for an exclusive interview a bit later in the show looking very much forward to that we have less than ten minutes to go whats your last chance trade, lindsey . I wanted to highlight lyft and uber we initiated coverage on them both today with buy ratings. 20 upside from here about that for both of them really . It is a recurring share riding service we just see top line and margins growing much faster than Analysts Expect because we see them the market in the u. S. Maturing, we see more stable pricing here more than that, mobility as a service and the latter part of this story that is really going to drive the business and our analyst is calling this the netflix of ride sharing. So i think there is going to be plenty of growth in 24 years right now a Service Without a profit i know. This is a longer term story. The stocks we didnt say specifically, you throw the charts back up there, hammered pretty good today. Yeah, i know. Pretty good day for the market it is a confusing trade especially when tech was doing so well. But, anyway, we think this today could be a buying opportunity for these stocks yeah. Certainly one to watch in terms of regulatory risks. Lindsey, thank you. Were on record close watch for the s p as it comes off its best june performance since 1955 up next, were covering all of the angles othf e market in our closing countdown. Stay with us you should be mad that this is your daily commute. You should be mad at people who forget theyre in public. And you should be mad at simple things that are unnecessarily complicated. But youre not mad, because youre trading with e trade, which isnt complicated. Their app makes trading quick and simple so you can strike when the time is right. Dont get mad, get e trade and start trading today. We have less than five minutes to go before the bell rings to close up the market today. Closing countdown and trade the close with mike lewis, barclays head of u. S. Equity cash trading. Mike, tell us, record close for the s p, that looks like what were going to get what does it mean . Well, i guess, it tells you a lot that you need to know about how investors took the results of the g20 over the weekend so it is one of the two hurdles we needed, which was to know that we werent going to escalate further and now that accompanied by potential dovish fed, the payroll number this friday will be very important. What were eing in tseeing in tt today, folks have been underweight cyclicals, a little underexposed there i think people continue to look to rerisk in this market. You make anything of the fact that, you know you had a nice gain off the open, you sold off a bit from the highs and you had a pretty decent last half hour of trade here where you had a pickup as we said, the s p since we started the show added what feels to me like 12 points yeah. I think that there is probably the action today was a little bit underwhelming. I think at least relative to what others may have expected. I think that tells you two things, one is, you know, with the results from the g20, is this going to be something which could reescalate at some point, maybe they think trump made too many concessions versus china. And secondly, it may tell you theyre also waiting on the fed. And the payroll number if it is weak or even just a little bit bad, i think that gets you to a place where investors will be comfortable with the fact that, you know, the rhetoric around trade is better and if the fed is going to be active, you have an accommodative fed, financial conditions should be easy, and i think a big point for that is that vol should remain low youll see some of the systematic investors, vol target funds and the like probably start to pick away at equities again. I see a grind toward 3100, 3200. The action today say little surprising it is not stronger. But i think it is a multitude of facts that are kind of looking into that. Likely a lot baked in already. Thank you. Thats mike lewis on the Trading Floor at barclays. To the other mike, mike santoli, third dashboard. Talking about happy rally signals. Looking for something below the surface. Lets start out with a measure of brent new york stock exchange, up volume versus down volume. You had the big powerful opening pop, up more than 1 in the major indexes. A lot of technicians are saying, lets see if we get a 90 update were not even 60 now you have faded throughout the day. That tells you this rally that we have had has been a little more rotational. Groups winning, defensive selling off, a little more churn, still to the positive side, not necessarily decisive high Energy Breakout type action but then also take a look at the high beta and low volatility, Risk Appetite measure, you see the high beta taking over the lead again in white. This is a year to date look at that you see basically the risk check on the market looks okay for now. I think you can say this is a win, though not necessarily decisive one lets get to the nasdaq for a closer look with bertha. When you look at high volume, you look at the chip names, sky works, these are a number of names highly exposed to china. Theyre rallying Something Big today as chips help lead tech. The s p 500 tech sector in fact scoring a new high today and a number of the software names, ones that we were seeing with new all time highs in the as far as cadence and synopsis and 52 week highs for the others now over to seema at the nyse. A strong debut for the u. S. Markets. We lost a bit of momentum into lunch time that came back into the close. S p 500 at 2961. Sectors helped lead us higher, technology, the banks, the china trade index. They did close in positive territory. Rate sensitive sectors like utilities did not hold up well take a look at gold. Reversing course, one of the safety trades that look very well in the month of june. Gaining about 7 you can see today, off by nearly 2 dow closing today at 26,710. Up 112 points. Were off the high to the session. But still a gain for the dow welcome to the closing bell. Im Morgan Brennan in for sarah ic icen look at what seema just said, the dow closing higher by triple digits 118, 119 points, 26,718. New record close 2964, gain of. 75 nasdaq up 1 thank you, chips, after the g20 with other trade stories the russell 2000, small caps, up a fifth of a percent pretty good day, all and all. It was. Small caps lagged, turned negative later in the session. Managed to pull gains here into the close. You mentioned tech, financials, top performers, really risk on today, real estate utilities, other safe haven sectors were the underperformers. Selling into the news of the g20 trade truce if you want to call it that that was probably the expectation that you were going to get tariff truce and no new tariffs, decent language out of the g20 and investors took that as a positive o guests made good points. Thats going to dominate the conversation in the days ahead havent gotten to earnings yet, isnt that far away either. Little soft data, manufacturing numbers, construction numbers today putting that jobs report later in the week further in focus joining us to talk about this, barry banister, and lindsey bell still with us. Good afternoon mike santoli, kick it off. I think net positive response i think that the market doesnt give you everything it wants at the open it looked like it could be this kind of breakaway day. It was going to be a more decisive move to a new high. And you had this churn underneath the surface of it it is partially because treasury yields just didnt give you that go ahead to say, okay, the story has changed, were back on inflation watch, we can look through the slowdown story i think you can count it as a win. Credit markets very, very solid today. Volatility comes down. Bleeds away out of the vix thats all to the good question, once the market is at a high, hard time accelerating from there, unless it gets some kind of catalyst or quick pullback. Win, lose or draw on todays session. What do you make of it after making a bearish trading call at the beginning of may, we issued a trading flash on june 3rd. The market was bottoming and we would make new highs were up 200 some points since then it used up a lot of the internal energy were not surprised to see the market stall here a bit. Longer term were in a secular bull market that has years left to run. Barry, are you surprised to see the s p close at a new record today no. If you look at from april 22nd to a little over a week ago, the cyclicals were getting trounced by the defenses so all youre having is a head fake rally in the cyclicals. Market is priced to perfection at 18 times our 2019 and 2020 estimate and we have been looking for a trading range of 2886 plus or minus 125. At the high end here, im not interested in the market i do think that there will be another test of the cyclicals and Double Bottom relative to defenses i would stick with that trade. And i do expect the fed to be theyll give us july 31st as a rate cut theyll hold out a little bit. We have to beat the fed up when they give us a cut after july, looking at august, august could be a tough month. Lets dive into some of the Economic Data. It is the indexs lowest level since october of 2016. May Construction Spending coming in weaker than expected. Falling by 0. 8 , compared to expectations of just 0. 1 increase it was the first decline since november i feel like were going to get back into this issue where bad news on the economy becomes good news for investors at least the market will end up taking it that way, it feels the fed will come to the rescue on any data point that disappoints. Absolutely. I agree with you i think thats why when the data points came out this morning, the market remained at its highs for the day. You did get selling as you went into the day, though and i think that as we move through to the end of the year, we are cautiously optimistic here i talked about this a little bit earlier, if you look at the second half of the year if you look at history, when you have a year where the s p 500 is up more than 10 in first half of the year, you have an 80 chance of seeing a rise of 7. 5 in the second half of the year. And that compares to all second halves of the year is where you see positive returns in the first half you get 4. 1 increase in the second half of the year, 70 of the time mike what do you make of the manufacturing data ism manufacturing 51. 7 means that it is still growing but the fact that it is softening from is some of the higher levels we have seen it is expected, but interestingly the way the market responded to this, i dont mean the stock market, was that the it was better than expected and thats not really what the market wanted to hear. The dollar index rallied from that moment on and i think the twoyear note yield bottomed at that point i think the market wants to be certain the fed is in the bag for july and the better even if it is a soft number, if it is slightly better than expected, i think it strikes at that raw nerve, probably slicing it too thin in terms of response. But i do think that, you know, were in this kind of global slowdown, how much of that do we suffer here in the u. S. , still not known. A lot of leading indicators of the ism is showing you a dip below 50 barry, i want to come back to you and make sure i understand and our viewers understand your point of view. Are you saying it is going to be a one and done fed theyre going to cut in july and then all bets are off after that if that is the case, what does that mean for the s p . No, no. If you think the way the fed is operating, it is like pulling teeth. Theyre going to take back that mistaken rate hike of december on july 31st to take back the september 2018 rate hike by september of this year, maybe well are to do some convincing of them in august as far as the pmi goes, the book to bill, 1. 0, we have the jpmorgan global pmi under 50, all the way through year end in our model. We think it will pull down the u. S. Pmi to 50 on manufacturing. That aligns with a 2 or sligt y slightly less than 2 tenyear yield. Thats not a heartening level if youre expecting a vshaped recovery we think it is more lshaped jeff, what do you make of the fact that small caps and transportation stocks have been underperforming the market really for the better part of the past year now. The transports came on pretty strong last week and theyre in a position where they can better their recent high theyre still a long way from their all time high. But i may be a pundit, but i think the economy will reaccelerate in the back half of this year. And i think the earnings estimates are far too level as we get into 2020 why i think the fair market value pe using our model is 19 and were trading at 16. 8 times the next 12 month forward earnings i dont think stocks are all that expensive what specifically do you think is going to trigger that reacceleration in u. S. Growth . I think the consumer will continue to be strong. I think manufacturing is going to pick up youre getting more Foreign Investment back in the u. S and a lot of things are coming the way of the u. S i agree with your other guests who said, you know, 3100 to 3200, you know, thats where we think the market is going by year end. How perfect do things have to be for the market to take that next big leg, get out of that 18 month, you know, going nowhere for the most part. I dont know about perfect, but i think it has to be moving in the right direction i think right now the market could not take the fed pushing back on its expectation of a couple of rate hikes before year end. Thats probably first. The second is are we going to be able to look through what might be kind of a messy earnings season when we start to report whether the market goes sideways there, sometimes does during earnings or not, that will be a question, because were still not picking up in terms of estimates. Maybe well come back in the third and Fourth Quarter, but seems as if thats where were going to have to hope that the fed can help keep multiples up because earnings are not going to be necessarily the thing that powers the we had lulls before, 2016 once again, earnings were no good, market stayed up. You have to have other stuff go right for that. It is a lot tougher for the market to continue going higher, even though numbers are coming down for the second and third quarter, Fourth Quarter still remains high when you look at 12 Earnings Growth for 2020, that still is pretty high. Those numbers havent even moved yet. The bar gets higher is what youre saying. As the market goes up, the numbers have to live up to the hype you did in the numbers. Absolutely. One benefit is that Investor Sentiment and positioning is not very bullish now i think you can argue that people have been a little bit skeptical of this rally, so it is not as if were kind of way out on a limb, everyone is expecting great thins and if we dont get great things, well fall apart thats a cushion probably. Thank you well see you again soon. You bet Semiconductor Stocks surging after the trade truce with china, including easing of the huawei ban up next, t. J. Rodgers tells us whether chip stocks can keep rallying ahead of a potential deal. And former counsel of economic advisers chairman glen hubbard tells us if the trade truce could take a fed rate cut off the table this month a record day on wall street. The s p 500 closing in, unchartered territory. We have all of the angles of this big rally covered today seema mody has the big movers here at the new york stock exchange, Bertha Coombs covering the nasdaq, josh lipton the surge in semis and we start with seema. Worth noting that this trade induced rallystarted overseas, strong outperformance in china, japan and europe u. S. Stocks closing off their best levels of the day, but notching a record close for the s p 500 and the main catalyst, that trade optimism, though fading as traders are now looking for that next catalyst we also had that weaker ism report that kept a lead on the gains. Manufacturing activity falling to the lowest level in three years. Still, a number of stocks hitting new 52 week highs today including visa and marriott, hilton well see if that new highs list can expand further this week morgan, back to you. Seema mody, thank you to the nasdaq now for the big movers there Bertha Coombs has retails. Thank you, morgan the new highs here in software, nonetheless that trade truce definitely created an impact in terms of the nasdaq move higher. And the s p 500 tech sector hitting a new high today apple closing above 200 for the First Time Since may 9th, still down from that may swoon consumer stocks were the losers, not by a whole lot concerns about some Economic Data coming in, and worries about what we might see with the jobs report on friday. Josh lipton has details for us on consumer stocks. The smh ending the day in the green, after surging 13 in june, best month since december 2010 the u. S. And china called a trade truce and easing huawei restrictions good news for the Chip Companies that do count the chinese tech giant as a customer. Mitch steves lists a few names he thinks will benefit including micron and Western Digital morgan, back to you. Josh, thank you lets talk more about this rally in chips and what the u. S. Restarting trade talks with china means for the Semiconductor Industry with t. J. Rodgers, former ceoof cypress semiconductor. Good to see you today. Hi, how are you so what does this mean . Were you surprised to see there was this easing of restrictions on some sales by u. S. Suppliers to huawei over the weekend not really. Really was the tempest in the teapot, i thought i brew up by pick two names, bloomberg and new york times, where they were talking about skirting the tariffs. Fact is that the typical chip Company Makes 5,000, 10,000 products and there is only five of them that are strategic and limited by the tariffs so i know i wasnt surprised that we found out that this is not the end of the world for the Chip Companies so do you think that the ban huawei still technically on the entities list, still looking for more details in light of what you said, do you think that huawei continues to be a National Security risk more broadly from a u. S. Policy standpoint yes, i do okay two points really. First of all, the National Security risk, look at the government of china they spy on their own people they dont allow their people to have free information. Theyre working on Face Recognition Technology how could it be that the number one supplier of Communications Equipment huawei is isnt building the equipment to get all of those deals done. All of those objectives . Therefore, having that equipment around is obviously a Security Risk on the other side, having said that, the chip guys are going to continue to ship to huawei because it is just not going to be that were going to shut down the ibm of china we already backed off on zte, huaweis little brother. So were going to ship to them but i dont think were going to buy their equipment. Are you in favor, sir, of the way that this trade war is being waged on behalf of the United States side . Are you in favor of the tariffs and the way that we have been going after the chinese . Thats a real great question. Im a free trader, a libertarian. I always said and believe as i sit here that when we have free trade, were go to be better off. Having said that, President Trumps push against trade, which he doesnt believe is free, made me aware, reminded me of my own problems with intellectual property with the chinese absolutely methodically take intellectual property from western companies, point one and point two, currency manipulations which unbalance trade war and actually ask for tariffs. I guess ill sit back and see how this thing works out i sure would like to see i. T. Protection be a reality in china. I think quite a number of foebz a folks and companies would as well it begs the question, i think about the wall street journal report last week on amd, for example, is the cat already out of the bag in terms of intellectual property and tech transfer in china . No. No the x 86 architecture, of course, thats a euphemism for a bunch of chips which are modern, all that smoke about the worlds biggest supercomputer, all that means is you take thousands of them and put them in racks side by side and crunch on problems that need a lot of Computing Power and parallel thats not a threat. It is a lot of noise, but it is not a true threat. You think we can get a deal with the chinese a comprehensive deal that has to do with everything that you just mentioned, the force partnerships, the transfer, the intellectual property, everything can we get that . You realize asking me in effect roll the dice and read me the number okay ill do that i think we can get a deal. I think we sell to huawei, all but the two or three most critical products that we dont want them to have because we want them for a customer, theyre important. I think china realizes President Trump is serious, hes done some things that kind of took my breath away. So i think there can be a deal i think Everybody Knows it is best for both sides. We now, based on the press coverage and little bit of Sensational Press coverage realized the details of how lack of free trade is bad for both sides. Lets get it behind us. T. J. Rodgers, thank you always great to get your thoughts. Thank you. Dont miss a first on cnbc interview with white house director and trade of trade and manufacturing, peter navar e navarro, tomorrow at 10 00 a. M. Eastern on squawk on the street. Well look forward to that. Shares of Genesee Wyoming after 6 billion buyout deal. Cliff robbins joins us for a victory lap straight ahead i dont know whats going on. Ive done all sorts of research, read earnings reports, looked at chart patterns. Ive even built my own historic trading model. And youre still not sure if you want to make the trade . Exactly. Sounds like a case of analysis paralysis. Is there a cure . Td ameritrades trade desk. They can help gut check your strategies and answer all your toughest questions. Sounds perfect. See, your stress level was here and i got you down to here, ive done my job. Call for a strategy gut check with td ameritrade. I cant tell you anything about myself. As someone in witness protection, but believe me, im not your average consumer. Thats why i switched to Liberty Mutual. They customized my Car Insurance, so i only pay for what i need. And as a man, uh, or a woman with very specific needs that i cant tell you about say cheese. Mr. Landry . Oh no. Hi mr. Landry [ grunting ] Liberty Mutual customizes your Car Insurance so you only pay for what you need. Liberty. Liberty. Liberty. Liberty. Welcome back freight rail Company Genesee wyoming closing higher by 9 today. Blue harbor group ceo Cliff Robbins appeared on closing bell last many and named this stock as one of the top picks. Here is what he said when he was asked about a potential sale of the company. Rates are low a lot of capital available for people that want to do deals this is a strong business. Im not surprised to understand that there is private equity infrastructure funds interested. On the same token, if there isnt a transaction, this is a company were happy to own a company with a rate a good Balance Sheet, strong business and should build value over the next few years even if it is not a shortterm sale. Joining us now on the phone and cnbc exclusive interview is Cliff Robbins, founder and ceo of Blue Harbor Group cliff, congratulations, i think thats first in order and let me ask you if i may to start, is this deal representative of where the action is now in the rail business or where private equity is being flushed with cash or a combination of both . Scott, this is our unique situation because of the Shortline Railroad that genesee owns really is a very special strategic business in north america. So i think this deal, having said that, i agree what you also asked about is that a lot of money in the hands of private equity and infrastructure firms and funds and interested in the very strong reliable cash flow generating assets like genesee cliff, what go ahead. Im sorry, morgan, go ahead i was just going to say what do you think of the details of the deal because i realize the sale price represents what a nearly 40 premium from the march price before speculation started to bubble out in the news around a possible takeover it is the stock is so close, around 111 1 hchb 100 a share the shares had been trading up on rumor recently and some press articles about it. But it is about a 40 premium too. The unaffected price i think it is a fair, good deal for stock holders and will be a good deal for brookfield and gic because this is a very well managed business and strong assets. And theyre good owners for this business because genesee will continue to buy other shortline businesses over time and improve their International Operations and have a Large Capital Patient Capital partners like brookfield and gic. It is the right home for this company. The premium is a good one. And it was good for stock holders. Gwr may be a Specialized Company as you said. But would you expect to see the dealmaking environment remain fairly robust given just sort of where we are, where Interest Rates are, which you spoke about the last time you were on absolutely. I think well continue to see a lot of m a generally everything is accretive on an eps basis for strategic buyers, using cash and also in private equity and Strategic Private Equity infrastructure funds, a ton of money. Just this week, in addition to this very important transaction today, at genesee, another one of our companies, Bca Marketplace was going private. Had two companies go private in the same week and i think were going to see more of that. A lot of capital out there both in strategic and private equity hands and so i think and powells been pretty straightforward that rates are going to stay low. It is going to be a very Good Environment for m a, absolutely this deal is a cash deal. That cash is going to be flowing to you based on how many shares you own. Is it the kind of environment you feel as if there are a lot more opportunities or you have to be very choosy right now because wide swaths in this market, cyclical stocks and such have been beaten down pretty well. Yeah, i feel like, you know, the market is at a higher valuation, having said that, you know, you can always find companies that for idiosyncratic reasons are trading at a significant discount genesee, we believe the shares were undervalued at 75, 80 a share, they had two small international businesss that investors doesnt understand and businesses werent as strong as the u. S. Business. And thats a really good example of why this company was trading so much so undervalued. So i think there are opportunities out there in the midcap space where companies are misunderstood or misfollowed and well see i will be reinvesting this cash in new positions and i think there is plenty of opportunities out there. All right you talked about the the opportunities you can find in the market the fact that the s p did close at a new record high today, more broadly what is your take on the markets . More broadly, you know, were quite constructive on the u. S. Markets. I dont know what will happen next week or next month or next quarter. But most of the ceos that were talking to are telling us our company is going to make more money in 2019 and 2020 than we made in 2018 our economy is still growing 2 , 3 consumer is strong, unemployment picture is good, rates will stay low. So putting aside any guesstimates of what will happen next week or next month, but we feel confident that the investments were making today will be worth a lot more in two or three years. Cliff, congratulations to you and your investors big day for you all and well talk to you again soon. Thank you, both take care. Thats Cliff Robbins, Blue Harbor Groups founder and ceo. Time for cnbc news update with sue herera. Here is whats happening at this hour, everyone. Police have restored control earlier tuesday after clashes with protesters on the streets of hong kong this after a day of unrest the escalation came after weeks of tension over the governments attempts to change its extradition laws a spokesperson for u. N. Secretarygeneral gutierrez urging iran to honor its commitment under the 2015 nuclear deal, this following the u. N. Nuclear agencys confirmation that tehran breached the limit for low enriched uranium he encourages the Islamic Republic of iran to continue implementing all its Nuclear Related commitments under the gcpoa as a participant continues to seek ways to overcome the considerable challenges the country faces. And now on view at sotheb s sothebys, look at that beauty in new york. The james bond 1965 aston martin db5, auctioned off in august. It is expected to fetch between 4 and 6 million it is considered the most famous car in the world and it comes complete, look at that, with fully functional james bond gadgets that is so cool. Thats the news update this hour guys, ill send it back downtown to you it is so cool i would never take it out on the road if i bought it. I would have it on display. Yeah. It is meant to be driven, but thats what tracy morgan thought when he bought his car. Thats really true, scott thats exactly right thats what he thought. He pulled out and two seconds later he got in an accident. All right some cars are better kept in the garage. Over to mike santoli for the final dashboard of the day thank you, morgan calling this a sleepy expansion. A long and sleepy economic expansion. Look at this chart, it shows you, by the way, we are now kind of celebrating the fact that we are now in the longest ever economic expansion we have in terms of months exceeded the 1990s expansion thats obviously the time between recessions the current one is in green. That 90s expansion in the orange n the 60s, another long one in blue. What is so pronounced here is the more gentle lower sloping trajectory of the current one. Obviously we know this, this has been more of a 2 type annual pace expansion i would point out in the 90s, people for first half of it puzzled over why the expansion was so slow. So successive long cycles have been more moderate in their growth rates demographics, the fact we have a debt overhang, the fact we had rolling crises that have hit the economy, the world economy, since 2009, probably account for a lot of this. The upside, people looking for silver linings, is that it does not really get so much of a head of steam going that markets and underlying economy have a lot of excesses building up thats the positive one. The downside is every time we have a little bit slowdown, people are worried about tipping back into recession. Thats the world we have been living in. It is hard to know what is going to change about that anytime soon. A lot of talk about, you know what inning were in, how late into the expansion we have been, whether the tax cuts, extended the runway but whether the trade skirmish and trade war has brought us back so many things in play. Especially with inflation low. Nominal growth is 4 nomm nominal gdp growth, not much of a cushion in terms of growth rate that where you have any challenge to and people think well get near the zero line, but not yet. Wants to keep the expansion going. Well see where it goes. He used the sleepy theme here not a sleepy topic still ahead, boeing sitting out the rally today after new concerns about the companys planes emerged we have those details coming up. And to cut or not to cut . That is the question facing jay powell and the fed findf the china trade truce could be a game changer for the feds Interest Rate plans. Well tdohat later on the closing bell. This is the couple who wanted to get away who used expedia to book the Vacation Rental that led to the ride which took them to the place where they discovered that sometimes a little down time can lift you right up. Flights, hotels, cars, activities, Vacation Rentals. Expedia. Everything you need to go. Welcome back to the closing bell. The dow finishing off the highs of the session still up 117 points. Heres what led to those gains apple, nike, dow, jpmorgan chase, also walt disney. Many of those names trading higher on the heels of those u. S. china trade talks renewed still ahead, boeing, though, under Pressure Company stock trading taking another hit on reports that its dreamliner could be under investigation. We have those details next plus, tesla takes center stage. Investors awaiting delivery numbers from the automaker and elon musk says it could be an all time record. Stick around closing bell will be right back after my dvt blood clot. I wondered, is another one around the corner. Or could it be different than i thought . I wanted to help protect myself. My doctor recommended eliquis. Eliquis is proven to treat and help prevent another dvt or pe blood clot. Almost 98 percent of patients on eliquis didnt experience another. And eliquis has significantly less major bleeding than the standard treatment. Eliquis is fdaapproved and has both. Dont stop eliquis unless your doctor tells you to. Eliquis can cause serious and in rare cases fatal bleeding. 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The best or nothing. Thats what happens in golf nothiand in life. Ily. Im very fortunate i can lean on people, and that for me is what teamwork is all about. You cant do everything yourself. You need someone to guide you and help you make those tough decisions, thats Morgan Stanley. Theyre industry leaders, but the most important thing is they want to do it the right way. Im really excited to be part of the Morgan Stanley team. Im justin rose. We are Morgan Stanley. Boeing shares slipping today, this on reports that the dojs investigation of the company has expanded to boeings 787 dreamliner phil lebeau has more phil thats one piece of news that is weighing on boeing. There is also the ongoing issue of the 737 max lets start with the dreamliner. This investigation by the doj was first reported on friday night by the Seattle Times and essentially it revolves around whether or not the shoddy workmanship, which has been reported in a number of different outlets when it comes to the charleston, south carolina, plant, when it comes to the dreamliner, whether or not this is a case that the federal government needs to look into and thats at the heart of the subpoenas that they have documented, according to the reports from boeing. Boeing as is usually the case, whenever you have the doj involved, says we have no comment on federal investigations and as for the 737 max, remember, last week, the company said, look, we dont expect it to be back because of ongoing issues until the september time frame. Gary kelly is out, and, remember, southwest has more 737 maxes than any other airline in an internal update, he said, im sure this will cause us to take the max out of the schedule beyond october 1st well also see what other modifications we might need to make for our plans this year because it is obviously extending well beyond what i had hoped. Look at shares of boeing, it is under pressure in part because as you talk with analysts, theyre all saying the same thing, where is the catalyst where is the bounce that it is going to come back are you believing thats going to happen soon or pushing it further into next year yeah. Key questions and some significant commentary there phil, investors are still awaiting details on teslas Second Quarter deliveries. What should we be watching for the total number is 90,700. Thats the estimate according to fact set that would essentially match the companys previous high. Remember, elon musk says we think we could possibly hit a record and if it tops 90,700, they would do that well say what is the strength by region, what is happening in terms of model 3 shipments over to europe . But it is the model 3 overall that people will be focused on if you look at the quarter by quarter deliveries of the model 3, big dropoff First Quarter thats expected to come back up to 7 4,000 in the Second Quarter. And, guys, we talked about this before, not just how many vehicles are delivered, it is what happens with the margins . We wont know that until they report earnings later on this month or early next month. Good stuff, phil, thank you bring in dan ives, neutral rating on tesla. Musk says it may be a record what will that mean for the stock and or your rating we dont see them hitting the guidance about 85k is where they hit. I think it is good news before bad news second half is going to be the key. Thats an ever slight battle to hit the numbers for the year thats the issue for investors now, profitability in second half numbers especially even if you get some good news in 2q. How you to see it, since you are bullish on the stock. I dont think disagree that much with dan here i think the one area is i think the profitability is not as big a focus here specifically for the quarter, were at 90 and 74 in terms of total units and so at consensus, that puts the back half delivering 63, that puts the back half at 200, a stretch. I think if we have visibility into that, the stock moves higher. It is hard to find a stock really when you think about it that has such differing views, not just on the ratings, but price targets. This is right square in the center of that debate. Dan, you have a 230 price target, jed, 394 price target were talking such a huge divergence what changes your opinion of where this stock can go . I think fork in a road situation over the next six months it comes down to can they sustain model 3 growth what is profitability look like . We continu profitability, they have to raise capital. You see the divergence in terms of the view of tesla in my opinion, for them to hit that year end number is going to be significant challenge i think right now it is a prove me stock for the bulls jed, prove you, i dont know. 394, sounds like they have already proven it to you. Yeah, listen, i think it is going to be it is a binary stock here i dont see it staying at the current levels that it is at it is either, you know, youre betting this company is going bankrupt or you think that the stock is worth a lot more. And were taking the case that with 75 market share in the u. S. Of electric vehicles and with the market trending that way, value being created here to disrupt gm and others is greater than where it is currently dan, ill put you on the spot here, were almost a year since elon musk tweeted about considering taking tesla private at 420 meantime, his other companies, spacex, in the process of raising the third round of capital since december valuation on that company, which, by the way, has been, you know, as we reported, has been profitable, is closing in on teslas. Does the time come maybe in the not too distant future where one Company Takes the other one under its wing in. I think it is a good question i think fundamentally, theyre backed against the wall. You go through the next six, nine, 12 months, they have to keep raising capital thats where that becomes potentially an issue that becomes a scenario. I think right now it comes down to can they actually show profitability, can you see sustained growth otherwise, musk is going to have to seriously consider. But right now this continues to be an uphill battle for the stock. Thank you we appreciate it very much thank you. Up next, the china factor, what could the u. S. China trade truce mean for the big fed decision well discuss all that straight ahead. Tell him were flexible. Dont worry. My dutch is ok. Just ok . in dutch tell him we need this merger. in dutch its happening. just ok is not ok. Especially when it comes to your network. At t is americas best Wireless Network according to americas biggest test. Now with 5g evolution. The first step to 5g. More for your thing. Thats our thing. Welcome back to the closing bell. The ceasefire in the china trade war boosting stocks today. How much will it play into the feds decision whether or not to cut rates . Joining us now is glen hubbard, Columbia Business School dean emeritus and former council of economic adviser under president george w. Bush how much will the renewed trade talks between the u. S. And china affect fed policy now moving forward . It is an interesting question because, of course, the trade truce is a good thing. But there is still so much uncertainty surrounding the trade rift that it is likely months before Business Leaders have the courage to invest more or hire again. It is still a head wind in the forecast i think the real issue for the fed is both that and whether it is meeting its long run inflation target which it isnt quite. I do think that the trid war is still hanging. You think the fed should cut rates, glen . I think the fed, if you go back to the last rate hike, the last rate the last rate hike was one too many or at least one not quite yet ready. I think the fed was at that time balancing risks of inflation breaking out or financial imbalances against downturn risks. Those risks have shifted i think there is an argument for fed rate cuts in the second half as a precaution and i think the right hook for that is the low inflation. Glenn, that implies that it would be, maybe, one or two cuts if were just taking back one increase that went a little bit too far, and the market has looked a little bit beyond that right now. How much of a dance do you think there will be meeting to meeting here between what the market looks for and asks for and what the fed is ready to deliver . I think probably one could make an argument just on economic grounds for 50 basis points in the second half of 2019 as a precaution i think if the fed wants to get ahead of the market it has to tell a story better about how it approaches the inflation target, what its goals are for the Balance Sheet and how it sees the economy. After all, it was good news from deregulation and tax reform. The trade war sort of stepped on the administrations own good policies im wondering, glenn, what you make of this, lets call it a demand let call it what is it the market demands, it seems right now that the fed cuts Interest Rates is the fed too beholden to what market want . The fed needs to articulate its own economic story. It shouldnt be responding to President Trumps tweets or beholden to the market the market is the voice of millions of people with real money making a bet on the economy. Its valuable information. The fed would be better served telling the public and the market what it plans to do to raise inflation towards its 2 goal can the fed be effective if they dont cut as many times as the market may want can it still be as effect by jaw boe boning maybe cut 25 basis points in july and you jaw bone and say youre on the case if things deteriorate youll be there. Were just not so sure i think you do that, obviously, but i think you need to do Something Else too, which is to articulate a story about a longer term inflation target rather than saying once inflation crosses 2 were done, if the fed were to articulate some notion of there being an average of 2 that the fed is willing to let the economy run hot to get above that so we average out i think thats the kind offer to thats more reassuring and grounded in the feds own mandate. We appreciate your time as always. My pleasure. Glenn hubbard joining us live up next were talking impulse purchases. Do you make any of those never never. Who is more likely to make a costly spur of the moment buy . Men or women the answer could surprise you. Thats ahead on thclin ll. Osg curiouser and curiouser, said alice. The rabbithole went straight on like a tunnel for some way. Ive seen a cat without a gri, but a grin without a cat. Hey, mercedes, end audio. Change lighting to soft blue. The completely reimagined 2020 gle. With Intelligent Voice control and available third row. Your adventure awaits. Visit your local mercedesbenz dealer for exceptional lease and financing offers. Mercedesbenz. The best or nothing. Cnbc and acorn is part nearing with survey monkey for our latest invest in you survey. Heres the currents pulse of consumer spending. Heres a question for you who do you think is more likely to make impulse purchases . Nearly 90 of both men and women say sometimes they do make those impulse buys but men spend morgan nearly a quarter of men she would out more than 100 the last time they made an impulse buy. Younger people were also more likely than older people to say they make those impulse purchases. We also found just over half the people consider themselves to be safers rather than spenders. Overall a third of people said they had cutback on spending in the past 12 months while 45 said they kept spending about the same and one fifth said they increased their monthly. Men do more impulse buying than money spending more too. Its all those gadgets. Thats what i said when i saw that number. Seriously, another question for you. You just mentioned the fact that americans are cutting back on spending why . Nearly a quarter of people said they have lost some alternative source of Household Income we read into that a spouse losing a job 17 told us its because theyve taken on some new form of debt 16 said they did so because they fear a recession or mick slow down. 15 said they personally lost their job. Really interesting read on the consumer the recession fears are there, not super high other things are coming in before that when cutting spending for more head to cnbc. Com investyou just as a reminder universal and comcast are investors in acorn were closing in here on the end of the show. See how excited she was when the result came in that it was men. Jumping out of her chair im buying it usually for somebody else in the household when i make an impulse buy its not for us. But it doesnt surprise me, though men lack a lot of the cost benefit analysis in the moment okay. So what does surprise you . Did the markets today surprise you not really. I do think that it made sense there was a little bit of relaxation in both the stock and bond markets maybe marginally better than expected on trade. I wonder what the next thing is. We know what the next event is, jobs report on friday. I do think the market is a little bit braced for a strong number wondering what it means for the fed. You know, i dont know it will be a decisive thing. The fed had an opportunity to push back against a rate cut has decided not to do that of course, its july 4th which means its a holiday week and investors should keep the fact that volumes will be light and more volatility. We got two and a half days of trading. Friday, youre going to get that nice news at the open and then see. Because the jobs was so disappointing the last time it ups the ante for this time not like we were gang busters the last dime. That was a huge deflating let down lets see what happens and what it means in the big picture. If you get a snap back and its a strong number people say the three month average havent gotten away from us. Fed isnt focused on jobs right now its focused on inflation. Fast money begins right now. Fast money starts right now. Watching the nasdaq. Im melissa lee. Your traders are on the desk tesla, the company set to report its Second Quarter delivery numbers any day this week. After a 30 puerto rico rally after its low did the stocks come too far too fast. One china bull says it could be a good time to buy china. Dow jumping more than 115 points nasdaq and tech up 1 . Weve seen this story before th